Financial Snippets

1. PSBs SHOW ROBUST GROWTH IN THE FIRST HALF OF FY-25: Public Sector Banks (PSBs) have demonstrated robust performance in the first half of the current financial year, with a 26% growth in net profit, an increase in business, and a decline in NPAs. The aggregate business across 12 PSBs, including State Bank of India, reached Rs 236.04 lakh crores in April-September 2024, marking an 11% year-on-year growth. During this period, deposits grew by 9.5%, and credit grew by 12.5%. Operating profit and net profit for this period were Rs 1,50,023 crores and Rs 85,520 crores, respectively. The gross NPA and net NPA in September 2024 were 3.12% and 0.63%, respectively, according to the Finance Ministry.

2. BANKS ASKED TO DO RE-KYC FOR JAN DHAN ACCOUNTS: The Finance Ministry has directed all banks to conduct re-KYC for Jan Dhan accounts that are due for updating. Approximately 10.5 crore PMJDY savings accounts were opened between August 2014 and December 2014, making them eligible for re-KYC after ten years. The ministry suggested using various methods for re-KYC, including fingerprint and face recognition, as well as declarations where no change in KYC documents is needed. This re-KYC can be completed through multiple channels like ATMs, mobile banking, internet banking, and other digital platforms.

3. MTNL DEFAULTS ON Rs 1,000 CRORE LOAN, BANK OF INDIA MAKES PROVISION: Mahanagar Telephone Nigam Ltd. (MTNL) has defaulted on Rs 1,000 crores of loans from Bank of India. As per regulatory norms, Bank of India has made a provision of Rs 200 crores. MTNL, a government-owned telecom company, has been facing financial challenges, with SBI classifying their loan account as "sub-standard." MTNL reported a loss of Rs 3,033 crores in FY24, as revenue continues to decline due to its struggles in adapting to the evolving telecom landscape.

4. SBI VENTURES, A UNIT OF SBI, TO RAISE Rs 2,000 CRORES FOR CLIMATE FUND: SBI Ventures Limited, a State Bank of India subsidiary, is planning to raise around Rs 2,000 crores for its third climate fund, pending board approval. The funds will be raised from multilateral institutions and invested in small and mid-sized companies focused on waste recycling, emission reduction, and other climate control initiatives.

5. BANKS EXPRESS NO STRESS AS GOVERNMENT DIRECTS CLOSE MONITORING OF LENDING TO MFI SEGMENT: The government has instructed Public Sector Banks (PSBs) to closely monitor microfinance sector lending, especially in co-lending arrangements with NBFCs. The directive includes ensuring credit access for government initiatives like the Mudra Yojana and PM Vishwakarma, as well as practicing sensitivity in microloan recoveries. The Finance Ministry has also urged banks to adhere to due credit appraisal processes when sanctioning microloans.

6. SBI'S DEPOSIT CROSSES Rs 50 LAKH CRORE MARK: State Bank of India’s deposit base surpassed Rs 50 lakh crores in the September quarter of the current fiscal year. SBI also reported a 28% increase in advances and a net profit of Rs 18,331 crores, the highest among banks. The bank has successfully reduced operating expenses, helping offset the impact of higher provisioning.

7. MUTUAL FUND "SIP" FLOWS HIT RECORD Rs 25,000 CRORES: Investors have continued to favor Mutual Funds' Systematic Investment Plans (SIPs) despite a declining stock market. Last month, gross SIP inflows reached a record Rs 25,323 crores, marking the first time above the 25,000-crore mark. The total number of SIP folios also surpassed 10 crores, demonstrating Indian investors' growing preference for disciplined investing.

8. RBI ISSUES FRAMEWORK FOR FOREIGN INVESTMENTS: In collaboration with the government and SEBI, the Reserve Bank of India has introduced a framework allowing Foreign Portfolio Investment (FPI) holdings to be classified as Foreign Direct Investment (FDI) when they exceed a 10% threshold in a company. This measure aims to enhance the "Ease of Doing Business" for foreign investors and provides greater flexibility for FPIs to pursue strategic, long-term engagements with Indian companies. This move comes amid a period of high FPI sales in the Indian equity market, with Rs 94,000 crores sold in October 2024.

1. GOVERNMENT PROPOSES MERGING OF REGIONAL RURAL BANKS: The Indian government has proposed the merging of Regional Rural Banks (RRBs) to reduce their numbers from 43 to 28. This initiative could help these banks cut costs and strengthen their capital base. RRBs provide credit to small farmers, agricultural laborers, and small businesses in rural areas, but have faced challenges due to inadequate access to capital and technology. Collectively, these banks hold a deposit base of Rs 6.6 trillion and advances of Rs 4.7 trillion as of March 31, 2024. The planned merger would result in one RRB in each state.

2. BANKS SEEK INTEGRATION WITH RBI PLATFORM TO MONITOR LRS LIMITS: Banks have approached the RBI, seeking integration with the Centralized Information Management System (CIMS) platform to enable real-time verification of limit utilization under the Liberal Remittance Scheme (LRS). Under the LRS, Indian citizens can remit up to $2,50,000 per financial year for various permissible transactions. This integration could also expedite the inclusion of international credit card spending under LRS regulations.

3. RISE IN DELINQUENCIES, BANKS TO GO SLOW ON ISSUING CREDIT CARDS: Rising delinquencies in credit card receivables have led banks to exercise caution in expanding their subscriber base during the festive season. RBI data shows the pace of new credit card issuance slowed to 620,000 in September from 920,000 in August, marking a 64% decline from the previous year. Experts suggest that new card additions will continue to slow as lenders remain cautious due to RBI's risk weight norms for the unsecured segment.

4. PSU BANKS AND FINANCIAL INSTITUTIONS MONETISE Rs 4.5 CRORES THROUGH SCRAP DISPOSAL: Public Sector Banks (PSBs) and other financial institutions have realized Rs 4.5 crores through scrap disposal during a one-month campaign focused on minimizing pendency and institutionalizing "Swachhata" from October 2 to October 31. The Department of Financial Services (DFS) launched the Special Campaign, emphasizing better space management and customer-centric initiatives.

5. PRIVATE BANKS PROVISIONING ON THE RISE DUE TO RISE IN MFI STRESS: Private banks have significantly increased provisions for loans granted to Microfinance Institutions (MFIs) amid rising stress in the sector. This aligns with RBI's directive for banks and NBFCs involved in microfinance lending to ensure that borrowers fully repay existing loans before availing of new ones. In Q2 of this fiscal year, banks like Kotak Mahindra Bank, IDFC First Bank, RBL Bank, and IndusInd Bank made substantial provisions for loans in this sector.

6. INCREASED COMPLIANCE FOR BANKS UNDER RBI'S REVISED MASTER DIRECTIONS ON FRAUD: The Reserve Bank of India's revised Master Direction on Fraud Risk Management, issued in July 2024, has introduced additional compliance challenges for banks. While the regulatory intent is to curb financial misconduct, these updated directives require banks to strengthen their fraud prevention and investigation systems, necessitating significant resource allocation.

7. RISE IN e-COMMERCE SHUTS 2 LAKH KIRANA STORES: The rapid expansion of quick e-commerce in India has led to the closure of approximately 2 lakh kirana stores across the country over the past year. This information comes from a report by the Association of Consumer Products Distributors Federation (AICPDF), which also notes that kirana store sales this festive season have stagnated. India currently has around 13 million kirana stores, with over 10 million located in tier-2 and smaller cities.

8. DIGITAL PAYMENTS' RISE LEADS TO SHUTTING OF ATMs: Indian banks are closing more ATMs despite record-high cash circulation. This trend is attributed to the growth in digital transactions and UPI payments, with the reduction primarily affecting off-site ATMs. This shift is driven by bank consolidation and the push towards digitalization, even as cash circulation remains at an all-time high.

1. NBFC GROWTH TO BE HIT DUE TO RISING UNSECURED LOAN STRESS: Unsecured loans like microfinance, personal loans, credit cards, and unsecured business loans will continue to be a source of stress for Non-Banking Finance Companies (NBFCs) this fiscal, as borrowers' repayment capacities are likely to be impacted by higher interest rates. Rising stress is expected to cause a slowdown in microfinance loan growth by 10 to 12% and a 19 to 21% slowdown in other unsecured loans. This is as per a report submitted by rating agency, ICRA. The report also notes that the stress may also extend to secured loans like small mortgages, vehicle loans, and other small-ticket secured loans.

2. MUDRA LOAN LIMIT DOUBLED TO Rs 20 LAKHS IN LINE WITH BUDGET ANNOUNCEMENT: As announced in the Union Budget for 2024-25, the limit of Mudra Loans under the Pradhan Mantri Mudra Yojana (PMMY) has been increased to Rs 20 lakhs from Rs 10 lakhs. This enhancement is specifically beneficial for upcoming entrepreneurs, facilitating their growth and expansion. This increase aims to further the overall objective of the Mudra Scheme, which is "Funding the Unfunded." The move aligns with the government’s commitment to fostering a robust entrepreneurial ecosystem.

3. IRDAI RAISES CONCERNS OVER HIGH AUTO COVER COMMISSIONS: The Insurance Regulatory & Development Authority of India (IRDAI), which recently held a meeting with top executives from non-life insurance companies, expressed concerns over high commission payouts to Motor Insurance Service Providers (MISPs) in the "motor own damage" segment. IRDAI presented data showing that commissions paid by insurers to MISPs for new private car insurance policies ranged from 25% to 57%. India's motor insurance, which accounts for 7.1% of the nation's GDP, has significantly boosted the growth of the sector.

4. BANKS TIGHTEN EXPENSES AS MARGINS AND PROFITABILITY COME UNDER PRESSURE: Indian banks are closely monitoring their expenses as margins and profitability face pressure from increased credit costs and higher slippages from the unsecured and microfinance loan book. Many private sector banks that have reported their September quarter earnings have recorded a slowdown in operating expenses by reducing staff strength and cutting IT and branch banking-related expenses.

5. TATAS TO ENTER QUICK COMMERCE SPACE WITH "NEU FLASH": Following Flipkart and Reliance Industries (RIL), the Tata group is the latest e-commerce player to enter the ultra-fast delivery market as demand continues to grow in metropolitan areas. The Tata group's e-commerce venture, Neu, is set to launch "Neu Flash" in the quick commerce segment, initially rolling it out to select users with offerings like groceries, electronics, and fashion. For grocery, Neu Flash will be powered by Big Basket, while Croma will handle electronics and Tata Cliq will manage fashion and lifestyle products.

6. RBI EXPECTS DAILY UPI TRANSACTIONS TO HIT A BILLION IN MONTHS: The Reserve Bank of India expects daily Unified Payments Interface (UPI) transactions to reach one billion in the next few months, doubling from the current 500 million transactions per day. In September, UPI processed 15.04 billion transactions, valued at Rs 20.64 lakh crore. RBI Governor Mr. Shaktikanta Das also mentioned that the RBI will not rush to announce a nationwide rollout of the Central Bank Digital Currency (CBDC). The RBI aims to conduct thorough trials and ensure the design, robustness, and security of the CBDC before considering broader implementation.

7. ALLIANZ LOOKS TO EXIT BAJAJ INSURANCE JOINT VENTURE: Bajaj Finserv has announced that its insurance joint venture partner, Allianz SE, is considering exiting their life and general insurance business. Allianz has informed Bajaj that, given its strategic priorities, it is actively exploring an exit from the life and general insurance joint ventures. Allianz holds a 26% stake in both Bajaj Allianz Life Insurance and Bajaj Allianz General Insurance, while Bajaj Finserv owns a 74% stake in both. Both companies are currently unlisted.

1. BANKS PREPARE FOR HIGHER OUTFLOW RATES ON RETAIL DEPOSITS AHEAD OF REVISED LIQUIDITY COVERAGE RATIO RULES: Commercial banks have started applying higher outflow rates on retail deposits in preparation for the upcoming revisions to the Liquidity Coverage Ratio (LCR) rules, which require them to purchase more high-quality liquid assets. The RBI is set to issue revised LCR rules to mitigate the risk emanating from mass withdrawals of deposits. Although the RBI has not yet issued the new LCR guidelines, banks said that they are likely to be implemented from April 1, 2025.

2. BUSINESS OPERATIONS OF NBFCs & MFIs TO TAKE A HIT AFTER RBI DIKTAT ON FOUR NBFCs: The Reserve Bank of India diktat barring business operations of four NBFC lenders will have a significant impact on mid and small-sized NBFCs and MFIs, particularly those focused on small-ticket unsecured loans. The NBFCs, which are already grappling with constrained funding, could see a further slowing down of business. RBI, which has been continuously flagging the buildup of risks in the unsecured segment, has said that the delinquency levels among borrowers with loans below Rs 50,000 were extremely high. The RBI has banned four NBFCs from sanctioning and disbursing new loans as they have been charging excessive interest rates.

3. KOTAK MAHINDRA BANK TO BUY STANDARD CHARTERED BANK'S Rs. 4,100 CRORE PERSONAL LOAN BOOK: Kotak Mahindra Bank Ltd has announced that it has entered into an agreement to acquire the personal loan book of Standard Chartered Bank Ltd to the tune of Rs 4,100 crore. The proposed takeover of the loan book consists of loans classified as Standard loans as per RBI guidelines. The transaction is expected to be completed over the next three months. The acquisition aligns with Kotak bank's strategy to transform for scale and focus on customer-centric growth.

4. HDFC BANK BRACES FOR SLOWER CREDIT GROWTH THIS YEAR: HDFC Bank's credit growth is expected to be slower than the overall banking sector growth rate in the current financial year. The bank's MD and CEO, Mr. Sashidhar Jagadishan, explained that in FY25, they would grow slower than the system, but they may align with the system's growth rate in FY26, and in FY27, they should surpass the industry level growth rate. The bank aims to grow its credit at a slower pace to match its deposit growth, focusing on profitable growth without sacrificing asset quality, and reducing its elevated Credit-Deposit (CD) ratio.

5. IRDAI ISSUES ADVISORY TO ALL INSURANCE COMPANIES TO CHECK THEIR IT VULNERABILITIES: Following data leaks from insurance companies, the Insurance Regulatory & Development Authority of India (IRDAI) has issued an advisory to all insurance companies asking them to check their Information Technology (IT) systems for vulnerabilities and take steps to protect policyholders' data. Recently, there was a data breach at Star Health & Allied Insurance Company's servers, and reportedly sensitive data of 31 million customers was put up for sale on a messaging platform.

6. STRESS IN MFI SECTOR LARGELY DUE TO CUSTOMER OVERLEVERAGING: The current stress in the Microfinance (MFI) sector is largely due to unchecked credit growth and the issuance of multiple loans to customers on fake voter ID cards and other documents, which has resulted in significant overleveraging among borrowers. This was reported by Motilal Oswal in one of their reports. Additionally, the report states that the stress in the MFI sector in this current year will persist throughout FY25, with signs of normalization only expected by the onset of FY26.

7. PRIVATE BANKS LEADING IN ARTIFICIAL INTELLIGENCE ADOPTION: A study by the RBI has revealed that private sector banks in India are leading in the adoption of Artificial Intelligence (AI) in areas such as fraud detection, customer segmentation, and chat automation. The asset size and the capital adequacy ratio are influencing the rate of AI adoption. Private banks, being more financially aware and catering to more affluent customers, see higher potential for leveraging AI-based solutions.

8. GROWING AI USE RAISES CYBER ATTACK RISKS: The Reserve Bank of India Governor, Mr. Shaktikanta Das, has warned banks that a growing reliance on Artificial Intelligence raises the risks of cyberattacks and data breaches, potentially threatening the country's financial stability. He noted that while technological advancements like AI and Machine Learning have opened new avenues for business and profit expansion for financial institutions, these technologies also pose risks to financial stability.

1. BANKS PITCH HIGHER DEPOSIT COVER FOR SENIOR CITIZENS: Banks have approached the Reserve Bank of India for a higher deposit insurance cover for senior citizens while seeking relief in premium payments for guaranteeing other retail deposits. Under the existing provisions, deposit insurance coverage by DICGC is uniformly set at Rs 5 lakhs per depositor per insured bank. The Deposit Insurance & Credit Guarantee Corporation (DICGC) is a wholly owned subsidiary of the RBI, which insures deposits across the banking system.

2. BANK MARGINS LIKELY TO REMAIN UNDER PRESSURE IN Q2 OF THIS FINANCIAL YEAR AMID RISING DEPOSIT COSTS: Increased cost of deposits is likely to keep bank margins under pressure in the second quarter of this fiscal. Slippages may also rise as banks tighten their risk weights in unsecured loans. Limited loan yield expansion has already contracted incremental spreads by 8 basis points for private sector banks, and the same remains flat for public sector banks.

3. PROFITABILITY OF SMALL FINANCE BANKS EXPECTED TO DECLINE IN FY25: As per a report by credit rating company CRISIL, the profitability of Small Finance Banks (SFBs), measured in terms of Return on Assets (RoA), will moderate around 40 basis points to about 1.7% this fiscal from 2.1% in the last financial year. This will be due to the lower Net Interest Margins (NIM) and higher credit costs. However, the report further said that the RoA of SFBs will still be higher than that of the overall banking system by 50-60 basis points, on account of the relatively higher yielding nature of their loan book.

4. JIOFINANCE APP LAUNCHED: After receiving feedback to make improvements, Reliance's financial services arm, Jio Finance, has announced the launch of the new JioFinance App, which will be available for users on Google Play Store, Apple App Store, and My.Jio. The new app will have an array of financial products and services added since the beta launch, including loans on mutual funds, home loans, and loans against property. Using the app will offer substantial savings for customers.

5. BANKS COMPLAIN e-CROOKS USING THEIR NAMES TO DUPE CUSTOMERS: Banks have raised concerns with the government over fraudulent entities impersonating them and using their names in text messages to dupe customers. The banks have urged the Finance Ministry to take up the issue with the telecom regulator and telcos to prevent unauthorized third parties from using the names of banks in message templates.

6. NUMBER OF STARTUPS LAUNCHED IN 2024 DOWN BY 65% YEAR-ON-YEAR: The number of Indian tech startups launched in 2024 has declined nearly 65% as compared to last year. While there has been a declining trend for startup launches since 2021, this is the sharpest year-on-year drop over the past 10 years. This is according to data provided by market intelligence firm Tracxn. Experts say that this is a combination of risk aversion among both investors and potential entrepreneurs, and the lack of a strong niche for innovation. The number of tech startups founded yearly in India peaked in 2020 with around 17,400 launches.

7. SBI AIMS TO BECOME FIRST FINANCIAL FIRM TO CROSS MILESTONE OF Rs 1 LAKH CRORE PROFIT: State Bank of India is aiming to become the first Indian financial firm to cross a milestone of Rs 1 lakh crore net profit in the next three years. SBI recorded a standalone net profit of Rs 61,077 crore in FY24, registering a growth of 21.59%. SBI Chairman, Mr. C S Setty, said that the bank has the potential to reach the milestone within the next three years.

1. CCI CLEARS JM FINANCIAL'S 43% STAKE BUY IN JM FINANCIAL CREDIT SOLUTIONS: The Competition Commission of India (CCI) has cleared JM Financial's proposed acquisition of a 43% stake in JM Financial Credit Solutions Ltd. This company is a non-deposit taking NBFC focused on wholesale lending, particularly in real estate and corporate financing. It is a subsidiary of JM Financial Co Ltd.

2. ICICI BANK PARTNERS WITH PhonePe TO OFFER INSTANT CREDIT ON UPI: ICICI Bank has partnered with PhonePe to offer instant credit on UPI to pre-approved customers. This collaboration enables ICICI Bank's pre-approved customers to activate a short-term credit line instantly through the PhonePe app, offering up to Rs 2 lakhs with a 45-day repayment period.

3. CREDIT GROWTH CONTINUES TO OUTPACE DEPOSIT FOR PSU BANKS: Public sector banks (PSBs) reported higher credit growth compared to deposit growth for the quarter ended September 2024. Banks like Bank of India, Union Bank, and Indian Bank posted year-on-year credit growth between 10-14%, while deposit growth remained at 8-10%. SBI reported 13.4% credit growth and 10.4% deposit growth. Despite slower deposit growth, SBI Chairman Dinesh Khara expressed confidence in the bank's asset growth.

4. SECURITISATION VOLUMES LIKELY TO TOUCH Rs.60,000 CRORES IN FY-25: Securitisation volumes of standard assets are expected to reach Rs 60,000 crores in Q2 of FY-25, showing a 36% quarterly growth and 315% year-on-year growth, according to a report by ICRA. Private banks are driving this trend by selling down portfolios to improve their credit-to-deposit ratios amidst slower deposit growth.

5. MTNL IS NOW AN NPA IN SBI'S BOOKS: Mahanagar Telephone Nigam Ltd (MTNL) has been declared a Non-Performing Asset (NPA) by SBI, with an overdue amount of Rs 281.62 crores out of a total outstanding loan of Rs 325.53 crores at the end of September 2024. Previously, PNB and other PSBs had downgraded MTNL's loan account to NPA.

6. RBI GRANTS WHITE-LABEL ATM LICENCE TO MUMBAI BASED EPS: The RBI has granted a white-label ATM licence to Electronic Payment & Services (EPS), the first such approval in a decade. EPS will be the fifth white-label ATM operator in India, joining Tata Communications Payment Solutions, India Payments, Hitachi Payment, and Vakrangee.

7. FOR THE FIRST TIME, INDIA'S FOREIGN EXCHANGE RESERVES SURGE PAST $700 BILLION MARK: India's foreign exchange reserves crossed the $700 billion mark for the first time, driven by a $12.6 billion increase over seven consecutive weeks. India is now the fourth country, after China, Japan, and Switzerland, to achieve this milestone.

8. BANKS' GROUP ENTITIES CANNOT BE USED TO CIRCUMVENT GUIDELINES: The RBI has proposed barring banks from using group entities to circumvent regulations. The draft circular on "Forms of Business & Prudential Regulations for Investments" released on October 4, 2024, suggests that banks will need to seek RBI approval before undertaking new business activities through group entities, other than those already permitted.

1. GROSS NPAs TO IMPROVE TO LOWEST IN TEN YEARS: CRISIL Ratings Agency has reported that the Gross Non-Performing Assets (GNPAs) ratio is set to improve to an all-time low in the last ten years to 2.5% in FY-24-25. However, it flagged concerns over unsecured exposures like personal loans and credit cards, as well as Microfinance (MFI) loans, which are witnessing a surge in stress. Credit growth is expected to moderate to 14% in FY25 compared to 16% in FY24, driven by lower economic growth expected at 6.8%.

2. UPI TRANSACTIONS CLOCK MORE THAN Rs 20 LAKH CRORES FOR 5 CONSECUTIVE MONTHS: India's most-used retail payments platform, Unified Payments Interface (UPI), continued its strong upward trajectory in September, surpassing Rs 20 lakh crores in transaction value for the fifth consecutive month. The platform recorded a transaction volume of more than 1,500 crores in September, according to NPCI data. Compared to September 2023, transaction count grew by 42% and transaction value by 31% this year.

3. RBI FLAGS IRREGULARITIES IN GOLD LOAN PRACTICES: The Reserve Bank of India (RBI) has uncovered significant irregularities in the processing of loans against gold jewellery. Following a recent review and on-site inspections, the RBI identified deficiencies and has asked financial institutions to review their processes and practices to address regulatory lapses. The RBI warned that non-compliance with its guidelines will be viewed seriously, attracting strict penalties, including supervisory actions.

4. NBFCs TAP ALTERNATIVE FUNDING SOURCES AS LOANS FROM BANKS BECOME SLOW: With bank loans becoming increasingly difficult to access, Non-Banking Finance Companies (NBFCs) are turning to alternative funding sources like Non-Convertible Debentures (NCDs), Commercial Papers (CPs), Foreign Currency Borrowings (FCBs), and securitisation. This shift comes after risk weights on bank lending to higher-rated NBFCs were raised last year, creating challenges in obtaining bank finance.

5. NPCI TO DEVELOP UPI-LIKE PLATFORM IN TRINIDAD AND TOBAGO: NPCI International Payments Ltd (NIPL) has entered into a strategic partnership with the Ministry of Digital Transformation (MDT) of Trinidad and Tobago to develop a real-time payment platform similar to India's Unified Payments Interface (UPI). This marks Trinidad & Tobago as the first Caribbean nation to adopt a UPI-like system, aiming to modernise its financial ecosystem.

6. CREDITORS TO HAVE INTERIM AIDE DURING INSOLVENCY TALKS: To ensure better representation of certain creditor classes, such as home buyers, during the Corporate Insolvency Resolution Process (CIRP), a new provision has been introduced allowing creditors to use the services of an Interim Representative (IR). The IR will act as a representative during committee deliberations. Experts believe this move will help reduce delays in insolvency resolution and promote transparency.

7. DIGITAL LENDERS' LOAN DISBURSAL RISE BY 27% IN THE FIRST QUARTER OF FY-25: Loans disbursed by digital lenders have risen by 27% to Rs 37,676 crores, according to the Fintech Association for Consumer Empowerment (FACE). However, this figure represents a 5% decline compared to the last quarter of the previous financial year, with half of the fintech companies reporting a drop in disbursements due to seasonal trends.

8. BANKS STRUGGLE TO MOBILISE LARGE DEPOSITS, C-D RATIO RISES TO 80%: Banks have struggled to mobilise large deposits to meet growing credit demand over the last two financial years. Outstanding credit disbursed by Scheduled Commercial Banks reached Rs 1,64,006 crores in 2023-24. The Credit-to-Deposit (C-D) ratio rose from 75.8% to 80.3% during this period, with credit growth outpacing deposit growth between FY19 and FY24.

9. RBI ASKS SMALL FINANCE BANK DIRECTORS TO ENSURE BUSINESS SUSTAINABILITY: The RBI has urged directors on the boards of Small Finance Banks (SFBs) to address emerging operational risks, especially in the area of cybersecurity, to ensure business sustainability. Directors are asked to identify and mitigate risks while strengthening cybersecurity measures to safeguard their business models.

1. INDIAN BANKS TO RELY ON CERTIFICATE OF DEPOSITS TO FUND YEAR-END CREDIT DEMAND: Indian Banks are likely to issue more Certificate of Deposits (CDs) to meet the year-end demand for loans as deposit mobilisation is becoming a challenging task. With the bulk deposit space becoming more competitive and expensive, banks will be looking to issue more CDs to meet the rising credit demand. Certificate of Deposits (CDs) are debt instruments with maturities of less than a year issued by banks. The outstanding CDs rose to a record high of Rs 5.15 trillion at the end of August'24. Since then banks have issued more than Rs 1 trillion in CDs.

2. SHARE OF BORROWERS RATED AS PRIME+ ON THE RISE: Data provided by credit bureau TransUnion CIBIL shows that the share of borrowers rated as prime+ is on the rise, indicating an improvement in India's credit culture. The share of prime and higher-rated borrowers—those with a credit score above 731—has increased from 51% in June'22 to 55% in June'24, while the share of subprime borrowers (credit score between 300 to 681) has decreased from 0.22% to 0.21% in the same period.

3. INSURANCE OMBUDSMEN SHORT STAFFED: The insurance ombudsman system is seeing a rise in complaints, especially in the health insurance segment, which accounts for more than two-thirds of the grievances. However, the system faces challenges due to a shortage of staff in the ombudsmen department, with three positions currently vacant and seven more retirements expected by October 2024. During the 2023-24 fiscal, 17 insurance ombudsmen centres received 52,575 complaints, of which 49,705 were resolved. However, 7,204 complaints remained unresolved as of April 1, 2024.

4. PSBs TO PITCH IN FOR FASTER SETTLEMENT OF UNCLAIMED DEPOSITS: Public Sector Banks (PSBs) are set to propose measures to the RBI to fast-track the return of unclaimed deposits. Banks will conduct a detailed analysis to identify factors contributing to the accumulation of unclaimed deposits and devise tech-based solutions to address the issue. Banks must transfer unclaimed deposits dormant for 10 years or more to the Depositor Education & Awareness (DEA) Fund, which held Rs 78,213 crores as of March 2024.

5. FINANCE MINISTRY SETS Rs 27.5 LAKH CRORE TARGET FOR AGRICULTURE CREDIT IN FY-25: The government has set an agriculture credit disbursement target of Rs 27.5 lakh crores for the current fiscal, 11% higher than the previous fiscal. The finance ministry has asked banks to align credit approvals with the Gross-Value Added (GVA) of crops for respective states to address regional imbalances in loan availability for farmers. Banks are already following District-wise potential-linked credit plans to boost the flow of bank credit to the priority sector.

6. RBI'S PROPOSED LCR NORMS WILL CURTAIL BANKS' LENDING TO NBFCs: The RBI's draft guidelines on the Liquidity Coverage Ratio (LCR) under Basel-III norms, set to take effect in April 2025, are likely to make it harder for low-rated NBFCs to access cheaper credit from banks. The draft guidelines are expected to skew bank lending towards NBFCs with AAA or AA ratings, making it more difficult for smaller NBFCs. Under the LCR norms, banks will be required to assign an additional 5% run-off factor for retail deposits with internet and mobile banking facilities.

7. FINANCE MINISTRY NOTIFIES DIRECT TAX VIVAD SE VISHWAS SCHEME 2024: The Finance Ministry has notified the Direct Tax Vivad Se Vishwas Scheme 2024, effective from October 1, 2024. The scheme allows taxpayers to settle appeals, writ petitions, and special leave petitions pending in the Supreme Court, High Courts, and appellate tribunals before the cutoff date of July 22, 2024.

8. THE GAP IN CREDIT-DEPOSIT GROWTH SHRINKING BUT CHALLENGES REMAIN: According to the "State of the Economy" report by the RBI, the gap between credit and deposit growth in banks, a major concern for the past two years, is finally narrowing. As of September 6, 2024, the gap had shrunk to just over 200 basis points (bps), down from over 700 bps at the start of 2024. Loan growth in banks has moderated to 13.3%, while deposit growth has climbed to over 11%.

9. THREE OUT OF FOUR USERS WILL LEAVE UPI IF TRANSACTION FEE IS LEVIED: A survey conducted by research agency Local Circles found that the majority of users would stop using the Unified Payments Interface (UPI) if transaction fees were introduced. Around 75% of UPI users indicated they would cease using the service if any fees were levied on transactions.

1. RETAIL USERS POWER-UP e-RUPEE TRANSACTIONS: The Central Bank Digital Currency (CBDC), or e-Rupee, is gaining popularity among retail users, with the RBI widening the scope of participation. e-Rupee worth Rs 234.12 crores was in circulation as of March 2024 compared to Rs 16.3 crores a year ago. The rise in CBDC may be because the RBI has allowed interoperability between CBDC and Unified Payments Interface, and also, some banks are pushing CBDC wallets among their employees. Almost the entire circulation of CBDC is in the retail sector.

2. HDFC BANK EYES FINTECH TIE-UPS TO CO-CREATE SOLUTIONS: HDFC Bank is exploring multiple fintech partnerships to co-create tech solutions for loan products, payments, customer service, liabilities, small business banking, and supply chain financing to scale its business across categories. Fintechs bring a significant amount of value in modular thought processes, enabling simple digital journeys and quicker turnaround times. HDFC Bank's two successful platforms – PayzApp and Vyapar – were created by fintechs Zeta and Mintoak.

3. FIXED DEPOSITS GROWTH OUTPACES SAVINGS DEPOSITS GROWTH FOR LAST TWO YEARS: Growth in banks' fixed deposits (term deposits), which are much costlier than demand deposits, has outpaced savings bank deposit growth for the past two years. This has pushed banks' cost of funds up and put pressure on their net interest margin. Savings bank deposit rates range between 2.7% to 3%, while term deposit rates for one-year tenures remain over 6% to 7.25%. Term deposits mobilized by the banking sector jumped 18.64% to Rs 116 lakh crores compared to a year ago, while savings bank deposits grew by 6% to Rs 63 lakh crores.

4. HDFC BANK FOCUSES ON ESG-COMPLIANT RISK ASSESSMENT: HDFC Bank has adopted risk assessment practices based on Environmental, Social, and Governance (ESG) frameworks for Wholesale banking loans, as it aims to set up sustainable finance efforts and promote responsible lending. Loans in excess of Rs 100 crores are subject to the Bank's ESG Risk Management Framework for lending, where a detailed E&S (Environmental & Social) assessment is undertaken. Loans up to Rs 50 crores are subject to an abridged E&S due diligence.

5. BANKS CHASE QUICK PROFITS BY SELLING IPO SHARES FIRST: Amid a booming Initial Public Offer (IPO) market, banks are pursuing short-term gains by offloading their allotted shares within the first week of listing. A recent market report from SEBI revealed that 80% of banks offload the allotted shares within a week's time of listing. The report showed that between April 2021 and December 2023, 75% of IPOs delivered positive returns on the listing day, with around 26 IPOs delivering more than 50% returns on Day 1. Banks' strategy of quickly selling shares appears to be profit-driven.

6. BANKS RAISE Rs 50 THOUSAND CRORES VIA INFRA BONDS SO FAR IN FY25: Banks have raised more than Rs 50,000 crores in the first five months of the current financial year by issuing infrastructure bonds, as deposit growth has remained sluggish amid firm credit growth. SBI, Bank of Baroda, ICICI Bank, Canara Bank, Bank of Maharashtra, and Indian Bank have collectively raised Rs 53,811 crores in the current fiscal to finance long-term development projects. With challenges in mobilizing deposits, raising funds via infrastructure bonds has proven to be a more cost-effective solution for banks.

7. YES BANK STAKE SALE HITS RBI ROADBLOCK: The proposed stake sale of Yes Bank has hit a regulatory roadblock, as the RBI is not comfortable giving a majority stake to a foreign financial institution. Earlier reports had suggested the bank's stake sale would be finalized in the last quarter of FY25. Japanese lender Sumitomo Mitsui Banking Corp (SMBC) and Dubai-based Emirates NBD have shown keen interest in acquiring a majority stake of over 51% in Yes Bank. Due to this stand-off, SBI has yet to take up the stake sale proposal, as there is no clarity on the timeline.

8. BIGGER DISCLOSURE BLOW LIKELY TO FINTECHS, CREDIT CARD FIRMS: Costs for credit card companies, payment aggregators, and fintech firms are likely to rise as the global Financial Action Task Force (FATF) plans to increase disclosure requirements, particularly for cross-border transactions. The FATF, of which India is a member, aims to enforce the new set of norms to aid investigative agencies with real-time information about senders and receivers of funds via these channels. The initiative is intended to bolster the fight against money laundering and terror funding.

1. ASSETS OF MF INDUSTRY TOUCH 65 LAKH CRORES FOR THE FIRST TIME: The Asset Under Management (AUM) of the mutual funds hit an all-time high of Rs 65 lakh crores for the first time in August 2024. The net AUM at the end of August 2024 stood at Rs 66.70 lakh crores. Open-ended equity mutual fund inflows rose by 3.03% in August 2024 to touch the magic figure of Rs 38,239 crores on account of heavy demand for small and mid-cap funds. The inflows in open-ended equity funds have remained in the positive zone for the 42nd month in a row, as every month there is growth in these funds. The inflows via Systematic Investment Plans (SIPs) continue to grow every month, hitting a new high of Rs 23,547 crores in August 2024.

2. MSME LOAN PORTFOLIO EXPANDS 17.8%: The Micro, Small & Medium Enterprises (MSMEs) loan portfolio witnessed a 17.8% growth, reaching Rs 64.1 trillion by March 2024, compared to the same period last year. This is according to the fourth edition of CRIF High Mark's "How India Lends" report. The report, accessed by the Financial Express, highlighted that MSME loans encompass credit provided to entities with an overall credit exposure of up to Rs 50 crores, as well as self-employed individuals.

3. BANKS TO SET UP A UNIFIED RECOVERY INTERFACE TO ENHANCE RECOVERY EFFICIENCY: Eying benefits from digital banking, banks are now looking at building a Unified Recovery Interface (URI) to enhance efficiency, reduce costs, and secure good prices for properties of defaulters. This will be managed by PSB Alliance Ltd, a company set up by all Public Sector Banks. URI will provide comfort to banks by ensuring that the recovery process runs efficiently when they lend money. PSB Alliance currently manages the e-auction portal EBKRAY, which serves as a platform for lenders to sell properties mortgaged for unpaid loans.

4. CCI APPROVES TATA MOTORS FINANCE MERGER WITH TATA CAPITAL: The Competition Commission of India (CCI) has approved the merger of Tata Motor Finance with Tata Capital. The merger, announced in June, will see Tata Capital issue its equity shares to the shareholders of Tata Motor Finance, effectively holding a 4.7% stake in the merged entity. The transaction aligns with Tata Motors' stated objective of exiting non-core businesses and focusing its capital spends on emerging technologies and products.

5. LIC OUTPERFORMS PRIVATE PEERS IN NEW PREMIUM MOP-UP: The life insurance industry saw a robust rise in new business income in August, driven primarily by strong growth from LIC of India, which outpaced its private sector peers in Annualized Premium Equivalent (APE) growth. The industry collected Rs 32,644 crores in total premiums in August, an expansion of 22% compared to August 2023. In terms of APE, the private sector saw a 9% growth in premiums, reaching Rs 7,715 crores, whereas LIC of India reported a 13% growth.

6. RBI REJECTS CANARA BANK'S CREDIT CARD SUBSIDIARY PLAN: The Reserve Bank of India has rejected Canara Bank's proposal to set up a credit card subsidiary, which the government-owned lender believed would give a boost to its fledgling card business. Currently, Canara Bank issues credit cards on its own. The RBI is not in favor of granting an NBFC license to a Public Sector Bank. Interestingly, SBI and Bank of Baroda already have separate subsidiaries called SBI Cards and BOB Cards, respectively.

7. UNION BANK OF INDIA BECOMES FIRST MAJOR INDIAN BANK TO SIGN PCAF: Union Bank of India has announced its decision to become a signatory to the Partnership for Carbon Accounting Financials (PCAF). This step aligns with the growing global emphasis on climate risk management and the recent draft guidelines issued by RBI on climate risk disclosures. PCAF is a global partnership of financial institutions working to develop and implement a harmonized approach to assess and disclose greenhouse gas emissions associated with loans and investments. Financial emissions represent the indirect emissions resulting from a bank's lending and investment activities.

8. FINTECHS CAPTURE 52% MARKET SHARE IN PERSONAL LOANS: Fintech companies have captured a 52% market share in the personal loan segment, according to a report released by Experian India. The report noted that fintechs have facilitated over Rs 2.48 trillion in personal loans and Rs 28,607 crores in business loans as of March 2024, mostly in amounts under Rs 50,000. These loans have primarily been extended to New-to-Credit individuals. Fintech firms could potentially double their customer base to 200 million within the next 2-3 years if they continue to innovate and overcome current challenges in recoveries.

1. AU SMALL FINANCE BANK SUBMITS APPLICATION TO RBI FOR VOLUNTARY TRANSITION TO UNIVERSAL BANK: AU Small Finance Bank Ltd has formally made an application to RBI for transition to a universal bank. Transition to a universal bank would mean that AU Bank has to follow easier regulatory norms in certain aspects—its capital adequacy requirement would come down to around 11.5% from 15%. The priority sector lending norm would be lower at 40% instead of 75%, and the stipulation of having at least 50% of the loan portfolio in loans less than Rs 25 lakhs would no longer exist. As per RBI norms, profitable and listed small banks with a minimum of Rs 1000 crore net worth and gross NPA of less than 3% for the last two years are eligible to seek a transition to a universal bank. Only two banks—AU Bank and Ujjivan Small Finance Bank—are eligible as per the norms.

2. PERSONAL LOANS GROW BY 14%, CARDS AND GOLD LOANS SURGE AHEAD: According to RBI data on bank credit, personal loans grew by 14.4%, reaching nearly Rs 55.3 lakh crores. Credit to agriculture and allied activities also saw an 18.1% increase, totaling Rs 21.6 lakh crores. As of July end, credit card dues emerged as the fastest-growing sector, increasing 22% year-on-year to nearly Rs 2.8 lakh crores. However, loans against gold jewelry grew the fastest within the personal loans sector, rising by 39%.

3. SBI CHIEF SAYS BANKS LACK SKILLS TO LEND TO NEW SECTORS: SBI Chairman Mr. C. S. Shetty recently discussed the challenges faced by banks in lending to emerging sectors such as green energy and battery storage. He said despite years of infrastructure financing experience, banks are still lacking expertise in these new areas. He mentioned that past corporate lending excesses, which led to a surge in NPAs, have pushed the banks towards personal loans. He mooted the idea of establishing a center of excellence focused on these new areas, in collaboration with multilateral development banks and large MNC banks.

4. NBFCs EDUCATION LOAN AUM TO CROSS Rs 60,000 CRORES: Non-Banking Finance Companies (NBFCs) education loan Assets Under Management (AUM) rose to around Rs 43,000 crores as of March 31, 2024. This is after a growth of over 80% and 70% in fiscals 2023 and 2024, respectively. Their AUM in this sector is expected to further grow at a healthy rate of 40-50% to Rs 60,000 crores in this fiscal year. On the asset quality front, it should remain stable despite specific concerns, as stated by CRISIL rating agency.

5. UPI SET TO EXPAND REACH ACROSS NATIONS: The RBI Governor Mr. Shaktikanta Das expressed optimism about the Unified Payment Interface (UPI) expanding its reach into more nations. He said that UPI is already present in many countries and that negotiations are in progress with many other countries. The RuPay card payments through the UPI network are already present in Bhutan, Nepal, Sri Lanka, Singapore, UAE, Mauritius, Namibia, Peru, and France.

6. FOREX RESERVES RISE BY $7 BILLION TO HIT RECORD HIGH OF $681.9 BILLION: India's Forex Reserves jumped by $7.023 billion to touch a new high of $681.688 billion in the week ended August 23, 2024. The overall reserves had jumped by $4.546 billion to $674.664 billion in the previous reporting week. The gold reserves increased by $893 million to $60.997 billion. India's reserve position with IMF was up by $4.68 billion.

7. INDIAN BANKS' ASSOCIATION TO SEEK EASING OF PROPOSED NORMS FOR RETAIL DEPOSITS: The Indian Banks' Association is likely to ask the RBI to reduce the amount of additional funds lenders need to set aside against some retail deposits and also seek a delayed and gradual implementation of the proposal. The RBI in July has proposed an additional 5% "runoff" requirement on retail deposits enabled with internet and mobile banking facilities to bolster the liquidity resilience of banks. IBA might suggest a gradual increase of 2 to 3% as 5% is not feasible.

8. BANKS READY A LIST OF 3,000 ENTITIES INVOLVED IN FRAUDULENT PRACTICES: Banks have drawn up a long list of around 3,000 entities involved in fraud that they will share and update on a real-time basis amid a spike in banking frauds. The list includes lawyers, builders, and gold loan appraisers, among others, colluding to secure loans through fraudulent means. The list is likely to be expanded as banks comply with the latest guidelines on fraud classification issued by the Reserve Bank of India on July 15.

1. PMJDY HAS CHANGED THE WAY BANKS AND FINANCIAL INSTITUTIONS OPERATE: The Pradhan Mantri Jan Dhan Yojana (PMJDY) has transformed India's financial landscape in the decade since its launch in August 2014. This scheme has brought millions of unbanked citizens into the fold of formal banking, making financial inclusion a reality for all. Offering a combination of basic free-of-cost bank accounts, with no requirement of minimum balance and no other charges, a free-of-cost RuPay debit card with in-built accident insurance of Rs 2 lakhs, and the availability of a Rs 10,000/- overdraft, the scheme has ensured universal access to banking facilities.

2. OVER 40% CONSUMERS USE DIGITAL PAYMENT EVERY DAY IN TIER 3-6 CITIES: More than 40% of consumers in Tier 3 to Tier 6 cities use digital payment on a daily basis. This is as per a report by Chase India on the State of Digital Payments in India. The report also identifies the key challenges faced by merchants and consumers in the adoption of digital payment services at the grassroots level. According to the report, nearly half of the merchants who are not using digital payments in rural India are unaware of the services, but in contrast, a staggering 94% of the consumers who are not using digital payments are aware of the services but still cannot use it as they face issues like no internet and limited knowledge of services.

3. HEATWAVE & ELECTIONS CAUSE A SEQUENTIAL SQUEEZE IN INDIA'S MICROFINANCE SECTOR: The severe heatwave in North India and the two-month-long general election process have led to a sequential squeeze in the microfinance sector for the first time in 12 quarters with the sector's outstanding gross loan portfolio shrinking to Rs 4.33 lakh crores at the end of June '24. Funding constraints and overheating of credit in some areas have also dented the growth momentum. An overall deterioration in the recovery position has also been observed.

4. IRDAI URGES COMPANIES TO STRATEGISE AFFORDABLE INSURANCE WITH "INSURANCE FOR ALL": The Insurance Regulatory and Development Authority of India (IRDAI) has urged insurance companies to devise strategies for offering affordable insurance products to meet the "Insurance for All" goal by 2047. The initiative comes in response to the high premiums in health insurance, which are causing many senior citizens to opt out due to affordability issues. One suggestion was to widen distribution channels to make insurance more accessible, especially in underserved areas.

5. UNIFIED LENDING INTERFACE LAUNCHED BY RBI AS A PILOT PROJECT: The Reserve Bank of India (RBI) has launched the Unified Lending Interface (ULI), a new platform that the RBI is developing for frictionless credit. The project is in its pilot stage and will be launched nationwide soon. The technology is aimed at reducing the time taken for appraisal, especially for smaller borrowers in rural areas, and simplifying multiple technical integrations. This platform facilitates seamless and content-based flow of digital information, including even land records of various states.

6. MARKET REGULATOR SEBI TO RELEASE STRESS TEST FINDINGS ON EQUITY MUTUAL FUNDS: The Securities Exchange Board of India (SEBI) will soon publish the results of an industry-wide stress test conducted on equity mutual funds (MFs). The test assessed the large number of days required to meet large redemptions over a short period. There are indications that the preliminary findings are encouraging. But fund houses have started publishing their own stress test reports for small-cap schemes every fortnight since March amid concerns of frothy valuations.

7. B2C e-COMM FUNDING SOARS 200% TO $1.6 BILLION IN Q-1: Funding for B2C e-commerce startups soared by more than 200% quarter-on-quarter to reach $1.6 billion in Q-1 of this financial year. Analysts attribute this surge in fundraising by some of the bigger players such as Zepto during the June quarter, rapid digital adoption in tier-II and tier-III cities, and the widespread use of online payment systems. The widespread popularity of UPI and other online payment systems has played a pivotal role in this growth.

8. DECLINE IN LOAN TO DEPOSIT RATIOS IN BANKS IS BECAUSE OF LOWER MONEY CREATION BY RBI AND SUBSTANTIAL INCREASE IN BANK PROFITS: Nomura, a leading global financial services group, has reported that the decline in the loan-to-deposit ratio (LDR) within the banking system in India is due to the lower money creation by the RBI and higher profits accrued by Indian banks over the past two years. During the fiscal year 2023-24, cumulative net fresh money creation by RBI amounted to only Rs.0.6 trillion, in contrast to approximately Rs.20 trillion created in the three fiscal years preceding it (FY-20 to 22). This has resulted in a drop in money supply. Another crucial factor influencing the decline in LDR is the substantial increase in bank profits. The increase in profitability, which is a healthy sign, has led to a reduction in bank deposits as banks appropriate a larger portion of these profits, which is a deterrent factor for depositors.

1. BANK BORROWINGS CROSS Rs 9 LAKH CRORE MARK, BANKS FACE PRESSURE TO RAISE FUNDS: Banks' borrowings through market instruments crossed its highest levels, as persistently faster pace of credit growth compels banks to rely on other routes to raise funds. Data released by the RBI on a fortnightly basis showed that as on June 26, banks' borrowings were at 9.32 lakh crores, 20% higher than the borrowing figure as on April 5. Figures listed under the borrowings section for scheduled commercial banks in the fortnightly RBI data largely represent short-term funding routes.

2. DEPOSIT GROWTH IS TOP ISSUE FOR INDIAN BANKS: According to Shalini Warrior, retail business head at Federal Bank, deposit growth is the Indian banking sector's biggest challenge as customers choose from an increasingly diverse range of investment alternatives. Deposit growth has lagged strong demand for credit in India for several years now, prompting top officials and the Finance Ministry to weigh in. Failure to boost deposits means loan growth may need to be tempered down and corporates will have to look for other alternative opportunities to raise funds.

3. GOVERNMENT SIGHTS 100% FDI IN INSURANCE, WEIGHS OPTIONS TO SECURE POLITICAL CLEARANCE: The government is considering a proposal to raise the Foreign Direct Investment (FDI) limit in the insurance sector from the present 74% to 100%, but it will require political approval since amending the Insurance Act is necessary. The proposal aims to open up the sector to foreign investors, as the current cap of 74% is seen as restrictive. Additionally, there are discussions for easing other FDI regulations, including the requirement that certain top management positions must be held by Indians.

4. FINANCE MINISTER BATS FOR CRITICAL MULTILATERAL DEVELOPMENT BANKS REFORMS: India made a strong case for reforms in Multilateral Development Banks (MDBs) to allow them to mobilize additional funds to help developing countries meet their developmental needs and address global challenges. Finance Minister Nirmala Sitharaman, while addressing the third Voice of Global South Summit hosted by India, said that "it is critical that the financing requests made to MDBs are met with speed and agility. This will require reforms both at operational levels as well as identifying new sources of finance."

5. SMEs TURN TO CAPITAL MARKETS FOR FUNDING, RAISE Rs 11,000 CRORES: Small & Medium Enterprises (SMEs) are increasingly turning to capital markets for funding needs, with 780 SMEs listed on the NSE and BSE as of June 2024. These companies have raised approximately Rs 11,000 crores. The combined market capitalization of these SMEs now exceeds Rs 1.6 trillion. Mr. Shekhar Choudhary, Director of the Financial Markets Division, emphasized the vital role capital markets play in India's economic growth and development.

6. GOLD LOAN DEMAND RISES DESPITE CASH BASED DISBURSEMENT CURBS AND PRICE FLUCTUATION: The demand for gold loans grew more than 20% in June over May 2024, according to rating agency Crisil. Most banks and NBFCs have maintained an LTV of 60-65% despite the regulatory requirement of 75%, which gives them a cushion when gold prices fell after the import duty was lowered in the budget. NBFCs' gold loans account for 90% of the industry assets under management (AUM). Given their robust risk management practices, these NBFCs are well-placed to withstand adverse gold price fluctuations as seen in the past few weeks.

7. RBI TIGHTENS NORMS FOR P2P LENDING PLATFORMS: The Reserve Bank of India has tightened the rules for Peer-to-Peer (P2P) lending platforms, prohibiting them from taking any credit risk, offering credit enhancement, or providing guarantees. In the revised guidelines, the RBI said a P2P platform should not promote peer-to-peer lending as an investment product with features like tenure-linked assured minimum returns, liquidity options, etc. The RBI has observed violations of rules by some entities, prompting it to issue revised guidelines.

1. IREDA MAY SET UP AN ARM TO HELP FINANCE SMALL AND RETAIL CLIENTS: Indian Renewable Energy Development Agency Ltd (IREDA), the state-run shadow bank whose shares have risen four-fold since last year's listing, plans to form a subsidiary to help finance small businesses and retail customers seeking to set up rooftop solar and bioenergy projects or buy electric vehicles. IREDA sees this as an opportunity to ensure fund flow to those segments deprived of financing and expects its intervention to help develop the sector. But, IREDA being a project financing company, and catering to small businesses and retail customers would require a different mindset, system and process altogether.

2. INSOLVENCY BOARD MANDATES UNIQUE IDENTIFICATION NUMBER FOR VALUATION REPORTS: The Insolvency and Bankruptcy Board of India (IBBI) will provide a unique identification number for each valuation report prepared under the insolvency law to ensure authenticity. IBBI is the designated authority for registration, monitoring and development of valuers under the Companies Act, 2013. Presently, the Registered Valuers (RVs)/Register valuer Entity (RVE) submit the valuation report with or without mentioning any reference number which may pose potential issues concerning verification. To ensure authenticity and to have a unique reference number of the valuation reports, it has been decided to provide a Valuation Report Identification Number (VRIN) for each valuation.

3. SBI AIMS AT SELLING ITS YES BANK STAKE WORTH Rs 18,240 CRORES BY MARCH'25 END: The State bank of India aims to sell its stake in Yes bank to the tune of Rs 18,240 crores (24%) by the end of March 2025. Japanese lender Sumitomo Mitsui Banking Corporation and Dubai based Emirates NBD are in advanced talks to acquire a majority stake in Yes Bank. Both bidders are interested in acquiring a majority stake of 51% in Yes bank to get sizeable control of the bank's business. The RBI has verbally okayed the proposal and due diligence is on.

4. INDIA AND RUSSIA EYE DYNAMIC RUPEE-ROUBLE RATE, VOSTRO BALANCE TO BYPASS DOLLAR TRADE BARRIERS: India and Russia are exploring the idea of a dynamic reference rate to start a rupee-rouble market, along with allowing greater deployment of the rupee balance that has accumulated in course of trade between the two countries since the outbreak of Ukraine war. A reference or exchange rate is aimed at overcoming the dollar trade barriers raised by US Sanctions imposed on Russia in February 2022.

5. PSBs FALL BEHIND PRIVATE BANKS IN FY-24 HIRING: Private banks have surpassed Public Sector banks (PSBs) in expanding their workforce in Financial Year 2024. Top 6 private banks increased their workforce by 14%, adding nearly 74,000 employees, taking the total workforce to 6,10,000 at the end of march 2024. In contrast, top 6 PSBs saw a 2% decline in their employee count to 6,20,000 by the end of March 2024. Following the mergers of some PSBs 4 years ago, there has been a noticeable slowdown in hiring activity as banks have begun to optimize their existing human resources.

6. RBI TIGHTENS RULES FOR DEPOSIT TAKING HOUSING FINANCE COMPANIES: The Reserve bank of India has released revised rules for deposit-taking Housing Finance Companies (HFCs), requiring them to maintain 15% liquid assets against public deposits held by them in a phased manner. Earlier it was 13%. The new rule which will be applicable from January 1, 2025, is aimed at bringing these HFCs on par with Non-Banking Finance Companies (NBFCs).

7. EQUITY MUTUAL FUNDS ATTRACTED OVER 37 THOUSAND CRORES IN JULY 2024:Inflows in equity mutual funds (MFs) continued their strong momentum in July 2024, despite the market volatility triggered by the Union Budget. Active MFs received Rs 37,113 crores of inflow, the second largest inflows ever, after attracting Rs 40,608 crores in June 2024. Systematic Investment Plans (SIPs) contribution reached an all time high of Rs 23,332 crores, indicating continued financial discipline among retail investors. MFs have become an integral part of retail investors' financial strategies, helping them to build wealth systematically.

8. RBI RANKS 12th AMONG THE WORLD'S CENTRAL BANKS BY TOTAL ASSETS: Central banks play a critical role in the global financial system. They are responsible for managing a country's monetary policy, controlling inflation, regulating financial system and overseeing the stability of the currency. They also act as the lender of the last resort to commercial banks and other financial institutions during times of economic distress. According to the Sovereign Wealth Fund Institute (SWFI), the RBI ranks 12TH among the world's central banks by total assets. These assets typically include foreign exchange reserves, gold reserves, and government bonds.

1. RBI GOVERNOR TELLS LENDERS TO BE CAUTIOUS WHILE EXTENDING CONSUMPTION RELATED PERSONAL LOANS : The Reserve Bank of India governor Mr.Shaktikanta Das has once again flagged the heightened risks in the unsecured segment asking lenders to exercise caution while extending personal loans for consumption purposes. Mr. Das said that lenders should also look at post disbursal monitoring of such loans. He said that such loans call for careful assessment and calibration of underwriting standards as well as post sanction monitoring of such loans.

2. RBI MPC PROPSES STEPS TO SPEED UP CHEQUE CLEARNCE TO A FEW HOURS : The Reserve Bank of India led Monitory Policy Committee (MPC) has proposed several measures to speed up clearance of cheques to a few hours. The RBI Governor said that the cheques will be scanned, presented and passed in a few hours and on a continuous basis during business hours. The clearing cycle will reduce from the present T+1 day to a few hours. Detailed guidelines in this regard shall be issued soon by the RBI. Currently, the Cheque Truncation System (CTS) processes cheques with a clearing cycle of up to two working days.

3. INSURANCE COMPANIES GET Rs.2,000 CRORE GST NOTICES : GST authorities have sent notices to more than 20 general insurance companies with operations in special economic zones (SEZs), demanding about Rs.2,000 crores in unpaid GST over services provided to employees of industrial units at SEZs and their families. The tax is levied on exports and supplies to SEZs under Section 16 of the Integrated GST (IGST) Act. An investigation by the DGGI found that the insurers misused the provision by extending it to group medical insurance cover provided to the employees of SEZ units.

4. BORROWING COSTS SOFTEN AMID RISING SURPLUS LIQUIDITY IN BANKING SYSTEM : The borrowing costs in the economy have softened as there is surplus of liquidity in banking system which has brought down the rates on a host of debt instruments. The surplus liquidity has piled up to Rs.2.86 lakh crores as on August 5, 2024. Surplus liquidity conditions are measured on the basis of the quantum of funds absorbed by the RBI, or the amount of excess money that banks deploy with the RBI.

5. MFIs SEEK EASIER CREDIT RATING RULES AS THEY GASP FOR BANK LOANS : The Micro-finance Sector has clamoured for easy credit rating rules from banks for micro lenders with less than Rs.500 crores portfolio so that entities get adequate doses of bank loans to grow their businesses. The Small and Medium sized micro lenders are gasping for bank loans as they don't get bank loans as easily as their bigger counterparts with a minimum Rs.1,000 crores portfolio, as the sector grew by nearly 25% in FY24 to a cumulative portfolio of Rs.4.3 lakh crores. They have urged the banks to devise policies which support lending to entities with lower credit ratings.

6. FINTECHS SHOULD WORK TOGETHER WITH BANKS TO DEVELOP SCALABLE, REGULATORY COMPLIANT SOLUTIONS : Financial Services Secretary Mr. Vivek Joshi has urged the fintech community to work in close coordination with banks so that scalable and regulatory compliant solutions can be designed. Addressing FICCI-IBA-PICUP Fintech Conference, he said the fintech sector is growing very fast and India has the highest fintech adoption rate vis-‡-vis global average. He urged the fintech companies to work hand in hand with banks, rather than creating a solution themselves and then approaching banks.

7. PSBs TO INTEGRATE DATA ANALYTICS INTO HR PROCESSES : Public Sector Banks (PSBs) will work on data-driven manpower planning, succession planning and productivity improvement as part of the government-approved reform agenda for fiscal 2025. They will integrate data analytics into Human Resource processes, including transfers and postings, with appropriate interventions and escalations. The main aim is to improve employee productivity.

1. YES BANK IN TALKS FOR STAKE SALE TO GIVE EXIT TO ITS LENDERS: Yes Bank Ltd is working towards giving an exit to its current major lenders, particularly State Bank of India. Four years ago, many banks led by SBI had come together to support the reconstruction scheme of Yes Bank. As per regulations, banks cannot remain invested in other banks for a long period. At some point they need to exit. Both SBI and Yes bank are in talks with various investors. SBI, HDFC bank, ICICI Bank, Kotak Mahindra Bank and Axis Bank collectively hold 33.74% stake in Yes Bank. RBI has already given approval for up to 51% stake sale in Yes Bank.

2. BANKS NEED TO DEVISE NEW STRATEGIES TO ATTARCT DEPOSITORS: Indian Banks need new strategies to attract depositors despite the current level of low-cost deposits being comfortable. Financial Services Secretary Mr. Vivek Joshi highlighted the CASA deposits, which were at a level of 41% of total deposits have seen a decrease from 45% in previous years. Mr. Joshi emphasized on the need to devise new strategies to attract depositor, he said it is a competitive market and banks will need to design means to attract more deposits through increased customer efficiency and other measures.

3. RBI UNVIELS PCA FRAMEWORK FOR URBAN CO-OPERATIVE BANKS: The Reserve Bank of India has launched the Prompt Corrective Action (PCA) framework for urban Co-operative Banks (UCBs) on the lines of PCA norms for schedules commercial banks and NBFCs. The framework will come into effect from April 2025. As per these PCA norms, RBI places regulated banks under PCA framework when they fail to meet the minimum regulatory requirement on Capital Adequacy Ratio (CAR), Non-Performing Assets (NPAs) and profitability. Once placed under PCA, the particular bank faces severe business restrictions which are lifted only after it meets the necessary regulatory requirements.

4. CLIMATE CHANGE MAY DISRUPT FINANCIAL STABILITY: The RBI Deputy Governor Mr. M Rajeshwar Rao said that climate change has a potential to create shocks to the monetary stability, growth, financial stability, safety and soundness of regulated entities in the country and it influences the action of the RBI. While delivering a speech at the JP Morgan Leadership Series Lecture in Mumbai he opined that there are clear linkages of climate events on the growth and inflation--- the two macro variables which most of Central Banks globally are deeply concerned about.

5. INTEGRATED TECH PLATFORM FOR INSOLVENCY BY 2025 END: The government is planning to launch the "Integrated Technology Platform" under the Insolvency & Banking Code (IBC) by the end of 2025. The Tech-portal will be launched in phases, but it will become operational from the end of 2025. The value-added services will be added to the portal in later stages. Finance Minister Ms. Nirmala Sitharaman during her Budget speech said that the integrated portal will be set up for improving the outcomes under the IBC for achieving consistency, transparency, timely processing and better oversight for the stakeholders.

6. GOVERNMENT ASKS PSBs TO FAST-TRACK BAD LOAN RECOVERY: With trillions of crore rupees locked up in cases under the Debt Recovery Tribunals (DRTs) and National Company law Tribunals (NCLTs), the government has asked the Public Sector Banks (PSBs) to monitor the top 20 defaulter loan accounts personally for faster recovery. The move is expected to boost the profits of the banks as the bad loans are already been fully provisioned. After the Gross NPAs of PSBs rose to an alarming 14.5% in 2016, the government took a slew of measures and these strict measures have nursed the credit sector back to sound health with the Gross NPAs have shrunk to 2.8% in 2024.

7. PSBs CHARGED Rs 2,331 CRORES IN FY-24 AS PENALTY FOR NOT KEEPING MINIMUM BALANCE: Public Sector Banks (PSBs) have charged depositors Rs 2,331 crores penalty for non-maintenance of quarterly or monthly average balance in FY-24. This is 25% higher than the amount collected by the banks in the previous year. Among the lenders, Punjab National Bank charged the highest sum of Rs 633 crores followed by bank of Baroda with Rs 386 crores. Indian Bank charged Rs 369 crores.

8. RBI IMPOSES PENALTY ON VISA FOR UNAUTHORISED PAYMENT TRANSFER: The Reserve Bank of India has imposed a penalty of Rs 24.1 million on Visa for using unauthorized payment transfer mechanism. As per RBI it was discovered that Visa had implemented a payment authentication solution without regulatory clearance from the RBI. For this violation, Visa has issued a statement as "We duly acknowledge the RBI order and remain committed to following RBI guidelines and regulations to continue providing safe and secure payment solutions in India"

1. ECONOMIC SURVEY CALLS FOR IMPROVED LIQUIDITY TO BOOST NPA PRICE DISCOVERY: The pre-budget Economic Survey has stressed the need for a liquid Non-Performing Assets (NPAs) market to facilitate bank acquisitions and assets turnarounds. The Survey noted several such steps already undertaken such as government setting up a bad bank and improving the insolvency ecosystem, which has helped bring NPAs to multi year low. The survey said that the prerequisites for an efficient market for the NPAS are that it should be deep, competitive and have adequate liquidity to support acquisition from the banks and support asset's turn-around.

2. CHANGING CUSTOMER BEHAVIOUR FORCES INDIA'S BANKS TO RECALIBERATE STRATEGIES: Since the persistent inflation level is eating into people's bank savings but banks are reluctant to raise interest rates on savings deposits, customers are turning themselves into investors, pushing banks to rethink their strategies. More and more funds are flowing from savings deposits to mutual funds, SIPs and term deposits. Since March 2020, savings account deposits have declined from 32.8% to 31.1%, while term deposits have increased from 57.8% to 59%. Most of the bank deposits are routed to Mutual funds.

3. UPI ADDS UP TO 6 MILLION NEW USERS EVERY MONTH: The popularity of the Unified Payments Interface (UPI) continues to grow, with the platform adding between 3 to 6 million new users every month. This is as per a statement by Ms. Praveena Rai, COO of NPCI. The growth of UPI transactions has been fuelled by RuPay credit cards on UPI and the launch of UPI in foreign countries. The number of transactions on UPI platform rose 49% year-on-year (y-o-y) to 13.9 billion in June. The transaction value rose 36% y-o-y to Rs 20.1 trillion. The average daily transaction count was 463 million in June with the daily transaction amount of Rs 66,903 crores.

4. ECONOMIC SURVEY FLAGS MIS-SELLING AND, FALLS CLAIMS IN INSURANCE SECTOR: Product mis-selling is rampant in the insurance sector. The Economic Survey 2024 has pointed this out and emphasized on the need for prompt and reasonable claim settlements and lower rejection rate to boost insurance penetration. Referring to financial products mis-selling, the survey said that mis-selling and misrepresentation needs acknowledgement, with firms compensating for consequential losses. The IRADAI Annual Report for FY23 showed that the centralized grievance portal received over 2 lakh complaints.

5.FINTECHS CAN BOOST DIGITAL LENDING, FINANCIAL INCLUSION IN INDIA: New-age Fintech firms have the potential to enhance and disrupt the digital lending space, aid financial inclusion, and help financial institutions upgrade their technology infrastructure significantly. Mr. Rajesh Bansal, CEO of RBI Innovation Hub said that a billion Indians are expected to avail digital finance in the next few years and for that to happen, Fintech firms will play a big role.

6. NO PLAN TO ALLOW BUSINESS HOUSES TO PROMOTE BANKS: RBI Governor Mr. Shaktikanta Das has said that the RBI does not have any plans to allow business houses to promote banks at present. Underlining that banks are different from other businesses, he said allowing corporate houses to promote banks exposes one to conflict of interest, risks and related-party transactions. The RBI has disqualified a long list of conglomerates from floating a bank in the last round of licensing around a decade ago.

7. PUBLIC SECTOR BANKS MAKE BEELINE FOR FUND RAISING VIA INFRASTRUCTURE BONDS: Public Sector Banks (PSBs), such as Canara bank, Bank of India and SBI are tapping the infrastructure bond market to raise funds. Canara Bank has raised Rs 10,000 crores at a coupon rate of 7.40% through a 10-year infrastructure bonds. SBI has raised Rs 10,000 crores also through infrastructure bonds with a 15-year tenor at a coupon rate of 7.36%. Bank of India also has raised Rs 5,000 crores through infrastructure bonds. Bank of Maharashtra is looking to raise Rs 10,000 crores via the same route.

8. SIDBI TO PARTNER INDIA POST PAYMENTS BANK TO SUPPORT MICROFINANCE LENDING: The Small Industries Development Bank of India (SIDBI) now wants the help of the humble postmen to help it extend credit to micro-entrepreneurs. SIDBI has now partnered the India Post Payments Bank (IPPB) to carry out the task. The initiative aims to provide finance to micro-level entrepreneurs using the services of postmen (Dakiyas) network. The postmen will receive the credit proposals from these micro-enterprises at grassroot level. These postmen will also assist in monitoring and collection of loans.

1. NOW BANKS TO TAG THE LOAN AS FRAUDULANT ACCOUNT ONLY AFTER HEARING THE BORROWERS: The RBI has now asked the banks to give borrowers at least three weeks to respond before tagging the loan account as fraud account. The RBI has also said that the decision conveyed to the borrower must contain their submission and reasons for classifying the account as fraud. This follows a Supreme Court judgement which said that the banks should adhere to the principles of natural justice and cannot unilaterally declare an account as fraud without providing defaulters with the right to be heard. This rule will also apply to Regional Rural banks, Rural co-operative societies and Housing finance companies.

2. BANKS LOOK TO FORM THEIR OWN SELF-REGULATORY BODY FOR FINTECHS: Very soon, banks are likely to set up a Section 8 entity under the Companies Act to apply for a Self-Regulatory Organisation (SRO) license for Fintech sector under the RBI's framework. Lenders have also held deliberations with other organisations including Payment Council of India. Many banks are already collaborating with fintechs for online lending platforms, AI-based credit assessment tools and digital payment solutions.

3. AROUND 33 MAJOR HEALTH INSURANCE COMPANIES JOIN THE GOVERNMENT'S CENTRALLISED CLAIMS-RELATED INFO EXCHANGE: Of the major health insurance companies in India, 33 companies have joined the national Health Claims Exchange (NHCX), a centralised platform developed by the government of India for the exchange of insurance claims-related information. The new system aims to expedite the insurance claims process and make it more transparent, with real-time access to claims settlement status by the Insurance regulatory Development authority of India (IRDAI). Citizens will also be able to monitor their insurance claims status through their mobile devices. This is as reported by Times of India.

4. AXIS BANK COMPLETES MIGRATION OF CITI BANK CUSTOMERS TO ITS SYSTEM: Axis Bank has completed the migration of Citibank customers to its system last week. But the bank faced glitches during the process. Several erstwhile Citi customers took to social media to complaint that they were unable to access their accounts on the Axis bank platform while a few others said they were unable to login to the Axis app despite spending hours to complete the registration.

5. DIGITAL LENDING TO REACH 5% OF INDIA'S RETAIL LOAN MARKET BY FY-28: India's younger generations are reshaping the country's lending landscape, with digital lending poised to capture 5% of the retail lending market by FY-28, up from 2.5% in FY-24. The digital lending will grow at a CAGR of 40% from FY-24 to FY-28, reaching Rs.4.5 to 5.00 trillion by FY-28. This marks a significant increase from the 2.5 trillion share in FY-24 and 1.8% share in FY-22. This is as per a recent report by Redseer Strategy Consultants in their report titled "The New Age of Borrowing: A Generational Shift Towards Digital Lending"

6. ARCs' GROWTH MODERATES TO 15% IN FY-24: The Asset Reconstruction Companies (ARCs) Sector's growth moderated to 15% in FY-24, down from nearly 32% in 2022-23. This is impacted by the continuous decline in Gross Non-Pergorming assets (GNPAs) in the banking system and absence of major bad loan sale deals. The value of NPAs acquired by ARCs reached 9.7 trillion as of March 2024. Lenders sell their stressed loans to ARCs at a discount, in exchange of either cash or a mix of cash and security receipts. These security receipts are redeemable when the ARC recovers the loan.

7. MFI INDUSTRY SEEKS ADDITIONAL FUNDING SUPPORT: The Microfinance industry has urged the government to facilitate additional funding, especially for entities with portfolios below Rs 1,000 crores. Government may consider creating a guarantee fund for the smaller MFIs with the subsidiary of NABARD, or the subsidiary of SIDBI, which can extend guarantee cover for the borrowing MFIs from banks and financial institutions. Additionally, a dedicated refinance facility of Rs 30,000 crores could be established under the aegis of the SIDBI.

8. US RATE CUTS CAN SPUR INFLOWS INTO INDIAN DEBT MARKET: Local traders broadly expect a $ 2 billion -per-month foreign funds flow from the inclusion in a JP Morgan Bond Index. But some experts say that this figure may go up as the US Federal Reserve is likely to start cutting rates soon, turning Indian debt market into a favourite within the emerging markets pack. With US rate cuts, the EM Bond funds attract more investment. As investments increase in EM bond funds, a part of that (almost 10%) will now get allocated to India.

1. RBI TO SEND STRICT "ZERO TOLERANCE" MESSAGE TO BANK HEADS: The Reserve Bank of India will meet respective bank heads and external auditors of commercial banks to send across a strong message of "Zero Tolerance" towards compliance and regulatory lapses. The two Deputy Governors-Mr. M Rajeshwar and Mr. J Swaminathan will address the CEOs and auditors. RBI will sensitise the bank heads and the auditors about their responsibility to ensure that the balance sheets accurately reflect the picture of the banks' financials.

2. RBI CANCELS REGISTRATION CERTIFICATES OF 2 NBFCs FOR IRREGULAR LENDING PRACTICES: The Reserve Bank of India has cancelled the certificates of registration of two NBFCs-Star Finserv India and Polytex India due to irregular lending practices. Giving reasons for the cancelling the Certificate of Registration (CoR) RBI said that the companies had violated the guidelines on the code of conduct in outsourcing financial services in its digital lending operations.

3. SBI SAYS IT IS A GOOD TIME TO PUSH DISINVESTMENT OF PUBLIC SECTOR BANKS: State Bank of India has suggested to the government to go ahead with disinvestment of Public Sector Banks (PSBs) as they are in good condition. In its research report titled "Prelude to Union Budget 2024-25 published this week, SBI has advocated for consolidation of existing government owned banks. SBI has also sought clarity in the forthcoming budget with regard to the privatisation of IDBI Bank as the government invited bids from buyers in October 2022, and in January 2023 the Department of Investment & Public Asset Management (DIPAM) received several expressions of interest for IDBI bank stake on offer.

4. SBI WANTS TAX PARITY ON BANKS' FIXED DEPOSITS ON PAR WITH MUTUAL FUNDS AND EQUITY MARKETS IN THIS BUDGET: SBI, in one of its reports leading up to the Union Budget has suggested that the government should align tax treatment of fixed deposits with that of mutual funds and equity markets. SBI's economic research wing has underscored the urgent need for tax parity for bank deposits, compared to other investment avenues. According to the report, the government's potential loss from such a tax adjustment would be minimal

5. MOBIKWIK LEVERAGES POCKET UPI TO EXPAND MARKET SHARE: IPO-bound MobiKwik is leveraging its Pocket UPI offering for a bigger Unified Payment Interface (UPI) market share. According to the latest data from RBI, the company's share in wallet transaction value rose to 23.1% in May 2024 from 11.3% in March 2024. Pocket UPI will help MobiKwik in UPI ecosystem, while simultaneously pushing the user to maintain a wallet balance. It will also give the company the capability to earn a merchant discount rate. The widespread adoption of pocket UPI platform in Tier-2 and Tier-3 cities has helped to increase wallet transactions.

6. NEW FOREX NORMS EMPOWER BANKS, IT WILL HELP TO EASE EXPORTS VIA e-COMMERCE: The draft of the new Export-Import regulations released by the RBI is extremely positive for exporters as it seeks to address the everyday problems faced by them on sourcing and shipment of goods by providing greater flexibility to banks in dealing with the issue of payments. The draft of Foreign Exchange management Regulations 2024 and the circular issued to banks authorised to deal in foreign exchange also brings in administrative simplicity by superseding 61 export-related and 62 import-related notifications.

7. INDAIBULLS HOUSING FINANCE REBRANDED AND RENAMED AS "SAMMAAN CAPITAL LIMITED": Non-Banking Finance Company (NBFC) Indiabulls Housing Finance has announced that it has officially changed its name to "Sammaan Capital Limited", following the receipt for Certificate of Incorporation issued by the Registrar of Companies and Certificate of Registration as an NBFC-ICC from RBI. The company had announced its plans to rebrand the company in May 2023 and January 2024

8. MUTUAL FUND SIPs HIT NEW HIGH OF Rs 21,260 CRORES IN JUNE: The monthly SIP contributions remained above 20,000 crores in June to touch a new high of 21,260 crores. The Systematic Investment Plan (SIP) contributions for the first 6 months of this year (From January to June) have surpassed the Rs 1 lakh crore marks, reaching 1.19 lakh crores. The total Asset Under Management (AUM) of Mutual Funds has reached a whopping Rs 60.89 lakh crores.

1. ESAF SMALL FINANCE BANK CREATES MICRO BANKING VERTICAL: ESAF Small Finance bank has absorbed about 5,200 employees of ESAF Swasraya Multi-State Agro Co-operative Society Ltd (ESMACO) as part of a strategic business restructuring. The bank will now directly manage the microfinance business of ESMACO through its banking outlets. But ESMACO will continue to manage business operations at the customer service centers, the micro banking vertical thus created now will primarily serve the needs of rural population through micro-loans, agriculture loans, vehicle loans and home loans.

2. TIGHT LIQUIDITY FORCES BANKS TO TAP DEBT MARKETS: Bank borrowings through money markets and a certain type of bonds jumped 60% on a year-on-year basis during April-June quarter of this fiscal. With tighter liquidity conditions, lenders were compelled to take debt route to raise money, with cost of funds rising. The latest fortnightly data released by the Reserve bank of India showed that in April-June quarter the average bank borrowings were at 7.71 lakh crore, compared with Rs.4.80 lakh crore during the same period last year.

3. BANKS SCANNING PROPREITOR ACCOUNTS TO SPOT "MONEY MULES": Many banks have either stopped or slowed down opening of sole proprietorship and individual current accounts of firms that are less than one year old amid suspicion that they could be "money-mules" for money laundering and digital frauds. Money-Mules are persons who let their bank accounts to be used by money launderers and shysters to move the proceeds of crime. Amid a surge in mule accounts since mid-2023, banks have spotted that an overwhelming number of such customers are sole proprietors or individuals holding current accounts.

4. INDIA RATINGS PEGS BANK CREDIT GROWTH AT 15.4% FOR FY-25: Rating agency India ratings has forecasted bank' credit growth at 15.4% in FY-25. India Ratings has also estimated that a turnaround in private capital expenditure could offset any pressure on the overall credit growth in FY25. It has also estimated that the growth in the agriculture segment is likely to remain largely stable with the projection of normal monsoons. As of May 31, 2024, the banking system's credit growth (excluding HDFC Ltd.'s merger with HDFC bank) was 16.1%.

5. BANKS TOLD TO STAY VIGILANT AMID INTEL ON CYBERATTACK THREAT: Banks across the country have been put on high alert amid a tip-off received by the regulator on a possible cyberattack. They have been told to proactively monitor their systems for threat detection on a 24/7 basis. Apart from continuously checking network activities and server logs to detect malicious intrusions, banks will have to monitor critical payment systems such as SWIFT, card network, the online local fund transfer frameworks like RTGS/NEFT and UPI.

6. UPI TRANSACTIONS RISE 49% YEAR-ON-YEAR TO 13.9 BILLION IN JUNE 2024: The number of transactions on the Unified Payments Interface (UPI) platform rose 49% on a year-on-year (y-o-y) basis to 13.9 billion in June 2024. This is as per the latest data released by NPCI. The transaction volume in June was marginally lower than 14 billion in May 2024 due to lesser number of days in June. The value of transactions had risen to 37% y-o-y to 20.4 trillion in May. According to the data, the average daily transaction count was 463 million and the average daily amount was Rs 66,903 crores in June 2024.

7. MUTUAL FUND'S AAUM GROWS 36%: The Average Assets Under Management (AAUM) of the Indian Mutual Fund Industry witnessed an average annual growth of 36% and 2.8% monthly growth. This is as per a report by rating agency, ICRA Analytics. The AAUM came at Rs 58.60 lakh crores in may 2024. Nearly 87% of the assets from B-30 cities (locations) were in equity schemes and the remaining in non-equity schemes in May 2024.

8. EMPLOYEE ASSOCIATIONS DEMAND MERGER OF RRBs WITH RESPECTIVE SPONSOR BANKS: Bank Employee Associations have demanded before the Union Finance Minister to merge Regional Rural banks (RRBs) with their respective sponsor banks to ensure overall efficiency and viability of the banking sector. On the other hand, the Regional Rural Bank Employees association, in response, has opposed the demand of merger, furnishing facts to argue their case. It said 43 RRBs have improved their performance over the years and have collectively earned a net profit of Rs 7,300 crores in FY24, having managed a business of Rs 10.4 lakh crores at the end of March 2024. Their collective gross advance was around Rs 4.32 lakh crores.

1. BANKS IN A GST FIX OVER RBI'S DIRECTIVE ON PENAL CHARGES: The RBI has directed all banks to levy penal charges on overdue loans as against the age-old practice of imposing penal interest. This is a matter of concern for banks as it would attract the GST on such penal charges. While interest rates are spared of GST, it is applicable on some of the other fees for services like processing loan proposals. Banks have asked the tax authorities last month to spell out their stand on penal charges.

2. FINANCE MINISTRY CALLS MEETING WITH PUBLIC SECTOR BANKS TO REVIEW FINANCIAL INCLUSION SCHEMES: The Finance Ministry has called a meeting of all Public Sector Banks (PSBs) to review the progress of financial inclusion schemes such as Jan Dhan Yojana, Jan Suraksha Yojana, Mudra Yojana. Finance Minister Ms. Nirmala Sitharaman had said that all financial inclusive schemes have ensured wide spread access to banking services, and that the government remains committed to further driving financial inclusion and empowering the underprivileged. The meeting will be chaired by Financial Services Secretary Mr. Vivek Joshi and a discussion on scaling the digital payments network in rural areas would also be taken up.

3. GOVERNMENT ASKS BANKS TO IDENTIFY NON-PERFORMING VENDORS AND PREPARE A NEGATIVE LIST : The government has asked all Public Sector Banks (PSBs) to prepare a list of vendors, law and consulting firms, IT companies who are service providers to PSBs and who are underperforming or delay projects of any one bank and prepare a negative list. The government wants to ensure that these non-performers do not get any more business from PSBs. The banks after preparing the list have to share amongst themselves and take strict action against erring parties.

4. BANKS' RETURN ON ASSETS TO FALL BY 10-20 BPS IN FY-25: The return on assets of banks is expected to fall by 10-20 basis points to 1.1-1.2% in 2024-25 from a 20 year high of 1.3% in 2023-24, owing to a higher cost of deposits. This is as per a report by Crisil Ratings. However, the return of assets will remain higher than the 20-year sectoral average of 0.75% and 10-year sectoral average of 0.5%. Further, Crisil has said that the cost of deposit of banks is expected to rise 25-30 bps in 2024-25. The net interest margin of banks is also expected to fall 10-20 bps in 2024-25.

5. MICROFINANCE ENTITIES ON OVERSEAS BORROWING SPREE: Domestic Microfinance companies are increasingly borrowing overseas, capitalizing on easing liquidity, attractive long-term interest rates and growing interest from global investors in India's microfinance sector. These microfinance companies are raising funds through External Commercial Borrowings (ECBs). ECBs are funds borrowed by Indian entities from foreign sources, typically in the form of loans or debt instruments. These loans are subject to regulations set by the RBI and are often used to access cheaper financing options and diversify funding sources.

6. THE WIDENING GAP IN DEPOSIT-CREDIT GROWTH ATTRACTS REGULATORY ATTENTION: The divergence between credit and deposit growth has attracted regulatory attention and to pre-empt potential asset-liability mismatches, the RBI has revised the bulk deposits threshold limit from Rs 2 crores to Rs 3 crores for commercial banks. The bank credit growth has averaged to around 18% in FY 24 while deposit growth was lagging at 13%.

7. L&T FINANCE'S RURAL BUSINESS FINANCE BOOK SIZE CROSSES Rs 25,000 CRORE MARK: The Hinduja Group, the successful resolution applicant of debt-laden Reliance Capital (RCap), has files a fresh application seeking additional time for the completion of the insolvency process. Hinduja Group said that there were no delays from its part and the process now requires a number of statutory and regulatory approvals. Hinduja Group has proved its bona fides by submitting a on-demand bank guarantee of Rs 483 crores to the administrator and Committee of Creditors at least 10 months ago.

8. JANA SMALL FINANCE BANK TO APPLY FOR UNIVERSAL BANK LICENSE IN 2025: L&T Finance Ltd has announced that its rural business finance has crossed Rs 25,000 crore mark in its book size. This is a testament to the Company's commitment to empowering rural entrepreneurs and small business owners who truly form the backbone of Indian rural economy. The company said in a statement that L&T Finance's rural business has been at the forefront of providing accessible and affordable financing solutions to the rural community. Till date L&T Finance has provided loans to over 1.4 crore rural women entrepreneurs. The company has over 1700 branches across 14 states.

1. LIC HAS NOT YET DECIDED TO ENTER HEALTH INSURANCE SECTOR: Life Insurance Corporation of India (LIC of India) has said that there is no formal proposal for entering into the health insurance sector. Currently, Life Insurance Companies are not allowed to underwrite health insurance policies. Such policies are sold by general insurer or standalone health insurance companies. But LIC has said that it will evaluate and explore various strategic opportunities for growth and expansion of its business, including strategic partnerships and investment opportunities. As per Insurance Act 1938, and regulations by IRDAI, composite licensing for an insurer to undertake life, general and health insurance under one entity is not allowed.

2. IRDAI ASKS LIFE INSURERS TO OFFER SURRENDER VALUE IN THE FIRST YEAR: The Insurance Regulatory and Development Authority of India (IRDAI) has asked all insurance companies to offer surrender value from the first year itself. This move will impact the margins of insurance companies. IRDAI has issued a master circular which mandates the insurers to pay special surrender value (SSV) after the first policy year, provided one full year's premium has been paid. Previously, the surrender value for guaranteed return products was "zero" in the first year and up to 30-35% in the second and third years.

3. ATM OPERATORS SEEK HIKE IN INTERCHANGE FEE FOR VIABILITY: ATM operators have approached the RBI and NPCI for an increase in the interchange fee paid by the customers on cash withdrawals. The Confederation of ATM Industry (CATMI), wants this fee to be raised to a maximum of Rs 23/- per transaction to ensure more funding commitment for the business. The interchange fee was increased two years back.

4. BANKS, NBFCs WELL PLACED TO SIEZE OPPORTUNITY FROM INDIA'S STRONG ECONOMIC PROSPECTS: BAccording to a report by rating agency ICRA, Indian banks and Non-Banking Finance Companies (NBFCs) are well placed to seize the opportunity from India's strong economic prospects through lending in various sectors, even though the loan growth is expected to moderate by about 3%. The report further said that the extent of growth of systemic liquidity and deposit will continue to remain a key factor for credit growth for banks amid strong demand for credit. ICRA also expect the banking sector's performance to remain strong with profitability primarily driven by strong loan growth and a favorable credit environment.

5. BANKS NEED TO REVISE PLANS TO DEAL WITH CREDIT AND DEPOSIT GROWTH GAP: RBI Governor Mr. Shaktikanta Das has said that banks need a re-strategize their business to deal with the persistent gap between credit and deposit growth. He also said that further actions on moderating growth in unsecured loans could be taken, if required. He also said that RBI is watchful of every aspect of financial sector especially in the banking sector. RBI is agile and is watchful and if and when some further measures are required, RBI will be ready with it.

6. SBI SANCTIONS 20,000 DIGITAL SME LOANS IN SIX MONTHS: State Bank of India has sanctioned 20,000 loans of the ticket size of Rs 10-50 lakhs to Small and Medium Enterprises (SMEs) in the last six months. These loans are all digital and drawn from various data points. Now SBI has started rolling Rs 5 crores loans also through Digital process. Under Digital process the bank takes only 45 minutes to sanction digital SME loans. SBI uses an ecosystem of APIs to streamline the entire lending process. It uses data from Income Tax records, GST returns and bank statements to sanction these loans.

7. HINDUJA GROUP FILES FRESH APPLICATION FOR DEADLINE EXTENSION IN R-Cap INSOLVENCY RESOLUTION: The Hinduja Group, the successful resolution applicant of debt-laden Reliance Capital (RCap), has files a fresh application seeking additional time for the completion of the insolvency process. Hinduja Group said that there were no delays from its part and the process now requires a number of statutory and regulatory approvals. Hinduja Group has proved its bona fides by submitting a on-demand bank guarantee of Rs 483 crores to the administrator and Committee of Creditors at least 10 months ago.

8. JANA SMALL FINANCE BANK TO APPLY FOR UNIVERSAL BANK LICENSE IN 2025: Jana Small Finance Bank will apply for Universal Bank License in 2025. According to RBI guidelines on voluntary transition of Small Finance Banks (SFBs) to Universal banks, an SFB must be listed on a recognized stock exchange, have a minimum net worth of Rs 1,000 crores at the end of previous year, meet minimum capital requirements for SFBs and must post net profit in last two financial years.

1. TATA MOTOR FINANCE TO BE MERGED WITH TATA CAPITAL: Tata Capital and Tat Motors Finance have approved a merger of Tata Motor Finance with Tata capital through an NCLT scheme of arrangement. The transaction is in line with Tata Motors' stated objective of exiting from non-core businesses and focus its capital spends on emerging technologies and products. As consideration for the merger, Tata Capital will issue its equity shares to the shareholders of Tata Motor Finance, resulting in Tata Motors effectively holding a 4.7% stake in the merged entity.

2. RISK WEIGHTING SLOWS DOWN THE GROWTH OF UNSECURED LOANS: The pace of expansion of unsecured loans (personal loans and credit card outstandings) has continued to slide down after the RBI enhanced the risk weighting on such exposures to minimise the likelihood of mounting delinquencies in the banking system. Unsecured loan growth slowed down to about 18% in November 2023, when the RBI made it less attractive for lenders to advance such credit. Going forward, most banks expect the credit growth momentum to moderate a bit due to the regulatory action on unsecured loans.

3. ADANI GROUP ENTERS RETAIL FINANCE SECTOR, TO LAUNCH CO-BRANDED CREDIT CARDS WITH ICICI BANK: Adani Group has announced that it is venturing into the financial sector, launching with ICICI bank a Co-branded credit card with airport-lined benefits as it looks to leverage customer touchpoints across businesses. The group's "Adani-One", an app to help users to book air tickets, check flight status, access lounges, shop duty free products etc will also be launching India's first co-branded credit cards with ICICI Bank with airport-linked benefits in collaboration with visa.

4. NOW A "BANK CLINIC" TO HELP YOU ON COMPLAINTS: Bank employees have come together to launch a complaint redressal platform-"Bank Clinic" to guide retail customers about their rights and remedies. Bankclinic.com is a website where a retail customer can register a complaint. Within 5 days the platform will inform the customer of regulatory guidelines regarding the matter. The website will not be liable to resolve the customer complaints but will guide them on available remedies. The Bank Clinic is an initiative by the All-India Bank Employees Association (AIBEA) to help customers address their grievances.

5. BANKING FRAUDS TRIPLE IN THE LAST FISCAL YEAR: The number of frauds detected in the banking system last fiscal almost tripled, even as the amount involved has decreased. Public sector banks (PSBs) continue to contribute the most to the total fraud amount. The amount involved due to frauds in PSBs was Rs 10,507 crores while private banks incurred losses worth Rs 3,107 crores due to frauds. The number of frauds due to cards and internet transactions shot up more by almost four times with 29,000 cases being detected in FY24. With the increase in adoption of digital payments, frauds related to this are expected to rise. In March 24 alone, UPI touched 13,440 million transactions. This is as per a data released by the RBI.

6. FOREIGN INCOME JUMP BOOSTED RBI PROFITS: A sharp 71% rise in income from foreign holdings boosted the Reserve Bank of India's profits for FY24. This, along with a cut in provisions enabled it to pay the government a record dividend of Rs 2.11 trillion. While the total income for the year increased by 17% to Rs 2.75 trillion, the total expenditure declined by 56% to Rs 64,694 crores on the back of a big 67% drop in provisioning. The interest income from foreign sources, comprising mainly investments in bonds and deposits jumped to Rs 1.03 trillion.

7. BANKS' LOANS TO CONSTRUCTION, INFRA SECTOR SWELL 30% IN 5 YEARS: Loans to infrastructure and construction sectors given by banks has grown by 30% in the past 5 years. The total loans to infrastructure and construction of banks increased to Rs 14.6 trillion in March this year from 10.8 trillion in January 2019. The RBI has proposed up to 5% provisions on all existing and new project loans, making banks jittery about the growth prospects of infrastructure loans.

8. DESPITE UPI SUCCESS, CASH CONTINUES TO BE THE KING: At a time when transactions through Unified Payment Interface (UPI) are growing at a tremendous speed of 40%, the demand for cash has not gone down at all. In fact, the value of cash transactions is on the rise. A recent report by CMS Info Systems, which provides logistics and technology solutions to banks, said that the monthly cash withdrawals from ATMs rose about 6% year-on-year in FY 24 to Rs 1.43 crores per ATM from Rs 1.35 crores in FY 23.

1. UCO BANK LINES UP Rs 1,000 CRORES INVESTMENT FOR DIGITISATION DRIVE: UCO Bank has lined up Rs 1,000 crores of investment for digitization drive and upgradation of existing information technology system. The bank would like to be a part of the digital journey which is happening across the spectrum and this would allow then bank to cross-sell its products and boost income in the future. The bank is improving its overseas core banking system and upgrading cyber security and treasury-related IT systems. The bank is also planning to open 130 new branches in the financial year. The bank has clarified that the planned IT spending is nothing to do with the internal technical glitching IMPS that happened in November'23.

2. FOREIGN BANKS SEEK LEEWAY ON LEF RULES FOR NOSTRO ACCOUNTS: Foreign lenders have requested RBI for flexibility in compliance with the Central Bank's Large Exposure Framework (LEF) , particularly in handling certain types of accounts that facilitate global transactions. Foreign banks have requested RBI to exclude Nostro Accounts from the exposures that are permitted under the LEF. A Nostro account is one that a bank holds with an overseas lender which is denominated in the currency of that country. Such accounts help banks in enabling fund flows for international trade.

3. BANKS FAIL TO MEET RBI MANDATE ON CRR MULTIPLE TIMES: An analysis of daily data released by banking regulator showed that the average fortnightly cash balances of banks kept with RBI fell short of the RBI's mandated Cash Reserve Ratio (CRR) 15 times in the past year. RBI prescribes the CRR for schedules commercial banks and the current CRR is set at 4.5% of net demand and time liabilities, which is a proxy for deposits. The CRR can also be used to influence Monitory Policy by the Central bank as changes in the reserve requirements have an impact on banking system liquidity.

4. FINTECHS AND ENFORCEMENT AGENCIES DISCUSS CYBER SECURITY, DOGITAL/FINANCIAL FRAUDS: To build confidence and trust among the ecosystem partners in dealing with cybersecurity and digital/financial fraud, Financial Services Secretary Mr. Vivek Joshi urged for greater collaboration among the government, regulator, public and private sectors to harness the full potential of start-up and Fintech sector in India. There was a half day workshop with law Enforcement Agencies (LEAs), Start-ups and Fintech ecosystem partners which was attended by heads of around 60 Fintech Companies,23 state Police Departments, CBI, ED and Central government Ministries.

5. RBI UPDATES GUIDANCE NOTE OF OPERATIONAL RISKS, INCLUDES NBFCs: The Reserve bank of India has updated its guidance note on lenders' operational risk management structure, bringing NBFCs, Co-operative Banks under its purview. Operational risk is inherent in all banking/financial products, services, activities, processes and systems. RBI said that effective management of operational risk is an integral part of the regulated entities and that the new note is in line with the recommendations of Basel Committee on Banking Supervision (BCBS).

6. HIGHER COST OF FUNDS KEEP PRIVATE BANKS' NET INTEREST MARGIN UNDRER PRESSURE: The Net Interest margin (NIM) of private banks remained under pressure during the fourth quarter of FY-23/24, impacted by rising cost of funds amid tight liquidity. Private lenders, including HDFC Bank, ICICI bank, Yes Bank, IDFC bank and RBL Bank have reported 5 to 50 basis points year-on-year (y-o-y) decline in NIM in the 4TH quarter. With demand of loans staying strong, several lenders have raised interest rates on deposits by 10 BPS in February to mobilize deposits amid tight liquidity status.

7. NBFCs SET ROADMAP FOR THE YEAR 2024-25 CONSIDERING TECHNOLOGY AND FINANCIAL INCLUSION: The recent Moody's report projects India's GDP growth to 6.8%, which is the fastest among the G-20 economies. Outlook for the NBFCs appears optimistic. There will be increasing demand for financial products in rural markets fueled by the penetration of internet and an entrepreneurial mindset and various government schemes have created a backbone for NBFCs in this market. There is immense potential here as microfinance loans can boost local businesses. Agri loans can spur farm productivity.

1. HITACHI PAYMENT SERVICES LAUNCHES UPGRADABLE ATM: Hitachi payment Services has announced the launch of an upgradable ATM. As per the company these ATMs can be transformed in to high-performance Cash recycling machine (CRM) and manufactured under the make in India initiative. These new upgradable ATMs provide flexibility to banks. With this launch, Hitachi Payment Services aims to enhance access to a wide range of banking services, promoting financial inclusion especially in areas with low banking penetration. In September 2023, the company also had introduced first of its kind UPI-ATM on android platform for card-less cash withdrawals.

2. GOVERNMENT MAY SELL STAKES IN FIVE PSBs WITH LOW PUBLIC FLOAT: The Centre may disinvest minority stakes in 5 Public Sector banks (PSBs) if they fail to comply with the Minimum Public Shareholding (MPS) norm by raising fresh capital from the market in a year. According to SEBI rules, a company is required to have an MPS of 25% within 3 years after listing. Government had set a deadline of August 2024 for these five PSBs-Punjab & Sind Bank, Indian Overseas Bank, UCO Bank, Central bank of India and Bank of Maharashtra to meet the MPS.

3. GOVERNMENT MAY SELL 10% STAKE IN GIC: The Centre may sell up to 10% stake in state-run General Insurance Company Corporation (GIC) in the current financial year (FY-24-25). GIC received very good response in the road shows held recently to apprise potential investors regarding GIC's unique position in the Indian reinsurance market. A 10% stake in the company is worth Rs 5700 crores at the current market price.

4. RBI ASKS KOTAK MAHINDRA BANK TO STOP ISSUING FRESH CREDIT CARDS AND ONBOARDING OF FRESH CUSTOMERS VIA MOBILE BANKING: The Reserve bank of India has asked Kotak Mahindra Bank to cease and desist from issuing new credit cards and onboarding of new customers through online and mobile banking channel with immediate effect. RBI has found serious deficiencies and non-compliances in certain areas of its operations. The directive, issued in the interest of the customers, comes as a part of regulatory actions taken by RBI in response to concerns regarding compliance and risk management at the bank.

5. BharatPe LAUNCHES ALL-IN-ONE PAYMENT DEVICE BharatPeONE: Indian fintech major BharatPe has launched BharatPeOne, an all-in-one payment product that integrates POS (Point Of Sales), QR Code and speaker into one device. It plans to launch the product in about 100 cities to start with in the first phase. It will further scale it to around 450 cities over the course of next 6 months. Equipped with a high-definition touchscreen display, 4G and Wi-Fi connectivity, and powered by the latest Android Operating system, BharatPeOne delivers enhanced performance and security.

6. PSU BANKS DO NOT HAVE THE POWER TO ISSUE LOOK-OUT CIRCULARS: The Bombay High Court has ruled that Public Sector banks (PSBs) do not have the power to issue Look Out Circulars (LOCs) against citizens and foreigners under the Office Memoranda (OM) of the Central Government. The High Court ruled this in a clutch of petitions challenging the LOCs issued to restrain people who are indebted to PSBs from travelling abroad. With this ruling, all such LOCs issued at the request of PSBs were quashed and set aside by the High Court.

7. POOR RISK ASSESSMENT IS THE ROOT OF ASSET QUALITY CONCERNS: SBI Chairman Mr. Dinesh Kumar has said that poor risk assessment is the root cause of asset quality concerns on the unsecured lending front. The comment comes amid increased regulatory discomfort and efforts to dissuade banks from increasing exposures to segments such as credit cards and personal loans. Mr. Dinesh Kumar said there is no challenge if a bank is able to manage risk but the unsecured loan becomes a problem if the assessment is not done properly.

1. RBI DIRECTS PAYMENT AGGREGATORS TO UNDERTAKE DUE DILIGENCE OF ONBOARDED MERCHANTS: The Reserve Bank of India has directed all payment aggregators to undertake due diligence of merchants on boarded, as per RBI norms to regulate payment ecosystem. The KYC norms shall be applicable from the date of this present circular and the due diligence norms of all the merchants on-boarded by payment aggregators shall be completed by September 30, 2025. RBI has directed all the aggregators to monitor transactions of merchants on an ongoing basis. Based on the transaction pattern, the merchant shall be migrated to higher category.

2. GLOBAL RATING FIRM FITCH AFFIRMS THE RATINGS OF PUBLIC SECTOR BANKS: Global rating firm Fitch has affirmed ratings of the Public Sector banks (PSBs). It has rated and maintained a Stable outlook on PSBs. The rating decision is in line with the sovereign rating to which these ratings are linked. The rating firm has affirmed the ratings of SBI, Canara Bank, Bank of India, Union Bank of India, Punjab National Bank and Bank of Baroda. The banks' Viability Rating (VR) is at "BB" and Government Support Rating (GSR) is at "BBB".

3. NOW BANKS MUST EXPLAIN THE TOTAL COST OF A LOAN AND THE FEES IN A SIMPLE LANGUAGE: The RBI has said that all regulated entities will be bound by terms of loan indicated in the Key Fact Statement (KFS) if the borrower agrees to them. RBI has directed all banks and financial institutions to issue KFS to retail borrowers and small businessmen, effective from October 1, 2024. KFS is aimed to help the borrowers to take an informed view before executing a loan document. RBI has further clarified that Credit card receivables are exempt from this category.

4. BANKS PUSH TO GROW DEPOSITS FASTER TO LOWER CD RATIO: After RBI raised concerns about the high credit-deposit ratio (CD ratio), banks have started taking steps to bring it down by growing deposits faster in the 4Th quarter of FY-23-24. The provisional figures show that many banks have outpaced loan growth in the last quarter of FY-23-24 which will result in moderation of CD Ratio. The CD ratio of some private banks like HDFC bank, IDFC First Bank has gone above 100% which is higher than the industry level of 80%. Compared to private banks, Public Sector banks have a lower CD ratio.

5. PUBLIC SECTOR BANKS' FRESH SLIPPAGES (BAD LOANS) TO BE LOWER THAN PRIVATE BANKS: Public Sector banks (PSBs) are likely to post lower fresh slippage ratio than private banks in FY25. Slippages essentially denote the fresh bad loans in a year. Domestic rating agency ICRA, in its banking outlook report for FY25, has said that PSBs' fresh slippage ratio in FY 25 would be at 1.5% as against 2.2% for private banks. In FY 24 also PSBs' slippage ratio would be at 1.3%, lower than 2% of private banks. The report also said that the primary reason for this trend is that private banks have a higher share of retail unsecured loans, credit card outstandings, and personal loans in their portfolio and also have micro, small and medium enterprises.

6. SBI APPROACHES RBI TO CAP NBFC LENDER BASE: State Bank of India has approached RBI to put a curb on Non-Banking Finance Companies' (NBFCs) lender base. Currently, many NBFCs borrow from over 50-60 lenders at the same time. SBI believes that large number of lenders dilutes the ability to monitor NBFC loan books significantly. It is also explained that there are multiple banks who are lenders to a single NBFC, but they seldom communicate or have meetings to gauge the performance of the particular NBFC.

7. JAN-DHAN ACCOUNT BALANCES RISE 18% TO Rs 2.35 TRILLION IN FY24: Net cash accretion in No-frills Pradhan Mantri Jan Dhan Yojana (PMJDY) bank accounts rose to an all-time high of Rs.36,153 crore in 2023-24, which also showed that average cash deposits per account at a high of Rs 4,524/-. Despite reaching a near saturation levels, as many as 33 million new PMJDY accounts were opened in FY24, taking the cumulative PMJDY accounts at 519.5 million. The total balance in these accounts stood at Rs.2,34,997 crores as compared to Rs.1,98,844 crores a year ago.

1. HDFC BANK BECOMES THE FIRST PRIVATE SECTOR BANK TO OPEN A BRANCH IN LAKSHADWEEP: HDFC Bank becomes the first private sector bank to open a branch in Lakshadweep. The branch is aimed at upgrading the banking infrastructure in the union territory by offering a wide range of banking services with a focus on personal banking, including QR-based transactions. As of December 31, 2023, HDFC bank has 8,091 branches and 20,688 ATMs spread across 3,872 cities, towns and villages in India.

2. SBI, ICICI MAY ACT AS THIRD-PARTY LIAISONS FOR EUROPEAN BANKS: State bank of India and ICICI bank are likely to act as local intermediaries for European banks seeking a plan for third-party clearing after last month's meeting between top RBI officials and those from certain European banks. The proposal for local banks to carry out third-party clearing for European banks comes on the back of a decision by the European Securities & Markets Authority (ESMA) in October 2022 to de-recognise the Clearing Corporation of India (CCIL) as RBI then refused to permit foreign body rights of inspection and audit over CCIL.

3. CO-LENDING AUM NEARING Rs.1 LAKH CRORE: The overall Asset Under Management (AUM) through the co-lending model is nearing Rs 1 lakh crores in the last five years. But, regulatory curbs on unsecured lending are expected to result in a decrease in the share of personal loans, the highest contributor to the co-lending model. Personal loans occupy a third of the overall AUM at present and the growth in this segment is likely to impact due to RBI's measures adopted last year. With these measures the share of personal loans in the co-lending could decline whereas, the share of MSME and Home loans should go up. This is as per a report submitted by Crisil Ratings.

4. ICRA CUTS BANKING SECTOR OUTLOOK TO "STABLE" FROM "POSITIVE": Domestic rating agency ICRA has revised its outlook for Indian banking sector to "Stable" from "Positive", which is a downward revision. The downward revision is based on moderate increase in credit growth, challenges in deposit mobilisation and regulatory measures to slow down credit growth towards unsecured loans. However, ICRA said that notwithstanding the margin compression, the growth in loan book shall translate into steady operating profits, aided by firm credit costs and this will drive for healthy earnings that will largely be sufficient for most banks to meet their regulatory as well as growth capital requirements.

5. PRIVATE BANKS BET ON BUSINESS CORRESPONDENTS TO GROW IN RURAL AREAS: Private sector banks are increasingly turning towards business correspondents (BCs) for growing their business in rural and semi-urban areas. BCs are cost effective for lenders, can now perform a host of banking services and enable last mile reach which is mandated by the RBI. These BCs also play a pivotal role in CASA (low-cost deposit) development as for example if a branch is able to collect at least Rs 10 lakh per branch from one BC per month, the bank will add around 4% in CASA in one year.

6. RBI GIVES APPROVAL FOR CASH DEPOSIT, MONEY TRANSFER FROM PPI WALLET VIA UPI: In a bid to shore up liquidity and add to user convenience along with boosting digital payment options, the Reserve bank of India has now proposed to facilitate deposit of cash in Cash Deposit Machines (CDMs) using UPI. This measure is also expected to make the currency handling process in the banks a lot more efficient. Earlier, cash deposits through CDMs were possible using debit cards. Further, RBI has also approved the use of third-party UPI apps for making UPI payments through PPI Wallets. This will further enhance customer convenience and boost adoption of digital payments for small value transactions.

7. INDIAN BANKS ARE BATTLING THE WORST DEPOSIT CRUNCH IN 20 YEARS: Banks in India struggled to attract deposits in 2023-24 even as credit growth turned stronger. Date from RBI showed the Credit-Deposit ratio (CD ratio) was the highest since the year 2005 as loan offtake rose across categories including home loans and other loans for consumption. The CD ratio indicates how much of a bank's deposit base is being utilised for loans. Several banks have initiated diverse measures to reinforce their financial positions. SBI has raised $ 1 billion overseas for ESG financing and an additional Rs 5,000 crores through additional tier-I (AT-1) bands. Similarly Bank of Baroda has also raised Rs 5,000 crores through long-term infrastructure bands and Rs 2,000 crores via tier-II bonds.

1. FINCARE SFB MERGES WITH AU SMALL FINANCE BANK: AU Small Finance Bank Ltd (AU-SFB) amalgamated Fincare Small Finance Bank, (Fincare-SFB) marking the first such consolidation in the small bank sector. In the all-stock deal announced earlier, the shareholders of Fincare SFB received 579 shares of AU SFB for every 2000 shares of Fincare SFB. The merger received its final approval from RBI on March 4, 2024. With this merger now, AU-SFB has a franchise with a combined base of about 1 crore customers having deposit base of Rs 89,854 crores and a balance sheet of Rs.1,16,695 crores. The staff strength is 43,500 employees.

2. LENDERS SEEK ANONYMITY FOR OFFICERS TAGGING WILFUL DEFAULTER ACCOUNTS: Banks are seeking advice from the RBI on shielding the identities of their officers who spot wilful defaulters and build cases against errant customers. A recent High Court order has directed banks to name the employees on committees identifying a borrower as a wilful defaulter. The RBI draft norms stress the need to give the borrower an in-person hearing and put in place an identification and review committee. However, the draft guidelines do not mention naming the employees on the committee. Banks are concerned that the High Court and apex court orders would supersede a banking regulator's guidelines.

3. BANK OF INDIA RECEIVES Rs 1,128 CRORE TAX DEMAND ORDER: Bank of India has said that it has been issued with a demand tax notice totaling to Rs 1,128 crores by the Income tax Department's Assessment Unit. The demand pertains to assessment year 2016-17. The bank is in the process of filing an appeal before the Commissioner of the Income Tax (Appeals) against the said order within the prescribed time limit. The bank believes that it has adequate factual and legal grounds to reasonably substantiate its position in the matter.

4. MICROFINANCE PORTFOLIO UP BY 31% YEAR-ON-YEAR TO Rs 4 TRILLION: The portfolio outstanding in the microfinance sector rose nearly by 31% year-on-year (y-o-y) to Rs 4 trillion as on December 31, 2023. The number of active loans rose 23.2% y-o-y to 155 million. The loans disbursements rose 27% y-o-y to Rs 89,043 crores in December quarter. The average ticket size of loans rose nearly 16% y-o-y to Rs 46,700/- in the December quarter. The portfolio at risk for more than 90 days past due is stable at 0.9% as on December 2023.

5. RBI SHOWING SERIOUS COMMITMENT TO IMPROVE GOVERNANCE, TRANSPARENCY IN FINANCE SECTOR: The RBI is showing serious commitment to improve governance and transparency in financial sector. The recent measures by RBI will curtail lenders' over-exuberance, enhance compliance culture and safeguard customers. RBI's measures include restraining IIFL Finance and JM Financial Products Ltd from disbursing gold loans and loans against shares respectively and asking Paytm Payments Bank to stop onboarding new customers. RBI suspended HDFC bank from sourcing new credit card customers after repeated technology outages. These measures are a departure from the historically nominal financial penalties imposed for breaches in the past. This is as per a report submitted by S&P Global Ratings.

6. PUBLIC SECTOR BANKS' DIVIDEND PAYOUT TO GOVERNMENT MAY EXCEED Rs 15,000 CRORES IN FY-24: Public Sector Banks (PSBs) are likely to pay a dividend in excess of Rs 15,000 crores to the government for the financial year ending March 2024 on the back of improved profitability. In the first three quarters of the current financial year, all 12 PSBs earned a total profit of Rs 98,000 crores, as a result the government has already earned a dividend of Rs 13,804 crore, 58% higher than the payout made last year.

7. MARCH GST COLLECTION UP 11.5% YEAR-ON-YEAR: Good & Services Tax (GST) Collection in the month of March 2024 rose 11.5% to Rs 1.78 lakh crores on a Year-on-year (Y-o-y) basis, the second highest GST collection in a month since the GST regime came into force in July 2017. The highest GST collection was recorded in April 2023 at Rs 1.87 lakh crores. GST collection for FY-24 saw an increase of 11.7% at Rs 20.14 lakh crores. The average GST collection per month in FY-24 is Rs 1.68 lakh crores, up from 1.5 lakh crores done a year ago.

8. FINTECH QUARTER-3 LOAN DISBURSEMENT VALUE JUMPS 46%: Fintech Companies loan disbursement rose 12% year-on-year (y-o-y) to Rs 2.5 crores in December quarter of FY-24. The disbursement value rose 46% to Rs 33.922 crores for the quarter under review. The average loan ticket size for loans stood at Rs 11,945/-. Total Asset Under Management (AUM) of the Fintech industry were Rs 41,220 crores as on December 2023.

1. HDFC BANK SELLS HDFC CREDILA-ITS EDUCATION LOAN ARM: HDFC Bank has sold its education loan arm, HDFC Credila for Rs 9,552 crores to investors led by Baring Private Equity Asia and Chrys Capital . HDFC Credila was valued at Rs 10,360 crores. The sale was necessitated by a regulation that barred HDFC Bank from owning its inherited education loan company after its merger with parent company HDFC Ltd. HDFC Credila was founded in 2006. It is the country's largest education loan company with a loan book of Rs 25,237 crores with less than 0.1% bad loans. The low bad loan percentage is because the borrowers are screened properly and only those students are given loans that are sincere in their studies and diligent in loan repayment.

2. A MAJORITY OF ONLINE BANKING USERS PAY HIDDEN CHARGES: A survey by a community social media platform- LocalCircles has found that 63% of online banking users surveyed had to pay hidden charges which were not disclosed upfront and was debited from their account later. 41% of online users surveyed have said that they have experienced interface interference where another product would be presented to them to buy or subscribe to. 32% of online banking users surveyed have said that they have experienced subscription traps.

3. SBI TO SHIFT GLOBAL BACK OFFICE FROM KOLKATA TO MUMBAI: State Bank of India is likely to shift its centralized global back office and some other foreign exchange related departments from Kolkata to Mumbai. This is a further move by the bank to centralize operations. The back office was set up in 2015 in Kolkata. The back office works 24x7 to cater to customers in Sydney, Bahrain, Hong Kong, London and New York. The bank is also considering foreign currency desk, derivatives and structured products desk to shift to Mumbai.

4. IPL-2024 GETS Rs 10,000 CRORE INSURANCE COVER: The Indian Premier League (IPL), the richest cricket tournament in the World has been insured for Rs 10,000 crores this year. The New India Assurance Company and National Insurance Company have extended the major part of the Rs 10,000 crores insurance cover. India's most expensive insurance cover is taken by broadcasters, team owners against playing fees. The premium has gone up by 25% due to calendar clash with general elections. Other Insurers that write such policies are United Insurance and ICICI Lombard.

5. HINDUJA COMPANY TAPS JAPANESE BANKS TO FUND RELIANCE CAPITAL BUY: Hinduja group Company-IndusInd International Holdings Limited (IIHL) has approached Japanese banks to raise up to Rs 8,000 crores to finance a bid for Reliance Capital, formerly promoted by Anil Ambani, ahead of May 27, 2024 deadline set by a bankruptcy court to close the deal. Japanese banks may derive comfort from Reliance Capital's association with Nippon Life, a joint venture partner of Reliance Capital. The two together run a life insurance joint venture in India. The funds could come in at a much cheaper rate than what IIHL has been discussing with other lenders so far.

6. RBI DIRECTS AGENCY BANKS DEALING WITH GOVERNMENT TRANSACTIONS TO REMAIN OPEN ON SUNDAY, MARCH 31: In an effort to handle the huge volume of transactions, all agency banks who are handling government business have been asked by RBI to remain open on Sunday, March 31. The government of India has made a request to keep all branches of the banks dealing in government receipts and payments to keep open for transactions on March 31, which is a Sunday.

7. BANKS' EXPORT CREDIT AT Rs 20,489 CRORES WHICH IS A 12 MONTH HIGH: Bank loans to exporters in January 2024 reached their highest level in the past 12 months, in line with renewed global demand for Indian goods despite the Red Sea Crisis that has affected trade since late autumn due to piracy raids and question marks over maritime security. Outstanding export credit for Indian banks was seen at Rs 20.489 crores at the end of January 2024, rising 5% this financial year. This is as per the data from Reserve bank of India.

1. PUBLIC SECTOR BANKS TOLD TO SPELL OUT 3-YEAR BUSINESS PLAN: The Finance Ministry has asked Public Sector Banks (PSBs) to submit their business plans till FY 2026-27 by the end of March 2024. These plans will be assessed on a quarterly basis by the government-nominated Directors on the respective bank boards. The government has asked the banks to cover strategies to increase low-cost deposits, raise capital, resolve bad loans, improve cybersecurity and undertake financial inclusion outreach. In addition to the quarterly review by the government-nominated directors on the bank board, there will be mid-term and annual reviews by the finance ministry to access the performance.

2. BANKS ASKED TO CHECK MIS-SELLING, SAFEGUARD ACCOUNT HOLDER'S INTEREST: As the Department of Financial Services (DFS) regularly gets complaints that fraudulent and unethical practices are being adopted by the banks and Life Insurance Companies for procuring polices from the bank customers, Financial Services Secretary Mr. Vivek Joshi has asked the Public Sector Banks (PSBs) to check mis-selling of insurance products and ensure protection of account holders' interest. There have been instances that banks have sold life insurance policies to customers aged above 75 in tier I and tier II cities.

3. 5 PUBLIC SECTOR BANKS TO REDUCE GOVERNMENT SHAREHOLDING TO MEET MPS NORMS: Five Public Sector Banks (PSBs) - Bank of Maharashtra (BoM), Indian Overseas Bank (IOB), Punjab & Sind Bank (P&SB) , UCO Bank and Central Bank of India (CBI) are planning to reduce government stake to less than 75% to comply with SEBI's Minimum Public shareholding (MPS) norms. Currently, government holding in BoM is at 86.46%, IOB is 96.38%, P&SB is 98.25%, UCO is 95.39% and CBI is 93.08%. As per SEBI's guidelines all listed companies must have a minimum of 25% MPS.

4. FINANCE MINISTRY ASKS PSB BANKS FOR COMPREHENSIVE REVIEW OF THEIR GOLD LOAN PORTFOLIO: The Finance Ministry has directed all Public Sector Banks (PSBs) to review their gold loan portfolio as instances of non-compliance with regulatory norms have been noticed by the government. A directive in this regard has been issued advising them to fix anomalies relating to collection of fees and interest and closure of gold loan accounts. The directive has flagged various concerns, including disbursement of gold loans without requisite gold collateral, and anomalies regarding collection of fees and repayment in cash. The country's biggest lender, SBI alone holds a gold loan portfolio of Rs 30,881 crores as of December 2023.

5. RESERVE BANK OF INDIA ASKS BANKS TO MONITOR END-USE OF FUNDS FOR BUSINESS CARDS: Many banks issue business credit cards to business entities/individuals for business expenses. Business credit cards may be issued as charge cards and corporate credit cards, or by linking a credit facility as overdraft/cash credit. Now RBI has asked these banks to monitor the end-use of funds on account of those. The move comes after RBI last month ordered restraining commercial transactions routed through intermediaries by a card network.

6. FUNCTIONING OF INTERNAL BANKING OMBUSDMAN REQUIRES CONSIDERABLE IMPROVEMENT: RBI has put in place an Internal Ombudsman (IO) mechanism for regulated entities to strengthen their internal grievance redress mechanism. But the RBI Governor has said that the functioning of IO mechanism needs considerable improvement. Mr. Das opined that it has been observed that on a number of occasions, IOs tend to endorse the decision of regulated entities mechanically without giving proper weightage to the complaints. In several cases, rejected complaints are not being referred to IO.

7. RBI TAKES DELIVERY OF $ 5 BILLION DOLLAR/RUPEE SWAP: The Reserve Bank of India's dollar/rupee sell-buy swap conducted in March 2022 has matured in March 2024. RBI had the option to take delivery of the swap, roll it over entirely or opt for a partial rollover. But the RBI did not rollover the swap and took delivery of the $5 billion dollar/rupee swap that matured this month, aiming to bolster foreign exchange reserves and rupee liquidity. This move will help RBI in better managing the rupee liquidity situation ahead of tax outflows.

8. 85% OF PAYTM WALLET USERS UNLIKELY TO BE IMPACTED BY PAYTM PAYMENT BANK BAN: 85% of Paytm Payment wallet users are unlikely to be affected by the clampdown on Paytm Payments Bank Ltd, as their wallet or app is also linked to other bank accounts. RBI has advised the Paytm Payment Bank Ltd (PPBL) to shift the remaining 15% Paytm wallet users, whose app is linked to the Paytm Bank account, to other banks.

1. BANKS' PROFITABILITY TO REMAIN HEALTHY DESPITE SOME MODERATIONS: According to global rating agency Moody's, Indian Banks' profitability will remain at a healthy level despite slight moderation on account of declines in Net Interest margins (NIMs). The report also said that higher risk weights for exposures to Non-Bank Finance Companies (NBFCs) and unsecured retail loans will result in slight moderation in banks' capital ratios. But their capitalization will still remain strong. NIMs will decline marginally as banks reprice maturing deposits at higher rates to fully reflect previous increases in interest rates.

2. BANKS ASKED TO LIST STALLED HOUSING PROJECTS: The government has asked banks to compile and share a list of stalled housing projects under SWAMIH Fund (Completion of Construction of Affordable and Mid-Income Housing Projects). The government is looking to push for faster resolution and completion of stressed housing projects under SWAMIH. The government has received feedback that although the SWAMIH fund has been successful over the years, scaling up is an issue, considering the large number of stalled projects.

3. UCO BANK IMPS SCAM--- CBI RAIDS 62 LOCATIONS ACROSS INDIA: The Central Bureau of Investigation (CBI) has conducted raids across 62 locations in Rajasthan and Maharashtra with suspicious IMPS transactions worth Rs 820 crores as reported by UCO Bank. The raids aimed to uncover details related to the IMPS scam, which involved wrongful posting of transactions and credited Rs 820 crores to UCO bank accounts without debiting the originating bank accounts. On November 10 and 11, IMPS inward transactions from around 14,600 account holders of seven private sector banks were wrongfully credited in the accounts of over 41,000 UCO bank account holders. During the raids, approximately 130 incriminating documents related to UCO Bank and IDFC, and 43 digital devices were seized for forensic analysis.

4. MUTHOOT FINCORP PARTNERS WITH VEEFIN SOLUTIONS TO START SUPPLY CHAIN FINANCE OPERATIONS: Non-Banking Finance Company (NBFC) Muthoot FinCorp has partnered Veefin Solutions Ltd as a Technology Partner to start Supply Chain Finance (SCF) operations in India. Muthoot will deploy Veefin's suite of solutions across all SCF products, which include onboarding suppliers and vendors, underwriting their loans and managing transactions on the Loan management solution. Supply Chain Finance helps buyers and suppliers to optimize working capital by speeding up cash flow.

5. CUSTOMER COMPLAINTS WITH RBI OMBUDSMAN UP BY 68% IN 2022-23: Customer complaints with the RBI Ombudsman were up by 68% on 2022-23. Under the RBI Integrated Ombudsman Scheme (RBIOS0) RBI received 7,03,544 complaints between April 1, 2022 to March 31, 2023, showing an increase of 68% over the last year. In this, 41% of the complaints were of Public Sector Banks, while 31% pertained to Private Sector banks. In terms of category of complaints, 20.25% were concerning mobile and internet banking and 20.15% were concerning loans and advances.

6. ADITYA BIRLA CAPITAL AND ADITYA BIRLA FINANCE ANNOUNCE A SCHEME OF AMALGAMATION: The Boards of Aditya Birla Capital Ltd (ABCL) and Aditya Birla Finance Ltd (ABFL) have approved a scheme of amalgamation of the two companies to further create a large unified operating NBFC. The company's proposed amalgamation, which is subject to regulatory and other approvals as required, has quite a few benefits as the merger will result in reduction of legal entities and simplification of the group structure of Aditya Birla Capital.

7. RBI ASKS CREDIT CARD ISSUING COMPANIES TO GIVE USERS THEIR CHOICE TO PICK A NETWORK: The Reserve Bank of India has asked banks to provide eligible card users with an option to choose from multiple networks while issuing credit cards. This means the customers will now be able to choose from card networks such as VISA, MasterCard and others at the time of card issuance. The RBI has also asked the issuers of cards not to enter into any arrangements or agreement with card networks that restrain the customers from availing of services of other networks. Banks have welcomed this move as they say this will offer more choices to the customers.

8. SEVEN NBFC COMPANIES SURRENDER THEIR LICENSE TO RBI: The Reserve bank of India has announced that seven Non-Banking Finance Companies (NBFCs) have surrendered their Certificate of Registration (CoR). The seven Companies who have surrendered their CoR are, Marudhar Food & Credit, L&T Infra Credit, Creative Infra, L&T Finance, Jinvani Trading & Investment, Manjushree Fincap and Shruti Financial services.

1. RBI BARS IIFL FINANCE FROM OFFERING GOLD LOAN: The Reserve Bank of India has ordered IIFL Finance Ltd to stop sanctioning and disbursing any more gold loans with immediate effect citing regulatory violations. IIFL has been found to be granting more loan amount than what the security permitted. This was likely to be enabled by deviation in certifying the purity and weight of the gold at the time of loan sanction and auction. RBI has also prohibited IIFL from selling its gold loan portfolio by way of assignment or outright sale to other lenders. As per IIFL's investor presentation as of December 2023, the company had a gold loan portfolio of Rs 24,692 crores which accounts for 32% of its loan book.

2. RBI CLEARS "INTEROPERABLE" NET BANKING PAYMENTS: RBI has now approved a platform that will facilitate online merchants to receive payments from any bank via internet banking without signing up for every bank. Bharat Bill Payment System, an arm of the National Payments Corporation of India (NPCI) will implement a new system of interoperable net banking payments which will make it easier for smaller businesses to do e-commerce as even small payment aggregators can provide this service without on-boarding banks individually.

3. TATA MOTORS IS BEING SPLIT INTO TWO DIFFERENT LISTED ENTITIES: Tata Motors is looking to split its passenger and commercial vehicle units into two separate listed entities to unlock value of its electric vehicles and luxury car businesses. But there is no clarity on whether the new company will be an operating or holding entity of the passenger vehicle business. The currently listed Tata Motors will retain the Commercial Vehicle business. The demerger will help the two automotive companies to deliver higher growths while reinforcing accountability.

4. BANK OF INDIA INVESTS RS 109 CRORES IN NARCL: Bank of India has invested nearly Rs 109 crores in National Asset Reconstruction Company Ltd (NARCL). The investment is under preferential share issue. However, the bank's shareholding in NARCL will come to 9% which is as per the norms set by RBI.

5. FINCARE SMALL FINANCE BANK TO BE MERGED WITH AU SMALL FINANCE BANK: The merger between AU Small Finance bank and Fincare Small Finance Bank has been approved by RBI. These two banks will become one from April 1, 2024. All branches of Fincare Small Finance Bank will function as branches of AU Small Finance Bank from April 1, 2024. On January 23, 2024 the Competition Commission of India (CCI) approved the merger. Under the deal, shareholders of unlisted Fincare Small Finance Bank will get 579 shares of listed AU Small Finance Bank for every 2000 shares they hold. Once the merger is completed, there will be changes in the bank board as well.

6. 30 BANKS JOIN RBI'S UDGAM PORTAL FOR UNCLAIMED DEPOSITS: The Reserve Bank of India has said that 30 banks are facilitating their respective customers to search their unclaimed deposits/accounts through the UDGAM portal. Remaining banks are in the process of getting on-boarded. UDGAM-Unclaimed Deposits-Gateway to Access InforMation is an online portal developed by RBI. It facilitates the registered users to search unclaimed deposits/accounts across multiple banks in one place in a centralised manner. As of March 2023, the unclaimed deposits in the banking sector totalled to Rs 42,270 crores.

7. RBI BARS JM FINANCIAL FROM DOING ANY FORM OF FINANCING AGAINST SHARES & DEBENTURES: The Reserve Bank of India has barred JM Financial Products Ltd from doing any form of financing against shares and debentures after it found some serious deficiencies that are detrimental to the interest of the customers. This also includes sanctioning and disbursing loans against IPO of shares and subscription of debentures. RBI has allowed the company to service its existing customers through the usual collection and recovery process.

8. BANKS' NPAs AT THE LOWEST AS RECOVERIES INCREASE: Banks' bad loans (Non-Performing Assets - NPAs) have fallen to record lows as recoveries from defaulters rise and many who missed payments have regularised. But lenders are looking at building buffers anticipating some stress. Bad loans fell by 21% to Rs 4.85 lakh crores, from a year earlier. The ratio of gross bad loans could improve to 2.8% this year from 2.9% last year. Write-offs stood at Rs 34,000 crores as against Rs 29,000 crores in the December quarter last year.

9. BANKS TURN TO BULK DEPOSITS TO MEET CREDIT DEMAND: Banks struggling with slow growth in deposits, have tapped the bulk deposits market aggressively in the last few months, resulting in the outstanding Certificate of Deposits (CDs) in the banking system. The RBI data showed that outstanding CDs in the banking industry rose to Rs 3.81 lakh crore, the highest since April 2014.

1. SEBI ASKS SMALL, MID-CAP FUNDS TO DISCLOSE MORE ABOUT RISKS: Small and Mid-sized funds have seen high inflows, causing concern among authorities about how they would counter in the event of a sharp market selloff. Securities & Exchange Board of India (SEBI) has asked the asset managers of such funds to give more information to investors about risks associated with their funds. The funds have been asked to disclose how long it might take to accommodate large redemptions, what impact large outflows could have on the value of the portfolio and how much cash and liquid assets the fund holds to meet emergencies.

2. GOVERNMENT TO LOOK AT CHANGE OF OWNERSHIP HOLDING OF FINTECHS TO ENABLE REGULATORY COMPLIANCE: Amid crisis at Paytm Payments Bank, Finance Ministry has given a statement that the RBI, Department for Promotion of Industry and Internal Trade (DPIIT), and Ministry of Finance will look at the change of ownership holding/control of listed fintech companies to enable them to be in-sync with regulatory compliance. The statement has stressed that the cost of lending and funding for critical areas including priority sector should be rationalised and that the Know Your Customer (KYC) process across all fintech segments must be simplified and digitised.

3. FINTECHS HELP BANKS TO CONSOLIDATE THEIR SHARE IN NBFC BASTION: The lending landscape in India is undergoing a change with the spread of digitisation and the advent of fintechs. In the past, banks were hobbled by the lack of infrastructure, reach and costs involved in expanding their geographic footprint into the areas where NBFCs were operating. But fintechs and advancements in technology has enabled banks to extend their reach without significant inflation in fixed costs. Banks are now able to enter consumption credit market which once was dominated by NBFCs only.

4. MOBIKWIK INTRODUCES POCKET UPI TO FACILITATE PAYMENTS WITHOUT LINKING BANK ACCOUNTS: MobiKwik has announced a new feature on its platform, "Pocket UPI", which the fintech company said will enable users to have enhanced control over their finance management as the feature allows users to make UPI payments through MobiKwik Wallet without linking their bank account, thus giving more power in the hands of the users with an additional choice.

5. NCLT CLEARS INDUSIND INTERNATIONAL'S Rs 9650 CRORE BID FOR RELIANCE CAPITAL: The National Company Law Tribunal Ltd (NCLT) has approved the Hinduja group firm IndusInd International Holding's Rs 9,650 crores resolution bid for the crippled Reliance capital. IndusInd International had submitted its proposal in June 2023. Under the resolution plan cleared by NCLT, creditors will take a massive haircut of 63%. Out of the total claims of Rs 38,526 crores, only Rs 26,086 crores were admitted by the tribunal and the final winning bid is for Rs 9,661 crores which means only 37% will be realised.

6. PAYTM LIKELY TO PARTNER WITH FOUR BANKS FOR ENABLING UPI TRANSACTIONS: Paytm likely to partner with Axis Bank, HDFC Bank, State Bank of India and Yes Bank for processing transactions via the popular UPI platform. The Reserve Bank of India, last week had asked National payments Corporation of India (NPCI) to examine a request from Paytm to become a third-party applicant provider and to facilitate 4 to 5 banks to act as service providers for Paytm.

7. BRANCH BANKING ALSO BECOMES MORE IMPORTANT FOR INDIAN BANKS NOW: India's digital drive helped link branches to villages through core banking solutions. Through core banking a lot of things can be done at the backend. Mr. Dinesh Khara, Chairman of SBI opined that all said and done the proximity to customers is something which always works well in terms of enhancing trust and confidence of customers. So, to build a new customer base for deposits, banks must be visible in areas where they want to draw customers. That explains the addition of more than 3,500 bank branches across the country in the past two years by just the top 4 private sector banks.

8. FINANCE MINISTER ASKS RBI TO HOLD MONTHLY MEETINGS WITH STARTUPS AND FITECH FIRMS: Finance Minister Nirmala Sitharaman has asked RBI to hold monthly meetings with startups and fintech companies to address their concerns. There was a meeting with startups and fintech firm which was attended by top executives of about 50 firms including RazorPay, CRED etc during which certain concerns were raised.

1. RBI STEPS -UP SCRUTINY OF FINTECH COMPANIES WITH MORE INSPECTIONS: With the latest fiasco of Paytm Bank which is termed as persistent non-compliance with RBI regulations, the RBI has stepped up its scrutiny on Fintechs by hiring analysts to scrutinize customer data, holding frequent meetings with their executives. These steps from RBI have come after regular inspections over the past one year which exposed a number of lapses, including customer due diligence.

2. BAJAJ ALLIANZ LIFE PARTNERS WITH SATIN CREDITCARE TO BOOST FINANCIAL INCLUSION IN RURAL AREA: Bajaj Allianz Life has signed a strategic agreement with Satin Creditcare to ramp up financial inclusion in rural areas. Through the strategic partnership, enabled by insurance broker Coverfox, Satin Creditcare's customers can secure loans with Bajaj Allianz life's tailored Insurance plans across its 1,386 branches in the country. Coverfox will be used for buying, selling and servicing insurance digitally. Satin Creditcare says that the strategic partnership is poised to redefine industry standards and set new benchmarks in customer-centric innovation.

3. PANEL ON INSOLVENCY PROPOSES MEDIATION AT PRE-DEFAULT STAGE: An expert committee set up by the Insolvency regulator has recommended mediation between lenders and borrowers even at the pre-default stage to achieve faster out-of-court results. The committee is of the view that since the pre-default stage falls outside the formal insolvency framework of the code, the use of mediation at this level may be encouraged by lenders to achieve faster out-of-court settlements. The committee has also suggested mediation even after the insolvency proceedings have been applied for or initiated under the Insolvency & Bankruptcy Code (IBC) for faster results.

4. IRADAI TO ENHANCE SCRUTINY OF HEALTH & SAVINGS PLANS AIMED AT INDIVIDUALS OVER THE AGE OF 55 TO CURB MIS-SELLING: The Insurance Regulator- IRADAI is planning for enhanced scrutiny of complex insurance products, especially those aimed at individuals over the age of 55, including Health & Savings Plans to curb mis selling. IRADAI is in discussions with all the stakeholders about ensuring transparency in sales and introducing mandatory video verification before policy acceptance. The regulatory is also in discussion for more accountability by all parties.

5. RBI GIVES 15 DAYS EXTENSION TO PAYTM BANK CUSTOMERS: In a relief to Paytm Payment Bank's (PPB) merchants and customers, the RBI has extended the deadline for the bank to stop accepting fresh deposits in its accounts and wallets by 15 days. Now the new deadline is March 15, 2024. At the same time, Paytm has announced that it has shifted its nodal account to axis bank by opening an escrow account to ensure seamless merchant settlements. Earlier Paytm was using PPB services.

6. SBI IN TALKS WITH RBI TO LOWER CASH RESERVE RATIO REQUIREMENT ON GREEN DEPOSITS: State Bank of India (SBI) has requested RBI to lower its Cash Reserve Ratio (CRR) requirement for green deposits. Green Deposit is a fixed-term deposit for investors who are looking to invest their surplus cash in environmentally beneficial projects and initiatives. CRR is the percentage of a bank's total deposits that must be kept with RBI at zero interest rate. Currently, banks' deposits attract a CRR of 4.50%.

7. RBI SUSPENDS MASTERCARD, VISA'S CARD-BASED COMMERCIAL PAYMENTS: The Reserve Bank of India has asked Mastercard and Visa to suspend commercial payments made by companies through cards till further notice. While most companies typically make payments through net banking or real time gross settlement (RTGS), some firms pay through cards for the purpose like payments to suppliers and vendors. The total monthly transaction size of such payments is in excess of Rs 20,000 crores.

8. HYBRID MUTUAL FUNDS GARNER MORE AMOUNT : Hybrid Mutual Fund schemes have been gaining popularity among investors, attracting Rs 20,634 crores in January, marking a 37% surge from the previous month. With this, the total inflow in the category reached Rs 1.21 lakh crores in the April-January period of the current financial year. The surge may be due to the scheme's appeal as an alternative investment option post-change in taxation laws for Debt funds. Hybrid Mutual Fund schemes are those funds that typically invest in a combination of equity and debt securities and sometimes in other asset categories such as gold.

1. NPCI IN TALKS TO LINK INDIAN AND US BANKS FOR REAL-TIME PAYMENT SERVICE: The National Payments Corporation of India (NPCI) and banks in the US and India are in advanced stages of discussions to execute a real-time payment linkage between US and India. The plan seeks to build on the domestic payments body's inroads to setting up cross-country systems. Given that the US does not have a nationwide system similar to what NPCI has done with the UPI in India, the model would initially focus on small consumer payments.

2. CANARA BANK PLANS TO START CREDIT CARD SUBSIDIARY: Canara bank will soon seek RBI's approval to convert ban IT subsidiary into a credit card company as it aims to leverage its existing customer base for selling credit cards with a bid to tap this potential growth market. The planned subsidiary will have a 94% stake of Canara Bank with Karur Vysya Bank holding the remaining 6%. Canara Bank plans to convert its subsidiary, Canbank Computer Services in which Canara Bank holds 69.14% stake, Bank of Baroda owns 18.52%, DBS Bank and Karur Vysya Bank hold 6.17% each. Both Bank of Baroda and DBS Bank are ready to sell their stake in the subsidiary.

3. TOP INSURANCE COMPANIES RAISE CONCERN OVER THE PROPOSED CHANGE IN POLICY SURRENDER VALUES: Top Executives of many Life insurance companies have met with the Chairman of Insurance Regulatory and Development Authority of India (IRDAI) to express their concerns over a proposed change in the guidelines to calculate the surrender value of prematurely terminated policies. They opined that the proposed hike in surrender values could lead to higher lapses in insurance policies there by lowering their profitability.

4. MERCHANT SIGNUPS SOAR FOR BharatPe, MOBIKWIK AND PhonePe: With RBI's crackdown on Paytm Payments Bank on January 31, for not complying with regulations, downloads of rival companies BharatPe, Mobikwik and PhonePe have seen a significant surge in new merchant's onboarding their platform. Merchant signups on BharatPe platform have doubled in the first week of February. MobiKwik also saw a 50-60% jump in new merchant onboarding. Not just merchant onboarding, MobiKwik also had an overall increase in UPI transactions by 50%. To meet the surge in demand, MobiKwik is doubling its sales force in the next one month.

5. GOVERNMENT EXAMINING FDI FLOW FROM CHINA IN PAYTM PAYMENTS SERVICES: The government is examining Foreign Direct Investment (FDI) from China in Paytm payments Services Ltd (PPSL), the payment aggregator subsidiary of One97 Communications Ltd. In November 2020, PPSL had applied for license with RBI to operate as a Payment aggregator, but in November 2022, RBI had rejected PPSL's application and had asked the company to resubmit it, so as to comply with Press Note-3 under FDI rules. One97 Communications Ltd has investment from China firm Ant Group Co.

6. RBI CONDUCTS 2 VRR AUCTIONS TO INFUSE LIQUIDITY INTO BANKING SYSTEM: RBI has conducted two four-day Variable Rate Repo (VRR) auctions to infuse liquidity into the banking system. The liquidity deficit in the system widened to Rs 1.93 trillion in the first week of February. The first four-day VRR auction, RBI received bids worth Rs 1.23 trillion, against a notified amount of Rs 25,000 crores. The second auction received bids worth Rs 97,280 crores.

7. IRDAI PROPOSES TO SET UP ONLINE MARKETPLACE "BIMA SUGAM" : Insurance regulatory IRDAI has proposed to establish an online insurance market place, "Bima Sugam", a one-stop solution to enhance availability, accessibility, and affordability of a insurance product. This will be an online digital public infrastructure. It would promote transparency, efficiency, collaboration across the entire insurance value chain, and technological innovation in the sector. It will also help to achieve the government's vision of "Insurance for all by 2047"

8. RBI CAUTIONS BANKS AND NBFCs AGAINST COMPLACENCY: The Reserve Bank of India Governor Mr Shaktikanta das has asked banks to be on guard against complacency and be vigilant around build-up of risks in financial sector. The governor highlighted issues relating to business model viability, the abnormal growth in personal loans and also urged adherence to co-lending guidelines. He complimented banks on their improved financial performance but also cautioned against rising risks.

1. PAYTM PAYMENTS BANK TOLD TO HALT ITS SERVICES BY FEBRUARY END: The Reserve Bank of India has ordered Paytm Payments Bank Ltd (PPBL) to stop all forms of banking services, including accepting deposits and processing of payments by February end. RBI has put a freeze on all basic transaction services through Paytm's various platforms using UPI, IMPS, Aadhaar-enabled payments and others. RBI had been frequently flagging off grave issues like money laundering concerns, questionable dealings of huge money. Incidentally, PPBL had lakhs of non-KYC compliant accounts and in thousands of cases a single Pas were used for opening of multiple accounts.

2. INDIAN OVERSEAS BANK PUTS BAD MSME LOANS ON THE BLOCK, PLANS 60% DEBT RECOVERY: Many Banks are selling bad loans in Micro, Small & Medium Enterprises (MSMEs) to clear their loan books. Indian Overseas Bank has decided to sell loans in MSME segment comprising of 41 accounts worth 208 crores. The bank is looking to recover 60% of the debt. It has invited potential buyers to submit offers, with 20% in cash and 80% in Security Receipt (SR). The last date for submitting expressions of interest is February 9th and e-bidding will take place on February 21st. The total cash component will be 26.40 crores and the SR portion will be Rs 105.60 crores and the total recovery expectation would be 60% of the outstanding book value.

3. INDIA FINANCIAL CRIME FIGHTING AGENCY WILL PROBE PAYTM PAYMENTS BANK FOR MONEY LAUNDERING: Revenue Secretary Mr. Sanjay Malhotra has said that India's Financial Crime fighting agency will probe Paytm Payments Bank Ltd (PPBL) for money laundering and siphoning of funds. RBI has already ordered PPBL to stop all banking services. The Financial Crime Fighting Agency will see if there are any instances of money laundering by PPBL.

4. BANKS MUST ASSESS SMALL MFIS' DIFFERENTLY: Microfinance Industry Network's Chief Executive Officer has told that banks must use a different yardstick to assess the credit-worthiness of small microfinance entities. He said the government should adopt different measures to facilitate funding to small microfinance institutions. Every bank has some criteria based on net worth, profitability and credit rating which are their internal mechanism. But they cannot judge smaller players with the same yardstick so the banks should have different approach while dealing with this sector.

5. RBI GRANTS NOD TO HDFC BANK ENTITIES TO ACQUIRE UP TO 9.5% IN YES BANK, INDUSIND BANK AND FOUR OTHER BANKS: The RBI has granted HDFC Bank's entities approval to acquire aggregate holding up to 9.5% in six banks-Yes bank, IndusInd Bank, Axis bank, ICICI bank, Bandhan Bank and Sarvodaya Small Finance Bank. HDFC bank entities include HDFC Mutual Fund, HDFC Life Insurance Co, HDFC ERGO General insurance Co. HDFC bank had made the application to RBI on behalf of its group of companies.

6. BANK CREDIT GROWTH AS A WHOLE COULD BE MODERATE IN FY-25: S & P Global Ratings has said strong credit growth of Indian banks could moderate to 12-13% in the next fiscal (FY-25) if deposit growth remains subdued. S & P Credit ratings has cautioned that due to timid deposit growth, the liquidity conditions will be tightened. The report highlights potential challenges like the need for wholesale funding, and rising share of unsecured personal loans. Despite stable asset quality and capitalisation, S & P emphasises the impact of liquidity constraints on India's banking sector's robust credit growth.

7. INFRA PROJECTS BY THE GOVERNMENT DRIVE BANKS' CORPORATE LOAN GROWTH: Banks have witnessed strong growth in corporate loans in the third quarter of this fiscal year. This is driven by demand from companies in the infrastructure and power sector. With economy expected to grow at a faster pace with the government's focus on strengthening the infrastructure, banks expect the corporate loan demand to remain firm in the coming years. The Interim Budget has also given re-assurance on continuation of infrastructure spent which will open more opportunities for corporate book growth.

1. LOANS FROM SMALL TIME BORROWERS SURGE POST COVID: Banks and NBFCs together have more loans to small time borrowers including micro enterprises in the MSME space and retail individual borrowers post COVID. The outstanding portfolio of retail individual loans (consumption loans) stood at Rs 78 lakh crores as of June 2023, up by 17.4% on a year-on-year basis. Delinquencies improved across all individual MSME loans. Home loans rose by 61% from FY-20 to FY-23. This is as per a report submitted by credit bureau CRIF Highmark.

2. RELIANCE HOME FINANCE HEADED FOR VOLUNTARY LIQUIDATION, SURRENDERS CERTIFICATE OF REGISTRATION: Authum Investment & Infrastructure Ltd, which acquired the stock exchange-listed Reliance Home Finance a year ago, has proposed voluntary liquidation of the company. Authum Investment has informed the Exchange that RBI has approved the Company's application for surrender of its Certificate of Registration (CoR) on account of voluntary exit from housing finance business. Under the resolution plan, Authum had acquired Rs 11,540 crores of debt of reliance Home Finance for Rs 3,351 crores.

3. GOVERNMENT MAY CUT GUARANTEES, CONSULTANTS MAY BE SCREENED FOR QUALITY: The government could cut bank guarantees, provide facility of deemed approval and introduce new stringent eligibility criterion as part of a significant revamp of the bid process for selection of consultants who prepare project reports for road and highway projects. This is a move aimed at expediting award of projects with emphasis on quality, presently a certain percentage of the contract is to be given in the form of bank guarantees by the contractors. The government is now planning to fix a slab or make it on a pro-rata basis.

4. ONE FORMAT OF DATA SUBMISSION FOR BANKS TO CREDIT INFORMATION COMPANIES: Reserve Bank of India has issued show-cause notices to individual banks over data discrepancies submitted to credit information companies. Banks are now looking at standardizing data submission to these credit information companies. The proposed move is expected to address issues such as inexplicable changes to credit scores, delays in updating loan closures, lack of response to requests for correction and identity thefts. At present, each lender has its own format which leads to data variation.

5. GOVERNMENT MAY SET HIGHER DIVIDEND TARGET AT Rs.70,000 CRORES FROM RBI, AND FINANCIAL INSTITUTIONS: Having reaped rich dividends from RBI and financial institutions this year, the government will be looking forwards to receiving about Rs 70,000 crores from RBI and Financial Institutions in the next financial year. The current financial year estimates has already exceeded the Budget target as RBI has paid a dividend of Rs 87,416 crores to the government. With Public Sector banks and financial institutions posting good profits this year, the dividend payout by them in the coming year would be higher as compared to this year.

6. PRIVATE BANKS FACE NET INTEREST MARGIN COMRESSION: The Net Interest Margin (NIM) of private sector banks has remained under pressure in the third quarter of this fiscal, reflecting the rise in their cost of funds. Most of the private banks have reported year-on-year (Y-o-Y) decline in their NIM, impacted by the hike in interest in term deposits and tight liquidity in the banking system. The NIM of private banks has contracted by 6-36 basis points year-on year during the third quarter of this fiscal.

7. A NEW REGULATOR TO MONITOR FINTECH APPS IS PROPOSED: Fintech apps have revolutionalized the way we manage our finance, invest, lend, borrow, make changes to our investments and so on. They have obviated the need to visit a physical branch. But alongside this convenience lies a dark side. Crimes like data theft have risen, cybersecurity and customer protection too have taken a hit at times. Hence, the RBI has released a draft framework for fintechs to create Self-Regulatory Organizations (SRO-FT) which will ensure members adhere to industry standards and comply with relevant laws and regulations. They will also play an important role in serving consumer interest.

8. CASHLESS TREATMENT AT ANY HOSPITALS NOW: The General Insurance Council (GIC) in consultation with general and health insurance companies has launched "Cashless Everywhere "initiative to extend the cashless treatment at all hospitals. Health Insurance policy holders can now avail of cashless facilities even at hospitals that are not in the network of the insurance companies. Under the "Cashless Everywhere" system, the policy holder can get treated in any of the hospitals they choose through cashless hospitalization facility even if the hospital is not in the network of the insurance company.

1. NBFCs BAT FOR CERTAIN GOOD MEASURES IN THE INTERIM BUDGET: Non-Banking financial Companies (NBFCs) that are granting gold loans are facing liquidity crunch, have urged for fiscal measures in the upcoming Union Budget 2024 to infuse liquidity in the system and introduce a partial credit guarantee scheme to cover NBFCs onward lending to micro-enterprises. These NBFCs have also urged the Centre for granting "priority" sector status to gold loans and allowing Gold Linked Credit Line via UPI that can go a long way to help small business owners to meet their financing needs and monetise idle gold jewellery.

2. BHARTI GROUP IN TALKS WITH SBI LIFE AND OTHER COMPANIES TO SELL ITS INSURANCE BUSINESS: Bharti Group is in advanced stage of talks with SBI Life and some other insurance companies to sell its wholly owned life insurance venture Bharti AXA Life Insurance. The move comes after Bharti Group announced its plans in October 2023 to buy out its joint venture partner AXA Group's 49% stake in Life insurance business. And after acquiring the business from AXA, now Bharti has been looking to sell the life insurance business and focus on telecom.

3. BULK OF CREDIT CARD LOANS ARE SUBPRIME: The credit card segment has emerged as the fastest growing among all retail loans, which could be a cause of concern for the regulator as much of this unsecured credit is going into the below-prime category. In case of these credit cards, per live borrower credit outstanding is higher for below-prime borrowers, suggesting a higher flow of credit to relatively riskier borrowers. A bulk of it is flowing to the economically less well-off, with an average outstanding of Rs.40,000/- by the subprime segment borrowers and about Rs.60,000/- by near-prime borrowers.

4. MOBILISING DEPOSITS AND CYBER SECURITY ARE KEY CHALLENGES FOR BANKS: Keki Mistry, former VC & CEO of HDFC has said that mobilising deposits and cyber security are the two biggest challenges for banks. Further elaborating on his statement, he said that banks need to focus on building their deposits at an optimum cost because growth in credit has been very sharp. Secondly, cyber security challenges are increasing every day. At no point of time can any organisation ever be 100% sure that it will not face any cyber-attack. So, every bank has to keep evolving and looking at the latest trends and keeps updating its systems.

5. RBI CALLS UPON INTERNAL OMBUDSMEN TO GIVE INPUTS FOR FURTHER ENHANCING PROCESSES: The Reserve Bank of India has called upon all internal ombudsmen of banks, NBFCs and CICs to provide inputs for further enhancing internal systems and processes. As per RBI's continuing engagement with regulated entities, the Deputy Governor Mr. Swaminathan J in his key note address has emphasised the pivotal role of internal Ombudsmen as the vigilant observers and facilitators in a fair and just dispute resolution process, for ensuring effective and impartial redress of customer grievances within the regulated entity itself.

6. RBI PROPOSES STRICTER NORMS FOR DEPOSIT TAKING HOUSING FINANCE COMPANIES: Deposit taking Housing Finance Companies (HFCs) will have to maintain 15% liquid assets against the public deposits held by them, up from 13% stipulated earlier. RBI has proposed the said enhanced requirements of liquid assets as part of steps to harmonise regulations for housing finance and NBFCs. Deposits taking HFCs will get time till March 2025 to meet the enhanced liquid asset norms.

7. RBI PROPOSES BANKS WITH LESS THAN 6% NET NPA TO DECLARE DIVIDENDS: The Reserve Bank of India has proposed for allowing banks having a Net Non-Performing-Asset (NNPA) ratio of less than 6% to declare dividends. As per the prevailing norms last updated in 2005, banks need to have a NNPA of up to 7% to become eligible for declaration of dividends. The guidelines have been reviewed in light of implementation of Basel-III standards, and revision of Prompt Corrective Action framework. RBI has proposed that the new guidelines should come into effect from FY-25 onwards.

8. RBI ASKS BANKS NOT TO CLASSIFY "ZERO" BALANCE ACCOUNTS AS INOPERATIVE: The Reserve Bank of India has asked all banks not to classify zero balance accounts as inoperative, which are opened for availing the benefits of the government schemes like Direct Benefit Transfer (DBT), even if there is no activity in the account for two years. RBI said that Central and State governments have been expressing difficulty in crediting cheques/direct benefit transfer/electronic benefit transfer/scholarship amounts in these accounts as they are also classified as inoperative due to non-operation for two years.

1. HDFC BANK'S CREDIT CARD REACH WIDENS DUE TO CO-BRANDING: HDFC Bank's credit card business has received a major push from its co-branding strategy in recent months The bank has co-branded its credit card with Tata-Neu and Swiggy. Till now HDFC Bank has distributed a million-plus cards with tata group's Tata-Neu and around 1.20 lakh cards with Swiggy. HDFC bank had announced its partnership with tata-Neu in August 2023 and with Swiggy in July 2023. Co-branding with major players is a big success for banks as there are around 4.5 million ICICI Bank and Amazon-Pay co-branded cards in use.

2. EaseMyTrip VENTURES INTO INSURANCE BUSINESS WITH NEW SUBSIDIARY: Online travel booking platform EaseMyTrip has announced that it is venturing into the insurance sector with the launch of its new subsidiary "EaseMyTrip Insurance Broker Pvt Ltd" The Company termed it a Strategic move to diversify its service portfolio and tap into the insurance market by creating a specialised product to solve customer needs. The new venture is expected to strengthen EaseMyTrip's position in the industry and cater to a 7.9 trillion market with EaseMyTrip's own 20 million userbase.

3. RBI ASKS BANKS TO TAKE PRE-EMPTIVE STEPS TO MITIGATE RISKS: The Reserve Bank of India expects the board of directors and risk executives of all banks to step up the measures to ensure that incipient risks are nipped in the bud. The RBI Governor, Mr Shaktikanta Das has said that India's strong banking system is the cornerstone of its success on the global stage after it pulled out of the depths it had fallen due to the bad loans a few years back. And, RBI expects the senior management, the Board of Directors, the Audit and Risk management Committees and the Internal Audit functions in the banks to play a more proactive role and be more vigilant of incipient and emerging risks.

4. OVER 100 MILLION INDIAN TO EARN OVER $10,000/- BY 2027: The number of affluent Indians with an annual income of $10,000 (around Rs 8.30 lakhs) or more has grown 12 times faster than the population in the past 4 years and is set to become 100 million by 2027. This is as per a report by Goldman Sachs. The report also says this growth in income levels is having a direct impact on consumption in segments like leisure, jewellery, out-of-home food, healthcare and premium brands category. The report estimates the population of affluent consumers to have grown at a Compounded Annual Growth Rate (CAGR) of 12% between 2019 to 2023 and in the same period the population has expanded at a CAGR of 1%.

5. STUDY FINDS THAT BANK VALUATIONS COULD RISE BY $7 TRILLION IN 5 YEARS: Boston Consulting Group in one of its studies has quoted that Global banks could boost their valuations by a combined $7 trillion in the next 5 years if they take major steps to promote growth and boost productivity. Banks could roughly double their valuations if they pursue growth and improved price-to-book ratios despite obstacles.

6. ALGO LENDING CAN LEAD TO POTENTIAL CRISIS: The Reserve bank of India Governor Mr Shaktikanta Das has warned financial institutions against the potential risks of relying on algorithm (model-based-lending). Lenders must continuously maintain a vigil on the efficiency of such models. He further said that the ground realities keep changing. So, it is important to monitor whether your model is falling behind the curve or is in tune with the times, and what are the possible risks.

7. BANK DEPOSITS TOUCH RECORD Rs 200 LAKH CRORES, DOUBLE FROM THE YEAR 2016: Banks ended financial year 2023on a high note with their deposits crossing the Rs 200 lakh crore milestone. Total deposits with the banking sector have doubled from Rs 100 lakh crores in 2016, reflecting a growth of around 9.5%. While this is the fastest rate at which banks have doubled the deposits, the rate of growth has slowed down as compared to earlier. The deposits stood at Rs 200.8 lakh crores as on December 29, 2023, an increase of 13.2% over the last year.

8. AT Rs 14 LAKH CRORES, NET DIRECT TAX COLLECTION KITTY HITS 81% OF THE FY-24 TARGET: The net direct income tax collections so far, this financial year have already crossed 81% of the target set for this financial year. The total tax collection so far is Rs 14.70 lakh crores which is 19.4% more than the last year's collections during the same time. Government has budgeted to collect Rs 18.20 lakh crores from direct taxes this year, higher than the total collections of Rs 16.60 lakh crores done in FY-23. The latest figures will provide much needed comfort to the government, which is seeking to ensure that it sticks to the fiscal deficit target of 5.9% of the GDP during the current fiscal year despite higher spending under several heads and lower than budgeted disinvestment.

1. BANKS TO SET UP COMMON WEBSITE TO ENCOURAGE e-RUPEE ADOPTION: Banks will soon set up a common website to promote transactions in digital currency and also create more awareness and encourage to adopt e-Rupee. RBI had asked the banks to explore setting up a platform to onboard customers and create digital e-Rupee awareness. There were discussions as how to further promote e-Rupee, the Central Bank Digital Currency (CBDC), and one of the suggestions being worked out is to set up a website. As per the estimates, the website is expected to have around 5 lakhs hits per month, which may be doubled by the end of the first year. RBI, has already met its target of hitting a million of daily transactions in the retail segment by the end of 2023.

2. TAXPAYERS UNDER GST CAN PAY TAX VIA CREDIT, DEBIT CARDS: Tax payers under GST will now be able to pay their tax via credit and Debit cards. The Goods and Services Tax Network (GSTN) has enabled GST payments through credit and debit cards. As of now, the active online methods for GST payments were net banking, IMPS and UPI. Initially the facility is started in 10 states/Union territories from 5TH January 2024. Soon, this facility will be extended to all the states.

3. JC FLOWERS ARC, ACRE, EDELWEISS ARE AMONG THE BIDDERS FOR THE SALE OF YES BANK'S Rs 4,200 CRORE NPA PILE: JC Flowers ARC, Ares-backed Acre ARC, and Edelweiss ARC are among the eight bidders bidding for Rs 4,200 crores of NPA sale offered by Yes Bank. The NPA pile consists of both the retail and corporate segments. The corporate portfolio segment includes 8 accounts that have become NPAs after 2019. The Corporate NPA loan pool is worth Rs 3,091 crores while the retail NPA loan pool is worth Rs 1,142 crores. Yes Bank had sought only cash bids and the last date to submit the bid was 6TH January 2024.

4. BANK BORROWINGS INCREASE BY 67% IN 2023: Borrowings by banks has increased in 2023, on an average as two-thirds in aggregate, as RBI's liquidity mop-up to tame consumer prices coincided with higher credit demand for credit and trailing deposit growth. RBI's data showed average bank borrowings on a fortnightly basis were at Rs 6.39 lakh crores from January to December 2023, which is 67% higher than average fortnightly borrowings of Rs 3.81 lakh crores in the year 2022. These borrowings for scheduled commercial banks largely represent short-term funding routes.

5. LOAN GROWTH, INCREASE IN NON-INTEREST INCOME TO LIFT BANK PROFITS: Strong loan growth, stable asset quality and increase in fee income will help banks to report an increase in profits year-on-year. But the profitability may take a hit by lower Net Interest Margins (NIMs) as the increasing cost of deposits could totally offset the profit margins. Deposit rates have increased between 70 and 120 basis points, mostly in third quarter due to which the margin compression could hence be severe.

6. FINO PAYMENTS BANK APPLIES FOR SMALL FINANCE BANK LICENSE: Fino payments Bank Ltd has applied for a Small Finance Bank license. The bank has been preparing itself for an upgrade in terms of banking activity for quite some time. RBI allows payments banks without corporate lineage to apply for a Small Finance Bank license after completing 5 years of business. The business opportunities for payments bank are limited as they can accept deposits from low-income households but they cannot offer any loan facilities to them.

7. MUTUAL FUNDS NET ASSET UNDER MANAGEMENT CROSSES Rs 50 LAKH CRORES: The total Asset Under Management (AUM) of Mutual Funds has surpassed the Rs 50 lakh crores mark in December 2023, the first time ever. The AUM is increased by approximately 3.53% and stood at Rs 50.77 lakh crores as against Rs 49.04 lakh crores in November 2023. The equity category witnessed an increase in total inflows by around 9.4%. Monthly gross inflows through Systematic Investment plans (SIPS) also topped Rs 17,600 crores, a new all-time record. Last month, the SIP AUM recorded another milestone by crossing Rs 10 lakh crore mark. This data is shared by the Association of Mutual Funds in India (AFMI).

8. NBFCs MAINTAIN A RESILIENT MARKET SHARE OF 60% IN GOLD LOAN: Non-Banking Financial Companies (NBFCs) focusing on gold loans have maintained a reasonably resilient market share despite intense competition from banks. The gold loan portfolio of NBFCs has been driven by their ability to hold on to their customers, focus on small and mid-sized loans, and increasing reach by expanding branch network. Due to these factors the market share of gold loan of NBFCs has been resilient at over 60% between March 2021 to September 2023.

1. CUSTOMER COMPLAINTS AGAINST CREDIT INFORMATION COMPANIES INCREASING: The Reserve Bank of India has said that there has been a rise in the customer complaints against Credit information Companies (CICs). The statement from RBI was released after a meeting between Deputy Governor Mr. Swaminathan J and Managing directors and Chief Executives of CICs. The statement also mentioned certain specific areas where CICs need to focus on. The Deputy Governor opined that the CICs need to redress customer complaints timely.

2. TOTAL UPI TRANSACTIONS CROSS 100 BILLION MARK IN 2023: Total transactions processed through the Unified Payments Interface (UPI) crossed Rs 100-billion mark in 2023, creating a new milestone. National Payments Corporation of India (NPCI) operates the UPI service along with other payment processing infrastructure. Total transactions processed by UPI in 2023 stood at 117.6 billion. This is a staggering growth for UPI payments service in the country which had recorded around 74 billion transactions in 2022 and 38 million in 2021. Monthly transactions on UPI have seen a jump of 49% between January to December 2023. This is as per a data released by NPCI.

3. RBI PROPOSES NEW DIVIDEND PAYMENT RULE FOR BANKS, LENDERS WITH LOWER NPAs MAY OFFER HIGHER DIVIDENDS: The Reserve bank of India has said that banks with a net Non-Performing Asset (NPA) ratio less than 6% and capital adequacy above the minimum regulatory thresholds for the past three financial years should be eligible to declare higher dividends. In a draft circular released earlier this week, it has proposed a revised graded dividend pay out policy with a higher ceiling on dividend payment to 50% from 40% earlier. The lower the NPA ratios, the higher would be the dividend payout.

4. CANARA BANK TO OPEN CYBER SECURITY WING, STEPPING UP AI ADOPTION: Canara Bank will open separate cyber-security wing from April 1, 2024 as the bank steps up its investment in cyber security initiatives to prevent customers from falling into the trap of online fraudsters. After opening the bank's Data and Analytics centre (DnA) in Bangaluru, the bank had been at the forefront in leveraging analytics for improving customer experience and operations. The Managing Director of the bank said that Artificial Intelligence is reshaping the banking sector in unprecedented ways, and the bank is committed to adopt AI to spur business growth while ensuring data privacy and security.

5. RBI SIMPLIFIES REACTIVATION OF DORMANT ACCOUNTS, TIGHTENS NORMS TO CURB FRAUDS: The Reserve Bank of India has eased the process to re-activate the dormant accounts and at the same time has tightened norms to ensure that frauds are limited in the inoperative accounts where funds remain unclaimed. The RBI has said that activation of such accounts can simply be done by re-submitting KYC details across branches including non-home branches. The process can also be done through Video-Customer Identification Process (V-CIP) on account holder's request, if the facility is being provided by the bank. Banks can charge a nominal fee for activation of such accounts but there should not be any penal charge for non-maintenance of minimum balances in any account that is classified an inoperative.

6. 17 CO-OPERATIVE BANKS CLOSED DOWN IN 2023: Concerns over financial health of the Co-operative banking sector continued to haunt stakeholders with as many as 17 co-operative banks shutting down their business in 2023 which is the highest in nine years. Of these, 6 banks were Urban Co-operative Banks (UCBs), which otherwise fare better than their rural counterparts. Since 2014, a total of 60 cooperative banks have been closed while three banks were revived including the Punjab & Maharashtra Bank which was merged with Unity Small Bank. In 2022 a total of 12 cooperative banks were shut.

7. RBI ASKS BANKS TO PERIODICALLY LAUNCH SPECIAL DRIVE TO LOCATE CUSTOMERS AND REDUCE UNCLAIMED DEPSOITS: The Reserve Bank of India has come out with comprehensive guidelines on unclaimed deposits under which banks will be required to undertake special drives periodically to find out the whereabouts of the customers with such deposits. The revised guidelines which come into effect from April 1, 2024 are expected to complement the ongoing efforts and initiatives taken by banks and RBI to reduce the quantum of unclaimed deposits in the banking system.

1. GOVERNMENT IN TALKS WITH IRDA FOR REVIEW OF 24-HOUR HOSPITALISATION CLAUSE FOR MEDICLAIM: The Consumer Affairs Ministry has said that there is an issue raised by National Consumer Commission regarding the clause of 24-hour hospitalization for claiming the Mediclaim reimbursement in a health insurance policy and the same will be taken up with the Insurance Regulatory & Development Authority (IRDA) and the Department of Financial Services (DFS). The concern revolves around the denial of medical claims by insurance companies if a policyholder is not hospitalized for a minimum period of 24 hours for surgery or treatment. Now several treatments can be done in less than 24 hours, so, there is a need for amendment of this clause.

2. RBI CRACKS DOWN ON ILLEGAL FOREX TRADING: The Reserve Bank of India (RBI) is in talks with banks and government for more stringent measures to ensure that banking channels are not misused for illegal forex trading. RBI has sought suggestions on the matter from various government agencies concerned and also to all financial institutions. It has also urged the financial institutions to create greater public awareness. The matter has come into limelight when earlier this year, the Directorate of Enforcement arrested two businessmen in connection with illegal forex activity and further investigations revealed that the Kolkata-based businessmen controlled and managed 180 bank accounts from which Rs 120 crores were seized. RBI wants lenders to be more vigilant and ensure that Know Your Customer 9KYC) norms for all parties in such transactions are strictly followed.

3. NBFCs AND FINANCIAL INCLUSION ARE BRIDGING THE GAP IN UNDERSERVED MARKETS: For resilience and growth trajectory witnessed by the Indian Economy, the financial sector has played a vital role in the last few years. The Commercial Banks and NBFCs, by adopting the Financial Inclusion strategy have contributed towards the revival and growth with an objective of inclusive growth. The Financial Inclusion strategy adopted by the country is paying rich dividends. NBFCs in this respect provide new opportunities and challenges for bridging the gap in underserved markets. Financial Inclusion basically implies to providing individuals and businesses in the underserved areas financial access by offering affordable and useful financial products that meet their respective needs.

4. FINANCE MINISTRY ASKS BANKS TO MONITOR TOP 20 IBC CASES: The Finance Ministry has asked heads of Public Sector banks (PSBs) to monitor and review the top 20 Insolvency and Bankruptcy Code cases as part of their Bad Debt management. The Ministry has also asked them to monitor cases long pending for admission and resolution under the Insolvency and Bankruptcy Code (IBC). The Ministry also reviewed the working of the National Asset Reconstruction Company Limited (NARCL). The Cabinet in 2021 had cleared a proposal to provide a government guarantee worth Rs 30,600 crores to security receipts issued by NARCL.

5. UPI TRANSACTIONS SOAR 118% IN SEMI-URBAN, RURAL AREAS: Transactions on the Unified Payments Interface (UPI) platform rose by 118% year-on-year (YoY) at retail stores in semi-urban and rural areas in 2023, indicating a wider adoption beyond tier-II regions. Transaction value rose by 106% YoY. This is as per a report submitted by PayNearby on assisted digital transactions. The new registered retail count in rural and semi-urban areas rose by 9%, clearly indicating the eagerness of small retail community to participate in the India growth story.

6. PUBLIC SECTOR BANKS' TOTAL PROFIT LIKELY TO TOUCH Rs 1.50 LAKH CRORES: India's banking sector is all set to witness another good year and the total profit of all PSBs together is set to cross Rs 1.50 lakh crores amid higher credit demand driven by a strong economic growth. During the first six months of the current fiscal, PSBs posted a profit of Rs 68,500 crores and the trajectory is likely to continue upwards in the second half as well. In FY2023 the PSBs had posted a net profit of Rs.1.04 lakh crores.

7. AS INDIA CONNECTS TO UPI, NEFT/RTGS AND CARD USAGE TAKES A HIT: The resounding success of Unified Payment Interface (UPI) as a payments and settlement platform has led to the other popular payment methods like NEFT/RTGS and payments through debit cards to the back seat. At a time when the value of UPI transactions grew at 46% Y-o-Y in November 2023, NEFT rose by 17.5% while debit cards contracted by 6.6%. This is as per latest RBI data.

1. AFTER RBI'S TIGHTER REGULATIONS, BORROWING COSTS RISE FOR NBFCs: After Reserve bank of India announced tighter regulations for credit to Non-Banking Finance Companies (NBFCs), cost of borrowings for these NBFCs has jumped sharply. Banks too are paying more funds amid tight liquidity crunch in the banking system. The cost of credit for NBFCs through Commercial Papers (CPs) and Certificate of Deposits (CDs) has increased 15-25 basis points over the last month.

2. LIC TO PLAY KEY ROLE IN ACHIEVING "INSURANCE FOR ALL BY 2047": In a bid to achieve "Insurance for All by 2047", LIC of India will play a significant role, and to meet that objective it is planning to launch a product especially designed for rural areas. The focus would be to cover maximum rural masses who actually need insurance. The insurance regulator, IRDAI has already proposed a policy called "Bima Vistar", a composite product. The product will consist of life, health and property insurance.

3. MAHINDRA FINANCE TO FORAY INTO INSURANCE DISTRIBUTION: Mahindra & Mahindra Financial Services (Mahindra Finance) will enter the general, life and health insurance distribution business. The board of Mahindra Finance has approved undertaking supplemental business activity of soliciting and procuring insurance business as a composite corporate agent in the areas of life, health and general insurance-both group and individual. However, the decision is subject to getting approval from IRADAI and No objection from the RBI and other regulatory authorities. The corporate agency license will help the company to diversify its sources of income.

4. INDIA AND USA REVENUE AUTHORITIES DISCUSS WAYS TO TACKLE ILLICIT FINANCE RISK: Revenue authorities of India and USA have discussed ways to strengthen efforts to address illicit finance risk and accelerate global implementation of anti-money laundering standards for virtual assets. Both parties recognized the pressing need to accelerate global implementation of AML/CFT standards for virtual assets, in line with the Financial Action Task Force (FATF) recommendations.

5. FINTECHS DISBURSED Rs.31,692 CRORES SMALL TICKET LOANS IN SECOND QUARTER OF THIS FISCAL: Fintech Companies disbursed loans amounting to Rs 31,692 crores, up by 43% on a year-on-year basis and 15% sequentially. This is as per a report by Fintech association for Consumer Empowerment (FACE). This report analyzed disbursement data of 37 FACE member Fintech companies. Overall, total asset Under Management (AUM) of Fintech lenders stood at Rs 36,169 crores as of September 30, 2023, with 69% of loans on the lenders' own balance sheet.

6. RBI PENALTIES ON BANKS, NBFCs ADD UP TO Rs 40.39 CRORES FOR 2022-23: The Reserve bank of India has imposed penalties to the tune of Rs 40.39 crores on banks, NBFCs and other entities for breach of norms during 2022-23. In this, as many as 176 cases involving an amount of Rs.14.04 crores pertained to Co-operative banks. Whereas, fine paid by other banks is, Private sector banks Rs.12.17 crores, Public Sector Banks Rs.3.65 crores, foreign banks Rs.0.97 crore, Regional Rural Banks Rs.0.42 crore. Housing Finance Companies and NBFCs ended up paying Rs.0.10crore Rs.4.35 crores respectively.

7. BANKS CAUTIOUS IN PROVIDING SMALL-TICKET LOANS OF LESS THAN Rs 50,000/- TO NEW-TO-CREDIT CUSTOMERS: Banks have increasingly become cautious in providing small-ticket loans of less than Rs 50,000/- to new-to-credit customers, or those who have no prior credit history. The approval rates of these kind of customers have reduced to 28% from the 38% in the quarter ended March'23. These small ticket personal loans comprise 2% of all the personal loans. The number of defaulters in this category increased to almost 33% as on April 2023. These figures are as per the reports of Trans Union CIBIL and Credit Market Indicator (CMI).

1. LIC OF INDIA GETS Rs 183 CRORE GST DEMAND ORDER WITH INTEREST: LIC of India has received a GST demand order with interest and penalty worth Rs 183 crores for its Telangana region. The said order is appealable before Appellate Joint Commissioner (ST) Hyderabad Rural Division. LIC of India however has clarified that there has not been any material impact on its financial, operations or other activities due to this demand order. LIC of India may appeal against this with valid reasons.

2. RBI CAUTIONS AGAINST UNAUTHORISED LOAN WAIVER CAMPAIGNS: The Reserve Bank of India has cautioned against misleading advertisements offering loan waivers. RBI said that some entities are promoting many such campaigns in the print media as well as social media platforms and charging a service fee for issuing "Debt Waiver Certificates" without any authority. Some persons or entities are falsely campaigning that dues of banks need not be paid which goes against regular payment practices and it undermines the efforts of banks in enforcing their rights over the securities charged to the banks. RBI has cautioned borrowers about such false and misleading campaigns and has urged them to report such incidents to law enforcement agencies.

3. IBA, BANK EMPLOYEE UNIONS AGREE TO 17% WAGE HIKE AND 5-DAY WEEK PROPOSAL: The Indian Banks' Association (IBA) and the bank unions have reached an agreement on a 17% wage hike for all Public Sector bank employees. This wage hike will benefit around 9 lakh bank employees. The 5-day week proposal also has been agreed upon. An MoU has been signed in these lines and the final settlement on the wage revision will be completed within 180 days. The said wage revision will be effective from November 1, 2022, for a period of five years.

4. RESERVE BANK OF INDIA WANTS THE BANKS TO CURTAIL CONSUMPTION LOANS: Deputy Governor of RBI Mr. Swaminathan J has said that RBI wants banks to curtail consumption loans (unsecured loans) where the end-use is unidentified. Consumption loans are normally personal loans. The Deputy Governor further clarified that the intent of RBI is not to deny or ration unsecured loans and said that if there has been a recalibration of the growth number in such credit which suggests tweaks in business models, it should be seen as being illustrative of the regulations having its intended effect.

5. RBI GETS SERIOUS ABOUT CONNECTED LENDING: In India Corporates are not allowed to own bank as it may give a rise to "connected lending", which refers to a banking system in which the bank is owned by a corporate and it provides loans to their own company, affiliated entities or connected individuals at reduced rate of interest. Hence if a Corporate owns a bank, it has the advantage of borrowing money for a high-risk venture at a lower cost. Now RBI is worried and wants to discourage "Connected Lending" but interestingly, the RBI panel back in 2020, had recommended to let industrial houses to set up banks.

6. INDIAN MUTUAL FUND INDUSTRY POSTS 93% GROWTH IN INFLOWS, 21% GROWTH IN AUM: The Indian Mutual Fund industry recorded net inflows growing by 93% at Rs 25,616 crores in the month of November 2023 as against Rs 13,264 crores in November 2022. While Debt MFs witnessed net outflows, Equity MFs witnessed a 588% growth in net inflows on a year-on-year basis. The net Assets Under Management (AUM) of the Indian Mutual Fund industry grew by 21% to touch Rs 49.05 lakh crores as on November 2023, up from Rs 40.38 lakh crores as on November 2022. The net inflows into Equity oriented schemes grew by 588% at Rs 15,366 crores in November, up from Rs 2258 crores in the same period last year.

7. ARCs SHIFT FOCUS TO RETAIL LOANS: Asset Reconstruction Companies (ARCs) are increasingly focussing on recovering retail loans as lenders have largely cleaned up their corporate books in recent years. Since the shift is on retail loans, this portfolio of ARCs has been growing faster than corporate loan book. As such, there is likely to be a sizeable supply of retail NPAs to ARCs. There are estimates that the share of retail assets in the overall portfolio of ARCs will rise to over 20% in the next two years from around 13% at present. The ARCs are recognising the huge untapped opportunity in small-ticket loans such as personal, education and SME loans.

8. GODREJ CAPITAL TO REACH Rs 10 LAKH CRORE AUM: Non-Banking Financial Company (NBFC) Godrej Capital is on track to achieve Rs 10,000 crore as Assets Under Management (AUM) by February 2024. As of October 2023, the Company has achieved Rs 8,000 crores of AUM and is confident that it would reach the target of Rs 10,000 crores AUM by February 2024. The NBFC will aim to grow its AUM to Rs 30,000 crores by FY26 and to Rs.50,000 crores by FY28.

1. RELIANCE ARC ONBOARDS NEWLY LAUNCHED DEBT RECOVERY PLATFORM: Reliance Asset Reconstruction Company (Reliance ARC) has onboarded a newly launched debt recovery platform- "Credgenics", a platform built for ARCs to help them with comprehensive digital and insights-driven capabilities which can help in efficient debt resolution in retail and SME segments. This empowers ARCs to reconsider debt recovery approaches. The utilization of AI/ML models allow ARCs to access the efficiency and adjust outreach strategies to enhance recovery outcomes.

2. GOVERNMENT GETS INTO MOTION TO CHECK DIGITAL FRAUDS: The government has started discussions on building new filters and safeguards for digital/financial transactions amid rising concern over rapidly growing frauds. The Ministry of Finance, RBI, Ministry of Electronics & Information Technology (MeitY) and NPCI are examining mandatory filters above a certain monetary threshold, including one-time passwords (OTP) for digital payments. Measures are also being taken to prevent cloning of mobile phone SIMs or the fraudulent usage of QR codes.

3. UNION BANK OF INDIA TIES UP WITH ACCENTURE FOR ANALYTICS BASED CUSTOMER SERVICES: Union Bank of India has tied-up with Accenture for analytics-based customer services. The tie-up will involve providing a scalable and secure enterprise data platform with advanced analytics and reporting capabilities. This program is expected to boost the bank's operational efficiency and enhance its ability to offer customer-centric banking services and manage risk by using predictive analytics, machine learning and artificial intelligence.

4. BANKS WRITE-OFF Rs 10.57 LAKH CRORES IN FIVE YEARS: Banks have written-off Rs 10.57 lakh crores during the last five financial years, of which Rs 5.52 lakh crores was in respect of loans pertaining to large industries. But during this same period the commercial banks have also recovered Rs 7.15 lakh crores of non-performing assets (NPAs). Comprehensive steps have been initiated to recover NPAs and also in recent years banks are concentrating on recovery of Written-off accounts which directly increases their bottom line.

5. BANKS WRITE TO RBI SEEKING MORE TIME TO DECLARE A NPA AS WILFUL DEFAULTER: Banks have again reached out to the RBI, seeking more time in declaring a Non-Performing Asset (NPA) account as wilful defaulter. In September 2023, RBI had granted banks a six months' time in its draft rules "Framework for Compromise Settlement and Technical Write-offs" on the treatment of wilful and large defaulters. Banks have sought more time after the RBI rejected their earlier request in October to defer the implementation of the guidelines by six months.

6. 2,623 WILFUL DEFAULTERS OWE Rs 1.96 LAKH CRORES TO BANKS: As per the information provided by the RBI, there were 2,623 unique borrowers classified as "Wilful Defaulters" with an aggregate outstanding of Rs 1.96 lakh crores by schedules commercial banks as on 31/03/2023. The data is for borrowers with aggregate exposure of Rs 5 crores and above. Once a loan account holder is declared as a wilful defaulter, further compromise settlement is not available to such borrowers as a matter of right. It will be at the discretion to be exercised by respective banks based on their commercial judgement.

7. RBI SAYS RS 2,000 NOTES WORTH Rs 9,760 CRORES STILL WITH THE PUBLIC: The Reserve Bank of India has said that nearly 97.26% of the Rs 2,000 currency notes have been returned to the banking system, and only Rs 9,760 crores worth notes are still with the public. In may 2023, RBI has announced the withdrawal of Rs 2,000 currency notes from circulation. People can deposit or exchange Rs 2,000 notes at the 19 RBI offices across the country or send the bank notes through India Post from any post office, to any RBI offices for credit to their bank accounts in India.

8. RISE IN DEBT SETTLEMENTS VIA PERSONAL LOANS: Robust growth in personal loans in banks is raising questions about borrowers' spending destination as there is sluggish consumption growth. Banks believe a significant portion of these funds is either being used to repay existing loans or invested in the stock market for speculative purposes. Usually, higher personal loans should lead to higher spending by borrowers on consumer durable goods, but this has not been the case so far. The personal loans have grown by 30% in September, 31% in August and 32% in July this year. This as per a data released by RBI.

1. LIC KEEN TO KEEP PART OF ITS STAKE IN IDBI BANK TO REAP BANCASSURANCE BENEFIT: Life Insurance Corporation of India (LIC of India) has revealed its plans to retain a part of its stake while divesting in IDBI Bank to harness the benefits of bancassurance. It will not fully divest its stake in IDBI Bank. The government holds 45% and LIC of India holds 49.24% stake in IDBI Bank and together they want to divest 60.7% stake. IDBI bank became a subsidiary of LIC of India in January 2019 when LIC acquired additional 82,75,90,885 equity shares.

2. PRIVATE GENERAL INSURANCE COMPANIES EXPAND MARKET SHARE TO 53.58%: Private general insurance companies increased their combined market share to 53.58% in gross direct premium collections in the fist half of the current financial year from 50.81% in the year-ago period. As many as 31 private insurers from non-life industry had underwritten gross direct premiums of Rs 1.43 lakh crores in the first half of this fiscal. These private insurance companies registered an annual increase of 14.86% in gross direct premiums. ICICI Lombard General Insurance Companies leads the pack with a market share of 8.67% where as in Public Sector General Insurers, New India Assurance Company has a market share of 13.09%. This is as per a data released by IRDAI.

3. RISING BANK FRAUDS FORCE GOVERNMENT TO TAKE SERIOUS NOTE: The recent major issue at UCO bank and rapidly rising cases of bank frauds occurring on a daily basis have forced the Finance Ministry to take serious notice. The Department of Financial Services has enlisted the support of the Indian Cyber Crime Coordination Centre (14C), an agency under the home ministry, which will provide insights from the National Cybercrime Reporting Portal and share information on the challenges faced by law enforcement agencies. Financial Services secretary Mr. Vivek Joshi is holding some key consultations on the matter.

4. RBI SUPERSEDES ABHUDAYA CO-OPERATIVE BANK BOARD: The Reserve bank of India has superseded The Board of Directors of Mumbai based Abhyudaya Co-operative Bank Ltd for lapses in governance standards and appointed Mr. S P Pathak, former SBI Executive as the Administrator to run the bank for the next 12 months. But unlike the PMC Bank, there are no restrictions on the bank and customers can transact business normally.

5. UNSECURED PERSONAL LOANS JUMPED 4-FOLDS TO Rs 13.3 LAKH CRORES: Unsecured personal loans portfolio of banks and NBFCs has jumped more than 4-fold to Rs 13.32 lakh crores as of March 2023 from Rs 4.26 lakh crores in March 2017. Overall number of personal loans has almost tripled during this period. This means the personal loan books of Banks and NBFCs almost grew 1.5 times between FY-2017 to FY-2023 and now constitutes 30.3% of the overall credit of Rs 170.50 lakh crores as of March 2023. In March 2017 the figure was 21.5% (Rs 18.6 lakh crores) of the overall loan book.

6. LIC OF INDIA EXPLORING POSSIBILITY OF SETTING UP FINTECH ARM: LIC of India is exploring the possibility of setting up a Fintech unit. LIC of India has initiated a total digital transformation project, DIVE- Digital Innovation and Value Enhancement and appointed a consultant to steer the project. The objective of LIC is to get best in class digital initiatives for all their stakeholders, customers, and intermediaries. In the first phase, the customer acquisition part is going to be transformed.

7. CO-LENDING DEALS BETWEEN NBFCs AND BANKS SET TO RISE AFTER RBI'S NUDGE: The banking sector is expected to witness rise in co-lending deals between banks and Non-Banking Finance Companies (NBFCs) after the RBI's instruction to NBFCs to reduce their over-dependence on bank funding. Smaller and mid-sized NBFCS will prefer co-lending with banks as funds sourced through banks will be cheaper than raising funds from bond markets. Under co-lending, sourcing of loans is done by NBFCs while the underwriting is done by banks and hence funds raised under this arrangement will not be considered as exposure to NBFCs.

8. AXIS BANK ASPIRES TO BUILD FULLY DIGITAL BANK THROUGH A MOBILE APP: Axis bank Ltd is focussed on creating a fully digital bank with no human assistance through its mobile App "Axis Open". The rationale for focussing on building a digital bank is higher yields and better fee income. Axis Bank currently has over 13 million monthly users, and has originated loans and deposits to the tune of over Rs 10,000 crores each day till now.

1. HIGH COURT RULING PLUGS PERSONAL INSOLVENCY LOOPHOLE: The Kerala High Court has said that simply submitting an application under the Insolvency & Bankruptcy Code (IBC) for personal insolvency does not trigger a moratorium immediately. This ruling has plugged a loophole that defaulters used to use to their advantage to safeguard their personal assets when their businesses failed. The ruling has clearly clarified that the interim moratorium begins when the application is duly numbered by the tribunal. This ruling, along with the recent ruling of Supreme Court on personal guarantees, would help creditors to exercise their rights.

2. GOVERNMENT CANCELS BID FOR APPOINTING ASSET VALUER FOR IDBI BANK, FRESH RFP TO BE ISSUED: The government has cancelled the bid process for the appointment of an asset valuer for strategic disinvestment of IDBI Bank on low bidder interest. A fresh Request For Proposal (RFP) would be invited soon after a review of some of the bid criteria to enable better interest from bidders. Last time the government had only one single bid.

3. BANK BORROWINGS FROM MSF HIGHEST IN NOVEMBER AS LIQUIDITY TIGHTENS: Banks' borrowings from the Reserve bank of India's Marginal Standing facility (MSF) rose sharply in November, reflecting the tight liquidity situation in the banking system. Banks borrowed Rs 1.5 trillion on November 20, the highest amount borrowed so far in this month. Tightening in liquidity position was evident in the last week of the previous month when Banks' borrowing through MSF touched 1.86 trillion. Banks turn to RBI's MSF facility for overnight funds when the interbank liquidity dries up.

4. FINTECH COMPANY CUSTOMERS MAY SWITCH TO BANKS OR NBFCs AFTER RATE HIKE: Fintech companies may see their customers shifting to banks and Non-Banking Finance Companies (NBFCs) with an impending rise in their interest rates. Rates are set to go up because of higher cost of funds after Reserve bank of India has decided to raise weights on unsecured loans. The RBI's move will also prompt Fintech Companies to diversify their product portfolios.

5. HIGHER RISK WEIGHT ON UNSECURED BANK LOANS IS A CREDIT POSITIVE: Global rating agency Moody's, in a note has said that the Reserve bank of India's move to increase risk weights on unsecured consumer loans like personal loans and credit card by 25% is a "Credit positive" step as it will force lenders to allocate higher capital on such risky loans and may dampen the pace of the unsecured loan growth. Moody's further said that the unsecured segment has been growing very rapidly in the past few years, exposing financial institutions to a potential spike in their credit costs in case of sudden economic or interest rate shocks.

6. FINANCE MINISTRY ASKS PSU BANKS TO TAKE MEASURES TO STRENGTHEN CYBERSECURITY: The Finance Ministry has asked Public Sector Banks (PSBs) to review systems and processes related to their digital operation in view of the recent UCO Bank incident wherein the bank reported erroneous credit of Rs 820 crores to account holders of the bank via Immediate Payment Service (IMPS) due to some technical issues in IMPS. The bank is yet to clarify whether this technical glitch was due to human error or a hacking attempt and the bank has reported the matter to the law enforcement agencies for necessary action. The banks have been advised to check their cybersecurity robustness and take appropriate measures to strengthen them.

7. RBI'S TIGHTER REGULATORY RISK WEIGHT TO HIT BANKS' CAPITAL ADEQUACY BY 60 BASIS POINTS: S & P Global Ratings has said that the Reserve Banks's decision to tighten norms for consumer credit by raising risk weights for unsecured loans is likely to hit banks' capital adequacy by 60 basis points. The move will curtail riskier bank lending to consumers and is expected to squeeze the non-bank sector in particular.

8. SBI'S COUNSELLING OVER A BOX OF CHOCOLATES LEADS TO UPGRADATION OF 13% ACCOUNTS SENT AS PILOT PROJECT: State bank of India's novel approach of distributing box of chocolates and counselling borrowers to recover Non-Performing Assets (NPAs) have started yielding good results. The bank is able to upgrade nearly 60 accounts or around 13% of total accounts sent as a pilot project to fintech for resolution. SBI is currently running pilot project with two fintechs on this recovery model wherein fintechs approach NPA borrowers with a box of sweets and counsel them for repayment of their loans. The officials feel that these fintechs are great counsellors and speak to customers in a sweet language.

1. UCO BANK FACES TECHNICAL GLITCH, IMPS SERVICES HIT: UCO Bank in its regulatory filing has said that that its Immediate Payment Service (IMPS) faced some technical glitch and made IMPS offline. The financial impact due to the shutdown is yet to be ascertained. The IMPS shutdown was between November 10th to 13TH. As a precautionary measure the bank has shut its IMPS channel offline and is working closely with the stakeholders to resolve the issue and restore the IMPS Services at the earliest.

2. RBI TELLS BAJAJ FINANCE LTD TO STOP LOANS UNDER "E-COM" AND "INSTA-EMI" PRODUCTS: The Reserve Bank of India has directed Bajaj Finance Ltd to stop the sanction and disbursal of loans under two of its lending products-"e-COM" and "Insta-EMI Card" with immediate effect as Bajaj Finance did not comply with certain norms like non-issuance of Key fact statements to the borrowers and the deficiencies in the Key fact statements issued in respect of other digital loans sanctioned by the company.

3. BAD LOAN PROVISIONING OF PSU BANKS FALL IN QUARTER-2 OF THIS FISCAL AMID IMPROVING ASSET QUALITY: Public Sector Undertaking (PSU) banks have gained significant attention of investors over the past few quarters following their improving financial condition and better asset quality. The PSU banks continued to show a sustained improvement in the September quarter. At the aggregate level, the provisioning for bad loans for 12 listed PSU Banks fell to Rs 16,552 crores as compared to Rs 16,852 crores in the previous quarter and Rs 18,138 crores in the year ago quarter.

4. GOVERNMENT LOOKS TO OFFLOAD 5% TO 10% STAKE IN SOME PUBLIC SECTOR BANKS: The government is considering the divestment of 5-10% stake in Public Sector banks (PSBs) in which it currently holds over 80% equity. A detailed roadmap is expected to be firmed up soon. The government is keen to take advantage of the sharp rally in share prices of PSBs that are riding on much-improved financial performances and fundamentals.

5. INSURERS NEED TO CHECK MIS-SELLING OF THEIR PRODUCTS TO CUSTOMERS: The Insurance Ombudsman of Delhi Region Ms. Sunita Sharma has said that Insurance Companies have to keep a check on incidents of mis-selling. Stressing that customers are the King and insurers are in existence because of customers, she said companies should avoid mis-selling of products. Insurance Ombudsman is a quasi-judicial grievance redressal machinery to redress complaints of insured persons against life and non-life insurance companies.

6. ICICI BANK GETS RBI APPROVAL TO MAKE ICICI SECURITIES A WHOLLY OWNED SUBSIDIARY: ICICI Bank has said that it has got the approval from the Reserve Bank of India for making ICICI Securities a wholly owned subsidiary, subject to certain conditions as certain other statutory/regulatory approvals as required under applicable law are awaited by ICICI Bank. ICICI Securities, promoted by ICICI Bank, is country's leading retail-led equity franchise, distributor of financial products and investment banking.

7. LENDERS LOOK TO DERISK PROMOTER GUARANTEES BY IMPLEMENTING NEGATIVE LIENS TO SAFEGUARD ASSETS: Indian lenders will now insist that a negative lien is created on the assets underlying personal guarantees given by promoters of companies raising bank loans. The move is aimed at preventing them from transferring these personal assets to a special trust, which may be bankruptcy remote. This move by banks follows the recent landmark Supreme Court order that upheld the constitutional validity of recovery provisions against personal guarantors under the Insolvency and Bankruptcy Code (IBC). The banks may introduce loan covenants that allow them to create a negative lien on the assets underlying the personal guarantees given by promoters. By creating a negative lien, the borrower commits not to dispose of the asset or create encumbrances on it without the consent of the lender.

1. MICROFINANCE SECTOR'S PORTFOLIO UP BY 24%, DELINQENCIES CONTAINED: The outstanding portfolio of Microfinance sector was at Rs 3.55 lakh crores as of June 2023, up by 24.3% on a year-on-year basis. Urban markets registered year-on-year growth of 19.9% while rural markets showed 27.3% growth during the same period. The growth is largely attributed to the large-scale adoption of digitization by the sector as a whole. The delinquencies also have been reduced by better repayment habits among the small customers.

2. MICROFINANCE INDUSTRY NEEDS TO FOCUS ON DATA PRIVACY AND CYBER SECURITY: SBI Managing Director Mr. Alok Kumar Choudhary has said that there is a need for the microfinance institutions (MFIs) to pay attention to data privacy and cyber security as they deal with data of a large number of customers. He also told that MFIs need to focus more on improving ease of transaction through digital means and the need of the customers in the ever-changing time has to be addressed as per their convenience and ease.

3. INDIA, SINGAPORE DIGITAL PAYMENT LINK CLOCKING 100 TRANSACTIONS PER DAY: The cross-border payment tie-up between Singapore's PayNow and India's Unified Payment Interface (UPI), the first international payment systems link to use scalable cloud-based infrastructure, is currently clocking close to 3,000 transactions per month, benefitting the Indian public through sharp reduction in remittance charges. On February 21, 2023 India and Singapore launched the real-time linkage between the UPI and PayNow to facilitate instant cross-border fund transfer. Now money can be transferred from India to Singapore using mobile phones and from Singapore to India by using virtual payment address.

4. UNSECURED LOAN GROWTH TO REMAIN STRONG DESPITE RBI RAISING RISK WEIGHTED NORMS: The growth in the concerning unsecured loans segment will remain strong even after the RBI raising the risk weighing norms for such lending. RBI has asked banks and financial institutions to be more diligent that no undue risk gets built up in the system because of high growth in unsecured assets such as personal loans and credit cards.

5. SHRIRAM GROUP TO START ARC: Shriram Capital, the holding company for the financial services in the Shriram Group will invest Rs 300 crores to start a new Asser Recovery Company (ARC) as it seeks to leverage its collection efficiencies. The Company will also expand its asset management business by building a wealth management as it seeks to deepen relationships with its depositors. Shriram has already applied for an RBI license to start the ARC and expects to get the nod from RBI soon.

6. PUBLIC SECTOR BANKS TOLD TO SHIFT FOCUS AWAY FROM HIGH-COST BULK DEPOSITS: The government has cautioned the Public Sector banks (PSBs) against relying heavily on high-cost bulk deposits and advised them to focus on low-cost retail deposits. The caution on high-cost bulk deposits is a part of review of the asset-liability risk management practices followed by banks. The government also pointed out that another challenge for PSBs is to arrest the decline in Current and Savings account (CASA), which has come down to 57% IN March'23 from 64.9% in 2018.

7. PUBLIC SECTOR BANKS' RECOVERIES FROM WRITE-OFF ACCOUNTS IMPROVE: Many Public Sector Banks (PSBs) have seen an improvement in their recovery from write-off accounts in September quarter of this fiscal as the banks have adopted a wide range of measures to recover these loans. Apart from the government's push to clean-up bad loans, pre-insolvency restructuring, a booming private credit market and a lower fresh slippage, apart from the recovery of write-off loans have helped banks to improve their recoveries.

8. FINO PAYMENTS BANK TO APPROACH RBI FOR SMALL FINANCE BANK TRANSITION: Fino payments Bank, whose Board of Directors have approved the conversion of the payments bank into Small Finance Bank (SFB), will file an application with the RBI in a month or two for the transition. The Payments bank meets all the regulatory guidelines for the said transition on shareholding structure, net worth and fit and proper criteria.

1. AU SMALL FINANCE BANK TO ACQUIRE FINCARE SMALL FINANCE BANK IN SHARE DEAL: AU Small Finance Bank has announced a share merger with Fincare Small finance bank Ltd. Allaying the concerns of its shareholders AU Small Bank said its $530 million all-share merger of Fincare Small Bank has a slew of advantages like helping it enter the lucrative microlending segment and expanding into southern India. The deal is expected to be closed by February 2024. Under the agreement, shareholders of Fincare Small Finance bank will get 579 shares of the listed AU Small Finance Bank for every 2,000 shares they own. Post merger, shareholders of Fincare will own 9.9% equity in AU Small Bank.

2. IRDAI SETS UP PANEL TO SIMPLIFY WORDINGS OF INSURANCE POLICIES: The Insurance Regulatory Development Authority of India (IRDAI) has set up a committee to simplify the wordings of insurance policies to help people make an informed decision before buying their cover. The 8-member committee has been asked to submit its recommendations within 8-10 weeks. The decision was taken by IRDAI as the policyholders often find it very difficult to comprehend the terms and conditions in insurance policy contracts because of the complexity of the language used which causes confusion.

3. RBI PROPOSES TO BAR RECOVERY AGENTS FROM CALLING BORROWERS BEFORE 8 am AND AFTER 7pm: The Reserve Bank of India has proposed stricter norms for recovery of overdue loans under which financial institutions and recovery agents cannot call borrowers before 8 am and after 7 pm. Also, it proposes that Regulated Entities like Banks and NBFCs should not outsource core management functions, including policy formation and decision-making functions like determining compliance with KYC norms and according sanction for loans. The RBI also has proposed that the Recovery agents should be properly trained to handle their responsibilities with care and sensivity.

4. MUTHOOT FINANCE SELLS Rs 725 CRORES DISTRESSED GOLD LOAN PORTFOLIO TO ARCIL: Muthoot Finance has sold distressed gold loan portfolio of Rs 725 crores to Asset Reconstruction Company of India (ARCIL). This is the first time a gold loan portfolio is being sold by a lender to Asset Reconstruction Company (ARC). Most lenders prefer an in-house recovery since the value of gold is adequate to cover the value of the loan disbursed. Muthoot finance did not take a significant haircut as gold has appreciated and the transaction is structured in a way that upside would be shared between the two.

5. HDFC BANK LOOKS AT MORE BANKING CORRESPONDENTS TO REACH 2 LAKH VILLAGES: HDFC bank is looking to add more and more Business Correspondents (BCs) which will help the bank to reach 2 lakh villages and also reach its targets. HDFC Bank's Retail Banking group head Ms Smita Bhagat feels that if around 2 lakh villages are covered then it will touch across larger portion of uncovered/under- covered set of people who want banking services and products and participate in the development of their areas.

6. RBI'S GOLD HOLDINGS TOUCH 800 TONNES: The Reserve Bank of India's gold holdings, part of its foreign exchange reserves, has reached nearing to 800 tonnes level. The landmark number comes at a time when the first tranche of Sovereign Gold Bonds (SGBs) issued in 2015 are going to come up for redemption in November. The RBI started buying gold from 2018. Before that, it had purchased 200 tonnes in 2009 during the global financial crisis. Since 2018, it has added nearly 242 tonnes of gold.

7. YES BANK RAISES ITS STAKE IN JC FLOWERS ARC TO 9.9%: Yes bank has acquired 2.4 crore additional shares of J C Flowers ARC, taking its stake to 9.9%. In November 2022, Yes Bank had acquired 9.9% stake in J C Flower ARC. But consequent to certain corporate actions at J C Flower ARC, the bank's stake had reduced to 5.01% from the 9.9%. However, in accordance with share subscription and purchase agreement, the bank has now acquired additional shares in J C Flower ARC so as to reinstate the bank's stake to 9.9%.

8. PRIVATE BANKS STRUGGLE WITH NET INTERERST MARGIN CONTRACTION AND FALLING CASA: Private banks have struggled to protect their Net Interest Margin (NIM) and CASA (Current and Savings Account) ratio. None of the major private banks was able to improve their NIM during the second quarter and reported a decline of 20 to 50 basis points sequentially. And, this is despite the fact that they recorded a healthy loan growth in the second quarter of this fiscal.

1. SHRIRAM FINANCE'S SYNDICATED LOAN CROSSES $ 400 MILLION: Foreign lender HSBC has nearly tripled its size of overseas loan syndication to Indian NBFC Shriram Finance group to $ 400 million (around Rs. 3,329 crores), with international financiers showing firm appetite for lending to domestic NBFC sector amid volatile global interest rate outlook. HSBC has upscaled the syndication from the original size of $ 150 million to $ 404 million. The deal will be concluded in the next few days. Mr. Ajay Sharma, Head of Commercial Banking at HSBC opined that it is a testimony of both the faith and the growing appetite shown by international banks/investors for the Indian BFSI Sector, particularly in the retail finance.

2. RBI ACTION ON BANK OF BARODA HAS PEERS ON ALERT TO PLUG DIGITISATION LOOPHOLES: The Reserve Bank of India's action against Bank of Baroda (BoB), banning it from onboarding new customers on its digital application, has forced other lenders to relook at their digitization processes, plug loopholes, and monitor employees to prevent any untoward incidents. Bankers will henceforth scrutinize digital data more closely and not take anything at face value.

3. GOVERNMENT MAY INFUSE CAPITAL IN PSU GENERAL INSURANCE COMPANIES IN QUARTER-4 OF THIS FISCAL BASED ON PERFORMANCE: Finance Ministry is considering capital infusion in three loss-making Public Sector General Insurance Companies (National Insurance Company -NIC, Oriental Insurance Company- OIC, and United India Insurance Company- UIIC) on their financial performance of 9 months. The infusion if required would be made in the 4TH quarter of the current financial year. The financial review would give some idea about the impact of restructuring initiated on the profitability numbers and solvency margin.

4. KOTAK MAHINDRA BANK GETS RBI NOD TO BUY SONATA FINANCE: Kotak Mahindra Bank (KMB) is acquiring 100% stake in Sonata Finance for Rs 537 crores, The bank has got the approval for the same from the RBI. Upon completion of the transaction, Sonata Finance will become a wholly owned Business Correspondent (BC) subsidiary of Kotak Mahindra Bank. Sonata Finance has done a total business of Rs 305.7 crores with a profit of Rs 13.6 crores in FY 22. Sonata has 502 branches, majority in North India with a customer base of more than 9 lakh. KMB had entered Micro Finance business in the year 2017 through the acquisition of BSS Microfinance and crossed customer base of 1 million as of FY 23.

5. BANK OF BARODA SUSPENDS EMPLOYEES AFTER THE BAN OF ITS APP BY RBI: Bank of Baroda has suspended several of its employees after RBI banned it from onboarding new customers on its "BoB World" mobile app. The suspension covers many bank employees, business correspondents and one of the consultants hired for onboarding new customers. The suspension of employees includes some of the senior level executive cadre employees at the level of Asst General Managers. The action has been taken against employees from Gujarat and North West Region.

6. GOVERNMENT PLANS REVISED LIST OF PUBLIC SECTOR BANKS FOR PRIVATISATION: With the Indian economy showing signs of improvement and a substantial reduction in Non-Performing Assets (NPAs). The government is reportedly considering a re-evaluation of Public Sector banks (PSBs) earmarked for privatization. A new panel, comprising of representatives from the Finance Ministry, NITI Aayog, and the RBI is expected to compile a fresh list of banks for potential privatization. India currently has 12 PSBs. In the quarter ending June 30, 2023 these banks collectively reported a net profit of Rs 34,418 crores, more than double of Rs 15,307 crores reported in the same quarter last year.

7. RBI DIRECTS BANKS TO APPOINT WHOLE TIME DIRECTORS: The Reserve bank of India has directed all banks to strengthen their senior management by hiring at least one Whole Time Director (WTD) besides the Managing Director on the board. RBI has set a four-month deadline for submitting proposals for such appointments. RBI feels that considering the growing complexities of the banking sector, it becomes imperative to establish an effective senior management team in the banks to navigate ongoing and emerging challenges.

1. INCOME TAX DEPARTMENT MOVES TO COURT AGAINST TRIBUNAL'S ORDER IN FAVOUR OF LIC: The Income tax department (I-T Dept) has moved Bombay High Court to challenge an appellate tribunal order in favour of LIC of India in two major tax disputes involving a cumulative amount of Rs 4,993 crores. The Income Tax Appellate Tribunal had ruled in favour of LIC of India in two cases pertaining to assessment year 2013-14. One case was for Rs 1,838.8 crores and the other was for Rs 3,153.9 crores. The Income Tax Department has filed an appeal before Bombay High Court against the ruling of the Appellate Tribunal.

2. NBFC-MFIs OUTPACE MICROFINANCE INDUSTRY GROWTH: The Non-Banking Finance Companies (NBFCs) and Microfinance Institutions (MFIs) have consolidated their position in the microfinance market with more than average growth of 43% on a year-on-year scale. This has helped them to raise their market share in microfinance portfolio to 41.28% from around 35% last year. The overall microfinance loan portfolio grew 21% on a year-on-year basis to Rs 3.59 lakh crores as on June'23. The share of the microfinance loan portfolio of NBFC-MF indicates that they have become more proactive.

3. BANKS FIND NEW WAYS FOR OVERSEAS INVESTMENT: Banks are beginning to take a rational view of regulations to let wealthy Indians to invest in offshore funds in financial centers like Singapore. The development is closely tracked by private wealth managers and financial experts catering to rich clients who typically park a slice of their wealth in overseas securities, properties and funds betting on startups. Such diversified investment strategy ran into a hurdle last year when the RBI laid down new strict guidelines for overseas investments.

4. NBFCs MAY POST A HEALTHY 30% PROFIT RISE ON STRONG LOAN GROWTH: The Non-Banking Finance Companies (NBFCs) are likely to report 25-30% growth in their net profit in the second quarter of this FY-23 driven by strong loan disbursements. This is in spite of the pressures on the margins due to rise in cost of funds. A very few companies may see slight compression in net interest margin (NIM) on account of marginal rise in funding costs and some asset mix change.

5. GOVERNMENT TO COMPUTERISE 1,851 AGRI AND RURAL DEVELOPMENT BANKS AND STATE COOPERATIVE REGISTRARS: The government has announced that it will computerize state cooperatives registrars and 1,851 offices of Agriculture and Rural Development Banks (ARDBs) under a scheme with a budget of Rs 225.9 crores. Currently, the government is computerizing all Primary Agriculture Credit Societies (PACSs) in the country. A Central Project Monitoring Unit (CPMU) will be established, which will work towards the successful implementation of the scheme.

6. RBI ASKS BANKS TO MONITOR PERSONAL LOANS: Reserve bank of India is monitoring certain components of personal loans for signs of incipient stress at a time when the unsecured retail loan portfolio of lenders has grown at a rapid pace, RBI is advising banks and NBFCs to strengthen their internal surveillance mechanism, address the build-up of risks if any and initiate suitable safeguards in their own interest. Considering the surge in personal loans the RBI Governor feels that the banks must maintain robust risk management and stronger underwriting standards as the surge in personal loans may heighten risks going ahead.

7. RBI BANS NEW CUSTOMERS ON BANK OF BARODA'S MOBILE APPLICATION: Reserve bank of India has banned Bank of Baroda from onboarding new customers onto its "Bob-World" mobile application with immediate effect. The action is based on certain material supervisory concerns observed in the manner of taking on customers by the bank so far. RBI's action comes almost three months after a news network exposed how the bank linked bank accounts to unregistered mobile numbers and signed up these numbers to the application. This led to artificial increase in the number of downloads and sign-ups. But the bank has denied the allegations.

8. 69% OF MSMEs USE DIGI WALLETS, m-PAYMENTS AS MOST FREQUENTLY USED PAYMENT MODE: The India Council for Research on International Economic Relations (ICRIER) has said that Micro, Small and Medium Enterprises (MSMEs) integrated with e-commerce platforms report healthy turnovers and profitability, and 69% of the surveyed MSMEs used digital wallets and mobile payments as their most frequently used payment mode for doing business. In its annual survey of MSMEs, it revealed that over 85% of the surveyed enterprises reported an increase in total sales and profit margins after integrating with e-commerce channels, with most reporting a growth of more than 30%.

1. INSURANCE COMPANIES DISREGARDING GUIDELINES ISSUED BY THE REGULATOR: The Association of Healthcare Providers India (AHPI) has accused insurance companies of "Unfairly" rejecting claims by patients and blatantly disregarding the guidelines set by IRDAI. Further, the AHPI alleged that some private healthcare providers are collectively discontinuing the cashless facilities provided to hospitals, depriving patients of their right to choose treatment and healthcare providers.

2. NBFC-MFIs OUTPACE MICROFINANCE INDUSTRY GROWTH: The Non-Banking Finance Companies (NBFCs) and Microfinance Institutions (MFIs) have consolidated their position in the microfinance market with more than average growth of 43% on a year-on-year scale. This has helped them to raise their market share in microfinance portfolio to 41.28% from around 35% last year. The overall microfinance loan portfolio grew 21% on a year-on-year basis to Rs 3.59 lakh crores as on June'23. The share of the microfinance loan portfolio of NBFC-MF indicates that they have become more proactive.

3. BANKS FIND NEW WAYS FOR OVERSEAS INVESTMENT: Banks are beginning to take a rational view of regulations to let wealthy Indians to invest in offshore funds in financial centers like Singapore. The development is closely tracked by private wealth managers and financial experts catering to rich clients who typically park a slice of their wealth in overseas securities, properties and funds betting on startups. Such diversified investment strategy ran into a hurdle last year when the RBI laid down new strict guidelines for overseas investments.

4. NBFCs MAY POST A HEALTHY 30% PROFIT RISE ON STRONG LOAN GROWTH: The Non-Banking Finance Companies (NBFCs) are likely to report 25-30% growth in their net profit in the second quarter of this FY-23 driven by strong loan disbursements. This is in spite of the pressures on the margins due to rise in cost of funds. A very few companies may see slight compression in net interest margin (NIM) on account of marginal rise in funding costs and some asset mix change.

5. GOVERNMENT TO COMPUTERISE 1,851 AGRI AND RURAL DEVELOPMENT BANKS AND STATE COOPERATIVE REGISTRARS: The government has announced that it will computerize state cooperatives registrars and 1,851 offices of Agriculture and Rural Development Banks (ARDBs) under a scheme with a budget of Rs 225.9 crores. Currently, the government is computerizing all Primary Agriculture Credit Societies (PACSs) in the country. A Central Project Monitoring Unit (CPMU) will be established, which will work towards the successful implementation of the scheme.

6. RBI ASKS BANKS TO MONITOR PERSONAL LOANS: Reserve bank of India is monitoring certain components of personal loans for signs of incipient stress at a time when the unsecured retail loan portfolio of lenders has grown at a rapid pace, RBI is advising banks and NBFCs to strengthen their internal surveillance mechanism, address the build-up of risks if any and initiate suitable safeguards in their own interest. Considering the surge in personal loans the RBI Governor feels that the banks must maintain robust risk management and stronger underwriting standards as the surge in personal loans may heighten risks going ahead.

7. RBI BANS NEW CUSTOMERS ON BANK OF BARODA'S MOBILE APPLICATION: Reserve bank of India has banned Bank of Baroda from onboarding new customers onto its "Bob-World" mobile application with immediate effect. The action is based on certain material supervisory concerns observed in the manner of taking on customers by the bank so far. RBI's action comes almost three months after a news network exposed how the bank linked bank accounts to unregistered mobile numbers and signed up these numbers to the application. This led to artificial increase in the number of downloads and sign-ups. But the bank has denied the allegations.

8. 69% OF MSMEs USE DIGI WALLETS, m-PAYMENTS AS MOST FREQUENTLY USED PAYMENT MODE: The India Council for Research on International Economic Relations (ICRIER) has said that Micro, Small and Medium Enterprises (MSMEs) integrated with e-commerce platforms report healthy turnovers and profitability, and 69% of the surveyed MSMEs used digital wallets and mobile payments as their most frequently used payment mode for doing business. In its annual survey of MSMEs, it revealed that over 85% of the surveyed enterprises reported an increase in total sales and profit margins after integrating with e-commerce channels, with most reporting a growth of more than 30%.

1. BANKS SHOULD FOCUS ON CASA TO EASE MARGIN PRESSURES: Ratings firm, India Ratings has said in one of its reports that Banks will have to focus on enhancing the share of CASA (Current and Savings Bank accounts) which are low cost deposits to reduce margin pressures arising on account of higher transmission to deposit rates, besides investments in technology to reduce costs. The banking system's Net Interest Margin (NIM) is likely to moderately decline in FY-24, given that repricing pressure on deposit rates will continue to play out even as the competition for deposit accumulation continues. As such, the best way for banks to negate this effect is to increase their CASA.

2. SBI LAUNCHES MOBILE HANDHELD DEVICE TO PROVIDE BANKING SERVICES TO FINANCIAL INCLUSIVE CUSTOMERS: The State Bank of India has launched Mobile Handheld Device to provide banking services to Financial Inclusive customers. The move is aimed at enhancing accessibility, convenience in availing banking services and to empower financial inclusion and extend essential banking services to the rural mass. The Mobile Handheld Device is set to revolutionalize banking accessibility in rural areas by bringing kiosk banking directly to customers' doorstep. It offers greater flexibility to the Banking Correspondents enabling them to reach out to customers wherever they are.

3. IN A MAJOR REJIG, HDFC BANK SPLITS RETAIL LOANS DIVISION: HDFC Bank has taken a bold step by splitting its Retail loans into mortgage and non-mortgage segments, with two group heads and two regional heads for branch banking, which would be pivotal for asset growth. The changes are effective from October 1. HDFC Bank is the only bank with a $100 billion-plus market value. The bank's CEO told its employees that the organization changes will help bring in a very sharp focus on leveraging what they we have built, and for enhanced execution.

4. BAJAJ FINSERV'S INSURANCE ARM RECEIVES GST DEMAND NOTICE: Bajaj FinServ's insurance arm, Bajaj Allianz General Insurance Co Ltd has received a show cause cum demand notice from GST Intelligence Cell, alleging a tax demand of Rs. 1,010 .05 crores. The notice was sent by the authority's Pune office referring to the failure to pay GST between July 2017 and March 2022 notably in two areas. The Show cause cum demand notice refers to two matters that are industry wide issues and based on the advice of its tax advisors, Bajaj Allianz will be filing appropriate response to the said notice within the prescribed time frame.

5. NBFCs MUST BE CALIBRATED WHILE PARTNERING WITH FINTECHS: Rating agency India Ratings & Research has said that Non-Banking Financial Companies (NBFCs) must take a calibrated approach while providing asset and liability support to Fintech as the end-use of these loans largely remains consumption based where, overleveraging by borrowers can be a large risk. The rating Agency's view comes when NBFCs are increasingly partnering fintechs to disburse unsecured loans.

6. NPCI TO SIGN MoU IN UAE FOR PAYMENT CARDS: The National Payment Corporation of India (NPCI) that has been tasked with taking its payment technologies global, would sign an initial agreement with Al Etihad Payments to help develop the United Arab Emirates Domestic scheme for payment cards. The NPCI International Payments will sign the MoU to develop the card system based on RuPay's debit and credit card stack. India and UAE have signed an MoU in July this year to link fast payment systems of both the countries -UPI and IPP. They had also agreed to link the respective card switches- RuPay Switch and UAE Switch and explore linking of payment systems.

7. UPI TRANSACTIONS RISE 56% YEAR-ON-YEAR TO 10.6 BILLION IN SEPTEMBER: Transactions on Unified Payments Interface (UPI) platform rose 56% on a year-on-year (y-o-y) basis to 10.6 billion in September 2023. At the same time, transaction value rose nearly 42% y-o-y to Rs 15.8 trillion in September, marginally lower than 15.76 trillion in August. This is largely because of the fact that September has one lesser day than August. On an average, 358 million transactions happen per day. Out of this, PhonePe did nearly 5 billion transactions, controlling 47% of the market share in terms of volume.

1. URBAN CO-OPERATIVE BANKS' NPAs ON THE RISE: The RBI Governor Mr. Shaktikanta Das has said that RBI is not comfortable with the Gross Non-Performing Assets (GNPAs) ratio of 8.7% in Urban Co-operative Banks (UCBs) and asked them to work towards improving the same. Mr. Das urged that UCBs should improve their governance standards, avoid related party transactions and focus on credit risks. Mr. Das reminded the Directors of UCBs that the banks run on depositors and protection of the hard-earned money pooled in from middle class, poor and retirees is far more important.

2. LIC GETS ORDER DEMANDING Rs 290.05 CRORES GST WITH INTEREST AND PENALTY: The Life Insurance Corporation of India (LIC of India) has received an order under SGST and CGST Act 2017 demanding Rs 290 crores Goods & Service Tax (GST) along with interest and penalty. LIC of India intends to file an appeal before the GST Appellate Tribunal against this order within the prescribed time limit.

3. GOVERNMENT IN MID OF DISCUSSIONS TO EASE FDI NORMS IN SPACE SECTOR: An Inter-ministrial discussion is going on to further liberalise Foreign Direct Investment (FDI) norms in the space sector to attract overseas players and private companies as there is a huge scope for foreign companies to invest in India in this fast-growing space sector. Presently, FDI in space sector is allowed up to 100% in the area of satellite establishment and operations through government routes only. Aftder the successful launch of Chandrayan-3 spacecraft near the moon's south pole, many countries have expressed interest in possible collaborations or partnerships with India in the space sector.

4. RBI APPROVES CHANGES IN WILFUL DEFAULTER NORMS: The Reserve Bank of India has proposed a transparent mechanism for declaring a borrower as Wilful Defaulter. It is also expanding the definition and is planning to make harder to secure funding for future ventures by such defaulters. The move follows the Supreme Court decision earlier this year that made it mandatory for lenders to give such borrowers a chance to represent themselves before declaring an account as fraudulent. The primary objective of this move is to provide a non-discriminatory and transparent procedure. According to RBI data, there are about 16,000 cases of wilful defaulters involving nearly 3.5 lakh crores at then end of 2022.

5. INDIAN BANKS REACH OUT TO RBI OVER US BAN ON ACU SETTLEMENTS: Indian banks have approached the RBI after US Office of Foreign Assets Control (OFAC) asked banks there to refrain from processing payments linked to the Asian Clearing Union (ACU) mechanism. The ACU allows transactions to be squared off by participating central banks on a multilateral basis, leaving only smaller net amounts that need to be paid. The instructions of OFAC means there will be no settlement through foreign banks in dollars going ahead under the aegis of ACU.

6. NATIONAL FINANCIAL INSTITUTIONS TO IMPLEMENT BASEL-3 NORMS FROM APRIL 2024: The Reserve Bank of India has brought in national financial institutions such as NABARD, SIDBI, Exim Bank under the purview of Basel-3 prudential regulations that would strengthen financial stability. The new norms will be applicable to these institutions from April 2024. Basel norms are basically Capital adequacy norms, wherein the Capital Adequacy Framework rests on three pillars, Pillar-1 is the Minimum Capital Ratio while Pillar-2 and pillar-3 are the Supervisory Review Process (SRP) and Market Discipline respectively.

7. IRDAI TO ROLL OUT NATIONWIDE CASHLESS MEDICAL-INSURANCE SETTLEMENT SOON: Insurance regulator IRDAI has mandated the Committee on Common Empanelment Process of Hospitals to submit a report of implementing fully Cashless Medical-Insurance settlement in hospitals across the country. Currently, cashless settlement is available in 49% of the hospitals, numbering to about 25,000 hospitals. Around 400 million medical-insurance policyholders are likely to be benefitted by this once the plan is implemented.

88. SBI TO SEND CHOCOLATES TO BORROWERS WHO ARE LIKELY TO DEFAULT ON REPAYMENTS: The State bank of India will send a pack of chocolates to those borrowers who are likely to default on monthly instalments. SBI has found that a borrower who is defaulting will not answer its reminder calls. So, the best way is to meet them at their homes unannounced with a pack of chocolates. The move is aimed at ensuring better collections as retail lending has grown in the bank by leaps and bounds. SBI retail portfolio grew over 16.49% in June 2023 to reach Rs.12,04,279 crores.

1. FINANCE MINISTER CALLS FOR FULL DIGITISATION OF REGIONAL RURAL BANKS: Finance Minister Nirmala Sitharaman has called for full automation of Regional Rural Banks (RRBs) and Cooperative banks. She has directed the Department of Financial Services to study the gap between loan sanction and disbursement in these banks. Sitharaman's remarks came at the launch of Kisan Rin Portal (KRP) and "Ghar KCC Abhiyan", an ambitious campaign aimed at extending the Kisan Credit card scheme to farmers.

2. FINANCE MINISTRY MOVES SUPREME COURT AGAINST HC ORDER QUASHING YES BANK'S AT-1 BONDS WRITE-OFF: The Finance Ministry has moved the Supreme Court against the order of Mumbai High Court that quashed RBI's and Yes Bank's decision to write-off additional tier-1(AT-1) bonds worth Rs 8,415 crores. In March'20 Yes Bank had written-off AT-1 Bonds as part of a reconstruction scheme. Institutional investors such as mutual funds, bondholders and retail individual investors had put in as much as Rs 8,415 crores in AT-1 Bonds and these bondholders had moved the High Court to challenge the written-off decision by Yes bank and RBI and reclaim their money. The High Court ruled in their favour.

3. BANK LENDING TO NBFCs JUMPS 23.6% IN JULY: Banks' credit exposure to Non-Banking Finance Companies (NBFCs) rose to 23.6% on year-on-year basis in July 2023, pushing their overall exposure to NBFCs to 9.3%. There has been a consistent upward trend in bank credit to NBFCs in the second half of FY-22, coinciding with phased reopening of the economy after the pandemic. The growth momentum further accelerated during FY-23 and in the first quarter of FY-24. Also, Mutual Funds' debt exposure to NBFCs including commercial papers and corporate debt, jumped 60.1% in july'23.

4. MINISTRY APPROVES WELFARE MEASURES FOR LIC AGENTS AND EMPLOYEES: The Finance Ministry has approved a series of welfare measures, including enhancement of the gratuity limit and family pension, for the benefit of LIC of India's agents and its employees. The welfare measures are related to the amendments to LIC (Agents) Regulations 2017. The gratuity limit for LIC agents is enhanced from Rs 3 lakhs to Rs 5 lakhs. These measures are aimed at bringing substantial improvements to the working conditions and benefits for the LIC agents.

5. SBI INTRODUCES DIGITAL OPENING OF NRE/NRO ACCOUNTS SETUP THROUGH YONO APP: State Bank of India has introduced a digital facility for Non-Resident Indians (NRIs) to effortlessly open NRE and NRO accounts (both savings and current accounts) through its mobile app YONO. This service is designed for new customers, providing them with ease and efficiency in the account opening process. This initiative fulfills a long-standing demand from NRI customers for a hassle-free way to open and manage their accounts in India.

6. ATM MANUFACTURERS SEEK HIGHER INTERCHANGE RATES: ATM operators have made a representation to the RBI and the NPCI to hike the current interchange rate on transactions to make them financially viable, suggesting that they be linked to wholesale price index, the way toll rates are linked. The Confederation of ATM Manufacturers of India (CATMI), an industry body that represents the interests of stakeholders has made a request to both the RBI and NPCI.

7. HDFC BANK LAUNCHES THREE DIGITAL PAYMENT PRODUCTS ON UPI: HDFC Bank has launched 3 digital payments products on Unified Payment Interface (UPI). These products are "UPI123 Pay", "Payment Via IVR (Interactive Voice Response)", and "UPI Plug-In Service" for Merchant Transactions AutoPay on QR codes. UPI123Pay enables use to make payments using a phone call, without requiring internet connectivity or a smartphone.

8. INDIA'S BANKING SYSTEM LIQUDITY DEFICIT JUMPS TO OVER 4-YEAR HIGH: India's banking system liquidity deficit is at its highest in over 4 years, amid tax outflows and the lack of any major inflows. Banking system liquidity deficit jumped to Rs 1.47 trillion as on September 18, 2023, the highest single day shortfall` since April 23, 2019. Advance tax payments took place last week, while outflows towards GST will be completed next week, banks are estimating aggregate outflows of up to Rs.2.50 trillion.

1. AU SMALL FINANCE BANK PARTNERS BAJAJ ALLIANZ LIFE INSURANCE, TO OFFER INSURANCE PRODUCTS: AU Small Finance Bank Ltd and Bajaj Allianz Life Insurance Co have entered into a strategic partnership, wherein it will help the AU Small Bank customers to get access to Bajaj Allianz's life insurance products. AU Small Finance Bank aims to leverage technology-based solutions for its customers through life insurance products offered by Bajaj Allianz. This will enable the banks customers in their financial planning.

2. WORLD BANK LAUDS INDIA'S DIGITAL PUBLIC INFRASTRUCTURE IN G20 DOCUMENT: The World Bank has appreciated India's Digital Public Infrastructure in a G20 document. It said India's Digital Public Infrastructure has a transformative impact, extending far beyond just financial inclusion. The document also said that India has achieved milestones in just six years which otherwise would have taken about five decades. The document cites the examples of UPI, Jan Dhan, Aadhaar, ONDC and CoWin. India has developed some of the finest digital public goods infrastructure which could change lives the world over.

3. PUBLIC TECH PLATFORM A GAME CHANGER: The Reserve Bank of India's Public Tech Platform for frictionless credit will be akin to the UPI-moment for lending in India, ushering in a new era of efficiency in disbursing loans in rural areas. Mr. Ajay Choudhary the Executive Director of RBI said that in the next one and a half years or so, this will change the landscape of lending. The RBI has launched the pilot of Public Tech Platform on Kisan Credit Card (KCC) digitisation in September 2022 in some districts of Madhya Pradesh and Tamil Nadu, with the scheme facilitating successful disbursal of agricultural loans up to Rs 1.60 lakhs per borrower without any collateral.

4. ICICI BANK GETS RBI NOD TO MAKE I-PROCESS SERVICES AS WHOLLY OWNED SUBSIDIARY: ICICI Bank has received a green signal from RBI to make I-process Services (India) Pvt Ltd a wholly owned subsidiary. Started in 2005, I-Process Services (India) Pvt Ltd was set up to provide staffing solutions services for some of India's top financial institutions. ICICI Bank currently holds a 19% stake in I-Process. With in depth experience across recruitment, HR operations, payroll, compliance and training, I-Process can smartly negotiate market challenges and evolving social dynamics.

5. LENDERS AND INTELLIGENCE AGENCIES IN TALKS FOR ALERTS ON DEALS BY DEFAULTERS: Lenders have started discussions with some prominent intelligence agencies regarding early warning mechanism for timely detection and tracking of counterparty transactions in accounts of loan defaulters. The proposed mechanism will ensure that such suspected transactions are flagged immediately, giving intelligence agencies enough time to take swift action. The counterparty transactions help the intelligence agencies to track frauds, siphoning off funds and other such illegal activities in accounts under the radar.

6. SC SEEKS RESERVE BANK OF INDIA'S RESPONSE ON BANK LOANS: The Supreme Court has asked the RBI to file an affidavit indicating whether its circulars mandate banks to furnish/supply documents that are signed at the time of granting loans and if the lenders are under obligation to inform the borrowers in writing about any interest rate fluctuations and give yearly statements of their loan accounts to them. The Supreme Court observed that there must be a complete transparency in such cases.

7. SOON YOUR CAR WILL BE ABLE TO PAY FOR FUEL, RECHARGE FASTags DIRECTLY: In the ever-evolving landscape of digital payments, Pay-by-Car has emerged as the latest innovation. Amazon and Mastercard-backed ToneTag have launched a new service, integrating UPI with your car's infotainment system, ushering in a new era of convenient and smartphone-free payments.MG Hector, in partnership with Bharat Petroleum has recently showcased the tech that will let you make payments directly from your car, eliminating the need for a smartphone or other handheld devices.

1. UDAY KOTAK RESIGNS AS MD & CEO OF KOTAK MAHINDRA BANK AHEAD OF RETIREMENT: The CEO and MD of Kotak Mahindra Bank Mr Uday Kotak has resigned from the post well ahead of his retirement on December 31, 2023. In the interim, Dipak Gupta, the Joint MD will takeover the responsibilities of the bank till December 31, 2023, subject to Reserve Bank of India approval. Uday Kotak who is the founder of the bank has led the bank from the front since its inception after converting the NBFC he founded in 1985 into a full-fledged commercial bank in 2003.

2. 93% OF Rs 2000/- CURRENCY NOTES ARE WITH BANKS: The total value of Rs 2,000 notes received back from circulation is Rs 3.32 lakh crores up to August 31, 2023, which is 93% of the total currency issued. Data collected from all banks indicate that out of the total bank notes of Rs 2,000 currency received by the banks from circulation, 87% is in the form of deposits and 13% has been exchanged into other denomination across the counters. RBI had had recalled the circulation of these notes from May 19, 2023.

3. PUBLIC SECTOR BANKS TIE UP WITH VEEFIN SOLUTIONS FOR CLOUD-BASED MSME LENDING PLATFORM: Public sector Banks (PSBs) have tied up with Veefin Solutions Ltd to manage supply chain financing for MSMEs on a cloud-based platform. This will be done through an entity promoted by PSBs called PSB Alliance that outsources number of services for 12 PSBs. The unmet credit needs of MSMEs is estimated at around 20-25 trillion and Veefin's cloud-based platform is expected to empower all these PSBs to bridge the gap. The platform will also facilitate communication among PSBs. This project brings all the PSBs together as cohesive force to reduce the cost of sourcing the customers and expand their opportunity to provide access to credit.

4. GOVERNEMENT INVITES BIDS FOR ASSET VALUER FOR IDBI BANK: The government has commenced the process of selling a majority stake in IDBI Bank by inviting bids for the appointment of an asset valuer. The chosen asset valuer will be responsible for evaluating the bank's assets and providing essential support throughout the sale process. The bidding window for this crucial task will remain open till October 9, 2023. The Department of Investment and Public Asset Management (DIPAM) is overseeing this strategic sale but is awaiting clearance from RBI.

5. UPI CROSSES 10 BILLION TRANSACTIONS FOR THE FIRST TIME IN AUGUST: Instant payment system Unified Payments Interface (UPI) has crossed the historical mark of 10 billion transactions for the first time in the month of August. In July, UPI had registered 9.96 billion transactions, with a total value hitting Rs 15.34 lakh crores. UPI transactions have been on the rise over the past few years owing to the arrival of several such interfaces and people increasingly using them to make all sorts of payments. This indeed is an incredible milestone and the power of Digital Payments.

6. FIRST TIME IN 4 YEARS, MFIs OVERTAKE BANKS IN MICROLENDING: After a gap of 4 years, standalone Micro Finance Institutions (MFIs) overtook banks in microlending in 2022-23 with a 40% share of loans, up from 35% in the last year. On the back of recovery after being badly hit during the pandemic when the recovery and disbursals plunged, MFIs have bounced back from 32% share in FY20, which declined to 31% in FY21 before improving to 35% in FY22. Almost all banks have an MFI book as part of meeting their priority lending targets. Microfinance industry grew by 37% in FY23 due to favourable macroeconomic climate and renewed demand.

7. BAJAJ AUTO CONSUMER FINANCE GETS NBFC LICENCE: Bajaj Auto Consumer Finance (BACF) a wholly-owned subsidiary of Bajaj Auto has received a certificate of registration from the RBI to carry out operations as a Non-Banking Finance Company (NBFC). The licence is subject to specific conditions stipulated in the certificate. This significant development allows the company to expand its financial services without accepting public deposits. BACF is the second NBFC in the Bajaj group, the first being Bajaj FinServ, in which it holds two subsidiaries-Bajaj Finance and Bajaj Housing Finance.

1. INCREMENTAL CRR TIGHTENS LIQUDITY, BANKS PUSH FOR CDs: Since the implementation of Incremental Cash Reserve Ratio (ICRR) by RBI to drain out surplus funds with the banks, the liquidity condition of banks has become very weak and hence banks have stepped up issuances of Certificate of Deposit (CD) to meet funding requirements. From August 18 to August 23, 2023 banks have issued CDs worth Rs 21,470 crores in the primary market. This amounts to more than half the amount raised by banks in the whole of July month. Private banks are leading in raising CDs. The ICRR which became effective from August 12, 2023, is estimated to have impounded funds worth Rs 1.1 trillion from banks.

2. BANKS DEPOSIT GROWTH TOUCHES SIX-YEAR HIGH: Deposit growth in banks has reached a six-year high of 13.5% in the fortnight ended August 11, 2023. In one of its reports, Care Edge Ratings said that this is for the first time since 2017 that the deposit growth has crossed 12.5%. Over the past few months, deposit growth has been half of credit growth and hence banks have had to hike deposit rates to attract deposits. Credit growth during said fortnight was 19.7%.

3. LOAN WAIVER PROMISES MAY HAMPER MICRO LOAN REPAYMENT, BUT ONLY TEMPORARILY: Many political parties are trying to woo their voters with loan waivers in four states where assembly elections are due which may affect the loan repayment behaviour adversely at the grassroot level for a couple of months. However, the impact of such announcements if any, may be just short-lived as the borrowers have over the years learnt the importance of maintaining healthy credit score as they know that a good repayment ensures timely dose of loans when they require it the most. Unless specific debt waiver announcements are made for microfinance, the impact could be temporary.

4. PSU BANKS FOCUS ON EXPANDING START-UP BRANCH NETWORK: Public Sector Banks (PSBs) are increasingly focussing on opening more Start-Up specialised branches as they receive government incentives including credit guarantee while funding such entities. Bank of India has opened 3 start-up branches last month, Bank of Baroda has already opened 11 such branches, State Bank of India is also opening many start-up branches. These start-up branches are granting loans to start-up firms as per their requirements with modified packages such as lower interest rates, foreign currency current account, dedicated relationship managers, corporate premium credit cards among others. These start-up branches are one-stop solutions to start-ups.

5. GOVERNMENT MAY RELAX RETIREMENT AGE FOR PUBLIC SECTOR BANK MDs: The government is considering relaxing the retirement age of Chiefs of all Public Sector Banks and LIC of India. The age of retirement of Chairman and Managing Directors of Public Sector Banks may be increased to 62 from the present age of 60. But the retirement age of Chairman of SBI is 63. The government is also considering this to extend up to 65. In such scenario the present Chairman of SBI, Mr. Dinesh Khara will to get an extension of two years.

6. RBI ASKS NBFCs TO STRENGTHEN GOVERNANCE STANDARDS: The Reserve Bank of India has told Non-Banking Finance Companies (NBFCs) to strengthen governance standards and assurance mechanisms like compliance, risk management and internal audit in these entities. In a recently held meeting with MDs of upper level NBFCs, RBI discussed risks associated with high credit growth in retail segment, particularly in unsecured lending space. It also discussed the importance of upgrading information technology systems, strengthening balance sheet, and monitoring stressed assets.

7. THE DIVIDEND PAID BY BANKS TO THE GOVERNMENT TO RISE TO AT LEAST 7 YEAR HIGH LEVEL: Indian banks aggregate dividend payout to shareholders is set to rise to its highest level in seven years in 2023-24, helped by strong business metrics and healthy credit growth. S&P Global Market Intelligence report says that Indian economic activity will likely sustain high credit growth, resulting in excellent earning forecast for banks.

1. BANKING SYSTEM LIQUIDITY IN DEFICIT AS INCREMENTAL CASH RESERVE RATIO KICKS IN: The liquidity in the banking system has slipped into a deficit for the first time in FY-23/24 as the RBI has decided to implement the Incremental Cash Reserve Ratio (ICRR) with an intension to impound extra funds and hence reduce inflation risks as this has led to a cash shortfall amid tax outflows. RBI has announced an ICRR of 10% that banks must maintain on the rise in their deposits from May 19 to July 28, 2023. Daily RBI data showed that RBI injected funds worth Rs 23,644.4 crores into the banking system for the first time since March23 which reflects deficit liquidity.

2. TOTAL BANKING TRANSACTIONS AT GIFT-IFSC REACH USD $ 508 BILLION: Total banking transactions at GIFT International Financial Services Centre (IFSC) has reached USD $ 508 billion till July 2023. There were a total of over 545 IFSCA registered entities at GIFT-IFSC till July 2023, including 25 aircraft and shipping entities. The monthly turnover on the IFSC international stock exchange in July 2023 was USD 60.33 billion. As on date, over 5,000 employees are working at GIFT-IFSC zone.

3. RETAIL, MSME BAD LOANS LEAD ARCs PURCHASES: Data from Indian ARC Association (IAA) shows that as much as 50% of the assets purchased by bad loan aggregators in the quarter ended June 2023 is from retail, MSME and mid corporate segments. This a change from the cumulative numbers as of March 2023 which shows that as much as 78% of the bad loans purchased by ARCs were from the corporate sector. Bankers and ARCs say the change in new bad loans calls for a more rigorous recovery process.

4. CANARA BANK LAUNCHES UPI-INTEROPERABLE DIGITAL RUPEE MOBILE OPERATION: Canara Bank has launched UPI Interoperable Digital Rupee mobile application as a part of the Reserve Bank of India Central Bank Digital Currency (CBDC) pilot project. Canara Bank is the first Bank among Public and Private sector banks to introduce this feature in Banks CBDC mobile app called Canara Digital Rupee App. With this launch, the bank customers will be able to scan merchant QR Code or UPI using the app and make the payment through digital currency. This is a revolutionary step towards digitising the Indian economy.

5. BANKS CANNOT COMPOUND PENAL INTEREST: The Reserve Bank of India has taken a significant decision to ensure fairness and transparency in the disclosure of penal interest by saying that the penalty should be a charge instead of interest. Charge cannot be compounded whereas interest can be compounded, hence banks must not compute further interest on such charges. However, this will not impact the normal procedure for compounding normal interest charged to loan accounts. The circular clearly states that the penalty for non-compliance of material terms and conditions of loan contract by the borrower shall be treated as Penal Charges and shall not be in the form of penal interest.

6. RBI LAUNCHES NEW PORTAL TO TRACK UNCLAIMED FIXED DEPOSITS: The Reserve Bank of India has launched a Centralised Web Portal --- Unclaimed Deposits Gateway to Access InforMation (UDGAM) portal. The portal has been developed by RBI for use by members of public to facilitate and make it easier for them to search their unclaimed fixed deposits across multiple banks at one place. Given the increasing trend of unclaimed deposits, RBI has been undertaking public awareness campaigns from time to time to sensitise the public on this matter and the launch of this UDGAM portal is a real breakthrough.

7. RBI TO USE AI FOR BETTER REGULATORY SUPERVSION, SELECTS MCKINSEY & CO, ACCENTURE SOLUTIONS: The Reserve Bank of India plans to work with global consultancy firms in order to improve regulatory supervision over banks and NBFCs. RBI has reportedly selected Mckinsey & Company India LLP and Accenture Solutions Pvt Ltd to develop system that use Artificial Intelligence (AI) and machine learning for better supervisory functions. The contract is worth Rs.91 crores.

1. RBI TO LAUNCH PILOT PROJECT FOR PUBLIC TECH PLATFORM: The Reserve Bank of India will launch a pilot project for Public Tech Platform that seeks to facilitate credit through seamless flow of required digital information to lenders. The platform would focus on products such as Kisan Credit Card loans up to Rs 1.6 lakhs per borrower, dairy loans, MSME loans (without collateral), personal loans and home loans through participating banks. The platform would also enable linkage with services like Aadhaar, e-KYC, land records from onboarded state government records, PAN validation among others.

2. AXIS AMC LAUNCHES PRIVATE CREDIT FUND: Axis Asset management, the mutual fund arm of Axis Bank, has launched a private credit Alternative Investment Fund (AIF) and is aiming to raise as much as Rs 1,250 crores from investors. The private credit fund is a part of Axis Mutual Fund alternative assets business, which comprises of late-stage private equity and real estate AIFs on the private market side and portfolio management services and long-only equity AIFs on the public market side. Axis manages assets worth about Rs 5,000 crores under these asset classes.

3. PROBE ON INSURERS OVER, INCOME TAX DEPARTMENT FINDS ALLEGED TAX EVASION OF Rs 15,000 CRORES: The Income Tax Department has completed its investigation into the alleged malpractices in the payment pf commissions by insurance companies and has uncovered an evasion of more than Rs 15,000 crores. The tax on this will be about Rs 4,500 crores. Apart from the IT department, the insurers were also investigated by the Directorate General of GST Intelligence (DGGI), while the DGGI was probing them for fake input tax credit (ITC) claims, the tax department was investigating alleged tax evasion.

4. TRANSFER OF BAD LOANS FROM BANKS TO NARCL HITS A HURDLE: Asset transfers from banks to the government-backed bad loans aggregator National Asset Reconstruction Co (NARCL) have stalled once again due to the differences over specific wordings of the agreement between entities. NARCL has insisted on banks signing an agreement which absolves NARCL from any future liabilities arising from the assets sold like fraud cases or investigations from government agencies. Banks have refused to sign the said agreement, resulting to a stalemate. Banks have refused to give any blanket indemnity to NARCL and insisted that just like other Asset Reconstruction Companies (ARCs), all future legal and other liabilities must be borne by NARCL after the transfer of the assets.

5. BANKS MAY SWITCH TO FIVE-DAY WORK WEEK FTROM DECEMBER ONWARDS: The government will likely approve the five-day working week for banks from December-23 onwards. This could bring cheers to over 1.5 million bank employees. After prolonged negotiations between the apex body- Indian Banks Association (IBA) and employee unions, the IBA approved their proposal last month to make all Saturdays a holiday for bank employees. The IBA has sent the proposal to the Finance Ministry for consideration.

6. RISING CREDIT-TO-DEPOSIT RATIO MAY POSE PROBLEMS FOR SOME BANKS: A rising Credit-to-Deposit (CD) ratio may pose problems to some banks as they would have to borrow funds at higher rates to meet the demand for loans. In a recent report, credit rating agency CareEdge showed that the CD ratio of banks has risen to 75.9% as on March 31 2023 from 67.8% a year ago as deposit growth has consistently lagged credit growth. Also, the RBI announced mandate of 10% Incremental Cash Reserve Ration (I-CRR) is expected to weigh on banking system liquidity in the near term.

7. BANKS STEP UP INVESTMENT IN DIGITAL INFRA: Large and mid-size banks are spending more for enhancing their digital capabilities as the current user interface of mobile applications and websites need a revamp with a better human touch. SBI Chairman Mr. Dinesh Khara in a post-earning press meet said that SBI is investing heavily into analytics to acquire customers on the asset side.

1. SBI IS THE LARGEST HOME LOAN LENDER: State bank of India Chairman Mr. Dinesh Khara has said that SBI has been, and will continue to lead the home loan market. The banks home loan book is worth Rs 6.52 lakh crores as on June 30,2023, hitting an increase of around 14% over the last year. His statement attracts more attention after the exit of HDFC Ltd after its merger with HDFC bank from July 1, 1023. SBI overtook the traditional market leader HDFC Ltd in home loans in February 2021 when the home loan books of SBI crossed Rs 5 lakh crores mark. At that time SBI enjoyed a market share of 23.5% of the home loan. Its present market share in home loans is 33.3%.

2. OTT, E-TECH PLATFORMS DRIVING GLOBAL PAYMENTS TO INDIAN BUSINESSES: According to a report by Razorpay International Payments, Indian Over The Top (OTT) and Ed-platforms saw a 194% revenue from international viewers in the last two years and a 361% increase in international transactions. The report, intended to understand the trends and impact of international transactions on Indian business is based on findings from over 1 crore international transactions processed on Razorpay payment and business banking platform between April 2021 to July 2023.

3. BANKS STRIVE HARD TO RECOVER WRITTEN-OFF LOANS AS THE SHARE OF WILFUL DEFAULTERS SEEMS TO BE RISING: Banks have stepped up efforts to recover written-off loans even as delays in the loan recovery process continues. But the share of wilful defaulters seems to be rising. According to various reports, private and public sector banks combined have written-off bad loans worth Rs 2.1 trillion in 2022-23, higher than Rs 1.7 trillion in the previous year. At the same time the banks have recovered Rs 1.1 trillion of written off loans out of Rs 5.9 trillion of written-off loans in the last three years.

4. STATE BANK OF INDIA POSTS HIGHEST EVER PROFIT IN THE FIRST QUARTER OF THIS FISCAL: State Bank of India (SBI) has reported its highest-ever quarterly net profit of Rs 16,884 crores for April-June quarter of FY 23-24. This is 178% higher than profit achieved in the corresponding quarter last year. The increase in net profit is mainly due to higher Net Interest Income (NII). During the quarter, the advances grew by 13.9% and deposits by 12%. The NII jumped by 24.7% to Rs 38,905 crores.

5. BANK OF BARODA NET PROFIT RISES BY 88%: The net profit of bank of Baroda rose 88% year-on-year in April-June owing to a growth in Net Interest Income (NII) and lower provisioning due to better asset quality. Low-cost current account and savings account deposits rose by nearly 6% which is a very positive factor for the bank. Also, retail loan portfolio of the bank rose 26% year-on-year to Rs 1.8 trillion as on June 30, 2023.

6. RESERVE BANK SAYS 88% OF THE Rs 2,000 NOTES HAVE RETUTRNED TO THE BANKS: The Reserve Bank of India has said that 88% of the Rs 2,000 bank notes valued at Rs 3.14 lakh crores have returned to the banking system after its announcement of withdrawal of said currency note in May. Consequently, Rs 2,000 currency notes in circulation as at the date of business on July 31, 2023 stood at Rs 0.42 lakh crores. Out of the total bank notes that were returned to the bank, about 87% came in the form of deposits and the remaining 13% have been exchanged at the counter.

7. FINANCE MINISTER TELLS REGIONAL RURAL BANKS TO FOCUS ON DIGITALLY ACTIVE CUSTOMERS: Finance Nirmala Sitharaman has told the Regional Rural Banks (RRBs) to focus on increasing digitally active customers to supplement the government's effort for greater digitisation of economy. The finance minister was reviewing the financial performance of RRBs in the southern region of the country. The review has revealed that the performance of southern region RRBs in terms of credit-deposit ratio, gross NPAs and provisions coverage ratio is better than the rest of the RRBs in the country.

1. BANK LENDING UP BY 16.3%: The resilient consumer demand, which ensures sustained economic expansion was evident in the latest granular data on loans as buyers of homes, cars or education which helped the bank lending to increase by 16.3% in June 2023 in aggregate terms. The rapid growth in retail loans has supported the overall credit expansion. In this, the share of personal loans in total bank credit has surged to 28% in 2022-23 from 21% in 2017-18. But loans to large firms also doubled in June-23 to 6.4% as compared to 3.2% last year. Revival in loans to large firms could be attributed to capital expenditure.

2. SBI ECONOMISTS SUGGEST TO INCLUDE MORE WOMEN UNDER MGNREGS : Economists at SBI have suggested to include more women under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) to strengthen their inclusion in formal banking system. It is observed mostly in the southern states that where there is more women participation in MGNREGS, there is more increase in women percentage under Pradhan Mantri Jan Dhan Yojana. (PMJDY). The SBI Economist report says that overall per capita women deposits increased by Rs 4,618 in the last five years and rural area are a major source of deposits by women.

3. MAJORITY OF INDIANS TURN TO PHYSICAL BANK BRANCHES TO RESOLVE ISSUES: About 70% of people in India prefer physical bank branches for a solution to their banking issues. This has been revealed by a study conducted by Accenture. A total of 1,560, or 78% of 2,000 people who took part in the study said they preferred a physical branch visit in their neighbourhood to solve their banking problems. The study has found that globally also around 63% of people prefer having a bank branch nearby. A total of 49,000 people were covered in the survey from 33 countries. It is revealed that people prefer personal interaction with banks before taking financial decisions.

4. IMPROVED DETECTION, AND REGULAR REPORTING BRING DOWN BANK FRAUDS: Minister of State for Finance Mr Bhagwat Karad informed the parliament that the bank frauds have declined from Rs 77,544 crores in 2013-14 to Rs 1,650 crores in 2022-23. This is because of improved detection and regular reporting along with necessary appropriate steps taken by the banks. Likewise, comprehensive steps, including measures to address security flaws/loopholes and strengthen the fraud risk management mechanism in banks have been taken up by the government and RBI which has a positive effect in detection of frauds. The government has also set up the Central Fraud Registry to enable timely identification, control, and mitigation of fraud risk.

5. ACTUAL COST OF MISSING JULY 31 ITR FILING DEADLINE IS MUCH MORE THAN PENALTY: The last date to file Income Tax Returns (ITR) for FY 2022-23 is July 31, 2023. Individuals missing the deadline can still file the returns before December 31, 2023 but with a penalty of Rs 1,000/- or Rs 5,000/- depending upon their taxable income. Late filing of returns has much more effects than just the penalty. If income tax refund is due, then interest will not be paid on that refund if filing is beyond July 31, 2023. Likewise, you also will forgo the advantage of making use of certain losses, such as those from sale of mutual funds or shares as it cannot be carried forward for set-off against future gains.

6. ENFORCEMENT DIRECTORATE RECORDS 490 FRAUD CASES RELATED TO NPAs: The Directorate of Enforcement (ED) has recorded 490 bank fraud cases related to Non-Performing Assets (NPAs) of Rs 20 crore or more in the last five years under the provisions of Prevention of Money Laundering Act, 2002 (PMLA). As on July 20, 2023, proceeds of crime amounting to Rs 26,732 crores have been attached /freezed, 82 persons have been arrested and 80 prosecution complaints have been lodged before the special court. Further, assets worth Rs 15,113 crores have been confiscated and resituated to Public Sector Banks.

7. BAJAJ FINANCE DEPOSITS CROSS Rs 50,000 CRORE MARK: Bajaj Finance Ltd has become the first largest deposit-taking Non-Banking Financial Company (NBFC) with a consolidated deposit book crossing Rs.50,000 crores mark in July and the number of depositors rising to 5 lakhs. After the merger of HDFC Ltd with HDFC Bank, Bajaj Finance remains the largest Deposit taking NBFC in the country. Shriram Finance, Mahindra Finance and LIC Housing Finance are among the other large deposit-taking NBFCs. The company started taking deposits in 2014 when its balance sheet size was Rs 17,000 crores. Over 10 years, it has grown the deposit book at a CAGR of 60% and depositor count at a CAGR of 49%.

1. HDFC BANK EXPECTS 17-18% CREDIT GROWTH THIS YEAR: HDFC Bank Ltd expects a 17-18% credit growth in this current financial year 2023-24. The parent mortgage firm, HDFC Ltd was merged with HDFC Bank on 1ST July 2023 making it the second largest bank in India after State Bank of India. During the first quarter of FY-23/24 the total advances of the bank rose by 15.8% and the total bank credit of the bank was Rs 16.15 lakh crores. Considering the overall credit demand, the bank expects to touch the credit growth rate of around 17-18%.

2. UNION BANK TO SELL 8 NPA ACCOUNTS WORTH Rs 3,000 CRORES TO NARCL: Union Bank of India has identified 8 bad loan accounts worth Rs 3,000 crores, which will be sold to National Asset Reconstruction Company Ltd (NARCL). Union Bank has more than doubled its net profit to Rs 3,236 crores in the June23 quarter on improved asset quality and recoveries. In the last fiscal, the bank had sold 3 bad accounts to NARCL worth Rs 900 crores at a recovery rate of 33%. The bank has identified 42 troubled loan accounts worth Rs 10,000 crores to be sold to NARCL over a period, out of which 8 accounts worth Rs 3,000 crores will be sold this year.

3. REGIONAL RURAL BANK MERGERS EXEMPTED FROM CCI APPROVAL: The government has decided to exempt mergers of Regional Rural Banks (RRBs) from the requirement of clearance from the Competition Commission of India (CCI). The exemption is aimed at fast-tracking such mergers and this would be applicable for the next five years. The latest move comes at a time when the government has stepped up the focus on modernising the RRBs in a bid to spur credit in remote areas and boost economic growth.

4. DGCI UNEARTHS Rs 3,500 CRORES INPUT TAX CREDIT DISCREPANCIES FROM 15 INSURANCE COMPANIES: The Directorate General of GST Intelligence (DGGI) has completed the investigation in 15 insurance companies, detecting Input Tax Credit (ITC) discrepancies to the tune of Rs 3,500 crores so far. THE DGGI will complete the probe of 15 more companies by November 2023. Most of the tax dues in the cases where the probe is complete has been already recovered.

5. NBFCs GROWTH TO BE STRONGER DUE TO UNSECURED LOANS: Rating agency ICRA has revised its growth forecast for Non-Banking Finance Companies (NBFCs) to 18 to 20% from the earlier forecast of 12 to 14% due to the likely strong demand for the loan in retail segment consisting of personal and consumption loans, unsecured small enterprise loans and microfinance loans. Secured loans consisting of housing, vehicle, gold and secured business loans will grow at around 12-14%.

6. FINO PAYMENTS BANK LOOKING TO UPGRADE TO SMALL FINANCE BANK: Fino Payments Bank Ltd is keen to become a Small Finance Bank after having completed 5 years of operations. Fino Payments bank is a subsidiary of Fino Paytech, which is backed by marquee investors such as Bharat Petroleum, ICICI Group, Blackstone, IFC, Intel and LIC. Fino payments bank which started in 2017 has 410 branches. Fino which was a remittance service provider, has converted most of its Fino Money Mart outlets into bank branches after getting licence from RBI. Fino Payments Bank is the only lender in this segment to be traded on exchanges.

7. RBI ASKS BANKS TO REPORT ALL DIGITAL FRAUDS IRRESPECTIVE OF THE AMOUNT: According to the RBIs FY-23 annual report, even as the overall value of bank frauds reported has halved from Rs 59,819 crores in FY22 to Rs 30,252 crores in FY23, the value and volume of digital frauds committed using cards and internet-based payments method has nearly doubled. Earlier, as per the RBI ruling digital frauds over Rs 1 lakh were to be reported, but now looking at the volume and value of digital frauds which has doubled in a year, RBI has asked banks to report all digital frauds.

1. BANKS CAUTIOUS ABOUT PARKING EXTRA CASH IN RBI'S VARIABLE RATE WINDOW: Banks are cautious about deploying excess funds with RBI as the banks are not sure as to how long the deposited funds of recently withdrawn Rs 2,000/-will remain with them as overall demand for loans remains firm, exerting pressure on liquidity. In the Variable Rate Reserve Repo (VRRR) auctions that the RBI has carried out since June 30, banks have on an average deployed only 50% of the sum that the RBI has offered to mop up. Banks have preferred to park their surplus funds in the RBI's Standing Deposit Facility (SDF).

2. DICGC ASKS BANKS TO DISPLAY ITS LOGO, QR CODE ON THEIR WEBSITE: Deposit Insurance & Credit Guarantee Corporation (DICGC) has asked all banks to prominently display its logo and QR code on their respective websites and internet banking portals by August 31, 2023 with a view to create awareness about the deposit insurance scheme. Deposits upto Rs 5 lakhs in banks are insured by DICGC. This is being enforced to instill confidence in the banking system and maintain financial stability.

3. INDIA, UAE SIGN MOUs FOR PROMOTING LOCAL CURRENCIES IN CROSS BORDER TRADE: The Reserve Bank of India and the Central Bank of UAE (CBUAE) have signed two Memorandum of Understanding (MoU) to strengthen the use of local currencies for cross-border transactions and for interlinking their payment and messaging systems. Both RBI and CBUAE, with an aim to put in place a Local Currency Settlement System (LCSS) have agreed to establish a framework for the use of their respective currencies for transactions between the Asian countries.

4. CREDIT CARD DEFAULTS SURGE AS RETAIL CREDIT GROWS: The credit card payment defaults have surged in June 2023 despite the growth of credit card lending. Unsecured credit portfolios and small ticket loans have driven the retail credit expansion. The serious delinquency--- over 90 days past due rate for credit cards rose by 66 basis points on a year-on-year basis reaching 2.9% (Delinquency is a type of default in which the borrower is behind on payment schedules). Digital and information-oriented lending is fueling the growth of retail credit, particularly in unsecured consumption led products. This sector has seen a compound annual growth rate of 47% from March 2021 to March 2023.

5. RBI SHOWCASES FRICTIONLESS DIGITAL LOANS IN MINUTES TO FARMERS: While the G-20 summit is having deliberations to find common ground to address global challenges, the Reserve Banks of India is showcasing its delegates as to how digitized land records data can be used to sanction and disburse loans to farmers in a completely paperless manner in minutes without the farmer having to visit the bank branch. At the RBI's Innovation Pavilion, the exhibits also provide information about upcoming digital tech platform, which is being developed to enable frictionless credit of various types of loans including MSME and personal loans.

6. RBI CANCELS THE LICENCE OF UNITED INDIA CO-OPERATIVE BANK: The Reserve Bank of India has cancelled the licence of UP based United India Co-operative Bank Ltd, citing lack of adequate capital, and earning prospects. The bank will cease to carry on business and every depositor will be entitled to receive deposit insurance claim amount of up to Rs 5 lakhs from DICGC. As per the data submitted by the bank, 99.9% of depositor are entitled to receive full amount of their deposits from DICGC.

7. GOVERNMENT ASKS ALL BANKS TO ISSUE MOBILITY ENABLED CARDS: The government has asked banks to ensure that all new cards and reissue of old cards to have the National Common Mobility Card (NCMC) feature as a default with contactless or near-field function facilities. A contactless card is a chip card with an inbuilt radio frequency antenna that allows transactions of certain value without entering PIN details. The NCMC card works as both debit card and a wallet.

1. 70% OF HDFC Ltd TOP EXECUTIVES RESIGN DURING INTEGRATION PROCESS: Nearly 70% of the senior management of HDFC, which has merged with HDFC Bank, will step down from executive positions, in a move that could expedite the integration process. Most of the top management of the erstwhile HDFC comprising members of executive management will not join the combined entity-HDFC Bank as rules do not allow banks to have superannuated executives on Bank's rolls. The absence of senior executives from HDFC is expected to make the integration process more seamless as the bank leadership will drive the process.

2. FINANCE MINISTER ASKS IBA TO FINALISE WAGE REVISION OF BANKERS BY DECEMBER 1: The government has asked the Indian Banks' Association (IBA) to initiate the process of wage revision (process of negotiations for 12Th Bi-partite settlement) in a time-bound manner to finalise it by December 1, 2023. The said wage revision of public sector banks is due from November 1, 2023. Further, the finance ministry has asked IBA to ensure that all future wage revisions should be finalised before the beginning of the subsequent period so that the wage revision could be implemented from the due date itself. All the wage revisions in the past have been always tedious and time-consuming with delays of 2-3 years.

3. UNRESOLVED CORPORATE LOANS, DIFFICULT ASSETS CAN BE PROFITABLE FOR ARCs: The CEO of Asset Reconstruction Company India Ltd (ARCIL), Mr. Pallav Mohapatra is of the opinion that unresolved corporate loans and assets can be profitable. According to him, there is still business opportunities in the corporate book which have gone bad a few years back and are either still with NCLT or about to go to NCLT. ARCIL is looking at these assets wherever they see good potential and good possibility of recovery.

4. RBI GOVERNOR STRESSES ON FISCAL CONSOLIDATION: Reserve Bank of India Governor Mr. Shaktikanta Das has highlighted the importance of debt sustainability of state governments and reviewed their market borrowings at the 33RD conference of state finance secretaries. He emphasized on the need for the state governments to focus on fiscal consolidation, improving quality of expenditure and other issues of the fiscal health of the states such as contingent liabilities and guarantees.

5. MICROFINANCE LENDERS HAVE WRITTEN OFF Rs 26,000 CRORES OF STICKY LOANS AFTER COVID: The Microfinance lenders have written off around Rs 26,000 crores of bad loans after the Covid to clean their balance sheets and help cumulative Gross Non-Performing Assets (GNPAs) ratio to fall 90 basis points to 10.2% at the end of March'23. The size of write-off constitutes 7.7% of the sectoral loan portfolio of Rs 3.38 lakh crores. The share of write-offs last year was 4.8%. This is as per a report filed by credit bureau CRIF High Mark.

6. SECURITISATION VOLUME RISES 60% IN QURTER 1 OF FY-24: Led by strong demand for retail loans increased use of securitisation as an alternative funding route by NBFCs, securitisation volume increased by 60% to Rs 55,000 crores in the first quarter of financial year 2023-24. This is the highest ever in a fiscal first quarter. Securitisation of loans is a process through which financial institutions like banks and NBFCs combine their financial assets to form a consolidated instrument and then is issued to the investors. The number of securitisation transactions have gone up from 160 last year to 250 in this year.

7. SBI TO BUY SBI-Cap VENTURES: State Bank of India will acquire SBICap Ventures for Rs 708 crores. SBI will acquire 60.4 million shares of SBICap Ventures. SBICap Ventures was set up in 2005 to carry out the business of asset management, investment management advisors and provide venture capital, technology funds and any other funds for seed capital. As on March 31, 2023 it had an Asset Under Management (AUM) of Rs 330.50 crores.

1. BANKS' NET INTEREST MARGIN JUMPS TO 3.3% : Banks' Net Interest Margin (NIM) grew by 46 basis points to 3.3% in January-March quarter of FY 22-23. NIM is a key profitability gauge. This was because of slower deposit rate resetting. Net Interest Income (NII) which is the difference between the interest earned by banks by lending and interest paid on deposits, rose to Rs 1.83 lakh crores in the last quarter of FY23 due to the healthy loan growth and a higher yield on advances as against the year-ago period.

2. BANK OF BARODA PLANS TO DIVEST UP TO 49% FROM ITS CREDIT CARD ARM: Bank of Baroda plans to sell up to 49% stake in credit card business arm BOB Financial Solutions Ltd. The bank has floated a request for the said proposal for roping in a strategic investor, and process is expected to complete in one year. Bank of Baroda intends to do this in a combination of primary and secondary capital from one or multiple investors to create more value in BOB Financial Solutions and take it to the next level of growth. BOB Financial has doubled the acquisition of new credit cards in FY 23 by issuing close to 1.2 million new credit cards as compared to 0.5 million a year ago. The net profit of BOB Financial also grew to Rs 24.62 crores in FY 23 as compared to Rs 10.07 crores in FY22.

3. SBI LAUNCHES FULLY REVAMPED YONO APP, TO HAVE MORE ATTRACTIVE UPI FEATURES: The State Bank of India has launched its fully revamped digital banking app "YONO" for its customers. With YONO the banks customers will have access to the Unified Payments Interface (UPI) features like "scan and pay", "Pay by Contacts", "Request Money" etc. Since its inception in 2017, YONO has over 6 crore registered users. In FY-23, 78.60 lakh savings bank accounts were opened in SBI digitally through YONO.

4. HDFC MERGER GIVES HDFC BANK A RUNWAY TO DOUBLE EVERY FOUR YEARS: HDFC Bank could double its business every four years after taking over its parent co-HDFC. Given the combined entity's large and growing distribution and customer franchise, more than adequate capital, healthy asset quality and profitability the bank is capable to double its business every four years, that is, like creating a new bank of its size every four years. The bank's CEO Mr Shashidhar Jagadishan said this in a communication to employees post the merger. Post the merger, HDFC bank will now be the fourth most valuable bank in the world and will be the second largest bank in India by far with a loan book of more than Rs 22 lakh crores.

5. SHARE OF HOUSING LOANS IN TOTAL ADVANCES RISES TO 14.2% IN 11 YEARS: The share of residential housing loans in total advances of all banks put together has increased over the last 11 years to 14.2% in March 2023 from 8.6% in March 2012. The housing sector is witnessing a healthy growth with sales growing by 21.6% in the fourth quarter of FY-23, in addition to rising sales, new launches also maintained healthy growth, reflecting strength in demand by end users. This is as per the RBI's latest Financial Stability Report (FSR).

6. INDIAN BANKS' ASSET QUALITY BEST IN A DECADE, EXPECTED TO IMPROVE FURTHER: In the latest Financial Stability Report (FSR) by RBI, it is reported that the GNPAs of all banks put together has touched a low of 3.9% as of March'23. The report further said that it is expected to improve to 3.6% in the baseline scenario. The Governor Mr Shaktikanta Das said that financial stability is non-negotiable, and all the stakeholders in the financial system must work to always preserve this.

7. RBI WORKING ON A LIGHT WEIGHT, PORTABLE PAYMENT SYSTEM: The Reserve Bank of India is working on a light weight and portable payment system that can be used for critical transactions during catastrophic events like natural calamities and war. The proposed Light Weight Portable Payment System (LPSS) will be independent of conventional technologies and can be operated from anywhere by a bare minimum staff. The proposed LPSS System would be made active only on a need basis.

1. BANKS MAY GIVE UP RIGHTS TO REVIVE HOUSING PROJECTS: Many banks have said that they will give up their first claims over assets and cash flows in favour of new financiers who step in to revive stuck housing projects that have left millions of home buyers high and dry. Bank CEOs and senior industry officials have discussed this matter with several of them willing to relinquish their rights to new lenders who are offering priority funding. ANAROCK, a leading real estate services company has reported that at the end of May 2022, around 4.80 lakh units worth over Rs 4.80 lakh crores, were stuck in various construction stages in the top 7 cities.

2. OPEN AGRI NETWORK-SAMUNNATI EYEING OVER 50% GROWTH IN REVENUE: Open Agri Network company- Samunnati is eyeing over 50% growth in revenue at Rs 6,600 crores in 2023-24, by deepening both its verticals-Agri finance and market linkage businesses. The company has achieved Rs 4,400 revenue in 2022-23. The company has its presence in 22 states but bulk of its business is in Andhra Pradesh, Tamil Nadu, Karnataka, Telangana Madhya Pradesh, Maharashtra, and Gujrat. The company is planning to strengthen its clientele base in all the 22 states and expand its business in other untapped states as well.

3. BANKS SAY SYSTEMS ARE NOT YET READY FOR NEW TAX COLLECTION AT SOURCE REGIME: The rollout of new tax regime-Tax Collection at source (TCS) on overseas credit and debit card spending from July 1 looks uncertain with banks reporting that the software required for implementing the regime is still not ready. Foreign Currency spending over Rs 7 lakhs via credit/debit will be counted towards the Liberalised Remittance Scheme (LRS) and will attract 20% Tax Collected at source (TCS). Banks have flagged the issue to the government.

4. APPLE EXPLORES FINTECH TIE-UPS WITH HDFC BANK: Global Tech-giant Apple and HDFC Bank are exploring multiple financial technology tie-ups including an UPI-integrated Apple-Pay app. There are talks and discussions happening for the ensuing tie-up but as of now there is nothing on table to say that whether any launch will happen soon. But high on the agenda is the launch of Apple-Pay in India and this may happen through HDFC tie-up.

5. BANKS TOLD TO PUSH FOREIGN TRADE IN RUPEE: Banks are being gently encouraged by the government to popularise the settlement of cross-border trade in Rupee. While many businesses driven by commercial convenience, balance of payments and terms of global reinsurers often prefer to deal in convertible currencies, government is pursuing its aim to internationalise our Indian Rupee. The Directorate General of Foreign Trade (DGFT) under the ministry of commerce and industry has asked the banking industry body to advise all the banks to conduct outreach programmes with the international trading community to promote trade in Special Rupee Vostro Account (SRVA).

6. WHITE LABEL ATMs SEE RED IN UNDER A DECADE: White Label ATMs (WLAs), set up and operated by non-banking entities made their debut in 2013-14, with the RBI pursuing its ongoing goal of financial inclusion, gave licences to 8 players to set up and operate ATMs in predominantly semi-urban and rural areas. Less than a decade later half of the companies have withdrawn from the business, weighed down by higher costs and lower fees.

7. HDFC-HDFC BANK MERGER TO BE EFFECTIVE FROM JULY 1, 2023: The boards of HDFC Ltd and HDFC Bank are set to meet on June 30 to go ahead with the merger following approvals from requisite regulatory bodies. The effective date of the merger will be July 1, 2023. Termed as the biggest transaction in India's corporate history, HDFC Bank on April 4, 2022 agreed to take over HDFC in a deal valued at about USD $ 40 billion, creating a financial services titan. The proposed merged entity will have a combined asset base of Rs 18 lakh crores. HDFC Bank will allocate 42 new shares for 25 shares of HDFC.

1. FINTECH CITY TO BE SET UP IN TAMILNADU: The Tamilnadu government laid the foundation stone for setting up a Fintech City in Chennai and is expected to bring in investments worth Rs 1,000 crores in the first phase. The Fintech City will have a Fintech Tower at an outlay of Rs 370 crores. In the first phase of its development, the TN Fintech City will attract Rs 1,000 crores in investments and will create 7,000 employment opportunities. Once it is fully completed, it will generate around 90,000 jobs in the state.

2. BANKS NEED TO COLLABORATE AND CREATE POLICIES FOR MOBILIZING CAPITAL TOWARDS GREEN FINANCE: Financial Secretary Mr. Vivek Joshi has asked banks to collaborate and create policies for mobilizing capital towards green finance. He said that the financial sector is well positioned to incite a behavioural change in corporates and contribute towards building a sustainable society. He further stressed on the steps taken by the Indian government to address the climate change issue and urged banks to collaborate and create policies accordingly.

3. BANK DEPOSITS SURGE Rs 3.26 LAKH CRORES AS PEOPLE RUSH TO SURRENDER Rs 2,000 CURRENCY: The banking system is flushed with deposits in the very first fortnight after the RBI announced the withdrawal of Rs. 2,000 currency notes. Aggregate deposits mobilised by the commercial banks rose by Rs. 3.26 lakh crores to Rs 187 lakh crores during the first fortnight of June. In this, the term deposits increased by 2.65 lakh crores. At the same time bank lending increased 15.4% as compared to 13.1% in the same period last year.

4. SBI DISTRIBUTES HIGHEST EVER DIVIDEND TO THE GOVERNMENT: The State Bank of India paid a dividend of Rs 5,740 crores to the government for the financial year 2022-23. The dividend cheque was presented by SBI Chairman Dinesh Khara to the finance minister. This is the highest ever dividend given by SBI to the Govt of India for a financial year. SBI had declared a dividend of Rs. 11.30 per equity share (1,130%). For the FY-22/23 the bank's net profit was Rs 50,232 crores as against a net profit of Rs. 31,675 crores in FY-21/22.

5. BANKS NET INTEREST MARGINS TO COMPRESS BY 10 TO 20 BASIS POINTS IN FINANCIAL YAER 2023-24: Considering the rising deposit rates the Indian Banking system's Net Interest Margins (NIMs) are expected to compress by 10-20 basis points (bps) for the financial year 2023-24. NIMs could be at 3.1-3.2% as against 3.3% in 2022-23. But this still will be above pre-pandemic levels of 2.7-2.8%. This is because an estimated 30 to 35% of deposits are expected to come up for repricing in FY24, at higher rates and shift from current and savings deposits to term deposits. This is as per a report submitted by rating agencies ICRA and CRISIL.

6. PRIVATE BPrivate Sector Banks' slippages and Write-offs from loans restructured after Covid-19 pandemic are nearly double than that of Public Sector banks (PSBs) Private Sector Banks have slippages and loan write-offs at 44%, as against 23% in case of PSBs. This is as per a report by India Ratings and Research (Ind-Ra).

7. BAJAJ HOUSING FINANCE EXTENDS HOME LOAN TENURE TO 40 YEARS: Bajaj Housing Finance has extended its maximum home loan tenor to 40 years from the present 30 years for salaried applicants, who are new home buyers. With the change in tenor, Bajaj Housing Finance now offers EMI starting at just Rs 733/- per month per lakh (at 8.50% of interest rate). Bajaj Housing finance's revised tenor capping is subject to the applicant's age at the time of application. The eligibility for age is 23 to 75 years, with 75 years as the upper limit for age at the time of loan maturity.

1. RBI ASKS RATING AGENCIES THE NAMES AND DETAILS OF COMPANIES HIDING INFORMATION USED FOR CREDIT ASSESSMENT: The Reserve Bank of India has asked credit rating companies to give the list of companies holding back information used to assess the credit-worthiness of a borrower. RBI said that out of the 40,000 companies rated in India, about 50% of them do not cooperate with Credit Rating Agencies. (CRAs). And since a predominant number of such ratings pertain to bank loans, RBI has taken up the matter. In the absence of adequate information, the CRAs categorise the ratings as Issuer Not Cooperating (INC). This symbol "INC" is used as a suffix with the credit rating symbol.

2. INDIA TOPS DIGITAL PAYMENTS RANKINGS GLOBALLY: India has topped the global rankings in digital payments for the year 2022. During the year under review, there were 89.5 million digital transactions in the country. India accounted for 46% of the total global Real-Time Payments in 2022 which was more than the combined digital payments of the next four countries. India has witnessed new milestones in digital payments both in value and volume. This is as per a report from government's citizen engagement platform MyGovIndia.

3. GO DIGIT LIFE INSURANCE GETS IRDAI NOD TO CARRY LIFE INSURANCE BUSINESS IN INDIA: Regulator IRDAI has given permission to Go Digit Life Insurance Ltd to carry the life insurance business in India. Go Digit is a company backed by Canada-based Fairfax Group is already doing business in general insurance. With the latest addition, the number of insurers operating in life insurance segment in India has gone up to 26. Go Digit is also proposing to come out with an IPO and has already filed papers with market regulator SEBI.

4. RBI NOTIFIES 4 KEY MEASURES TO HELP STRENGHTHEN 1,514 URBAN CO-OPERATIVE BANKS: Aiming to strengthen 1,514 Urban Co-operative Banks (UCBs), the RBI has notified four key measures, including giving them two years to meet the priority sector lending targets. Now in order to expand their business, UCBs can now open branches up to 10% (maximum 5 branches) of the number of branches in the previous financial year without prior approval from the RBI. UCBs can also do One-time Settlement at par with commercial banks. UCBs must get the policy approved by their respective boards and comply with the Financially Sound & Well Managed (FSWM) norms.

5. BANKS VARY OF LIQUIDITY AHEAD OF ADVANCE TAX OUTFLOW AND GST: Worried about liquidity crunch in view of advance tax and GST payments, banks remained reluctant to park funds with RBI's Variable Rate Reserve Repo (VRRR) auction last week. Against a notified amount of Rs 1 trillion for four-day VRRR auction, banks parked only Rs 5,780 crores. Banks are playing it safe ahead of advance tax and GST outflows.

6. 50% of Rs 2,000 NOTES BACK WITH BANKS: Nearly 1.8 trillion (around 50%) of the outstanding Rs 2,000 currency notes in circulation as on March 31, 2023 have come back to banks since May 19, when the RBI called for withdrawal of the said currency notes. Out of this broadly, around 85% of Rs 2,000 notes are coming back to banks as deposits into bank accounts while the rest are being exchanged at bank counters. State Bank of India's Chief Economist Soumya Kanti said that as 85% of the notes are being deposited into bank accounts, the bank deposits are likely to increase by at least Rs 2 lakh crores.

7. SBI TO EXTENSIVELY USE BUSINESS ANALYTICS, AI/ML: State Bank of India in its Annual Report has reported that it has proposed to enhance the use of business analytics and Artificial Intelligence/Machine Learning (AI/ML) in decision making and operations by deploying NextGen Data Warehouse and Data Lake to augment its product offerings to enhance customer satisfaction. The bank is also exploring new partnerships with fintechs and NBFCs for co-lending.

8. RBI PERMITS BANKS TO UNDERTAKE COMPROMISE SETTLEMENT OF WILFUL DEFAULTS/FRAUD ACCOUNTS: In order to ensure maximum recovery from distressed assets, the RBI has allowed banks to go for compromise settlement of fraud accounts and wilful defaults. The banks need to put in place board-approved policies for undertaking the said compromise settlement, laying down process to be followed.

1. MAHARASHTRA GOVERNMENT SIGNS AN MOU WITH BAJAJ FINSERV: The Maharashtra government has signed a Memorandum of Understanding (MoU) with Bajaj Finserv under which Bajaj Finserv will invest Rs 5,000 crores in Pune to develop projects in Pune, including a sustainable Bajaj Finserv Campus which will create 40,000 new jobs. The project will be planned as a sustainable development that meets the highest ESG global standards of certifications with green solutions and a net-zero approach. Work on the project will commence in 2023 and envisions state-of -the-art connectivity and facilities for business.

2. RBI MAY CONSIDER CHANGING CRR COMPUTATION TIMING: The Reserve Bank of India could consider changes in the timing of computation of Cash Reserve Ratio (CRR) for banks to help them manage funds more efficiently amid 24/7 funding obligations. The CRR is currently at 4.5% of Net Demand and Time Liabilities (NDTL) which is a proxy for deposits. A change in the timings of CRR computation could free up some of the surplus funds being deployed by banks at the RBI's Standing Deposit Facility (SDF) window. This in turn, would help prevent the call rate from hardening as more funds would be available in the call money market.

3. RBI ISSUES DRAFT CYBERSECURITY NORMS FOR PAYMENT SYSTEM OPERATORS: The Reserve Bank of India has released draft Master Directions on Cyber Resilience and Digital Payment Security Controls for Payment System Operators (PSOs) that cover governance mechanism for identification, assessment, monitoring, and management of cybersecurity risks. RBI has invited comments on these directions from stakeholders before June30, 2023. As per the circular, the boards of payment system operators will be responsible for ensuring adequate oversight over information security risks, including cyber risk and cyber resilience.

4. ICICI BANK COMMITS Rs 1,200 CRORES TO TATA MEMORIAL CENTRE, LARGEST DONATION MADE UNDER CSR BY ANY INDIAN COMPNAY FOR CANCER: ICICI bank has announced a commitment to contribute Rs 1,200 crores towards Tata Memorial Centre (TMC) to expand infrastructure at three cancer treatment hubs. The proposed donation is the largest donation made under Corporate Social Responsibility (CSR) by an Indian company towards cancer care. ICICI bank will donate the money to set up three new buildings spanning over a combined area of 7,50,000 sq ft at TMC's centers in Navi Mumbai, Mullanpur in Punjab and Vishakhapatnam and equip them with high-end radiology machines.

5. CBI REGISTERS A CORRUPTION CASE IN IL&FS PROBE: The Central Bureau of Investigation (CBI) has registered a corruption case in the IL&FS matter. The case has been registered against ITNL, a step-down subsidiary of IL&FS, and its erstwhile directors. The complaint given by Canara Bank alleges that the accused indulged in a criminal conspiracy to cheat 19 banks under multiple banking arrangements has misappropriated the sanctioned credit facilities by diversion of funds thereby causing a loss of Rs 6,524 crores to these banks.

6. IDBI BANK BUYER TO GET TAX WAIVER: The government ahs extended a specific tax waiver for buyers of government stakes in companies being privatized to those who acquire stakes held by state-run entities as well. The immediate beneficiary of the move will be the potential buyer of IDBI Bank, which is promoted by LIC of India. The change in tax rules would exempt the buyer of IDBI Bank from tax liability on notional gains if the market value of shares sold by LIC is higher than the price discovered through a competitive bidding process.

7. IIT MADRAS RESEARCH PARK AND RBI'S INNOVATIVE CENTRE ARE WORKING ON VOICE-BANKING TECHNOLOGIES: IIT Madras Research Park (IITMRP) have joined hands with RBI Innovation Hub (RBIH) to work on creating voice-driven banking solutions. The objective is to address the language barriers, a key challenge in financial inclusion for millions of Indians. The voice-based banking solution aims at performing basic banking transactions through voice-commands in the Indian languages of Hindi, Tamil, and Telugu to start with, in addition to English. The innovation will assist people who are illiterate, and visually impaired.

1. GOVERNEMNT IN TALKS WITH BANKS ON TRANSFER OF ATTACHED ASSETS: The government is in discussions with banks to work out a regulatory framework to transfer assets attached by various investigative agencies to a buyer or successful resolution applicant under the Insolvency & Bankruptcy Code (IBC). Presently, wherever the investigative agencies have attached assets of a fraudulent bankrupt borrower, banks are unable to include such assets in the corporate insolvency resolution process under the IBC. Experts say that the sooner this issue is settled, the better as it will be a positive outcome under IBC both in terms of timing and value.

2. BANKS REPORT LOWEST BAD LOAN PROVISIONING IN THE FOURTH QUARTER OF FY-23 SINCE THE PANDEMIC: The loan loss provisioning for banks in March quarter of financial year 2022-23 continued to fall for the 5TH consecutive period. This is the result of sustained collection efficiency and improving asset quality. The cumulative bad loan provisioning of 29 banks put together fell by 42.5% to Rs 18,354 crores on a year-on-year basis. The overall asset quality in the banking system has been improving gradually.

3. BANKS, CBI SPAR OVER ACTION ON FRAUD LOANS: Banks and CBI agency are at loggerheads over the action to be taken in case of fraudulent loans. In a meeting of bankers, CBI, and Central Vigilance Commission (CVC) last week, the CBI again raised its long-standing complaint that lenders are not giving permission to act in cases of fraudulent loans. CBI is seeking cooperation from banks in establishing connivance by bank officials. However, bankers claim that every fraud is not an act of connivance. There is difference in how the lenders and the CBI see frauds. In case of banks, if a borrower uses loan amount for another purpose, the account cab be classified as a fraud.

4. HIGHER COSTS FOR NEW DEPOSITS MAY HIT BANK MARGINS: Higher costs involved with deposit mobilization could potentially dent the Net Interest Margins (NIM) of banks. Term Deposit rates have gone up by about 200 basis points in the last few months as banks have had to catch up with stronger credit growth. Incremental deposits are still being repriced, which will keep the cost of deposits high. Also, most of the transition in lending rates has already happened so bank margins will be under pressure. However, the strong growth in retail advances should minimize the contraction in core profits as the unsecured personal loans typically fetch higher returns for the banks.

5. STRONG PERFORMANCE OF INDIAN BANKS TO CONTINUE: S&P Global Ratings has said that Indian Banking Sector's profitability will stabilize at a healthy level, asset quality will continue to improve. It further said that Indian Banks' earnings will likely to remain healthy, the sector has improved substantially in the past seven years, from a period when many Public Sector Banks (PSBs) were grappling with bas loans. Geeta Chugh, a Credit analyst with S&P Global Ratings said that the formation of new Non-Performing Assets will remain at a very low level, despite pressure from higher interest rates and a recovery in written-off accounts is also boosting the profitability of the banks.

6. UPI TO ACCOUNT FOR 90% OF RETAIL DIGITAL PAYMENTS BY 2026-27: A PwC India report says that Unified Payment Interface (UPI) transactions are likely to reach 1 billion per day by 2026-27, accounting for 90% of the retail digital payments in the country. UPI, which is driving the digital payments revolution in India, accounted for about 75% of the total transaction volume in the retail segment in 2022-23. The Indian digital payments market is seeing a steady growth at a CAGR of 50% (volume-wise) and is expected to reach 411 billion transactions in FY 2026-27 from 103 billion in FY 2022-23.

7. CASH WITHDRAWALS AT ATMs RISE BY 235% SINCE 2016 DEMONETISATION: More than 76 months after the demonetization, cash withdrawals from ATMs rose by 235% to Rs. 2.84 lakh crores at the end of March 2023. The pan-India ATM cash replenishments carried by CMS Info Systems witnessed an annual growth of 16.6% in fiscal year 2023. Maharashtra, Gujrat, Tamilnadu, Karnataka and Uttar Pradesh together accounted for 43.1% of the total ATM cash replenishment by CMS Info Systems. These figures are as per the data released by CMS Info Systems, a banking logistics and technology service provider.

1. NPCI LEANS ON BANK PARTNERSHIPS TO PUSH RuPAY CREDIT CARDS: The National Payments Corporation of India (NPCI) is looking to push up the usage of RuPay Credit cards in the market and is seeking bank tie-ups to help this happen. NPCI is closely working with a clutch of major banks to find out ways to push the usage of these credit cards and has set an internal target of cornering around 10% of the overall monthly credit card spends in the next one year. The recent regulatory nod for RuPay credit cards on UPI transactions is opening and pushing up fresh cases of usage.

2. CREDIT CARD SPENDS IN FOREIGN CURRENCY TO ATTRACT 20% TCS: The Finance Ministry has brought international credit card spending under the RBI's Liberalized Remittance Scheme (LRS) account and will attract 20% Tax Collected at Source (TCS). Foreign Currency payments such as digital subscriptions to publications or goods bought on foreign ecommerce sites through international credit cards will attract TCS. However, if these purchases are made in Indian Rupees, then they will not be counted as LRS and will not face any TCS. Likewise, corporate cards given to employees for official expenditure overseas will also not attract TCS as these expenses are covered under residual current account transactions outside the LRS.

3. Rs 2,000 CURRENCY NOTES WITHDRAWN FROM CIRCULATION: The Reserve Bank of India has decided to withdraw the circulation of Rs 2,000 currency notes. RBI has instructed banks to stop issuing Rs 2,000 bank notes with immediate effect. All Rs 2,000 currency notes must be exchanged or deposited to the banks on or before September 30, 2023. But RBI has said that these notes will continue as legal tender.

4. SBI'S ANNUAL PROFIT CROSSES Rs 50,000 CRORES: State Bank of India has reported an annual net profit of more than Rs. 50,000 crores for the first time. It has announced a net profit of Rs 50,232 crores for the financial year ending 2023. Net profit increased by 83% to Rs 16,695 crores in the last quarter of FY23 from Rs 9,114 crores a year ago. This is led by strong credit growth and falling provisions as the bank's asset quality improved to the best. The bank's credit growth increased 16% led by a 20% growth in loans from foreign offices and 18% growth each in retail and SME advances. Loan growth was supported by expansion in net interest margins (NIM), which improved 44 basis points to 3.84% in March 2023.

5. SEVERAL UNCERTAINTIES HAVE HIT INVSTOR CONFIDENCE IN STARTUPS: The speculations of a pandemic re-run have put businesses under extraordinary economic strain as they deal with safety regulations, supply chain interruptions and complete shutdown in some cases. The uncertainty of the situation has had a profound impact on investors, who have become more concerned with profitability and sustainability when making decisions. The volume of funding deals in India has declined by 62.5% in January 2023, while the value of deals fell by 80.3%. the impact of this uncertainty on investor confidence in startups has been felt across the board. This is as per a report submitted by Global Data.

6. DOUBLE DIGIT RISE IN TOP BANKS' LOANS: Large banks, including SBI, HDFC Bank, ICICI Bank, Bank of Baroda and Punjab National Bank have posted 13% to 19% Year-on-Year (YoY) growth in their loan books during the last quarter of FY-23. This has boosted their Net Interest Income (NII) and bottom-line growth. While SBI's advances rose by 16% YoY to Rs 32.69 trillion, HDFC Bank's total advances grew by 17% and that of PNB by 13%. ICICI bank and Bank of Baroda have reported a loan growth of 19% YoY.

7. BANKS LOOK TO TAKE ACQUISITION ROUTE TO BUILD MFI LOAN BOOK: Banks are looking to acquire Microfinanciers to get their lucrative high-yielding loan book and tap into the under-banked customer segment. While Yes Bank and Federal Bank have expressed interest in acquiring microfinanciers, Kotak Mahindra Bank has already acquired Bangalore-based BSS Microfinance and has announced plans to acquire Lucknow-based Sonata Finance for Rs 537 crores. The microfinance space is of much interest to banks because the segment offers an opportunity for the bank to get into the large segment of untapped customers who are under-served. And this will also boost the bank's priority sector advances.

1. NPCC INTRODUCES CVV-LESS PAYMENTS FOR TOKENISED CARDS: RuPay has now introduced the CVV (Card Verification Value) free payment experience for its debit, credit and prepaid cardholders who have tokenized their cards to the merchant application or webpage. The new experience is meant to ensure that the cardholder will not have to reach out to their wallet or remember any card details, if they have saved (tokenized) their card on the ecommerce merchant which supports this feature. Tokenization is a simple technology to secure card transactions without sharing the clear or real card details with the merchants. This has been authenticated by National Payments Corporation of India (NPCI)

2. INSURANCE INDUSTRY'S GROSS DIRECT PREMIUM TO CROSS Rs.3 LAKH CRORES BY FY-25: The Insurance Industry is expected to net Gross Direct Premium Income (GDPI) of about Rs 3 lakh crores by financial year 2025 as against Rs 2.4 lakh crores at the end of March 2023. Private insurers' combined ratio is likely to improve and Return on Equity (RoE) is expected at 11.2 to 12.8% in FY-24 and 12.5 to 13.9% in FY25. Most PSU insurers are expected to witness high combined ratio resulting in net losses, though it will be lower compared to last few years. This is as per a report by ICRA.

3. BANKS AND ARCs ARGUE OVER A KEY DOCUMENT: Indian Banks and Asset Reconstruction Companies (ARCs) are locked in a cold war since the last two months over a key document. Banks want ARCs which acquire loans to give an undertaking that they have no links whatsoever with the promoters of defaulting borrower companies. This is a legal declaration that would become significant if such company faces bankruptcy and is auctioned to a new owner. Many banks are also refusing to sign the standard indemnity they give on sale of sticky loans to ARCs as they fear this could become a deal breaker in the stressed loan market.

4. CREDITORS' RECOVERY VIA IBC SURGES TO 36% OF ADMITTED CLAIMS: Financial Creditors' recovery from defaulters surged to 36% of the admitted claims in FY23 from 23% in the previous year and 17% in FY21. This is the result of increased sittings by National Company law Tribunal (NCLT) with the easing of Covid scenario and the bidders have raised offers amid improving economic prospects. Data available from the Insolvency & Bankruptcy Board of India (IBRI) showed that out of the total admitted claims of Rs 1.42 lakh crores, creditors have realized Rs 51,425 Crores in FY23.

5. NHB ASKS LARGE HOUSING FINANCE COMPANIES TO ADOPT EARLY WARNING SIGNALS FRAMEWORK: Regulator for housing finance firms-National Housing Board (NHB) has asked large Housing Finance Companies (HFCs) with an asset size of more than Rs 1,000 crores to adopt an Early Warning Signals (EWS) framework to check financial frauds and to prevent accounts from turning into NPAs. NHB has observed that the accounts which are identified as fraudulent are because of seller impersonation, submission of fake documents, submission of fake title deeds and collusion of the builder and the borrower. So, to negate all these points it has suggested the EWS framework to be adopted so that alert is triggered before the account turns to NPA.

6. ASSET RECONSTRUCTION COMPANIES SEEK EASIER SETTLEMENT GUIDELINES FOR SMALL LOANS: Asset Reconstruction Companies (ARCs) have asked the RBI to review the recently prescribed norm that requires an Independent Advisory Committee (IAC) to examine all settlement of dues with borrowers. This includes Retail, small and MSME loans which are small and many in number. According to ARCs, reviewing and considering each settlement proposal by the IAC and the board for approval is not possible for these thousands of small loans and as such, there is a need for relaxation to be given for these small loans.

7. DEPARTMENT OF FINANCIAL SERVICES INSTRUCTS RRBs TO IMPROVE CREDIT DELIVERY: The Finance Ministry and the Department of Financial Services (DFS) have instructed the Regional Rural Banks (RRBs) to further improve their performance in achieving financial inclusion and credit delivery in rural areas. It has been noted that there has been substantial improvement in the financial performance of RRBs in 2022-23 as compared to 2021-22. DFS also stressed on the need for technology upgradation of RRBs, strategies for NPA reduction, IT initiatives and improvement in the support given by sponsored banks to the RRBs.

8. BANK BORROWINGS VIA CDs SURGES 50% IN A YEAR: Borrowings by banks has risen 50% in the past one year as they struggle to keep pace with increasing demand for loans amid rising costs of deposits. The outstanding value of Certificate of Deposits (CDs) is at Rs 3 lakh crores now, up from Rs 2 lakh crores a year ago. A wide gap in credit and deposit growth, lower liquidity and strong credit demand have been driving higher issuance of CDs.

1. HDFC BANK LIKELY TO OPEN OVER 600 BRANCHES IN SEMI-URBAN/RURAL AREAS: HDFC Bank will open over 600 branches in semi-urban and rural areas across the country in FY-23/24. The action is bank's new plan to acquire more customers in rural and semi-urban areas and there by it aims to achieve its priority sector lending targets. With this move, the bank will have more than 5,000 branches in these locations in this fiscal. As on March 31, 2023 the bank has a total of 7,821 branches and 19,727 ATMs. Out of this, around 52% branches are situated in semi-urban and rural areas.

2. RBI'S PLAN TO INTRODUCE CREDIT-LINE ON UPI WILL CREATE A WIN-WIN SITUATION FOR ALL: Last month, during its monetary policy announcements, RBI said that a pre-sanctioned credit-line would be made available via Unified Payment Interface (UPI). With this, a pre-sanctioned credit-line approval acts as a digital credit card to millions of people who may not have a credit card. This recent announcement is an opportunity to all banks to extend credit to a UPI-holder. As compared to the 85 million credit-cards that are active in the country (which is just 5% coverage), one can imagine the reach which the banks can achieve by sanctioning credit on UPI, as at present there are 256 million UPI codes, excluding Bharat QR Codes. Looking at the potential in store some large banks have already started offering credit-line on UPI.

3. 39% OF FAMILIES CLAIM TO BE VICTIM OF ONLINE FINANCIAL FRAUD: LocalCircles, a community social media platform has surveyed and presented a report on online frauds. According to the survey, around 39% of families in India have experienced financial fraud in the last three years and only 24% of them have got their funds back. 23% of the families have experienced credit or debit card frauds while 13% indicated fraud by buying, selling and classified site users. 10% of the families have experienced bank account frauds. The survey covered 32,000 responses from families located in 331 districts of India comprising of 66% male and 34% female respondents.

4. AIRTEL PAYMENTS BANK ROLLS OUT FACE AUTHENTICATION FOR AePS: Airtel Payments Bank has rolled-out Face Authentication for Aadhaar-enabled Payment System (AePS) at its 5,00,000 banking points as part of its collaboration with the National Payments Corporation of India (NCPI). With this, Airtel Payments Bank is amongst the first 4 banks to offer face authentication for AePS in the country. The rollout is planned in phases with the first phase that includes non-financial transactions like balance enquiry and mini-statements.

5. LARGE COMPANIES MAY GET MARGIN BREATHER ON DERIVATIVES DEAL WITH BANKS FOR HEDGES: Large Corporates may be spared from keeping margins for derivative deals with banks if such transactions are done to hedge or cover risks arising from fluctuations in interest and foreign exchange rates. Under the arrangement, a corporate would either pay to the bank or receive from the Bank a Variation Margin (VM) calculated daily, based on how the value of the derivative contract changes.

6. NBFCs STEP UP USED CAR FUNDING AS EVs CATCH ON: Non-Banking Finance Companies (NBFCs) are stepping up the funding of used cars, and seeing is as a growth potential over the next 2-3 years, especially with Electric Vehicles (Evs) gaining market share. Many a NBFCs are expecting wider acceptance in metros for used Evs. Finance penetration in this market has grown from 20% a year ago to about 35% currently. Usually, loans for used cars carry higher rate of interest, but due to the key shift in the business, the interest rate difference is narrowing between used car loans and new car loans from 400 to 250 basis points.

7. INDIA POST PAYMENTS BANK LIKELY TO BREAK EVEN IN FY-23: India Post Payments Bank (IPPB) is likely to break even in financial year 2023-24, in the 5TH year of its operation. This is much ahead of its earlier target to reach break-even point by FY-25. The bank is now planning to seek permission from the RBI to extend small ticket loans to its customers. IPPB was launched in 2018, with the intent to leverage rural population with the help of its massive network of 1,55,000 post branches, but upfront hiring of a large number of employees, investment in constantly changing technology and zero MDR regime on digital payments led to incur losses in the first 4 years.

8. CHARTERED ACCOUNTANTS, COMPANY SECRETARIES NOW UNDER THE AMBIT OF MONEY LAUNDERING LAW: Notifying changes in the Prevention of Money laundering Act (PMLA), the Finance Ministry has bought practicing Chartered Accountants (CAs), Company Secretaries (CSs) and Cost & Works Accountants (CAWAs) carrying out financial transactions on behalf of their clients into the ambit of PMLA. However, Lawyers and Legal professionals are left out of the gambit of PMLA. Many Tax experts opine that given the onus on compliance and low conviction rate, the said inclusion was uncalled for.

1. LARGE CORPORATES WILL NEVER BE ALLOWED TO OPEN A BANK IN INDIA: Veteran banker Mr. N Vaghul opines that Large Corporates will never be allowed to enter banking sector in India. He said that India has learnt from its past experience during the pre-nationalisation era and will never repeat the same mistakes by allowing large corporates in to banking. Two years ago, a RBI discussion paper made a clear case for allowing the large corporates because of their ability to get capital which will in turn fund economic growth. That discussion led to a raft of criticism by many, including former RBI top brass and the said discussion did not move ahead.

2. SPECIAL DRIVE BY PUBLIC SECTOR BANKS LIKELY TO RECOVER WRITTEN-OFF LOANS: Public Sector Banks (PSBs) are likely to launch a special drive to recover written-off loan accounts after the government nudged them for fast-track proceedings against errant borrowers. PSBs wrote off bad loans worth Rs 8.16 lakh crores from their books in six years till 2021-22. In the first 9 months of 2022-23, PSBs have written-off Rs 90,958 crores of bad loans. Banks write off loan accounts only when recovery looks impossible in the near future. A write-off loan helps the bank to free-up its capital and update the balance sheet.

3. IRDAI ASKS INSURANCE COMPANIES TO LAY DOWN SOCIAL MEDIA GUIDELINES FOR EMPLOYEES: Insurance Regulatory and Development Authority (IRDAI) has asked insurance Companies to lay down social media guideline for its employees to ensure that no unverified or confidential information relating to the organisation is disseminated to the public through these platforms. IRDAI said that social media platforms should be used in a way that adds value to the organisation's business. Any information received, accessed, or obtained by an employee, either in his/her official/personal mail/media forums or in any other manner, if proposed to be shared in any media forum, such information should be forwarded to the Organisation's Compliance team for prior approval.

4. RBI MONIRORING BANKS' BUSINESS MODELS MORE CLOSELY: The RBI Governor Mr. Shaktikanta Das while speaking at the Global Conference on Financial Resilience said that The RBI has started to monitor the business models of Indian Banks more closely. The recent stress tests revealed that Indian Banks were efficient and will be able to maintain capital adequacy above minimum requirement even in situation of severe distress. Mr. Das further said that the RBI has put in place various frameworks to monitor the banks and has also developed macro prudential measures to assess system level build-up of risks.

5. HINDUJA SOLE BIDDER FOR RELIANCE CAPITAL: Hinduja Group entity IndusInd International Holdings was the sole bidder for Reliance Capital at the auction held on 26TH April 2023 as part of bankruptcy proceedings. It submitted a Rs. 9,650 crore upfront cash offer. Torrent Investments and Oaktree Capital did not submit bids. Lenders had set Rs. 9,650 crores as the threshold amount for participation in the auction, including a minimum of Rs 8,000 crore as upfront cash. Rs 9,650 crores offer equates to a recovery of 41% for the lenders. The Hinduja bid is about Rs 1,000 crore more than what Torrent offered in the first round of the auction.

6. TATA CAPITAL BOARD APPROVES PLAN TO CONSOLIDATE ARMS: Tata Capital, the holding company of Tata Group's financial services business, is consolidating its group subsidiaries following a recent board approval, ahead of finalising its listing plans to meet the revised Scale-Based Regulation (SBR) of RBI. Tata Capital Financial Services and Tata Cleantech will merge with Tata Capital. Tata Housing Finance will be housed separately.

7. GST REVENUE COLLECTION FOR APRIL 2023 HIGHEST EVER AT Rs 1.87 LAKH CRORES: The Finance Ministry has reported the GST collections for the month of April'23 at Rs 1.87 lakh crores which is the highest ever collection so far. GST collections for April'23 is all time high. Last year in April'22 the collection was Rs 1.67 lakh crores. In the month of March'23 it was Rs 1.62 lakh crores. For the first time since the introduction of GST regime, the collections have crossed Rs 1.75 lakh crores mark.

8. 60% INCREASE IN UPI PAYMENTS, CLOCKS RECORD HIGH TRANSACTIONS IN MARCH 2023: Unified Payment Interface (UPI) has recorded its highest-ever number of transactions at 8.7 billion in March'23. The payment infrastructure recorded 60% jump in year-on-year transactions on real time payment. The total value of UPI transactions for March'23 touched Rs 14.05 trillion, reporting a growth of 46% in terms of value. This is as per NCPI data.

1. RBI HARMONISES PROVISIONING NORMS FOR URBAN COOPERTAIVE BANKS: The Reserve Bank of India has harmonised the provisioning norms for standard assets applicable to all categories of Urban Cooperative Banks (UCBs). In December 2022, RBI had categorised UCBs into 4 tiers-(Tier1/2/3/4) for regulatory purposes. Direct advances to agriculture and SME sectors which are standard, would attract a uniform provisioning requirement of 0.25% of the funded outstanding on a portfolio basis to all categories of UCBs under the revised framework.

2. JM FINANCIAL AND INDOSTAR IN TALKS TO MERGE MORTGAGE BUSINESSES: Non-Bank lenders JM Financial and Indostar have announced that they are in preliminary discussions to merge their respective mortgage verticals into a single entity. And as per the official statement, the entity created by merging the retail mortgage portfolio of JM Financial Home loans and mortgage-backed portfolio of Indostar may also be listed in the market. However, the discussions which are underway are non-binding in nature.

3. ASSET RECONSTRUCTION COMPANIES ARE HOPEFUL OF RBI FILLIP TO HELP TACKLE Rs 6 LAKH CRORE OF SOURED LOANS: Asset Reconstruction Companies (ARCs) are awaiting the next set of RBI guidelines, including widening of the definition of qualified buyers to include High Net Worth Individuals (HNIs) and corporates, and permitting ARCs to acquire distressed assets from all financial entities. These changes could help clean up Rs 6 lakh crore of soured assets.

4. NEW REMITTANCE RULES PUT WEALTHY INDIANS IN A FIX: The wealthy residents, who spread their investments across currencies and markets, are now unsure how to diversify their savings, with the RBI yet to spell out whether they can hold Fixed Deposits (FDs) with overseas banks. A new rule restrains them from keeping money beyond 6 months in offshore bank accounts. The rule requires them to invest the unused money remitted from India in foreign securities, mutual funds, properties, and other permitted investments. And it is interpreted that FDs are not included in permitted investments under the Liberalised Remittance Schemes (LRS).

5. RBI ALLOWS AU SMALL FINANCE BANK TO DEAL WITH FOREIGN EXCHANGE: AU Small Finance Bank Ltd has said that it has received revised guidelines from the RBI to act as an authorised dealer to deal in foreign exchange. Now the bank will be able to deal in foreign exchange subject to compliance with applicable regulations.

6. ICICI SECURITIES TO DOUBLE ITS WEALTH TEAM, EYES $60 BILLION ASSETS: ICICI Securities Ltd aims to double its wealth managers and boost the assets from rich clients to $ 60 billion in the next two years. As competition ramps up in India's rapidly growing wealth industry and with the current crisis at Credit Suisse Group AC, could provide some hiring opportunities. India's $600 billion wealth industry is growing at 12% annually as more Indians are comfortable with professional wealth management banks and financial institutions.

7. LIC TOTAL PREMIUM RISES 17% TO Rs 2.32 LAKH CRORE IN FY-23: Life Insurance Corporation of India (LIC of India) said that its total premium increased by 17% to Rs 2.32 lakh crores in Financial Year 2022-23. The same stood at 1.99 lakh crores in Financial Year 2021-22. In terms of premium collection LIC continues to hold a market share of 62.58% as on March 2023. LIC's premium collection for the fiscal 2023 is the second highest among the listed peers with HDFC Life leading with 18.83%. SBI Life is in third spot with 16.22%.

8. INCOME TAX DEPARTMENT CRACKS DOWN ON BAJAJ ALLIANZ AND ICICI PRUDENTIAL FOR EVADING TAX: The Income Tax Department has sent show-cause notice to Bajaj Allianz and ICICI Prudential Life Insurance for evading taxes since 2017, as part of a probe spanning 16 insurers and about $610 million in unpaid dues. The probe, started in September 2022, is a crackdown on the insurance industry's practice of accounting for all sales commissions above the regulator-prescribed limit as advertising and marketing costs, and then claiming tax credit.

1. CBIC MAY SOON INTRODUCE AUTOMATED SYSTEM OF PUBLISHING DAILY EXCHANGE RATES FOR 22 CURRENCIES: The Central Board of Indirect taxes and Customs (CBIC) is likely to introduce a system of publishing daily currency exchange rates on the integrated customs portal, replacing the existing system of notifying rates fortnightly. This move would help capture daily exchange rate fluctuations and help importers and exporters to precisely calculate customs duties based on daily exchange rates. The exchange received from SBI everyday shall be adjusted to the nearest 5 paisa and integrated with Indian Customs EDI System and published on Indian Customs National Trade Portal by 6 pm.

2. PSU BANKS SET TARGET FOR SELLING FLAGSHIP GOVERNMENT INSURANCE SCHEMES IN FY24: Public Sector Banks (PSBs) have set a target for the sale of government's flagship insurance schemes- Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY) on FY24. Besides they have also set goals for other financial inclusion schemes like Mudra Yojana and StandUp India Scheme. Since the launch of the schemes in 2015, 15.99 crores enrolment has taken place under PMJJBY, while 33.78 crore under PMSBY as of March 31, 2023.

3. FUNDING CONSTRAINTS MAY HAMPER NBFCs' LOAN GROWTH IN THIS FISCAL: With Non-Banking Finance Companies (NBFCs) reaching the maximum funding cap from banks, their projected 16% loan growth may be impacted, leading to marginal compression in this fiscal. Bank funding to NBFCs has grown rapidly to 13.1 lakh crores in February 2023 from a low of Rs 3.9 lakh crores in FY-17, growing at a CAGR of 22%, which is double the rate of overall bank credit growth. This is as per a report submitted by India Rating. NBFCs will face increased funding challenges in Financial Year 24, which is likely to impact their loan growth targets.

4. UNSECURED PERSONAL LOANS TOP GROWTH CHARTS FOR BANKS: Personal Loans are emerging as the biggest credit segment and have nearly doubled as compared to the large corporate loans last year. In absolute terms, Unsecured Loans disbursed between February 2022 to February 2023 were at 2.2 lakh crores, which is almost double the amount that banks have lent to Corporates in the same period at Rs 1.18 lakh crores. The figure is inching closer to Rs 2.49 lakh crores worth of Home Loans disbursed by commercial banks during the same period. Unsecured loans rose by 26% year-on-year basis during this period as compared to 15% growth in home loans. This is as per a data shared by RBI.

5. INDIAN COMPANIES TO FACE HIGHER INTEREST BURDEN IN FY24: Indian Companies will face sharp rise in interest rates and increased working capital needs, India Ratings & Research, has reported this in one of its reports. The rating agency expects interest burden on corporates to surpass pre-covid levels in terms of value, increasing by 30% in Financial Year 23-24 as compared to FY22, with cost of debt likely to increase across all categories irrespective of size of the corporate. However, the rating agency does not expect this to lead to broad-based credit deterioration.

6. HDFC BANK'S COSTS SOAR DUE TO BRANCH EXPANSION SPREE: HDFC Bank witnessed a steep rise in its operating expenses in the fourth quarter owing to branch expansion and a rise in employee benefit expenses. The bank opened 1,479 new branches in Financial Year 22-23, including 638 branches in the fourth quarter of FY-23. The bank's operating expense was up by 32% from a year earlier to Rs 13,462 crores as against Rs 10,152 crores in the corresponding period of the previous year. But the Bank's Net Profit jumped 19.8% to Rs 12,047 crores at the end of March 2023. It reported a 23.7% net interest income growth in FY-23.

77. RBI BEGINS EVALUATING POTENTIAL BIDDERS FOR IDBI BANK: The Reserve Bank of India has started evaluating at least five potential bidders interested in picking up a majority stake in state-owned IDBI Bank Ltd. Kotak Mahindra Bank, CSB Bank and Emirates NBD are among those that have submitted expressions of interest. The stake sale in a state-owned bank is the first major disinvestment plan of the government as part of a broader privatisation plan and could fetch the government 300 billion rupees at the current market valuation. The government owns 45.48% of IDBI Bank, and is looking to divest 30.48% along with LIC of India which will sell 30.24% from its 49.24% holding in the bank.

8. ICICI BANK INTRODUCES EMI FACILITY FOR UPI PAYMENTS: ICICI Bank has announced that it has introduced an EMI facility for UPI payments made by its customers by scanning a QR code. The bank's customers can avail the said EMI facility using the Bank's "Buy Now-Pay later" option. This is first of its kind facility introduced by the bank which enhances the affordability of lakhs of the bank's customers as they can now instantly buy products or services just by scanning the required merchant QR code and make payments in EMIs.

1. RETAIL LOAN SECURITISATION RISES 56%: Retail loan securitisation jumped to a robust figure of Rs. 1.76 lakh crores reflects the resilient retail assert pools in the secondary market as well as the preference of banks to grow their retail assets to meet priority sector requirements. Such robust growth was possible as bank lending to NBFCs jumped. The credit quality of retail assets remained resilient, and the credit growth of the banks increased by 15% while bank credit to NBFCs grew by 32%.

2. BANKS SANCTION Rs. 23.2 LAKH CRORE LOANS TO ABOUT 41 CRORE BENEFICIARIES UNDER MUDRA YOJANA: Banks and Financial institutions have sanctioned Rs 23.2 lakh crores of loans to over 41 crore beneficiaries under the Mudra Yojana scheme since its launch in 2015. Pradhan Mantri Mudra Yojana (PMMY) was launched in April 2015 to facilitate easy collateral-free micro credit of up to Rs 10 lakhs to non-corporate, non-farm small and micro enterprises for income generating activities. About 68% of the accounts in the scheme belong to women entrepreneurs and 51% of the accounts belong to SC/ST/OBC categories.

3. AS LIQUIDITY TIGHTENS, BANK CD SALES JUMP 3-FOLD IN FY/22-23: There is a substantial reduction in surplus liquidity in Indian banks and banks have significantly increased their dependence on Certificate of Deposits (CDs) to mobilise funds. With this, the CD sales has surged more than 3 times in this fiscal (FY23). The Reserve Bank of India's March bulletin has said that banks' fund mobilisation through CD issuance was Rs 6.3 lakh crores in 2022-23 up to March 10, 2023 as against Rs 2 lakh crores a year ago.

4. BANKS WANT COVER FOR ONE-TIME SETTLEMENT OPTION UNDER ECLGS: Banks have urged National Credit Guarantee Trustee Company Ltd (NCGTC) to cover one-time settlement option for the resolution of stressed loans provided under the Emergency Credit line Guarantee Scheme (ECLGS). At present, the banks need to initiate legal proceedings to avail of the full credit guarantee coverage provided by the NCGTC under the scheme. One-time settlement schemes are not considered legal recourse and are not covered by the guarantee. As per the latest data, 11.3 million accounts with a consolidated amount of Rs 2.4 lakh crores are guaranteed under the scheme.

5. CVC ASKS BANKS AND GOVERNMENT DEPARTMENTS TO SEND FACTUAL REPORT ON CORRUPTION COMPLAINTS IN ONE MONTH: he Central Vigilance Commission (CVC) has asked Public Sector Banks, Insurance Companies, and government departments to provide factual reports on corruption complaints sent to them by the probity watchdog within a month. The move is aimed at ensuing timely action on graft complaints and checking inordinate delays. Chief Vigilance Officers (CVOs) are required to submit the factual report to the commission based on scrutiny of relevant records/documents within a period of 30 days of the receipt of the complaint.

6. NARCL TO STEP UP ACQUISITIONS OF DISTRESSED ASSETS IN FY-24: The National Asset Reconstruction Co Ltd (NARCL) will step up the pace on the acquisition of distressed assets in financial year 23-24. NARCL has missed its self-imposed target of Rs. 50,000 crores in FY 22-23. Last year NARCL could acquire only Rs. 10,378 crores of outstanding loans. In FY 23-24, NARCL will most likely to acquire Rs.30,000 crores of Srei Equipment Finance and Srei Infrastructure Finance loans, subject to approval by adjudicating authority.

7. FINANCIAL YEAR 23 LOAN GROWTH IS 11 YEAR HIGH DESPITE STEEP HIKE IN LENDING RATES: Credit growth continued to outpace deposit growth in financial year 2023 at an 11 year high even as banks have transmitted full 250 bps into their lending rates linked to external benchmarks which now comprise almost half of floating rate loans. It can be said that credit demand may not be linked to interest rates but more to economic growth. Bank loans rose to 14.6% in FY'23 and deposits grew by just 9.6%. The credit growth last year is the highest since FY'11-12 during which credit rose by 17%.

8. WEB PORTAL ON UNCLAIMED FUNDS, RULES FOR CREDIT SCORING COMPANIES: The Reserve Bank of India has said that it plans to open a web portal to allow depositors to search for their unclaimed deposits across banks, and has issued norms to make Credit Information Companies (CICs) more accountable. These measures are aimed at helping consumers. As per Section 26 of the Banking Regulation Act, banks need to submit data, within 30 days of the close of every calendar year, on domestic deposits that have not been used for 10 years. These deposits are transferred to the Depositor Education and Awareness Fund maintained by RBI. At the end of February 2023, the total amount of unclaimed deposits of 10 years and more transferred to RBI by banks stood at Rs 35,012 crores. RBI has been taking various steps to ensure that newer deposits do not turn unclaimed and existing unclaimed deposits are returned to the rightful owners or beneficiaries after following all the procedures.

1. PUBLIC SECTOR BANKS TO SUBMIT PLAN TO DEAL WITH KEY BUSINESS RISKS: Public Sector Banks (PSBs) have decided to submit a detailed scenario-mapped plan of various business risks to the government. They will also outline the communication strategy to deal with any exigency. PSBs will also share information on provisioning made for pledged shares along with strategies to integrate market data of such securities. This mechanism will send alerts enabling banks to take timely action and steps to manage overall exposure to a corporate, inclusive of lending through pledged shares.

2. VEDANTA SEEKS RBI NOD TO GIVE GUARANTEES FOR $1 BILLION LOAN: Vedanta Ltd has sought Reserve Bank of India approval to provide guarantees for a $ 1 billion loan that will be raised through one of Vedanta’s overseas subsidiaries. The funds thus raised are expected to be up streamed to the group’s London-based holding company Vedanta Resources Ltd (VRL) through dividend payouts. The loan is being raised through The Zinc Ventures, a Mauritius based wholly owned subsidiary of Vedanta Group. Vedanta Group is in talks with JP Morgan, Barclays, Standard Chartered and Deutsche Bank for the said $1 billion loan.

3. PE FUNDS OPTING FOR A LOCKED-BOX MECHANISM FOR HIGH-VALUE TRANSACTIONS: Private Equity Funds in India are increasingly adopting the “Locked-Box” mechanism, particularly in high-value purchases to protect the value within the businesses they are targeting while negotiations are ongoing. Under this mechanism, both the fund and the target company agree on the final purchase price using the target’s most recent audited financial statements and there is no post-completion adjustments. This mechanism helps investors safeguard the value of the target company during the period between the locked box date and the date of completion of the deal.

4. INSURERS PLAN DIGITAL PAYMENTS PLATFORM FOR REINSURANCE BUSINESS: Insurance companies are looking to set up a digital payments platform (exchange) for effective management of their reinsurance business, which will facilitate reinsurance premiums, commissions, claims, and any other transactions between the insurer, insurance intermediary and reinsurance companies. The initiative led by General Insurance Council will also have participation from foreign reinsurers and broker associations. The platform will enable transparency and improve the efficiency of financial transactions between reinsurers.

5. AXIS BANK AND SHRIRAM HOUSING FINANCE ANNOUNCE PARTNERSHIP FOR CO-LENDING: Axis Bank and Shriram Housing Finance Ltd (SHFL) have announced partnership under the co-lending model through the ”YubiCo.lend” platform. Through this partnership, both the lenders will offer secured MSME loans and home loans to middle and low-income segment borrowers based in rural and semi-urban regions. The partnership will cater to customers mostly untapped by larger institutions and build a secured loan book.

6. PSU BANK STOCKS DELIVER UP TO 96% RETURN IN FY-23: Beating much-fancied private sector peers by a wide margin, Public Sector Bank (PSB) stocks have turned out to be top performing sector of Fy-22-23 on the back of improved loan growth, margins and controlled credit costs. In the last one year Nifty PSU bank index has rallied over 30% with UCO Bank turning out as winner as it has nearly doubled the money. But investors are now worried over worsening asset quality and weakening loan growth due to rising interest rate environment.

7. SUPREME COURT VERDICT ON FRAUD LOANS MAY REMOVE HURDLES FOR LENDERS: Banks will have to set down a proper process, including a platform to hear the views of borrowers and accounts labelled as a fraud, even after a forensic audit finds such delinquents guilty of embezzlement. The Supreme Court in its recent judgement has said that borrowers must be heard before their accounts are classified as fraud. Bankers and lawyers feel that though the process to declare the account may get elongated after the Supreme Court verdict but the detailed Standard Operating Procedure (SOP) will eventually eliminate legal hurdles in the future. The order does not have retrospective applicability, means it will not apply to accounts already labelled as fraud.

1. SEBI INSTRUCTS INVESTMENT BANKS TO REMOVE PROMOTERS AADHAAR CARD INFORMATION FROM OFFER DOCUMENTS: Market regulator Securities and Exchange Board of India (SEBI) has asked investment banks to remove Aadhaar details of promoters from hundreds of offer documents filed by companies. The move comes after Aadhaar governing body UIDAI pulled up SEBI for publication of such confidential information in publicly available documents in contravention of the Aadhaar Act. Some promoters had complained to UIDAI expressing concerns over misuse of their Aadhaar details as these offer documents were publicly available on SEBI sites.

2. FINANCE MINISTRY SEEKS DATA ON BANKS' BOND PORTFOLIOS AMID GLOBAL BANKING TURMOIL: Finance Ministry has asked state-owned banks to submit details of their bond portfolios, amid the turmoil in global banks. The Ministry has asked the banks to submit their Held-To-Maturity (HTM) portfolios and Mark-To-Market (MTM) losses in trading books to identify any potential stress. This data collection is more of a precautionary exercise because the government does not want to be caught off-guard.

3. HDFC GETS AN ALL-CASH OFFER FROM OMKARA-ARC FOR BAD LOAN PORTFOLIO: HDFC Ltd has received a bid for its wholesale bad loan portfolio from Omkara-ARC valued at Rs.1,195 crores which includes several developer loans. The offer comes ahead of the fag end of the financial year but the deal is unlikely to be concluded this month. HDFC Ltd is currently evaluating the bid and a decision is expected to be taken in the coming week. HDFC may ask for more bids to maximize its recovery. HDFC is expected to complete this process before its planned merger with HDFC Bank Ltd.

4. BANKS REACH OUT TO RBI, SEEK EASING OF MSME BAD LOAN RULES: Banks have written to the Reserve Bank of India seeking relaxation in recognition of Non-Performing Assets (NPAs) in the MSME sector. Banks want that a restructured MSME account under the Covid package be considered as NPA from the latest date and not from the date prior to restructuring. This will give some relief to banks as it would lessen their provisioning burden. As per RBI data, outstanding advances to the MSME sector stood at Rs. 20.44 lakh crores in FY-22. The gross NPA ratio of MSME sector in Public Sector Banks was 7.6% in FY-21-22 and touched 6.1% in FY 22-23.

5. MORE BANKS WILL FAIL IN USA AND UK: The CEO of hedge fund Man Group, Mr. Luke Ellis has opined that the banking turmoil sparked by the collapse of Silicon Valley Bank is not yet over, and a significant number of banks will fail within next 2-3 years. He further added that smaller and regional banks in USA and challenger banks in Britain could be at risk. Market chaos forced the emergency rescue of Credit Suisse by its Swiss rival UBS has brought some calm in the markets.

6. THE GLOBAL BANKING CRISIS CAN IMPACT INDIA IN A DIFFERENT WAY: United States of America witnessed banking failures this month with SVB and Signature Bank collapse and the rescue of Credit Suisse by UBS. India is seen to be relatively undisturbed by the shocks of this US bank crisis. But if more banks in USA or in Europe fail then India's macroeconomic stability and India's banking system will have problems. If more banks fail then this crisis might ripple through India's economy and manifest in India's tech sector, markets, and startups. The banking crisis in US and Europe could take a toll on the Indian $ 245 billion IT business process management industry, which draws around 41% of its revenues from the banking, financial services and Insurance sector.

7. FINANCE MINISTER TELLS PSBs TO FLAG STRESS POINTS IN BUSINESS AND STAY ALERT: Finance Minister Nirmala Sitharaman has asked Public Sector Banks (PSBs) to review their business models closely to identify stress points, urging them to remain vigilant amid a deepening banking crisis in the US and Europe. She urged banks to watch their interest rate and concentration risks and adverse exposures and regularly undertake stress tests. She told that PSBs should frame detailed crisis management and communication strategies.

8. BANKS COULD EXPECT MORE DEPOSIT FLOWS AFTER MUTUAL FUNDS LOSE INDEXATION BENEFIT: Banks are likely to get more deposit flows in the next fiscal year with the government removing the indexation tax benefit for long-duration debt mutual fund investments. According to the latest bill, mutual funds having less than 35% assert under management in domestic equity will lose indexation benefit and the returns will be taxed as short-term capital gains. High-Net-Worth Individuals whose funds are invested in these funds, may get converted to bank deposits. Also, mutual funds were using such investments to fund the working capital and non-convertible debentures of companies and now this business will also flow to banks for refinance.

1. CREDIT SUISSE'S DISCOUNTED SALE IS A WARNING SIGNAL TO ALL BANKS: Kotak Bank's Uday Kotak has pointed out that Credit Suisse's garage-sale valuations- a $3 billion takeover of a $600 billion balance sheet to warn his counterparts about building size without risk assessment, underscoring the enduring importance of prudence in the global lending industry. Credit Suisse sold to UBS for $ 3 billion, about $ 600 billion balance sheet company. Last week the Swiss authorities brokered a takeover of Credit Suisse Group AG by rival UBS Group AG, while the Federal Reserve and five other central banks announced coordinated action to boost liquidity in US dollar swap arrangements.

2. INDIA INC'S STRONG DEBT PROFILE KEY TO ECONOMY'S MACRO STABILITY: A finance Ministry report has said that the strong debt profile of Indian companies was a key factor to maintain the country's macroeconomic stability, which is expected to further improve as the Current Account Deficit (CAD) for the present fiscal year is set to be shrinking than earlier years. Supported by gains from high services exports, moderation in oil prices and a recent fall in import-intensive consumption demand, India's CAD is estimated to narrow in FY-23 and FY-24, providing a buffer to the rupee in uncertain times. While earlier it was projected that the CAD to remain between 3% to 3.5% of the GDP in FY-23, the deficit is now expected to come under 3%.

3. INDIA's STATE-OWNED BANKS' GROSS NPA EASES, AND EARN GOOD PROFITS IN THE CURRENT FISCAL: The asset quality of Indian Public Sector Banks has improved significantly which is evident by the fact that the gross NPA ratio has declined to 5.53% in December '22 which was at a peak of 14.6% in March 2018. At the same time, the provision coverage ratio of PSBs has increased from 46% to 89.9% in December 22. The Capital Adequacy Ratio (CAR) is 14.5%. All PSBs together have earned a Net Profit of Rs. 70,167 crores in the first nine months of this fiscal. Total market cap of PSBs (excluding IDBI Bank) is Rs 10.63 lakh crores as on 31 December 2022.

4. HC GRANTS TIME TO RBI TO RESPOND TO PIL ON UNIFORM BANKING CODE FOR FOREIGN EXCHANGE TRANSACTIONS: The Delhi High Court has granted 6 more weeks to Reserve Bank of India to respond to a PIL seeking implementation of a Uniform Banking Code for foreign exchange transactions to control black money generation and benami transactions. The petitioner has contended that there are loop holes in the system in relation to transfer of foreign funds which could be used by anti-national elements. The counsel of RBI had prayed for a six-weeks' time which has been approved by the High Court.

5. CREDIT CARD OUTSTANDINGS RISE 29.6% TO REACH RECORD HIGH IN JANUARY'23: The Economic Affairs Secretary Mr. Ajay Seth has stated that the collapse of two American Banks and the recent crisis at Credit Suisse are unlikely to impact India's banking system or the country's macroeconomic stability. But he further said that in the event of the crisis getting more pronounced, global capital flows may get adversely affected. However, he said that the situation has not reached anywhere near the level of the 2008 global financial crisis.

6. AMERICAN BANKS BORROW $164.8 BILLION FROM FEDERAL RESERVE IN A RUSH TO BACKSTOP LIQUIDITY: American Banks borrowed a combined $164.8 billion from two Federal Reserve Backstop facilities in the last week, signalling a sign of escalated funding strains in the aftermath of Silicon Valley Bank's failure. Data published by Federal showed $ 152.85 billion in borrowing from the discount Window- the traditional liquidity backstop for banks in the week ended March 15, 2023. This is an all-time high in recent times, up from $4.58 billion the previous week. The previous high was $111 billion borrowed during the 2008 financial crisis.

7. LOW-COST HOMES HIT BY INTEREST RATE HIKE SPREE: Fewer customers are availing loans to buy so called affordable homes after several back-to-back interest rate hikes. With this, the demand for affordable homes has decreased considerably. Home loans up to Rs 30 lakhs which had a share of 60% of total home loans disbursed between April-June 2022, now decreased to 45% in January-February 23. Whereas, the loans above Rs 50 lakhs, the share has increased to 25% from 15% in the same period.

8. AIR INDIA CHIEF SEES END OF PRICE WARS AFTER TATA GROUP'S DECESION TO MERGE ITS FOUR AIRLINES: Fare wars between airlines will soon end and travellers should brace for higher ticket prices with the Tata Group's move to merge its 4 airlines. Tata Group has decided to merge Air India, Vistara, Air Asia and Air India Express in to one unit with the Singapore Airlines to own 25.1% stake in the merged entity. With this, IndiGo and Air India will then control about 85% of the domestic market, thereby controlling prices as well.

1. SVB COLLAPSE-NAME MIX-UP SENDS AN INDIAN BANK CUSTOMERS INTO PANIC MODE: The collapse of Silicon Valley Bank (SVB) in California has impacted the mood of customers of Mumbai based Indian cooperative bank, The Shamrao Vithal Cooperative Bank Ltd (SVC Bank Ltd). The bank is getting queries from panicked customers regarding the safety of their deposits due to similarity in name of the bank. The bank has received scores of queries on its social media platform. The bank has issued a clarification stating that they area completely different entity and has stated that it has no relation to Silicon Valley Bank-California.

2. BANK OF BARODA BOARD APPROVES 49% STAKE DIVESTMENT IN BFSL: The Bank of Baroda board has approved up to 49% divestment in its subsidiary BoB Financial Solutions which is a 100% owned company of Bank of Baroda. The bank has issued an advertisement inviting Expressions of Interest (EoI) from suitable Investors/Strategic Partners to acquire 49% shareholding of Bank of Baroda in BFSL.

3. INDIAN BANKS' GROSS NPAs LIKELY TO TOUCH TO SUB-4% BY FY-24: Bad loans (Non-Performing Assets-NPAs) of Indian Banks are expected to decline by 90 basis points to less than 5% in FY-23 and hit a decade low of sub-4% by March 31, 2024. This is as per a report by Assocham-Crisil Ratings Study. The study attributes the decline in Gross NPAs of the banks to post-Covid economic recovery and higher credit growth. The report further states that the biggest improvement would be in the Corporate Loan segment, where Gross-NPAs are seen falling below 2% in the next fiscal from a peak of 16% as on march 31, 2018. This follows a significant clean-up of books by banks in recent years followed by strengthened risk management and underwriting.

4. AXIS BANK PARTNERS WITH ITC TO OFFER RURAL LENDING PRODUCTS TO FARMERS IN REMOTE REGION: Axis bank has announced its partnership with ITC Limited to offer the bank's lending products and services to farmers who are a part of ITC's agriculture eco-system. The deal will enable Axis Bank to cater to the financial needs of the farmers of the unserved and under-served areas based in the remote regions of the country. Axis Bank will leverage ITCMAARS-a meta market for Advanced Agricultural Rural Services, a full fledged Agri-tech application for reaching out to farmers and addressing their financial requirements.

5. CREDIT CARD OUTSTANDINGS RISE 29.6% TO REACH RECORD HIGH IN JANUARY'23: The Credit card outstanding in January 2023 rose by 29.6% to Rs 1.87 lakh crores which is an all time high. This is on the back of the increased digitisation, rising consumer confidence and more spending habits of the youth population in the post-Covid period. The credit card outstanding has recorded a growth of over 20% in the 10 months of the current fiscal. If one looks at the year-on-year growth then there is a 45% increase. This is as per a latest data submitted by the RBI. Since the last 11 months, credit card spends have consistently stayed above Rs 1 lakh crore mark every month.

6. BANKS AND SERVICE PROVIDERS NEED TO RAISE CAPACITY TO KEEP PACE WITH UPI: Banks and payment service providers need to raise their digital transaction capacities and capabilities substantially to keep pace with the trend and the National Payments Corp India (NPCI) which has built capacities that could handle nearly 4 times the transactions it processes now. Mr. Shaktikanta Das, Governor of RBI speaking on this issue said that the Unified Payments Interface (UPI) currently handles 26 crores transactions per day and has the capacity to handle 100 crore transactions a day. He was speaking on this topic at the launch of RBI's Digital Payments Awareness Week. RBI has been giving a big push to digitisation and is on a mission to take the Indian model globally.

7. MANY COUNTRIES KEEN ON ENTERING INTO COLLABORATION FOR UPI LINKED PAYMENTS: The RBI Governor Mr. Shaktikanta Das has said that since the activation of the linkages between UPI and Singaporean counterpart PayNow, many countries have expressed keen interest in entering such collaborations on the payments front and expressed the hope to sign up at least 6 countries soon. Recently, the RBI also enabled visitors from G-20 countries to be on-boarded to UPI platform without having a bank account in the country.

8. HDFC BANK'S NBFC ARM CONFIRMS DATA LEAKAGE OF CUSTOMERS: A hacker has posted 7.5 GB of customer data to the hacker forum "Breached.vc", potentially belonging to HDB Financial Services, a subsidiary of HDFC Bank. The leak contains 73 million entries which include all the data pertaining to customers (all KYC details), including loan details.

1. RBI IMPOSES Rs 3.06 CRORES PENALTY ON AMAZON PAY (INDIA): The Reserve Bank of India has imposed a penalty of Rs 3.06 crores on Amazon Pay (India) Pvt Ltd for non-compliance with certain provisions related to Prepaid Payment Instruments (PPIs) and Know Your Customer (KYC) direction. RBI had issued a notice to Amazon Pay (India) as to why penalty should not be imposed for the said violations. After considering the company’s response, RBI concluded that the aforesaid charge of non-compliance with RBI was substantiated and warranted imposition of the said monetary penalty.

2. SBI MAY LOOK TO CUT STAKE IN YES BANK ONCE THE LOCK-IN PERIOD ENDS: State Bank of India may look to lower its stake in Yes Bank after a lock-in period ends on March 13, 2023 which was put in place by RBI as a part of lender’s restructuring. SBI does not want to permanently retain its stake in Yes bank and would want to trim its holdings in phases. But the percentage of equity dilution that SBI intends to do will have to be placed before RBI in due course. SBI initially acquired 49% of Yes Bank, now holds a 26.14% stake as of December 31, 2022. SBI is still the largest single shareholder in Yes Bank.

3. KOTAK MAHINDRA BANK TO CREATE VERTICAL FOR MID-MARKET FIRMS: Kotak Mahindra Bank Ltd is all set to create a separate vertical for mid-market companies having a turnover between Rs 500 to Rs 1,500 crores to increase its focus on the segment. The Bank is also keen to increase its focus on high-margin structured finance. At present the mid-market segment is part of the large corporate team, which covers companies between Rs 500-6000 crores. From April 1, 2023 onwards, the new vertical will be created, while the large corporate team will serve clients having revenue between Rs 1,500 to Rs 6,000 crores.

4. AXIS BANK COMPLETES ACQUISITION OF CITI BANK INDIA’S CONSUMER BUSINESS: Axis bank has completed the acquisition of the consumer business of Citibank India and its non-banking finance arm- Citicorp Finance India Ltd for a cash consideration of Rs 11,603 crores, less than the earlier estimate of Rs 12,325 crores made at the time of the announcement of the deal last year. The value of the deal declined as the number of customers who decided to join Axis Bank was lower than what was envisaged earlier. Now there will be an 18 months integration period during which Citi customers will be migrated to Axis bank’s technology platform. The integration cost will be Rs 1,500 crores which will be amortised by Axis Bank over 18 months.

5. INDIAN BANKS ASSOCIATION CONSIDERS 5-DAY WEEK FOR BANK EMPLOYEES: The Indian Banks Association (IBA) is said to be considering bank unions’ demand for a 5-day week. But the working hours could be increased by 40 minutes every day to compensate for lost hours with cash transactions from 10 am to 4 pm. With the proposal getting IBA’s nod, it will be sent to Finance Ministry and subsequently to the RBI for approval.

6. NBFCs PLAN EARLY REDEMPTION OF BONDS: A clutch of Non-Bank Finance Companies (NBFCs) are planning early redemption of their market-linked debentures to ensure that the investors are not taxed at a higher rate since the preferential taxation for such instruments has been withdrawn from the next financial year. According to Union Budget announcement, from April 1, 2023 all market-linked debentures, which are typically issued by small NBFCs rated A or below, will attract short-term capital gains tax of 30% instead of 10% under long-term capital gains.

7. BANKS STRUGGLE WITH DEPOSIT ACCRETION: Indian banks must mobilise deposits without hurting margins while making additional provisions for the transaction to the proposed expected credit-loss accounting model. This is as per the rating company-- India Ratings & Research. The company says that deposit mobilisation will continue to happen in a competitive environment, especially as banks have drawn on almost Rs 5 trillion of liquidity since March 2022 that has enabled reasonably priced and evenly placed deposit mobilisation. The rating Company cautioned that public sector banks would struggle to secure low-cost deposits as they are expanding their loan books at a much faster rate.

8. MOODY’S MAINTAIN STABLE OUTLOOK ON INDIAN BANKS: Global credit rating agency Moody’s Investors Service has said that the outlook for India’s banking sector remains stable and is supported by economic growth and improved financials. It has maintained a stable outlook (Baa3-stable) for India’s banking system while expecting the country’s real GDP growth to moderate level in the fiscal year ending March 2024. It says India’s underlying growth potential is fundamentally strong, which will support banks’ credit growth and asset quality.

1. RBI IMPOSES RESTRICTIONS ON 5 CO-OPERATIVE BANKS: The Reserve Bank of India has imposed several restrictions on 5 co-operative banks in the wake of deteriorating financial conditions. The restrictions will remain in force for 6 months. Customers of HCBL Co-operative Bank Ltd, Lucknow, Adarsh Mahila Nagari Sahakari Bank Ltd, Aurangabad, and Shimla Sahakari Bank Ltd Maddur, Karnataka cannot withdraw further from their accounts due to present liquidity position. Customers of Urvakonda Co-op Bank Ltd (Andhra Pradesh), and Shankarrao Mohite Patil Sahakari Bank Ltd, Akluj, Maharashtra can only withdraw up to Rs 5000/- per month. All these 5 banks cannot grant any loans, make any investment, incur any liability and transfer or dispose of any of its properties.

2. MICROFINANCE INDUSTRY GROWS 26% YEAR-ON-YEAR: The Microfinance Industry (MFI) grew 26% year-on-year to Rs 3.24 lakh crores at the end of December 2022, backed by NBFC-MFIs The massive jump in their gross portfolio cemented NBFC-MFIs' dominance in the sector with 38.5% market share. NBFC-MFIs regained their leadership in lending to the economically weaker section by overtaking banks. Banks enjoyed 35% market share at the end of December 2022. Small Finance Banks had a market share of 16.5%, while NBFCs and other not for profit entities contributed 8.4% and 1.1% respectively.

3. INDIAN BANKS MAY FACE RISE IN BAD LOANS FROM RETAIL AND SMALL BUSINESS LOANS: Indian Banks could see an increase in bad loans in the retail and small business segments from its recent low levels. This is as per a statement by SBI. While the loans in these segments have been growing fast, defaults have thus far been low. Mr. Ashwini Kumar Tiwari, Managing Director of State Bank of India said that "we cannot have a system where we have a 20% growth rate year-on-year on MSME and retail loans and then an NPA ratio which will remain below 1% which is not sustainable as it has to align with the system.

4. SBI ALLOWS BHIM-BASED REAL-TIME PAYMENT WITH SINGAPORE: A Day after RBI established a real-time payments system linkage between India and Singapore using UPI platform, SBI has announced a partnership with PayNow-- an online payments system, for cross-border payments. The facility is offered through SBI's BHIM SBIPay mobile application and the linkage will allow fund transfers from India to Singapore through registered mobile numbers, and from Singapore to India using UPI ID. This linkage is a significant milestone towards developing an infrastructure for cross-border payments between two countries.

5. HDFC BANK, LULU EXCHANGE SIGN A DEAL TO ENHANCE CROSS-BORDER PAYMENTS BETWEEN INDIA-GULF REGION: HDFC Bank and UAE based Lulu Exchange have signed a deal to strengthen cross-border payments between India and the Gulf Cooperation Council (GCC) region. In the first phase of partnership, Lulu Exchange's expertise and regulatory framework would be utilised to launch a digital inward remittance service titled "RemitNow2India". This will allow resident individuals of UAE to send money to any bank account in India via IMPS and NEFT modes through HDFC Bank's digital banking channels.

6. HSBC INDIA PROFIT UP BY 15%: AHongkong and Shanghai Banking Corp Ltd (HSBC Ltd), Europe's largest bank by assets, has said that its India profit had risen by 15% year-on-year basis amidst all around growth across businesses even as provisions for expected bad loans fell. Profit before Tax rose to $ 1.28 billion in the year ended December 2022 from $ 1.11 billion a year ago. The bank said it will continue to expand the balance sheet in India and look for new customers. Profit from personal banking and wealth management doubled to $ 45 million from $ 20 million.

7. BANKS SEEK MORE TIME TO REPORT LOAN FRAUDS TO RBI: Banks have asked the RBI for a relaxation in the rules on reporting loan frauds on the pretext that the existing norms are too stringent. They have sought a month's time for reporting loan frauds as against the current norm of seven days. Banks need to make full provisions once an account is classified as fraudulent. Under the existing framework, banks need to report fraud to the RBI's Central Repository Information on Large Credits (CRILIC) within a week of the Joint Lenders' Forum (JLF) declaring an account fraudulent. After the JLF meeting, each lender has to individually get approvals to have the account classified as fraud and this takes more than a week.

1. INDIA TO RECORD HIGHEST NUMBER OF CASHLESS TRANSACTIONS IN THE WORLD India is moving ahead to record the largest number of cashless transactions in the world. External Affairs Minister Mr. S Jaishankar told this at the Raisina @Sydney Business Event. Raisina @Sydney Business event was organised jointly by the Australian Strategic Policy Institute (ASPI) and India’s Observer Research Foundation (ORF) at Sydney. As part of the government’s strategy to digitise the financial sector and economy, payment transactions have been consistently increasing over the last few years. In December’22 the number of Unified Payments Interface (UPI) transactions reached a record high of 782 crores, amounting to a record of Rs 12.82 lakh crores.

2. SEVERAL BANKS OPEN SPECIAL VOSTRO ACCOUNTS FOR TRADE IN RUPEE : Several Banks have opened special Vostro accounts to facilitate overseas trade in Indian Rupee and many more countries have expressed interest to have this arrangement for the local currency trade. As of now 20 banks have opened this special vostro account. And all the banks have shared a list of nodal officers to sort out exporters’ issues pertaining to these accounts. Some African countries that are facing foreign exchange problems and issues with US Dollar and Euro mobilisation are showing interest in the rupee trade mechanism.

3. PAYTM PAYMENTS BANK LAUNCHES UPI-LITE FEATURE : Paytm Payments Bank Ltd (PPBL) has gone live with UPI-LITE, a feature enabled by National Payments Corporation of India (NPCI) for multiple small-value UPI transactions, thus becoming the first Payments bank to do so. The feature enables faster real-time transactions with a single click through Paytm as the bank aims to drive the adoption of digital payments across the country. Designed by NPCI, UPI-LITE was launched by the RBI in September’22. It also declutters the bank passbook/statement of small value transactions, as these payments would now only show in Paytm balance and history section.

4. DIGITAL LENDING TO PIP TRADITIONAL LENDING IN UNSECURED SEGMENT BY 2030: As per a report by Experian Credit Information Company of India, Fintechs will fuel digital lending over the next 6-7 years and take it ahead of traditional lending by 2030 in the unsecured loans category. This will be driven by deeper inroads being made in the unsecured small-ticket size segment as well as the secured collateral based high-ticket size market. The report highlights that the next 100 million customers are likely to have a vastly different profile and expectations than those currently in place.

5. HDFC RAISES Rs 25,000 CRORES IN LARGEST-EVER LOCAL BOND ISSUE: Housing Development Finance Corporation (HDFC) has raised Rs. 25,000 crores privately placed corporate bond which is the country’s largest privately placed corporate bond issue. The Non-Convertible-Debenture (NCD) issue witnessed participation from across investor categories, with LIC of India being the one of the largest ones, along with other insurers, banks, mutual funds and pension trusts. HDFC received 92 bids amounting to Rs 27,863 crores on electronic bidding platform and it retained and accepted 55 bids worth Rs 25,000 crores. The bonds carry a coupon rate of 7.97% per year.

6. 60% PRIVATE INSURERS SEE RAPID RISE IN FRAUD: About 60% of Indian private insurers believe there has been a significant rise in insurance-related frauds and this requires a immediate need to consider a proactive fraud risk management framework. This is as per a survey conducted by Deloitte India—Audit, Consulting and Financial advisory firm. Insurance companies in India have experienced a rise in fraud in life and health insurance. Remote working, weakened controls are the key factors contributing to frauds. The survey, conducted in the second quarter of FY-23, was based on interviews with key suit holders/senior management responsible for compliance across leading private insurers in India.

7. BANKERS HIGHLY OPTIMISTIC ABOUT CREDIT DEMAND ACROSS SECTORS: Bankers are highly optimistic about credit demand across all main sectors in short term. After sagging for the last two years, the non-food credit growth has been hovering above 15% in FY-23. This is as per a Bank Lending Survey conducted by the RBI. The Bank Lending survey provides sentiments of banks on loan demand, loan terms and their outlook in the short term across major sectors. It captures the banks’ expectations on future credit demand along with adjustments in terms and conditions and also seeks feedback on prevailing credit market conditions.

1. BANKS REPORT HIGHEST QUARTERLY NET INTEREST INCOME IN THE THIRD QUARTER OF THIS FISCAL: The Banking sector has reported a record Year-on Year (YoY) growth in Net Interest Income (NII) for the December quarter of this fiscal year since the pandemic hit June’20 quarter. This is the result of sustained double-digit credit offtake, lower YoY provisioning for NPAs. NII for December’22 quarter increased by 34.5% to a record Rs 1.8 lakh crores. Public Sector banks reported a significant fall of 30.3% in provisioning while the private banks posted a 21.7% drop in provisioning.

2. DIGITAL CREDIT TO BE ROLLED OUT THIS YEAR: The government will roll out digital credit service this year which will enable even small street vendors to avail credit from large banks. Telecom & IT Minister Mr. Ashwini Vaishnaw speaking at “Digital Payments Utsav” said it will be rolled out like UPI service and will be a big achievement under Prime Minister Narendra Modi’s vision of “Digital India”. NPCI will take lead in this over a period of next 10-12 months. People will soon be able to make payments by speaking on their mobile phone in their local language and the said service will be available in 18 languages.

3. RATE HIKE WILL NOT IMPACT NBFCs’ COLLECTIONS: A Day after the RBI delivered another rate hike, Icra Ratings has said that the increase will not impact collection efficiencies of NBFCs. This is primarily because of the collaterals given by borrowers and the priority they accord to repayments. The RBI has hiked rates in five consecutive policy revies since May 2022 in order to curb inflation, resulting in an overall jump in the interest rates in the system. Icra said that NBFCs and Housing Finance Companies are reporting collection efficiencies to the tune of 97% for the first nine months of this fiscal.

44. ADANI PLANS TO PRE-PAY $500 MILLION LOANS REPAYMENTS DUE IN MARCH’23: The Adani Group of Companies plans to prepay a $500 million loan repayment which is due in March’23 to a group of banks as the Indian conglomerate looks to bolster its finances following a short seller attack. Barclays Plc, Standard Chartered Plc and Deutsche Bank AG are among banks that lent Adani $ 4.5 Billion to finance the purchase of Holcim Ltd cement assets last year. A portion of that is due in March’23.

5. 5 MORE BANKS TO JOIN DIGITAL RUPEE PILOT IN 9 MORE CITIES SOON: Five more banks will join the pilot on the RBI’s Central Bank Digital Currency—CDBC (e-rupee) for retail customers and the project will be extended to 9 more additional cities. RBI which began this e-rupee for retail customers in early December’22 with 8 banks in 5 cities, stressed that it does not want to rush with it but favours a slow and steady adoption. Presently, the retail CDBC is available for only 50,000 users and in this, 5,000 are merchants in 5 cities.

6. YOUNG GENERATION IS BOOSTING INDIA’S LOAN GROWTH : The young generation of India have become the driving force behind the country’s credit growth which is witnessing the expansion of riskier segments like credit cards, consumer durable loans and personal loans. This is as per the report by CIBIL. The credit information company said that during September’22 quarter the proportion of loan enquiries by people of age group 18-30 years grew by 5% from last year. The trend is underlined by rapid growth in consumption-led credit products like credit cards, consumer durables and personal loans.

7. LIC OF INDIA’S THIRD QUARTER NET PROFIT JUMPS BY 40 TIMES : LIC of India has reported a 40 times higher net profit over last year of Rs 8,349 crores in the third quarter of this fiscal year, up from Rs 211 crores in the same quarter last year. LIC’s net premium income rose by 15% to Rs 1.12 lakh crores in Q-3 of FY-23, from Rs 98,052 crores during the same period last year.

8. BANKS’ EXPOSURE TO ADANI GROUP “INSUFFICIENT”: According to rating agency Fitch, Indian banks’ exposure to the Adani group is insufficient in itself to pose any threat to the banks’ standalone credit profiles. Fitch has stated that the controversy over the short-selling report had no immediate impact on the ratings of Fitch-rated Adani group and their securities. It further stated that “even under a hypothetical scenario where the wider Adani Group enters distress, exposure for Indian Banks should in itself, be manageable without adverse consequences on the banks’ viability ratings”

9. HSBC IS BETTING BIG ON INDIA’S $400 BILLION PILE OF WEALTH: Europe’s largest lender, which is grappling with a downturn in profits from Greater China region which have been HSBC’s centers of gravity since last 150 years, is looking to participate in a wide variety of activities in India. The bank is planting its sight more firmly on the ultra-rich society in India, where the wealth held by billionaires has crossed $400 billion from $148 billion in 2016. It has plans to launch an onshore private banking service in the South Asia country this year.

1. IL&FS TO DISTRIBUTE Rs 3,200 CRORE TO IFIN CREDITORS: IL&FS Group has initiated its largest interim distribution pay-out till date. The group will be paying a total of Rs. 3,200 crores to IFIN eligible creditors, in accordance with the NCLT approved Revised Distribution Framework (RDF). Of the total Rs 3,200 crores, Rs 2,250 crores is being paid to a combination of 28 state-run, private and foreign banks. Another Rs 950 crores will be distributed to over 500 public debenture holders, public funds including EPFO, Army Group Insurance and others.

2. STANDARD CHARTERED STOPS LENDING AGAINST ADANI DOLLAR BONDS: After Citi and Credit Suisse, now Standard Chartered has stopped giving loans against dollar bonds floated by companies of Adani Group which is battling allegations of price manipulation and accounting fraud by US short-seller Hindenburg Research. The bank will not accept these papers as collaterals for margin loans. The decision is a temporary decision by the bank. Standard Chartered has comparatively tiny exposure to these entities, so it’s not a major risk for the bank.

3. FINANCIAL WATCHDOGS TO SOON PUT TIME LIMITS FOR KEY DECISIONS : India’s financial sector watchdogs will soon prescribe time limits for key regulatory decisions such as vetting an entity for a banking licence and also put out regulations for public discussions before they are adopted under a process revamp announced in the budget. The idea is to make regulators more accountable and responsive without impinging on their independence. Additionally, under the new framework, regulators will have to review their sectoral regulations periodically to see if some provisions have become irrelevant or too complicated and accordingly take remedial measures.

4. SBI, BoB SAY ADANI EXPOSURE WITHING LIMITS, PAYMENTS ON TRACK: State Bank of India and Bank of Baroda have announced that their loan exposure to the Adani Group is well within the prescribed corporate ceiling limits as per the RBI norms and also, the loans are being serviced regularly. SBI has announced that the bank’s exposure to Adani Group is 0.88% of its loan book while Bank of Baroda said the Bank’s exposure to the group is 1/4TH of the large corporate ceiling set by RBI norms. Both banks have also said that the loan repayments are regular and do not show any signs of stress. SBI’s loan book as on December’22 was Rs. 31.33 lakh crores, means a 0.88% exposure to Adani group is about Rs 27,000 crores. 5. BANKING SECTOR REMAINS RESILIENT AND STABLE: The Reserve Bank of India has said that the banking sector remains resilient and stable, a statement issued by it considering the fears of growing concern about the exposures of Indian banks to the Adani Group. RBI issued a statement stating “ As the regulator and supervisor, the RBI maintains a constant vigil on the banking sector and on individual banks with a view to maintain financial stability” RBI has a Central Repository of Information on Large Credits (CRILC) database system where the banks report their exposure of Rs 5 crores and above which is used for monitoring purpose.

6. STEPS TAKEN TO IMPROVE DATA-SHARING MECHANISM IN FINANCIAL SECTOR BY USING AI, DATA ANALYTICS: India will strengthen its economy by fully digitising its banking and financial services industry. An efficient use of data and information on customers will prove to be the game changer. In the latest budget, the Finance-Minister has put data-enabled digital banking and financial services infrastructure at the centre of India’s growth plan. However, to set up such a robust digital framework, the country needs to establish an easy and safe financial data-sharing mechanism. Financial Institutions and banks are leveraging the benefits of Artificial Intelligence and data analytics for holistic transformation spanning several years based on a detailed understanding of the customer’s past behaviours.

7. SBI POSTS ITS HIGHEST EVER QUARTERLY PROFIT: The State Bank of India has announced a smart 68% year-on-year jump in the net profit for the quarter ended December 31, 2022 of Rs. 13,205 crores—the highest ever quarterly profit for the bank. This was made possible on the back of a decline in its provisions and boost in interest income. The bank’s provisions fell by 17% year-on-year (Y-o-Y) to Rs 5,761 crores led by improved asset quality.Net Interest income rose by 24% Y-o-Y to Rs 38,069 crores. The domestic Net Interest Margin (NIM) stood at 3.69%, expanded by 29 basis points.

8. BUDGET ANNOUNCES A HOST OF MEASURES TO ENHANCE BUSINESS IN IFSC: To enhance business activities in International Financial Services Centres (IFSCs), Finance Minister has announced host of measures in the latest budget. These include a subsidiary of EXIM Bank for trade re-financing and allowing acquisition financing by IFSC Banking Units of foreign banks.

1. VIKAS CO-OPERATIVE BANK’S DIRECTORS VIOLATE NORMS TO SIPHON OFF FUNDS: The board of directors of Maharashtra based Vikas Co-operative Bank Ltd have violated the banking norms and have sanctioned loans to shell entities and siphoned off funds. The Enforcement Directorate (ED) has issued a statement to this effect after Pimpri-Chinchwad Police arrested the bank’s chairman Mr Amar Mulchandani. ED said that an audit of the co-operative bank has revealed a gross fraud and misappropriation of funds worth Rs 429.60 crores spread across 126 NPA loan accounts. RBI has cancelled the licence of the said bank.

2. OVER SIX BANKS JOIN GRANT THORNTON IN COMPLEX LEGAL BATTLE: Around six banks in India have joined hands in a complex legal battle in a London court spreadhead by Grand Thornton UK against Jatin Mehta & his Family, the promoters of one of India’s largest wilful defaulters Winsome Group. State Bank of Mauritius, Bank of Maharashtra, IDBI Bank, Standard Chartered Bank, Axis Bank and Exim Bank are among the financial institutions which have registered their claims in an arrangement under which, Grand Thornton (GT) after collecting its fee and litigation funding from an associate firm, would pay these banks Pari-passu in relation to the value of their claims. Canara Bank and Punjab National Bank also have their exposures in Winsome group but they have not registered their claim and have not joined hands with GT in the legal battle.

3. INDIA’S TOP BANKS SAY ADANI EXPOSURE WITHIN RBI LIMITS: Some of the leading Indian Public Sector Banks have said that their exposure to Adani Group was within the limits prescribed by RBI. The Adani group, a power-energy conglomerate has come under attack from US short-seller Hindenburg Research, leading to a sharp fall in shares of the group companies. Reserve Bank of India allows for no more than 25% of a bank’s available eligible capital base to be exposed to any one group of connected companies.

4. TRANSACTIONS WORTH Rs 12,000 CRORE BY INSURERS UNDER TAX DEPARTMENT’S LENS: Transactions of more than Rs 12,000 crores are under the scanner of the income tax department that is probing several commission agents of insurance companies over alleged tax evasion. These transactions were made by shell companies that insurance companies allegedly used to pay much higher commissions to agents than the cap set by the insurance regulator. These companies, which include both life and non-life insurers, are under the scanner of the tax authorities for allegedly showing bogus expenses made to shell companies to pay excess commissions. 5. NEW AGE BANKING HINGES ON TECH AS DIGITAL ECONOMY SETS IN: With the advent and penetration of banking services like UPI and mobile banking, the banking sector is on the cusp of witnessing massive transformation. Digital Banking Units (DBUs) and digital currency introduced by the government are the two major initiatives bringing concepts of self-service, financial inclusion and cost-effective banking services. With DBU and digital currency many processes will become extremely efficient. This in turn will help to reduce the burden on banks while also keeping the economy consistently operational and driving financial inclusion.

6. BANK SHOULD NOT ASK FOR VERIFICATION AT BRANCH LEVEL IF THE CUSTOMER DOES e-KYC: The Reserve Bank of India has instructed the banks that they should not ask for verification of KYC documents at the branch level in case a customer has done e-KYC or those who have completed the KYC (Know Your Customer) process on the C-KYC portal. In case of updation through C-KYC, the customer needs to send a mail to the concerned branch from his/her registered mail id or message through mobile to access the KYC details from the C-KYC portal.

7. GOLD LOAN NBFCs SEEK PRIORITY SECTOR STATUS: Non-Banking Financial Companies (NBFCs) specially giving Gold Loans have sought “Priority” sector status for eligible gold loans, including microloans, loans to farmers and micro businesses in the upcoming budget. Availing Gold loan by pledging household jewelleries is one of the important funding sources for MSMEs, small farmers. Gold Loan NBFCs serve the underserved segment or the bottom of the pyramid as this segment frequently borrows less than Rs 50,000 and tenure of these loans is also typically is for less than 12 months.

1. HIGH COURT SETS ASIDE YES BANK AT-1 BONDS WRITE-OFF: The Bombay High Court has set aside the 2020 order of the Reserve Bank of India appointed administrator at Yes Bank to write off more than Rs. 8,300 crores of additional tier-one (AT-1) bonds bought by investors , including several retail customers of the bank. The High Court has upheld the plea filed by Axis Trustee Services and other petitioners, challenging the move of the administrator appointed by the RBI. However The court has allowed the oral plea made by the counsel of an administrator to stay the operation on the order for 6 weeks.

2. FINANCE MINISTRY ASKS BANKS TO INCREASE CREDIT PENETRATION IN 112 ASPIRATIONAL DISTRICTS: The Finance Ministry has asked banks to further increase credit penetration in aspirational districts and ensure availability of at least one banking outlet within 5 km of all inhabited villages. Progress of 112 Aspirational Districts under Targeted Financial Inclusion Intervention Programme (TFIIP) was discussed in detail during a review meeting of Lead District Managers (LDMs) of aspirational districts and State level Bankers’ Committee (SLBC) convenors chaired by the Banking Secretary. The review meeting was also attended by senior officials of NITI Aayog and Department of Financial Services.

3. DIGITAL ECONOMY PUSH OFFERS HOPE FOR MULTIPLE PLAYERS: India’s push towards expanding digital economy offers room for multiple players to grow in the payments ecosystem. Digitisation and expanding the digital economy is good. There is plenty of room for different types of players in that ecosystem. This was expressed by the Vice Chairman and President Mr. Michael Froman of Mastercard. But he also opined that it is very important to evolve issues around cyber security and fraud which is very important. Mastercard is seeing India as one of the important key markets.

4. NCLT EXTENDS STATUS-QUO IN RELIANCE CAPITAL CASE UNTIL FURTHER ORDER: The Mumbai bench of National Company Law Tribunal (NCLT) has directed to continue a status-quo in an auction process of Reliance Capital until further order. This follows last week’s order of the bankruptcy court to maintain the status quo until January 23, 2023 in the matter, including deferring the proposed auction for the sale of the Reliance Capital. The tribunal’s direction comes in an application filed by Torrent challenging the second auction and a late improved offer from Hinduja group entity. 5. INSURERS WANT NPS TAX EXEMPTION FOR THEIR PENSION SCHEMES ALSO The insurance industry is seeking a level-playing field with the National Pension System (NPS) with tax exemption for annuity products of insurance companies to make them more competitive. Companies are arguing that a tax exemption for investments in pension schemes will increase their pull to investors, helping them to deepen insurance penetration as it can be bundled with a life cover. Industry experts argue that a separate tax exemption limit is needed for insurance because the present limit of 1.50 lakhs is too small and has not been revised for a long time.

6. GOVERNMENT MAY NOT GIVE ANY CAPITAL INFUSION TO PSBs IN BUDGET 2023 : The government is unlikely to announce any capital infusion for Public Sector Banks (PSBs) in the upcoming Budget of 2023 as their financial health has improved significantly and they are on track and have earned a combined profit of Rs 1 lakh crores. Their capital adequacy ratio also is much above the regulatory requirements and varies between 14 to 20%. And, banks are raising funds from the market and also selling their non-core assets to augment their resources and as such the government feels that the banks do not require any capital support as of now.

7. GOOGLE PARENT COMPANY ALPHABET TO SACK 12,000 EMPLOYEES: Google parent company Alphabet has announced that it plans to cut about 12,000 jobs, which accounts for 6% of its global workforce. The layoffs will affect jobs globally and across the entire company. The layoffs are global and impact US staff immediately. In the US, the company will pay employees during the full notification period of 60 days.

8. MOODY’S UPGRADES RATINGS FOR PNB, CANARA BANK AND BANKS OF BARODA : Global Rating agency Moody’s has upgraded the long-term local and foreign currency deposit ratings of Bank of Baroda (BoB), Canara Bank and Punjab national Bank (PNB) from “Ba-1” to “Baa-3”, reflecting improved credit profile and macro-economic conditions. Moody’s also upgraded the Baseline Credit Assessment (BCA) of State Bank of India.

1. SIP FLOWS IN DECEMBER’22 AN ALL TIME HIGH: Monthly flows into Mutual Fund Systematic Investment Plans (SIPs) inched up to Rs. 13,573 crores in December 2022, an all time high. Investors continued to use this route to save for the long term. This is the third consecutive month that SIP collections touched the Rs 13 thousand crores mark. The December’22 data indicated that over the last one year, monthly SIP flows have jumped 20% with Rs 2,268 crores increase, while the number of SIP transactions surged by 25% to touch 6.1 crores. This is as per the data released by the industry trade body AMFI.

2. INDIAN BANKS GAVE HIGHEST RETURNS IN ASIA PACIFIC REGION: In a research report, S&P Global has said that Indian banks posted some of the best total stock market returns among their Asia-Pacific peers for the second consecutive quarter as they continued to benefit from solid financial metrics and growth prosects of the country’s economy. Indian banks occupied 11 out of the 15 slots in a list compiled by S&P Global Market Intelligence with the highest total returns in the quarter ended December’22. Apart from Indian banks, 3 banks from Mainland China and one from Japan made it to the list of top 15 performers.

3. NARCL GETS Rs 15,300 CRORE BLANKET GUARANTEE TO TACKLE BAD LOANS The government has approved a Rs. 15,300 crores blanket guarantee for National Asset Reconstruction Co Ltd (NARCL), clearing the roadblock for all awaited transfers of NPA accounts to NARCL. The guarantee was approved after all legal and procedural formalities were completed. The guarantee will be valid for five years, to be invoked in case of resolution or liquidation of the bad loan. It will cover the shortfall between the Security Receipt face vale and the actual realisation from the account when NARCL finds a buyer.

4. CABINET CLEARS Rs 2,500 CRORE SCHEME TO PROMOTE RuPAY AND BHIM-UPI: The Union Cabinet has approved the incentive scheme for promotion of RuPay Debit Cards and low-value BHIM-UPI transactions (person-to-merchant) for a period of one year from April 2022. The scheme has a financial outlay of Rs. 2,600 crores and acquiring banks will be provided financial incentives for promoting Point-of-Sale (PoS) and e-commerce transactions using RuPay Debit Cards and low-value BHIM-UPI transactions. In 2021-22, the government had approved an incentive scheme in compliance with the budget announcement to boost digital transactions. 5. INDIA’S M&A DEALS SOAR TO $ 126.09 BILLION: Mergers & Acquisition (M&A) deals in India soared to $ 126 billions across 1,185 deals in 2022. However, the growth rate at 141% was largely due to the HDFC Bank and HDFC Ltd merger which was worth $ 57 billion. The deal size is the biggest in India’s corporate history, was higher than the total value of all deals of $ 52.31 billion in 2021. This was followed by Adani Group’s acquisition of Switzerland-based Holcim Group’s entire stake in two Indian firms--- Ambuja Cements and ACC for about $ 10.5 billion.

6. RBI TWEAKS NORMS RELATED TO SHARE ACQUISITION IN BANKS: The Reserve Bank of India has tweaked norms related to acquiring shares in Indian banks in a bid to ensure ownership is well diversified and shareholders are fit and proper. As per the fresh directives to own a major shareholding in a banking company, the person making such acquisitions will have to submit an application to the RBI. The decision of RBI to accord or deny permission or accord permission for acquisition of a lower quantum of aggregate holding than that has been applied for, shall be binding on the applicant and the concerned banking company.

7. SECURITISATION SOARS 42% TILL DECEMBER QUARTER IN THIS FISCAL: The Securitisation volume jumped 42% to over Rs. 1.15 lakh crores in the first nine months of the current fiscal. This is driven by 20% rise in the number of originators to 120. Led by Small Finance Banks, securitisation activity became broad-based and the number of originators rose to 120 from 100 last year. Growth in the non-mortgage space was led by commercial vehicle at 31% and Microfinance loans at 14%. Unsecured loans, including personal and business loans also continued to draw investors attention, comprising 7% of the securitised assets as compared to 3% in FY 22.

8. GROSS DIRECT TAX REVENUE JUMPS 24.58%: India’s gross direct tax collections rose by 24.58% to Rs 14.71 lakh crores till January 10, 2023. Geared by an upsurge in personal income tax mop up, the government data showed that after adjusting refunds, net direct tax collections stood at 12.31 lakh crores, a jump of 19.55% over the corresponding period last year. The government has reached 86.68% of its FY’23 budget estimates for direct taxes, pegged at Rs. 14.20 lakh crores.

1. GOVERNMENT RECEIVES OFFERS FOR IDBI BANK STAKE SALE: The government has received several Expressions of Interest (EoIs) for the strategic sale of stake in IDBI Bank held by the government and LIC of India. A consortium, two foreign banks and a private equity firm are said to be among those that have submitted the paperwork. 6Th January was the last date for submitting EoIs. The transaction will now move to the second stage. But there is no official confirmation of those companies/banks that have submitted EoIs.

2. FRESH KYC PROCESS CAN NOW BE DONE THROUGH VIDEO: The Reserve Bank of India has released guidelines for Know Your Customer (KYC) processes that allow the banks to complete them remotely. Now fresh KYC process can be done by visiting a bank branch or remotely through video-based Customer Identification Process (V-CIP). But this V-CIP has to be enabled by the bank. In addition, the RBI has advised banks to provide non-face-to-face channels to self-declare a KYC in case there is no change in the information. Hence, if there is no change in the information, a self-declaration to that effect from the customer is sufficient to complete the Re-KYC process.

3. OUTSTANDING MICROFINANCE LOAN PORTFOLIO TO RISE IN FY-23: The outstanding loan portfolio of the Micro-Finance Institution (MFI) sector across India will increase to around 20.3% at Rs 3.25 lakh crores in 2023-24 as compared to the last fiscal. During the last fiscal, the total outstanding of the MFI sector was Rs 2.7 lakh crores. The sector has also created around 1.32 lakh jobs in the country since 2020. The collection efficiency (recovery) ratio of the sector during the pandemic had been badly affected which was at around 70%. But the collection efficiency ratio at present has increased to 97%. According to Micro-Finance Institution Network (MFIN) study, the total number of MFI beneficiaries in the country is 6.2 crores.

4. HDFC BANK PARTNERS WITH MICROSOFT FOR DIGITAL TRANSFORMATION JOURNEY: HDFC Bank has partnered with Microsoft for its digital transformation. HDFC Bank will leverage Microsoft’s Azure platform to consolidate and modernise its enterprise data landscape through a Federal Data Lake to scale its information management capabilities across enterprise reporting and advanced analytics using artificial intelligence. The bank is developing in-house IPs as well as partnering with several companies to co-create technology IPs. 5. RBI STRESS TESTS SHOW THAT BAD LOANS MAY EASE NEXT YEAR: The Reserve Bank of India has reported that bad loans could slightly decline to 4.9% of the total advances in September 2023 under the baseline stress scenario, down by 10 basis points from September 2022. This report is based on the assumption that no further regulatory reliefs as well as not accounting for the potential impact of stressed asset purchases by NARCL. RBI said that falling slippages, increase in write-offs and continuous improvement in loan growth has been able to bring bank Gross-NPAs ratio down to less than 5% in September. The Net-NPA ratio stood at a 10-year low of 1.3%, whereas private banks’ net-NPA was below 1%.

6. BANKS NEED ROBUST CREDIT APPRAISAL POLICIES TO LIMIT RISK : A Reserve Bank of India report has said that Indian banks need to ensure they have a robust due diligence and credit appraisal mechanism in place to limit credit risk as the current uncertainties in the present macroeconomic conditions could be challenging. RBI’s report on Trend and Progress of Banking in India 2021-22 said that if downside risks materialize, asset quality could be affected. Hence the slippages in restructured loans need to be monitored closely and timely resolution of stressed assets is essential to prevent asset value depletion.

7. IDBI BANK BUYER TO GET TAX RELIEF ON LIC STAKE: The government will exempt the potential buyer of IDBI Bank from tax liability on notional gains if the market value of shares sold by LIC of India is higher than the price discovered through competitive bidding process. Similar tax concessions were made available to the buyers in earlier strategic disinvestment deals where the government was the seller.

8. EMPLOYEE STRENGTH OF PRIVATE BANKS ALMOST EQUALS THAT OF PUBLIC SECTOR BANKS: The number of employees in the private-sector banking space has almost equalled that of Public Sector Banks. This is as per a data released by the Reserve Bank of India. In 2021-22, the employee strength of PSBs stood at 7,70,812 while the number of employees in units operating in private sector including private banks, small finance banks and payment banks stood at 7,69,890.

1. SBI, ICICI BANK AND HDFC BANK CONTINUE TO REMAIN SYSTEMATICALLY IMPORTANT BANKS: The Reserve Bank of India said that State Bank of India, HDFC Bank and ICICI Bank Ltd continue to be domestic systematically important banks (D-SIBs) which are “Too Big” to fail. Based on the bucket in which a D-SIB is placed, an additional common equity requirement has to be applied to it. Accordingly, the additional Common Equity Teir-1 (CET-1) requirement for SBI continues to be 0.6% of its risk weighted assets while that of ICICI Bank and HDFC Bank continued to be 0.2%.

2. BANKS SET FOR STRONG LOAN GROWTH IN QUARTER-4 OF THIS FISCAL Banks are expected to report strong credit growth in the last quarter of this financial year 2022-23 on the back of a healthy consumption trend and improving corporate credit growth. Public sector Banks have outperformed private banks in the recent past. Indian Banking system is on a roller-coaster ride as far as credit growth is concerned with stronger than expected credit growth after years of lacklustre performance. Bank loans surged at 18% in November’22 as compared to 7% a year earlier, reflecting strong demand from both retail and corporate sectors.

33. BANKS TOLD TO HAVE NODAL OFFICERS TO ASSIST TRADE SETTLEMENT IN RUPEE: The government has asked banks to designate nodal officers who can act as a single point contact to facilitate and promote International Trade Settlement in Indian Rupees. They have also been asked to open Special Rupee Vostro Accounts (SRVA). The move is intended to push banks as points of referral and assist the trading community in rupee settlement. It has asked Indian Banks Association (IBA) and Federation of Indian Export Organisation (FIEO) to hold sensitisation programmes on rupee trading arrangement for all stakeholders.

4. BANKS TO FAVOUR MID AND SMALL-SIZE NBFCs ON IMPROVED PERFORMANCE : Banks have increasingly gained confidence on mid and small-size Non-Banking Finance Companies (NBFCs) based on their improved performance. Bank lending to NBFCs grew buy 31% in September 2022. Rating Agency-- India Ratings has said that with the sharp rise in bank lending rates and stable rates in capital market, large NBFCs could partially move to capital market to tap their incremental funding, leaving bank funding open for small and mid-sized NBFCs. 5. JIO FINANCIAL SERVICES COULD BECOME ONE OF THE LARGEST FINANCIAL SERVICES ENTITY SOON: Jio Financial Services (JFS) owned by Reliance Capital and all set for demerger and listing, could become India’s fifth largest financial services firm. This is as per a report by Macquarie Research. JFS has significant scope to expand its balance sheet. JFS can disrupt the payments business and become a threat to fintech models. Reliance Industries has said that it will demerge its financial services business to create a new entity that will be listed on the exchanges. With the regulatory licences for key businesses in place, Reliance Industries will incubate payments, digital broking and asset management for atleast next 3-4 years.

6. CAPITAL INFUSION INTO PUBLIC SECTOR BANKS UNLIKELY NEXT FISCAL: The government was forced to capitalise Public Sector Banks (PSBs) for about 15 years till FY-22. It has infused a massive Rs.3.3 trillion between FY-16 to FY-21 to shore up their capital base and help them cope up with the crisis. In FY-22 Rs 15,000 crores was earmarked for infusion. However, it has not budgeted any funds for any capital infusion in FY-23. PSBs have raked in good profits this fiscal. Loan ratios have improved and capital adequacy position remains sound. The country’s 12 PSBs recorded a 50% jump in their profitability in the second quarter of FY-23 from a year before, to Rs 25,685 crores. Their total net profit in the first half of this fiscal stood at Rs 40,991 crores, up by 13.6% from a year before.

7. BANK FRAUDS INVOLVING CARDS, INTERNET AND CASH RISE IN SIX MONTHS: Banking frauds involving cards and internet have gone up during the first half of this fiscal year amid the rapid progress made in the area of digitisation. According to RBI data, 2,331 fraud cases involving Rs 87 crores were reported by banking entities during the first six months of this fiscal as compared to 1,532 frauds involving Rs 60 crores last year during the same period. Additionally, cash frauds are also on the rise. Banks reported 589 cases of fraud involving cash transactions worth Rs 81 crores during the said period.

1. FINANCIAL SERVICES BATTLE FOR LOSS OF TALENT TO LUCRATIVE SECTORS: Attrition levels are at a high in financial services segment with the total departure of employees in the first nine months of FY-22-23 pegged at 25%. Within the financial, banking services and insurance space, the insurance sector recorded the worst attrition at 47%. Domestic banks continued to record high attrition levels at 31%. Banks, NBFCs and Insurance sectors have lost lot of people to fintech, start-ups and tech companies and are facing a huge amount of challenge in retaining talent. This is as per an exclusive HR trend analysis done by consulting firm, Aon for Economic Times.

2. LIC MAY LOOK AT COMPOSITE LICENCE AFTER PASSAGE OF INSURANCE LAWS (AMENDMENT) BILL: Life Insurance Corporation of India (LIC of India) may take a call on composite licence clause after the passage of Insurance Laws (Amendment) Bill in the parliament. As per the proposed amendment bill, an applicant may apply for registration of one or more classes/sub-classes of insurance business of any category or type of insurer. However, if the proposed composite insurance registration is passed, there would be change in solvency margin and capital requirement for these companies.

3. RACE FOR RELIANCE CAPITAL BID: The race for Reliance Capital bid has taken an unexpected turn with Hinduja Group submitting an offer that exceeds that of Torrent Investments which had made a top bid of Rs 8,640 crores. Hinduja Group has submitted a bid of Rs 9,400 crores. Torrent Investments has sent a protest note to the administrator, condemning the attempt to overturn the bidding process. The note said that one of the resolution applicants, in utter disregard to the sanctity of the challenge process, has sought to revise the bid amount which is illegal as it is beyond the permissible time period.

4. IMPROVING PROFITS, IMPROVED ASSET QUALITY HINT AT LIKELY PSU BANKS‘ RE-RATING As the profitability and asset quality of Public Sector Banks (PSBs) improve, the banks are going to see Return on Assets inch upward by 1% mark, analysts say with a recovery in growth, stable asset quality and high loan growth the PSBs may be in for a re-rating. Bank Nifty has gained around 28% whereas PSU Banks were up by 74% in the last 6 months. 5. BIG 4 ARE NOW EMERGING AS BIG FORCE IN M & A, I-BANKING: The big-4 firms-- Earnst & Young, KPMG, PwC and Deloitte are striking large and complex Mergers & Acquisitions (M&A) investment banking deals. According to the Mergermarket M&A league table for the years 2018 to 2022, the Big-4 firms have participated in 500 M&A deals, including 133 undisclosed deals. As demand for M&A has grown, particularly in rapidly expanding mid-market, the firms have filled a market void by initially focussing on mid-and -small sized deals with lower fees and higher volume.

6. INDAIN BANKS RAISE $2 BILLION VIA INFRASTRUCTURE BONDS IN TWO WEEKS : Indian Banks have raised USD 2 billion (about Rs 165.66 billion) through infrastructure bonds in the last two weeks, anticipating a revival in private capital expenditure and increased government spending. In this, SBI alone has raised Rs 100 billion (1.22 billion USD) in the largest such issue. Infrastructure bonds are issued to finance long-term development projects.

7. RETAIL LOANS CAN BECOME A SOURCE OF SYSTEMATIC RISK: As per Reserve Bank of India, Retail loans, long considered a safe bet for the banking system, may become a systematic risk. RBI, however, was quick to add that it is well-equipped with its policy toolkit to handle any such systematic risk that may arise. RBI, in its Trends & Progress Report for FY-22 said that Empirical evidence suggests that a build-up of concentration in retail loans may become a source of systematic risk. It can be noted that in the recent past, banks which faced huge loan reverses on the large exposure front, had switched focus towards the retail assets to avoid any major reverses in asset quality. After the analysis of the Indian scenario as per globally accepted models, it is said that there is no difference between the risk posed by Public Sector Banks and Private banks.

1. YES BANK COMPLETES TRANSFER OF Rs.48,000 CRORES WORTH BAD LOANS TO J.C. FLOWERS : Yes Bank has announced that it has completed the transfer of its bad loans worth Rs 48,000 crores ($5.81 billion) to private equity firm J.C. Flowers, in a deal aimed at cleaning up of its balance sheet. The deal, which is the largest sale of bad loans in the Indian banking sector till date, comes after more than two years after RBI stepped in to take control of the bank after a dramatic rise in bad assets that alarmed investors and depositors. Yes Bank also concluded allotting share and share warrants worth $1.1 billion to private equity firms Carlyle and Advent International in a bid to boost its capital and fund growth.

2. HDFC BANK TARGETS ISSUING ONE MILLION CREDIT CARDS A MONTH: HDFC Bank is seeking to issue one million credit cards every month. This is a remarkable bounce-back for the bank after RBI banned it from taking on new card clients two years ago. Data has shown that the bank has captured 29% of India’s overall spending on credit cards in October, the highest among its competitors. The bank also will announce a range of partnerships across a range of industries from online retail to food delivery in the coming weeks to increase spending on cards.

3. SAMARA CAPITAL PLANNING TO BUY ADITYA BIRLA CAPITAL’S INSURANCE BROKING ARM: Amazon India’s private equity partner, Samara Capital is planning to buy the insurance broking arm of Aditya Birla Capital Ltd. For Samara Capital, entering the financial services business is a crucial part of its strategy. The deal is estimated to be worth between Rs 800 crores to Rs 1,000 crores. This is as per a report by Livemint.

4. MICROFINANCE NPAs AT ALL TIME HIGH AS RESTRUCTURED LOANS SHOWING STRESS : The stress in Microfinance sector’s bad loans ratio is on the rise for the second consecutive quarter to 12.1% at the end of September 2022 as compared with 10.5% six months earlier. In absolute terms this comes to Rs 36,418 crores of Gross Non-Performing Assets (GNPAs) which is an all time high. This is despite significant write-offs of very sticky loans. The rise in NPAs is largely due to the stress on restructured loans. The change in NPA classification rule by RBI is another reason behind the rise.

5. BANK MARGINS MAY COME UNDER PRESSURE AMID DEPOSIT RATE WAR: Banks’ profitability, now at its highest in a decade may face the risk of starting a downward journey yet again as the hunt for deposits is compelling banks to pay more and more interest to depositors thus narrowing the Net Interest Margin (NIM) which will put a dent in their profits. Over the past few weeks banks like HDFC Bank, SBI, ICICI Bank, BoB have raised their deposit rates to garner more deposits so that they have enough liquidity to lend to borrowers across segments.

6. INDIAN BANKS MAY SET NEW RECORD IN CREDIT GROWTH: Domestic rating agency ICRA has reported that Indian banks are set to see lifetime high credit growth, surpassing the Rs 19 lakh crores mark in the current fiscal year. It has also reported that system level asset quality will also improve to nearly 4%. The incremental credit growth of Rs 18-19 lakh crores in FY -23 is significantly higher than the previous high of Rs 11.4 lakh crores in FY-19. ICRA said the incremental credit growth in FY-24 also will be around 14-16 lakh crores.

7. GOVERNMENT TO AMEND INSOLVENCY LAW TO REDUCE TIME TAKEN FOR RESOLUTION PROCESS: The government is preparing to amend the insolvency law as it looks to reduce the time taken for completion of resolution process of stressed assets and prevent significant erosion of value of the assets. The Bankruptcy Code (IBC) came in to force in 2016 for timely resolution of stressed assets. Government’s move to amend the law comes against the backdrop of concerns in various quarters that many of the corporate insolvency resolution processes are taking a longer time due to litigations and other issues despite a stipulated time frame in place. Hence, the focus is on how to speed up the whole resolution process by reducing the time taken.

8. RBI ASKS RAZORPAY TO STOP ONBOARDING NEW MERCHANTS: Fintech giant Razorpay has been asked by RBI to pause onboarding of new online payment merchants as the Central Bank wants Razorpay to make certain changes and provide more information before it grants a final Payment Aggregator (PA) licence. As part of the migration to a full PA Licence, Razorpay will have to make certain systematic upgrades and migrations to an escrow account from a nodal account.

1. BANKS TO APPROACH GOVERNMENT FOR TDS ON LOAN WAIVERS Banks will soon approach the government as they find themselves caught in the TDS net while settling and rejigging loans to give distressed borrowers a second chance. The portion of loans that are being waived to lessen the strain on defaulting borrowers are being treated as benefits under the new provisions which the government has come out on Tax Deducted at Source (TDS). Even though there is no transfer of cash from bank to the borrower, the extent of haircuts (waivers) offered by the lenders to the borrowers are treated as “Income” for the borrower and hence 10% TDS is attracted on the waived portion of the loan.

2. FINANCE MINISTRY ASKS BANKS TO EXPLORE FINTECH PARTNERSHIPS AND CO-LENDING OPPORTUNITIES: The Finance Ministry has asked the Public Sector Banks (PSBs) to explore partnerships with Fintech Companies and co-lending opportunities to expand their reach. Lenders were also asked to focus on technology and data analytics to push their business to greater heights. Besides, the Ministry has also urged the banks to strengthen IT Security and cybersecurity to check frauds.

3. RBI TAPS TOP BANKS FOR BLOCKCHAIN-BASED TRADE FINANCING PROJECT: The Reserve Bank of India is engaging top Indian banks like HDFC bank, ICICI Bank, SBI, Union Bank of India, Bank of Baroda and Axis bank to run a Blockchain-based pilot project centred on trade financing. If successful, it could help prevent loan frauds. Belgium-based SettleMint, US-based Corda Technologies and IBM would provide technology support for the said project driven by RBI Innovation Hub in Bangalore. The pilot project, called “Proof of Concept” will harness blockchain technology where “Blocks” of transaction data will be stored in “Chains” with peer-to-peer access to enhance traceability of money flow.

4. CANARA BANK BOARD APPROVES Rs. 9,000 CRORE CAPITAL RAISING PLAN: : Canara Bank’s Board has approved a Rs. 9,000 Crores Capital raising plan through a combination of additional Tier-1 and Tier-2 bonds while the lender has no equity expansion plan in this fiscal. The bank would look to raise Rs. 5,500 crores through Base-III compliant additional Tier-1 bands and Rs 3,500 crores through Tier-2 bonds.

5. RBI EXTENDS CARD TOKENISATION DEADLINE BY 3 MONTHS: The Reserve bank of India has announced the extension of the deadline for Tokenisation of Debit and Credit Cards by another 3 months to September 30, 2022. The earlier deadline was June 30, 2022. RBI said that the extension was done as there were certain issues related to implementation of the framework in respect of guest checkout transactions. Also, number of transactions processed using token is yet to gain momentum across all categories of merchants and these issues were being dealt with, in consultation with the stakeholders.

6. ICICI BANK LAUNCHES “CAMPUS POWER”, A NEW DIGITAL PLATFORM: ICICI bank has launched a new digital platform called “Campus Power” to address the needs of the students aspiring to pursue higher education in India and Abroad. The One-stop platform caters to various needs of the entire student ecosystem comprising of students, parents and institutions. It offers value added services besides banking services, eliminating the need for student to contact with multiple stakeholders. It is available to anyone including customers of other banks. A first of its kind of initiative, Campus Power assists users to explore financial products, education loan, tax benefits etc. Further, it also provides information regarding a host of value-added services related to higher studies in India and Abroad.

7. SBI GEARS UP TO FIGHT MERGED ENTITY OF HDFC BANK: State Bank of India (SBI) is taking relevant steps to take on the combined strength of HDFC bank following its merger with HDFC. HDFC bank and HDFC have announced a merger deal in April 2022, expected to close in 18 months making the merged entity more competitive, allowing access to a captive customer base to cross-sell products. The merger will significantly widen its lead over its other private sector peers like ICICI Bank and Axis Bank in terms of total loans. To combat all these, SBI is gearing up to face the competition.

8. HDFC BANK TO SPLIT ITS PAYMENTS MODULE FROM CORE BANKING PLATFORM HDFC bank plans to move out the payments module from the Core banking platform and set up around 6,000 new branches in the next 3 to 5 years. HDFC Bank is planning a partnership with a new-age Startup which has deep experience in core banking technology. This project will enable the bank to move out its payments module from the existing Core banking platform and help creating a fully resilient active payments architecture that will ensure minimal payments downtime even if core banking is not available. The entire project will be completed in 2 years timeframe and allow the bank to own a modern cloud enabled mobile/net banking platform.

1. INSURANCE REGULATOR LOOKS AT PREMIUM FINANCING PROPOSAL: The Insurance regulator, Insurance Regulatory & Development Authority of India (IRDAI) is examining a proposal that may allow customers (both retail and corporate) to take loans for buying an insurance product and spread the premium payment over longer duration. This practice known as Premium Financing (PF) in insurance parlance, is not available in the country. This is aimed at increasing insurance penetration, retention, reducing gap and also creating new avenues of consumer and corporate financing. Under PF, the insurer or the broker will offer the customer an option to spread the cost of insurance over a period of instalments rather than to pay a single premium in one lump sum before the policy commences.

2. RBI AIMS A 3-FOLD INCREASE IN DIGITAL PAYMENTS BY 2025: Reserve Bank of India has come out with its “Payments Vision 2025” document which seeks a three-fold increase in the number of digital payments, increase in debit card usage and less cash in circulation. The document also speaks about ring-fencing (funds allocated for a particular purpose will not be spent on anything else) of domestic payments systems, including the need to mandate domestic processing of payment transactions, in view of the emerging geopolitical risks. The core theme of the vision document is “E-Payments for Everyone, Everywhere, Everytime (4Es)

3. SHRIRAM GROUP RECEIVES RBI NOD FOR MERGER OF FINANCIAL SERVICES BUSINESS: Shriram Group has secured RBI approval for the merger of Shriram City Union Finance and Shriram Capital Ltd with Shriram Transport Finance Company Ltd in a consolidation that will set to create the largest retail finance NBFC in the country. Apart from the RBI approval, the amalgamation scheme also needs to secure approvals from IRDA and other regulators to sail through. The combined financial service entity, Shriram Finance Ltd, would benefit from multiplier effect and leverage data analytics to serve over 2 crore customer bases.

4. TOKENISATION TO CATALYZE INDIA’S RAPIDLY GROWING DIGITAL PAYMENT LANDSCAPE: Data shows that digital payments in India increased five-fold by 33% Year-on-Year (YoY) growth during the financial year 2021-22. A recent study highlights that digital payments will continue to govern the payment space in India, with 41% of consumers opting for it as a preferred transaction system. On the other hand, this has led to an unparalleled spike in data theft and online frauds which has compelled RBI to address the issue of cybercrime and financial fraud. So, RBI has come out with a card-on-file Tokenisation framework that aims to safeguard the interest of both the customers and merchants. Customers will have to enter their card details one time to convert them into tokens as part of the transaction.

5. A MAJOR REVAMP AWAITS AT BANKS BOARD BUREAU: The Finance Ministry is working to expand and relaunch the Banks Board Bureau (BBB) by bringing in more representatives from the insurance sector. The move aims to legally empower BBB to recommend candidates for Public Sector Insurers and accelerate top level hiring. The Ministry plans to identify new members, restructure the bureau and refer the new names to the Appointment Committee of the Cabinet (ACC) in a couple of months. The revamped BBB may also get a new name.

6. RBI ALLOWS MASTERCARD TO ISSUE NEW CARDS AFTER A GAP OF 11 MONTHS: The Reserve Bank of India has lifted the restrictions on global card network Mastercard and has allowed it to issue new cards in view of the satisfactory compliance demonstrated by Mastercard with RBI circular dated April 6, 2018 on storage of payment system data. RBI had restricted Mastercard from onboarding new customers from July last year, citing its failure to comply with its data localization norms.

7. BAD BANK RUSHES TO AVOID AN EXTENSION OF LICENCE DEADLINE: National Asset Reconstruction Co Ltd (NARCL), India’s first Bad Bank a sovereign-backed asset reconstruction Company had earlier set itself a deadline of 31ST March, 2022 to acquire Rs 50,000 crores of bad assets, but failed to meet the deadline due to what bankers called procedural reasons. Now again, the Bad bank is racing against time to complete its first transaction by June 30, 2022, failing which it would have to seek an extension from RBI.

8. RBI SHOOTS DOWN THE PROPOSAL ON “DIGITAL ONLY BANKS”: In November 2021, Niti Aayog had proposed setting up of “Digital Only Banks” that would completely rely on digital platforms without any physical presence. But now RBI has shot down the proposal of “Digital Only Banks” as they pose risks to the system.

1. SIX INDIAN BANKS SUE GVK GROUP FOR Rs.12,114 CRORE DUES: Six Indian Banks (Bank of Baroda, Bank of India, Axis bank, Indian Overseas Bank, Canara Bank and ICICI Bank) are reportedly suing the GVK group for $ 1.5 billion (Rs.12,114 crores). This is as per a report by Times of India. According to the report, GVK Group defaulted on a $1 billion loan and $35 million Letter of Credit given in 2011 and a $160 million loan given in 2014 by these banks. GVK Coal Developers (Singapore) and 9 other GVK Group companies are being sued in the said case.

2. RBI ASKS SMALL FINANCE BANKS TO FOCUS ON INCREASING CAPITAL BASE: The Reserve Bank of India has asked Small Finance Banks (SFBs) to continue to evolve to tune in with the differentiated banking licence given to them with proportionate growth in their capital base. RBI Deputy Governors Mr.M K Jain and Mr.M Rajeshwar Rao held discussions in this regard with the Managing Directors and Chief Executive Officers of SFBs.

3. BANKS TO REPORT THE NAMES OF BORROWERS NOT COOPERATING IN FORENSIC AUDITS: Borrowers who are not cooperating in their forensic audits will now be reported to all banks as lenders want to speed up the forensic audit and by reporting the names of such borrowers, they can prevent such borrowers from taking any more loans from other banks. Banks will now update the forensic audit status of such borrowers in the Central Repository of Information on Large Credits (CRILC) constituted by RBI. Banks can take a decision based on this information and decide not to lend until the borrower gets a clean chit.

4. OVER 1.18 CRORE PAYMENT DEVICES DEPLOYED ACROSS COUNTRY More than 4.11 lakh PoS (Point of Sales), Mobile PoS and other physical devices were deployed across the country under the Payments Infrastructure Development Fund (PIDF) Scheme as on April 30, 2022. Besides this, 1.14 crore digital devices including inter-operable QR code-based payments such as UPI-QR and Bharat-QR were deployed under the said scheme. The PIDF scheme, operationalised by RBI from January 2021, subsidises deployment of PoS infrastructure in tier-3 to tier-6 centres and north-eastern states of the country.

5. STATE RUN BANKS PLAN DATA ANALYTIC WINGS TO CURB FRAUD: State run banks may soon have dedicated analytics teams to analyse data to track frauds, detect stressed borrowers who may default on payments and help lenders stay ahead of competition. The Finance Ministry had asked all banks to identify key resources from within the bank and outside to be part of new vertical that would provide them with insights aimed at improving efficiency while keeping a close tab on frauds and the build-up of bad loans.

6. RURAL CO-OPERATIVE BANKS CAN NOW LEND TO REALTY FIRMS: The Reserve Bank of India has now allowed Rural Co-operative Banks to lend to property developers for building residential housing projects. This is a move that could improve liquidity in the segment. Considering the growing need for affordable housing and to realize their potential in providing credit facilities to the housing sector, RBI has decided to allow these Co-operative banks to lend to these projects.

7. YES BANK TO EXIT RESCUE PLAN, TO SEEK NOD FOR A NEW BOARD: Two years after the government and the Reserve Bank of India had put in place a special plan to rescue and revive YES Bank Ltd, the Private Sector bank is now all set to exit the reconstruction scheme. Following the significant progress in turning around the bank, the Board of Directors, appointed under the reconstruction scheme has recommended setting up of an alternative board and sought shareholders’ approval. The proposal will be taken up at the bank’s Annual General Meeting on 15TH July.

8. HDFC BANK LOAN DISBURSALS IN MAHARASHTRA CROSS Rs.3 TRILLION: HDFC Bank has announced that its total advances in Maharashtra have crossed Rs.3 trillion. As on March 31, 2022, the bank’s total advances in Maharashtra stood at Rs.3.29 trillion. Its total advances growth is about 23% over the last year which is commendable. The total business in Maharashtra as of March 31, 2022 stood at 7.64 trillion with Rs.4.36 trillion of deposits and Rs.3.29 trillion of advances.

1. GOVERNMENT APPOINTS NEW HEADS FOR TWO PUBLIC SECTOR BANKS The government has appointed Mrs. A Manimekhalai as the Chairman & Managing Director of Union Bank of India and Mr. Swaroop Kumar Saha as the Head of Punjab & Sind Bank. A Manimekhalai was earlier with Canara Bank as Executive Director and now stands elevated to the post of CMD of Union Bank of India. She replaces Mr Rajkiran Rai who retired on 31ST May 2022. Manimekhalai joined erstwhile Vijaya Bank as Officer in 1988. Mr. Saha who is elevated as CMD of Punjab & Sind Bank was with Punjab National Bank as Executive Director.

2. GOVERNMENT LIKELY TO INCLUDE CORPORATE HOUSES IN IDBI BANK PRIVATISATION PROCESS: The government is likely to include corporate houses in IDBI Bank privatisation process and ask RBI to extend the time frame for the reduction of stake to 26% for new owners. However, RBI is silent on the decision to allow industrial houses to run banks after an internal working group gave its consent on this. The framework being now created by the government for IDBI Bank’s privatisation might be used for the privatisation of other two nationalised banks as announced in 2021.

3. GROUP OF 16 BANKS SELL OVER Rs 8,000/- CRORES OF SUZLON LOANS TO REC AND IREDA: A group of 16 banks led by SBI have sold more than Rs 8,000/- crores of Suzlon Energy Loans to the Rural Electrification Corp (REC) and the state owned Indian Renewable Energy Development Agency (IRDEA), cleaning up their book of accounts that was dragging for more than a decade and a half now. REC and IREDA led refinance would extend loans to Suzlon Energy at a lower rate of interest and extended tenure.

4. AIRTEL PAYMENTS BANK PARTNERS MUTHOOT FINANCE TO OFFER GOLD LOANS: Airtel Payments Bank has partnered with Muthoot Finance to offer gold loans through Airtel Thanks App. There will be no processing charges on the loan and Muthoot Finance will provide up to 75% of the pledged gold value as a loan. The loan facility will also be available at the 5 lakh banking points for Airtel Payment Bank customers.

5. BATTLE FOR DEPOSITS, MANY BANKS EYE BRANCH EXPANSION TO GARNER NEW CUSTOMER BASE: With the era of easy money drawing to a close, many banks are turning their focus back to bank fixed deposits. But instead of chasing the existing same set of customers, banks are ramping their branch expansion networks and sprucing up service quality to attract new customers. HDFC Bank has said that it plans to open 2,000 new branches every year for the next three years. SBI with 22,266 branches is also looking at fine-tuning its strategy on customer acquisition and sharpening focus on deposits.overnment is looking ahead to work out a revamp plan for Regional Rural Banks (RRBs) including further consolidation, listing on the bourses and addressing key operational issues such as allowing all RRBs to offer internet banking services. At present there are 43 RRBs in the country and the government is keen to have one large RRB for each state. There is scope for further consolidation and raising capital through the markets. There is also a suggestion to have a common framework for RRBs, on the lines of Core Banking Solution (CBS).

6. UPI CROSSES Rs 10 TRILLION TRANSACTIONS IN MAY’22: Unified Payment Interface (UPI), a home-grown payments system, has crossed the milestone of Rs 10 trillion worth of transactions in May 2022, processing more than 6 billion payments during the month. This is as per the report submitted by National Payments Corporation of India (NPCI). Transaction volumes for May’22 stood at 5.9 billion processed with a value of Rs 10.4 trillion, this has more than doubled in a year with Rs 4.9 trillion transactions affected in May 2021.

7. CASH NO LONGER THE KING, 65% OF TRANSACTIONS TO BE DIGITAL BY 2026: The habit of carrying your wallet while making payments may soon be replaced by carrying your mobile, as consumers continue to go cashless. According to a report jointly submitted by Boston Consulting Group (BCG) and PhonePe, 65% of all transactions (Two out of every Three transactions), in terms of value, are expected to be digital by 2026. India’s digital payments graph is expected to more than triple to $ 10 trillion by 2026 from the current level of $ 3 trillion

8. HDFC BANK TARGETS DOUBLING OF ITS BALANCE SHEET EVERY FIVE YEARS: HDFC Bank MD and CEO has opined that the merger of HDFC into HDFC Bank offers a significant opportunity for the bank to scale up its business and will help it double its balance sheet every five years. With the merger, the bank expects to penetrate its growth in housing loans. Despite being the largest private sector bank in India with a market share of 9.5% in deposits, its market share in home loans is just 2%. What’s more concerning to the bank is that 5% of its 71 million customer base has availed housing loan from other banks.

1. BANK OF MAHARASHTRA TOPS PSU BANKS CHART IN LOAN GROWTH IN FY’22: Bank of Maharashtra has emerged as the top Public Sector Bank (PSB) in terms of loan and deposit growth in percentage terms during 2021-22. The bank has recorded 26% increase in gross advances at Rs 1,35,240 crores at the end of March 2022. It was followed by State Bank of India at 10.27% and Union Bank of India at 9.66% growth. However, in absolute terms, aggregate loans of SBI were nearly 18 times higher at Rs 24,05,761 crores while Union Bank of India was 5 times higher at 6,99,269 crores as on March 2022. With regard to deposit growth Bank of Maharashtra grown by 16.26%.

2. KARNATAKA BANK LTD REPORTS ALL TIME HIGH PROFITS Private sector scheduled lender Karnataka Bank has posted an all-time high annual consolidated net profit of Rs 508 crores for the year 2021-22 as against last year’s Rs 482 crores. The bank posted a net profit of Rs 130.20 crores in the fourth quarter which is four-fold increase compared to the net profit posted for the same period last year. The bank has recommended a dividend of 40%.

3. BANKS NEED TO SUPPORT GROWTH, REMAIN WATCHFUL OF SLIPPAGES: The Reserve bank of India has said the banks need to support growth while being watchful of the credit behaviour of such entities whose loans were restructured during the pandemic period to arrest slippages. Banks had extended moratorium on repayment of loans and restructured advances to business entities to help them combat the impact of Covid-19 pandemic. In its annual report, RBI said the banking sector has witnessed improved financial parameters in this fiscal.

4. THE RURAL ECONOMY HAS MORE ACCESS TO BANKING NOW: India’s financial inclusion in the rural areas and the credit flow to the rural economy are improving along with the rise in household sector’s financial savings, setting a stage for an accelerated growth in rural centres. The net financial savings of household sectors in rural areas grew more than 3% point to 11.5% with insurance and pension funds leading the gains. In December 2021 the total banking outlets in rural areas were over 19 lakhs which was 12.5 lakhs a year ago. This is as per RBI annual reports.

5. PUBLIC SECTOR BANKS TO PAY AROUND Rs 8,000 CRORES OF DIVIDEND TO THE GOVERNMENT THIS YEAR: Public Sector banks (PSBs) will give a record Rs. 7,867 crores as dividend to the government this year. This is an indication of better profitability and capital position, largely driven by the falling stock of Non-Performing Assets (NPAs). 9 out of 12 PSBs have paid dividend for the fiscal year ended March 2022, led by SBI with Rs. 3,616 crores followed by Union Bank of India with Rs 1,084 crores.

6. GOVERNMENT TO WORK OUT A REVAMP PLAN FOR REGIONAL RURAL BANKS: The government is looking ahead to work out a revamp plan for Regional Rural Banks (RRBs) including further consolidation, listing on the bourses and addressing key operational issues such as allowing all RRBs to offer internet banking services. At present there are 43 RRBs in the country and the government is keen to have one large RRB for each state. There is scope for further consolidation and raising capital through the markets. There is also a suggestion to have a common framework for RRBs, on the lines of Core Banking Solution (CBS).

7. LENDERS STARE AT Rs 19,000 CRORES OF NPAs: Banks are likely to face a fresh spike in bad loans, with close to 9% of the restructured loans under the RBI’s pandemic relief plan turning sour in the last six months of 2021-22. Although overall bad loan numbers are improving, analysts are cautious about the future delinquencies arising out of the restructured loans. Some banks have also scheduled staggered exits from moratorium for borrowers as the repayment delays and recoveries could be managed better. This is as per a data compiled by Mint.

8. TATA GROUP MAY ABANDON PLANS TO ENTER BANKING BUSINESS: The Tata group is understood to have done a rethink on its banking business entry and may not go ahead with it. The group had considered getting into banking business through Tata Capital, after a working group of the RBI had recommended granting of banking licenses to industrial houses in November 2020. But considering the operational issues for the conglomerate and also the costs that would far outweigh the benefits, it has been decided by the group not to go ahead in this matter.

1. SBI KEEN TO SELL STRESSED POWER AND OTHER LOANS: State bank of India is seeking buyers for its distressed loans and about a third of these are from power sector. SBI has circulated a list of 168 distressed loan account list among asset reconstruction companies and distressed-loan buyers last week. The prominent names in the list include Essar power Gujrat, Anil Ambani’s Vidarbha Industries Power etc. These 168 accounts totalled unpaid liabilities of Rs 31,363 crores.

2. HACKERS, FRAUDULENT CUSTOMERS STEAL Rs 7.38 CRORES FROM PAYMENT GATEWAY FIRM- RAZORPAY: Hackers and fraudulent customers have stolen Rs 7.38 crores by tampering and manipulating the authorization process of Razorpay software to authenticate 831 failed transactions. This is as per a police complaint filed by the payment gateway company. The company says it was unable to reconcile receipt of Rs 7.38 crores against 831 transactions. These 831 transactions were marked as failed or unsuccessful by its authorisation partner- Fiserv. However, it is found that certain unknown hackers and fraudulent customers have tampered, altered and manipulated the authorisation process.

3. YES BANK PICKS JC FLOWERS ARC AS JV PARTNER TO OFFLOAD DISTRESSED LOANS WORTH Rs 51,000 CRORES: Yes Bank picked JC Flowers Asset Reconstruction Company (ARC) as its Joint Venture Partner to offload nearly Rs 51,000 crores of distressed loans. Yes Bank believes this could improve its valuation and help attract equity investors which it badly needs. The transaction, once completed will be India’s largest sale of distressed loans that will result in Yes Bank becoming nearly a zero Non-Performing Asset (NPA) bank.

4. RBI APPRISES ON CARD-LESS CASH WITHDRAWAL AT ATMs: : The Reserve Bank of India has asked all banks to provide an option of Interoperable Card-less Cash Withdrawal (ICCW) at their ATMs. This is aimed at curbing frauds like skimming, card cloning and device Tampering. Presently cardless cash withdrawal at ATMs is offered by a few banks only at their own ATMs. National Payments Corporation of India (NPCI) has been advised to facilitate Unified Payments Interface (UPI) integration with all banks and ATM networks.

5. RBL BANK COLLABORATES WITH AMAZON PAY TO OFFER UPI PAYMENT SERVICES: RBL bank, Amazon pay and Amazon Web Services (AWS) have announced a collaboration to offer UPI payments. The bank has partnered with Amazon pay to offer Peer-to-Peer and Peer-to-Merchant transactions. With this integration Amazon pay will issues NPCI’s allotted UPI ID with the handle @rapl, to RBL Bank.

6. PNB EARNS OVER Rs 645 CRORES THROUGH ATM TRANSACTION CHARGES IN FY 22: Punjab National Bank (PNB) has earned over Rs 645 crores by levying ATM transaction charges on customers during the Financial Year 2021-22. Besides this, the bank also earned Rs 239 crores in the form of penalty imposed on customers who failed to maintain minimum balance or quarterly/monthly average balance in their bank accounts.

7. PAYTM FORMS JOINT VENTURE GENERAL INSURANCE COMPANY: Digital Financial Services firm One97 Communications, which operates under Paytm brand, has formed a joint venture general insurance company—Paytm General Insurance Limited (PGIL) in which it has committed to invest Rs 950 crores over a period of 10 years. Initially, One97 Communications will hold 49% stake in PGIL while the rest of 51% stake is to be owned by VSS Holding Private Limited (VHPL).

8. HDFC BANK MAKES RURAL BANKING A SEPARATE VERTICAL: HDFC Bank will open 1060 branches in Semi-Urban and Rural areas in the current financial year. The bank has created a separate rural banking vertical in order to meet this push in the rural areas. The rural banking vertical will expand the bank’s distribution in the rural areas. The bank will enter in to strategic partnerships with outside entities, launch new products and services which will meet the needs of its rural customers and provide non-stop shop solutions to farmers and encourage financial literacy.

1. RBI OKAYS MERGER BETWEEN EQUITAS HOLDING AND EQUITAS BANK: The Reserve Bank of India has approved the merger between Equitas Holding limited (EHL) and Equitas Bank Limited. RBI has instructed that EHL should divest its shareholding in its subsidiary Equitas Technologies Pvt Ltd prior to the merger while Equitas Bank should bring Equitas Development Initiatives Trust and Equitas Healthcare Foundation under its belt. Further, RBI has also said that investors which will acquitting or holding 5% or more shareholding in the bank after merger need prior regulatory approval within one month from now.

2. BANK LOANS PICK UP AT ALMOST DOUBLE THE PACE AS LAST YEAR: Bank loans rose in double digits at 10% in the fortnight ending April 22 as economy is getting back on track after facing disruptions due to covid related lockdowns. This is almost double the pace of 5.7% in the same period a year ago. Outstanding bank credit amounted to Rs 119.5 lakh crores as on April 23, 2022, up by 10% on a year-on-year basis. The latest assessment of the economy by RBI economists acknowledges the loan pick up which could aid economic recovery.

3. NBFCs SEE TURNAROUND IN RURAL AREAS: Non-Banking Finance Companies (NBFCs) expect a turnaround in loan disbursements this year, especially from rural areas, despite consumers remaining cautious about spending and lenders facing increased operation costs because of inflation. Some of the bigwig NBFCs are looking to double their business growth this year and many of them are looking to diversify their portfolio. NBFCs are seeing the change as they are expecting strong rural demand for used and small commercial vehicle finance loans.

4. DIGITAL BANKING UNITS IN 75 DISTRICTS LIKELY TO BECOME OPERATIONAL BY JULY: All Public Sector Banks (PSBs), 10 private sector Banks and one small finance bank have initiated the work to have Digital Banking Units (DBUs) operational by July’22. This is as per the announcement made by IBA. Finance Minister Mrs. Nirmala Sitharaman had announced the setting up of 75 DBUs in 75 districts in the 2022-23 union budget. As per the guidelines, DBUs of the banks will be treated as banking outlets and each unit needs to be housed distinctly with separate entry and exit provisions. Each DBU must offer certain minimum digital banking products and services.

5. REPO RATE HIKED BY 40 BASIS POINTS IN EMERGENCY MEET: In an unscheduled press briefing the RBI Governor Mr. Shaktikanta Das said that the Monetary Policy Committee (MPC) in an off-cycle meet unanimously voted to hike the rates. The policy repo rate has been hiked by 40 bps to 4.40% with immediate effect. This is the first rate hike since August 1, 2018. Mr. Das further said that the MPC also decided to remain accommodative while focussing on withdrawal of accommodation to ensure that inflation remains within the target going forward while supporting growth.

6. GOVERNMENT OFFERS INCENTIVES TO VC, PE FUNDS TO BOOST STARTUP FINANCING: The government will let Venture Capital (VC) and Private Equity (PE) funds to take a higher share of profit, earn more fees and go for a faster drawdown of the money they receive from the state’s Fund of Funds for Startups (FFS). FFS was introduced in 2016 for contribution to various Alternative Investment Funds (AIFs) registered with the capital market regulator SEBI. The FFS is run by the state controlled Small Industries Development Bank of India (SIDBI) and so far, SIDBI has invested Rs 9,400 crores in 86 AIFs.

7. PUBLIC SECTOR GENERAL INSURERS MAY GET CAPITAL INFUSION OF Rs 3,000-4,000 CRORES: The government may infuse Rs 3,000 to Rs 4,000 crores additional capital in the 3 Public sector General Insurance Companies based on their performance and requirement during the year. The capital infusion would help improve the financial health of the three general insurance companies—National Insurance Company Ltd, Oriental Insurance Company Ltd and United India Insurance Company Ltd. In the last financial year, the government had made a capital infusion of Rs 5,000 crores in these three companies.

8. REPO RATE HIKE—HOME, CAR LOANS TO BE MORE EXPENSICE, DEPOSIT RATES MAY RISE: Both existing and new retail borrowers will now pay higher Equated Monthly Instalments (EMIs) for their home loans, car loans and loans against properties after the recent Repo Rate hike by 40 bps by RBI. However, those who have availed loan at a fixed rate will be spared. Banks may also increase the fixed deposit rates on fresh deposits.

1. IRDAI PANEL SUGGESTS “MICRO INSURANCE” MODULES FOR LOW-INCOME GROUP, SMALL BUSINESS: A committee appointed by regulator IRDAI has suggested over a dozen low-cost “Micro-Insurance” modules with a view to expand protection plans for uncovered population and small businesses. The committee suggests that the insurance companies should be allowed to adopt a modular approach using different permutation combinations for Combi Micro Insurance (MI) products. MI aims to protect low-income population and small businesses with insurance products that are affordable.

2. LIC KEEN TO RETAIN SOME STAKE IN IDBI BANK FOR BANCASSURANCE GAINS: Along with the government, LIC of India will also divest its stake in IDBI Bank, but LIC of India has said that it will retain part of its stake in IDBI Bank to reap benefits of the bancassurance channel. The government will sell its 45% minority stake in IDBI Bank to the strategic investors as part of its privatisation drive. At present LIC of India holds 49.24% stake in IDBI Bank.

3. RISE OF BIG TECH CALLS FOR INTER-REGULATORY COLLABORATION: The growth of big FinTech has led to the rise of regulatory collaboration that necessitates clear demarcation of responsibilities over such big business entities. This has been suggested by Reserve Bank of India in its report on currency and finance. The report also raises concern over digital financing where it says that, if went unchecked this could lead to volatility issues.

4. BANK CREDIT LIKELY TO GROW AS 4-YEAR HIGH OF 11-12% IN FINANCIAL YEAR 2023: As per a report by Crisil Ratings, bank credit is likely to grow at a 4-year high of 11-12% in financial year 2023, on the back of better economic growth and budgetary support from the government. In the fiscal year ended March 2022, bank credit has grown by around 9-10%. The report also says that the robust credit growth expectation is also supported by the improved resilience of the banking system.

5. RBI MOOTS PRIORITY ACCESS TO CAPITAL FOR PUBLIC SECTOR BANKS WITH BETTER ASSET QUALITY: The Reserve Bank of India has suggested to set up a mechanism that incentivizes Public Sector Banks (PSBs) with better asset quality performance by allowing them priority access to capital. RBI, in its latest report of currency and finance has said that to avoid the moral hazard problem of the government recapitalization of PSBs, an incentive mechanism should be established and banks with better performance in terms of loan recovery and asset quality improvement should be given priority in terms of access to fresh capital.

6. LIC IPO PRICE BAND AT Rs 902-949/- PER SHARE: LIC of India is floating its Initial Public Offer (IPO) that is likely to open for the public on May 4, 2022. It has set a price band of Rs.920-949/- per share. The IPO will close on May 9, 2022. LIC of India would offer a Rs.60/- discount for policyholders and Rs.45/- for retail investors and employees. The government is likely to sell 3.5% stake in LIC of India. The issue size is expected to be worth Rs.21,000 crores.

7. NBFC BODY FIDC URGES RBI TO EXTEND INCLUSION OF BANK CREDIT TO NBFCs FOR ON-LENDING TO MSEs AND AGRICULTURE AS PRIORITY SECTOR BY AN YEAR: Finance Industry Development Council (FIDC), a representative body of Non-Banking Finance Companies (NBFCs) in India, has written to Reserve Bank of India to extend inclusion of bank credit to NBFCs for on-lending to Micro and Small Enterprises (MSEs) and agriculture as priority sector advance by another year till March 2023. As of now any credit by banks to NBFCs for on-lending to MSEs and agriculture is considered as Priority Sector lending till March 2022. The same has been requested by FIDC to extend till March 2023.

8. NBFCs SEEK STAGGERED MIGRATION TO NEW NORMS AND SOME RELAXATIONS IN THE NORMS: Non-Banking Finance Companies (NBFCs) are likely to be hit by rising costs while making transition to the new regulatory norms prescribed by the RBI, aimed at maximising regulatory parity between banks and NBFCs. These NBFCs are also seeking some relaxations in implementation and additions to the guidelines. One of the additions sought by NBFCs is that the loan amount to invoke recovery proceedings under SARFAESI Act be harmonised for banks and NBFCs at Rs 1 Lakh. Another request is that Housing Finance Companies (HFCs) be allowed to exclude cash and bank balances while making calculations for the purpose of determining the minimum exposure they must have to home loans.

1. FINANCE MINISTRY ASKS BANKS TO SOAR UP THEIR BALANCE SHEET BY RAISING CAPITAL FROM THE MARKET: The Finance Ministry has asked the Public Sector Banks (PSBs) to strengthen their balance sheets by raising capital from the market. The enhanced capital would help banks to expand their business and push credit growth in the productive sectors. RBI Governor Mr. Shaktikanta Das had also asked banks to take proactive measures to strengthen their resilience and lending capacity and this can happen by raising capital from the market.

2. RBI ISSUES NEW RULES, PENALTIES FOR CREDIT AND DEBIT CARDS: The Reserve Bank of India has revised the rules governing debit and credit cards by introducing penalties for banks for issuing or upgrading cards of customers without prior consent. RBI has asked the banks to ensure that overdue interest is not adjusted to the principal of the loan causing negative amortisation. It has also instructed the banks to ensure that unpaid charges, levies and taxes are not capitalised for compounding of interest. The new directions are effective from July 01, 2022.

3. NOW NBFCs ARE PERMITTED TO ISSUE CREDIT CARDS WITH PRIOR APPROVAL FROM RBI: As per the latest guidelines now, Non-Banking Finance Companies (NBFCs) can issue credit cards of their own but with the prior approval from the Reserve Bank of India. NBFCs with a net worth of Rs 100 crores and above are now permitted to undertake credit card business independently. Urban Cooperative Banks (UCBs) with a minimum net worth of Rs 100 crores and above and having core banking solution in place also can issue credit cards after RBI’s approval.

4. RBI ALIGNS EXPOSURE, DISCLOSURE NORMS FOR NBFCs WITH BANKS: In a slew of regulatory frameworks, Reserve Bank of India has laid down a set of rules for Non-Banking Finance Companies (NBFCs) on large exposures, lending to directors and sought additional disclosures in their notes to accounts. RBI said that aggregate exposure of an upper layer NBFC to any entity must not be higher than 20% of its share capital, although the Board can approve an additional 5% to take it to 25%. However, for infrastructure finance companies, the aggregate limit will be 30%. These guidelines are meant to further harmonise regulations between banks and NBFCs.

5. UPI, PAY LATER AND DIGITAL CURRENCY TO DRIVE PAYMENTS IN COMING YEARS: According to a report by PwC India, although presently Unified Payment Interface (UPI) will continue to drive digital payments in India, newer avenues like Buy Now Pay Later (BNPL), Digital Currency, e-RUPI, Central Bank Digital Currency (CBDC) and offline payments will shape the industry. The report also provides insights into the current and future digital payments landscape and key factors that are influencing customer spending.

6. NOW ITR FILING MANDATORY IF TDS/TCS IS Rs 25,000/- OR MORE IN A FINANCIAL YEAR: The government has now made it mandatory for an individual to file Income Tax Returns if his/her total Tax Deduction at Source (TDS)/ Tax Collection at Source (TCS) during a particular financial year is Rs 25,000/- or more even if the individual’s income is below the basic exemption limit. In case of Senior Citizen this rule will apply if the individual’s aggregate TDS/TCS is Rs 50,000/-or more in the year. Further, an individual whose deposits in a Savings bank account are Rs 50 lakhs or more in a financial year will also have to file the tax return compulsorily.

7. SIX WORKING GROUPS SET UP TO SUGGEST WAYS TO IMPROVE PSBs’ FUNCTIONING, TO SUBMIT REPORT BY DECEMBER’22: Six Working Groups have been created to suggest ways to improve functioning in Public Sector Banks (PSBs) and strengthen their balance sheets. These groups will submit their respective reports by December 2022. The six working groups would look into the functioning of PSBs and suggest way to improve customer service, digitisation, HR Incentives, Corporate Governance and collaboration.

8. HDFC BANK ADDS A RECORD 21,486 EMPLOYEES IN FY22: HDFC Bank Ltd has added a record 21,486 employees during the financial year 2022, taking the total employee strength to 1,41,000. The Bank had hired 3,122 employees in FY 21 and 18,910 in FY 20. The bank also opened 734 new branches and 2,043 new ATMs during FY 22. It now has a network of 6,342 branches and 18,130 ATMs. The bank literally added two new branches per day during FY 22 which is a record.

1. DECLINE IN BAD LOANS TO IMPROVE PROFITABILITY OF BANKS: As per a report by Moody’s Investor Service, growth in pre-provision earnings and decline in bad loans will improve the profitability of banks in current financial year. Better profitability will offset increases in capital consumption due to an acceleration in loan growth. Capital ratios of Public Sector Banks (PSBs) have improved in the past year, helped by capital infusions from the government. Further improvements in PSBs financial health will continue to help them raise equity capital from the market, reducing their dependence on capital support from the government.

2. BANKS ASK RBI TO ALLOW CLOUD ADOPTION Battling an onslaught from Fintech companies, banks want RBI to lay down the rules that allow them to store and analyse data on Cloud service (A cloud service, simply put, offers data storage and computing power without the user’s direct management).The proposal assumes significance in the wake of data security and other regulations on one hand, and the urgency felt by traditional banks to innovate with Fintech firms challenging the conventional operating models and commercial structures.

3. MERGER OF HDFC ENTITIES TO INCREASE MERGERS AND ACQUSITIONS PROMINANCE AMONG BANKS: The proposed merger of HDFC Bank and HDFC Ltd could redefine the competitive edge for banks and this will increase the prominence of Mergers and Acquisitions (M&A) among lenders. This has been opined by Fitch Ratings. Fitch believes that the proposed merger of HDFC entities and the recently announced acquisition of Citibank India’s consumer business by Axis Bank could encourage more and more banks to turn to M&A. Large Non-Banking Financial Companies (NBFCs) could be acquisition targets, given their high-margin products and potential cross-selling opportunities.

4. NPCI PERMITS WHATSAPP TO RAISE UPI USER BASE TO 100 MILLION: National Payments Corporation of India (NPCI) has approved WhatsApp to add another 60 million users on Unified Payments Interface (UPI), taking the total base to 100 million. With this approval, WhatsApp will be able to expand its service to 100 million users.

5. RBI TO ALLOW CARDLESS CASH WITHDRAWALS TO ALL BANKS: At present, the facility of card-less cash withdrawal through ATMs is limited to only a few banks. Now, to encourage card-less cash withdrawal facility, RBI has proposed to make card-less cash withdrawal facility available to all the banks across the country at all ATM networks using the Unified Payments Interface (UPI).

6. EQUITY MUTUAL FUNDS SEE Rs 1.64 LAKH CRORES NET INFLOW IN FY22 ON STRONG SIP BOOK: Strong SIP boom and lower returns from traditional investments like bank FDs has made equity mutual funds an attractive investment destination for investors with equity-oriented funds. These Equity-oriented Mutual Funds have received a staggering inflow of Rs 1.64 lakh crores in financial year 2021-22. During the financial year 2020-21 the inflow was Rs 25,966 crores. This is as per the data shown by Association of Mutual Funds in India (AMFI).

7. NBFCs TO ASSESS NEW NORMS BEFORE EXPLORING MERGERS AND ACQUISITIONS: Large Non-Banking Financial Companies (NBFCs) are in favour of living with the new regulatory regime for a few quarters before deciding on any moves in the direction of consolidation. Some of the large NBFCs are owned by big corporate companies with interest in non-financial businesses. Converting into a bank is not an option for them under the current licensing regime.

8. GOVERNMENT AMENDS FEMA RULES TO ALLOW 20% FDI IN LIC The government has amended rules of the Foreign Exchange Management Act (FEMA), paving the way for up to 20% Foreign Direct Investment (FDI) in the Life Insurance Corporation (LIC). The government is planning to dilute its stake in LIC through the Initial Public Offer (IPO). The notification has inserted a new paragraph in the existing policy, allowing up to 20% FDI in LIC through the automatic route.

9. MICRO, SMALL ENTERPRISES SEE RECORD GOVERNMENT PROCUREMENT: The Central government purchases from Micro, Small Enterprises (MSEs) have hit a record high in the financial year 2021-22. This comes in the backdrop of the gradual increase in the share of procurement made from MSEs by most of the government ministries and departments out of their overall annual public procurement made in the past 4 years barring the covid affected year. The background of this growth is the government had earlier mandated all ministries and departments to procure atleast 20% of their annual procurement of goods from MSEs. The limit was enhanced to 25% in 2018.

1. HDFC LTD TO MERGE WITH HDFC BANK: India’s largest housing finance company, HDFC Ltd will merge with the largest private sector bank, HDFC Bank. The merged entity will have a combined balance sheet of 17.87 lakh crores and net worth of Rs 3.3 lakh crores. While HDFC Bank will continue to be the second-largest bank in the country after State Bank of India, its size following the merger would be twice that of ICICI Bank. The closing of the merger deal is expected to be completed within 18 months, subject to regulatory approvals. Shareholders of HDFC as on record date will receive 42 shares of HDFC bank, each of face value of Rs 1/- for 25 shares held in HDFC Ltd.

2. ECO RECOVERY, IMPROVING BUSINESS CONFIDENCE TO HELP BANKS IN FINANCIAL YEAR 2022-23: Global credit rating agency Moodys expects Indian Banking sector to stabilise this year riding on a gradual economic recovery, improving consumer and business confidence, decline in bad loan provisions and better margins. Fundamentals for the sector will improve especially due to India’s continuing economic recovery which Moodys expects to grow at 8.4% in the Fiscal ending March’23.

3. BANKS’ CREDIT GROWTH NEARLY DOUBLES IN FINANCIAL YAER 2022: Bank credit growth in the preceding fiscal (2021-22) hit 9.6% against 5.6% seen in FY 21. Deposit growth slowed down to 8.9% in FY-22 as compared to 11.4% in FY-21. According to the data released by Reserve Bank of India, total bank credit stood at Rs 118.9 lakh crores as March 25, 2022. Banks have added Rs 10.4 lakh crores to their loan books in FY-22. This is almost double the Rs 5.8 lakh crores growth registered in FY-21.

4. BIG NBFCs HAVE TO DECIDE THEIR OWN FUTURE: Big Non-Banking Finance Companies (NBFCs) backed by Industrial houses like Bajaj Finance, Shriram Transport Finance, Tata Capital, Aditya Birla Capital and Mahindra & Mahindra Financial Services have to find a way out of the tightening regulations as the RBI is unlikely to ease norms for them to convert in to a bank or permitting them to merge into a bank. RBI Governor Mr Das said, it is for the NBFCs to make their own choice and the Central Bank after having created a broad framework does not have any role in it.

5. RBI ISSUES GUIDELINES FOR BANKS TO SET UP 24x7 DIGITAL BANKING UNITS: The Reserve Bank of India has said existing banks can open Digital Banking Units (DBUs) to offer products and services in both self-served and assisted mode round-the-clock. In the recent Union Budget, the government announced the setting up of at least 75 Digital Banking Units (DBUs) in 75 districts. According to the guidelines on the establishment of DBUs, the products and services to be provided at a DBU include, opening of accounts, cash withdrawal and deposit, KYC updation, loans and complaint registrations.

6. BANDHAN LED GROUP TO BUY IDFC MUTUAL FUND: Bandhan Financial Holdings won the bid to buy IDFC Asset Management Company in a deal valued at Rs 4,500 crores. This is the largest deal to date in the Indian Asset management space. The consortium led by Bandhan bank trumped the US based Invesco that partnered with Warburg Pincus and Kedaara Capital, paying 3.6% of the asset under Management. Addition of Mutual Funds business to Bandhan’s portfolio of tiny, small ticket housing loans would improve its ability to cross sell financial products to millions of customers who do not have access to these saving or investment instruments.

7. RISING UPI PAYMENTS EAT INTO BANKS’ AND FINTECH FIRMS’ INCOMES: The increasing share of Unified Payments Interface (UPI) transactions in merchant payments has begun to affect banks and non-Banks’ fee incomes. Merchant establishments, especially small stores across the country have taken to UPI QR-based payments in a big way since they do not have to shell out a merchant discount rate (MDR) to their bank or non-bank service provider. In contrast all RuPay card transactions are chargeable by banks and tend to hurt merchants’ margins.

8. Rs 1.45 TRILLION IN MUTUAL FUNDS SINCE MARCH 2021: Usually heavy buying by Mutual Funds (MFGs) gets highlighted. But it is the individual investors who are providing the fireworks to domestic fund managers. Since March’21 individual investors have poured in Rs 1.45 trillion into Equity-oriented Mutual Fund Schemes. And there have been some months when the inflows have exceeded USD 3 billion. Further, inflows through Systematic Investment Plan (SIP) route have been consistently above Rs 10,000 crores (Rs 100 billion) since September 2021. Consequently, in the past 12 months, inflows of Rs 1.2 trillion have come through the SIP route.

1. BANKING SECTOR SHOULD SEE ROBUST GROWTH THIS YEAR: With the Covid-19 worries fading away, the banking sector is set to register robust growth this fiscal on the back of stable macroeconomic conditions and growth-oriented policies of the government. This was expressed by Bank of Maharashtra Managing Director Mr. A S Rajeev. He is of the opinion that the banking sector seems to be in a sweet spot and is expected to post good growth in the current fiscal, provided there are no external issues like fresh outbreak of the pandemic and sustained geopolitical tension.

2. REGIONAL RURAL BANKS NEED STATE OF THE ART UNIFORM REGULATIONS: According to a report by the economists at State Bank of India, the Regional Rural Banks (RRBs) need to be brought under uniform regulations along with Co-operative banks and Public Sector Banks. The report also said that several regulations for RRBs need to keep abreast with changing times and need to be updated. At present the RRBs are subjected to a hybrid regulation--- a combination of using specific outcomes to mandate rule-based regulations. So now is the time to clearly separate outcome-based regulation from rule-based regulation for a better result.

3. UNITY SMALL FINANCE BANK PAYS Rs 3,800 CRORES TO 8.5 LAKH PMC BANK DEPOSITORS: Unity Small Finance Bank Ltd has paid around Rs 3,800 crores to depositors of scam-hit Punjab & Maharashtra Co-operative Bank Ltd (PMC Bank) after the Deposit Insurance and Credit Guaranty Corporation (DICGC) had certified about 8,50,000 valid account holders who were eligible to receive up to Rs 5 lakh of their deposits.

4. BANKS GET TIME TILL MARCH 2023 TO IMPLEMENT NEW SYSTEM TO REPLENISH CASH IN ATMs: The Reserve Bank of India (RBI) has extended the time till March 2023 for banks to implement its direction on the use of only lockable cassettes for replenishing cash in ATMs. Presently cash is being replenished at ATMs by way of open cash top-up or by loading cash in the machines on the spot. To do away with this current system, in 2018 RBI had asked banks to ensure that lockable Cassettes are swapped at the time of cash replenishment in the ATMs. The earlier deadline was March 2021 which was extended up to to March 2022. The same has been further extended till March 2023.

5. AXIS BANK ACQUIRES CITIBANK’S INDIA CONSUMER BUSINESS FOR Rs 12,325 CRORES: Axis bank has finally acquired Citi Bank’s consumer business for Rs 12,325 crores. The transaction comprises the sale of the consumer businesses of Citi Bank India, which includes credit cards, deposits and loans business in retail banking, wealth management and consumer loans. The deal also includes the sale of Citicorp Finance (India) Ltd, comprising the asset-backed financing business (This includes commercial vehicle and construction equipment loans as well as personal loans portfolio). With this, Axis Bank will acquire 3 million customers of Citi Bank and its credit card balance sheet will grow by 57%.

6. TOTAL CREDIT CARDS NOW AT 71.7 MILLION, HIGHEST IN 21 MONTHS: India’s banking system reported net additions of approximately 1.5 million credit cards in February 2022, up by 165% year-on-year taking the total base to 71.7 million. Spends on credit cards increased by 43% year-on-year during the month of February 2022. HDFC bank continues to remain the market leader in credit cards despite competition from all other banks.

7. NON-LINKING OF PAN WITH AADHAAR WILL ATTRACT PENALTY OF Rs 500 TO Rs 1000/-: The Income Tax department has said that from April 1, 2022 onwards, taxpayers who have not yet linked their Aadhaar cards with their PAN number would be now required to pay a penalty between Rs 500/- to Rs 1000/- The Central Board of Direct Taxes (CBDT) said a late fee of Rs 500/- will be levied in cases where the Aadhaar is linked within the next three months or by June 30, 2022. A fine of Rs 1000/- will be levied thereafter.

8. STATE BANK OF INDIA EXPLORING NEW WAYS TO RESOLVE RETAIL LOAN STRESS: State Bank of India (SBI) had Gross Non-Performing Assets (GNPAs) of Rs 1,200 billion at the end of December 2021, of which retail loans accounted for more than Rs 619 billion. SBI is considering to offload pools of Non-Performing retail loans worth less than Rs 10 billion to Asset Reconstruction Companies (ARCs), a strategy typically used for larger corporate loans. Selling a smaller portion of NPA under retail portfolio to ARCs will help the bank to test the market and also assess the depth of the demand. This will also essentially help to free its staff engaged in chasing such small loans which can then be used for recovery of larger corporate loans where chances of getting a better recovery exist.

1. PNB ACQUIRES 6% STAKE IN PUBLIC DIGITAL e-COMMERCE PLATFORM: Punjab National Bank (PNB) has acquired nearly 6% stake in public digital e-commerce platform ONDC for Rs 10 crores. Open Network for Digital Commerce (ONDC) is an initiative of the Ministry of Commerce and Industry to promote open networks for all aspects of the exchange of goods and services over digital networks. ONDC was incorporated on December 30, 2021, with an early investment from Quality Council of India and Protean e-Gov Technologies Ltd.

2. RESERVE BANK OF INDIA SETS UP RESERVE BANK INNOVATION HUB: The Reserve Bank of India has set up Reserve Bank Innovation Hub (RBIH) as a section 8 company under Companies Act 2013, with an initial capital contribution of Rs 100 crores to encourage and nurture financial innovation in a sustainable manner through an institutional set up. The Hub has an independent Board with Senapathy Gopalkrishnan as the Chairman. Other eminent persons from Industry and academia are included as members.

3. FEDERAL BANK AND RBIH PARTNER TO ADVANCE DIGITAL FINANCIAL INCLUSION FOR WOMEN: Federal Bank has teamed up with Reserve Bank Innovation Hub (RBIH) as a scale up partner for the second phase of Swarnari TechSprint Programme. The programme is aimed at advancing digital financial inclusion for women of India and to create digital solutions for bridging the gender gap. Swarnari TechSprint programme aims to create and produce smart, creative and sustainable solutions supporting women advancement in financial growth and independence and for women-owned enterprises in India.

4. BANKS SHARE IN INDUSTRIAL CREDIT PLUNGES TO 34% IN FINANCIAL YEAR 2021: As per a report by BofA Global Research, domestic banks’ share in the overall commercial credit has plunged to a low of 34% in FY 2021 from 56% in FY 2011. This is mainly because companies are moving away from bank for funds. The share of non-banks in commercial credit has more than doubled to 44% while that of foreign banks has gone up to 22% in FY’21.

5. SBI SIGNS CO-LENDING PACT WITH 5 HOUSING FINANCE COMPANIES: State Bank of India has entered into a co-lending agreement with five Housing Finance Companies (HFCs)—PNB Housing Finance Ltd, IIFL Home Finance Ltd, Shriram Housing Finance Ltd, Edelweiss Housing Finance Ltd and Capri Global Housing Finance Ltd to sanction home loans to the unserved and underserved sector and areas. As per SBI, shortage in affordable housing continues to be a major concern for India, especially for Economically Weaker Section (EWS) and the informal sections of the society. The collaboration will now enhance the Bank’s distribution network.

6. BANKS ON FUND RAISING SPREE AS ECONOMY SHOWS SIGNS OF STABILITY: With steady economic revival on the cards and prospect of higher demand, banks are readying themselves for future business growth. Bank of Maharashtra raised Rs 290 crores in Basel-III compliant Additional Tier-1 (AT1) bonds at 8.90% while Punjab National Bank is planning to raise capital soon in either AT-1 bonds or Tier 2 bonds or in combination of both. Uco Bank raised Rs 400 crores earlier in the week in Tier 2 bonds. Canara Bank has raised Rs 1,000 crores in AT1 bonds in the first week of this month at 8.7% . the fund will support the business growth of the banks.

7. STARTUPS TO GET UP TO 10 YEARS FOR CONVERTING DEBT INVESTMENT INTO EQUITY: The government has extended the timeline up to 10 years for startups to convert their debt investment made in the company into equity shares. This will surely give lot of relief to the startups to deal with the impact of Covid-19 pandemic. Earlier the option of changing convertible notes into equity shares was allowed for up to five years from the day when initial convertible note was issued. Now that timeline has been extended to 10 years.

8. HDFC LTD HOME LOAN APPROVALS CROSS Rs 2 LAKH CRORES: HDFC Ltd has approved retail home loans of over Rs 2 lakh crores during the period from April 2021 to March 21, 2022, the highest ever in any financial year, despite the challenges posed by the Covid-19 pandemic. HDFC Ltd has said that its thrust on digital initiatives and the inherent demand for housing helped it get back to normalcy faster than expected. Over 89% of retail loans are sourced online, up from less than 20% before the pandemic. The sweet spot for housing is still in the price range of Rs 50 lakhs to Rs 1 crore.

1. BANK PRIVATISATION TO KICKSTART SOON: The Finance Ministry is expected to seek cabinet approval for amendments to the Banking Regulation Act, 1949 and possibly other legislation as it prepares for process of privatisation of two Public Sector Banks (PSBs). The proposed changes should include the removal of 20% foreign investment cap applicable to PSBs in these two cases. A more attractive Voluntary Retirement Scheme (VRS) for employees of these two banks may also be proposed to the cabinet. Inter-ministerial consultations have been completed on a draft cabinet note on the proposed amendments.

2. PAYMENT AGGREGATORS HELP SHAPE DIGITAL PAYMENTS IN INDIA: India’s digital payments industry is dynamic and is growing rapidly. As per RBI statistics, retail digital payments worth $ 4.9 trillion in value and 44 billion in volumes were processed in financial year 2020-21. Out of this, P2M (Person-to- Merchant) retail payments accounted for approximately $ 800 billion in value and 22 billion in volumes. However, cash continues to be the most preferred mode of payment accounting for 70% of the value and 89% of volume. This implies that there is significant scope for growth by making digital payments more financially inclusive.

3. HDFC BANK TO GIVE DIGITAL PUSH TO SMALL BUSINESS LOANS: HDFC Bank has decided to create a dedicated App for small business loans to push merchant loans. According to the bank, “Small” is big business for them. The bank now clocks around Rs 1000 crores in merchant loans every month and is looking to triple the same. For merchant loans, it is launching “SmartHub Vyapar” App to push merchant loans. All the app payment platforms—Cards, UPI, QR Code, Tap Pay and SMS based payment will be bundled in to this one App. The bank will also launch an application “AutoFirst” that will offer fully automated auto loans.

4. KOTAK MAHINDRA BANK SIGNS MoU WITH BUSINESS FRANCE: Kotak Mahindra Bank Ltd has entered into a Memorandum of Understanding (MoU) with Business France, a French based national agency in charge of the development of exports and international investments in France, to support companies in the Indo-French corridor. Business France fosters export growth by French businesses, facilitating international investment in France. It also promotes Mid-sized French companies. This tie-up will bolster relationships between India and France.

5. NEED TO PROTECT CONSUMERS, SMALL RETAILERS AMID GROWTH IN E-COMMERCE: With rising growth in online trade, Consumer Affairs Secretary Mr. Rohit Kumar has stressed that there should not be a situation of monopoly by large E-commerce players like Amazon and Flipkart, and there is a need to prepare a new framework to protect consumers and small retailers. Speaking at an event to celebrate World Consumer Rights Day, Mr. Rohit Kumar said the government has recently introduced UPI in feature phones as well and this will lead to an exponential increase in digital payments and E-commerce. So, there is a need to prepare a new framework to protect consumers from unfair trade practices.

6. BANKS RECOVER OVER Rs 7.34 LAKH CRORES IN NPA AND FRAUD ACCOUNTS IN THE LAST SIX-AND-A-HALF YEARS: During the last six financial years and the first half of this financial year, banks have recovered Rs 7,34, 542 crores in NPA/Written-Off accounts and Fraud accounts. Minister of State for Finance, Mr Bhagwat Karad said in a written reply to the Rajya Sabha. On recovery of Fraud accounts, an amount of Rs 55,895 crores have been recovered during the same period.

7. RBI’S “RETAIL DIRECT” IS A HIT WITH INVESTORS: More than 35,000 individual investors are directly buying government bonds on RBI’s “Retail Direct Platform”, raising expectations that such ownership will accelerate due to transactional convenience, asset safety and yield differentials. Sovereign bonds now yield higher than traditional bank fixed deposits and can be sold more easily. A 10-year government bond yields around 6.80% half yearly, compared with 5.40-6.30% offered by banks across categories.

8. ADVANCE TAX COLLECTION RISES 54% : The Finance Ministry has said that the advance tax collection has increased by 53.50% to Rs 4.60 lakh crores so far in this fiscal. This indicates a recovery in the economy. The cumulative advance tax collections for the first three quarters of this fiscal (2021-22) stands at Rs 4,59,917 crores as against Rs 2,98,620 crores collected during the corresponding period last year, showing a growth of about 53.5%. Direct tax collections for 2021-22 as on December 16, 2021, show a net collection of Rs 9.45 lakh crores compared to Rs 5.88 lakh crores collected over the year-ago period which shows an increase of 60.8%

1. RBI LIFTS ALL RESTRICTIONS ON HDFC BANK’S BUSINESS GENERATING ACTIVITIES: Reserve Bank of India has lifted all the restrictions on the business generating activities of HDFC Bank which the regulator had imposed on the bank a year ago. HDFC Ban added that they have carved medium and long-term plans and have set goals to achieve in due course. HDFC Bank which normally issues more than 2 lakh credit cards per month was not able to do business and also could not launch any new digital initiatives due to this sanction.

2. PROMINENT NON-BANKING FINANCE COMPANIES BID FOR ACQUIRING RELIANCE CAPITAL: Prominent Non-Banking Finance Companies (NBFCs) like Adani Finserve, KKR, Piramal Finance and Poonawala Finance are among the 14 prominent NBFCs that have expressed interest to acquire debt-ridden Reliance Capital Ltd, promoted by Anil Ambani Group. The last date for submission of bids for acquiring the debt-ridden firm is March 25TH. This is the third large NBFC against which the RBI has initiated bankruptcy proceedings. Under Insolvency and Bankruptcy Code (IBC) Srei Group NBFC and DHFL are the other two.

3. RBI BANS PAYTM BANK FROM ON-BOARDING NEW CUSTOMERS: The Reserve bank of India has barred Soft-Bank backed Paytm Payments Bank from adding new customers due to likely gaps in its technology systems. RBI says new on-boarding of customers will be subject to specific permission to be granted by RBI after reviewing the report of the IT Auditors. This action is initiated based on certain material supervisory concerns observed in the bank.

4. SBI PLANS A SEPARATE DIGITAL BANK, TO REVAMP ITS “YONO” APP: State Bank of India (SBI) is planning a separate digital entry and will revamp its current mobile application—“YONO” to “Only YONO”, as part of its decision to be future-ready. SBI is looking to implement the revamp in 12-18 months, including migrating its existing YONO customers to “Only YONO”. “Only YONO” is envisaged as the next generation of Yono which will make SBI ready to launch a complete new digital bank with a leaner and modular architecture, more streamlined journeys, sleek and personalised customer-centric goal.

5. THOUSANDS OF STUDENTS WHO HAVE TAKEN EDUCATION LOAN TO STUDY IN UKRAINE ARE IN DEEP TROUBLE: Thousands of Indian students who had gone to Ukraine for higher studies are now staring at a bleak future. Due to the war, they had to flee the country back to India fighting for their lives and now they do not know when the crisis will end and whether they can go back and resume their studies. Majority of these students have availed expensive education loans from banks and financial institutions to study in Ukraine and now the students and the parents need to know how to deal with the loans that they have availed. They cannot afford to take the loan repayment lightly as lenders extend these loans to them with commercial consideration to earn interest income. In principle, what has been borrowed from banks needs to be repaid one way or the other.

6. PROJECTS WITH IMPLEMENTATION RISK SHOULD BE FINANCED BY CAPITAL MARKETS: Projects with implementation risks should normally be financed by the Capital markets and not by banks using public deposits. Former RBI Deputy Governor N S Vishwanathan has expressed his views on this. Speaking at an event organised by industry body ASSOCHAM, he said India needs a very strong bond market that can fund these projects and manage risks. Further, he added that going forward, the Indian Banking System should have Non-Performing Assets (NPAs) of globally accepted standards.

7. RBI CLARIFIES ON THE MODE OF RECEIPT OF COMPLAINTS UNDER OMBUDSMAN SCHEME: Instances of misinformation being spread through certain sections of the social media about RBI’s Integrated Ombudsman Scheme 2021 (RB-IOS) have come to the notice of RBI. These messages are conveying to public at large to lodge their complaints against banks through third parties for a fees/charges for early redressal of grievances. RBI has clarified that it does not have any arrangements with any entity for redress of grievances against banks. RBI has clarified that it has laid down a cost free grievance redress mechanism under RB-IOS which does not involve payment of any fees or charges in any form or manner.

1. RBI ASKS BANKS TO FIND ALTERNATIVE MECHANISM FOR RUSSIA PAYMENTS: The Reserve bank of India has instructed Indian banks to explore an alternative mechanism of payments for trade if the rapidly developing global opposition against Russia leads to Moscow’s total elimination from rest of the world’s banking system. The USA and its allies have decided to cut major Russian Banks from the SWIFT platform, which is now accepted global mechanism for electronic money transfer among banks.

2. BANKS, NBFCs RAISE LENDING RATES AS TIGHTER LIQUIDITY AND HIGH DEPOSIT COSTS PINCH: Banks and Non-Banking Finance Companies (NBFCs) have increased the lending rates by 15 basis points over the past one month on tightening liquidity conditions and higher cost of deposit. While RBI may keep the policy rates unchanged, lenders have to lure depositors from other means of investments by offering higher rates besides facing tightening liquidity situation. Almost all loans have re-priced upward keeping in mind the imminent change in interest rate cycle and increase in deposit rates.

3. PRIVATE EQUITY FIRM CARLYLE PLANS TO ACQUIRE 10% IN YES BANK FOR $500-600 MILLION: Private Equity group Carlyle is considering a Rs 3,750-4,500 crores investment in Yes Bank along with its peer Advent International. Yes Bank is in talks with Private Equity (PE) investors to raise Rs 7,500-11,250 crores of growth capital to further boost its balance sheet. Yes Bank has not been successful in attracting investors so far.

4. BBB LAUNCHES PROGRAMME FOR IMPROVING QUALITY OF PSU BANK BOARDS: The Bank Board Bureau (BBB) has introduced a development programme for management of Public Sector Banks (PSBs) with a view to improve the quality of bank boards. The nine-month Directors’ Development Programme (DDP) is designed for the Directors of the PSBs and Financial Institutions with the key objective of enhancing director effectiveness to increase their impact on the Boards. The programme is designed in collaboration with IBA which will enrich and empower the board as a whole in decision making.

5. PNB TO MAKE HIGH VALUE CHEQUE VERIFICATION (POSITIVE PAY SYSTEM) MANDATORY FROM APRIL: In a move to protect bank customers against cheque frauds, Punjab National Bank (PNB) has said that it will make Positive Pay System (PPS) mandatory from April’22 for high value transactions. Under PPS developed by National Payments Corporation of India (NPCI), a customer issuing a high-value cheque has to re-confirm some essential details which are cross-checked while presenting the cheque in clearing before payment.

6. INDIA POST MAY TEAM UP WITH SOME BANK TO START LENDING BUSINESS: India Post, run by the government may tie up with one of the commercial banks to offer various loan products with a focus on rural economy. The planned roll-out of 100% Core Banking Solutions (CBS) at all the 1.5 lakh post offices in the country would facilitate the loss-making entity’s transition to the new role as provider of multiple financial services. The plan will not only fast-track the process of Financial Inclusion, but also will make it possible at lower cost to the exchequer.

7. VALUE OF UPI TRANSACTIONS DECLINED IN FEBRUARY: As per the data from National Payments Corporation of India (NPCI), India’s cashless retail transactions on UPI platform were worth Rs 8.27 lakh crores in February 2022. This was slightly less than the amount recorded in the previous month. The total transactions in February were 452 crores. However, there was a slight increase in the value of automatic collection at toll plazas through the NETC FASTag technology, with over 24.36 crores transactions worth 3,631 crores in February.

8. 18% OF SUPER-RICH INDIANS INVESTED IN CRYPTOCURRENCIES: Nearly 18% of Indian Ultra High-net worth individuals invested in Crypto assets last year amid rising popularity of cryptocurrencies and NFTs. Ultra-High-net worth individuals are those individuals whose net worth is more than USD 30 million (about Rs 225 crores). 2021 was the year that crypto investments went mainstream.

1. CABINET ALLOWS UP TO 20% FDI IN LIC IPO: The Union cabinet has permitted up to 20% Foreign Direct Investment (FDI) under automatic route in IPO-bound Life Insurance Corporation of India (LIC of India) with an aim to facilitate disinvestment of the country’s largest insurer. LIC of India plans to float stake of 5% to raise about $ 8 billion next month.

2. RBI CANCELS REGISTRATION OF P C FINANCIAL SERVICES: The Reserve Bank of India has cancelled the Certificate of Registration (CoR) of P C Financial Services primarily engaged in mobile App-based lending operations through an app “Cashbean”. The said cancellation is on account of supervisory concerns such as gross violation of RBI instructions on outsourcing and Know Your Customer (KYC) norms. The company was also found to be charging a very high rate of interest. With cancellation of CoR, P C Financials will not transact the business of a Non-Banking Financial Institution (NBFI).

3. RESERVE BANK OF INDIA ASKS NBFCs TO IMPLEMENT CORE FINANCIAL SERVICES SOLUTION BY SEPTEMBER 2025: The Reserve Bank of India has asked certain class of Non-Banking Financial Companies (NBFC) to mandatorily implement “Core Financial Services Solution (CFSS) by September 30, 2025 in order to provide seamless customer interface as well as have a centralised data base. CFSS is equal to the Core banking Solution (CBS) adopted by all banks. As per this, certain class of NBFCs—Upper layer and Middle layer with 10 or more “Fixed Point Service Delivery Units” as on October 1, 2022 shall be mandatorily required to implement CFSS.

4. SHARE OF SMALL LOANS RISE, ALL CREDIT GOES TO SMALL FINANCE BANKS Small Finance Banks (SFBs) which came into existence about 4 years ago are gaining strength. While their overall market share of small loans as of now is still just 1%, they have bagged 8% incremental market share. In the past three and a half years, SFBs have delivered a robust 42% Compound Annual Growth Rate (CAGR) followed by private banks at 13% and Foreign Banks 8%. Public Sector banks were the lowest at 2%. This reflects the demand for small ticket loans in rural and semi urban areas and also points out that big lenders (Banks) are focussing only on top rated credit.

5. IRCTC, NPCI AND BANK OF BARODA TEAM UP TO MAKE TRAIN TRAVEL EASIER AND MORE COMFORTABLE: With over 6 crore users booking railway tickets on the IRCTC website on a daily basis, Indian Railways Catering & Tourism Corporation (IRCTC) along with NPCI and BOB Financial Solutions (BFSL)-- a wholly-owned subsidiary of Bank of Baroda has launched a co-branded Credit Card to tap the huge potential. The “IRCTC-BoB RuPay Contactless Credit Card” is specially curated to offer the maximum savings to frequent travellers on the Indian Railways. Customers can also use the card for other shopping purposes.

6. GOVERNMENT TO INFUSE Rs 15,000 CRORES INTO PSBs IN MARCH: This year the government has allocated Rs 15,000 crores towards bank recapitalisation in the revised budget estimates and the entire amount may be distributed next month. Punjab & Sind Bank and Central Bank of India – the only banks that still face lending curbs are likely to be the biggest beneficiaries of this latest capital infusion. All public sector banks have been asked to send their capital requirements to the Department of Financial Services as it is formulating the recapitalisation plan for the budgeted amount in the current fiscal.

7. LIC OWES Rs 75,000 CRORES TO INCOME TAX DEPARTMENT AS PER IPO DRAFT Life Insurance Corporation of India (LIC of India) which is planning to bring its Initial Public Offer (IPO) , owes Rs 74,895 crores to Income Tax Department. This is shown in the draft of the prospectus of IPO. The amount includes Rs 72,7562 crores direct tax and Rs2,132 crores in Indirect taxes claim. LIC of India is fighting these claims, some of which date back to 2003. As many as 63 litigations are ongoing between LIC and the Tax Department. However, the draft prospectus has not mentioned any provision that LIC has kept aside for these claims.

8. RBI’S NEW DEADLINE TO COMPLY WITH NPA NORMS WILL GIVE RESPITE TO NBFCs INTO MSME LENDING: RBI’s decision to defer the implementation of its Non-Performing Assets (NPAs) upgradation norms by six months for NBFCs will give some respite to these NBFCs, particularly to those NBFCs that are lending to MSMEs. RBI has extended the deadline for NBFCs to adhere to the new asset classification norms by six months to September 30, 2022. This will help the NBFCs in a big way as they now have more time to adhere to the new rule and improve NPA profiles.

1. BANK LOANS TO INDUSTRIES GAINS MOMENTUM AFTER NEARLY 21 MONTHS: Bank loans to industries crossed the mark of Rs 29 lakh crores for the first time in 21 months. As on December 31, 2021 the total loan to industries touched 29.85 lakh crores with an improvement in consumer and business confidence that has paved the way for sustained economic revival. Top bankers expect the momentum to continue, with an increase in demand and the government placing its thrust on infrastructure spending and capacity expansion.

2. BANKING SECTOR IN PINK OF HEALTH, CREDIT GROWTH TO PICK UP India Rating and Research (Ind-Ra) expects banking sector credit growth to hit double digits for the first time in 8 years, supported by demand for loans from companies to support rising capital expenditure. One more rating agency Fitch expects credit growth to click to 10% in 2022-23 for the first time since 2013-14. During 2013-14 it had touched 14%. Fitch however, has reduced its estimate for the current fiscal ending March’22 to 8.4%.

3. KOTAK BANK PARTNERS Ezetap FOR PoS SOLUTIONS: Kotak Mahindra Bank has partnered with Ezetap—a payment solutions Company, to provide integrated Point of Sale (PoS) solutions across 4,000 locations in India. Through this association, Ezetap’s integrated and customised PoS solutions will benefit scores of Kotak Mahindra Bank merchants in retail business spread across the country. In the backdrop of growing digital payments market, this partnership will benefit both Ezetap and Kotak bank.

4. STANDARD CHARTERED BANK LAUNCHES INTEREST-ONLY HOME LOAN ACCOUNTS: Standard Chartered Bank Ltd has launched its Interest-Only home loan facility aimed at new as well as its existing customers. The Interest-Only home loan facility is a facility provided for purchase of completed residential properties where the customer can choose to pay only the interest portion of the housing loan through EMIs for an initial period of one to three years. After the interest-only period is over, the home loan facility will be treated like a normal housing loan where the EMIs comprise of both principal and interest till the maturity of the loan.

5. NBFCs TO SEEK EXEMPTION OF SMALL-VALUE ACCOUNTS FROM NEW NPA NORMS: As per the new guidelines on Non-Performing Assets, now the Non-Banking Finance Companies will be allowed to upgrade a NPA loan account to standard category only if all outstanding dues are cleared. NBFCs have requested the RBI to exempt vehicle loans up to Rs 25 lakhs and Micro, Small & Medium Enterprise (MSME) loans from the ambit of the new guidelines.

6. RESERVE BANK DEPUTY GOVERNOR IN FAVOUR OF BANNING CRYPTOCURRENCY: Reserve Bank of India Deputy Governor Mr. T Rabi Sankar has opined that cryptocurrencies are even worse than Ponzi schemes and threaten the financial sovereignty of a country, making a strong case for banning cryptocurrencies. Observing that crypto-technology is underpinned by philosophy to evade government controls, and have been specifically developed to bypass the regulated financial system. Further, he emphasised that cryptocurrencies can wreck the currency system, monetary authority, banking system and in general the government’s ability to control the economy.

7. INDIAN IT INDUSTRY REVENUE GROWS SUBSTANTIALLY IN PANDEMIC HIT FY-22: India’s Information Technology sector is all set to become a USD 227 billion industry in Financial Year-2022, registering a 15.5% growth. This is as per the report by industry body NASSCOM. The 15.5% growth is the highest in over a decade. The industry revenue had grown by 2.3% to USD 194 billion in FY-21. Besides this, the IT Industry added 4.5 lakh new jobs to take the overall direct employment to 50 lakhs. Over 44% of new hires were women and their overall share is now 18 lakhs.

8. BANKS EXPLORE OPTION OF SETTING UP A PANEL TO ADVISE THEM ON LOAN RECAST: Banks are exploring the possibility of setting up an “Expert Committee” to advise them on restructuring of loans for providing additional comfort to the sanctioning authorities while making decisions. The banks are concerned over recent allegations of mismanagement in restructuring of Non-Performing Loan accounts. The committee can vet the restructuring proposals above a threshold limit and provide opinion on other cases. This comes as banks are under pressure to justify their commercial decisions and face undue scrutiny from vigilance agencies.

1. GOVERNMENT RECAPITALISED PUBLIC SECTOR BANKS WITH Rs 3.10 LAKH CRORES CAPITAL INFUSION OVER LAST FIVE YEARS: The Government has recapitalised Public Sector Banks (PSBs) by infusing Rs.3.10 lakh Crores from 2016-17 to 2020-21. Majority of the infusion was through issuance of Recapitalisation bonds and only Rs. 34,997 crores were through budgetary allocation. However, during these five years, 43 large corporate loan accounts of Rs 2,500 crores and above were resolved through market driven Corporate Insolvency Resolution Process (CIRP) under Insolvency & Bankruptcy Code, 2016. These Corporate debtors owed a total of Rs 5.44 lakh crores to banks while their liquidation value was Rs 1.06 lakh crores.

2. HERO FINCORP IS THE FIRST INDIAN COMPANY TO SECURE NEW BENCHMARK LOAN: Hero FinCorp has become the first Indian Company to raise a Secured Overnight Financing Rate (SOFR)- linked syndicated loan. The Non-Bank Finance company promoted by Hero MotoCorp, has raised $ 350 million (about Rs 2,630 crores) at 168 basis points above SOFR, a new international benchmark that has come into existence to replace the London Interbank Offered Rate (LIBOR) from January 1, 2022. Axis bank and HSBC are underwriters to the loan.

3. SBI DISBRSES A RECORD Rs 1.12 LAKH CRORES HOME LOANS IN FY-22: State Bank of India has disbursed a record Rs 1.12 lakh crores of Home-loans to individual buyers as of January 31,2022. This is a 20% growth over the corresponding period in Financial Year 2020-21. SBI’s home loan disbursal has now surpassed pre-Covid levels, underscoring the appetite for new homes among end users. The growth was geographically broad-based.

4. BANK OF BARODA TO ACQUIRE UNION BANK OF INDIA’S 21% STAKE IN INDIAFIRST LIFE INSURANCE: Bank of Baroda’s Board has approved the acquisition of a 21% stake of Union Bank of India in IndiaFirst Life Insurance, subject to regulatory approvals. However, the details of valuation of the deal are not available. On completion of the deal, Bank of Baroda will hold 65% stake in IndiaFirst, Union Bank will hold 9% and Carmel Point Investments India will have the remaining 26% stake. As of March 31, 2021, IndiaFirst’s total assets under management stood at Rs 17,109 crores while the total premium collections stood at Rs 4,056 crores.

5. 67% OF MSMEs WERE TEMPORARILY SHUT, PROFITS DIPPED FOR 66% OF UNITS IN FY-21: As per a survey done by SIDBI which was assigned by the MSME Ministry, 67% of Micro, Small & Medium Enterprises (MSMEs) were temporarily closed for up to a 3-months period during Covid-19 in Financial Year 2020-21. The survey further reported that 66% of the units have reported a decline in profitability. Around 65% of MSMEs that were surveyed had availed the Emergency Credit Line Guarantee-Scheme (ECLGS).

6. MFIs’ ASSET UNDER MANAGEMENT IS LIKELY TO GROW AT 18-20% IN FY-2023: Domestic Rating Agency ICRA has reported a revised downward growth outlook of 12-14% Assets Under management (AUM) of NBFCs and MFIs. However, the report says that the AUM for Financial Year 2022-23 for MFIs and NBFCs is expected to improve to 18-20%. The report is based on the survey which shows a healthy demand in the industry and increasing level of economic activity.

7. RBI MAY ALLOW NBFCs TO ISSUE CREDIT CARDS: Reserve Bank of India is in discussions with a few large Non-Banking Financial Companies (NBFCs) for the possibility of allowing to issue Credit Cards on a standalone basis. Presently, NBFCs can only issue co-branded credit cards with banks. In the past, three leading NBFCs—Reliance Capital, Tata Capital and Bajaj Finance had approached RBI, seeking permission to issue credit cards on a standalone basis on the VISA network.

8. SBI REGISTER ITS HIGHEST QUARTERLY NEW PROFIT IN THE THIRD QUARTER OF THIS FISCAL: State Bank of India has reported a 62% year-on-year rise in its net profit to Rs 8,431 crores for the quarter ended December 31, 2021 which is the highest ever net profit achieved in any quarter. The Bank’s total deposits grew by 8.83%, savings bank deposits grew by 10.30 % and current account deposits grew by 7.89% during this quarter. Meanwhile, the bank expects to recover Rs 8,000 crores from written-off accounts, including from NCLT resolved cases in the current Fiscal year.

9. JC FLOWER AND CERBERUS VIE FOR YES BANK ARC: American private equity firms Cerberus Capital and JC Flowers & Co have submitted competing binding bids to buy a majority stake in Yes Bank’s proposed Asset Reconstruction Company (ARC). However, two other shortlisted US firms, Oaktree Capital and Apollo Global Management have withdrawn from the race.

1. UNION BANK OF INDIA TO OFFER WHATSAPP BANKING POWERED BY INFOSYS FINACLE: Union Bank of India and Infosys Finacle have announced the launch of banking services on WhatsApp, following the implementation of Finacle Conversational Banking, Finacle Remote Banker and Finacle Mobile Teller solutions. The new service is called “Union Virtual Connect (UVConn) which will provide personalized, daily banking services to its customers through WhatsApp mode.

2. RBI CANCELS THE LICENCE OF MAHARASHTRA BASED INDEPENDENCE CO-OPERATIVE BANK: The Reserve Bank of India has cancelled the licence of Nashik-based Independence Co-operative Bank Ltd. It has started the process of winding it up following the erosion of Bank’s capital. The customers of the bank would receive up to Rs 5 lakhs from Deposit Insurance & Credit Guarantee Corporation (DICGC) after the bank’s liquidation. And as per the data made available to RBI, almost 99% of the customers of the bank are entitled to receive the full amount of their respective deposits.

3. SCHEDULED COMMERCIAL BANKS TO SET UP 75 DIGITAL BANKS IN 75 DISTRICTS: Presenting the Union Budget 2022-23, Finance Minister Nirmala Sitharaman said that Scheduled Commercial banks will set up 75 digital banks in 75 districts to encourage digital payments. Further, the data-exchange among all-mode operators will be brought on a unified logistics interface platform.

4. POST OFFICES IN INDIA TO BE CONNECTED TO CORE BANKING SYSTEM: Finance Minister Nirmala Sitharaman has announced that all the 1.5 lakh post offices in India will be connected to the core banking system. It will enable people to access their account on line and also transfer money within post office accounts and to other banks. Bank accounts can be accessed through net banking, mobile banking and ATMs and also online transfer of funds between post office accounts and bank accounts will be a reality. Since most of the post offices are located in rural areas, this will be helpful especially to poor farmers and senior citizen.

5. RBI TO ISSUE CENTRAL BANK DIGITAL CURRENCY IN FY-23: While presenting the Union Budget 2022-23, Finance Minister Nirmala Sitharaman has proposed that RBI will roll out the Central Bank Digital Currency (CBDC) in financial year 2022-23. RBI will issue this CBDC using blockchain and other technologies. This will be a big boost to the economy. The CBDC will be a digital version of money that will co-exist with hard cash. The move on CBDC comes at a time when there has been a huge shift seen towards private virtual currencies called Cryptocurrencies.

6. PUNJAB NATIONAL BANK TO LAUNCH CO-BRANDED CREDIT CARD WITH PATANJALI IN PARTNERSHIP WITH NPCI: Punjab National Bank (PNB) and Patanjali Ayurved Ltd (PAL) have launched a co-branded credit card in partnership with National Payments Corporation of India (NPCI). The said co-branded credit card is offered on NPCI’s RuPay Platform and is available in two variants—PNB RuPay Platinum and PNB RuPay Select.

7. DIGITAL PAYMENTS THROUGH UPI KICKSTART ON A STRONG NOTE IN 2022 UPI transactions in 2022 kickstarted on a strong note with highest ever monthly value recorded at Rs 8.32 lakh crores in January 2022.This is significantly higher than the monthly average of Rs 6.3 Lakh Crores in last 12-month period. This is as per the data processed by NPCI. Higher transactions figure in January 2022 reflects faster adoption of digital mode payments in the country, further solidifying the government’s push to make the economy paperless.

8. BANKS NEED PRIOR APPROVAL FOR FLOATING FOREIGN CURRENCY DEPOSIT SCHEMES: The Reserve Bank of India has mandated banks to seek prior permission or approval from it before offering any foreign currency deposit schemes to customers under the liberalised remittance route. RBI expressed concerns over some advertisements by banks on behalf of mutual funds for lack of appropriate disclosure.

9. LIC LAUNCHES SPECIAL CAMPAIGN FOR REVIVAL OF INDIVIDUAL LAPSED POLICIES: Life Insurance Corporation of India (LIC of India) has announced a special revival campaign for individual lapsed policies from February 7th to March 25, 2022. This is the second such campaign for revival of individual lapsed policies in this financial year.

1. PANDEMIC EFFECT - GUJRATIS SELL 28 MT GOLD TO MEET NEEDS: Around 28 metric tonnes of their gold assets have been sold by Gujaratis since the outbreak of Covid-19 pandemic to meet their urgent monetary requirements, especially medical emergencies. The World Gold Council (WCC) has estimated that 142 metric tonnes of gold were recycled in India during the pandemic period from April 2020 to December 2021, of this, Gujrat comfortably accounts for 20%.

2. BANKS PLEA SEEKING TIME FOR BORROWERS TO COMPLY WITH NRE LOAN RECAST PLAN REJECTED: The Reserve Bank of India has rejected the request of banks seeking an extension for borrowers to comply with financial parameters prescribed by the Kamath Committee on restructuring of loans. Both banks’ and IBA had reached out to the RBI seeking extension of the deadline till March 2023 on account of resurgence of pandemic.

3. GOVERNMENT APPROVES PMC BANK AMALGAMATION PLAN: The government has approved the plan for the amalgamation of Punjab & Maharashtra Bank Ltd (PMC Bank) with Unity Small Finance Bank (USFBL), a joint venture between Centrum Financial Services and digital payments platform BharatPe. The scheme of amalgamation envisages takeover of the assets and liabilities of PMC bank, including deposits by USFBL and the amalgamation will come into force with immediate effect and all the branches of PMC Bank will now function as branches of USFBL.

4. IDBI BANK SELLOFF - POTENTIAL INVESTORS WANT Rs 34,000 CRORE NPAs TO BE GIVEN TO BAD BANK: Potential strategic investors in IDBI Bank want the government to transfer some of the bank’s Non-Performing Assets (NPAs) of over Rs 34,000 crores to the newly formed Bad Bank and also allow investors to form consortium to bid for the bank. As per the latest stock prices, IDBI Bank has a market capitalisation of over Rs 52,000 crores. These suggestions have been made in investor feedback sought by KPMG, the transaction advisor for IDBI Bank strategic sale.

5. FEDERAL BANK LAUNCHES DEBT FUND IN TIE UP WITH SINGAPORE’S CAPITAL: Federal Bank has launched a Debt/Bond Fund with a targeted AUM of $200 million in association with Singapore’s Scube Capital and Equirus Wealth. Only NRI customers of Federal Bank can invest in the US dollar fixed maturity bond fund, which targets to mop up around USD 200 million. Scube Capital will be the fund manager for the said scheme.

6. US BASED USISPF RECOMMENDS URGENT ACTION TO ADDRESS DISTORTIONS AND INEFFICIENCIES INTHE BANKING SECTOR: A top American business advisory group, US-India Strategic Partnership Forum (USISPF), which represents leading Fortune 500 companies has suggested a set of recommendations to the Finance Ministry for urgent action to address the distortions and inefficiencies arising out of a regulatory mandate in the banking sector. These recommendations are suggested to improve ease of doing business for institutional investors, and the ability to adopt a single window clearance which will enable smoother setting up of companies in India.

7. BANKS IN TALKS WITH NESL TO SET UP LOAN REGISTRY,INFORMATION UTILITY: Banks are in discussion with National E-Governance Services Limited (NESL) to explore the possibility of establishing a loan registry and developing an Information Utility which will store financial data such as borrowings, defaults and security interests. The aim is to increase the efficiency in exchange of information in the consortium arrangements. However, the discussions are in the initial stages and the Indian Banks’ Association (IBA) will take a final call.

8. BharatPe’s POS BUSINESS GROWS TO $4 BILLION: BharatPe, a fintech company has said that it has witnessed 200% growth in annualised transaction value to USD 4 billion (About Rs.30,078 crores) from its Point of Sales (POS) business over the last 12 months. With this, now the POS business of BharatPe contributes about 25% to the overall Payments Transaction Processed Value (PTV) of the company. The phenomenal growth can be attributed to the expansion of the company’s POS business in non-Metro cities, with more than 50% of BharatPe’s Swiping machines being deployed in Tier II and Tier III cities.

9. AIRTEL PAYMENTS BANK CUSTOMER DEPOSIT SURGES 75%: TCustomer Deposits with Airtel Payments Bank has surged 75% to Rs.1,000 crores in 2021 as compared to the previous year. The Bank has added 3.5 crores of new customers during this year and crossed 10-crore customer base in 2021. RBI’s decision to increase the Day-end savings limit to Rs 2 lakhs for Payments Bank account has been a big boost.

1. KOTAK BANK SIGNS MoU WITH GIFT SEZ FOR BOOSING FINANCIAL SERVICES ECOSYSTEM: Kotak Mahindra Bank has signed a Memorandum of Understanding (MoU) with GIFT SEZ Limited for boosting financial services ecosystem at International Financial Services Centre (IFSC) at Gandhinagar, Gujrat. This MoU will enable both to work together towards greater enhancement of the financial services. The area of focus will be to ease market access and cross border activities for fund management community.

2. GOVERNMENT TO REIMBURSE Rs. 974 CRORES TO BANK FOR PANDEMIC LOAN MORATORIUM: The Union Cabinet has approved a sanction of Rs 974 crores for banks as reimbursement related to loan moratorium that was implemented amid the Covid-19 pandemic. In March 2020, Reserve Bank of India had announced a loan moratorium on payments of instalments of term loans falling due between March 1 and May 31, 2020 which was extended till August 31, 2020.

3. INDIA POST PAYMENTS BANK’S CUSTOMER BASE CROSEES 5 CRORE MARK: India Post Payments Bank (IPPB) has crossed 5-crore customer base which makes it third largest entity in the segment after Paytm and Airtel Payments Bank. IPPB opened these 5 crore accounts in digital and paperless mode by leveraging 1.36 lakh post offices, out of which 1.20 lakh are in rural areas. And this was done with the help of about 1.47 lakh doorstep banking service providers. Reaching to 5-crore customers in a short span of 3 years is a stupendous task.

4. BANKS NEED TO BE CAUTIOUS ABOUT FRAUDS IN LOANS TO SMALL AND MEDIUM BUSINESS: According to a banking survey made by Deloitte India, loans disbursed to small and medium businesses during the pandemic could pose a higher risk of frauds as banks do not continuously monitor them. The survey captured the views of 72 senior management executives responsible for compliance and fraud risk management from various financial institutions. The Deloitte India survey showed that the majority of financial institutions said that end-use monitoring is most vulnerable stage and that is not happening in these loans. This is a potential area of concern.

5. HDFC Bank QUARTER 3 RESULTS - BANK PROFITS UP BY 18%: HDFC Bank Ltd has reported a 18.1% rise in its standalone net profit at Rs 10,342 crores for the third quarter ended December 31,2021. This is due to the improvement in loan growth and asset quality. The Bank’s net interest margin increased by 12.1% to Rs 26,627 during the said period.

6. NRI DEPOSITS PLUNGE 62% DURING APRIL-NOVEMBER’21: The Non-Resident Indian (NRI) bank deposits plunged by 62% in the first 8 months of the fiscal year as returns shrank in a falling interest scenario. Net inflows to various NRI deposit schemes plunged to $2.6 billion during April-November 2021, from $ 7 billion in the same period a year ago. More than 72% of the NRI deposits are Rupee deposits in the Non-Resident External (NRE) accounts. The returns are linked to domestic rates, which have been signalling lower rates which has made these deposits unattractive. Other alternative avenues like mutual funds and stocks are looking more attractive to the NRI.

7. SIP REGISTRATIONS IN FY-22 ALREADY AT FIVE YEAR HIGH: Around 19.5 million new SIPs have been registered till December’21 end, as against 14.1 million in the whole of financial year 2021. Increasing investor awareness and positive experiences have spurred this increase. The data from Association of Mutual Funds in India (AMFI)shows that new registrations have topped 2 million every month since June’21. September’21 saw a registration of 2.6 million new SIP registrations which is a record so far.

8. NITI AAYOG PROPOSES TO INCUDEELECTRIC VEHICLES IN RBI’S PRIORITY SECTOR LENDING GUIDELINNES: NITI Aayog has proposed to the government to include Electric Vehicles (EVs) in the Reserve Bank of India’s priority sector lending guidelines. This move will give a significant push to retail lending for Evs. According to a report by NITI Aayog, banks and NBFCs have a potential to achieve an EV financial market size of Rs 40,000 crores by 2025 and Rs 3.7 lakh crores by 2030.

9. DIGITAL BANKING IS SLOWLY TAKING OVER TRADITIONAL BANKING: The long haul of pandemic has amplified the need for digital solutions for any financial need. This has demonstrated the value of being able to transact online anytime, anywhere with people across the world in an instant. This is where digital banks play a significant role, offering customers the convenience of banking at their fingertips with 24x7 availability. Digital banks also save on branch investment as they do not need a physical presence and can add more value to its customers. This also empowers the banks to invest more in hi-tech services and enhanced product offerings.

1. EDELWEISS GROUP PARTNERS INDIAN BANK FOR CO-LENDING TO PRIORITY SECTOR: Edelweiss Financial group’s Edelweiss Housing Finance Ltd (EHFL) and ECL Finance Ltd (ECLF) have entered into a co-lending partnership with Indian Bank for lending to priority sector areas. Agriculture, Micro Enterprises and advances to weaker sections of the society are amongst the categories under priority identified for further lending.

2. RBI SETS UP NEW FINTECH DEPARTMENT TO PUSH INNOVATION: The Reserve Bank of India has set up a new Fintech Department to facilitate innovation. RBI has appointed Mr. Ajay Kumar Choudhary, Executive Director to head the department. All matters related to inter-regulatory and international coordination on Fintech shall also be dealt with by the new department. The department will not only promote innovation in the sector but also will identify the challenges and opportunities associated with it and address them in a timely manner.

3. EQUITY-ORIENTED FUNDS DRIVE MUTUAL FUNDS ASSETS TO A RECORD HIGH: Driven by a surge in inflows into Equity-oriented funds, Assets Under Management (AUM) of Mutual Funds surged to a new high of Rs 37.73 lakh crores in 2021, up by 22% from that in the previous year. There is a net increment of 6.70 lakh crore over the last year and this also is a record high over a previous peak of Rs 4.80 lakh crores in 2017 and Rs 4.5 lakh crores in 2020. The record number of inflows is mainly attributed to the inflows into equity-oriented funds.

4. DEPOSITS IN JAN-DHAN ACCOUNTS CROSS 1.5 LAKH CRORE: Deposits in bank accounts opened under the Jan-Dhan scheme, launched about seven years ago by the government, have crossed Rs 1.50 lakh crores mark. As per the latest Finance Ministry data, the total balance in over 44.23 crore Pradhan Mantri Jan-Dhan Yojana (PMJDY) accounts was at Rs 1,50, 939 crores as at December 31,2021. As per the data, out of the 44.23 crores of accounts, 34.9 crore accounts are with Public Sector Banks, 8.05 crore accounts with Regional Rural banks and 1.28 crore accounts are with Private Sector Banks.

5. PAYTM PAYMENTS BANKS LEADS UPI BENEFICIARY CHART, SBI IS THE BIGGEST REMITTER: Paytm Payments Bank (PPBL) has emerged as the biggest receiver of UPI amount with Rs 926.17 million transactions while State Bank of India topped the chart of being the biggest remitter in December 2021. This is according to the data released by National Payments Corporation of India (NPCI). State Bank of India also became the second-best bank after PPBL in terms of UPI receipts with 664.89 million transactions.

6. STATE-RUN BANKS ASK PRIVATE BANKS TO RAISE THEIR STAKE IN BAD BANK: Public Sector Banks have asked their Private Sector counterparts to raise their stake in National Asset Reconstruction Company Ltd (NARCL) and India Debt Resolution Company Ltd (IDRCL). Under the twin structure, IDRCL, an Asset Management Company is mandated to resolve the bad loans acquired by NARCL. The Union Cabinet has given its approval for a guarantee of 36,600 crores to back security receipts issued by NARCL for acquiring stressed loan assets from banks. Canara Bank is the main sponsor bank for NARCL. It is proposed that eventually no bank will hold more than 10% stake to ensure a diversified ownership for the ARC.

7. BANKING COMPLAINTS ROSE BY 22% IN FY 20-21: The Reserve Bank of India saw a 22.3% jump in consumer complaints under various Ombudsman Schemes for the fiscal year 2020-21, bulk of them related to debit cards, online banking and credit cards. RBI has released the Annual Report of the Ombudsman Schemes for 2020-21 which covers the activities under the Banking Ombudsman Scheme, Ombudsman Scheme for Non-Banking Financial Companies (OSNBFC) and Ombudsman Scheme for Digital Transactions.

8. RBI BANK COLLABORATES WITH GOOGLE TO CATER NEXT GENERATION CUSTOMER EXPERIENCE: RBL bank and Google have announced a strategic collaboration to fuel the Bank’s customer experience strategy and expand its value proposition to serve its rapidly growing customer base through its digital platform Abacus 2.0. This collaboration will enable better customer data management, enabling effective cross-selling within the Bank’s large customer base and subsequently reduce the cost of customer acquisition. RBL Bank currently has over 4 million urban retail asset and liability customers and it has set a business goal to grow this base to 12-14 million over the next 3 years.

1. RBI GIVES APPROVAL TO FINO PAYMENTS BANK’S INTERNATIONAL MONEY TRANSFER SERVICE: Fino Payments Bank Ltd has got approval from Reserve Bank of India to offer the international money transfer service to its customers. Fino Bank has received the much-awaited approval from RBI to commence the international remittance business under the Money Transfer Service Scheme (MTSS). The bank will undertake inward cross-border money transfer in association with an overseas principal, the details of which are being worked out.

2. FOUR LARGE AND MID-SIZED BANKS REPORT HEALTHY DEPOSIT GROWTH IN THE THIRD QUARTER OF THIS FISCAL: Four large and mid-sized banks, HDFC Bank, Yes Bank, IDFC First Bank and Bank of Maharashtra have reported a 10.5% to 26% year-on-year (y-o-y) rise in their deposit base for the quarter ended December 31,2021. HDFC Bank’s deposits rose by 13.8% to 14.46 lakh crores, Yes Bank reported a 26% year-on-year deposit growth in its deposit base. IDFC First bank has reported 10.7% deposit growth for the said period. Lastly, Bank of Maharashtra has reported 15.21% y-o-y rise in its deposits.

3. AIRTEL PAYMENTS BANK GETS SCHEDULED BANK STATUS FROM RBI: Airtel payments bank has been categorised as a scheduled bank by Reserve Bank of India. With this, the bank can now pitch for government-issued Requests for Proposals (RFPs) and primary auctions and undertake both central & state government business, besides participating in government-operated welfare schemes. Airtel payments Bank is among the fastest-growing digital banks in the country with a customer base of 115 million users.

4. THIRD WAVE OF COVID-19 TO POSE RISK TO ASSET QUALITY OF BANKS The third wave of Covid-19 poses high risk to banks asset quality, especially the restructured loan book. This is as per a report by domestic rating agency- ICRA. Besides bad loans, banks are likely to see challenges on profitability and solvency fronts due to the disruption caused by the Omicron variant of Coronavirus.

5. RBI PROMPTS PRIMARY DEALERS TO TRADE IN RETAIL DIRECT: The Reserve Bank of India has offered a dedicated window for bond houses known as Primary Dealers (PDs), through which they can exchange illiquid/semi liquid securities acquired through the Retail Direct platform with liquid papers. The said move should encourage them to participate in the first ever platform for individuals. A special Switch window will be opened for PDs every month where the PDs will switch the Illiquid/semi liquid securities acquired through Request for Quotes (RfQ) segment from Retail Direct Gilt (RDG) account holders.

6. SBI, ICICI BANK AND HDFC BANK CONTINUE TO BE SYSTEMATICALLY IMPORTANT BANKS: RBI has said that State Bank of India, HDFC bank and ICICI Bank will remain as Domestic Systematically Important Banks (DSIBs) and therefore will have to maintain additional Common Equity Tier-1 (CET-1) capital ratios in the same manner as prescribed in 2020. For SBI, the additional CET-1 requirement is maintained at 0.6% of the bank’s Risk weighted Assets, while for HDFC Bank and ICICI Bank the requirement is kept at 0.2%. The additional CET-1 requirement is in addition to the capital conservation buffer and has been prescribed to strengthen these banks’ capital.

7. 5-DAY WEEK, 50% WORKFORCE REQUESTED BY MAHARASHTRA BANK UNIONS: With the recent surge in coronavirus cases due to the new super mutant strain-Omicron, Bank Unions have demanded a 5-day week for bank employees and capping the attendance of the workforce to 50% in Maharashtra till the pandemic scenario improves. Besides this, the unions also urged to consider restricting banking hours till 2 pm on all days. The unions have written letter to State Level Bankers Committee (SLBC). The Unions feel that this will help in reducing the customer intersection time at the branches/offices and will reduce the risk of contamination among the employees and the customers.

8. ICICI BANK FACILITATES PAYMENT OF CUSTOMS DUTY ONLINE: ICICI Bank has announced the launch of a facility for its customers-both retail and corporate to pay customs duty digitally. Corporate customers can pay customs duty through bank’s Corporate Internet Banking and mobile banking app- InstaBIZ, while the retails customers can do so through the bank’s retail banking internet platform.

9. CVC EXPANDS AMBIT OF ADVISORY BOARD ON LARGE SCALE BANK FRAUDS: The Central Vigilance Commission (CVC) has expanded the ambit of an advisory board that conducts first level examination of large bank frauds which now will cover all fraud cases involving an amount of Rs 3 crores and above and examine the role of all levels of officials. Prior to this, the Advisory Board for Banking & Financial Frauds (ABBFF) used to conduct initial examination in all large bank fraud cases of Rs 50 crores and above before recommendations or refences are made to investigative agencies.

1. HDFC Bank TIES UP WITH IPPB TO DELIVER SERVICES IN SEMI-URBAN & RURAL PLACES: HDFC Bank has tied up with India Post Payments Bank (IPPB) to offer its banking services to the unbanked and underserved segments in semi-urban and rural areas. A MoU has been signed between HDFC Bank and IPPB to cater to the majority of over 4.7 crores customer base of IPPB. About 90% of IPPB customers reside in rural areas. This alliance will enable HDFC Bank to provide affordable and diversified offerings, including access to finance to its customers and also to IPPB customers with nearly 2 lakh postal service providers (Postmen and Dak Sevaks) equipped with Micro-ATMs and biometric devices. IPPB has 650 branches and over 1,36,000 banking access points across India.

2. STATE-BACKED BAD BANK SET TO BEGIN OPERATIONS IN JANUARY’22 SECOND WEEK: The long-awaited government Bad-Bank is all set to start its operations from the second week of January 2022. Banks may generate one-off gains as they have already fully provided for those sticky loans (supposed to be transferred to Bad Bank) estimated at about Rs 82,000 crores in about 22 accounts. The Bad Bank plans to recruit as many as 50 professional executives for the Asset Management Company (AMC)—India Debt Resolution Company Ltd (IDRCL). IDRCL’s regulatory framework is being worked out.

3. AXIS BANK IS NOW SECOND LARGEST IN PoS MACHINES: Axis bank has become the second-largest merchant acquiring bank in the country by installing over 2 lakh card-swiping machines (PoS Machines) during the year. This is part of the bank’s “Axis-One” strategy where it approaches the customers offering its entire gamut of products instead of standardised service. By providing the PoS Machines, the bank also looks at the opportunity to open new current account, personal savings account and also explore the possibility of lending and selling insurance. HDFC bank dominates the merchant-acquiring space followed by Axis Bank.

4. BANKING SECTOR TO SEE SIGNIFICANT REFORMS IN 2022: The Banking sector is all set to witness significant reforms in 2022 with the likely privatisation of around two public sector banks and strategic disinvestment of IDBI Bank on the agenda of the government. The banking sector has done reasonably well in 2021, notwithstanding the impact of the second wave of the pandemic. Pursuant to the government’s “Four-R” concept (Recognition, Resolution, Recapitalisation & Reforms), Non-Preforming Assets (NPAs) of the banking sector have declined to Rs 8,35,051 crores as on March 31,2021. Also, with the government’s bad bank to start its operations in January’22, there will be a further reduction in NPA levels.

5. 4,071 BANKING FRAUD CASES INVOLVING Rs 36,342 CRORES IN THE FIRST HALF OF FINANCIAL YEAH 2021-22: During the first half of the financial year 2021-22, the reported number of fraud cases in various banking operations increased to 4,071 cases as against 3,499 reported a year ago during the same period. However, the amount involved in frauds during the said reporting period declined to Rs 36,342 crores as against Rs 64,261 in corresponding period of the previous financial year. This is as per the report by RBI on “Trend & Progress in India 2020-21.”

6. MUTUAL FUNDS ADD Rs. 7 LAKH CRORE TO THEIR KITTY IN 2021: Mutual funds as an investment avenue has won the hearts of investors in 2021 with MF industry adding a whopping 7 lakh crores to their asset base during the year. While it may not be as smooth in 2022 with the Omicron threat in the offing. But experts are hopeful that the impact of the Omicron variant may not be as severe as those witnessed in the first two waves of the pandemic.

7. INCOME TAX DEPARTMENT CAN TRACK 46 KINDS OF FINANCIAL TRANSACTIONS VIA THE ANNUAL INFORMATION STATEMENT: The newly launched Annual Information Statement (AIS) is a comprehensive statement as it contains the details of 46 kinds of the financial transactions (income, investment and expenditure) undertaken by you in a financial year (FY). IAS is an information statement which provides details of all the income received from various sources irrespective of whether tax has been deducted or not on such income. Further, any investments made will also be reflected in the AIS.

8. SBI ALL SET TO EMBRACE NEW RECOMMENDED INTEREST RATE BENCHMARK: State Bank of India is all set to embrace new recommended interest rate benchmarks necessitated as the traditional rate gauge- London Interbank Offered rate (LIBOR) will cease to exist for its day-to-day businesses and pricing. All the systems and processes in SBI are now aligned to support transactions linked to these Alternate Reference Rates (ARR).

1. TOKENISATION OF CREDIT & DEBIT CARD FOR SAFE ONLINE SHOPPING: Henceforth, you would no longer be required to save your 16-digit card number and other details on merchant’s website while doing online shopping. This is very risky as such online sites when hacked, your card details could be leaked. As per the new rules set by RBI, the only way that you can conveniently make online card payment repeatedly is through a process called “Tokenisation”. Tokenisation is a process of converting your card details into a unique token number that is specific to your card and only one merchant at a time. This code masks all your important card details and no one can misuse your card. The start date for tokenisation was from January 1, 2022, but due to the discomfort expressed by various stakeholders in meeting this deadline, RBI extended the date till 30TH June 2022.

2. HSBC TO ACQUIRE L&T MUTUAL FUND FOR Rs 3,250 CRORES: HSBC will acquire the mutual fund business of L&T Finance Holdings for Rs 3,250 crores ($425 million). The deal values L&T Mutual Fund at 4.2% of its Asset Under Management (AUM) which is Rs 78,273 crores. After the completion of the deal, HSBC will merge the operations of L&T MF with its existing Asset Management Business in India.

3. NO CABINET DECISION ON PRIVATIZATION OF TWO PUBLIC SECTOR BANKS: The cabinet has not taken any decision on privatisation of two Public Sector Banks (PSBs) which the government had announced in Budget 2021-22. Speaking on the said topic, Finance Minister Nirmala Sitharaman told that consideration of various issues related to the disinvestment is entrusted to the Cabinet Committee designated for this purpose and the said Committee has not taken any decision on this yet.

4. AXIS BANK PIPS KOTAK BANK, INDUSIND BANK FOR CITI BANK'S CONSUMER BUSINESS IN INDIA: Axis Bank has emerged as the frontrunner to buy Citi Bank’s consumer business in India, pipping rival contenders Kotak Mahindra Bank and IndusInd Bank. Axis and Citi have signed an exclusive agreement to hold bilateral negotiations. Citi is expecting about $ 2 billion from the sale of this India business. The final valuation will be linked to the number of variables including the quantum of deposits, number of customers, partners, quantum of assets and liabilities that move from one franchise to another.

5. BANKS NEED ANOTHER $70 BILLION TO SUPPORT $5 TRILLION ECONOMY TARGET: According to SBI Chairman Mr. Dinesh Khara, Indian Banks will need an additional capital of $70 billion (about Rs 5.3 trillion) to support India’s ambition to become a 5 trillion economy despite being adequately capitalised at present. Mr. Khara said that Indian banks should continue to stay as attractive as they are at present for investors and should also be in a position to raise additional tier-I (AT-1) capital at a fairly reasonable cost.

6. TOP 30 NBFCs NON - PERFORMING ASSETS AT OVER Rs 84, 000 CRORES: Non-Performing Assets (NPAs) of the top 30 Non-Banking Finance Companies (NBFCs), including Housing finance Companies stood at around Rs 84,000 crores as on September 30, 2021. And this is not likely to come down soon after the RBI rejected the industry petition to allow them to standardise NPAs with partial payments. The total NPAs in NBFC sector were at 6.4% of their total exposure at the end of March’21. Further, India Ratings and Research has reported that the RBI’s move on NPA recognition in NBFCs is likely to increase bad loans by around one-third.

7. RBI IS IN FAVOUR OF COMPLETE BANK OF CRYPTOCURRENCY: The Reserve Bank of India has conveyed to its central board that it favours a complete ban on cryptocurrencies. RBI has made a detailed presentation to the board, highlighting serious concerns relating to macroeconomics and financial stability as well as exchange management. RBI also highlighted the challenge of regulating intangible assets that originate overseas.

8. BANKS RAISE CONCERNS OVER RBI'S PLAN TO LAUNCH DIGITAL CURRENCY: Although Central Bank Digital Currency (CBDC) have been discussed for the last few years, a completely operational CBDC has yet to be implemented anywhere. However, in the past few months, counties like Netherlands, Sweden and China have already begun piloting CBDC projects using distributed ledger technology. Banking stakeholders have been raising concerns over the potential drop in deposits, disruption in the debt market, reduction in credit creation and impact on lending rates due to the retail CBDC.

1. Rs 5 LAKHS DEPOSIT GUARANTEE, NOW MANDATORY FOR BANKS TO RETURN THE MONEY WITHIN 3 MONTHS: With deposit insurance coverage of Rs 5 lakhs per depositor per bank, the number of fully protected accounts at the end of previous financial year constituted 98.1% of the total number of accounts, as against the international standard of 80%. Earlier where there was no time limit for refund, now the government has made it mandatory within 90 days in the event of the bank sinking. Likewise, the first tranche of interim payments has been released by Deposit Insurance & Credit Guarantee Corporation (DICGC) recently against claims received from depositors of 16 Urban Cooperative banks. Pay-out of over Rs 1,300 crores has been made to alternate bank accounts of over 1 lakh depositors.

2. RBI COMES OUT WITH PCA FRAMEWORK FOR NBFCs: The Reserve Bank of India has released a Prompt Corrective Action (PCA)framework for Non-Banking Finance Companies (NBFCs), detailing punitive action against NBFCs in case their capital adequacy ratio falls or Non-Performing Assets (NPAs) rise above a certain threshold. The action of the Central Bank comes after a series of jolts in the financial systemin the last 3-4 years. The PCA framework for NBFCs has been put in place to further strengthen the supervisory tools. The new framework will come into effect from October 1, 2022.

3. FOR THE FIRST TIME EVER, ANNUAL SIP INFLOWS CROSS Rs 1 LAKH CRORE MARK: As per the data from the Association of Mutual Funds in India (AMFI), the cumulative inflows from Systematic Investment Plans (SIPs) have crossed Rs 1 lakh crore in a year for the first time. Buoyed by the continued support from retail investors, the domestic flows have partially offset the selling pressure from Foreign Portfolio Investors (FPIs). The previous record SIP flow in a calendar year was Rs 98,612 crores in 2019. The domestic funds deployed Rs 63,439 crores in the equity market while the FPIs invested close to Rs 43,193 crores in the first 11 months of 2021.

4. RBI PROPOSES NEW NORMS FOR CAPITAL REQUIREMENT FOR BANKS: The Reserve Bank of India has proposed to replace the existing approaches for measuring minimum operational risk capital requirements of banks with new Basel-III standardised approach. Operational risk refers to the risk of loss resulting from inadequate or failed internal process, people and system or from external events. RBI has already issued Draft Master Direction in this regard and has sought comments on the draft by January 31, 2022. All existing approaches are proposed to be replaced by the new Basel-III Standardised Approach.

5. GOVERNMENT UNLIKELY TO ANNOUNCE CAPITAL INFUSION FOR PSU BANKS IN BUDGET 2022-23: The government is unlikely to announce capital infusion for Public Sector Banks (PSBs) in the upcoming Budget as their financial has improved on the back of reduction in bad loans. To augment their resources, banks would be encouraged to raise funds from market and also by selling their non-core assets. It is to be noted that the net profit of PSBs has surged to Rs 14,012 crores in the first quarter, which further rose to Rs 17,132 crores in the second quarter of this fiscal. The combined profit of the first half of this fiscal is close to the total profit earned by the banks in the entire previous financial year.

6. SHRIRAM GROUP TO MERGE ALL FINANCE BIZ, SEPARATE ITS INSURANCE BUSINESS: Shriram Group has announced a consolidation exercise that will create India’s largest Financing NBFC. Under the terms of restructuring, Shriram Capital and Shriram City Union Finance, the retail arm of the group will be merged with Shriram Transport Finance. The merged entity will be renamed as Shriram Finance. The merged entity will have 3,605 branches and over 50,000 employees and will manage Rs 1.50 lakh crore of assets. It will spin off its insurance business into a separate entity and thereby sharpen focus on businesses.

7. CABINET CLEARS Rs 1,300 CRORE SCHEME TO PROMOTE RuPay, BHIM TRANSACTIONS: The Cabinet has approved a Rs 1,300 crore incentive scheme to promote RuPay debit cards and boost low-value transactions through the BHIM Unified Payments Interface (UPI) application for one year starting April 2022. The idea is to enable a vast number of people, especially in the marginalised sections of society who are outside the formal banking network, to adopt the digital payment system.

8. HDGC BANK'S LOAN BOOK TO MSMEs CROSS Rs 1,300 CRORES IN UTTAR PRADESH: HDFC bank has reported that its Micro, Small & Medium Enterprises (MSMEs) loan book witnessed a 17% year-on-year growth in Uttar Pradesh. As on September 2021, the bank’s MSME loan book for Uttar Pradesh stood at Rs 13,154 crores. It has offered loans to more than 66,000 MSME units in the state .

1. PUBLIC SECTOR BANKS DISBURSED MOST LOANS TO MSMEs: As per a study conducted by Credit Bureau TransUnion Cibil, Public Sector Banks (PSBs) accounted for the largest share of loans under government’s ECLGS scheme to Micro, Small & Medium Enterprises (MSMEs). Private sector banks were very close behind PSBs but PSBs reached more to tiny borrowers. Out of the applications received under ECLGS scheme, PSBs share was 47% and Private banks did 44% but PSBs have reached out more to tiny borrowers which accounted for 58% of the number of loans.

2. PAYTM PAYMENTS BANK GETS APPROVAL TO FUNCTION AS SCHEDULED PAYMENTS BANK: Paytm Payments Bank has gained RBI’s approval to function as a scheduled Payments Bank. As a scheduled Payments bank, Paytm Payments bank can participate in government and companies’ request for proposals, primary auctions, fixed and variable rate repos and reverse repos, along with participation in Marginal Standing Facility. The bank is also eligible to be a partner in government run financial inclusion schemes.

3. SOON, UPI PAYMENTS CAN BE DONE THROUGH FEATURE MOBILE PHONES: Reserve Bank of India has proposed to introduce UPI-based payment products for feature mobile phones (Basic models). With this, crores of mobile phone users will soon be able to make digital payments, as at present out of the 118 crore users, 74 crore people are using smart phones. This means, once the RBI’s proposal is brought in to action, the remaining 44 crore of basic model mobile phone users will also be able to make digital payments. However, feature phone users will have limited access to innovative payment products.

4. RBI ALLOWS LIC TO DOUBLE ITS HOLDING IN INDUSIND BANK: The Reserve Bank of India has approved Life Insurance Corporation of India (LIC of India) to double its stake in IndusInd Bank. Presently LIC of India holds 4.59% of stake in IndusInd Bank. As per the approval, LIC can now raise its stake to 9.99%. According to the filing, the approval is valid for a period of one year, till December 8, 2022.

5. RBI ALLOWS BANKS TO INFUSE CAPITAL IN OVERSEAS BRANCHES WITHOUT ITS PRIOR PERMISSION: Presently, Indian banks can infuse capital in their overseas branches and subsidiaries and retain profits in these centres or transfer the profits with the prior approval from RBI. Now RBI has allowed the Indian banks to infuse capital in such entities without seeking its prior approval, subject to fulfilling certain regulatory conditions. This has been done with a view to provide operational flexibility to banks.

6. PUBLIC SECTOR BANKS RECOVERED OVER Rs 4.18 LAKH CRORES RELATED TO FRAUD ACCOUNTS IN LAST THREE FISCAL YEARS: Public Sector Banks (PSBs) have recovered over Rs 4.18 lakh crores in the last three financial years from incidents pertaining to frauds and defaults. The amounts related to frauds is of Rs 1 lakh and above. The government has taken comprehensive steps to tackle defaults and to effect recovery from defaulters. The heads of PSBs have been empowered to take action against such people as well as obtain a certified copy of the passport of promoters or directors of companies availing loans of over Rs 50 crores.

7. 421 CASES RESOLVED UNDER INSOLVENCY LAW, 1,149 CASES WENT FOR LIQUIDATION TILL SEPTEMBER 2021: As many as 421 cases involving a realisable value of Rs 2.55 lakh crores were resolved and 1,149 cases having a liquidation value of Rs 52,036 crores went for liquidation under the insolvency law till September 2021. Corporate Insolvency Resolution Process (CIRP) is conducted as per the provisions of the Insolvency and Bankruptcy Code (IBC).

8. RBI WEIGHS PRIORITY SECTOR LOANS FOR ELECTRIC VEHICLES: The Reserve Bank of India is considering a proposal from the Niti Aayog to categorise loans to purchase electric vehicles under the Priority Sector Lending (PSL) segment. If the proposal is accepted, it will help the segment to get credit at lower rate of interest. Currently these loans are given under retail auto category.

9. INDIA POST PAYMENTS BANK, NPCI TIE UP TO LAUNCH DOORSTEP BILL PAYMENTS SERVICE: India Post Payments Bank (IPPB) has said it has tied up with National Payments Corporation of India (NPCI) bill payments system Bharat BillPay to facilitate cash-based bill payments service at customer’s doorstep. Payments for various utility bills can be done on the Bharat BillPay platform and the facility will be made available to non-IPPB customers as well.

10. ICICI BANK OFFERS INSTANT OVERDRAFT FACILITY TO SELLERS REGISTERED ON FLIPKART: ICICI Bank has announced that it has partnered with Flipkart to offer an instant and completely digital Overdraft (OD) facility to individual sellers and businesses registered on the e-commerce platform. Customers of any bank can avail of the OD from ICICI Bank if they are registered as sellers with Flipkart.

1. SBI JOINS HANDS WITH ADANI CAPITAL FOR CO-LENDING TO FARMERS: State Bank of India has joined hands with Adani Capital as a Co-lending partner to provide loans to farmers. The bank has signed a master agreement with Adani Capital Ltd for this. The farmers will get financial assistance for purchase of tractors, to increase efficiency in farm operations and productivity of crops. SBI is looking at co-lending opportunities with multiple NBFCs for financing farm mechanisation. This partnership will also help SBI to expand its customer base and as well help the underserved farmers.

2. INDIA’S NEW CRYPTO LAW SET TO RED-FLAG CHIT FUND, MLM BUSINESS MODELS: Government is set to red-flag several investment schemes launched by individuals and cryptocurrency exchanges that are similar to chit-funds, Multi Level Marketing (MLM) and Systematic Investment Plans (SIPs), as it seeks to build a robust regulatory framework to protect the interest of the public more particularly the vulnerable rural population which may fall prey to such schemes. RBI and SEBI have raised concerns before a parliamentary panel about such schemes with business models resembling Chit-funds, MLM and SIPs.

3. TIGHTER NPA ACCOUNTING COULD INCREASE NBFC BAD LOANS: The Reserve Bank of India’s stricter Non-Performing Asset (NPA) norms for NBFCs is likely to increase bad loans by around one-third for these Non-Banking Finance Companies. However, the impact on provisioning could be modest as the provisioning policies are more conservative than IRAC requirements. NBFC borrowers are usually a weak class of borrowers and have volatile cash flows which could mean that once an account is classified as NPA, it could remain there for a considerable period as the ability of the borrower to clear all overdues at one go may be constrained.

4. KREDITBee PARTNERS WITH Mswipe TO OFFER CARDLESS EMI: Bengaluru based fintech lending platform KredtBee has announced its partnership with Mswipe to offer a fully digital mode of payment—"Cardless EMI” at leading retail stores. Considering the Indian consumer’s increased focus on ease and convenience in services, the idea is to have an integrated 360-degree checkout flow to service their transactions and make it more accessible and hassle free.

5. GOVERNANCE AND TRANSPARENCY IN INDIAN BANKS IS VERY WEAK: Rating agency Standard & Poor (S&P) has said that Indian Banks lack proper governance and transparency. Though they have learnt a good lesson from the recent bad loan surges, they are still way far behind in these departments as compared to global standards. S&P has released a report titled “As India’s Banks Grow Again, will Old Mistakes Return?” in which it says that the lack of improvement in risk management and corporate governance in the growth cycle could produce new crop of bad loans. More follow-through on governance reforms is required, especially for Public Sector Banks.

6. BANKS WRITE-OFF Rs 46,382 CRORES NPA IN THE FIRST HALF OF THIS FINANCIAL YEAR: As per the RBI data on global operations, scheduled commercial banks have written-off bad loans worth Rs 46,382 crores in the first half of 2021-22. As per the RBI guidelines and policy approved by bank boards, Non-Performing Loans in respect of which full provisioning has been made on completion of 4 years, such loans are removed from the balance sheet of the banks concerned by way of write-off.

7. CREDIT CARD SPENDS JUMP BY 12% TO CROSS Rs 1 LAKH CRORE MARK: Spending through credit cards grew by 12% in October 2021 to cross Rs 1 lakh crore for the first time. This is driven by a robust 26% growth in the previous month led by HDFC Bank and ICICI Bank. The banking system saw a net addition of 13,36,000 new credit cards in October 2021. This takes the total credit cards to 6.64 crores, a growth of 11.7% annualised growth. More significantly, monthly total card spendings crossed the Rs 1 lakh crore mark for the first time at Rs 1,01,200 crores.

8. SHRIRAM CITY RECORDS HIGHEST EVER 2-WHEELER LOANS: Shriram City Union Finance, the Chennai based leading two-wheeler lending NBFC and part of Shriram group has disbursed the highest ever loans amounting to Rs 1,022 crores by financing 1.6 lakh two-wheelers in November 2021. The attractive financing offers during the festive season have stood out as one of the keys to this success. With an additional push by the increase in people movement and recovery in rural demand with increasing demand for electric vehicles (EVs), the company foresees a rise in the average loan ticket size which will help the company in touching new milestones.

1. GOVERNMENT TO HELP RESTART THE CLOSED MSMEs DURING PANDEMIC: The government is planning to provide help to the Micro, Small & Medium Enterprises (MSMEs) which were closed during the Covid-19 pandemic. Restarting these closed units will create new jobs and will raise the production and GDP. A high-level meeting of ministers along with the Prime Minister has already happened in this regard and plans are being finalised.

2. PMC BANK DEPOSITORS WITH OVER Rs 5 LAKH DEPOSITS TO GET PAID IN FULL IN OVER 10 YEARS: The Reserve Bank of India has released the draft scheme for the amalgamation of Punjab & Maharashtra Co-operative Bank Ltd (PMC Bank) with Unity Small Finance Bank (Unity SFB). Unity Small Finance Bank is promoted jointly by Centrum Financial Services and BharatPe owner Resilient Innovation. The scheme envisages a full payment for depositors with deposits of over Rs 5 lakhs over a period of 10 years. However, the depositors with less that Rs 5 lakh deposits will get their full amount within 90 days’ time. Unity SFB will have to transfer the amount received from Deposit Insurance & Credit Guarantee Corporation (DICGC) to all eligible depositors of PMC bank an amount equal to the balance in their deposit accounts up to Rs 5 lakhs within 90-day period.

3. 300% JUMP IN MICROFINANCE LOANS DURING APRIL-JUNE QUARTER OF THIS FISCAL: Despite the second Covid wave, the Microfinance Industry (MFI) has disbursed Rs 25,808 crores of loans during April-June 2021 quarter, a 300% jump in volumes from 6,460 crores disbursed during the same period last year when Covid first wave was rampant. However, the disbursement showed a decline of 72% in comparison to Rs 94,001 crores of loans that were disbursed in January-March 2021 period. This is as per a quarterly report titled “Microfinance Pulse” by SIDBI and Equifax India.

4. BANK PRIVATISATION NOT IN ONE GO, GOVERNMENT MAY RETAIN 26% STAKE IN PSBs: The government may not fully exit from the two state-run banks that are slated to be privatised and may retain at least 26% stake for the first few years. The extent of stake sale will depend upon the interest from investors and market conditions. The government will introduce a bill in the winter session of the parliament to make the changes needed before privatising the two banks. As per Niti Aayog recommendations, Central Bank of India and Indian Overseas Bank are the two banks being short listed for privatisation. However, a final decision is yet to be taken.

5. GST COULD SEE MAJOR REVAMP: REDUCING TAX SLABS AND PRUNING OF EXEMPT LIST ARE ON THE CARD: Government could be eyeing a significant revamp of the Goods & Services Tax (GST) structure as the regime completes 5 years in July 2022 when the compensation to states is set to come to an end. Tax slab restructuring and reducing the exemptions could be considered in the most comprehensive makeover of the single tax that was rolled out in July 2017.The new regime may have just 3 major tax slabs of 5%, 12% and 18% as against the existing four slabs. The recast will aim at simplifying the regime as well as lift revenue.

6. ICICI BANK TO OPEN TRADE PLATFORM TO NON-CUSTOMERS—EYEING FOR MARKET SHARE GAINS: After gaining market share in retail banking and credit cards, ICICI Bank plans to open its trade platform for use by non-customers of the bank to gain a bigger chunk of the market. It has launched a new trade platform which will allow exporters and importers to access services like letter of credit, bank guarantee, forex, payment and collections and also value-added services like credit bureaus and shipment booking.

7. BCIC EXPERT PANEL CALLS FOR EFFORTS TO LINK FINTECH FIRMS AND BANKS TO SET UP SUPPORT TO MSME: A 5-member expert committee of the Bangalore Chamber of Industry & Commerce (BCIC) has called for efforts to link up partnerships between Fintech Companies and Banks to set up lending channels to Micro, Small & Medium Enterprises (MSMEs). The pandemic after-effects have left the MSME sector in deep pains which has provided the largest number of jobs in the organised sector.

8. NITI AAYOG FLOATS THE IDEA OF SETTING UP OF FULL-FLEDGED DIGITAL BANKS WITHOUT PHYSICAL BRANCHES: Niti Aayog has floated the idea of setting up full-stack “Digital Banks”, which would primarily work on the internet and other proximate channels to offer their services, instead of physical branches. These proposed banking will help mitigate the financial deepening challenges being faced by the country. These entities will entirely work through internet or other proximate channels instead of physical branches and will issue deposits, give loans and offer the full set of services that the Banking Regulations Act empowers them to.

1. IDFC FIRST BANK PARTNERS WITH HPCL TO FACILITATE FUEL PAYMENTS USING FASTag: IDFC First Bank has partnered with Hindustan Petroleum Corporation Ltd (HPCL) for enabling its customers to make fuel payments at HPCL petrol pumps using the bank’s FASTag. In addition to this, IDFC FASTag can also be bought, recharged and replaced at select petrol bunks of HPCL. IDFC First Bank has issued nearly Five million FASTags and these tags are actively used by motorists across toll plazas with transactions averaging to two million per day.

2. FRESH ROUND OF BAD LOANS LIKELY IF CREDIT MORATORIUM ENDS: The Government, last year had introduced the Emergency Credit Line Guarantee Scheme (ECLGS) to help support businesses hit by the pandemic. Under the scheme, the government provides 100% guarantee coverage to banks and NBFCs on loans disbursed to small businesses under the scheme. With the one-year moratorium on ECLGS ending soon, banks and NBFCs are concerned that as soon as the moratorium ends, the borrowers have to start paying principal dues and this could give rise to fresh round of bad loans.

3. NPCI TAKES UPI GLOBAL, TIES UP WITH PRPO: The International arm of National Payments Corporation of India, NIPL (NPCI International Payments Ltd) and PRPO, a leading global provider of local payments infrastructure have signed a Memorandum of Understanding (MOU) to expand and empower international growth of India’s digital payments ecosystem. The agreement aims at expanding RuPay and UPI acceptance across PRPO’s global clients such as Payment Service Providers (PSPs) and global merchant acquirers.

4. RBI WORKING GROUP RECOMMENDS A SEPARATE LAW TO PREVENT ILLEGAL DIGITAL LENDING: A Reserve Bank of India (RBI) working group has recommended a separate legislation to prevent illegal digital lending activities. RBI had constituted a working group on digital lending including lending through online platforms and mobile apps in January this year. The panel was set up in the backdrop of business conduct and customer protection concerns arising out of the spurt in illegal digital lending activities. The thrust of the panel report has been on enhancing customer protection and making the digital lending ecosystem safe and sound.

5. SBI SIGNS PACT WITH U GRO CAPITAL FOR FINANCING MSMEs: State Bank of India has entered into a Co-lending agreement with UGRO Capital to offer strategic financing solutions to the unserved and underserved Micro Small & Medium Enterprises (MSMEs) in line with RBI guidelines. SBI is looking at co-lending opportunities with multiple NBFCs through their products for financing the MSMEs. This initiative will financially empower needy MSMEs and further drive financial inclusion in the country.

6. RBI’s ASSET CLASSIFICATION NORMS ON NBFCs WILL INCREASE NBFC NPAs: The Clarification on asset classification norms issued by RBI which brings Non-Banking Finance Companies (NBFCs) on par with banks in classification norms, could lead to spurt in bad loans of NBFCs, including among MSME borrowers. As per RBI, loan accounts can be upgraded to standard asset category only if all the arrears of interest and principal are paid by the borrower.

7. 40% OF BORROWERS PREFER ONLINE MODE FOR SECURING LOAN: According to a survey--- “How India Borrows” (HIB) conducted by financial firm Home Credit India, nearly 40% of borrowers showed willingness to move to digital platforms for taking loans. This is over and above the 15% customers who have already shifted to the online loan platforms instead of traditional offline channels. Post the second wave of Covid-19 pandemic, a large consumer borrowing through digital mode is seen which can be attributed to an increase in digital penetration during the Covid-19 period.

8. KOTAK MAHINDRA BANK AND PVR LAUNCH A CO-BRANDED DEBIT CARD: PVR Cinemas has partnered with Kotak Mahindra Bank to launch first of its kind co-branded debit cards. Kotak-PVR debit card holders will receive joining vouchers and earn points on every transaction on the debit card, with no upper limit on the points earned. Points can be redeemed throughout the year on PVR movie tickets and on food & beverages at PVR. The two companies already have two co-branded credit cards, currently used by around 3 lakh users.

9. NEARLY 30% OF INDIAN POPULATION DO NOT HAVE ANY HEALTH INSURANCE: 30% of India’s population or nearly 42 crores of people in India do not have any health insurance with actual numbers being higher due to gaps in the existing scheme and overlap between schemes. This is as per a report by NITI Aayog. Further, NITI Aayog has suggested the need for covering this segment of population with low-cost health insurance product if India aims to achieve universal health coverage.

1. RBI ASKS BANKS NOT TO STANDARDISE NPA ACCOUNTS ON JUST RECEIVING INTEREST PAYMENTS: The Reserve Bank of India has tightened the norms related to NPA accounts. It has directed banks not to regularise NPA accounts (bad loans) if they receive only the interest payments in respective accounts. It has also made it mandatory for banks to mention the due dates of payment of principal amount along with details of interest. It was observed that some banks were upgrading NPA accounts to standard assets on payment of only interest amount. So, to avoid any further ambiguity, RBI has notified this rule now.

2. BANKS WANT MORE PROVISIONS TO BE INCLUDED AS STATUTORY CAPITAL: At present, because of the regulatory cap, provisions only to the extent of 1.2% of the Credit-risk weighted assets are considered as Tier-II capital. Banks have urged to relax norms and allow more provision made towards unidentified losses to be reckoned as statutory capital. Finance Ministry, in its monthly report has said that India is on its way to becoming the fastest growing major economy. So, if the said cap is removed or increase the percentage then banks will benefit from the additional provisions made by them.

3. INDIVIDUALS CAN NOW DIRECTLY BUY GOVERNMENT SECURITIES FROM MARKET THROUGH RBI’s RETAIL DIRECT SCHEME: Through RBI’s Retail Direct Scheme launched by the Prime Minister, individuals can now directly purchase treasury bills, dated securities, sovereign gold bonds (SGB), and State Developments Loans (SDLs), from primary or secondary markets. As per the scheme, retail investors will have the facility to open an online Retail Direct Gilt Account (RTG Account) with the RBI and it can be linked to their savings bank account. Along with this scheme, the Prime Minister also launched the Reserve Bank-Integrated Ombudsman Scheme (RB-IOS) which is aimed at further improving the grievance redress mechanism for resolving customer complaints.

4. INDIA NOW AHEAD OF CHINA IN FINANCIAL INCLUSION METRICS: Boosted by Pradhan Mantri Jan-Dhan Yojana, digital infrastructure and usage of banking Correspondents (BCs) model for furthering Financial Inclusion, the number of bank branches per 1 lakh adults in India rose to 14.7 in 2020 as compared to 13.5 in 2015. This ratio is higher than Germany, China and South Africa. This is as per a report by SBI. The report, which is authored by Soumya Kanti Ghosh, SBI’s Group Chief Economy Advisor, states that financial inclusion policies have a multiplier effect on economic growth, reducing poverty and income inequality.

5. NBFCs SOURCE MAJORITY LOANS FROM DIGITAL CHANNELS POST COVID: The Covid-19 pandemic has accelerated the pace of customer acquisition through digital channels by Non-Banking Finance Companies (NBFCs). Several NBFCs have focussed on digital channels for loan applications and even loan approvals which helped with business continuity. Many mid-sized NBFCs are also focussing on digital means to increase loan and deposit business. For example, Shriram City Union Finance currently receives 60% of its collections via digital mode where customers can pay via digital wallets or company generated hyperlink.

6. SIPs AT NEW HIGH, BUT EQUITY SCHEMES GET LOWER INFLOWS: Systematic investment Plans (SIP) of Mutual Funds continued to post healthy progress in October 2021and hit a new high of Rs 10,518 crore. The SIP collections for September’21 were Rs 10,351 crores. But Equity mutual funds witnessed lower net inflows of Rs 5,214 crores in October’21 as compared to Rs 8,677 crores collection in the previous month.

7. SBI, PNB, ICICI BANK, AXIS BANK REPORT SHARP INCREASE IN BAD LOAN RECOVERIES: State Bank of India (SBI), Punjab National Bank (PNB), ICICI Bank and Axis Bank have reported a sharp increase in bad loan recoveries in the second quarter of this financial year. This is largely due to improvement in retail collections that had fallen sharply in the first quarter because of the pandemic effect. Analysts are of the opinion that the improvement in recoveries is another indicator of improving consumer sentiment and is a start of better asset quality for banks in the immediate future.

8. RBI LIFTS THE BAN IMPOSED ON DINERS CLUB: The Reserve Bank of India has lifted the ban imposed on Diners Club International in April’21 from adding new customers for flouting data storage norms. The ban was lifted after Diners was found to have complied with the stipulated rules. In April’21, RBI had barred three US based card networks namely Mastercard, American Express and Diners Club International from doing new business in India as these companies were found to be flouting with the local-data storage rules set by RBI.

1. CITI BANK TO FOCUS ON INSTITUTIONAL BANKING IN INDIA: Citi Bank India, while exiting from its retail business, is planning to introduce Lease Rental Discounting (LRD) for top commercial real estate companies in India. LRD is a globally popular credit instrument offered against rental receipts. The bank will be setting up a separate team and infrastructure for this service line. The average tenure of LRD may be in the range of 5 to 7 years. This could give a boost to Citi’s growing institutional approach.

2. RBI REVISES PCA FRAMEWORK FOR BANKS: The Reserve Bank of India has reviewed and revised the existing Prompt Corrective Action (PCA) framework for scheduled Commercial Banks (SCBs) and the changes will be effective from January 1, 2022. RBI said, the PCA framework would apply to all banks operating in India including foreign banks operating in India. A bank would be placed under PCA based on the audited annual financial results and ongoing supervisory assessment made by RBI. Capital, asset quality and leverage of the banks are some of the key areas that will be taken into consideration for monitoring.

3. SBI LAUNCHES PRE-APPROVED 2-WHEELER LOAN “SBI EASY RIDE” ON YONO APP: State Bank of India has launched “SBI-Easy Ride” , a pre-approved two-wheeler loan scheme through its digital platform YONO. The pre-approved 2-wheeler loan will be available to all its customers through YONO app without visiting any of its branches. Customers can apply for the 2-wheeler loan for upto Rs 3 lakhs and a minimum of Rs 15,000/- at 10.5% interest rate. The tenure of the loan will be for a maximum period of 48 months. The loan will be disbursed directly into the dealer’s account.

4. RBI APPOINTS BANDHAN BANK AS AGENCY BANK: The Reserve Bank of India has authorised private lender Bandhan Bank as its agency bank for undertaking government business. The appointment would allow Bandhan Bank to undertake government business on behalf of RBI. With this, Bandhan bank joins ranks with a few other scheduled private sector banks to be empanelled as agency banks for RBI. Now Bandhan bank will be able to handle transactions related to the collection of state taxes and revenue receipts such as VAT and GST, collection of stamp duty and pension payments on behalf of Central and State governments.

5. NPA ACCOUNTS—CENTRE TO ISSUE UNIFORM NORMS FOR STAFF ACCOUNTABILITY: At present, different banks are following different procedures for conducting staff accountability exercise on all NPA accounts. Recently the Department of Financial Services (DFS), under Ministry of Finance, vide its order dated October 29 has advised broad uniform guidelines to be adopted by all Public Sector Banks (PSBs) on Staff Accountability Framework for NPA Accounts up to Rs 50 crores. The guidelines will be implemented from April 1, 2022 for accounts turning Non-Performing Assets (NPAs) beginning next financial year.

6. SBI LAUNCHES “VIDEO LIFE CERTIFICATE” FACILITY FOR PENSIONERS: With an aim to offer seamless life certificate submission experience for millions of pensioners, SBI has announced the launch of the Video Life Certificate (VLC) facility. However, this facility is not available for Family Pensioners. Pensioners can schedule a video call with SBI staff from the comfort of their homes at their convenience and complete the process of life certificate submission without having to visit the bank branch.

7. POOR CORPORATE LOAN GROWTH AND THIN MARGINS HIT BANKS’ NET INTEREST INCOME: Deposit rate cuts have been less frequent so far in the financial year and with lending rates continuing to trend down, Net Interest Income (NII) of banks have come under pressure. As loan growth in corporate sector has slowed down and overall low interest on other loans has put a lid on margins. Most large banks have seen their Net Interest Income (NII) slide during the first half of this financial year.

8. SBI DECLARES HIGHEST EVER QUARTERLY PROFIT: State bank of India has recorded its highest ever quarterly net profit of Rs. 7,627 crores for the quarter ended September 2021, up by 67% from Rs. 4574 crores in the previous year. This has been possible due to growth in retails loans and a marked improvement in asset quality which reduced provisions. Total advances grew by 6% driven by personal loans which grew by 15% and a 11% growth in home loans which covered a 4% fall in corporate loans. Now Home loans constitute 24% of the bank’s domestic advances. The bank hopes to grow its loan book by 10% for this fiscal end of March 2022.

1. LENDING CAP ON NBFCs MAY OFFER BIG OPPORTUNITIES TO SMALL PLAYERS: The Reserve Bank of India has imposed new lending caps on large Non-Banking Finance Companies (NBFCs) against funding initial share sales. This may throw up big opportunities for small players in last-mile financing. Such funding was earlier done by big NBFCs like Bajaj Finance, IIFL, JM Financials etcetera. Now many small NBFCs are likely to enter the estimated Rs 80,000 crore short term funding market.

2. GOVERNMENT MAY NOT INFUSE CAPITAL INTO STATE RUN BANKS IN FY-23: The government may not infuse/allocate funds towards bank capitalisation in Financial Year 2023 budget. This will be a first instance since the last decade. This comes as all state-run banks have turned profitable and the newly set up Bad Bank is expected to free up capital for lenders. Besides these profits, many a bank have plans to raise capital from the markets. For FY-22, the government had set aside Rs 20,000 crores for bank capitalisation. The government also opines that as the economy recovers, they don’t expect bad loans to rise substantially putting pressure on Banks’ financials. But the government will always support them if needed.

3. 5,000 SMEs TO SUFFER HUGE LOSSES IF COAL CRISIS IS NOT ADDRESSED: According to the Indian Industrial Value Chain Council (IIVCC) more than 5,000 Small & Medium Enterprises (SMEs) which are part of the aluminium value chain, are at the risk of suffering huge losses if the ongoing coal crisis faced by the aluminium industry is not urgently addressed. The development assumes significance as Coal India, which accounts for 80% of domestic coal output is prioritising coal supply to the power sector in view of the low stock position at thermal power plants. A large section of SMEs whose businesses are totally linked to the aluminium industry are staring at a bleak future as acute shortage of coal for these non-power sector (particularly aluminium manufacturers) , puts these plants at the risk of a sudden closure.

4. GOVERNMENT CONSULTS RBI FOR LIBERAL PSB SALE NORMS, LOOKS FOR BIGGER POOL OF BIDDERS: The government is in consultation with Reserve Bank of India on a special framework for privatisation of Public Sector banks (PSBs) that would allow bids from big corporate-owned NBFCs and as well as global sovereign wealth funds. This could help speed up the disinvestment of PSBs. If this is approved then it will pave the way for corporate ownerships of banks, which at present is a highly regulated space with lot of restrictions for such biddings.

5. INDIA POST PAYMENTS BANK TEAMS UP WITH HDFC FOR OFFERING HOME LOANS: India Post Payments Bank (IPPB) and HDFC have entered into a strategic alliance to offer home loans to nearly 4.7 crore customers of IPPB. Leveraging its country wide network of 650 branches and over 1,36,000 banking access points (Post Offices), IPPB aims to make HDFC’s home loan products and its expertise available to its customers across India. This will facilitate home loans to customers in unbanked and underserved areas with most of them having little or no access to finance.

6. CCI APPROVES HDFC BANK’S ACQUISITION OF 4.99% STAKE IN HDFC ERGO GENERAL INSURANCE CO: Fair Trade regulator Competition Commission of India (CCI) has approved HDFC Bank’s acquisition of 4.99% shareholding in HDFC Ergo General Insurance Co. In June’21 HDFC Bank’s board had approved to buy 3.55 crores (4.99%) shares of HDFC Ergo General Insurance Co from its parent company, HDFC Ltd. This has been approved by CCI now. The proposed acquisition will enable HDFC Bank to participate in the growth opportunity of HDFC Ergo General Insurance Co.

7. SHAKTIKANTA DAS RE-APPOINTED AS RBI GOVERNOR FOR THREE MORE YEARS: The government has re-appointed Mr Shaktikanta Das as the Reserve Bank of India Governor for 3 more years. The re-appointment is effective from December 10, 2021. Mr Das was appointed as RBI Governor on December 11, 2018 for a period of three years.

8. YES BANK LAUNCHES “YES-FAMILY ACCOUNT” TO FULFILL THE NEEDS OF ENTIRE FAMILY MEMBERS: Yes Bank has launched its YES Family Proposition, which offers services and privileges for the entire family of an account holder. The bank claims that the offering is packed with exclusive benefits which have been curated carefully. The key attraction of the proposition include free domestic ATM withdrawals, flexibility to maintain minimum balance across family accounts, dedicated Relationship Manager for the entire Family, Yes Reward points on banking transactions, Family healthcare benefits, competitive interest rates on deposits and loan products and discounted locker rentals for the entire Family.

1. PSU BANKS LIKELY TO GET CAPITAL SUPPORT FROM THE GOVERNMENT IN Q-4 TO MEET REGULATORY REQUIREMENTS: The government is likely to pump in capital in Public Sector Banks (PSBs) during the last quarter of this financial year to meet the regulatory requirements. The government in the Budget-2021-22 has made an allocation of Rs 20,000 crores for capital infusion in PSBs. The capital position of all PSBs would be reviewed in the next quarter, and depending on the requirement, the infusion will be made to meet the regulatory needs.

2. AXIS BANK TO WAIVE 12 EMIs ON SELECT HOME LOANS: Axis bank has announced that it would waive 12 Equated Monthly Instalments (EMIs) on select home loan products as part of its festival offer. For business loans it will offer several benefits on term loans, equipment loans and vehicle finance. The bank has also announced several deals and discounts on purchases made through Axis Bank debit and credit cards.

3. RBI TIGHTENS RULES FOR NBFCs FUNDING IPOs: The Reserve Bank of India has announced a limit on Non-Banking Finance Companies (NBFCs) financing subscriptions to initial share sale to stem the flow of large amounts of borrowed capital by high-net-worth individuals to such offerings. There will be a ceiling of Rs 1 crore per borrower for financing subscription to Initial Public Offer (IPO). NBFCs can fix more conservative limits. The new rule will be effective from 1ST April 2022.

4. GROSS NPAs OF BANKS TO RISE TO 8—9% THIS FISCAL: According to a report by rating agency Crisil, the Gross Non-Performing assets (GNPAs) of banks are expected to increase to 8—9% in the current financial year. According to Crisil, the Covid-19 relief measures such as the restructuring dispensation and the Emergency Credit Line Guarantee Scheme (ECLGS) will help restrict the GNPA to 8---9%. However, this is well below the peak GNPA of 11.2% at the end of fiscal 2018.

5. MOODY’S UPGRADES OUTLOOK FOR INDIAN BANKING SYSTEM: Moody’s Investors Service has revised the outlook for Indian Banks to stable from negative. Moody’s expects India’s economy to continue the recovery in the next 12-18 months, with GDP growing at 9.3% in the fiscal year ending 2022 and 7.9% in the following year. This will drive credit growth to the extent of 10 to 13% annually. According to Moody’s, the deterioration of asset quality since the onset of coronavirus has been moderate and improving operating environment will support asset quality. Declining credit costs as a result of improved asset quality will lead to improvement in profitability.

6. BANKS FLAG CONCERN OVER USA’S RULES ON CONSUMER DATA, SEEK GOVERNMENT GUIDANCE: Indian Banks have raised concerns over the mandatory sharing of customer details with USA under the country’s expanded National Défense Authorization Act (NDAA) which took effect from January 1, 2021. Indian Banks’ Association (IBA) has sought government intervention and guidance on the issue as banks have pointed out that the provision will raise the costs and any compliance shortfall can have serious implications.

7. NATIONAL ASSET RECONSTRUCTION COMPANY—FIRST SET OF NPA TRANSFER TO HAPPEN BY JANUARY 2022: The National Asset Reconstruction Company (NARCL), or the so-called Bad Bank is expected to witness the transfer of the first batch of bad loans worth about Rs 90,000 crores by the end of January 2022. Earlier this month the NARCL got its licence from the RBI to start operations. Some large stressed bad loans have been already identified and their transfer is unlikely to be delayed beyond late December 2021 or early January 2022. The asset transfer will be a decisive step towards the resolution of large stressed assets worth Rs 2 lakh crores in the banking industry.

8. MUDRA LOAN NPAs RISE AS COVID HITS MSMEs: The pandemic has hit small businesses harder than their larger counterparts and that may be putting pressure on loan availed by these small concerns particularly the Mudra Loans. The ratio of Gross Non-Performing Assets (GNPAs) in the loans outstanding under the Pradhan Mantri Mudra Yojana (PMMY) stood at 11.98% as on March 31, 2021. This has been announced by Micro Units Development & Refinance Agency (MUDRA) in response to a Right to Information (RTI) query.

9. OVER 2 CRORE ITR FILED, AS THE NEW PORTAL STARTS STABILISING: Central Board for Direct Taxes (CBDT) has stated that a number of technical issues in the new income tax portal have been resolved and the performance of the portal has substantially stabilised. With this, over 2 crores Income Tax Returns (ITR) have been filed so far for the financial year 2020-21.

1. SUNDARAM FINANCE TO LOOK AT CO-LENDING TO ADD MORE ASSET CLASSES: Sundaram Finance which has a strong lending business in truck finance is preparing for the next phase of growth by funding various other classes of assets amid a possible boom in rural incomes and the government’s infrastructure projects. Sundaram Finance would further leverage digital, technology and data without compromising on its ethics of safety and customer orientation.

2. FIVE BANKS MAY BID FOR CITI BANK’S CONSUMER BUSINESS: Five top banks including HDFC Bank, and Kotak Mahindra Bank Ltd are expected to submit binding bids for the Citi Bank’s consumer businesses before October 24TH. Axis bank, IndusInd Bank and DBS Bank are also in contention for the business Citi is exiting in India. Although the US based bank is seeking a valuation of around $ 2 billion, the bids could be more circumspect after Citi lost significant market share in its retail and credit card books.

3. RBI AUTHORISES KARUR VAISHYA BANK TO COLLECT DIRECT TAXES: Karur Vaishya Bank has commenced the integration process with the Central Board of Direct Taxes to collect direct taxes on its behalf, following the Reserve bank of India’s approval to collect direct taxes. Once the integration process gets completed, the bank customers can remit the direct taxes through any branch of Karur Vaishya Bank or through net banking.

4. BANK FDs TO FETCH NEGATIVE REAL INTEREST WITH ELEVATED INFLATION: Last week RBI said that the Consumer Price Index (CPI)-based inflation is now projected to be at 5.3% for 2021-22 with risks evenly balanced. With this retail inflation exceeding the FD interest rates, senior citizen and others depending upon FD interest income for their survival will be at the receiving end. At this level with fixed deposits offering lesser rate of interest would earn a negative intertest.

5. KOTAK MAHINDRA BANK LAUNCHES MICRO ATMs ACROSS INDIA: Kotak Mahindra Bank has announced the launch of its Micro ATMs across India. This will help the bank to deliver essential banking services conveniently to a larger section of consumers living in relatively remote areas. Customers of other banks also would be able to use Kotak Micro ATM for key banking services such as cash withdrawal and balance checking. Micro ATMs are small handheld device—a mini version of an ATM. The bank will use its extensive Business Correspondents (BC) network to launch Micro ATMs.

6. FIVE FOREIGN INVESTORS SHORTLISTED FOR MAJORITY STAKE IN YES BANK BACKED ARC: Five foreign investors have made presentations to the YES Bank management to form a joint venture Asset Reconstruction Company (ARC) that will house the bank’s bad loans. The investors who have made the presentations include Los Angeles based Ares-SSG Capital, Varde Partners, distressed loans giant Oaktree Capital and private equity company KJC Flowers.

7. CRYPTOCURRENCY – INDIA AMONG TOP 10 NATIONS WITH MOST AWARENESS: Even as Modi government looks to regulate the cryptocurrency ecosystem in India, the craze around Bitcoin and other cryptocurrencies among users in India is significant. Based on the total global searches over the last 12 months, the number of crypto owners, the global crypto adoption index and other factors, India is currently 7TH most crypto aware country. This is a s per a report and study by the discovery broker and comparison platform BrokerChooser.

8. CREDIT GROWTH TURNS POSITIVE FOR THE FIRST TIME IN THIS FINANCIAL YEAR: Credit growth turned positive for the first time in this financial year 2021-22 at 0.1% in September 2021. This reflects a gradual pick-up in demand. According to RBI data, bank lending rose by Rs 7,283 crores till September 24, 2021 showing a 0.1% increase. Outstanding bank credit stood at Rs 109.56 trillion as on September 24, 2021. This positive growth has happened despite a more debilitating impact of the second wave of Covid-19 pandemic.

9. HDFC BANK REPORTS 17.6% JUMP IN NET PROFITS IN Q-2 RESULTS: HDFC Bank has reported a 17.6% year-on-year rise in net profits at Rs 8,834.30 crores for September quarter as compared with Rs 7,513.11 crores in the year-ago quarter. Gross Non-Performing Assets (GNPA) as percentage of gross advances came in at 1.35% compared with 1.47% in June quarter. Excluding NPA in agriculture segment, NPAs for September quarter came in at 1.2%.

1. RBI SAYS IT IS REVIEWING THE SCHEME TO PENALISE BANKS FOR DRY ATMs: In August’21 RBI had announced that it will penalise banks for failure of timely replenishment of currency notes in ATMs to avoid cash-out situations. As part of the circular, a penalty of Rs 10,000/- per ATM was initiated in the event of a cash-out situation for more than 10 hours in a month. This circular is effective from October 1, 2021. But many banks had approached RBI seeking relaxation in this scheme citing issues of replenishing ATMs in rural areas that could significantly push costs and make business unviable. Based on the inputs received from the banks, RBI said it is in the process of reviewing the said scheme.

2. IMPS TRANSACTION DAILY LIMIT INCREASED TO Rs 5 lakh: Reserve Bank of India has increased the transaction limit of Immediate Payment Service (IMPS) to Rs 5 lakhs from the current Rs 2 lakhs. In view of the importance of IMPS system in processing of domestic payment transactions, it is proposed to increase the limit for channels other than SMS and Interactive Voice Response Systems (IVRS). This will lead to further increase in digital payments and will provide an additional facility to customers for making digital payments beyond Rs 2 lakhs.

3. RBI TO INTRODUCE INTERNAL OMBUDSMAN FOR CERTAIN NBFCs FOR GRIEVANCE REDRESSAL: Reserve Bank of India has said that it will soon introduce Internal Ombudsman Scheme for certain categories of Non-Banking Financial Companies (NBFCs) having higher customer interface to strengthen the internal grievance redress mechanism of NBFCs. The increased significance, strength and reach of certain NBFCs across the country has necessitated this step for better customer experience including grievance redress practices.

4. DEEPENING ENERGY CRISIS IN INDIA RAISES INFLATION ALARM: Higher oil prices and acute shortage of coal is a risk factor for increase in inflation and slowing economic growth in India. Coal shortage means factories could shut down, forcing the country to import more fossil fuels at a time when crude prices are at a 7-year high are already weighing on India. This is a negative economic shock, since it will result in higher inflation, lower growth and potentially widen deficit.

5. SBI LAUNCHES NAV-eCASH CARD:Taking Digital India at high seas, the Indian Navy and State Bank of India have launched SBI’s NAV-eCASH card onboard India’s largest naval Aircraft Carrier INS Vikramaditya. The said launch of NAV-eCASH card is an important milestone for digital payment solutions. The unique infrastructure at naval ships inhibits traditional payment solutions particularly when the ship is on high seas where there is no connectivity. NAV-eCASH card will, facilitate both online and offline transactions.

6. HOUSING SALES UP BY 92% IN SECOND QUARTER OF THIS FISCAL, BREACHES PRE-COVID LEVEL:Housing demand has breached pre-Covid levels with 92% year-on-year growth in sales during July-September quarter of this financial year. This as per the data from 8 major cities, mainly on the back of stable prices, very low loan interest rates and changing customer attitude towards home ownerships.

7. ARTIFICIAL INTELLIGENCE MARKET IN INDIA TO REACH $ 7.8 BILLION BY 2025: The artificial Intelligence (AI) market in India is expected to grow at a 5-year compound Annual Growth Rate (CAGR) of 20% and touch USD 7.8 billion by the year 2025. This is according to a report submitted by research firm IDC. The businesses in India will adopt both AI-centric and AI-non centric applications for the next five years. AI software segment is expected to dominate the market and grow from USD 2.8 billion in 2020 at a CAGR of 20% to touch USD 7.8 billion in 2025.

8. PMC BANK AT AN ADVANCED STAGE OF RESOLUTION: Punjab & Maharashtra Co-operative Bank Ltd (PMC Bank) was on the brink of collapse when the regulator seized it on 24TH September 2019. In June’21 RBI had cleared the decks for its takeover by Centrum and BharatPe. Reserve Bank of India is examining an application filed by Centrum Financial Services and fintech Startup BharatPe for a licence to set up a small finance bank and takeover PMC Bank. Once the final licence is approved, it will go ahead with the draft scheme and getting the requisite approvals for the takeover.

9. BANK OF MAHARASHTRA LAUNCHES DIGITAL LENDING PALTFORM FOR HOME AND CAR LOANS: Bank of Maharashtra has launched a digital lending platform for its home and car loans. The platform will enable its customers and prospective retail loan seekers to get loans digitally through a paperless process at the convenience of their place and time of choice. The platform is capable of validating KYC, CIBIL and financials of the applicant and provide in-principle approvals in a hassle free manner.

1. DHFL LENDERS SET TO MAKE A RECOVERY OF Rs 37,400/-, THE BIGGEST AMONG NPA RECOVERY THIS FISCAL: Banks led by State Bank of India are set to make recoveries worth Rs 37,400 crores as Piramal Capital & Housing Finance’s (PCHF) acquisition of Dewan Housing Finance Corporation (DHFL) should be completed this month. Banks will get a mix of upfront cash and Non-Convertible Debentures (NCDs) due in seven years to complete the recovery process which is billed as the biggest recovery of stressed assets this year. The cash component will help the banks to write back provisions on these advances and potentially will boost their bottom lines in the second quarter of this fiscal.

2. INDIA NEEDS 4 TO 5 MORE SBI SIZE BANKS TO MEET CHANGING REQUIREMENTS OF ECONOMY: Finance Minister Nirmala Seetharaman while addressing the 47TH AGM of IBA told that India needs 4 to 5 more “SBI-Size” banks to meet the growing needs of the economy and Industry. Speaking on the occasion, she further expressed that as far as the long-term future is concerned, it is going to be largely driven by digitised processes and there is a need for seamless and interconnected digital systems for a sustainable future for the Indian banking industry.

3. HDFC BANK TO DOUBLE RURAL REACH TO 2 LAKH VILLAGES IN TWO YEARS: HDFC Bank aims to cover a third of India’s villages, by expanding its reach to 2 lakh villages in the next two years. Currently the bank has covered 1 lakh villages. The bank plans this expansion through a combination of branch network, business correspondents, business facilitators and digital outreach platforms. The bank feels that India’s rural and semi-urban markets are under-served in credit extension. As a part of this plan, the bank plans to hire 2,500 people in the next 6 months.

4. LENDERS TIE UP WITH FINTECH COMPANIES TO EXPAND REACH: A growing number of small and mid-sized banks in India are partnering with fintech companies to expand their reach and tap new customers, saving on costs and time to ramp up their retail network. Traditionally banks have relied on their branch network, especially in semi-urban and village areas. But physical branch expansion is a very costly affair and needs a long-term planning. Now the smaller banks which are relatively new are more aggressively taking the approach of teaming with fintech companies.

5. MANY DISTRICTS IN INDIA DO NOT HAVE BANKING FACILITIES DESPITE HIGH ECONOMIC ACTIVITY: Finance Minster Nirmala Seetharaman has said that despite huge thrust on financial inclusion and high economic activity, there are several Indian districts where there is no banking presence yet. The finance minister has directed all banks to get their act together and open either full-fledged bank branches in such areas or an outpost rendering banking services. She has directed IBA members to digitally map all districts to find out which areas have low banking coverage and accordingly make provisions for either a physical branch or an outpost.

6. RBI TAKES INDIAN OVERSEAS BANK OUT OF PROMPT CORRECTIVE ACTION FRAMEWORK: Reserve Bank of India has taken Indian Overseas Bank (IOB) out of Prompt Corrective Action (PCA) framework on its improvement in financial and credit profile. This gives IOB more freedom for lending, especially to corporates and grow the network subject to prescribed norms. IOB was placed under PCA framework in October 2015 on account of high Non-Performing Assets (NPAs) and negative Return on Assets (RoA). As on March 2021, the bank’s net NPA has declined to 3.58% from 5.68% in March 2015.

7. HDFC BANK RAMPS UP CREDIT CARD ISSUANCES, ADDS 4 LAKH NEW CARDS: HDFC Bank has ramped up issuing new credit cards after RBI lifted the ban on issue of new cards last month. The bank has issued a record 4 lakh new cards since the ban was lifted. The bank has announced that it will ramp up its credit card acquisition very fast and will endeavour to regain the lost market soon.

8. REVISED NORMS FOR SECURITISATION LIKELY TO BOOST VOLUME OF LOANS: The revised norms for securitisation are expected to boost the volumes of loans that lenders sell to investors as RBI has reduced the minimum holding period from 12 months to 6 months. The securitisation process involves the conversion of an asset (loans) into marketable securities which are sold to investors to raise cash. Lenders use one of the two methods--- direct assignment and pass-through certificate to offload loans. RBI has also reduced the minimum amount of loan to be retained on books from 10% to 5% for sale and has laid down clear rules for risk weights for loans acquired through securitisation. These changes could lead to an increase in volumes in the second half of this financial year.

1. ASIAMONEY POLL 2021 VOTES HDFC BANK AS THE MOST OUTSTANDING BANK: On a poll conducted by reputed publication Asiamoney, HDFC Bank has been polled as No 1 amongst banks in India for 4TH year in a row. The poll, known as Asia’s outstanding Companies Poll, is designed to acknowledge listed companied that have excelled in area such as financial performance, management team excellence, investor relations and CSR initiatives. Over 1,070 fund managers, analysts, bankers and rating agencies took part in the voting which concluded on July 16, 2021.

2. SURVEY FINDS OVER TWO-THIRDS OF CUSTOMERS WILLING TO SWITCH TO DIGITAL-ONLY BANKING: Over two-thirds of Indians surveyed by Mckinsey- a global management consulting Company are willing to switch to a digital-only bank for their banking needs. Approximately 4,000 respondents were surveyed by the consulting firm. This comes at a time when digitisation is growing and a slew of neo-banks are coming up. Low-cost digital-only banks and robo-advisors could pose a big challenge to conventional banking in future.

3. SHORT OF LENDING TARGETS, BANKS SEEK PRIORITY SECTOR TAG FOR RETAIL AND INFRASTRUCTURE: Most of the banks are struggling to meet their priority sector targets with the premium lending certificates rising by almost 200 basis points in the last one year. Banks have reached out to the government seeking priority sector tag for retail-trade and infrastructure. At present, lending towards agriculture, MSME, export credit, housing, education, renewable energy and social infrastructure is considered eligible for priority sector lending. Banks have to mandatorily deploy 40% of their Adjusted Net Bank Credit (ANBC) towards priority sector, of which 18% is allocated towards agriculture.

4. RBI ALLOWS BANKS TO SELL FRAUD LOANS TO ASSET RECONSTRUCTION COMPANIES: Reserve Bank of India has allowed banks to sell fraud loans to Asset Reconstruction Companies (ARCs). So, banks will now be able to transfer such advances termed as Fraud to ARCs. This is with the condition that the responsibility of continuous reporting, monitoring, filing of complaints with law enforcement agencies and proceedings related to such complaints shall also be transferred to the concerned ARC and the said ARC accepts the condition. However, transfer of such fraud loans to ARCs does not absolve the bank from fixing the staff accountability as required under the prevailing instructions on frauds.

5. DESPITE POLICY MEASURES, 83% OF SMEs LACK ACCESS TO BANK FINANCE: A survey conducted by B2B platform TradeIndia shows that over 83% of Small Businesses are unable to access finance despite a slew of measures taken to deepen credit. The survey also shows that 63% of small businesses lack technological know-how, domain knowledge and guidance for business loans. The survey involved 50,000 small and medium enterprises having a revenue of 5 to 50 crores.

6. HOME LOANS--- COMPETITION HEATS UP AS BANKS GO ON INTEREST RATE CUTTING SPREE: With economy on the verge of limping back to normalcy and home buying market expected to stage a growth in the forthcoming festive season, many banks are racing to woo home loan customers with interest rate cuts. Although RBI has kept the policy rates unchanged at 4% in the last seven review meetings, banks led by SBI, Kotak Mahindra Bank, PNB and others have slashed home loan interest rates, triggering a competition among these banks to woo customers. SBI, which has a home portfolio of Rs 5.05 lakh crores, has now offered credit score linked home loans at 6.70% irrespective of the loan amount.

7. RETAIL DEPOSITORS EARNING NEGATIVE RETURNS, SBI ECONOMISTS SUGGEST A RELOOK AT TAXATION ON INTEREST: Economists at State Bank of India have said that retail depositors are earning negative returns on their bank deposits and hence there is a need for reviewing taxes on interest earned. If not for all depositors, the taxation review should be carried out for at least the deposits made by senior citizens who depend on interest for their daily needs. Overall retail deposits in the system are pegged at Rs 102 lakh crores. As the policy has shifted to growth, the interest rates are going down in the system which pinches the depositor.

8. INDIA LIKELY TO BLOCK CHINESE INVESTMENT IN INSURANCE GIANT LIC’s IPO: The government wants to block Chinese investors from buying shares in Indian insurance giant Life Insurance Corporation (LIC) which is due to go public by announcing an IPO. LIC commands more than 60% share of India’s Life Insurance market with assets of more than $500 billion, the forthcoming LIC IPO is likely to be country’s biggest-ever IPO worth probably more than $12.2 billion.

1. GOVERNMENT’S BAD BANK TO SOLVE Rs 2 LAKH CRORE BAD LOANS: The government’s bad bank is finally taking shape. The National Asset Reconstruction Company (NARCL), as it is officially named, will acquire banks’ bad assets to resolve or liquidate. It will buy these stressed assets for a mix of cash and government guaranteed security receipts. It aims to help clean banks’ books by taking over Rs 2 lakh crores of bad loans and this will reduce the banks’ Non-Performing Assets (NPAs) by over 1% and help recover some of bad debts too.

2. BAD BANK LIKELY TO SPARK GLOBAL INTEREST IN INDIA’S $ 300 BILLION DISTRESSED ASSETS INDUSTRY: Since the government’s announcement of bad bank--The National Asset Reconstruction Company (NARCL), top global investors such as SSG Capital, Deutsche Bank, SC Lowy, Varde Partners and Fiera Capital are likely to raise their stake in India’s $ 300 billion distressed assets industry amid prospects of quicker resolution.

3. UPI TO BE LINKED TO SINGAPORE’S “PAYNOW” BY JULY 2022: The Reserve Bank of India has said that it is working on a project with Monetary Authority of Singapore to link the Unified Payments Interface (UPI) with Singapore’s fast payments system—PayNow. The linkage is targeted to be completed by July 2022. The UPI-PayNow linkage is a significant milestone in the development of infrastructure of cross-border payments between India and Singapore, and closely aligns with the G20s financial inclusion priorities.

4. FINTECH COMPANIES ARE PAVING PATH FOR GREATER FINANCIAL INCLUSION IN INDIA: Fintech Companies have a wide scope of business in India, particularly in lending, personal finance management and regulation technologies. The nation’s vast population, expanding the number of web users and endeavours from the government to make India a digital nation is bringing numerous new opportunities for Fintech Companies and these companies are utilising those opportunities to stand in the competition and grow fast.

5. PAN-AADHAAR LINKAGE DEADLINE EXTENDED TILL MARCH 2022: The Central government, in continuation of its commitment to address the hardship being faced by various stakeholders on account of the Covid-19 pandemic, has decided to extend timelines for linking PAN with Aadhaar. Accordingly, now Aadhaar linking with PAN can now be done till March 31, 2022. Earlier the deadline was till September 30, 2021.

6. MAHINDRA FINANCE ENTERS VEHICLE LEASING BUSINESS: Mahindra & Mahindra Financial Services Ltd has forayed into the vehicle leasing and subscription business. The new vertical would operate under the brand name “Quiklyz”, denoting the changing mindset on mobility. According to a survey made by the company, customers now want to access vehicles earlier in their life and upgrade their vehicles faster than ever before. Leasing and subscription offer initiated by Mahindra Finance allows the consumer to pay a monthly fee to access the vehicle of his choice across all brands at a lower price.

7. MUTUAL FUND SIP ACCOUNT ADDITIONS HIT A RECORD HIGH IN AUGUST: Investors continued to increase Mutual Fund investments through the Systematic Investment Plan (SIP) route in August 2021 amid the sustained momentum in the stock market. New SIP account registration hit a record of 24.9 lakh in August 2021. This is as per a data from the Association of Mutual Funds in India (AMFI). The number of registrations in August was nearly 2.5 times the long-term average. This is the third month in a row when new SIP registrations were more than 20 lakhs, taking the total tally of SIP accounts to 4.3 crores.

8. BAD LOANS OF BANKS MAY CROSS Rs 10 LAKH CRORES BY THE END OF THIS FISCAL: A study by industry body Assocham and rating firm Crisil has reported that banks’ bad loans might cross Rs 10 lakh crores by the end of this fiscal, mainly on account of slippages in retail and MSME sectors. The addition may be also due to some restructured assets falling into bad loan category. The study is titled “Reinforcing the Code” The current asset quality stress cycles this time around is different than that witnessed a few years back. Earlier the NPAs came primarily from bigger, chunkier accounts. This time, smaller accounts specially the MSME and retail segments are expected to be more vulnerable than large corporates.

1. SBI AND BANDHAN BANK PLANNING TO MOVE THEIR BACK-OFFICE VERTICALS TO FINTECH HUB: State Bank of India and Bandhan Bank are planning to move several of their back-office verticals and processing centres in the fintech hub of Kolkata which is being built on a sprawling 70-acre land in New Town area. As many as 28 financial institutions and legal firms have already taken land in the fintech hub, for which foundation stone was laid in 2012. About 48 acres of 70-acre land has been allotted so far.

2. BANK OF BARODA LAUNCHES ONE-STOP DIGITAL PLATFORM “BOB-WORLD”: Bank of Baroda has announced the launch of its digital banking platform “Bob-World”, aimed at providing all banking services under one roof. The bank aims to provide an all-inclusive and seamless virtual banking experience, encompassing all digital banking services under one roof for the convenience of its customers. The pilot of “Bob-World was rolled out on August 23, 2021 and the App is being used by more than 50 lakh users. The App will cover 220 banking services, covering 95% of all retail banking services.

3. RBI REMOVES LENDING CURBS ON UCO BANK: UCO Bank will no longer be subject to strict lending curbs imposed on it by RBI in May 2017, as RBI said that the bank has been taken out of Prompt Corrective Action (PCA) restrictions. With this step, now only two banks—Indian Overseas Bank and Central bank of India remain under PCA. UCO bank has provided a written commitment that it would comply with the norms of minimum regulatory capital, net Non-Performing Asset (NPA) and leverage ratio on an ongoing basis.

4. NPCI AND FISERV LAUNCH RuPay CREDIT CARD STACK FOR FINTECHS AND BANKS: The National Payments Corporation of India (NPCI) and Fiserv Inc, a leading global provider of payments and financial services technology, have come together and entered into an agreement to launch the plug-and-play RuPay Credit Card Stack—nFiNi. This Banking as a Service provides a ready stack of services required for fintechs and banks to issue RuPay credit cards.

5. UCO BANK PARTNERS WITH FISDOM TO OFFER WEALTH MANAGEMENT SOLUTIONS: UCO Bank has partnered with Finwizard Technology which runs Fisdom, to offer wealth management services via its “mBanking Plus” App. This partnership will enable high-quality wealth management services accessible, affordable and truly digital. This service will create greater values for its customers.

6. ITR FILING DUE DATE FOR ASSESSMENT YEAR 2021-22 EXTENDED: The Central Board of Direct taxes (CBDT) has decided to further extend the due date for filing Income Tax Returns (ITR) for financial year 2020-21 till December 31, 2021. The earlier due date was till September 30, 2021. This extension has been done keeping in view the difficulties reported by taxpayers and other stakeholders in filing of income tax returns as well as various reports of audit.

7. INDAIN MSMEs PLANNING TO STEP UP TECHNOLOGY INVESTMENT AND HIRING DESPITE THE THIRD WAVE SCARE: Micro, Small and Medium Enterprises (MSMEs) which had braved the first and second waves of Covid-19 are now looking to step up investment in digital technology along with hiring more people this year and would continue the momentum next year as well. The momentum of MSMEs took a back seat due to Covid-19 first wave. But however, towards the end of 2020, atleast one out of three MSMEs was looking to increase its staff for the next year and also their investment in digital technology is on an increasing scale.

8. INDIA’S FINTECH MARKET TO TRIPPLE TO Rs 6.2 LAKH CRORES BY 2025: The government’s various initiatives have led to fast growth in the fintech sector, which is likely to triple to Rs 6.20 lakh crores in value terms by 2025. This is as per a statement by Minister of State for Finance Mr Bhagwat K Karad. Mr Bhagwat, highlighting India’s position said that India is leader in adopting financial technology among emerging markets, the country had a technology adoption rate of 87% in March 2020, as compared to the global average of 64%. In 2019 India’s Fintech market was valued at Rs 1,920 billion. By 2025, it is expected to grow to Rs 6,207 billion. Skilled workforce and technology enormity in India makes it a great destination to develop financial technology.

1. AMAZON PAY UPI RECORDS 5 CRORE CUSTOMER SIGNUPS IN INDIA: Amazon has announced that it now has 5 crore customer base using its UPI platform in India. To celebrate this Milestone, Amazon is offering daily rewards throughout September to all its customers using UPI platform for shopping, paying bills and sending money to other contacts. Amazon has said that customers are using Amazon app to pay at around 2 crore local shops by scanning any UPI QR code. In the last one year, over 75% of its customers using Amazon App are from tier 2 & 3 cities.

2. HDFC BANK COULD DOUBLE ITS TECHNOLOGY SPEND: HDFC Bank is expected to more than double its technology spending as it aims to improve its digital capabilities in line with global peers. The bank could also see rise in cost to income ratio by 3 to 4% as it looks to compete with tech companies. Analysts are viewing the bank’s renewed focus on technology as a positive step in maintaining and improving their market leadership across payments, cards and various lines of businesses. This is as per a report by Macquarie Capital.

3. INDIA AIMS TO OPEN FINANCE TO MILLIONS WITH USER-DATA SYSTEM: Indian Government has formally introduced Account Aggregator System, an ambitious approach that combines privacy protection with credit reporting. The data sharing system could revolutionalize investing and credit, giving millions of consumers greater access and control over their financial records and expanding the potential pool of customers for lenders and fintech companies. If the system works, firms will be able to access large amounts of data within seconds to access the creditworthiness of a small business, recommend a wealth management product for an individual, or tailor an insurance policy for a Family.

4. UPI TRANSACTIONS CROSS 3.5 BILLION IN AUGUST: The volume of transactions made through the Unified Payment Interface (UPI) channel stood at 3.55 billion in August and the value of transactions rose to Rs 6.39 lakh crores. The market share of UPI has constantly been increasing and stood at 80% over the first four months of FY 22, up from 73% in FY 21. This is as per a report by Motilal Oswal Financial Services.

5. PayU TO ACQUIRE BILLDESK FOR Rs 34,000 CRORE: In one of the biggest deals in the Indian consumer internet space, global player Prosus NV has said its fintech business PayU will buy digital payments provider BillDesk for USD 4.7 billion (Rs 34,377 crores). With the deal, the Netherland incorporated company Prosus NV’s investment in India will jump to more than USD 10 billion. The PayU-BillDesk transaction, which is subject to approval from Competition Commission of India (CCI), is expected to close by early 2022.

6. 430 MILLION JAN-DHAN ACCOUNTS HAVE Rs 1.46 TRILLION: The PM Jan-Dhan Yojana has about 430 million accounts with a total deposit amounting to Rs 1.46 trillion as on August 2021. In this, about 86% (369 million) accounts are operative. Seven years after the scheme was launched, the average deposit per account is Rs 3,398 which has increased 2.7 times over August 2015. About 312 million RuPay Cards have been issued to Jan-Dhan account holders. The government has also launched the Jan-Dhan Darshak, a mobile application to provide a citizen-centric platform to locate banking touch points such as bank branches, ATMs, bank correspondents and post offices in the country.

7. IF EPF CONTRIBUTIONS EXCEED 2.5 LAKHS THEN YOU WILL NOW HAVE TWO PF ACCOUNTS: In Budget 2021, it was announced that interest on Employees’ Provident Fund (EPF) and Voluntary Provident Fund (VPF) above Rs 2.5 lakhs in a financial year will be taxable. The Central Board of Direct Taxes (CBDT) has now notified the rules regarding the taxation of the interest on the excess EPF contributions. Accordingly, for the purpose of calculation of taxable interest, separate accounts within the provident fund account shall be maintained during and from financial year 2021-22.

8. MUKESH AMBANI’S WORLD’S CHEAPEST MOBILE PHONE CAN UNLEASH A CREDIT REVOLUTION: A smartphone widely believed to be priced below Rs 3800/-, likely the world’s cheapest, will start selling in a few days’ time by Mukesh Ambani’s Jio. If, JioPhone Next, an Android device custom-built for India by Alphabet Inc’s Google, is a hit in the price-centric market then it will unleash a credit revolution in the country. With the country’s remaining 300 million future phone users going online, there will be a surge of customer data that can be made available to the banks using the account aggregators.

1. STRONG BUFFERS TO HELP INDIAN BANKS TO WITHSTAND FRESH SURGE IN BAD LOANS: Moody’s Investors Service has reported that Public Sector banks are likely to witness fresh Non-Performing Assets (NPAs) which would be around 1.5% of their gross loan portfolio in each of the next two years. This is mostly on account of loans given to small enterprises and retail loans. But the report also quotes that the banking system would be able to withstand this as the bad loans scenario are resolved and adequately provided for and are backed by higher capital.

2. BARCLAYS TO INVEST MORE THAN $ 400 MILLION TO EXPAND INDIA OPERATIONS: Barclays has announced that it will pump in more than $ 400 million (around 2,950 crores) into India arm to tap rising corporate and investment banking activity in India. This is Barclays single largest capital infusion in its Indian business in the last 3 decades. It comes after Barclays exit from India’s retail business in 2011 and exit from Indian equity investment business in 2016. Barclays has said that that the investment would help grow its corporate and debt investment banking.

3. BANKS TO REPOSSESS, AUCTION PROPERTIES AS MORE HOME LOANS TURN BAD: Both Public and Private sector banks are attempting to take control of more properties used as collaterals against loans and put them for sale as borrowers fail to repay post the second wave of pandemic. Advertisements by banks in respect of these is more common nowadays. According to bankers and industry experts, larger number of demand and possession notices are also the outcome of stress from the first wave last year that had been masked by the moratorium.

4. GOOGLE PAY MAY SOON ALLOW USERS TO OPEN FIXED DEPOSITS ON ITS PLATFORM: Google pay (GPay) will partner with a startup company Setu to provide users to open fixed deposits within the app. Setu is a fintech company that offers application programming interfaces to its clients across multiple payment methods. Google Pay will partner up with Equitas Small Finance bank for the deposits. Other banks like Ujjivan Small Finance bank and AU Small Finance bank are rumoured to be next in line. To avail the facility, users are expected to undergo a standard Know Your Customer (KYC) process, which will require an Aadhaar card.

5. BANKS RECAST LOANS WORTH Rs 35,000 CRORES UNDER RBI’s SECOND SCHEME: Banks have recast loans worth Rs 35,000 crores under RBI’s regulatory package 2.0 till June’21 this year. This is much lower than the Rs 1 Trillion of loans restructured under the earlier package announced after Covid-19 first phase last year. According to CARE Ratings, loans to Micro Small and Medium Enterprises (MSMEs) have the largest share in the two schemes combined.

6. HDFC BANK AIMS TO ADD 5 LAKH CARDS PER MONTH AND REGAIN CREDIT CARD MARKET SHARE IN ONE YEAR: HDFC Bank is looking at winning back the market share in number of credit cards in next one year. HDFC bank was banned for issuing new cards by RBI in December 2020 due to concerns over repeated technological outages. Now RBI has allowed the bank to issue new cards. So, the bank aims to achieve its first target of issuing fresh 3 lakh cards which the banks says it aims to achieve in three months. And later it aims to achieve a target of 5 lakh cards per month.

7. ITR FILING DEADLINE FOR FY 20-21 MAY HAVE TO BE EXTENDED BEYOND SEPTEMBER 30, 2021: The Income Tax Return (ITR) filing deadline for Financial Year 2020-21 for individuals has already been extended till September 30, 2021 from the usual deadline of July 31, 2021. However, the new income tax e-filing portal has been marred by glitches and other problems from inception. The Finance Minister has given Infosys time till September 15, 2021 to fix all problems. This means that an Individual have only 15 days-time to file his/her return and that too with a new unfamiliar system. So, this may prompt the IT department to extend the due date of filing beyond September 30, 2021.

8. IBBI PROPOSES CODE OF CONDUCT FOR COMMITTEE OF CREDITORS: Seeking to bring in more transparency, the Insolvency & Bankruptcy Board of India (IBBI) has proposed a code of conduct for the committee of creditors under the insolvency law. IBBI, a key institution in implementing the Insolvency & Bankruptcy Code (IBC), has also proposed further measures to strengthen the regulatory framework for liquidation process. Public Comments have been sought by IBBI on discussion papers related to Corporate Insolvency Resolution Process (CIRP) and liquidation process.

1. FDI INVESTMENTS IN BANKS WITH INSURANCE VENTURES WILL NOW REQUIRE RBI AND IRDAI APPROVAL: Foreign Direct Investment (FDI) in banks with insurance ventures will require approval from RBI and the insurance regulatory, IRDAI. This is as per the rules notified under the Foreign Exchange Management Act (FEMA). The new rules are pursuant to higher foreign investment being allowed in the insurance sector as per the Insurance (Amendment) Bill 2021, passed in March 21. Now the FDI investment cap in Insurance has been raised to 74% from 49% earlier.

2. RBI STANDARDISES BANK LOCKER RULES: Reserve Bank of India has standardised the rules for opening and maintaining bank lockers across banks, in response to directions by Supreme Court. RBI has asked all bank boards to frame an agreement for safe deposit lockers based on a model locker agreement to be framed by Indian Banks Association (IBA). Banks have time till January 1, 2022 to comply with the new norms and have to renew their locker agreements with the existing safe deposit locker customers by January’ 23. Bankers have been allowed to obtain a term deposit from locker holder covering three years locker rent and the charges for breaking open the locker in case of eventuality. However, bankers shall not insist on such term deposit from existing customers.

3. GOVERNMENT MAY PROPOSE THE SALE OF UNITED INDIA INSURANCE FOR PRIVATISATION: The Government might propose United India Insurance for privatisation. The cabinet nod will be sought after other approvals are in place. This is as per a report by CNBC-TV18. The Parliament has recently passed the General Insurance Business Nationalisation (Amendment) Bill, 2021, which permits the government to dilute its stake in state-owned general insurance companies to below 51%. The government has an ambitious disinvestment target of Rs 1.75 lakh crores for the Fiscal year 2021-22.

4. SEBI CUTS LOCK-IN PERIOD FOR PROMOTERS TO 18 MONTHS POST-IPO: Market regulator SEBI has reduced the minimum lock-in period for promoters’ investment post an Initial Public Offer (IPO) to 18 months from three years, under certain conditions. In addition, SEBI has streamlined disclosures requirements of group companies.

5. SUPREME COURT REFUSES TO ENTERTAIN BANKS’ PLEA FOR RTI EXEMPTION: In a setback to various Public Sector and Private Banks, a Supreme Court bench has refused to entertain their petitions seeking exemption from disclosing any information related to their customers, trade secrets, risk ratings or any unpublished price sensitive information from Right to Information (RTI) Act.

6. RETAIL TO DRIVE LOAN BOOKS OF BANKS IN FY ’22, BUT ASSET QUALITY IS A CONCERN: Banks have focussed on retail loans for their business growth in the absence of corporate demand. Public Sector Banks (PSBs) have focussed more on retail sector. But the second wave has started impacting the asset quality of retail loans. Bank credit is expected to grow by 7.5% to 8.5% in financial year 2021-22, largely driven by retail. But according to a report by Care ratings, the second wave of Covid-19 has impacted the asset quality in retail loans. But bankers see the stress in retail to be temporary. The moment the economy opens up, life goes back to normal.

7. RBI PENALTY CLAUSE MAY DETER BANKS FROM INSTALLING MORE ATMs: The Reserve Bank of India’s decision to penalise banks by Rs 10,000/- if ATMs run dry for over 10 hours is likely to increase the expenses for all banks by Rs 125-200 crore annually, according to a rough estimate by ATM operators and logistic companies. The Confederation of ATM Industry (CATMi) has expressed its shock over such a circular by RBI. It says the guidelines were not thought through and have been introduced without consulting anyone. CATMi says that if this is implemented, there would be no option but to shut down existing ATMs.

8. KOTAK MAHINDRA BANK LAUNCHES “DIY” REPAYMENT PLATFORM: Kotak Mahindra Bank, in a tie-up with Creditas Solutions—a fintech company, has launched a Do-It-Yourself (DIY) repayment platform for missed loan repayments. Powered by Artificial Intelligence (AI) and Machine Learning (ML), the Neo Collection platform will look to deliver a personalised and non-intrusive experience thereby enabling customers to manage their dues seamlessly on their own through an intuitive repayment platform.

9. SBI OPENS A FLOATING ATM ON HOUSEBOAT: State Bank of India has opened an ATM on a Houseboat at Dal Lake, Srinagar for the convenience of locals and tourists. Besides fulfilling the long-standing need of the area, the floating ATM will also add to the charm of Srinagar.

1. ICICI HOME FINANCE LAUNCHES ON-THE-SPOT HOME LOANS FOR PERSONS HAVING NO ITR: ICICI Home Finance Ltd has launched an on-the -spot home loan for workers and self employed who do not have Income Tax Returns (ITR) to show their income proof. Under the “Big Freedom Month”, ICICI Home Finance aims to assist those home loan seekers who do not have any income proof to buy their dream home. Such persons can avail the spot home loan by submitting PAN Card, Aadhaar card and bank account statement of the past 6 months.

2. INDIAN BANK SIGNS MOU WITH PARALYMPIC COMMITTEE: Indian Bank has signed a Memorandum of Understanding (MoU) with Paralympic Committee of India (PCI) as one of the banking partners of the Paralympic Games scheduled to commence from August 24, 2021 in Tokyo, Japan. The bank through its year long association with PCI, will provide financial assistance to support the Paralympic athletes to prepare for the sports events in domestic as well as global platforms for a year.

3. YES BANK TO FLOAT ASSET RECONSTRUCTION COMPANY, INVITES BIDS:Yes Bank has proposed to set up an Asset Reconstruction Company (ARC) and has invited bids from interested investors. The prospective investor should have strong financial capacity and substantial experience in managing distressed asset management. Earnst & Young has floated the Expression of Interest (EoF) on behalf of Yes Bank. The interested investor can submit its EoF by 31St August, 2021.

4. KREDITBEE ENTERS THE CARD SEGMENT: KreditBee, one of India’s leading digital lending platforms, has entered into the card segment with the launch of “KreditBee Card”. The card provides the unserved and underserved banking customers quick and secured access to short-term liquidity with multiple payment options, eliminating the need to avail separate loan. KreditBee has partnered with RuPay and RBL bank for the launch of this product. This card is a Credit-Line backed prepaid card (kind of a Microfinance) for the end consumer, where the amount is loaded into the KreditBee card account once the user sends a purchase or drawdown request. The customer can avail a credit limit of up to Rs 10,000/- and can be repaid within a single billing cycle not going beyond 45 days.

5. MULTIPLE BANKS COME TOGETHER TO LAUNCH “SLMA”: Ten major banks including SBI and ICICI Bank have come together to set up a Secondary Loan Market Association (SLMA) for promoting growth of secondary market for loans in India and also unveil an online platform. SLMA is a self-regulatory body and has been set up as per the recommendations of RBI on development of secondary market for corporate loans. According to SLMA’s Memorandum of Association, it will facilitate, promote and set up an online system for standardisation and simplification of primary loan documentation, standardisation of documentation for the purchase and sale/assignment for secondary loan market.

6. SIDBI ANNOUNCES NEW FUND, BUSINESS DEVELOPMENT SERVICES PROGRAMME TO BOOST MSME CLUSTER DEVELOPMENT: Small Industries Development Bank of India (SIDBI) has announced initiatives to boost cluster development for the growth of Micro, Small and Medium Enterprises (MSMEs). For this, SIDBI has launched a focussed vertical for MSME Clusters’ centric programmes along with a Cluster Development Fund to give thrust to hard infrastructure support to state governments. The bank said it is working on both interventions, hard infrastructure (physical infrastructure) and soft infrastructure (training, skilling, marketing, technology access, design etc). The bank has setup the Cluster Development Fund with RBI’s support.

7. STATE OWNED BANKS’ NET PROFIT JUMPS 140% AS PROVISIONS DIP IN THE FIRST QUARTER OF FY 22: Public Sector Banks have posted 139.6% growth in net profits in the first quarter of FY 2022, on a year-on-year basis. This was mainly because of rise in other income by 34.8% and dip in provisions by 10.7%. However, the Net Interest Income (NII) showed a subdued growth of 5.4% in a quarter marked by low credit offtake due to the impact of Covid-19 on Indian Economy. The Asset Quality of Public Sector Banks remained stable with a marginal fall in Gross Non-Performing Assets (GNPAs).

8. ICAI TO COME UP WITH 8 NEW FORENSIC ACCOUNTING INVESTIGATING STANDARDS: The Institute of Chartered Accountants of India (ICAI), Chartered Accountants’ apex body has come out with 8 new Forensic Accounting and Investigation Standards (FAIS), whereby forensic auditors will be required to issue a precise and unambiguous report. Under the new accounting standards, auditors will be required to follow stiff norms while conducting forensic audit. The new forensic audit standards are likely to render several existing forensic audit reports untenable. Now these 8 new forensic standards proposals will be placed for final approval.

1. SBI REPORTS HIGHEST EVER QUARTERLY PROFITS: State Bank of India has reported highest ever quarterly profit of Rs 6,504 crores for the first quarter ended June’21 in financial year 2021-22. This is an increase of 55% over Rs 4,189 crores profit in the same period during last year. The main reason for such a jump in profit is because of a 24% jump in non-interest income to Rs 11,803 crores. As compared to the figures of the last year during the same period, deposits have increased by 8.8%, advances by 5.8% and Net NPA has reduced from 1.86% to 1.77%.

2. GOVERNMENT LAUNCHES VOUCHER-BASED DIGITAL PAYMENT MECHANISM—eRUPI: The government has launched eRUPI, a person and purpose specific digital payment solution that is aimed at improving transparency and targeted delivery of benefits. eRUPI is a cashless and contactless one-time digital payment mechanism. Developed by National Payments Corporation of India on its UPI platform, in collaboration with the Department of Financial Services, Ministry of Health & Family welfare and National Health Authority, ERUPI is a QR code or SMS string-based e-voucher, which is delivered to the mobile of the beneficiary. The beneficiary will be able to redeem the said e-voucher without a card, digital payment app or internet banking access at the service provider. To begin with, e-RUPI facility is available for health care services only and later on will be expanded to other segments.

3. HOME LOAN PORTFOLIOS OF MANY BANKS BEGIN SHOWING SIGNS OF STRESS: As per a data shared by India Mortgage Guarantee Company (IMGC), a leading guarantor of mortgage loans, there is an increase of nearly three times in the mortgage delinquency pool over the past 15 months. For the past 15 months the economy has fared very badly due to the pandemic on account of which there were many job losses and wage cuts and this has impacted the mortgage loans recovery. IMGC guarantees home loans for about 20 lenders, including SBI, HDFC, ICICI Bank and Axis Bank.

4. INDIAN BANK AND IIMB’S INCUBATION ARM SIGN UP ON EXCLUSIVE CREDIT TO STARTUPS: Indian Bank has signed an MOU with NSRCEL, the incubation arm of IIMB, for extending exclusive credit facilities to startups. NSRCEL is known for bringing up startups, industry mentors and eminent academicians from the parent institution, IIM Bangalore. Under the MOU, NSRCEL will identify the Startups and MSMEs based on their credentials and past experience and will refer such members for financial assistance from Indian Bank. The bank will extend loans up to Rs 50 Crores to these startups and MSMEs for their working capital requirements or purchase of machinery, equipment etc.

5. UPI LOGS 3 BILLION TRANSACTIONS IN JULY’21: Unified Payments Interface (UPI), the flagship payments platform of National Payments Corporation of India (NPCI) has made a record in volume and value of transactions in July’21 as digital payments rise in the pandemic. UPI processed a record 3.24 billion transactions in July’21, up by 15.7% from June’21. In value terms, UPI has processed transactions worth Rs 6.06 trillion, up by 10.76% from June’21. UPI, launched in 2016, had crossed 1 billion transactions for the first time in October 2019.

6. RBI EXTENDS CURRENT ACCOUNT RULES IMPLEMENTATION DEADLINE TO OCTOBER 31,2021: The Reserve Bank of India has given further time to banks till October 31, 2021 to implement changes in current account front, following reports of small businesses being badly hit with account freezes by the banks. RBI had issued a circular for current account rules aiming at enforcing credit discipline as well as to facilitate better monitoring by the lenders.

7. MASTERCARD SUBMITS NEW AUDIT REPORT TO INDIA AFTER ITS BAN OVER ISSUE OF NEW CARDS: Mastercard has submitted a new audit report to RBI. Mastercard is seeking an overturn on ban on fresh card issuance in India. On July 14, 2021, RBI had created panic waves by announcing a ban on issue of fresh cards by citing non-compliance with 2018 rules that required Mastsercard to store payments data only in India. RBI had imposed a ban after studying a system audit report submitted by Mastercard’s auditor. Now RBI is reviewing the new audit report.

1. PSU BANKS MOBILISE RECORD FUNDS OF Rs 58,700 CRORES FROM MARKETS IN FY 21: Not withstanding the tough economic conditions prevailing in the country due to the Covid-19 pandemic, Public Sector Banks (PSBs) have managed to raise a record Rs 58,700 crores from markets in FY 2020-21 though a mix of debt and equity to enhance capital base. In this, Bank of Baroda raised Rs 4,500 crores from Qualified Institutional Placements (QIP). Canara Bank also raised Rs 2,000 crores through QIP. Series of successful QIPs reflect confidence of both domestic and global investors in PSBs and their potential.

2. RBI’S NEW RULES ON INTERCHANGE FEE, 24/7 BULK CLEARING FACILITY: Reserve Bank of India has issued new directions on raising interchange fee and making available the facility of bulk clearing round the clock, will be effective from 1ST of August 2021. The interchange fee for financial transactions have been raised by Rs 2/-, from Rs 15/- to Rs 17/-. (An interchange fee is a fee charged by banks to the merchant who processes a credit card or debit card payment). Besides this, National Automated Clearing House (NACH) has been made available on all days from August 1St, 2021.

3. UNPRECEDENTED FLOW OF EASY MONEY KEEPS INDIAN STOCK MARKET ON BULL RUN: India’s National Stock Exchange (NSE) Nifty 50 index has more than doubled since March 2020, one of the best performers in the world over the period and testing new peaks every month. It is also among Asia’s top gainers this month. Reserve Bank of India has held a dovish stance as the RBI Governor feels that the price gains are transitory. Overseas investors are taking note as markets have received inflows amounting to $ 7 billion so far this year. The market is expecting a continued favourable monetary policy even as inflation fears deepen.

4. UNION CABINET PAVES THE WAY FOR PRIVATISATION OF GOVERNMENT-OWNED INSURANCE COMPANIES: The Union Cabinet has approved amendments to the General Insurance Business (Nationalisation) Act, paving the way for privatisation of government-owned insurance companies. The amendments will remove the clause for Centre to hold at least 51% in public sector insurance companies at any given point of time. It will also have an additional provision for transfer of management control from the government to the potential buyer of the public sector insurance company. This will open the doors for privatisation of public insurance companies.

5. LOANS WORTH Rs 1.34 LAKH CRORES TO REAL ESTATE SECTOR UNDER SEVERE STRESS: Around Rs 1.34 lakh crores, which is 18% of the overall lending to the Indian real estate is under severe stress. However, loans worth Rs 5 lakh crores (about 67%) of the total advances made to real estate sector are completely stress-free. Another 15% (about 1.2 lakh crores) are under pressure but have scope for resolution with certainty on at least on the principal amount. This is as per a report submitted by Anarock Property Consultants.

6. RBI CANCELS LICENCE OF MADGAUM URBAN CO-OPERATIVE BANK LTD: The RBI has cancelled the licence of Madgaum Urban Co-operative Bank Ltd, Margoa, Goa, as the bank with its current financial position would be unable to pay its present depositors in full. However, RBI has further added that as per the data submitted by the bank, about 99% of the depositors will receive full amounts of their deposits from DICGC. The Office of Registrar of Cooperative Societies, Goa has already been requested to issue an order for winding up the bank and appoint a liquidator for the bank.

7. DEPOSITORS TO GET THEIR MONEY WITHIN 90 DAYS IF THE BANK GOES INTO LIQUIDATION: In a relief to depositors of stressed banks, the Cabinet has cleared amendments to the Deposit Insurance Credit Guarantee Corporation (DICGC) Act, which will enable customers to have access to their deposits up to Rs 5 lakhs within just 90 days if their banks go bust. Briefing the reporters, the Finance Minister Mrs Seetharaman said that the DICGC (amendment) bill will cover 98.3% of the depositors and 50.9% of the deposit value in the banking system, way above the global level of 80% and 20-30% respectively.

8. UNCLAIMED FUNDS WITH BANKS AND INSURANCE COMPANIES NEAR 50,000 CRORES: Funds lying unclaimed with banks and insurance companies are nearing Rs 50,000 crores mark with an estimated addition of Rs 5,977 crores into bank accounts during 2020-21. While the exact number of insurance policies where money has not been claimed is not available, Rs 24,356 crores was lying in over 8.1 crore accounts.

1. INDIA POST PAYMENTS BANK DOUBLES ITS TRANSACTIONS, PLANS TO CREATE DIGITAL PLATFORM: India Post Payments Bank (IPPB) has recorded a twofold increase in its transactions since the beginning of the pandemic last year, even as other payments banks in general have been struggling to enhance their business. IPPB, on an average records about 1 million transactions worth Rs 30 crores daily. Now IPPB plans to create a platform for Digital services with India Post’s network. A synergy between India Posts’ huge network and IPPB’s digital technology can create wonders in the rural banking space.

2. RBI ALLOWS LOANS UP TO Rs 5 CRORE TO OTHER BANKS’ DIRECTORS WIOTHOUT BOARD APPROVAL: The Reserve Bank of India has raised the limit on loans to be sanctioned to directors of other banks or their relatives and relatives of bank’s own directors without board approval. It was felt that the threshold limit of Rs 25 lakhs which was fixed in 1996, needed an upward revision to match the increase in general prices since that time and more importantly to encourage professionals with expertise to join the boards, RBI has decided to increase the threshold limit to Rs 5 crores. Considering the sensitivity of the issue, the increased threshold will only be applicable to personal loans.

3. U GRO CAPITAL LAUNCHES A MSME CO-LENDING PROGRAM WITH BANK OF BARODA: U GRO Capital, a listed technology enabled small NBFC has announced the launch of a co-lending partnership with Bank of Baroda for Micro, Small and Medium Enterprises (MSMEs). The new scheme is named as “Pratham”. The loan disbursements have already begun on the occasion of Bank of Baroda’s 114TH Foundation Day. The program has been launched under RBI’s revised co-lending guidelines. “Pratham”, a Rs 1000 crore co-lending program will enable MSMEs to avail customised lending solutions at a competitive interest rate, with a significant reduction in turn-around time. The loan amount ranges from Rs 50 lakhs to Rs 2.5 crores with a maximum tenure of 120 months.

4. BANKS DIG DEEP TO VERIFY CLIENT CLAIM ABOUT COVID IMPACT: Top private sector banks have put the loan accounts of hundreds of their borrowers under forensic scrutiny on suspicion that these companies may have window-dressed or exaggerated their financial statements, diverted funds or lied about the Covid Impact on their operations. These banks are even conducting due diligence in cases where they have to extend new loans to old customers after the moratorium period ended. Banks want to find out independently the impact of Covid-19 on business operations and performance.

5. HALF OF GLOBAL POPULATION WILL USE DIGITAL BANKING BY 2026: With the increase in digital transformation efforts that banks have adopted after disruption by Covid-19 pandemic, there has been a significant growth in the number of users opting for digital banking. As of now, 2.5 billion users across the world are using digital banking services. It is expected that almost 53% of the global population will access digital banking by 2026. This is as per a research study report by UK based research firm Juniper Research. It has been also reported that over the next few years, China will become the largest digital banking market and will account for 25% of digital banking users.

6. OVER 13 LAKH MSME LOAN ACCOUNTS HAVE BEEN RESTRUCTURED TILL NOW: Till June 25, 2021, as many as 13.06 lakh Micro, Small & Medium Enterprise (MSME) loan accounts with an aggregate amount of Rs 55,333 crores have been restructured post Covid-19 pandemic scenario. This was tabled in the Parliament last week by the MSME Minister. And till July 2, 2021, 2.73 lakh crores have been disbursed under Emergency Credit line Guarantee Scheme. It has been also reported that since the inception of Prime Minister’s Employment Generation Programme (PMEGP), till July 9, 2021, 6,97,612 units have been set up with Margin Money subsidy of Rs 16,688 crores.

7. LENDERS LOOK TO OFFLOAD STAKE IN ASSET RECONSTRUCTION COMPANIES: Lenders have started looking for buyers for their stakes in Asset Reconstruction Companies (ARCs) to free up their capital for the launch of the National Asset Reconstruction Co Ltd (NARCL) or the “Bad Bank” which they will jointly own. Punjab National Bank has put its entire 10.01% stake in Arcil, one of India’s oldest ARCs. Similarly, IDBI Bank has also begun looking for a buyer to sell its 19.18% stake in Arcil.

8. TAX PAYERS CAN NOW FILE THEIR INCOME TAX RETURNS AT NEARBY POST OFFICE: India Post is now offering an option to avail income tax returns (ITR) services at nearest post office Common Services Centres (CSC) counters. This could be a very good news for lakhs of salaried tax payers across the country.

1. CENTRAL BANK OF INDIA TO SEEK SHAREHOLDERS’ APPROVAL TO SET OFF ACCUMULATED LOSS OF Rs 18,724 CRORES: Central Bank of India will seek shareholders’ approval in its ensuing Annual General Body meeting (AGM) to set off accumulated loss of over Rs 18,724 crores from the share premium account of the bank. The next AGM is scheduled for August 2021 through audio/video means. The bank is of the view that this is the most practical and economically efficient option available to the bank in the present scenario so as to present a true and fair financial position.

2. SBI WORKING TOWARDS THE LAUNCH OF “YONO-2”: State Bank of India is working towards the launch of its next version of its digital platform—YONO (You Only Need One App). Bank’s Chairman Mr. Dinesh Kharia has expressed that during the course of the journey, SBI could realise Yono’s potential for international operations, particularly where it has retail operations. And now the bank has started leveraging YONO for its agriculture segment as well. According to the bank’s annual report, as of March 31, 2021, YONO has over 7.96 crores downloads and about 3.71 crores registrations.

3. BANKERS FEAR HUGE DISRUPTION FROM RBI’S BAN ON MASTERCARD: Many a banks (mainly —Axis bank, Yes Bank, IndusInd Bank, HDFC Bank) are to be impacted by RBI’s decision to ban Mastercard from issuing new cards for not complying with local data storage guidelines. Besides banks, Bajaj Finserve and SBI Cards may also face problems as they were issuing Mastercards. And issuing of new cards through another payment gateway would take another 2-3 months as it involves technology integration and other modalities.

4. INDIA BAD BANK TAKES SHAPE WITH SBI EXECUTIVE AS FIRST CHIEF: The National Asset Reconstruction Co Ltd (NARCL), or the so-called Bad Bank, has been registered in Mumbai with a paid-up capital of Rs 74.6 crores according to the filings with the Registrar of Companies (RoC). The Bad Bank will be headed by Mr. Padmakumar Madhavan Nair, a stressed assets expert from State Bank of India as its first Managing Director. Initially Public Sector Banks will transfer 22 bad loan accounts worth Rs 89,000 crores to NARCL. Total bad loans worth Rs 2 trillion are likely to be transferred in tranches.

5. AS FOREX RETURNS DIMINISH, RBI AND GOVERNMENT TURN TO EXPERTS FOR DEPLOYMENT ADVICE: With the rate of returns on the country’s foreign exchange reserves declining, RBI and the government are exploring ways to enhance returns and have sought external expert assistance for better deployment of Forex. There have been a number of discussions on how to better deploy forex reserves. In the past, RBI has used a portion of the forex reserves to fund infrastructure projects in the country, while there has also been suggestion that these can be deployed to capitalise public sector banks.

6. WRITE-OFFs OF Rs 1.85 LAKH CRORES AID BANKS TO REDUCE BAD LOANS IN THEIR BOOKS: Loan write-offs of Rs 1,85,000 crores during year ended March 31, 2021 has aided banks to lower Gross Non-Perfuming Assets (NPAs). However, this figure is less than the write-offs that happened in the last fiscal (Rs 2,37,876 crores). As per the disclosures made by SCBs, loans written-off accounted for more than Rs 70,000 crores in the quarter ended March 2021, in the first 3 quarters of FY 2020-21 banks had written-off bad loans worth Rs 1.15 lakh crores.

7. BharatPe EYES $6 BILLION BUSINESS IN ANNUALISED TRANSACTION PROCESSED VALUE FROM PoS BUSINESS: Fintech firm BharatPe has said that it is planning to scale up its Point of Sales (PoS) business by three folds and has set up a target of USD 6 billion (about Rs 44,000 crores) in annualised transaction processed value (TPV) by the ned of 2021-22. BharatPe is the third largest player in private PoS category, and is also working on increasing its reach by five times and sell “BharatSwipe” in 80 cities across India by the end of this fiscal. It is also planning to expand brand partnerships significantly, and offer consumer credit drive further to add value on PoS business.

1. BANK EMPLOYEES POSTED IN SENSITIVE POSITIONS TO GET SURPRISE LEAVE EVERY YEAR: Bank Employees posted in sensitive positions will get surprise leave for not less than 10 consecutive working days every year. RBI has directed all banks to adopt a “Mandatory Leave Policy” for such employees. Such employees will be sent on leave every year without any prior intimation. The leave policy will come into effect within six months from now. RBI has instructed banks to adopt Board-approved policy and prepare a list of sensitive positions to be covered under the “Mandatory Leave” requirements.

2. RAZORPAY & MASTERCARD LAUNCH SOLUTION FOR RECURRING PAYMENTS, AIM TO INTEGRATE WITH OVER 50 BANKS: Payments solution provider Razorpay has partnered with Mastercard to launch “MandateHQ” – a payment interface that will help card issuing banks to enable recurring payments for its customers. Razorpay aims to integrate MandateHQ with more than 50 banks in next 12 months. RBI had issued a framework for processing e-mandates on recurring online transactions by making Additional Factor Authentication (AFA) mandatory for all recurring transactions below Rs 5,000/- on debit/credit cards, UPI and other prepaid Payment Instruments.

3. RBI PENALISES 14 BANKS FOR NON-ADHERENCE TO RULES ON LENDING TO NBFCs: The Reserve Bank of India has penalised 14 banks including SBI, Bank of Baroda, IndusInd Bank for non-compliance with certain norms and provisions issued by it on lending to NBFCs, restrictions on loans and advances and reporting to RBI on large exposures. A scrutiny was carried out and it was observed that these 14 banks had failed to comply with the provisions and notices were sent to these banks. After examining the responses, RBI decided that it was apt to impose monetary penalty.

4. AXIS BANK OFFERS DEFENCE SERVICE SALARY PACKAGE FOR INDIAN ARMY: Axis Bank has signed an MOU with the Indian Army for offering a defence service salary package under its “Power Salute” initiative. This defence service salary package will offer different benefits to all ranks of army officers. It offers Personal Accidental cover of up to Rs 56 lakhs to all army personnel, additional up to Rs 8 lakh education grant, total Permanent Disability Cover benefit up to Rs 46 lakhs, Permanent Partial Disability cover up to Rs 46 lakhs, air accident cover of Rs 1 crore and free additional debit card for a Family Member. The benefits of MOU will cover both serving Defence Personnel and Defence Pensioners.

5. BANKS’ LIQUIDITY SURLPUS AT HIGHEST LEVEL SINCE EARLY APRIL’21: According to a report by Care Ratings, the banking system has been witnessing a liquidity surplus over the past two years, primarily on account of inflows of bank deposits and poor offtake of credit. The outstanding liquidity surplus ranged between Rs 4.8 trillion and Rs 6 trillion in June last week. Incremental deposit growth as of June 18Th (as compared to March’21) has been 1.2% as against the contraction of bank credit of -1% . In absolute terms, the outstanding bank deposits were Rs 153 trillion while the outstanding bank credit was Rs 108 trillion.

6. RBI NOTIFIES INCLUSION OF RETAIL, WHOLESALE UNDER MSME CATEGORY: RBI has notified the inclusion of retail and wholesale trade under the Micro, Small & Medium Enterprises (MSME) category. This will help retail and wholesale trade to avail the benefits of Priority Sector lending under RBI guidelines. The revised guidelines will benefit 2.5 crore retail and wholesale traders. The move would also allow them to register on Udyam Portal of MSMEs.

7. MFIs SMALLER NBFCs COLLECTIONS DROP BY 65 TO 85% IN Q1 OF THIS FISCAL: Domestic ratings agency Acuite Ratings has reported that the collection efficiencies of Micro Finance Institutions (MFIs) and smaller NBFCs have dropped by 65 to 85% during the first quarter of financial year 2021-22. The impact of the second wave of the pandemic has been more pronounced on collections of these institutions. The collections efficiencies of MFIs and NBFCs which were recovering above 90% in March’21 have been drastically dropped to 60 to 85% during the first quarter of this fiscal.

8. TRANSACTION ADVISORS FOR IDBI BANK STAKE SALE CAN SUBMIT BIDS TILL JULY 22nd: Government and LIC of India have intended to sell their full stakes in IDBI Bank with an open offer as per SEBI guidelines. The Department of Investment & Public Asset Management (DIPAM) has extended the deadline for submission for strategic divestment of IDBI bank till July 22, 2021 from the earlier date of July 13, 2021. Along with the full transfer of the stake in IDBI, there will be full transfer of management control as well.

1. IIFL TO HIRE 5,000 PEOPLE, OPEN 700 BRANCHES: Defying the general perception that the pandemic has crippled the brick-and-mortar business model, IIFL Finance is planning to open 700 branches in small cities/towns and is likely to hire about 5,000 people to run these branches. It has already obtained the approval from RBI. By the end of March 2022, IIFL Finance will have about 3,300 branches and plans to hire local people from that area as it feels that local presence is a huge plus point to attract customers. The lender has a loan book of Rs 45,000 crores, of which 91% is retail credit.

2. RESERVE BANK OF INDIA SETS JULY 30, 2021 DEADLINE FOR BANKS TO MOVE OUT CURRENT ACCOUNTS: Reserve Bank of India has set a deadline of July 30, 2021 for banks to give up current accounts of all those where their credit exposure is below a cut-off point as prescribed by RBI. The move, initiated more than a year ago, could trigger a migration of many lucrative current accounts from MNC banks to public sector banks and some large private sector banks. According to the new rule, a bank with less than 10% of the total approved facilities (which include fund based and non-fund-based finance) to a company is barred from having the company’s current account.

3. CENTRUM-BHARTPE JOINT VENTURE TO PUMP Rs 1,800 CRORES INTO PMC BANK MERGER: Reserve Bank of India has given an approval to Centrum Financial Services, a step-down arm of the diversified financial services group, to set up a Small Finance Bank (SFB) on a condition that it takes over the troubled PMC Bank. Now Centrum has entered into an MOU with digital payments setup BharatPe for launching a Small Finance Bank which will infuse Rs 1,800 crores capital into the troubled Punjab & Maharashtra Cooperative Bank (PMC Bank) on its merger with the proposed Small bank.

4. NITI AAYOG MOOTS 100% EXEMPTION FOR DONATION TO NOT-FOR-PROFIT HOSPITALS: Government think tank Niti Aayog has suggested 100% income tax exemption for donations and provision of working capital loans with lower interest rates for not-for-profit hospitals to strengthen healthcare services in India. The Niti Aayog has also pitched for involving high performing hospitals in public-private-Partnership (PPP) models for managing primary health care (PHCs) operations of government and PSU hospitals.

5. RBI ASKS BANKS TO WATCH RETAIL, MSME CREDIT AND SHORE UP CAPITAL: RBI has asked banks to monitor their exposure to the retail and Micro, Small & Medium Enterprises (MSMEs) , saying both the segments are witnessing high stress due to the pandemic effect. And also, in its Bi-Annual Financial Stability Report (FSR), RBI has asked banks to shore up capital positions while favourable market conditions prevail, improve governance and remain vigilant in the context of global spillovers. The consumer credit, which has become a favourite with banks since the reverses on the corporate and wholesale side has deteriorated after the 6-month loan moratorium program came to an end in September 2020.

6. STATE BANK OF INDIA LAUNCHES DEDICATED COUNTERS TO CURRENT ACCOUNT CUSTOMERS: State Bank of India has launched a dedicated counter across its select 360 branches for catering only to Current Account Customers. The dedicated counter known as Current Account Service Point (CASP) will address the critical needs of key current account customers and also mobilize new accounts. CASP will be staffed by trained and dedicated Relationship Managers across all centres.

7. LOAN LOSS RATIOS COULD RISE BUT BANKS HAVE ENOUGH CAPITAL: As per a report by RBI, it estimates loan losses to the tune of 232 basis points year-on-year to 9.8% by March 2022 in a baseline stress scenario. With the pandemic having hurt the businesses across sectors, the Gross Non-Performing Asset (GNPA) ratio could rise to 10.36% by March 2022 if the stress is moderate and 11.22% if it is severe. But the good news is that the banks are well-capitalised and moreover, have high provision coverage ratios. The fall in the capital adequacy would be relatively small and even if the going gets tough, all 46 banks would have adequacy ratios well above the regulatory minimum of 9%.

8. CO-OPERATIVE BANKS SHALL NOT OUTSOURCE CORE MANAGEMENT FUNCTIONS: The Reserve Bank of India has directed Cooperative banks not to outsource core management functions such as policy formation, internal audit and compliance, compliance with KYC norms, credit sanction and management investment portfolio. However, RBI said that the lenders can hire experts, including former employees on a contractual basis.

1. BANK OF MAHARASHTRA TOPS PSU BANK CHART IN MSME LOAN GROWTH IN FY 2021: Bank of Maharashtra (BoM) has become top performer among all Public Sector Banks (PSBs) in terms of retail and Micro Medium and Small Enterprises (MSMEs) growth in financial year 2020-21. BoM has recorded a 35% growth in MSME loans at 23,133 crores in 2020-21. In terms of retail lending, BoM has achieved a growth of 25.61% which is more than SBI which could achieve 16.47% growth in retail lending. However, in absolute terms SBI’s asset base in retail segment is a whopping 30 times higher (Rs 8.70 lakh crores) than BoM (Rs 28,621 crores).

2. RBI PRESCRIBES QUALIFICATIONS FOR MDs AND WHOLE TIME DIRECTORS OF COOPERTAIVE BANKS: The Reserve Bank of India has prescribed educational qualifications and a “Fit and Proper” criterion for becoming eligible for the post of Managing directors (MDs) and Whole Time Directors (WTDs) of Urban Co-operative Banks. It has clearly barred MPs, MLAs and Corporators from these posts. MDs and WTDs should be a Chartered Accountant, post graduate or have qualifications in finance discipline. The person should not be below the age of 35 or more than 70 years of age.

3. HDFC BANK INCREASES ITS LENDING TO STATE-RUN ENTITIES: HDFC Bank has lately been raising its lending to state-run entities which according to the bank is considered to be safest corporate lending in a pandemic hit year. The bank’s MSME exposure also has crossed the Rs 2 lakh crore threshold. The bank has started a new business segment of Commercial (MSME) and Rural Banking to capture the next wave of growth in rural areas.

4. SBI-LED CONSORTIUM GETS OVER Rs. 5,800 CRORES IN MALLYA LOAN DEFAULT CASE: The State Bank of India led consortium of banks that lent loans to businessman Vijay Mallya has received Rs. 5,824 crores in its accounts after shares of United Breweries Ltd (UBL) were sold recently. The Disputes Resolution Tribunal (DRT) sold these shares to SBI-led consortium on the directions of a special PMLA court that is hearing the case involving Mallya in Mumbai.

5. RBI ISSUES ELIGIBILITY CRITERIA FOR NBFCs TO PAY DIVIDENDS: The Reserve Bank of India has put in place certain conditions for Non-Banking Financial Companies (NBFCs) to pay dividends to shareholders from the financial year ending March 31, 2022. The conditions are specific to different categories of NBFCs which will have to meet minimum capital adequacy ratios, net Non-Performing Assets (NPAs) ratios and few other criteria to be able to declare the dividend. Also, the NBFCs must report a net NPA ratio of less than 6% in each of the last 3 years.

6. SBI CARD AND FABINDIA LAUNCH CO-BRANDED CONTACTLESS CREDIT CARD FOR PREMIUM CUSTOMERS: SBI Card has joined hands with lifestyle retail chain Fabindia by launching contactless co-branded credit cards to cater to the premium segment customers. The new co-branded contactless credit card combines the best-in-class rewards points on retail spends with the value back on varied spending categories, thus addressing overall spending needs of premium cardholders.

7. ICICI BANK EXTENDS INSTANT CARDLESS EMI FACILITY: ICICI Bank has introduced the instant Cardless EMI facility to online purchases made on e-commerce platforms. The facility enhances affordability to millions of the Bank’s pre-approved customers, as it allows them to buy products and services online through Equated Monthly instalments (EMIs) in just a few clicks by using their mobile phones and PAN. Customers can convert the transactions up to Rs 5 lakhs into easy EMIs.

8. SBI LAUNCHES AAROGYAM HEALTHCARE BUSINESS LOANS: State Bank of India has launched the “Aarogyam” healthcare business loan scheme to provide enhanced support to the healthcare sector amid pandemic. Under this new product, the entire healthcare ecosystem (both direct and indirect) such as hospitals, nursing homes, diagnostic centres, pathology labs, manufacturers, suppliers, importers and logistic firms engaged in healthcare can avail of loans up to Rs 100 crores (as per the geographical locations) repayable in 10 years. The Aarogyam loan can be availed either as a term loan to support expansion/modernisation or as working capital facilities such as cash credit, bank guarantee/letter of credit.

1. MICROFINANCE INSTITUTIONS PORTFOLIO ROSE BY 8.4% IN FY 2021: According to a report by credit Bureau CRIF Highmark, Microfinance Portfolio is in double digits in Financial Year 2021 even as banks are struggling to lend to big ticket borrowers. Outstanding portfolio of Microfinance sector is at Rs 2.53 lakh crores, an increase of 8.4% in financial year 2021. Due to Pandemic scenario this sector was also badly hit as borrowers who are generally small sized loan holders were adversely impacted in their ability to repay loans.

2. BharatPe REVENUE JUMPS OVER SIX TIMES TO Rs 700 CRORES IN FINANCIAL YEAR 2021: Financial Technology firm BharatPe has seen its revenue and transaction volume jump manifold in the financial year 2020-21, as pandemic has forced people and businesses to adopt digital-transactions and fund-starved small businesses seeking more credit avenues. BharatPe gives small-ticket fully unsecured loans averaging at Rs 75,000/- to its merchant members. It disbursed Rs 1,600 crores in 2020-21 to 1.8 lakh merchant customers. The figure was only 150 crores in 2019-20. This has given a growth in revenue by over 700 crores, up from about Rs 110 crores in 2019-20.

3. SECOND COVID WAVE IMPACTS BANK DEPOSITS, CURRENCY HOLDING WITH PUBLIC: Bank Deposits and currency holding with the public have been adversely impacted during the second wave of Covid-19. This indicates heavy outflows towards medical expenditure/emergencies. This is as per a report by RBI in its monthly bulletin. The rate of decline in Bank deposits as against the bank credit has also been higher, indicating that this time the banking sector component of household savings has declined. This is in sharp contrast with the spike in savings witnessed during the first wave.

4. ICICI BANK LAUNCHES “ICICI STACK” FOR CORPORATES: With Corporate loan-demand stuttering amid difficulties on the economic front, ICICI Bank has initiated a solution, aimed at profiting by offering a wider set of services to high-value clients. Its newly launched “ICICI STACK” will provide digital banking solutions to corporates, their channel partners, employees and other stake holders.

5. INDUSIND BANK LAUNCHES “INDUSEASYCREDIT”: IndusInd Bank has launched a comprehensive digital lending platform “IndusEasyCredit” that enables customers and customers of other banks as well to meet their financial requirements from the comfort of their homes. With this, both customers of IndusInd Bank and non-customers can instantly avail personal loans and credit cards on a single platform in a completely paperless and digital manner.

6. PRIVATE ARCs MOVING TO RETAIL LOANS AS NATIONAL BAD BANK BECOMES A REALITY: With RBI’s restructuring and moratoriums which has lessened the tide of bad loans among corporates and also Banks are planning to transfer big ticket bad loans to Newly proposed National Bad Bank, private Asset Reconstruction Companies (ARCs) have been banking on retail loans to drive the business in the pandemic-hit phase. The Rs 1.5 lakh crore asset reconstruction market comprises of over a dozen players in the market.

7. EXPERTS SEE NEW SURGE IN BAD LOANS COULD RISE TO 13-15% IN THIS FISCAL: With a number of large banks and Non-Banking Finance Companies (NBFCs) facing fresh challenges due to the second wave of Covid-19, bad loans are projected to see a fresh spike as the rising stress across sectors is beginning to impact the repayment capacity of borrowers. Experts in the field estimate that Non-Performing Assets (NPAs) will jump from a little under 8% (in the previous year) to nearly 15% in FY 2021-22. NBFCs and Micro Finance Institutions (MFIs) are reporting sharp surges in stressed assets.

8. RBI EXTENDS RISK-BASED INTERNAL AUDIT SYSTEM TO HOUSING FINANCE COMPANIES: Reserve Bank of India has extended the Risk-Based Internal Audit (RBIA) system to select Housing Finance Companies (HFCs) to enhance the quality and effectiveness of their internal audit system. In February this year, the RBI had issued a circular mandating the RBIA framework for select Non-Banking Finance Companies (NBFCs) and Urban Co-operative Banks by March 31, 2022. This RBIA system will apply to all deposit taking HFCs, irrespective of their size, as well as non-Deposit taking HFCs with an asset base of Rs 5,000 crores and above. Such HFCs have been asked to put in place an RBIA framework by June 30, 2022.

1. DEMAND FOR RETAIL LOANS ON THE RISE FROM TIER-2/3 CITIES AMID COVID RAGE: As per a joint report by TransUnion Cibil and Google, Covid-19 has affected borrower behaviour patterns in the consumer segment, with a majority of loan requests coming from tier-2 cities and smaller towns. Even the ticket sizes have also shrunk. The report also points out at the increasing use of technology platforms to borrow in recent times. And an analysis of consumer loan patterns by Credit Bureau showed that 49% of new retail loan borrowers are below the age of 30. Personal loans have gone up from 10% in 2017 to 60% in 2020.

2. GOVERNMENT PLANS TO DRESS UP PSBs BEFORE SALE: The government plans to dress up some Public Sector Banks’ balance sheets through capital infusion and sale of non-core assets among other measures before putting them on the block for sale. The transformation plan also includes transfer of bad loans to the proposed bad bank and reducing the employee count by offering attractive voluntary retirement schemes. Bank of Maharashtra, Bank of India & Indian Overseas Bank are the frontrunners for being privatised. Central Bank of India can also be considered based on its financial recovery.

3. INDIA OFFERS HUGE POTENTIAL FOR DIGITAL BANKS: Lending Consultancy BCG has said in one of its reports that revenue opportunities in India, which has a population of more than 130 crores, is pegged at 10 times higher than that of rest of South East Asia. India offers huge potential for Digital Challenger Banks (DCBs) but the report also sees the currency depreciation and regulations as the big concerns for Foreign Investors. The report says that Indian Regulators place significant emphasis on financial inclusion and priority sectors, which can limit the potential model and opportunity.

4. SBI UNIONS AND OTHERS ASK RBI NOT TO PERMIT PAYMENT PLATFORM BY CORPORATES: The employee Union of State Bank of India in coalition with other labour unions and NGOs have demanded the Reserve Bank of India to reject Amazon’s application to set up a new payment system. The for-profit New Umbrella Entity (NUE) system proposed by the RBI intends to set a stage for competitors to the current non-profit system by promoting private players to operate alternate for-profit payment systems. This is being opposed by most of bank unions.

5. RBI ASKS BANKS NOT TO DESTROY CCTV FOOTAGE FROM DEMONETISATION PERIOD: Reserve Bank of India has directed banks to preserve the CCTV recordings of operations at bank branches and currency chests for the period from November 8 to December 30, 2016. During this period the government had demonetised high value currency notes with an aim to check black money. On the basis of various inputs, the investigative agencies started probing matters relating to illegal accumulation of new currency notes. In order to facilitate such investigations, RBI has asked banks not to destroy the CCTV recordings of demonetisation period.

6. ICICI BANKS’S “iMOBILEPAY” APP IS BEING USED BY 2 MILLION NON-CUSTOMERS: ICICI Bank has announced that over two million customers of other banks are now using the revamped version of its mobile banking app “IMobilePay”. The bank has achieved this milestone in a span of five months. ICICI Bank had opened its mobile banking app “iMobileApp” to customers of all banks in December 2020. The first-in-the -Industry initiative has provided the significant convenience of interoperability, as it has enabled users of any bank to link their account to the app and start making payments/transactions digitally.

7. RBI’s Rs 16,000 CRORES SPECIAL LIQUIDITY FACILITY TO SIDBI WILL HELP MFIs TO MITIGATE COVID-RELATED CHALLENGES: Reserve Bank of India has decided to provide a special liquidity facility of Rs 16,000 crores to Small Industries Development Bank (SIDBI) for on-lending and refinancing to Micro-Finance Institutions (MFIs). This will help the MFIs to mitigate challenges arising due to the pandemic. Small and Medium MFIs will be prominently covered under the on-lending and refinancing facilities by SIDBI as the industry is facing disruptions in collections due to the second wave of Covid-19.

8. EQUITY MUTUAL FUNDS SEE Rs 10,000 CRORE INFLOW IN MAY’21: Equity Mutual Funds witnessed a net inflow of over Rs 10,000 crores in May 2021, making it the third consecutive monthly infusion. In March 2021 there was an inflow of Rs 9,115 crores and Rs 3,347 crores in April 2021. Prior to this, equity schemes had consistently witnessed outflow for 8 straight months from July 2020 to February 2021. This is as per the data furnished by the Association of Mutual Funds in India.

1. BANKS CAN NOW SELL VIJAY MALLYA’S PROPERTIES WORTH Rs 5,646 CRORES TO RECOVER THEIR DUES: The State Bank of India-led consortium of banks can now move to sell certain real estate properties and securities belonging to Vijay Mallya to cover his unpaid bad loans, after a court lifted the claim of the Enforcement Directorate on the assets it had seized. The Assets included several floors of the UB City Commercial tower in Bengaluru and shares in United Breweries and United Spirits to be valued at around Rs 5,646 crores.

2. BANKS, ASSET MANAGERS WANT RBI TO ALLOW SALE OF FRAUD LOANS TO ARC: Increasing instances of bank frauds have led top banks and Asset Managers to seek Central bank (RBI) to permit the sale of such accounts to Asset Reconstruction Companies (ARCs), which, at present is prohibited by the banking regulator. These banks and Asset managers also want ARCs to be granted indemnity from any prosecution arising out of a fraudulent account. Now, banks must seek the resolution of fraudulent accounts with the bankruptcy courts or Debt Recovery Tribunal (DRT). Once the account is declared as a fraud, banks do not enter into a settlement with the borrower. Indian banks are saddled with frauds loans worth Rs 5 lakh crores, almost 4.5% of the total bank credit as of March 2021.

3. RBI CANCELS LICENCE OF PUNE BASED SHIVAJIRAO BHOSLE SAHAKARI BANKS LTD: RBI has cancelled the licence of Pune based Shivajirao Bhosle Sahakari Bank Ltd as the lender does not have adequate capital and earning prospects. As per the data available, more than 98% of the depositors will receive full amount of their deposits from Deposit Insurance & Credit Guarantee Corporation (DICGC) The bank also does not comply with certain provisions of the Banking Regulations Act, 1949 and as such the continuance of the bank licence is prejudicial to the interest of its depositors.

4. RBI’S LIQUIDITY AND GROWTH-SUPPORTING MEASURES CRUSCIAL FOR RECOVERY FROM THE SECOND COVID WAVE: The measures announced by RBI to maintain liquidity and support economic growth through lower interest rates will be crucial for economic recovery from the second wave of Covid-19 pandemic. RBI, in its latest monetary policy has kept interest unchanged at record low and is committed to maintain an accommodative policy stance to support growth. However, it has slashed its growth projection for the current fiscal year from the 10.5 % earlier to 9.5%.

5. FOREX RESERVES HIT A LIFETIME HIGH: India’s foreign exchange reserves rose by USD $ 2.865 billion to a record high of USD $ 592.894 billion for the week ended May 28, 2021. This spurt is boosted by gold and currency assets. This is as per the latest RBI data. The previous all time high was USD $ 590.10 billion for the week ended January 29, 2021.

6. NON-BANK FINANCIAL COMPANIES NPAs MAY RISE TO 4 TO 5% BY MARCH 2022: Restrictions in movements imposed by various states due to lockdown conditions are likely to impact collections of Non-Bank Finance Companies (NBFCs) and Housing Finance Companies (HFCs) which may see their NPAs rise to 4.5% to 5% by March’22. This is as per a report on NBFCs and HFCs by the rating agency ICRA. The report further states that this would adversely affect their earning by about 30% lower than of the pre-covid levels.

7. NITI AAYOG SUBMITS NAMES OF PSU BANKS TO BE PRIVATISED TO CORE GROUP OF SECRETARIES ON DISINVESTMENT: Government think-tank Niti Aayog has submitted the names of likely PSU banks to be privatised to the Core group of Secretaries on Disinvestment. Niti Aayog has been entrusted with the task of selecting two Public Sector Banks and one General Insurance Company for privatisation as announced in the annual Budget 2021-22.

8. PUBLIC SECTOR BANKS LIST Rs 82,500 CRORE NPAs FOR BAD BANK: Public Sector Banks have shortlisted 28 loan accounts to be transferred to the National Asset Reconstruction Company (NARCL). Lead banks have completed the process of obtaining approval from co-lenders in 22 accounts with Rs. 82,500 crores of loan dues. According to banking sources, work is progressing on multiple fronts to ensure that the Bad Bank starts operations at the earliest.

9. 50% RESTAURANTS MAY NOT OPEN ONCE RISTRICTIONS EASE: Though the lockdown restrictions are expected to ease gradually in many states, 50% of the restaurants may not open even when curbs are eased. Hotel Industry insiders do not foresee a full recovery for the sector till the time Indians are doubly vaccinated. The second wave was more devastating for families, which would have made people hesitant and fearful to venture out. They also see an exodus of employees to other sectors post lockdowns, which will have lot of labour issues for Hotel Industry as a whole.

1. USA PIPS MAURITIUS AS SECOND LARGEST SOURCE OF FDI IN INDIA: United States of America (USA) has replaced Mauritius as the second largest source of Foreign Direct Investment (FDI) into India during 2020-21with an inflow of USD 13.82 billion. Singapore remains the number 1 source of FDI into India with an inflow of USD 17.41 billion for the third consecutive year. Mauritius has contributed USD 5.64 billion during the same period. Overall FDI into the country grew by 19% to USD 59.64 billion during 2020-21. This is as per the data released by the Department for Promotion of Industry & Internal Trade (DPIIT), Government of India.

2. ICICI BANK TO USE SATELLITE DATA TO ASSESS CREDITWORTHINESS OF FARMERS: ICICI Bank has announced a unique way to assess the creditworthiness of farmers taking farm loans. The bank will use satellite data images to assess the creditworthiness of the farmers. With this, ICICI Bank has become the first bank in India to use satellite image to measure an array of parameters related to land, irrigation and crop patterns and use it in combination with demographic and financial parameters to make quicker lending decisions for farmers. The bank is already using this technique for the past few months in over 500 villages in Maharashtra, Madhya Pradesh and Gujarat. It plans to scale up the initiative to over 63,000 villages across the country very shortly.

3. CANARA BANK ANNOUNCES THREE COVID BASED LOAN SCHEMES: Canara Bank has announced 3 types of loan schemes for its customers to provide relief amid the coronavirus pandemic. Canara Suraksha Personal Loan Scheme will offer personal loans from Rs 25,000/- to Rs 5 lakhs for Covid-19 treatment to its customers. Canara Chikitsa Healthcare Credit Facility will offer Loans from Rs 10 lakhs to Rs 50 crores to registered hospitals, nursing homes, medical practitioners and diagnostic centres. Canara Jeevanrekha Healthcare scheme will offer loan up to Rs 2 crore for manufacture and supply of healthcare products at a concessional interest rate.

4. AGEING BAD LOANS, A BIG WORRY FOR SBI: Swelling aged (old carried forward) bad loans is a worrying factor for State Bank of India (SBI). These old bad loans are around 65% of the total bad loan portfolio of SBI in FY 2021. This is 5% more than the previous year. These old bad loans which increase every year require the banks to set aside higher sums of provisions which makes a dent in the profits. The increase signals the quantum of doubtful assets with lower chances of recovery. The figure of old bad loans in SBI stood at Rs 82,847 crores in FY 2020-21.

5. PAYTM VISA PHYSICAL DEBIT CARDS SOON: Paytm Payments Bank will soon launch physical debit cards issued by Visa. Currently, it offers physical debit cards by RuPay and virtual debit cards by Visa. It has already issued 45 lakh virtual Visa debit cards and plans to distribute over 10 lakh physical Visa Debit cards soon. Paytm is one of the largest issuers of RuPay debit cards to its customers in the country. The customers can apply for physical Visa Debit card through its Paytm App.

6. RBI ISSUES GUIDELINES FOR AMALGAMATION OF DISTRICT CENTRAL CO-OP BANKS WITH STATE CO-OP BANKS: RBI has come out with the guidelines for amalgamation of District Central Co-operative Banks (DCCBs) with State Central Co-operative Bank (StCB). As per the guidelines, RBI will consider the proposal for amalgamation when the state government makes a written proposal for amalgamating one or more DCCBs with the StCB. Besides, there should be an additional capital infusion strategy, assurance regarding financial support if required, projected business model with clear profitability and proposed governance model for the amalgamated bank. The scheme of amalgamation has to be approved by the requisite majority of shareholders.

7. RBI FLAGS RISK OF BUBBLE IN INDIAN EQUITY MARKETS: Reserve Bank of India has said that the sharp rally in the domestic equity markets despite an estimated contraction of 8% in GDP in 2020-21 poses the risk of a bubble. The benchmark index has crossed the 50,000 mark which represents a 100% increase from the slump just before the beginning of the lockdown in March’20 and 68% rise over the year 2020-21. The stock markets are mainly driven by money supply and Foreign Portfolio Investment (FPI). Also, economic prospects contribute largely to the movement of stock market but presently the impact of economic prospects is very bleak as compared to money supply and FPI.

8. BANK FRAUDS FALL BY 25% IN 2020-21: Bank frauds of Rs 1 lakh and above were reduced by 25% to Rs 1.38 trillion in financial year 2020-21 with the numbers of such cases also seeing a decline by 15%. This is as per the RBI’s annual report released this week. The share of public sector banks in total frauds, both in value and numbers decreased while that of private banks increased during the period.

1. RBI TO TRANSFER HIGHER PERCENTAGE OF SURPLUS TO THE GOVERNMENT IN FY 21: The Reserve Bank of India has raised its surplus transfer to the government to nearly 73% in financial year 2021. The surplus transfer amount is nearly Rs 1 lakh Crore, beating market expectations and even budget projection by the centre. This has become possible due to the gains in revaluation of foreign exchange reserves. After setting aside all the prescribed provisions, the RBI board approved the transfer of Rs 99,122 crores as surplus to the Central Government for the accounting period of nine months ended March 31,2021. This is 73.5% higher than Rs 57,128 crores transferred as surplus in FY 2020.

2. SUPREME COURT ALLOWS PERSONAL BANKRUPTCY CASES TO RESUME AGAINST INDIVIDUALS: The Supreme Court has now allowed personal bankruptcy cases to resume against individuals including those individuals who guaranteed those loans. Last year Lenders had filed bankruptcy cases against big tycoons including Reliance Group’s Anil Ambani, Dewan Housing Finance’s Kapil Wadhwan etc but the cases were halted on appeals filed in higher courts. The said verdict is a boost for lenders as it allows them to seek recovery dues from guarantors of loans even while the bankruptcy processes against the companies are pending.

3. PSU BANK EMPLOYEES TO GET SMALL GAINS THROUGH PERFORMANC-LINKED INCENTIVE: Employees of many Public Sector Banks are in for small gains due to the performance-linked component in the wage agreement signed with IBA in November 2020. Canara Bank has paid out a performance-linked incentive to its employees, equivalent to 15 days’ pay. Bank of Maharashtra which has posted a net profit of 165 crores which is 187% increase over the last years has also distributed the performance-linked incentive to its employees. This incentive is available to all employees irrespective of their rank or designation.

4. PSU BANKS SEEK SECOND RESTRUCTURING WINDOW, LOWER PROVISIONS: Public Sector banks (PSBs) have asked Reserve Bank of India to extend a second round of restructuring for all companies with a reduced provision rate of 5% as against the 10% last year. CEOs of all 12 PSBs were unanimous in their request for a second round of restructuring as the second wave of Covid-19 pandemic has hit both lives and livelihood of many and the entire economy is badly affected.

5. BANK OF BAROA PLANS TO HIRE DIGITAL MARKETING AGENCIES TO STRENGTHEN BRAND, CUSTOMER OUTREACH: Bank of Baroda is planning to hire three digital marketing agencies to strengthen its brand and aiming to be a preferred choice of customers with innovative banking models. Bank of Baroda is looking at an overall marketing strategy, improving effectiveness of digital eco system, suggesting ideas as per requirement of the bank. The digital marketing agencies thus hired, will be responsible for digital marketing communication as well across various media.

6. NOW YOU CAN AVAIL DOORSTEP BANKING FROM GOVERNMENT BANKS FOR A FEE: Major government banks have come together to form Public Sector Bank (PSB) Alliance to jointly offer important banking services to its customers which include both financial and non-financial services. According to the website of Psbdsb.in, the banks have engaged Atyati Technologies Pvt Ltd and Integra Microsystem Pvt Ltd to provide doorstep banking. The services are at present in 100 major centres across India. All these services are chargeable.

7. CREDIT FINANCE TO MSMEs UNDER CGTSME SCHEME DECLINES BY 26%: The Credit Guarantee Fund Trust for Micro, & Small Enterprises (CGTSME) which offers guarantee cover to banks and other lenders for collateral-free loans to Micro and Small Enterprises (MSEs) in case of default, has seen a 26% reduction in in the number of approved loans in financial year 2021. According to the available data from MSME Ministry, 6.19 lakh loans involving Rs 31,349 crores worth credit guarantee were approved in last financial year (FY’21) as compared to 8.38 lakh loans worth Rs 45,215 crores in FY’20.

8. INCOME TAX RETURNS FILING DEADLINE EXTENDED BY 2 MONTHS FOR INDIVIDUALS: In view of the ongoing severe impact due to the second wave of Covid-19 pandemic on individual tax payers and Corporates, the Income Tax Department has extended the due date of various compliances, including income tax return filing for salaried individuals by two months to September 30 from July 31. For Corporate tax payers and individual tax payers liable to tax audit, the due date has been extended by one month to November 30 from the existing date of October 31.

1. GLOBAL BANKS SHIFT THEIR OPERATIONS FROM INDIA DUE TO COVID IMPACT: The tech centres of global banks and financial institutions based in Bangalore, Gurgaon, Chennai and Mumbai whose staff are getting affected by Covid second wave has forced them to move some work to other geographics temporarily. Goldman Sach’s Bangalore office has over 6,000 employees had an impact as some of its employees were affected by Covid and they have moved some work from Bangalore to London. Likewise, HSBC which has 39,000 employees with 10,000 of them working in Bangalore tech centre. After many of its employees were affected by Covid, they have moved some of its work to China and Krakow in Poland.

2. RBI CANCELS UNITED CO-OPERATIVE BANK’S LICENSE: The Reserve Bank of India has cancelled the license of United Co-operative Bank Ltd of West Bengal as the bank does not have adequate capital and earning prospects. All depositors of the bank will receive the full amount of their deposits from the Deposit Insurance & Credit Guarantee Corporation (DICGC). With this, the bank ceases to carry on banking business with effect from May 13, 2021 and the process of liquidation will begin now.

3. GEOJIT SIGNS MOU WITH PUNJAB NATIONAL BANK TO OFFER THREE-IN-ONE ACCOUNT: Geojit Financial Services and Punjab National Bank (PNB) have joined hands to tap retail customers who are investing in capital markets by offering them a Three-in-One account which will combine savings, Dmat accounts of the bank with Geojit’s trading account. PNB customers can now open a Geojit trading account online in a few steps and start investing online in equity as well as Geojit’s Smartfolio product, which offers basket of carefully identified and curated stocks.

4. JANA SMALL BANK LAUNCHES “I CHOOSE MY NUMBER” FEATURED BANK ACCOUNT: Jan Small Finance Bank Ltd has announced the launch of “I choose my Number” feature for all its customers across India. This new feature gives the banks existing and new customers a freedom to opt and select their favourite number as their savings or current account number. The allocation of the account number as chosen by the customer will depend on the availability of the requested number.

5. BANK OF BARODA LAUNCHES “MICROSITE” TO SUPPORT ITS STAFF AMID SECOND WAVE OF COVID-19: Bank of Baroda has launched a micro-website that will serve as an emergency networking platform for all its employees amid second wave of Covid-19. This microsite will offer vital data, including a network of plasma donors to employees who are in need of it. Recovered employees can also enrol themselves voluntarily as donors. Apart from this, the site offers host of other facilities like providing contact details across zones, registration facility for employees to sign up for volunteer. The site also hosts external links for suppliers of necessities like oxygen cylinders, Ramdesivior, plasma and hospital beds.

6. ABOUT 2,118 BRANCHES OF PUBLIC SECTOR BANKS CLOSED OR MERGED IN LAST FISCAL: As many as 2,118 branches of 10 Public Sector Banks (PSBs) have either been closed or merged with other bank branches in the last fiscal. This data is available as per a RTI Reply. The highest number of 1,283 branches of Bank of Baroda were either closed or merged. These closures or merger of bank branches is the result of consolidation of 10 PSU banks in to four banks in the last financial year.

7. RBI MODIFIES NORMS FOR UNDERTAKING GOVERNMENT BUSINESS BY PRIVATE BANKS: RBI has come out with modified guidelines that allow sound private banks to undertake government business, whether at Centre or State. According to the modified norms, scheduled Private banks, which are soundly managed and are not under Prompt Corrective Action (PCA) framework of RBI, can undertake government business after executing an agreement with Reserve Bank of India.

8. FINANCE MINISTRY ASKS RESPECTIVE STATE GOVERNMENTS TO VACCINATE BANK AND INSURANCE STAFF ON PRIORITY: The Finance Ministry has asked respective state governments to accord priority in vaccinating bank and insurance staff. The letter to state governments from the Finance Ministry lauds the efforts of bank employees and says that they are exposed to high risks during these difficult times.

9. RBI AMENDS KYC NORMS TO FURTHER LEVERAGE VIDEO-BASED CUSTOMER IDENTIFICATION PROCESS: RBI has amended its master direction on Know-Your-Customer (KYC) to further leverage the Video-based Customer Identification Process (V-CIP) and simplify the process of periodic updation of KYC. V-CIP is an alternate customer identification with facial recognition and customer due diligence by a bank official by undertaking seamless, secure, live audio-visual interaction with the customer to obtain information.

1. RBI BOOSTER DOSE TO SUPPORT HEALTH SECTOR: Reserve Bank of India has taken a series of liquidity-boosting and loan-relief measures to help many sectors that have been adversely affected by the second wave of Covid-19 pandemic. It has announced a Rs 50,000 crore on-tap liquidity window which is aimed at rapidly boosting private investment in healthcare and financing individuals who have contacted Covid. Now banks will design schemes with extremely competitive rates and draw up eligibility criteria. The advantages of this scheme are that the terms and conditions are standardised and loans can be sanctioned without delay.

2. PSBs FORM “ALLIANCE” TO PROVIDE DOORSTEP BANKING: Public Sector Banks (PSBs) have come together to form a new Alliance in an attempt to take banking services to the doorsteps of their customers as they battle the challenges posed by Covid-19 pandemic. The new alliance is called PSB Alliance Pvt Ltd, will engage banking correspondents on behalf of the 12 public sector banks under a common Standard operating Procedure (SoP) to provide financial and non-financial services directly to the customers at their doorstep. Former SBI Chief General Manager Mr. Rajinder Mirakhur has been appointed as CEO of the new company.

3. GOVERNMENT OKAYS IDBI BANK STRATEGIC DISINVESTMENT: The government has approved the strategic disinvestment and transfer of management control in IDBI Bank. Presently the government holds a 45.48% stake in IDBI bank with LIC of India holding 49.24% stake. The government in a statement has said that the extent of respective shareholding to be divested by the government and LIC of India will be decided at the time of structuring of transaction in constitution with RBI. The strategic buyer will infuse funds, new technology and best management practices for optimal business development and growth of the bank.

4. BANKS, NBFCs ASK RBI TO RELAX BAD LOAN RULES: The second wave of Covid-19 pandemic is worse than the first wave which has disrupted the economy in a bad way and this has prompted banks and Non-Banking Financial Companies (NBFCs) to ask RBI to relax Non-Performing Assets (NPAs) or Bad Loan rules. They have requested for flexible restructuring up to two years across all categories of borrowers to be allowed. They have also asked for easier terms of repayment and moratorium on principal payments for borrowers below Rs 2 crore category, where the bankers feel that the impact of pandemic is severe. The lenders have also sought a cut-off time till September 2021 for fresh restructuring proposals for all standard assets and requested that restructuring be allowed outside the framework as prescribed by the K V Kamath Committee.

5. YES BANK SAYS NO TO NATIONAL ASSET RECONSTRUCTION: Yes Bank has said that it will not sell its bad loans to the newly proposed National Asset Reconstruction Company (NARC) as it believes it would be able to recover more than the proposed bad debt aggregator. At the same time the bank is still pursuing to form its own Asset Reconstruction Company (ARC) and is waiting for the new set of guidelines from RBI. RBI has refused Yes Bank’s earlier proposal to hold a majority stake in an ARC citing conflict of interest.

6. LOAN RECASTS---SMALL BORROWERS GET FRESH RELIEF FROM RBI: Individuals and Small businesses with loans up to Rs 25 crores who have never undergone restructuring before and who were classified as standard assets as on March 31.2021, shall be eligible under the new scheme floated by RBI which is named as Resolution Framework 2.0. The second wave of Covid pandemic has created new uncertainties and has impacted the economic growth and the most vulnerable category are the individuals, small businesses and MSMEs.

1. BANKS NEED TO ADOPT DIGITISATION: Former Finance Secretary Mr. S C Garg has said that with the surge in digital transactions there is a need for banks to adopt the model of Fintech companies. Fintech Companies have already captured a lot of area in payments space and now they are penetrating in credit segment as well which is the principal business of banks. He further said that if banks do not adopt the digitisation path, then they will start perishing.

2. ICICI BANKS LAUNCHES NEW DIGITAL PLATFORM FOR MERCHANTS: ICICI bank has launched a digital and contactless banking platform for merchants. The new platform named “Merchant Stack”, is targeted to cover over 2 crores retail merchants in the country to render banking services digitally. The Merchant Stack provides banking solutions including a zero-balance current account, instant credit facilities, digital store management and value-added services like e-commerce and digital marketing platforms.

3. SBI EARMARKS Rs 30 CRORES TO SET UP MAKESHIFT HOSPITALS FOR COVID PATIENTS: State Bank of India has decided to set up makeshift hospitals with ICU facilities for Covid-19 patients in some of the worst affected states. The bank is already in talks with some NGOs and hospital management for setting up medical facilities on an emergency basis. This is as per the Corporate Social Responsibility (CSR) initiatives. The bank intends to put in place 1,000 beds with 50 ICU facilities. It could be 120 beds at some places, while 150 at other places with adequate healthcare facilities.

4. BAD BANK TO GET Rs 2 LAKH CRORE OF DEFAULTING COMPANIES’ LOANS: The Indian Banks’ Association (IBA) has asked member banks to identify large loans where they are lead bankers and get approval from co-lenders so that these loans can be sold to National Asset Reconstruction Company (NARC) or the Bad bank. The association has identified 102 corporate bad loans, totalling to Rs 2 lakh crores, where the amount outstanding in each is over Rs 500 crores. They include loans in a variety of industries. These loans have been laying in the books of the banks for years with many accounts admitted under insolvency process and these loans are almost fully provided for by the banks.

5. RBI ISSUES GUIDELINES FOR APPOINTMENT OF STATUTORY AUDITORS OF BANKS, NBFCs: The Reserve Bank of India has tightened norms for appointing auditors and capped the numbers based on asset size of the bank. As per the new norms, banks will be required to take prior approval of RBI for appointment or reappointment of statutory auditors on annual basis. For banks with an asset size of Rs 15,000 crore and more, statutory audit will be conducted under joint audit of a minimum of two audit firms. All other entities should appoint a minimum of one audit firm for conducting statutory audit. RBI has also set criteria for audit firms regarding the number of audits they can take at a time and how they should conduct it.

6. RBI CAPS THE TENURE AND AGE LIMIT OF PRIVATE BANK CHIEFS’ : The Reserve Bank of India has capped both the tenure and age limit for senior Management including that of Chairman in all private banks. While the cap for non-executive directors and Chairman is set at 75 years, their tenure is fixed for 8 years and they can re-join after a gap of 3 years if they are found fit. Likewise, the posts of Managing Director, Chief Executive Officer as well as Whole Time Directors are capped at not more than 15 years. Banks will have to implement this norm by October 1, 2021.

7. OXYGEN/OXY-ANCILLARY SUPPLY COMPANIES TO GET LOAN FROM SIDBI AT 4.5% TO 6%: The Small Industries Development Bank of India (SIDBI) has launched two quick-delivery schemes to fund businesses in the Micro, Small & Medium Enterprise (MSME) segment that are helping tackle the second wave of the coronavirus pandemic. Under its scheme “SHWAS”, MSMEs engaged in manufacturing of oxygen cylinders, oxy-generators, oxygen concentrators, liquid oxygen or providing services in transportation, storage, refilling or supply of these items, will be eligible for low-cost credit. The rate of interest for such loans would be from 4.5% to 6%.

8. LOAN GROWTH REACHES NEW LOW DURING THE PANDEMIC YEAR: Bank loans to both large industries as well as small scale sector contracted in the Covid hit fiscal year. Loans to large industries fell by 0.8%. But the farm sector and the medium sized industries which were well supported by the government with special schemes and subsidies, saw a considerable growth. Agri loans rose by 12.3% in the year ended March 31, 2021 as compared to 4 % a year before. The loans to retail grew by 10%.

1. RBI BANS AMERICAN EXPRESS AND DINERS CLUB FROM SELLING NEW CARDS: Reserve Bank of India has banned American Express and Diners Club International from issuing new cards from May 1, 2021. The action has been initiated as these entities have been found that they were not storing payment data which the RBI had instructed them to store in India. As per the directions of RBI, all payment system providers need to store the payment data only in India.

2. CITI BANK’S CONSUMER BUSINESS ACROSS 10 MARKETS VALUED AT AROUND $ 8 BILLION: The Australian brokerage firm, Macquarie has estimated the value of Citibank’s consumer business across 10 markets out of the 13 that the bank has put on sale in the Asia pacific region at around $ 8 billion. The Indian business, which is also a part of the 10 markets, could fetch between $ 1.9 to $2.15 billion. Macquarie further added that DBS bank Ltd, Oriental Bank of China (OCBC) and Standard Chartered Bank are the most likely contenders to buy the Asia Pacific business.

3. INDIABULLS HOUSING FINANCE TO CHANGE ITS BUSINESS STYLE, TO BECOME ORIGINATOR OF LOANS: Indiabulls Housing Finance Ltd, a leading home-financier, no longer wants to be a lender. The lender has decided to be an originator of loans for the industry leader and India’s pioneer housing loan company- Housing Development Finance Corporation (HDFC). As per the new announced partnership, Indiabulls will originate and process retail home loans as per the jointly formulated credit parameters and eligibility criteria. Of these loans, 80% will be on HDFC’s books and 20% will be retained by Indiabulls.

4. COVID-19 RELATED DISRUPTIONS RAISE CONCERNS OVER NBFCs’ RETAIL LOANS: The rising Covid-19 cases since March’21 has again raised concerns on the asset quality of retails loans of NBFCs and Housing Finance Companies (HFCs) given the increasing instances of lockdowns in various cities across the country coupled with a gradual rise in severity of such restrictions by some state governments. The restrictions on movement would have a bearing on collection efforts for NBFCs, especially for microfinance loans where cash collections still remain dominant. This is as per a report placed by rating agency Icra Ratings.

5. BANKS TO CURTAIL BUSINESS HOURS, TO PROVIDE BASIC SERVICES: The Indian Banks’ Association has advised its member banks to provide basic banking services within restricted business hours till 2 pm as a business continuity plan in response to the surge in coronavirus cases. The banking body has laid out Standard Operating procedures (SOP) for bank branches but stressed on state-wise modifications on the gravity of the situation in respective states. Employees may be called on rotation basis or be allowed to work from home depending on the nature of the job. Ideally, 50% staff may be called for branch duty on rotation basis.

6. NPAs OF PUBLIC SECTOR BANKS MAY CROSS 18% IN EXTREME CASE SCENARIO: Former RBI Deputy Governor H R Khan has said that given the second Covid-19 wave all over the country, The Non-Performing assets (NPAs) of Public Sector Banks (PSBs) could cross 18% if there is further deterioration in economic activity due to the pandemic. Under the present circumstances it is projected that the NPAs would spurge to 13.5% of advances by September 2021, from 7.5% in September 2020

7. INDIAN BANKS GET NEW TOOL TO ASSESS “NEW TO CREDIT” CUSTOMERS: India’s oldest credit assessment company TransUnion Cibil has launched “CreditVision Score”, an eligibility score for new to credit customers who have never taken loan or have used only credit cards and hence have no formal credit history. CreditVision Score will use an algorithm to continuously monitor behavioural trends of subjects to capture any major shifts in trends, making it easier to lenders to assess their credit risk for such borrowers. The score ranges from 101 to 200, with higher values indicating lower credit risk or reduced probability of default.

8. GST OFFICERS TO BE SOON ARMED WITH REAL TIME DATA ON VEHICLES MOVING WITHOUT e-WAY BILLS: The government is working on a system to soon provide report to GST officers on a real-time basis for those vehicles which are moving without e-way bills. This will help to intercept stuck trucks at toll plazas and check GST evasion.

1. RESERVE BANK OF INDIA SETS UP REGULATORY REVIEW AUTHORITY TO REVIEW REGULATIONS, EASE COMPLIANCE: The Reserve Bank of India (RBI) has announced the setting up of a Regulatory Review Authority (RRA 2.0), to review regulations internally in consultation with other stake holders. The RRA 2.0 is thus named as such, as it follows a similar exercise conducted in 1999-2000. Deputy Governor Mr. M Rajeshwar Rao has been appointed as the Head of RRA 2.0. The recommendations will enable RBI to streamline and increase the effectiveness of several procedures, simplify regulatory prescriptions and will help in issuing master circulars and reduce burden on regulated entities.

2. GOVERNMENT ASKS PUBLIC SECTOR BANKS TO ADOPT NON-COERCIVE STRATEGY FOR RECOVERY OF EDUCATION LOANS: The government has asked Public Sector Banks (PSBs) to adopt non-coercive strategy for recovery of education loans. This comes after concerns were raised on the deteriorating condition of education loans in PSBs. The Non-Performing Assets (NPAs) level in education loans has touched 9.55% in December 2020, up from 7.61% in March’20. The government has addressed this issue through its nominees on bank boards.

3. COVID-19 WAVE PUSHES INDIA’S MIDDLE CLASS TOWARDS POVERTY: As the World continues to be ravaged by the covid pandemic since the last one year, it is becoming increasingly evident that the greatest burden has fallen on the poor and the middle-class. Many a poor class and middle-income group public who are not in an occupation in which Work-From-Home (WFH) is feasible are the worst sufferers as they have seen a drastic reduction in their incomes. Now the second wave of Covid-19 has stuck India, and the middle-class dreams of tens of millions of people face an even greater peril. Already, about 32 million people in India were driven into poverty by the pandemic last year.

4. BANK UNIONS REQUEST FINANCE MINISTRY FOR EMERGENCY STEPS TO PROTECT BANKSERS AS COVID-19 SURGES: Amid rising Covid-19 cases across country, bank unions have asked the Finance Ministry to initiate measures such as reducing bank working days and allowing banks to work with minimum staff to protect employees from Coronavirus infection. The United Forum of Bank Unions (UFBU), an umbrella of nine bank unions has given a representation to the Finance Ministry. Apart from these measures, it has already written to the Ministry for vaccination of bank employees on priority basis to instil confidence in their minds.

5. CITI BANK TO EXIT RETAIL BANKING IN INDIA: Citi Bank will shut its India retail banking business which includes credit cards, savings bank accounts, retail loans as part of its global decision to exit 13 markets, as the US-based bank focuses on a few wealthy regions around the World. Citi Bank started Retail banking in India in 1985 and was among the pioneers of credit cards. Now the bank says it will concentrate on corporate and institutional banking in India. Citi Bank will exit retail banking operations in Australia, Bahrain, India, China, Indonesia, South Korea, Malaysia, Poland, Russia, Taiwan, Philippines, Thailand and Vietnam.

6. HDFC BANK NET PROFIT JUMPS BY 18% IN QUARTER-04 OF FY 20-21: HDFC bank has reported an 18.2% year-on-year growth in its standalone profit at Rs 8,186.5 crores for the quarter ended March’21. As on March’20 the profit was Rs 6,927 crores. The increase in profit is mainly because of increase in Net Interest Income (NII) which grew by 12.60%. The profits would have been much more but for the provisions which rose by 24.02% during the quarter to Rs 4,693.70 crores.

7. LARGE PUBLIC SECTOR BANKS SPEED UP DIGITISATION IN THE POST-MERGER ERA: Public Sector banks (PSBs) have historically lagged behind their private peers in terms of their adoption of technology and digital systems. That might be changing as a pandemic that refuses to die, is forcing every bank to take a hard look at the way they have been doing business. For PSBs, the need to change has become even more relevant as mergers have expanded their scale and competition from tech-oriented players has only intensified.

8. SUPREME COURT ISSUES GUIDELINES FOR CHEQUE BOUNCE CASES, ASKS GOVERNMENT TO AMEND LAWS: Over the years, courts have been inundated with cheque bounce complaints which could not be decided within a reasonable time. To ensure speedy disposal of more than 35 lakh cheque bounce cases pending in various courts, the Supreme Court has given a number of directions, including asking the government to amend the laws to allow clubbing of multiple trials in cases filed for a same transaction against anyone.

1. RBI DIRECTS BANKS TO REFUND COMPOUND INTEREST CHARGED DURING MORATORIUM TO BORROWERS: The Reserve Bank of India has asked all banks to refund the compound interest (Interest on interest) charged on loan accounts during the moratorium period. Banks will have to immediately put in place board-approved policies to refund or adjust the “interest on interest” charged to borrowers during the period March 01, 2020 to August 31, 2020. Icra, the rating agency, in one of its report has estimated that the fresh refund exercise could be to the tune of an additional load of Rs. 7,500 crores for loans over Rs 2 crores.

2. FINTECH FIRMS WILL SOON PROCESS NEFT, RTGS PAYMENTS: Reserve Bank of India has announced a slew of measures for digital payments such as allowing Fintech companies to process NEFT and RTGS transactions and also set new norms on interoperability and cash withdrawal facilities for digital payment wallets. These measures are aimed at levelling the playing field for Non-bank Payment operators and banks, while also reducing settlement risks by widening the ecosystem. This means that companies such as Paytm, Visa, Mastercard and PhonePe among others will soon be able to process RTGS and NEFT payments.

3. MINI LOCKDOWN MAY AFFECT MICROFINANCE INSTITUTIONS’ COLLECTIONS: Crisil Ratings Agency in one of its latest reports has written that Microfinance Institutions (MFIs) may face challenges in loan recoveries if more states look at imposing mini-lockdowns like Maharashtra amid a surge in Covid-19 cases. Maharashtra, which is witnessing rise in maximum number of Covid-19 cases, has announced the most stringent restrictions—a mini-lockdown till April 30, 2021. Many states have already announced night curfew. And according to Crisil, if these curbs continue for long, MFI recovery would be greatly affected.

4. AIRTEL PAYMENTS BANK ANNOUNCES “REWARDS123” SAVINGS ACCOUNT, OFFERS BENEFITS ON DIGITAL TRANSACTIONS: Airtel Payments Bank has announced its new savings account “Rewards123” that offers other benefits and value to customers when they transact digitally using the bank account. Customers can get “Rewards123” at an annual fee of Rs 299/- and avail benefits ranging from certain cashback per month on payments for prepaid recharges, post-paid, broadband, landline and DTH bill payments, load money benefits and shopping rewards. Other benefits include zero minimum balance and free platinum online Mastercard Debit Card.

5. NBFCs FACE ASSET QUALITY RISKS AMIDST RESURGENCE OF COVID-19 INFECTIONS: Indian Non-Banking Financial Companies (NBFCs) face renewed asset quality challenges and liquidity risks amid a second wave of coronavirus infections according to global ratings firm Fitch Ratings. These risks could increase if recent restrictions to contain the pandemic are expanded or prolonged, leading to greater economic and operational disruptions.

6. BANKS WANT FREE VACCINE SHOTS TO THEIR EMPLOYEES: Indian Banks’ Association (IBA) has urged the government to allow vaccination of bankers against Covid-19 free of charge and without any age restrictions, like it was done for armed forces, police, healthcare and frontline workers. IBA says that bank employees are facing the risk of infection during public dealings. In a letter to the Ministry, IBA Chairman Mr Sunil Mehta noted that bank employees have been working uninterrupted while braving numerous odds since the Covid-19 pandemic outbreak last year.

7. THE TYPES OF NRI INCOMES THAT ARE TAXABLE IN INDIA: Tax on individual’s income depends on his source and the residential status in India. The residential status of an Indian citizen needs to be determined individually for every financial year which may vary from year to year. Till FY 2019-20, Non-Resident Indians (NRIs) would include individuals of Indian Origin who resides in India for less than 182 days in a particular financial year. However, in Budget 2020, the residency period has been reduced to 120 days for NRIs whose Indian Income is more than Rs 15 lakhs. As per the residency rules, an NRI is liable to pay income tax only on the income earned or accrued in India.

8. EQUITY MUTUAL FUNDS SEE INFLOWS AFTER 8 MONTHS: After seeing net outflows for continuous 8 months, equity mutual funds in March’21 saw investors re-allocating funds to equity schemes. Open-ended equity schemes saw net inflows of Rs 9,115 crores. This is as per a data from Association of Mutual Funds (AMFI). Mutual Funds have also seen sharp growth in Assets Under Management for FY 21, jumping at a rate of 30% as compared to last year.

1. PNB PLANS TO HIRE NON-JUDICIAL MEMBER TO SCRUTINISE PROPOSALS ON COMPROMISE AND WRITE OFF: Punjab National Bank (PNB) is planning to hire a non-judicial member for seeking advice on issues related to compromise settlement and write-off cases in loans. The bank has invited Expression of Intent (EoI) from professional and retired personnel. The non-judicial member will act as a member of the Head Office Committee which has been constituted by the bank for scrutinising the proposals relating to compromise and write-off.

2. ICICI BANK AND PhonePe TIE UP FOR ISSUANCE OF FASTag: ICICI bank Ltd and digital payment wallet PhonePe have partnered for issuance of FASTag, which facilitates electronic payment of fee at all toll booth points across India. Under the agreement, the issuance of FASTag will take place by using UPI on PhonePe App. All PhonePe app users can order and track the ICICI Bank FASTag conveniently on the app. Those PhonePe users who are also ICICI Bank customers do not need to visit the bank or the toll station in person to buy FASTag.

3. GOVERNMENT TO INJECT Rs 14,500 CRORES CAPITAL INTO 4 WEAK PUBLIC SECTOR BANKS: Government will inject Rs 145 billion (Rs 14,500 crores) into 4 Public Sector Banks to help strengthen their capital buffer and potentially free these banks from regulatory curbs. Central Bank of India, Indian Overseas Bank, Bank of India and UCO Bank are the four banks who will receive the funds through zero-coupon bonds. In this, except Bank of India all other three banks are under the Prompt Corrective Action (PCA) norms.

4. RISING COVID CASES COULD DERAIL FINANCIAL SECTOR RECOVERY: Rising Covid cases could potentially lead to severe lockdowns impacting economic activity and this will badly affect the financial sector. Eight large states including Maharashtra (which has Mumbai, the financial capital of the country) are leading in the Covid spike and it is spreading like wild fire. ICICI Securities in one of its report has stated that the investor confidence could be shaken if Covid cases continue to rise leading to a broad-based disruption.

5. BANK DEPOSITORS MAY FACE NEGATIVE RETURNS: Millions of bank depositors are faced with negative returns on their term deposits in commercial banks as the rate of interest on bank deposits have fallen to a historic low and at the same time the inflation is expected to hover around 5%. Experts say that since the inflation is hovering around 5% till September’20, hopes of a sizable positive return on bank deposits in the near future will solely depend upon the banks’ willingness to raise deposit interest rates.

6. BHIM UPI TRANSACTIONS MORE THAN DOUBLE IN MARCH’21: The number of transactions through BHIM UPI has more than doubled to 273 crores in March 2021. In March’20, around 125 crores transactions took place through BHIM UPI. The value of UPI transactions during March’21 stood at Rs 5,04, 886 Crores as against that of Rs 2,06,462 crores in March’20. In February’21, the number of BHIM UPI transactions were 229 crores valued at Rs 4,25,062 crores. This data is released by National Payments Corporation of India (NPCI).

7. INCOME TAX REFUNDS SEES AN INCREASE OF 43%: The Income Tax Department has issued refunds worth Rs 2.62 Lakhs crores to more than 2.38 crore tax payers in FY 20-21. This includes Rs 87,749 crore personal income tax refunds to 2.34 crore tax payers and Rs 1.74 lakh crore corporate tax refunds to around 3.46 lakh cases. The refunds issued in 2020-21 shows an increase of almost 43% over the last year. The total refunds issued in March’20 were Rs 1.83 lakh crore.

8. BANK CREDIT TO GROW AT 10% IN FY 22: According to rating agency Crisil, Banking system’s credit growth will almost double to 10% in financial year 2021-22 on account of speedy economic recovery and policy interventions. The quantum of Non-Performing assets (NPAs) will rise up to 10.5 to 11% by the end of FY 2021-22 which is a bit lower than what was expected. The GDP growth is expected to stand at 11% after a 7.7% contraction in the pandemic affected 2020-21.

9. SBI TO REVAMP MSME LENDING OPERATIONS TO INCREASE EFFICIENCY: State Bank of India (SBI) is planning to revamp its entire operational setup for lending to Micro, Small, & Medium Enterprises (MSMEs) with a view to improve Turnaround Time (TAT) and customer experience while keeping bad loans in check. Currently the bank’s share in MSME category is 15%. And with this revamp, it expects to increase this market share considerably.

1. FUTURE OF BANKING IN INDIA, RBI FORESEES FOUR KINDS OF BANKS: Reserve Bank of India (RBI) Governor Shri Shaktikanta Das has said that he foresees four categories of banks in the current decade. RBI is in discussion with the Central Government on this issue. Among the four categories, the first set of banks will be dominated by a few large banks with domestic and international presence. Next set will be several mid-sized banks with an economy-wide presence. The third set would have smaller private sector banks, Small Finance Banks (SFBs), Regional Rural banks (RRBs) and Co-operative banks which may specifically cater to the credit needs of small borrowers. The fourth segment would consist of digital players who may act as service providers directly to customers or through the banks.

2. TATA SONS READYING “UNIVERSAL” PAYMENTS SOLUTION: Tata Group’s retail payment entity Tata Sons is working on a mobile phone-based Universal point of Sale (PoS) system that could replace all thumbprint-powered transactions like the Aadhaar-enabled Payment System (AePS) in India. The payment system will be interoperable across all payment operators in the country. Notably, AePS is a popular payment system in rural India and its transactions have nearly doubled in one year, from Rs 11,286 crores in January’20 to Rs 21,978 Crores in January’21. This “Universal” payments network of Tata’s will pit against the Indian government’s National Payment s Corporation of India (NPCI).

3. SEBI ORDERS ATTACHEMENT OF BANK, DEMAT, MF ACCOUNTS OF RANA KAPOOR: Market regulator SEBI has ordered attachment of bank accounts as well as share and mutual fund holdings of Rana Kapoor, former MD and CEO of Yes Bank to recover dues over Rs 1 crore. In September 2020, SEBI had imposed a fine of Rs 1 crore on Kapoor for not making disclosures regarding a transaction of Morgan credit, which was an unlisted promoter entity of Yes bank.

4. ICICI BANK ENABLES CUSTOMERS TO BREAK HIGH-VALUE TRANSACTIONS INTO EMIs: ICICI Bank customers can now break their high-value transactions of above Rs 50,000/- into suitable EMIs directly on its internet banking platform to make their purchases more affordable. The said kind of facility is the first in the country by any bank. It will be applicable on transactions up to Rs 5 lakhs and will bear no additional cost to customers. The said facility is named “EMI@Internet Banking”. Customers can purchase any gadgets or pay for their insurance premium or school fees in easy EMIs from their savings account using internet banking. The bank has tied up with online payment gateways Billdesk and Razorpay to enable this facility.

5. GOVERNMENT MAY SEEK DETAILS OF INTEREST ON INTEREST CHARGED BY BANKS: Government may seek details of interest on interest charged by banks for loans exposure of over Rs 2 crores. This is the effect of the observation made by the Supreme Court where it noted that RBI and the government have not provided any rationale for the overall borrower’s debt cap of Rs 2 crores for waiver of interest on interest and has directed them to provide such relief to borrowers with overall exposure of Rs 2 crores.

6. PF THRESHOLD LIMIT RAISED TO Rs 5 LAKH FOR TAX-FREE INTEREST WHERE THERE IS NO CONTRIBUTION FROM THE EMPLOYER: The Finance Ministry has raised the limit for tax exemption interest earned on Provident Fund (PF) contribution by employees to Rs 5 lakhs per annum in specified cases as against Rs 2.5 lakhs proposed in the budget. This exemption is however is subject to condition that the up to Rs 5 lakhs contribution does not include employer’s contribution beyond the statutory limit of up to 12% of the basic pay. The new provision would come into effect from April 1, 2021.

7. SUPREME COURT LIFTS BLANKET BAN ON NPA CLASSIFICATION: In September’20, the Supreme Court had granted interim relief by ordering not to declare the loan accounts as Non-Performing assets (NPAs). Now this order stands vacated, ending the ban on classification of NPAs. However, there shall be no order as to costs.

8. PARLIAMENT PASSES BILL TO SET UP NATIONAL BANK FOR FINANCING INFRASTRUCTURE AND DEVELOPMENT: Parliament has passed a bill to set up the National Bank for Financing Infrastructure and Development (NaBFID) to fund infrastructure projects in India. The bill seeks to establish the National Bank for financing Infrastructure and Development to support the development of long-term non-recourse infrastructure financing in India including development of the bonds and derivative markets necessary for infrastructure financing and carry on the business of financing infrastructure and for matters connected therewith.

1. SBI’s DIGITAL TRANSACTIONS TOUCH NEW HIGH: State Bank of India’s digital transactions has seen a perceptible increase in number of transactions at its multiple digital channels, with the percentage moving from 60% in the pre-pandemic period to 67% as of now. This rise is largely driven by pick-up in e-commerce during the pandemic lockdown period. Due to the lockdown with restricted movement, the digital channels got wider currency and acceptability.

2. FEDERAL BANK PLANS TO BUY MICROFINANCE COMPANY TO EXPAND BUSINESS: Federal Bank sees an opportunity to grow both organically and through acquisition. The bank is interested in acquiring a microfinance business as part of its focus on growing the retail high-margin category. Mr. Srinivasan the Chairman of Federal Bank said that Federal Bank is now on par with any new-generation bank in terms of digital capability and operations and has sound asset quality due to its focus on retail business. The bank will also be launching its credit cards shortly and expanding personal loans.

3. BANK OF BARODA BETS ON NEW DIGITAL PALTFORM TO EXPAND RETAIL LENDING: Bank of Baroda is making a positive move to expand its retail business through its self-made digital lending platform which assesses credit risk through varied public and private data points like bank account statement, tax statements and consumption trends. Bank of Baroda has launched this digital lending platform in November’20 and has already disbursed Rs 1,000 crores of loans through this new digital platform and expects that half of its retail loans to be originated through this platform by the end of March 2022.

4. PERFORMANCE OF UNSECURED LOANS WORSENING: According to a report by India Ratings & Research, the performance of unsecured assets including microfinance loans and unsecured business loans is worsening. For secured loan segment the agency has a stable performance outlook considering the recovery in the economy in financial year 2022. The worsening performance of unsecured asset class is due to the deteriorating financial conditions of the borrowers.

5. POST EXIT FROM PCA, IDBI BANK TO FOCUS ON IMPROVING EFFICIENCY RATIOS: The Reserve Bank of India removed IDBI Bank from its Prompt Corrective Action (PCA) framework, which was imposed on the bank in May 2017, after it had breached certain regulatory thresholds. With restrictions thus imposed by RBI gone with removal from PCA, the bank is now looking at growing business in a calibrated manner with more focus on profitability and in improving efficiency ratios. In fiscal 2021- 22, the bank will be targeting to improve Net Interest Margin (NIM) to 3%, Return On Asset (ROA) at above 0.60to 0.70% and cost to income ratio to below 50% .

6. EX-PROMOTERS CANNOT SUGGEST REVIVAL SCHEME UNDER COMPANIES ACT: The Supreme Court has held that the promoter of a company undergoing liquidation under IBC cannot propose “Scheme of Compromise and Arrangement” for revival with lenders even if there are no resolution plans submitted for the corporate debtor.

7. PHONEPE CORNERED INDIA’S 42% UPI TRANSACTIONS IN FEBRUARY: PhonePe continued to remain the dominant UPI app for a third straight month in a row with its February’s share touching an impressive 42.5% out of the 2,292 million UPI transactions during the said month. PhonePe is currently competing with Google Pay and Paytm. Google Pay touched 34% while Paytm stood at third position.

8. RBI INSTRUCTS ALL BANKS TO IMPLEMENT IMAGE-BASED CHEQUE TRUNCATION SYSTEM IN ALL BRANCHES BY SEPTEMBER 30, 2021: The Reserve Bank of India has asked all banks to implement the image-based Cheque Truncation System (CTS) in all branches by September 30, 2021. This move is aimed at faster settlement of cheques resulting in better customer service. There are still 18,000 bank branches which are out of CTS purview. Last month RBI had announced Pan-India coverage of CTS by bringing all bank branches under CTS. CTS is in use since the year 2010 and presently covers around 1,50,000 bank branches. All the erstwhile 1,219 Non-CTS clearing houses have been migrated to CTS effective September 2020.

9. PUNJAB NATIONAL BANK INCORPORATES NEW ENTITY “PNB-CARDS & SERVICES” FOR CREDIT CARD BUSINESS: Punjab National Bank (PNB) has incorporated PNB Cards & Services, a wholly owned subsidiary of the bank. The new entity will undertake Non-financial support service related to credit card business. PNB Cards & Services has authorised capital of Rs 25 crores and paid-up capital of Rs 15 crores. PNB has reported a standalone profit of Rs 506.03 crores for December 2020 quarter as compared to a net loss of Rs 492.28 crores in the same period last year.

1. HDFC BANK TO COVER VACCINATION COST OF ITS EMPLOYEES & FAMILY MEMBERS: HDFC Bank has said that it will cover the vaccination cost of its 1 lakh employees and their family members. The bank will reimburse vaccination charges for the two moderate doses. Ms Ashima Bhat, HDFC Bank’s Group Head said that HDFC Bank employees who have ensured that an essential service like banking was available for its customers even during the lockdown and for their health and safety, covering the cost of vaccination for them and for their dependent family members is a small gesture from the organisation to express the management’s gratitude towards the employees.

2. GOVERNMENT TO INFUSE Rs. 14,500 CRORES IN BANKS UNDER RBI’S PROMPT CORRECTIVE ACTION FRAMEWORK: The Finance Ministry is likely to infuse Rs. 14,500 crores under RBI’s Prompt Corrective Action (PCA) framework in the next few days. The biggest beneficiary of this round of capital infusion would be the banks that are under PMA. Presently, Indian Overseas Bank, Central Bank of India and UCO Bank are under this PMA framework which puts several restrictions on them, including on lending, management compensation and Director’s fees.

3. RBI EXPLORING WAYS TO REGULATE ONLINE LOAN APPS: RBI has reached out to Google, Digital Lenders Association (DLAI), Fintech Association (FACE) and several non-bank lenders for inputs on ways to regulate non-bank digital lenders. RBI’s working group on digital lending has sought details from Google on its criteria for onboarding fintech loan apps on its play store platform and the parameters these lenders follow. The banking regulator is also seeking details on Google’s recent review exercise on online loan apps that proliferated on its platform, after which it removed more than 400 such apps deemed to be in violation of its policy. Many of these apps were backed by Chinese entities.

4. BANK UNIONS CALL FOR A TWO-DAY STRIKE AGAINST PROPOSED PRIVATISATION OF PSBs: United Forum of Bank Unions (UFBU), an umbrella body of 9 unions, has given a call for a two-day strike from 15TH Marc 2021 to protest against the proposed privatisation of two Public Sector Banks. The government has already privatised IDBI Bank by selling its majority stake in IDBI Bank to LIC of India and has merged 14 Public Sector Banks in last four years.

5. RBI REMOVES PCA RESTRICTIONS ON IDBI BANK: RBI has removed IDBI Bank from its Prompt Corrective Action (PCA) framework due to its poor capital, asset quality and leverage position four years ago. RBI has noted that as per the published results of the bank for quarter ending December 31, 2020, the bank is not in breach of the PCS parameters on regulatory capital, Net NPA and leverage ratio. The bank has also provided a written communication that it would comply with norms of minimum regulatory capital, net NPA and leverage ratio on an ongoing basis.

6. RBI REJECTS YES BANK’S ARC PLAN, CITES CONFLICT OF INTEREST: Yes Bank, in September 2020 had sought approval from RBI to launch its own Asset Reconstruction Company (ARC) and was expecting to operationalise it within 6 months of securing the clearance from RBI. But Reserve Bank of India has rejected the application to set up the ARC, citing a conflict of interest. Some of the biggest stressed loans on the books of Yes Bank are declared as fraud cases and as a result these accounts cannot be transferred to the proposed ARC and therefore, it would not have been very effective in resolving the situation that the bank is facing at present.

7. GST FRAUD OF Rs 20,124 CRORES DETECTED DURING NOVEMBER’20 TO JANUARY’ 21: The government has detected GST fraud of Rs. 20,124 crores between November 9, 2020 and January 31, 2021. A nationwide special drive against unscrupulous entities for availing and passing on Input Tax Credit (ITC) fraudulently on the strength of fake /bogus invoices is being carried out and around 2,692 cases have been booked by the GST officers. During the said period an amount of Rs 857.75 crores was recovered and as many as 282 persons have been arrested.

8. FRAUDULENT LOANS CANNOT BE SOLD TO BAD BANK: The Reserve Bank of India has said that loans classified as fraud should not be sold to the proposed National Asset Reconstruction Company (NARC) to be set up by Public Sector Banks. This would mean that a chunk of sticky loans would continue to remain on the books of the banks. According to a report by RBI, nearly Rs 1.9 lakh crore of bank loans had been classified as fraudulent as of March 2020. Public Sector banks account for around 80% of these fraudulent loans

1. SBI, HDFC BANK AND ICICI BANK WILL HAVE TO OFFLOAD EQUITY FROM THEIR INSURANCE ARMS: State Bank of India, ICICI Bank and HDFC Bank will have to offload equity worth 1.21 lakh crores from their respective insurance arms if RBI goes ahead with its reported plan to make banks cap their stakes in insurance arms at 20%. RBI has recently approved Axis Bank’s plan to buy Max Life only after it agreed to directly hold only 10% and also capped the overall holding at 20%. Currently regulations allow banks to own over 50% stake in insurance arms.

2. INDIA RATINGS FLAGS SYSTEMIC RISK ISSUES ON BANKS’ EXPOSURE TO NBFCs: Domestic rating agency India Ratings has warned of rising systemic risk on banks increasing exposure to Non-Bank Finance. As per India Ratings, any sector concentration is to be closely watched out and especially that of NBFCs. The banks’ exposure to NBFCs has risen from 6% in 2015 to nearly 10% in FY 2020. At the end of September quarter state run banks alone contributed more than 64% of overall bank exposure to NBFC funding which is quite alarming. On the other hand, the funding from mutual funds has seen a sharp decline from 2.5 lakh crores in August 2018 to 1.5 lakh crore in December 2020.

3. ICICI BANK TARGETING TO SERVE 20 LAKH CUSTOMERS OF RIVAL BANKS THROUGH ITS APP: ICICI bank has said that around 10 lakh customers of rival banks are using its mobile application – “iMobile Pay” for their transactions. The bank expects the number of such rival bank customers who are using its app for instant UPI-based payments and recharges to double in the next three months. The bank is using NPCI’s interoperable infrastructure to serve these rival bank customers.

4. PNB HOUSING BANK AND YES BANK SIGN STRATEGIC CO-LENDING PACT: PNB Housing Finance Ltd and Yes Bank have signed a MoU for a strategic co-lending service that will facilitate retail home loans at competitive rates. This MoU will pave way to provide an efficient and seamless experience to existing and prospective home loan customers. PNB Housing will service the customers through the entire loan lifecycle including sourcing, documentation and collection with appropriate information sharing arrangement with Yes Bank.

5. CREDIT SCORE TAKES CENTRE STAGE IN POST-COVID HOME LOAN BOOM: Home loan interest rates have touched a 15-year low which is due to RBI’s easy liquidity stance wherein lenders are pricing home loans differently, depending on profile and creditworthiness of the borrower. Hence credit scores have become increasingly important for borrowers. Some top banks are levying different interest rates to customer based on their CIBIL scores. SBI for instance, has lowered its home loan interest rate to 6.7% but the rate is available for those customers with a Cibil score of more than 800.

6. DIGITAL BANKING—INFOSYS TAPPING THE POWER OF CLOUD TO HELP LENDERS: The dependence on digital financial services during the Covid-19 pandemic has led Infosys Ltd to accelerate digital transformation process. Leveraging advanced technologies such as deep analytics and machine learning which will empower banks with a more sound understanding of customers and preferences, Infosys team is focussing on helping banks build new business designs to bridge the divide between digital and physical worlds. This includes comprehensive digitisation of businesses through the full modernisation of digital engines.

7. FDI INFLOWS UP BY 22% IN APRIL-DECEMBER 2020: India attracted a total of $ 67.54 billion of Foreign Direct Investment (FDI) during April-December 2020, the highest ever for the first 9 months of a financial year and 22% higher year-on-year. FDI Equity inflows rose by 40% in April-December 2020. Measures taken by the government on the fronts of FDI policy reforms, investment facilitation and ease of doing business have resulted in increased FDI inflows into the country. FDI inflows are an endorsement of India’s status as a preferred investment destination amongst global investors.

8. AS PER RBI, CREDIT DEMAND TO PICK UP POST VACCINATION ROLL OUT: As per a report from RBI, credit demand is set to accelerate with the rollout of vaccination in the country. The collapse in credit demand was more due to Covid related issues like lockdown. According to RBI report, credit offtake is expected to pick up as the economy is poised to stage a smart recovery in 2021-22 on the back of decline in Covid infections and swift rollout of vaccination programme in addition to a number of measures announced by the government in the Union Budget 2021-22.

9. GOVERNMENT EXTENDS LAST DATE FOR ANNUAL GST FILING FOR FY-20 TILL MARCH END: The government has extended the deadline for filing annual GST return and reconciliation statement for Financial year 2020 till 31/03/2021 from the existing deadline of 28/02/2021. Experts termed the extension as a positive move for industry grappling with continuous compliance requirements even as it stumbles to normalcy amid Covid-19 pandemic.

1. INDIAN OVERSEAS BANK SIGNS CORPORATE AGENCY PACT WITH SBI GENERAL INSURANCE: Indian Overseas Bank (IOB) has signed a corporate agency pact with SBI General Insurance to sell its insurance products to its customers. IOB will sell the general insurance products of SBI General Insurance to its customers and this partnership will improve penetration in urban, tier II and III markets and also create awareness about personal lines of insurance to customers. IOB has 3,200 branches across the country.

2. NEW BAD BANK WILL BE A NEW ARC SET UP BY PSBs: RBI Governor Mr. Shaktikanta Das has said that the proposed Bad Bank will be an Asset Reconstruction Company (ARC) to be set up by Public Sector Banks (PSBs) to takeover bad loans. He further said that the new entity will in no way jeopardise the functioning of existing ARCs. Mr. Das further added that RBI will focus on refining and upgrading the regulatory architecture for ARCs to ensure that they remain in business

3. IBA STARTS IDENTIFYING STRESSED LOANS FOR PROPOSED BAD BANK: The Indian Banks’ Association (IBA) has started the process of identification of bad loans in public sector banks that can be transferred to the proposed Bad Bank. IBA has written to the lenders seeking a list of all bad loans above Rs 500 crores. This exercise by IBA could help the lenders to identify the magnitude of the bad loan problem and get clarity over the initial capital required to set up the entity. Lenders have been asked not to submit details of those loans which are nearing resolution under bankruptcy courts or are in the liquidation process.

4. NOW PRIVATE BANKS CAN VIE FOR GOVERNMENT BUSINESS: Private banks now can compete with their public sector counterparts for government business such as transactions related to taxes, revenue payments, pensions and small savings scheme. The decision announced by the Finance Minister is expected to improve efficiency and competition while helping smaller banks to earn revenue. With this, the private banks also can be equal partners in development of economy, furthering social sector initiatives of the government and thereby enhance customer convenience.

5. GOVERNMENT EXTENDS DEADLINE FOR FILING DECLARATIONS UNDER “VIVAD SE VISHWAS” SCHEME TILL MARCH 31, 2021: The government has extended the last date for availing the direct tax Vivad se Vishwas (VsV) dispute resolution scheme to March 31, 2021 from the earlier date of February 28,2021. This is the fifth extension of the said scheme. The Direct tax “Vivad se Vishwas” Act 2020 was enacted on March 17,2020, with an objective to reduce pending income tax litigations, generate timely revenue for the government and to benefit taxpayers. As per CBDT’s notification, the date for payment of tax without additional interest under VsV remains unchanged to April 30, 2021.

6. FINO PAYMENTS BANK INCLUDED IN THE LIST OF SCHEDULED COMMERCIAL BANK: RBI has included the name of Fino Payments Bank in the category of a scheduled commercial bank. The name of Fino Payments Bank is now included in the Second Schedule of RBI Act, 1934. The Scheduled Commercial bank, also called scheduled bank status, will enable Fino Bank to enhance its banking position in the treasury and participation in Liquidity Adjustment Facility (LAF) window. This will also improve its business prospects further.

7. BANKERS FEAR SPIKE IN NPA FROM MUDRA LOANS: Outstanding loans under the Pradhan Mantri Mudra Yojana (PMMY) are increasingly becoming a cause of concern for banks as stress in Small & Medium Enterprises (SMEs) has spiked default rates beyond an amount guaranteed by the government in the scheme. Bankers say that Supreme Court moratorium over classifying loans as NPAs has so far kept the default rate under control. But they fear that as much as 25% loans under this scheme could turn bad.

8. SBI JOINS JP MORGAN’S BLOCKCHAIN-BASED PAYMENT NETWORK: State Bank of India (SBI) has tied up with JP Morgan to use US bank’s blockchain technology to speed up overseas transactions. The tie up is expected to reduce SBI customers’ transaction costs and time taken for payments. Time taken to resolve cross-border payments-related inquiries can be reduced to a few hours as compared to a fortnight now. This will help cross-border payments reach beneficiaries faster using limited steps.

9. RBI IMPOSES Rs 2 CRORE BAN ON BANK OF MAHARASHTRA: RBI has imposed a monetary penalty of Rs 2 crores on Bank of Maharashtra for Non-compliance with certain direction on fraud classification and reporting. The bank has also violated the RBI directions on Concurrent Audit System, disclosure of customer complaints and unreconciled balances on account of ATM transactions and Micro, Small & Medium Enterprises (MSMEs) sector- restructuring of advances.

1. TEAM OF DIVERSE INVESTORS PUT IN BID FOR TROUBLED PMC BANK: A diverse set of investors-- German based Alfa Pharma GmbH, Aegis Investment Fund (Mauritius), NexPact (Mauritius) and Global Com Fin Investment LLC (Dubai) are part of a consortium that has bid for failed lender Punjab & Maharashtra Co-operative Bank (PMC Bank). The consortium, led by Mr Surinder Mohan Arora, an Indian businessman, has submitted a plan for revival of the bank and conversion of PMC Bank into a Small Finance Bank (SFB) subject to certain regulatory forbearance from RBI.

2. LIC HOUSING FINANCE DISBURSES Rs. 1,331 CRORE OF LOANS VIA MOBILE APP: LIC Housing Finance has disbursed Rs. 1,331 crores worth loans through its mobile banking app in the last one year. The asp is called “Homy App” and it has facilitated 14,155 customer home loan applications since its launch on February 14, 2020. More than 7,300 of these customers have had their home loans sanctioned and loans worth Rs. 1,331 crores have been disbursed.

3. BANK UNIONS STAGE PROTEST AGAINST PRIVATISATION: Bank Unions staged a protest in all the state capitals opposing government’s privatisation plans. They also plan to march towards Parliament next month if their demands are not met. About 10 lakh bank employees and officers under the banner of United Forum of Bank Unions (UFBU) consisting of 9 unions are agitating against the government’s proposal to privatise certain public sector banks.

4. INDIAN BANK SIGNS MoU WITH SOCIETY FOR INNOVATION & SCIENCE FOR FUNDING START-UPS AND MSME: Indian Bank has signed an MoU with Society for Innovation & Science (SID), an initiative of Indian Institute of Science (IISc) for extending exclusive credit facility to Start-ups and MSMEs. This initiative is a part of the bank’s scheme “Ind Spring Board” for financing the Start-ups and MSMEs which will empower them to realise their research efforts which is backed by incubation facilities offered by SID.

5. GOVERNMENT RAISES CONCERNS OVER SBI-BoB-HDFC BANK NUE PLAN: The Finance Ministry has raised concerns over SBI’s plans to set up a joint venture partnering Bank of Baroda & HDFC Bank under the RBI’s New Umbrella Entity (NUE) framework. Government is worried that this will squeeze the National Payments Corporation of India (NPCI) as it does not want public sector banks to set up NUEs that will rival the country’s premier payments entity.

6. RBI TIGHTENS PAYMENTS SECURITY NORMS FOR BANKS AND DIGITAL PAYMENT OPERATORS: With a view to strengthen the country’s payment architecture, RBI has published detailed guidelines to improve security, control and compliance among banks, gateways, wallet operators and other Non-Bank entities. The new rules come at a time when India’s ever growing payments ecosystem has seen increased instances of outages, frauds and cyber breaches. The new rules set the framework for all regulated entities to standardise their security operations to emulate best practices defined by RBI.

7. BANKS’ PROVISIONING IN Q-3 RISES 10% SEQUENTIALLY: Provisioning of banks in the December’20 quarter is up nearly by 10% as per a data of 18 banks. These 18 banks have provided Rs 52,403 crores against loans during December’20 quarter compared to Rs 47,827 crores in September’20 quarter. Despite this rise in provisioning, the aggregate net profit of these 18 banks stood at Rs. 28,604 crores, up by 6%.

8. NBFCs STRESSED ASSETS MAY TOUCH Rs 1.5 TO 1.8 LAKH CRORE BY MARCH’21: Stressed Assets of Non-Banking Finance Companies (NBFCs) are likely to touch Rs 1.5 to 1.8 lakh crores in March’21 which is around 6 to 7.5% of their Asserts Under Management (AUM) by the end of March’21. However as per a report by Crisil ratings, the one-time Covid-19 restructuring window, and MSME restructuring scheme of RBI will limit the reported Gross Non-Performing Assets (GNPAs).

9. RBI SETS UP PANEL TO SUGGEST STEPS FOR STRENGTHENING, CONSOLIDATING URBAN-CO-OPERATIVE BANKS: RBI has set up a committee to draw a vision document for strengthening Urban Co-operative Banks (UCBs) and exploring the potential of consolidation in the sector. The committee will be headed by former RBI Deputy governor Mr N S Vishwanathan. The said committee will suggest effective measures for faster rehabilitation and resolution of Urban Co-operative Banks (UCBs) and also assess their potential for consolidation in the sector.

1. UNION BANK OF INDIA TO RATIONALISE 950 BRANCHES: Union Bank of India will be rationalizing 950 of its branches very soon. The bank has identified around 950 branches in the first year of amalgamation of Corporation bank and Andhra Bank with itself. The real benefit of amalgamation will be derived only if rationalization of branches happens. After amalgamation, Union Bank of India now has over 9,500 branches, 13,300 ATMs with over 75,000 employees. Rationalisation after amalgamation is the need of the hour due to the close proximity of bank branches of amalgamated banks and will optimise operational costs.

2. SBI LOOKING TO DOUBLE ITS HOME LOAN PORTFOLIO TO Rs 10 LAKH CRORE IN NEXT FIVE YEARS: State Bank of India is planning to double its home loan portfolio to Rs 10 lakh crores in the next five years. State Bank of India dominates the housing loan segment with a market share of 33%. The bank has reached the milestone of Rs 5 lakh crores in home loans portfolio this month. Home portfolio is now the largest portfolio in the asset base of SBI as it accounts for 23% of SBI’s domestic loans.

3. FOREIGN FIRMS KEEN TO INVEST IN YES BANK’S PROPOSED ASSET RECONSTRUCTION ARM: Mr. Prashant Kumar, CEO of Yes Bank has told that foreign firms are keen to invest in the Asset Reconstruction Company (ARC) which the bank is planning to launch. The bank plans to launch this ARC as it wants to hive off its bad loans worth Rs 50,000 crores. The bank is likely to put in initial capital of Rs 10 billion while the foreign investor will put in nearly Rs 25 billion. Yes Bank has already approached RBI for regulatory approvals to launch this ARC and it hopes to operationalize the ARC within six months after securing clearances.

4. HDFC BANK BEATS SBI IN COVID-19 SCHEME LOANS: HDFC Bank has outdone State Bank of India in disbursement under the Emergency Credit Line Guarantee Scheme (ECLGS) introduced by the government as part of the Covid-19 relief package. The scheme involved a government guarantee for additional loans up to Rs 3 lakh crores, extended to businessmen facing stress due to the pandemic. Out of the total Rs 1.4 lakh crore extended by banks up to January 25 2021, HDFC Bank has disbursed Rs 23,504 crores. This is nearly 17% of the total loans sanctioned. SBI has disbursed Rs 18,700 crores.

5. SERVICE COMPLAINTS BY BANK CUSTOMERS RISE BY 57% : As per a report by RBI, consumer complaints about lack of banking services jumped by 57% to 3.08 lakhs for the year up to June 30, 2021. In the annual report on Ombudsman Schemes, RBI said over a fifth of complaints were about services at ATMs or with debit cards, followed by mobile or electronic banking. Non-observance of Fair Practice Code (FPC) was at third place.

6. TOP 100 WILFUL DEFAULTERS OWE Rs 84,632 CRORES TO BANKS: The country’s top 100 wilful defaulters owe Rs 84,632 crores to banks as of March 2020 with top 10 including Gitanjali Gems, Winsome Diamonds and Kingfisher Airlines accounting for 32% of it. While the banks will write-off nearly 3/4TH of it to clean their balance sheet and get tax benefits, the default borrowers continue to appear in RBI’s internal CRILC database till they clear the default.

7. CAPITAL SUPPORT TO PSB BANKS WILL DETERMINE THEIR LOAN GROWTH: According to a study by Fitch Ratings, State owned banks will be forced to continue on a path of risk aversion and soft loan growth without adequate capital support from the government. The banks have so far managed to avert further pressures on their weak core capitalization on the back of regulatory forbearance, limited underwriting and lower credit growth. Fitch said it expects a moderately worse operating environment for these banks in 2021.

8. INDIA’S FOREX RESERVES TOUCH A NEW HIGH, INDIA IS NOW “NET CREDITOR”: India now has forex reserves of over USD 590 billion, the highest ever, up by USD 119 billion over the previous year. While the external debt is USD 554 billion, making our country a “Net Creditor”. Mr. Anurag Singh Thakur Minister of State for Finance said that the country is witnessing a “V” shaped recovery post Covid-19 pandemic which is evident by the record GST collections during the past 4 months.

9. PUNJAB NATIONAL BANK SIGNS AN MoU WITH INDIAN OIL CORPORATION TO PROVIDE LOAN TO ITS DEALERS: Punjab National bank (PNB) has signed an MoU with Indian Oil Corporation (IOC) to provide up to Rs 2 crore loan to IOC’s dealers. The MoU would benefit the dealers with credit facilities at lower rate of interest, nil margin and with minimum or zero collateral requirements through PNB’s e-Dealer Scheme.

1. MANY OFFERS RECEIVED FOR PMC BANK RESOLUTION: RBI Governor Mr. Shaktikanta Das has said that three investors have submitted their offers for reconstruction of crisis-ridden Punjab & Maharashtra Co-operative Bank Ltd (PMC Bank Ltd) and the evaluation for those three offers are underway. But it is understood that PMC Bank itself is evaluating the offers. These three investors were given time till February 1, 2021 for submission of their final offer. The outcome will be soon announced by RBI.

2. PENDING BANK BRANCHES TO BE COVERED UNDER CTS BY SEPTEMBER 2021: There are around 18,000 bank branches across India which are at present not covered under the Centralised Clearing system called Cheque Truncation System (CTS). RBI has decided to cover all these pending branches under CTS by September 2021. This will further improve and speed-up the payment and settlement systems besides making it more fool-proof. RBI has also said that it will set up a 24x7 helpline for digital payments services to secure them more against frauds and phishing.

3. ICICI BANK & MUFG BANK TIE UP FOR SERVING JAPANESE CORPORATIONS OPERATING IN INDIA: ICICI Bank has tied up with Japan’s MUFG Bank for catering to the banking requirements of Japanese corporates present in India. Both the banks have signed a Memorandum of Understanding (MoU) to this effect. Japan is the fifth largest investor in India with a cumulative foreign direct investment inflow of USD 34.15 billion from April 2010 to September 2020, contributing 7% of India’s total Foreign Direct Investment (FDI) inflows during the period.

4. RBI ANNOUNCES MAJOR STRUCTURAL MOVE, GIVES RETAIL INVESTORS DIRECT ONLINE ACCESS TO SECURITIES MARKET: In a major move aimed at encouraging small investors to become direct investors in government bonds, RBI will allow small retail investors to directly buy government bonds. This makes India the first Asian Country to do so and among a few globally. RBI, tasked with managing a huge Rs 12 lakh crore in government securities in government borrowing target next fiscal, hopes that this move will allow greater depth to the gilt market in particular and the overall debt market in general.

5. RBI INTERNAL PANEL WORKING ON THE MODEL OF CENTRAL BANK’S DIGITAL CURRENCY: Private Digital Currencies (PDCs)/ Virtual Currencies (VCs)/Cryptocurrencies (CCs) have gained popularity in recent years. However, in India the regulators and the government have been sceptical about these currencies and are apprehensive about the associated risks. But now an Internal committee within RBI is taking a close look at the model of Central Bank’s Digital Currency and very soon will come out with a decision on this. Last week Government has moved to ban private cryptocurrencies.

6. INTEREST ON PF CONTRIBUTION ABOVE 2.5 LAKH TO BE TAXABLE: From April 1, 2021 onwards, the interest earned by the Provident Fund contributions above Rs 2.5 Lakhs a year will now be added to the taxable income and taxed at the normal rates as applicable. This will only apply to employee’s contribution and not on employer’s contribution. This will impact the high-income salaried people who use the Voluntary Provident Fund to earn tax-free interest. Last year’s budget had capped the tax exemption on Employer’s contribution to Provident Fund, NPS and super annulation fund to Rs 7.5 lakhs.

7. RBI ANNOUNCES INTEGRATED OMBUDSMAN SCHEME FOR BANK CUSTOMERS: Presently, there are three separate ombudsman-- for Banks, for Non-Banking Finance Companies and for Non-Bank Prepaid Payment Issuers (Wallets). These are operated by RBI from 22 ombudsman offices spread across the country. Now RBI has decided to integrate all these three separate ombudsman under one centralised scheme to make the grievance redressal mechanism more efficient and simpler. The scheme will be rolled out in June 2021.

8. NOW NBFCs CAN INITIATE RECOVERY IN Rs 20 LAKH LOAN DEFAULT UNDER SARFAESI ACT: Finance Minister Mrs. Nirmala Sitharaman has proposed to lower the threshold limit for Non-Banking Financial Companies (NBFCs) to initiate recovery proceedings against loan defaulters under the Securitisation & Reconstruction of Financial Assets & Enforcement of Security Interest (SARFAESI) Act, 2002. She has proposed to lower the threshold of loan defaults to Rs 20 lakh as against Rs 50 Lakhs earlier.

1. RBI CANCELS THE LICENCE OF MAHARASHTRA BASED SHIVAM SAHAKARI BANK: Reserve Bank of India has cancelled the licence of Maharashtra-based Shivam Sahakari Bank Ltd as it does not have adequate capital and earning prospects. With this, Shivam Sahakari Bank ceased to carry on banking business with effect from January 29,2021. As per the data available, around 99% of the depositors are fully insured by Deposit Insurance & Credit Guarantee Corporation (DICGC).

2. AXIS BANK TO TREAT HOME LOANS OF CREDIT CARD DEFAULTERS AS NPAs: Axis Bank has said that those of its customers who get classified as defaulters on credit cards will see their housing loans tagged as Non-Performing Assets (NPAs). This is being done by the bank as a part of prudent provisioning practice in tackling bad loans. This would mean that the bank would take a hit on its earnings as it has to provide for such NPAs and at the same time, any interest charged to such accounts will cease to be regarded as income.

3. BANK OF BARODA IS THE FIRST PUBLIC SECTOR BANK TO LOOK AT PERMANENT WORK-FROM-HOME OPTION: Bank of Baroda (BoB) is the first public sector bank to consider Work-From-Home (WFH) as a permanent policy for a section of its employees. BoB which recently concluded the integration of Vijaya Bank and Dena Bank with itself, has appointed management consultancy firm McKinsey & Co to help implement a strategy for a post-Covid world.

4. RBI CONFIRMS IT IS NOT WITHDRAWING OLD SERIES OF Rs 100, 10 AND Rs 5 BANK NOTES FROM CIRCULATION: The Reserve Bank of India has clarified that it has no intension of withdrawing old series banknotes of Rs 100, Rs 10 and Rs 5. RBI has also introduced a new Rs 100 and Rs 10 denomination currency note as a part of Mahatma Gandhi (new) series banknotes.

5. ECONOMIC SURVEY POINTS OUT THE ORIGINAL MISTAKE THAT CAUSED INDIA’S BANKING CRISIS: The Economic Survey which has been presented has dealt at length on what is called the original mistake (sin) that caused the India’s banking mess. The policy of Forbearance was brought in during 2008 to deal with financial crisis. It entailed at relaxing the norms by banks for restructuring assets to help companies deal with temporary hardship. However, this practice should have been discontinued after main crisis was over but was not. So, the banks started exploiting the forbearance window to restructure loans for unviable entities, thereby window dressing their books. The inflated profits were used by the banks to pay dividends to shareholders. This resulted in under-capitalisation of Indian banks and this triggered a dissolution in banks’ potential incentives, eventually forcing them to indulge in risky lending.

6. RBI PROPOSES BANK-LIKE NORMS FOR BIG NBFCs: Large Non-Banking Finance Companies (NBFCs) are likely to be more intensely regulated and their lending to sensitive sectors like real estate and capital markets capped if the RBI were to implement proposals that it has put forward. The norms, which will be brought on par with banks for large NBFCs, include provisions for standard assets, CEO compensation guidelines, disclosure requirements and rule for selling bad loans. These big NBFCs will also need to have a centralised core banking system in place.

7. AMAZON TIES UP WITH GOVERNMENT’S STARTUP INDIA INITIATIVE TO BOOST e-COMMERCE EXPORTS: Amazon has launched Amazon Global Selling Propel (AGSP) to support Indian startups. For this, Amazon has tied up with government’s Startup India Initiative. Through this initiative, they will help early-stage startups working in consumer product space to enter international markets via Amazon’s AGSP. For this Amazon has formed a mentorship board which will engage with the emerging brands.

8. UNION BANK OF INDIA COMPLETES IT INTEGRATION OF ALL ANDHRA BANK AND CORPORATION BANK BRANCHES WITH ITSELF: Union Bank of India has completed IT Integration of all branches of Andhra Bank and Corporation Bank with itself. With this, all erstwhile Andhra Bank and Corporation Bank have been successfully migrated to Core Banking Solutions (CBS) of Union Bank. The said integration has been affected without any change in the account numbers, debit cards, and net banking credentials of both Andhra and Corporation Bank customers.

9. FOR INCOME TAX REFUNDS YOU MAY HAVE TO CONFIRM IT TO THE TAX DEPARTMENT: Your Income tax refund may be held up by tax department for want of your confirmation about its accuracy if there is a significant difference in incomes or deductions that you have claimed while filing your returns compared to your Form-16 or 16A. In such cases, for the refund to be credited to your account, you may have to respond to the email sent b y IT department, asking you to confirm your claim.

1. RBI IMPOSES Rs 2 CRORE PENALTY ON STANDARD CHARTERED BANK: The Reserve Bank of India has imposed a Rs 2 crore penalty on Standard Chartered Bank for delays in reporting of frauds to it. The said penalty is imposed on the bank for non-compliance with certain directions contained in the Reserve Bank of India – Frauds – Classification & Reporting by Commercial Banks. The said issue was revealed during the statutory inspection of the bank with reference to its financial position as on March 31, 2019.

2. BUDGET 2021 MAY KEEP ASIDE Rs 25,000 CRORES FOR PSB CAPITAL INFUSION: The government may set aside Rs 25,000 crores in FY 2022 budget for providing capital to Public Sector Banks (PSBs) . Finance Ministry has sought details from each PSB on capital requirements, estimated bad loans and plans to raise funds. The final capitalisation amount will be decided after these discussions. While various other discussions and proposals are being made, including a bad bank, an assessment is being done on capital requirements for banks. The amount may also vary on how the government plans to divest its stake in some banks.

3. HDFC BANK SUBMITS OUTAGE CONTROL PLAN TO RBI: HDFC Bank has submitted a plan to Reserve Bank of India outlining remedies for repeated glitches in the bank’s technology platform over the past 3 years. The bank is working on immediate and long-term solutions as part of its internal review. The action plan which the bank is working on may take anywhere between 10-12 weeks to implement. HDFC Bank is expected to invite RBI for inspection once its review is over. RBI has put restrictions on HDFC Bank on new card acquisition until it sorts out the problems.

4. RBI PAPER SUGGESTS CAPS ON NBFCs IPO, REAL ESTATE FINANCING: Reserve Bank of India, while discussing on new regulatory framework for Non-Banking Finance Companies (NBFCs) has proposed a cap on lending by NBFCs to subscriptions in initial public offering s (IPOs) and in lending to real estate unless government approvals are obtained. IPO financing by NBFCs, a large business for some of these NBFCs has come under scrutiny.While there is a limit of Rs 10 lakh for banks financing IPOs, there is no such limit for NBFCs. The new norms which are there for discussions in the public domain, say that the internal ceiling on sensitive sectors for NBFCs should separately disclose capital market and commercial real estate exposures.

5. YES BANK’S NEW INITIATIVE FOR MSME—Rs 5 CRORE LOAN WITHOUT COLLATERAL FOR STARTUPS: Aiming to boost and facilitate speedy and access to funds to Micro, Small and Medium Enterprises (MSMEs), Yes bank has recently launched YES MSME. With YES MSME, the bank will provide curated offerings to address business and individual needs of MSMEs, nurture new age entrepreneurs and maximise their potential. Here Yes Bank will enable start-ups to avail up to Rs 5 crore collateral-free funding by reducing the turnaround time for processing MSME loans. Under the new initiative, the bank will offer pre-approved commercial credit cards, advisory and wealth management solutions along with dedicated relationship managers.

6. ICICI BANK LAUNCHES “INSTA-FX” MOBILE APP: ICICI Bank has launched a new mobile application for authorised money changers to help customers of any bank to get ICICI Bank Forex Prepaid Card swiftly. The app is called InstaFX, enables the authorised money changers, who are partners for the bank, to complete the KYC verification and validation of customers digitally and on real-time basis. This facility significantly improves customer convenience as the ICICI Bank Forex Prepaid Card gets activated swiftly within a few hours, as against the industry practice of up to two days. ICICI Bank is the first bank in the country to offer such facility to money changers.

7. SBI WORKING ON SETTING UP e-COMMERCE PORTAL FOR MSMEs: State Bank of India is working on setting up an e-commerce portal for marketing of products manufactured by Micro, Small & Medium enterprises (MSMEs). The portal called as Bharat Craft, would be jointly run by the bank and the government. Last year MSME Minister had said that government is planning to launch Bharat Craft, an e-commerce poral, on the lines of Alibaba, and soon see turnover on the platform to the tune of Rs 10 lakh crore in a few years once it is launched.

8. BAJAJ FINANCE TO MAKE PAYMENTS APP WITH MERCHANTS: Bajaj Finance Ltd is in the process of launching “Bajaj pay” for consumers which will offer an integrated payment solution comprising of Unified Payment Interface (UPI), Prepaid Payment Instrument (PPI), Equated Monthly instalment card (EMI card)and credit card to its customers. It is also planning to provide a broadening payment solution for its merchants and enabling growth in its market share from these merchants. These moves are a part of Bajaj Finance’s business transformation plan.

1. PIRAMAL GROUP WINS BID FOR DHFL: Piramal Group has emerged as the preferred bidder for the troubled mortgage lender Dewan Housing Finance Limited (DHFL). The Committee of Creditors (CoC) is understood to have favoured the Piramal with almost 94% votes. A resolution plan needs a minimum of 66% votes to be passed by lenders. Piramal’s bid is for Rs 37,250 crores and Piramal’s offer had higher upfront cash payment which has likely impressed the creditors. The Piramal group’s offer translates to 43% recovery for DHFL creditors. 2. IDFC FIRST BANK ENTERS CREDIT CARD BUSINESS WITH INNOVATIVE INITIATIVES: IDFC First Bank has entered the credit card business with some innovative offers. The bank’s credit card will allow interest free cash withdrawal through ATMs at a nominal fee of Rs 250/- per transaction up to 48 days. It is offering the lowest finance charges that would be synchronised with customer ratings. IDFC First Bank will levy finance charges at an annual rate of just 9% for the best rated customer, climbing up to 36% for the lowest rated customer. The bank hopes to disrupt the credit card market with these first-of-kind initiatives. 3. BANKS GROSS NPAs MAY RISE TO 13.5% BY SEPTEMBER 2021: Reserve Bank of India in its bi-annual Financial Stability Report (FSR) has reported that Banks’ Non-Performing Assets (NPAs) may rise to as high as 14.8% in one year in case of severe stress scenario. The RBI’s stress test covers the first six months of the current fiscal ended March’21 and projects the Gross NPA at 13.5%. The Public Sector Banks’ Gross NPA ratio of 9.7% in September 2020 may increase to 16.2% in September’21 while the private sector banks’ Gross NPA may increase from 4.6% in September’20 to 7.9% in September’21 and Foreign Banks’ Gross NPA may rise from 2.5% in September’20 to 5.4% in September’21. 4. AXIS BANK ANNOUNCES NO PENALTY ON PREMATURE CLOSURE OF TERM DEPOSITS: Axis Bank has announced the removal of penalty clause on premature closure of fixed deposits of all new retail term deposits booked on or after December 15, 2020 for a fixed deposit with a tenure of two years or more. There will not be any penalty if the entire deposit is prematurely withdrawn post 15 months of booking. This is a first of its kind move by any bank. 5. GOVERNMENT INSPECTING CHIT FUNDS AND MULTI LEVEL MARKETING COMPANIES: Ministry of Corporate Affairs has asked Registrar of Companies (RoC) to probe the accounts of chit fund companies and certain Multi-Level Marketing (MLM) firms. As many as 87 companies have come under the scanner for alleged irregularities related to chit fund schemes and money circulation in the garb of multi-level marketing. 6. ICICI BANK TIES UP WITH “NIYO” TO ISSUE PREPAID CARDS TO MSMEs: ICICI Bank Ltd has tied up with Niyo, a new age fintech company, to issue prepaid cards to workers of Micro, Small & Medium Enterprises (MSMEs). The blue collared MSME workers who are mostly under-banked will now be able to get ICICI bank Niyo Bharat Payroll Card powered by Visa. With this, MSME companies can upload salaries of their workers on the card, which the workers can utilise as per their needs in a seamless manner. With this, the MSME workers will be able to enjoy the convenience and safety of digital banking. 7. MAHINDRA LIFESPACE DEVELOPERS TIES UP WITH SBI FOR FASTER HOME LOAN APPROVALS: Realty firm Mahindra Lifespace Developers Ltd has signed an MOU with State Bank of India for faster approvals of home loans as well as to offer special discounts to customers and employees of both the companies. As a part of the agreement, employees and customers of both the companies will be able to avail the benefits of faster home loan processing, approvals and special discounts. 8. YES BANK PARTNERS WITH ADITYA BIRLA WELLNESS TO LAUNCH WELNESS THEMED CREDIT CARD: Yes Bank has partnered with Aditya Birla Wellness Pvt Ltd to launch the “Yes Bank Wellness and “Yes Bank Wellness Plus” Credit cards, aimed at the holistic health, self-care and wellness of customers. Yes Bank customers can now enjoy the many complementary health benefits by simply registering on the Aditya Birla Multiply App. The app allows the customers to avail complementary benefits such as annual health check-ups, round the clock doctor or counselling helpline, home based workout sessions, personalised diet plans etc. 9. NBFCs URGE RBI TO RELAX COMPLIANCE RULES AS THEY CONVERT INTO BANKS: NBFCs want the RBI to relax compliance with norms for reserve ratio, priority sector and sectoral exposure while transforming into a bank. They have also requested RBI to pursue with the government, the issue of tax neutrality for restructuring existing entity (NBFCs) for becoming a bank under Non-operating holding company structure.

1. STATE BANK OF INDIA & INDIAN OIL CORPORATION LAUNCH CO-BRANDED RuPay DEBIT CARD: State Bank of India (SBI) and Indian Oil Corporation (IOC) have launched a co-branded contactless RuPay Debit Card. It is a contactless card and transactions up to Rs. 5,000/- can be paid with just a tap. Using the card in any IOC outlets will earn them a loyalty points worth 0.75% against purchase of fuel. Customers can also earn reward points for spending on dining, movies, grocery and utility bills.

2. PUNJAB NATIONAL BANK, IIT-KANPUR & FIRST HAVE PARTNERED TO SET UP FINTECH INNOVATION CENTRE: Punjab National Bank (PNB) has aligned with Indian Institute of Technology (IIT) Kanpur and Foundation for Innovation & Research in Science & Technology (FIRST) to set up Fintech Innovation Centre that would explore solutions in digital lending, payments and cyber security. The said partnership will facilitate research and develop technological solutions to address challenges faced by financial institutions and also explore opportunities. It will also pave the way to develop new products or solutions.

3. RBI APPOINTS ADVISORY COUNCIL FOR SUPERVISORY COLLEGE: The Reserve Bank of India (RBI) has appointed a six-member Academic Advisory Council (AAC) to support its newly setup College of Supervisors (CoS) which will reinforce supervisory skills among its regulatory & Supervisory Staff at entry level and also impart supervisory skills on regular basis. RBI said that the AAC will identify areas where skill building/upgrading the skills are required, plan and develop curriculum of all programmes and benchmark the programmes with international standards. It will also develop appropriate teaching skills.

4. PUBLIC SECTOR BANKS MAY FOLLOW A UNIFORM PRACTICE ON EMPLOYEE ACCOUNTABILITY FOR BAD LOANS: Public Sector Banks (PSBs) may follow a uniform practice on employee accountability for bad loans and other risk- oriented business calls to prevent potential witch-hunting in guise of probing lapses. Indian Banks’ Association (IBA) has formed a committee under Canara Bank Executive Director Mr. M V Rao to look into the nuances of staff accountability. The decision comes at a time when bankers at different levels are wary of taking business decisions over concerns of future probes if any. The government and RBI have on several occasions mentioned the need to end the fear psychosis among bankers to induce lending and economic revival.

5. SHIVALIK CO-OP BANK GETS LICENSE AS SMALL FINANCE BANK: Shivalik Urban Co-operative Bank Ltd is the first Urban Co-op bank in the country to convert as a Small Finance Bank under the voluntary transition scheme. Shivalik Urban Co-op Bank now becomes Shivalik Small Finance Bank (SSFB). The bank had received an in-principal approval from RBI for converting to a Small Finance Bank in January 2020 and was given an 18-month timeline to commence its business as a Small Finance Bank. SSFB expects to commence business as a Small Finance Bank from April 1, 2021.

6. RESERVE BANK OF INDIA IMPOSES Rs 2.5 CRORE PENALTY ON BAJAJ FINANCE FOR VIOLATION OF NORMS: The Reserve Bank of India has imposed a monetary penalty of Rs. 2.5 crores on Bajaj Finance for violation of regulatory norms. The lapses were linked to risk management and specific fair practice code.

7. CMS INFO SYSTEMS TO SET UP 3,000 ATMs FOR SBI BY MARCH’21: CMS Info Systems will set up 3,000 ATMs by March’21 for State bank of India. This is an outsourced model which is called Brown Level ATM (BLA) which is managed by a service provider on behalf of the bank. Most of the ATMs will be Offsite ATMs. As a part of the contract, CMS will select the site, deploy ATMS, provide cash management service, regular maintenance and upkeep of ATMs. The contract is valid for 7 years, extendable up to 3 more years on mutual agreement. With this, CMS Info Systems will have 5,000 ATMs.

8. BANK OF BARODA LAUNCHES WHATSAPP BANKING SERVICES: Bank of Baroda has launched banking services on messaging platform WhatsApp. Through this the bank is offering services such as balance enquiry, mini statement, cheque book request, request for blocking of debit card and information on product and services.

9. SMALL FINANCE BANKS HAVE HIGHEST RETURN ON ADVANCES: Small Finance Banks (SFBs) which came into existence in 2016 with an objective of providing a savings vehicle for the unserved sections as well as supplying credit to small businesses and marginal farmers are performing very well. Presently there are 10 SFBs in India and they pay a high 8.66% in cost of funds as against 4.92 by Public Sector Banks (PSBs)and 5.41% by private lenders. But when it comes to return on advances, SFBs pocket a whopping net 19.87% as against 8.16% for PSBs 10.10% for private banks and 8.45% for foreign banks.

1. BANK CREDIT GROWS AT 5.4% IN SEPTEMBER’20 QUARTER: As per an RBI data, Bank credit growth on a year-on-year basis stood at 5.4% in September’20 quarter as compared to 5.7% growth in the previous quarter. RBI data has covered 1,26,580 branches of 89 scheduled commercial banks (excluding Regional Rural Banks). Personal loans, which accounted for one-fourth of bank credit, continued to maintain double digit growth during the said period. The report also reveals that there is improvement in bank credit in rural, semi-urban and urban areas.

2. CCPA SEEKS RBI INTERVENTION ON BANKS DELAYING REFUND IN CASE OF FAILED TRANSACTIONS: Central Consumer Protection Authority (CCPA) has flagged the issue of delay in reversing or refunding of money on account of failed or cancelled banking transactions with RBI seeking its intervention to ensure banks reverse such money on time. In a letter to RBI the CCPA Chief Commissioner Nidhi Khare has stated that 2,850 complaints pertaining to failed/cancelled banking transactions but money not refunded by banks have been received through the National Consumer Helpline (NCH).

3. POST OFFICE SAVINGS BANK LIKELY TO BE INTERCONNECTED WITH OTHER BANKS: India Post is planning to make Post Office Savings bank interoperable with other bank accounts by April’21. It will also focus on enhancing digitisation of all services in 2021. The India Post has already digitised its banking and financial services and now it will focus on digitising services and delivery of services at doorstep in the coming months.

4. BANKS NEED Rs 1 LAKH CRORE FOR NPA MANAGEMENT AND GROWTH: The Reserve Bank of India has said that banks will need additional capital of up to Rs one lakh crore (around 1.5% point of risk-weighted assets). Preliminary estimates suggested that potential recapitalisation requirements for meeting regulatory purposes as well as for growth, capital may be to the extent of 150 basis points of the common equity tier-I (CET I) ratio for the banking system. RBI has said this in its report on “Trend and progress of banking in India”

5. RuPay PARTNERS WITH RBL BANK TO LAUNCH “RuPay PoS”: National Payments Corporation of India (NPCI) has announced that RuPay has partnered with RBL Bank to launch an innovative payment solution for Indian merchants--- RuPay PoS in association with PayNearby. The RuPay PoS will transform smartphones into merchant Point of Sale (PoS) terminals for the retailers. Merchants will now be able to accept contactless payments upto Rs 5,000/- through a simple tap and pay mechanism on his NFC enabled mobile phones. Customers using RuPay cards or have tokenized their RuPay cards, can carry out contactless payments for their regular purchases.

6. YES BANK RETAIL LOAN PROCESS TO BECOME EASIER AND FASTER: Yes Bank has partnered with Salesforce, a global leader in customer relationship management, to build a next generation technology platform to smoothen its retail lending business. Yes Bank is the first bank to collaborate with Salesforce for loan origination and processing. Yes bank said this collaboration aims to engage customers with a unified experience and drive aggressive retail growth for the bank.

7. MORE AND MORE MSE UNITS TURN TO DIGITAL PLATFORMS TO SHORE UP SALES: Covid-19 has changed the status quo for aspects related to Micro and Small Enterprises (MSEs) business. Now to fast track their sales MSE have increasingly switched to digital channels such as online aggregators or marketplaces, social media and mobile marketing. Before Covid-19 the MSEs using these channels were around 29%. But after Covid-19 the figure has gone up to 49%. This is as reported by Crisil Survey.

8. PRIVATE BANKS ARE TAKING AWAY SHARE FROM PSBs IN RURAL CREDIT: Rural Credit has gathered steam in FY 20 and has surpassed growth in other categories after a gap of 4 years. Private banks have begun to gain share in rural credit even as public sector banks’ share is reducing. As has been observed for the last few years, branch expansion in rural areas remained subdued as the Branch Correspondent (BC) model has made further inroads in villages with population of more than 2,000.

9. LARGE PUBLIC SECTOR BANKS HIRE EX-BANKERS, DEFENCE PEROSNNEL TO LOWER OPERATIONAL COSTS: The outbreak of pandemic has forced banks to seek the services of experienced personnel in operational roles. Large Public Sector Banks (PSBs) have moved to hire retired bankers and defence personnel in a bid to lower operational costs as also to seek advice while expanding the reach of some specific product categories.

1. CENTRAL BANK OF INDIA TO COME OUT OF HOUSING FINANCE BUSINESS, WILL SELL THE JOINT VENTURE STAKE: Central Bank of India has decided to sell its entire stake of over 64% which it has in Cent Bank Home Finance Ltd (CBHFL) and exit its housing finance joint venture. It will divest its entire equity share of 64% to Centrum Housing Finance for Rs 160 crores. But this is subject to approvals from regulatory authorities.

2. BANKS WILL FOCUS ON CASH-FLOW BASED LENDING IN FUTURE: Mr Ajay Vyas, Executive Director of UCO Bank, in a virtual panel discussion on Redefining Corporate Financing in New Normal, organised by PHD Chamber has opined that now banks will start focussing on cash-flow based lending. This has already been started by State bank of India and the bank is advocating for cash-flow based lending models over the traditional asset-based or rating-based lending. In cash-flow based lending, a bank grants a loan that is backed by the recipient’s past and future cash flows.

3. HDFC BANK, ICICI BANK AND SBI AMONG THE TOP 10 LENDERS IN 2020, GOOGLE PAY AND PHONEPAY TOP WALLET BUSINESS:As per a report by Wizikey which reports about the top 100 banks in India and emerging Banking Financial Services & Insurance (BFSI) models such as wallets UPI and NBFCs, HDFC Bank, ICICI Bank, Yes Bank, PNB and SBI as the top-10 banks in 2020, while google Pay and PhonePe are top wallets among the customers.

4. NOW GST RETURNS TO BE MADE A QUARTERLY AFFAIR: From January 1, 2021 almost 92% (around 94 lakh registered GST tax payers) of GST tax payers with a turnover of up to Rs 5 crores can opt to file their GST returns once a quarter. While the said modification is expected to ease the compliance burden on these companies, the government is also trying to plug in the loopholes and frauds by tightening the grant of input tax credits.

5. ICICI BANK LAUNCHES “INFINITE INDIA” ONLINE PLATFORM: ICICI Bank has announced the launch of an online platform called “Infinite India” for foreign companies looking to establish or expand their business in India. The said platform offers them banking solutions as well as value-added services. The platform offers significant convenience to foreign companies as it eliminates the need of co-ordinating with multiple touchpoints leading to a hassle-free experience of doing business in India. This initiative by ICICI Bank is its strategy to further strengthen its technology-enabled offerings aimed to partner with foreign companies coming to Indiato do business.

6. GOVERNMENT PLANS TO EXTEND SUSPENSION OF FRESH INSOLVENCY PROCEEDINGS TILL MARCH’21: The government is planning to extend the suspension of fresh insolvency proceedings till March 31, 2021. This move will provide major relief to corporate borrowers hit by the coronavirus pandemic. The government has taken several steps including deferment of tax payment date to help businesses. As a part of “Atmanirbhar Bharat” package, the government raised the minimum threshold to initiate insolvency proceedings to Rs 1 crore from Rs 1 lakh, which covers most of Micro, Small and Medium Enterprises (MSMEs) from bankruptcy on defaulting on loan repayments.

7. GOVERNMENT TO SET UP A DEVELOPMENT FINANCE INSTITUTION WITHIN A FEW MONTHS: The government is planning to set up a Development Finance Institution (DFI) in the next 3-4 months with a view to mobilise Rs 111 lakh crores required for funding of the ambitious national infrastructure pipeline projects. Mr. Debashish Panda, Financial Services Secretary told the media that there is a need for a Development Financial Institution as infrastructure financing needs patient and long-term capital, which the banks currently are not in a position to lend for long term projects which do not generate any cash-flow for years.

8. “POSITIVE PAY” SYSTEM FOR CHEQUES FROM JANUARY 2021: The Reserve Bank of India will introduce “Positive pay” system for cheques payments beyond Rs 50,000/- from January 1, 2021. Under the new system, the drawer of the cheque has to submit certain minimum details of the cheque (like date, name of the beneficiary and amount) to the drawee bank through channels like SMS, mobile app, internet banking etc. The drawee bank will cross check these details before passing the same. This is being implemented to avoid any fraudulent transactions.

9. NPCI STRENGHTHENS RuPay CONTACTLESS WITH NEW FEATURES:National Payments Corporation of India (NPCI) has introduced RuPay Contactless (Offline) feature which also provides reloadable wallets within RuPay Card, for day-to-day transit payments. NPCI has introduced this RuPay Contactless-Offline feature for retail payments on pilot basis. These additional features will increase the overall transaction experience for the RuPay card holders and revolutionise the overall card payment ecosystem.

1. BANKS DISCUSS MOVING TO RBI FOR “STANDSTILL CLAUSE” TO AVOID NPA TAG ON COVID-HIT COMPANIES: Leading banks are considering to approach Reserve Bank of India to introduce a “Standstill Clause” to avoid the NPA tag on loans to companies that have been restructured to overcome slowdown effect caused by Covid-19. The proposed “Standstill” period that will require the approval of RBI is between invoking the debt resolution on a loan and its implementation.

2. RBI LAYS DOWN NORMS FOR DIVIDEND DISTRIBUTION RULE FOR NBFCs: The Reserve Bank of India has laid down strict norms for distribution of dividend by Non-Banking Finance Companies (NBFCs). Only those NBFCs with a minimum of 15% capital adequacy and net NPA below 6% for three years will be eligible to declare dividend from this fiscal onwards. However, RBI has said that NBFCs with less than 4% net NPA can still be eligible for dividend distribution even if its minimum capital adequacy norms are not met for the previous two years.

3. BLANKET INTEREST WAIVER ON ALL LOANS DURING MORATORIUM WILL COST Rs 6 LAKH CRORES: The Central government has informed the Supreme Court that if Supreme Court considers waiving of interest on all the loans and advances to all categories of borrowers for the 6-month moratorium period announced by RBI in view of Covid-19 pandemic, then the amount forgone would be more than Rs 6 lakh crores. If banks were to bear the burden, then it would wipe out a substantial and a major part of their net worth, rendering most of the banks unviable and raising a very grave situation wherein it would be very difficult for most of the banks to even survive.

4. RESERVE BANK OF INDIA CANCELS THE LICENSE OF KARAD JANATA SAHAKARI BANK: The Reserve Bank of India has cancelled the license of The Karad Janata Sahakari Bank Ltd, Karad, Maharashtra as it does not have adequate capital and earning prospects. More than 99% of the depositors of the bank will get full payment of their deposits from DICGC.

5. ICICI BANK OPENS UP ITS MOBILE APP FOR CUSTOMERS OF RIVAL BANKS: At a time when RBI has tightened scrutiny over digital services offered by banks in light of the increased instances of outages, ICICI Bank Ltd has upgraded its mobile app to allow customers of rival banks to avail basic online banking services on its platform. The new App is a first of its kind in the industry which will allow other bank customers to link their bank accounts, generate a UPI ID and avail services such as online transactions, opening savings accounts, making investments, applying for loans and credit cards without being an ICICI Bank account holder.

6. FINO PAYMENTS BANK FIRMS UP PLAN TO CONVERT INTO SMALL FINANCE BANK: Fino Payments Bank which started generating profits three quarters ago, has started its plans to eventually convert into a Small-Finance Bank (SFB). Enthused by recent internal working group report that advocated allowing payments bank to convert to SFB after three years of operations, Fino Bank is looking to go ahead and convert into SFB.

7. GRADUAL PHASE-OUT OF MORATORIUM MITIGATES THE RISK OF DECLINE IN ASSET QUALITY: According to Moody’s Investor Service report, gradual tapering of moratorium relief measures will help prevent a spike in non-performing assets. The gradual tapering of support measures will give borrowers time to adjust and enable banks to build loan-loss buffers, in turn reducing the risk of a sharp decline in banks’ asset quality. Further the report says that still the risks remain amid a likely uneven recovery in 2021 that remains vulnerable to setbacks.

8. BANKS NEED TO HIRE EXPERIANCED CHIEF OFFICERS TO COUNTER CYBER ATTACKS: Deloitte India in one of its report observes that nearly 22% of cybersecurity attacks which took place in India during 2018-19 were on banking industry. The banking system needs to prepare itself to address the risks and challenges arising from cyber security and the disruptions being thrown up by technology adoptions. Mr. Gulshan Rai National cyber security coordinator at National Cyber Security Council in the PMO while addressing a banking technology summit organised by IBA opined that the banks need to be prepared to address the challenges of security, the challenges of risks and challenges of disruption which technology would present.

9. POST-LOCKDOWN BOOST--- PUBLIC SECTOR BANKS TOLD TO TAP MARKETS AGGRESSIVELY: The government has addressed the public sector banks (PSBs) to raise capital from markets more aggressively, taking advantage of abundant liquidity, and ensure a sustained activities thereby ensure a sustained credit push to help spur economic activities as lockdown curbs are slowly being lifted.

1. RBI GOVERNOR ADVISES BANKS TO INVEST MORE IN I-T INFRASTRUCTURE FOR BETTER REACH: RBI Governor has stressed that banks need to strengthen banking technology systems and also their supervision. The financial sector is becoming increasingly IT-dependent and the banks and NBFCs need to invest more in IT technology to stay in the market. With this increasing dependence on technology on each passing day the banks need to strengthen their grievance resolution and customer protection tools to ensure continued confidence in rapidly increasing virtual channels that are crucial for financial inclusion.

2. RBI HIKES THE LIMIT IN CONTACTLESS TRANSACTION TO DRIVE DIGITAL MOVE: Reserve Bank of India has increased the contactless transaction limit from Rs 2,000/- to Rs 5,000/-. This will drive digital payments further. This increase in contactless transaction limit will be effective from January 1, 2021. The increased limit will help boost the average value of transaction and push the adoption of digital payments. This step re-affirms the commitment of the country to become a cash-less economy.

3. RBI ELEVATES RURAL BANKS BY ALLOWING THEM TO ACCESS THE LIQUIDITY WINDOWS: The Reserve Bank of India has decided to broaden the size and scope of financial systems by offering regional rural banks to access the liquidity windows of RBI and the call/notice money market. To facilitate more efficient liquidity management by the rural-focussed at competitive rates, RBI will also extend the Liquidity Adjustment facility (LAF) and Marginal Standing Facility (MSF) to rural banking sector. They will also be permitted to take part in call/notice money market, both as borrowers and lenders.

4. RBI ASKS BANKS TO RETAIN PROFIT, NOT TO MAKE ANY DIVIDEND PAYMENT FOR FY20: In view of the economic stress caused by the Covid-19 pandemic, RBI has asked scheduled commercial banks and co-operative banks not to make any dividend pay-outs for the financial year ended March 2020. In view of the ongoing stress and the heightened uncertainty on account of the pandemic, it is imperative that banks continue to conserve capital to support the economy and absorb losses if any. The decision is based on the review of the September quarter financial performance of the banks.

5. RBI TO COME OUT WITH DIGITAL PAYMENT SECURITY CONTROL DIRECTIONS: RBI Governor Mr. Shaktikanta Das has said that it will be introducing digital payment security control directions for regulated entities. Such move will improve the security of digital payment channels and also convenience for users. The directions will contain requirements for robust governance, implementation and monitoring of certain minimum standards on common security controls for channels like internet and mobile banking etc.

6. RTGS TO BE MADE AVAILABLE 24x7 IN NEXT FEW DAYS: In a business-friendly move, the Reserve Bank of India has said the Real Time Gross Settlement (RTGS) system, used for large value funds transfer, will be made available round-the-clock in a few days. One more arm of the funds transfer mechanism, NEFT (National Electronic Funds Transfer) system was made available round-the clock in December 2019. Currently, RTGS is available from 7.00 am to 6.00 pm on all working days except on second and forth Saturdays of every month.

7. RBI TEMPORARILY BANS HDFC BANK FROM ISSUING NEW CREDIT CARDS AND LAUNCHING NEW DIGITAL INITIATIVES: The Reserve Bank of India has asked HDFC Bank to temporarily stop all new digital launches and sourcing of new credit card customers. The RBI order also states that the bank’s Board needs to examine the recent lapses and also fix accountability. The decision of RBI to restrict the bank comes after the bank suffered its third big outage in a span of just two years. The first outage was in November 2018, the second was in December 2019 and another incident happened in November 2020 which hampered customer service and it led to confusion in customers’ minds regarding the safety and services.

8. PUNJAB NATIONAL BANK LAUNCHES LOAN MANAGEMENT SOLUTION TO SPEED UP DELIVERY: Punjab National Bank (PNB) has launched a tech-based loan management solution called “LenS” ---The Lending Solution, to speed up and maintain accuracy in online loan processing and sanctioning of credit proposals. The main purpose behind this is to standardise the system, process and appraisal formats for loan processing, speed up the process of credit sanctions and auto-generate loan documents.

1. HALF OF NBFCs WHICH QUALIFY FOR BANK LICENCE ARE CORPORATE-OWNED: Almost Half of top Non-Banking Finance Companies (NBFCs) with an asset value of over Rs 50,000 crores that meet the RBI’s size criteria to get a bank licence are part of corporate groups. Among the top NBFCs in terms of asset under management, Aditya Birla Capital, Bajaj Finance, L&T Finance, Mahindra Finance, Tata Capital and Piramal are part of corporate group. HDFC is already a promoter of HDFC Bank while Life Insurance Corporation, promoter of LIC Housing Finance, owns IDBI bank.

2. JIO PAYMENTS BANK SEEKS TO OPEN RELIANCE INDUSTRIES GROUP COMPANIES’ CURRENT ACCOUNT: The Reliance Industries-promoted Jio Payments Bank has sought permission from Reserve Bank of India to open current account of Reliance Industries and other operating companies within the present group. The current accounts thus opened will be purely used for only collection and payment services. Jio’s proposal comes at a time where RBI has put in restrictions on scheduled commercial banks from opening current accounts of companies to which they have not lent beyond a certain limit.

3. HITACHI PAYMENTS ON EXPANSION SPREE: Hitachi Payment Services, a leading operator of white-label ATMs, plans to double its machine deployment by March’21 to 5,000 from its current installed capacity of 1,340 machines. Hitachi’s aggressive expansion spree is interesting as the white label ATM business has been in losses since the beginning because of the lower inter-change charges which the banking industry and the regulator has not been able to revise to a profitable level for the operators which has forced many a player in the sector to withdraw from the business.

4. RBI HAS SET PRECEDENCE IN LVB BOND WRITE-OFF, WILL HURT OTHER BANKS: Lakshmi Vilas Bank which is being merged with DBS Bank has been proposed by RBI to write-off Rs 318 crores of Tier-II bonds ahead of its merger. Replying to this write-off instructions by RBI, rating agency ICRA has reported that RBI has set a precedence with the proposed write-off as it is for the first time ever that tier-II bonds is being written off. The rating agency further says that this will hurt the private sector lender’s peers.

5. RBL BANK TO HOLD VIRTUAL CYCLOTHON TO RAISE FUNDS FOR GIRL CHILD EDUCATION: Amid Covid-19 crisis, RBL Bank has flagged off a virtual cyclothon on 27TH November wherein 127 shortlisted cyclists have taken part to finish the 1,000 km in 14 days. The funds raised through this event will be used to support girl child education. The funds raised from this event will go towards setting up of a second school (Udhbav RBL School) for girl child education. The first school has been set up in Hyderabad from Rs 5.10 crore funds raised from last year’s cyclothon. The bank aims to set up 10 such schools by 2030.

6. NPCI ALLOWS PAYMENT BANKS AND FINTECH COMPANIES TO BE SHAREHOLDERS: National Payments Corporation of India(NPCI) has said that it has completed private placement of 4.63% of its equity shares worth Rs 81.64 crores, allowing small finance and payment banks, as well as Fintech companies to be its shareholders. NPCI had made an offer for private placement to 131 regulated entities of which 19 companies showed interest and were allotted shares in NPCI. With this move, small finance & payment banks and Fintech Companies have joined NPCI’s shareholding and now they hold upto 0.44% each in NPCI.

7. RBI REJECTS MUTHOOT FINANCE’S PROPOSAL TO BUY IDBI MUTUAL FUND: Muthoot Finance Ltd had applied to RBI, proposing to buy IDBI Asset Management Ltd and IDBI MF Trustee Co Ltd from IDBI Bank Ltd & IDBI Capital Markets & Securities Ltd. But RBI has not cleared the said proposal. The Central Bank has conveyed to Muthoot Finance Ltd that the activity of sponsoring a mutual fund or owning an asset management company will not match with the activity of an operating NBFC.

8. HDFC LTD TO ACQUIRE 19.9% STAKE IN RENAISSANCE INVESTMENT SOLUTIONS LTD:HDFC Ltd will acquire nearly 20% stake in Renaissance Investment Solutions ARC (Asset Reconstruction Company) Pvt Ltd worth Rs 49.8 lakhs. HDFC will hold 4,98,750 equity shares of Rs 10 each. Renaissance Investment will undertake the business assert reconstruction subject to receipt of approval from RBI.

9. ADANI GROUP TOPS DHFL BID : Four Entities—Adani Group, Piramal Group, US-based asset management company- Oaktree Capital and SC Lowy have submitted bids for DFL. Adani Group has off late revised its offer to a total of Rs 30,000 crores plus interest of Rs 3,000 crores which is the highest bid as compared to other quotes. But lenders who are getting DHFL auctioned to recover unpaid loans, want the suiters to revise their bids as original offers were low.

1. RBI INTERNAL WORKING GROUP RECOMMENDS PROMOTERS TO HOLD HIGHER STAKES IN PRIVATE BANKS: The Reserve Bank of India’s internal working group formed to review ownership in Indian private banks has recommended that the promoters can hold higher stakes. The recommendation says that the promoters can hold up to 26% stake in banks over a period of 15 years. The group has also recommended increasing the cap on non-promoter holding to 15% so as to bring a uniformity among all types of shareholders.

2. LARGE CORPORATES MAY BE ALLOWED AS PROMOTERS OF BANKS: The RBI Internal Working Group has recommended that large industrial houses may be allowed as promoters of banks. The group has recommended that Large Corporate/Industrial houses may be allowed as promoters of banks only after necessary amendments to the Banking Regulations Act, 1949 to prevent connected lending and exposure between banks and other financial and non-financial group entities and strengthening of supervisory mechanism. The group has also recommended that well run large NBFCs with an asset size of over Rs. 50,000 crores be considered for conversion into banks subject to completion of 10 years of operation.

3. AXIS BANK OFFERS e-GOVERNANCE SOLUTIONS TO BANGALORE WATER SUPPLY AND SEWEARGE BOARD: Axis bank has partnered with Bangalore Water Supply & Sewerage Board (BWSSB) to manage various e-payment collections through digital and offline modes. The integrated payment solutions will help BWSSB authorities to collect payments from its 10 lakh plus customers in a seamless and effective way. All BWSSB customers can now pay digitally through Bharat Bill Payment System (BBPS), BHIM/UPI/QR Code.

4. DBS BANK WILL HAVE A STRONGER PRESENCE IN INDIA AFTER LAXMI VILAS BANK MERGER: Reserve Bank of India has announced a draft scheme to amalgamate the troubled Laxmi Vilas Bank Ltd (LVB Ltd) into DBS Bank India, which is fully owned by DBS Bank Ltd Singapore. Moody’s Investors Service has said that DBS Bank will strengthen its India business following the merger with LVB Ltd. LVB Ltd presently has 500 branches to DBS Bank India’s 27 branches. The merger will increase DBS Bank’s net loans in India to around 1.5% of group loans from the present 0.9% The acquisition will help DBS bank to increase the traditional banking practices in India with its digital strategy.

5. YES BANK LAUNCHES CO-BRANDED PREPAID CARD WITH NEOKRED FOR CASHLESS PAYMENTS: Yes Bank Ltd has launched a co-branded prepaid card in partnership with Neokred Technologies to facilitate cashless payments. The card can be personalised to suit the requirements of corporates seeking salary cards or expense cards for their employees. Initially the card will be offered to Neokred’s corporate partners across various sectors.The prepaid card has to be loaded with balance first and then can be used for any purchases, utility bill payments, online shopping etc including cash withdrawal at ATMs.

6. BAJAJ FINANCE, M&M FINANCIAL MAY BE FRONT RUNNERS TO BECOME BANKS: If the Reserve Bank of India accepts the recommendations of its internal working group for allowing well run NBFCs to be converted into full fledged banks then Bajaj Finance, Mahindra & Mahindra Financial and Shriram Transport Finance may become prime candidates for conversion into high-street banks despite their strong corporate lineage. But none of these large NBFCs has shown eagerness to grab the on-tap licence opportunity that is available since 2016 to start banking business, perhaps because they enjoy the light regulatory structure for NBFCs as compared to the more stringent and regulated banking rules.

7. RESERVE BANK OF INDIA APPEALS TO SUPREME COURT TO ALLOW NPA CLASSIFICATION: Reserve Bank of India has appealed to Supreme Court to let banks classify loans as Non-Performing Asset (NPA). Presently Supreme court has put aninterim stay on banks to classify loans into NPAs to help borrowers in the Covid-19 pandemic. But RBI is of the opinion that this could greatly harm the nation’s financial system. RBI has warned that failure to lift the said interim stay on banks immediately would undermine the Central Bank’s regulatory mandate.

8. INDIAN STATE GOVERNMENTS’ RISING DEBT POSE A RISK TO THEIR FINANCES: A report by RBI (Study of State Finances) published recently states that Indian state governments’ are racking up more debt to fund the prospect of wider budget deficits as they step up their spending to fight the pandemic. This increased spending has generated unprecedented pressure on fiscal positions at sub-national levels. The Central government has revised its borrowing plan for a second time in this fiscal with an additional 1.1 trillion rupees to compensate states for the shortfall in goods & Services Tax Collection.

1. HDFC BANK EYEING 10-FOLD GROWTH IN MERCHANT BASE IN 3 YEARS: HDFC Bank Ltd has set up an ambitious target to expand its merchant base by 10-fold in next 3 years. It is eying a sizable share of India’s rapidly growing digital payments market. The Bank is planning to reach out to more than 20 million small and medium merchants and also professional services like doctors, pharmacies, salons and laundry services across metro, semi-urban and rural India in the next 3 years. Presently HDFC Bank has about 2 million merchants on its network. For this to happen HDFC Bank has launched a new banking solution for its merchants called “SmartHub” through which merchants and professionals can open current account and start accepting payments.

2. IBA, BANK UNIONS CONCLUDE WAGE NEGOTIATIONS, OVER 8.5 LAKH EMPLOYEES TO BENEFIT: Over 8.5 lakh bank employees will get around 15% wage hike with the conclusion of the 11TH Bipartite Wage Negotiations. After 3 years of intense negotiations, the United Forum of Bank Unions (UFBU) and the IBA have entered in to a memorandum of Understanding (MoU) for a wage hike of 15%. The 15% wage hike would be for a period of 5 years starting November 2017.

3. ICICI BANK’S RETAIL HOME LOAN CROSSES Rs 2 LAKH CRORES: Even as the unlocking after Covid-19 is happening in stages, demand for housing loans has surged and ICICI Bank which has more than half of its retail loans in mortgages, witnessed an all time monthly high loan disbursement in October 2020. But most of the disbursements were in second and third tier cities. Overall, ICICI Bank’s retail housing loan portfolio reached Rs 2.05 lakh crores as on September 30, 2020, showing 9.6% year-on-year growth. The bank became the first private sector bank to reach the Rs 2 lakh crore milestone. State bank of India has a home loan portfolio of Rs 4.68 lakh crores as on September 30, 2020.

4. RETIRED PSU BANKERS MAY GET ONE RANK, ONE PENSION PLAN: A one-rank, one-pension (OROP) kind of a scheme in in the planning stage for the retired Public Sector Bank employees. OROP was a long-standing demand of bank employees where the pension would be reworked so that everyone who retired in the same rank will get the same pension, irrespective of the date of retirement. The recently concluded 11 Bipartite wage negotiation has already covered the Family pension updation.

5. GOVERNMENT OKAYS Rs 5,500 CRORE EQUITY INFUSION INTO PUNJAB & SIND BANK: The government has okayed the infusion of Rs 5,500 crores capital into Punjab & Sind Bank. The capital infusion is towards the contribution of the Central government in the form of preferential allotment of equity shares of the bank during the financial year 2020-21. The government’s shareholding in the bank as on September 30,2020 stood at 83.06% as per BSE data.

6. MICRIFINANCE INDUSTRY SEES 31% RISE IN LOAN PORTFLIO: India’s microfinance industry registered a 31% jump in its loan portfolio to Rs 2.36 lakh crores for 2019-20. The industry expects to post a moderate growth of about 15% in the current financial year. Despite the onset of the coronavirus pandemic for the past 8 months, the growth of 31% is considerable achievement. Bur it was less than the growth in FY 2018-19 which was 41%.

7. WHATSAPP PAY STARTS OPERTAING IN INDIA: WhatsApp has finally been allowed to roll out its payments service in India. WhatsApp had been offering the payments service in India on trial basis since early 2019. The approval comes after a lot of court battles and regulatory hurdles. WhatsApp will use the multibank Unified Payments Interface (UPI) which is operated by National Payments Corporation of India (NPCI). It has been allowed to begin with a user-number cap, and then gradually increase its UPI base. So, for customers using the WhatsApp pay app, transferring money will be as easy as sending a message.

8. ICICI BANK’S NEW INITIATIVE---- CONVERT THE KIRANA STORE TO BIG-BASKET LIKE ONLINE SHOP: In order to convert Kirana stores into online shops, ICICI bank Ltd has unveiled its Digital Store Management platform. This platform helps the merchants to manage full in-store operations online. The platform guides the merchants from inventory to billing to payment collections through PoS, QR-Code and payment links. A kirana Store owner can quickly create an online store and start receiving orders from customers in a few clicks. Any merchant can apply for the Digital Store Management platform while they are applying for PoS machine on ICICI Bank’s Eazypay applications for merchants.

1. SBI CARD TO LAUNCH CREDIT CARDS PARTNERING PAYTM: SBI Cards and Payment Services said it has launched credit cards in partnership with digital payment platform Paytm. The card will be available in two variants, Paytm SBI Card and Paytm SBI Card Select. The product has been launched on Visa Platform. The partnership aims to bring new and fresh credit card users. The card which can be used across Paytm ecosystem, third party platform and offline retail stores, will also enable digital process for the card application, issuance and managing expenses.

2. SCAM-HIT PMC BANK SEEKS INVESTORS FOR BAILOUT PLAN: Scam-hit Punjab & Maharashtra Co-operative Bank Ltd (PMC Bank) has invited expressions of Interest from investors to take management control of the bank and run its day-to-day operations. In a notice posted on its website, the bank said eligible investors could be financial institutions, individuals or companies, societies, trusts or any other such entities. But the bank has not quoted precise financial qualification. The last date for the submission of bids is December 15.

3. KOTAK MAHINDRA BANK REDUCES HOME LOAN RATES TO 6.75%, THE LOWEST EVER: Home loan rates across the country are at a 15-year low. Banks and other institutions are wooing home buyers by offering lowest of rates and other riders. Kotak Mahindra Bank has cut its housing loan interest rate to 6.75% which is the lowest in the industry at present and the same is applicable from November 1, 2020. Lower prices, lower stamp duty, low interest rates and other attractive riders could further support the sector making it the best time for anyone to buy a house.

4. SBI NET PROFIT GROWS 52% IN SEPTEMBER QUARTER: Backed by robust growth in retail loans and lower provisions for bad loans in September quarter, State Bank of India has reported a sharp 52% year-on-year jump in net profit to Rs. 4,574 crores. Retail business has been the bank’s major lever for the said growth. The home loan sanctions saw a growth of 29% on a year-on-year basis while the auto loans saw a growth of 27%.

5. FOR THE FIRST TIME UPI TRANSACTIONS HIT 200 CRORE PAYMENTS MARK: The number of Unified payments Interface (UPI) based payments crossed Rs 200 crores mark in October’20, reflecting a trend of faster adoption of digital payments in a post pandemic world. National Payments Corporation of India (NPCI) said that BHIM UPI has managed to change the face of person-to-person and person-to merchant money transfers in the past few years while making them safer and more secure.

6. NOW INDIA IS WORLD’S 5th LARGEST FOREX RESERVE HOLDER: A massive surge of $ 8.2 billion in Foreign Currency Assets (FCA), which is a major component of the overall forex reserves, took India’s forex reserves at a record level of $ 501.7 billion as on June 5, 2020. So now India becomes the 5TH largest foreign exchange reserves holder in the world with forex reserves crossing $ 500 billion mark for the first time ever. So, RBI is now looking at diversifying its foreign exchange reserve investments amid the fall in global interest rates caused by Covid-19 pandemic.

7. SBI INTEGRATES YONO KRISHI WITH IFFCO e-BAZAR: State Bank of India has facilitated the integration of Yono Krishi with IFFCO e-Bazar under its mandi section. The Yono Krishi Platform caters to all the needs of the farmers agricultural needs from sowing to harvesting. With the said integration, the farmer customers of the bank can avail free home delivery of all farm related products in over 27,000 locations across the country from IFFCO e-Bazar portal. Farmers can place order online for any farm products. Over 3 crores registered Yono customers will benefit with the said integration.

8. YES BANK IN TALKS WITH ARCs TO SELL NPAs WORTH Rs. 32,000 CRORES: Yes Bank is in discussions with several Asset Reconstruction Companies (ARCs) to sell off bad loans worth Rs 32,344 crores. Yes Bank has already made provisions for 76% of its gross NPAs worth Rs 24,476 crores and is looking forward for the said sale to regain its place in Indian Banking sector. The bank has already sold bonds held in Dewan Housing Finance Ltd (DHFL) in the secondary market to raise Rs 500 crores and reduce its exposure in the troubled DHFL.

9. BANKS PLACE CURBS ON FREE CASH DEPOSITS & WITHDRAWALS PER MONTH: Many Public Sector Banks have decided to withdraw the latest changes that they had made in service charges on cash deposits and withdrawals but have reduced the number of occasions the free deposits and withdrawals can be made. Most banks have restricted the free cash deposits and withdrawals in a month by allowing only 2 to 5 free cash transactions per month. SBI allows only two free cash transactions in a month for customers keeping an average monthly balance of Rs. 25,000/-.

1. AXIS BANK REVISES ITS JOINT VENTURE DEAL WITH MAX LIFE: On July 27, 2020 Axis Bank had a joint venture deal with Max life Insurance but the same was not approved by RBI as it flouted the banking norms. Now Axis Bank has yet again revised the terms of its deal with Max Financial to form a joint venture involving Max Financial Life Insurance entity. As per the revised deal, Axis Bank will now acquire 9% of the equity share capital of Max Life while its subsidiaries (Axis Capital & Axis Securities) will hold up to 3%. This deal however, is subject to approvals from regulatory authorities including RBI.

2. GOVERNMENT NOTIFIES REIMBURSEMENT OF COMPOUND INTEREST DURING MORATORIUM: Government has issued notification for waiving off the compounded interest (Interest on interest) on loans during the moratorium period between March 1 and August 31,2020. Likewise, RBI has issued a notification directing banks to follow the government order for reimbursing small borrowers with loans up to Rs 2 crores that have paid compounded interest during the moratorium period. This will restrict the losses of the banks.

3. COMPOUND INTEREST WAIVER—OUTSTANDING AS OF FEBRUARY 29, 2020 TO BE THE REFERENCE FOR EX GRATIA RELIEF: The loan outstanding as of February 29,2020 would be the reference amount for calculating the differential interest amount under the scheme for reimbursement of compounded interest during moratorium period for loans up to Rs 2 crores. The scheme is called as Ex gratia payment of difference between compound interest and simple interest.

4. JAN-DHAN ACCOUNTS RISE BY 60% DURING PANDEMIC: As per a research made by SBI, the Covid-19 pandemic has led to 60% increase in opening of new Jan-Dhan accounts. The latest data showed that the total number of Pradhan Mantri Jan Dhan Yojana accounts stood at over 41 crores with a total balance of Rs 1.31 lakh crore. Since April 1, around 3 crore new accounts have been opened with a deposit of Rs 11,060 crores. Using the Jan Dhan-Aadhaar Mobile (JAM) trinity, the central government has managed to seamlessly transfer money to these accounts, particularly women account holders, to help the poor tide over the difficult pandemic period.

5. YES BANK STARTS PHYSICAL TAKEOVER OF ANIL AMBANI’S RELIANCE GROUP HEAD QUARTER IN MUMBAI: Yes Bank has started the process for obtaining physical possession of Reliance Centre, the headquarters of Ambani’s Reliance Group in Mumbai. The bank is seeking to either sell the property or move its headquarters there. The bank had taken the symbolic possession of the said building in July. The action was under SARFAESI Act to recover dues of Rs 2,892 crores from Reliance Infrastructure. It is premature for Yes Bank to make plans for the property as the legal process could go on for some time.

6. BANKS TO TURN TO ARTIFICIAL INTELLIGENCE TO CURTAIL LOAN FRAUDS: State run banks are looking to deploy Artificial Intelligence (AI) enabled early warning signal system that crawls the web for information on borrower’s activities, including news articles and social media. Some of the capabilities sought by banks are AI, web crawling, Optical Character Recognition (OCR) for triggering early warning signals.

7. INCOME TAX RETURNS FILING DATE EXTENDED: In a relief to tax payers, the government has further extended the deadline for filing income tax returns by individual taxpayers for financial year 2019-20 to December 31,2020. Also, the due date for filing returns by those taxpayers whose accounts require to be audited has been extended till January 31, 2021. Likewise, the due date for filing 2018-19 Annual GST returns has been extended till December 31, 2020.

8. GOVERNMENT PROCUREMENT FROM MSMEs CROSS Rs 12K CRORE MARK: Central Ministries and departments, which have been mandated by the government to procure a minimum of 25% of their annual procurement from Micro, Small & Medium Enterprises (MSMEs) have purchased goods worth Rs 12,291 crores from these MSMEs in financial year 2020-21 so far. Out of the 54 ministries the Ministry of Petroleum & Natural Gas, Ministry of Power, Ministry of Heavy Industries and Public Enterprises, Ministry of Defence and Ministry Steel are the biggest buyers from MSMEs.

1. SURGING UPI TRANSACTION FAILURE RATE WORRY BANKS: There is a record surge in UPI payments failures which is a worrying factor for public sector banks. Data from National Payments Corporation of India (NPCI) shows a sharp spike in failed online transactions. 10 of the top 30 banks using the county’s Unified Payment Interface (UPI) network recorded failure rates of over 3% for the month of September 2020. UPI clocked 1.8 billion transactions in September 2020 worth Rs 3.6 lakh crores. The failure of UPI transactions may lead to pile-up of credit reversals.

2. INDIA MUST NOT NEGLECT BANK RECAPITALISATION DESPITE PANDEMIC: According to Mr. Viral Acharya, the former Deputy Director of RBI, India is neglecting bank recapitalisation as it focuses on debt moratorium and interest waivers for borrowers amid Covid-19 pandemic. Indian Banks are already burdened with over $ 120 billion in bad debts, and in severely stressed conditions the bad debt ratio could nearly double by March ’21. Mr. Acharya said that more such loan moratorium, interest waivers and farm loan waivers favouring the borrowers in the short term will be detrimental to a sound recovery of credit growth in the medium term.

3. RETAIL CHEQUE PAYMENTS COME DOWN IN FY-20: The aggressive push to a digital payments and settlement system has paid rich dividends to Reserve Bank of India as the share of cheque clearing in retail payments has come down in financial year 2020 as per a data released by RBI. The cheque clearing in retail payments has plunged by 2.96% in terms of volume and by 20.08% in terms of value. The efforts towards digitization have been very successful is clear from the steady fall in the cheque clearing.

4. HDFC BANK Q-2 NET PROFIT JUMPS BY 18.4%: HDFC Bank’s Q-2 profit for September 2020 rose by 18.4 % as asset quality remained steady and interest income rose. The net profit rose by 18% (year-on-year basis) to Rs 7,513 crores in September 2020. Net Interest Income (NII) rose by 17% to 15,776 crores in the same period. The gross non-performing asset ratio stood at 1.36%. The bank’s capital adequacy ratio stood at 19.1%. Considering the pandemic scenario which has affected the entire banking sector, these figures are very much encouraging.

5. MSME LONG TERM RECOVERY AFFECTED BY SUBDUED DEMAND AND LOWER DISPOSABLE INCOME: Micro, Small & Medium Enterprises (MSMEs) is among the five key sectors in India that has witnessed severe impact of pandemic. The MSME sector was expected to be revived, but according to a report by Dun & Bradstreet, subdued domestic consumption demand and lower disposable income would make the MSME revival more constrained and difficult. Also, costs required for maintaining hygiene levels and change in work processes would increase for small businesses making it more difficult for them.

6. CYBER CRIMES IN INDIA CAUSED Rs 1.25 LAKH CRORE LOSS IN 2019: Cyber crimes in India has caused a loss of Rs 1.25 lakh crores in FY-2019. These cyber threats will continue to increase as the country starts developing smart cities and rolling 5G network. There are only a few companies in India who are making some cyber security products and there is a big vacuum in this sector. Mr Pant, National Cyber Security Coordinator has called for setting up of dedicated industry forum for cyber security to develop trusted indigenous solutions to check cyber-attacks.

7. SOON, SMALL BUSINESSES CAN SELL THROUGH WHATSAPP: In order to ease selling for small businesses on WhatsApp, Facebook-owned massaging app will be launching a “Shopping-Button” for customers to purchase goods from within the app. They might use their catalogue and brochures to showcase their products and then chat with the prospective customer to coordinate the details and payment. This has been launched globally by WhatsApp but will be launched in India very soon.

8. SBI CARDS SEES A SPURT IN DEFAULTS: SBI Cards said its gross non-performing assets (NPAs) rose to 4.3% as on September 2020 compared to 2.3% a year ago, clearly showing the signs of financial stress among individual borrowers. The company added that this figure would have been 7.5% had there not been a Supreme Court order that restrained declaring some Covid-related defaults as bad loans.

9. YES BANK POSTS Rs 129 CRORE NET PROFIT: Yes Bank has reported a Net Profit of Rs 129 Crores in September 2020 quarter. The bank had announced a loss of Rs 600 crores in the corresponding period last year. The bank has reported a net profit of Rs 45 crores in June 2020. The bank has also shown improved asset quality during September 2020 quarter. The bank has already made full repayment of Rs 50,000 crores to RBI on account of special illiquidity facility provided by the regulator. The bank has also stepped up provisions due to Covid-19.

1. BANK OF BARODA PLANNING FOR 50% OF ITS STAFF TO WORK FROM HOME IN NEXT 5 YEARS: Bank of Baroda is considering a proposal to divide its workforce in such a way that about 50% of its staff may start work from home in next 5 years. In the next 5 years 50% of the bank’s staff may be full time employed in branches and the balance would be working from home. The bank could divide its employees into 3 categories of people—people who need to work in branches, people who are in back office remotely and rest who can work from home. This may give an opportunity to access talent and it might be possible to even employ fruitful people who have retired but still can contribute to the bank.

2. GOVERNMENT SEEKS APPROVAL FROM CABINET COMMITTEE ON ECONOMIC AFFAIRS ON DILUTING STAKES IN IDBI BANK: The government is planning to seek in-principle approval from the Cabinet Committee on Economic Affairs (CCEA) on lowering its stake in IDBI Bank. Presently the government holds 47.11% in IDBI Bank. Once the approval is granted, the government will decide on the percentage of stake to be sold. LIC of India presently holds 51% in IDVBI bank.

3. BANKS NEED ARTIFICIAL INTELLIGENCE FOR CORPORATE LENDING: Chief Economic Advisor Mr Krishnamurthy Subramanian has said that Indian Banking sector needs to use emerging technologies such as Artificial Intelligence (AI) and machine learning for corporate lending for improving its quality.He further said that for the past 15 years banks have not developed any special models to actively lend to the corporates and MSMEs. Mr Subramanian also opined that the use of AI and machine learning in agriculture sector can enable better crop choice and crop diversification which are one of the key issues that exist in the country.

4. 5% OF THE TOTAL BANK LOANS COULD BE RESTRUCTURED DUE TO COVID-19: CARE Ratings has estimated that almost 5% of the total loans in the banking system could be recast under the one-time restructuring (OTR) scheme available to customers impacted by the pandemic. CARE also said that the OTR scheme is expected to dilute Covid-19 impact on the asset quality of banks. Earlier India Ratings had estimated that up to 7.7% or Rs. 8.4 lakh crores of total bank credit could get restructured. But now the impact of OTR could be lesser as specific segments like NBFCs have been kept out of the ambit of the scheme and those accounts which are classified as SMA -1 and SMA-2 will also not be considered for OTR.

5. UNION BANK CHAIRMAN Mr. RAJKIRAN RAI IS THE NEW IBA CHAIRMAN: Indian Banks’ Association (IBA) has appointed Union Bank of India’s MD & CEO Mr Rajkiran Rai as the new Chairman of IBA for the term 2020-21.State Bank of India Chairman Mr Dinesh Kumar Khara has been elected as the Deputy Chairman of IBA.

6. RBI RAISES BANKS’ AGGREGATE EXPOSURE LIMIT FOR SMALL BUSINESSES TO Rs 7.5 CRORE: The Reserve Bank of India has raised banks’ maximum aggregate retail exposure limit to 7.5 crores from the present Rs 5 crores. This is applicable to small entities with a turnover of up to Rs 50 crores. This will apply to all fresh exposures and also to existing exposures where incremental exposure may be taken by banks up to the revised limit of Rs 7.5 crores.

7. NO RECAST OF LOANS FOR LOAN ACCOUNTS THAT WERE IN DEFAULT FOR OVER 30 DAYS AS ON MARCH 1, 2020: Loan accounts that were in default for over 30 days as on March 1, 2020 will not be eligible for One Time Restructuring (OTR) even if they are regularised thereafter. For the purpose of eligibility for the resolution under the framework, the definition of Micro, Small & Medium Enterprise (MSME) that would be applicable is the one that existed as on March 1, 2020 and not the revised one under the gazette notification dated June 26, 2020.

8. DIGITAL ADOPTION WILL IMPROVE RETURN OF EQUITY FOR INDIAN BANKS: Morgan Stanley, in its forecast has said that banks could see a rise of atleast 20 basis points in their return on equity , if the digital drive continues at the current pace. This increased digital adoption by Indian banks would lead to higher return ratios in the next few years. The forecast also reflects faster growth in retail and MSME segments, increased cross-selling and faster product delivery. Morgan Stanley believes that Indian banks are now ready and are well placed to manage the increasing competition from Fintech companies.

1. INTEREST RATES ON HOME LOANS ABOVE Rs 30 LAKH LIKELY TO DROP: Interest on home loans above Rs 30 lakh is about to become less. The biggest reduction may be in home loans of over Rs 75 lakhs. At present interest rates are linked to the size of the loan amount. Rates are lowest for loans up to Rs 30 lakhs and the they rise with the size of the loan. The progressive increase in rates is because of capital requirements that rise with the size of the loan. This will change as the RBI has announced that it will rationalise the risk weights in home loans and link it to Loan-to-Value (LTV) ratios for new home loans.

2. RBI RATIONALISES RISK WEIGHTS ON HOME LOANS, BIG BOOST FOR REAL ESTATE SECTOR: The Reserve Bank of India has announced that it will rationalise the risk weights and link home loans to Loan-to-Value (LTV) ratios for new housing loans sanctioned up to 31/03/2022. With lowering the risk weights, the requirement of capital provisioning for banks will come down and this is a much-needed boost to the real estate sector. This will encourage banks to lend more and offer lower rate of interest as well for the big-ticket size loans.

3. DINESH KUMAR KHARA IS THE NEW CHAIRMAN OF SBI, SAYS MAINTAINING ASSET QUALITY IS A PRIORITY: Mr. Dinesh Kumar Khara has been appointed as the chairman of State Bank of India. He opines that maintaining asset quality, protecting net interest margins (NIMs) and continuing on the path of digitisation are the three priorities at present. Mr. Khara was also confident of the bank’s provisioning requirements and said the bank will continue to make upfront provisions as and when required. SBI’s NPA post provisioning was 1.86% in June 2020, down from 3.07% in June 2019. Its Net Interest Margin (NIM) was 3.01% in June 2020, up from 2.81% in June 2019.

4. DHFL’S APPOINTED AUDITOR REPORTS FRAUDULENT TRANSACTIONS WORTH Rs 2,150 CRORES: Debt-ridden mortgage lender DHFL’s administrator had roped in Grant Thornton as auditors to conduct an investigation into the affairs of the mortgage firm. The auditing firm has said that fraudulent transactions worth Rs 2,150 crores by way of undervaluing the company’s insurance subsidiary have been detected. DHFL is undergoing resolution process under Insolvency and Bankruptcy Code.

5. MCA MAY ASK BIG UNLISTED FIRMS TO FILE FINANCIAL STATEMEMNT MORE FREQUENTLY: Armed with the recent amendment to Companies Act, the Ministry of Corporate Affairs (MCA) may direct large unlisted entities (like Flipkart, Zomato, Patanjali etc) to file financial statements more frequently with Registrar of Companies (RoC) than the usual annual periodicity now. The rationale behind the move is to enable early fraud detection and statutory compliance. At present listed companies have to submit financial statements annually to RoC and upload their financial results on aquarterly basis on the stock exchanges under SEBI norms. However, the private unlisted companies furnish financial data to the RoC only once a year. This will change now.

6. REGIONAL RURAL BANKS INCUR A NET LOSS OF Rs 2,206 CRORES IN FY-2020: Regional Rural Banks (RRBs) as a group reported a net loss of Rs 2,206 crores in Financial year 2019-20 (Year ended 31/03/2020), as against a net loss of Rs 652 crores in Financial year 2019. This is as per the data published by NABARD. Out of the total 45 RRBs, 26 RRBs incurred a net profit of Rs 2,203 crores while the rest 19 RRBs incurred a net loss of Rs 4,409 crores. These 45 RRBs are functioning in 685 districts across the country.

7. GOVERNMENT OPEN TO MORE CAPITAL INFUSION IN SELECT STATE-RUN BANKS: The government is willing to infuse more capital into select state-run banks in this fiscal to boost lending if there is any pressing need for more capital from these banks. The government through last five years, has infused Rs 3.1 lakh crore into the state-run banks. The government had refrained from providing any more capital infusion in its Budget for FY 21. However, the covid-19 outbreak has dented the balance sheets of most of the banks which has forced the government to seek parliamentary approval last month for a supplementary demand of Rs 20,000 crores to extend fresh capital. However, the one-time restructuring window for troubled loan accounts extended by RBI has reduced the pressure of fresh delinquencies.

8. NOW RTGS TO BE AVAILABLE ROUND THE CLOCK/365 DAYS: The Reserve Bank of India has announced that the Real Time Gross Settlement (RTGS) system of payments will soon be available 24 hours on all 365 days. This has been facilitated to support the ongoing efforts aimed at global integration of Indian financial markets and provide wider payment flexibility to domestic corporates and institutions.This facility will be made available from December 2020.

1. “POSITIVE PAY SYSTEM” FOR CHEQUE PAYMENTS LAUNCHED BY RBI: In order to check bank frauds, RBI has introduced the “Positive Pay System” for cheque payments from October 1, 2020. Under this Positive Pay System, re-confirmation of key details will be needed for payments beyond Rs 50,000/-. Availing this facility will be at the sole discretion of the account holder. But banks may consider making this mandatory in case of cheques amounting to Rs 5 lakhs and above. Under this system, the issuer of the cheque will be required to submit electronically/through SMS/mobile app/internet banking certain minimum details of the cheque to the drawee bank. The National Payments Corporation (NPC) will develop the facility of Positive Pay System in CTS and make it available to participant banks.

2. BANK CREDIT AND DEPOSITS INCREASE: According to RBI, Bank credit grew by 5.26% while deposits grew by 11.98% in the fortnight ended September 13,2020. Amount wise the bank credit touched a figure of Rs. 102.04 lakh crores while the deposits touched Rs. 142.48 lakh crores. Advances to agriculture and allied activities registered a growth of 5.4% in the reporting month as compared with a growth of 6.8% in the corresponding period last year. Loans to Industrial sector also was very sluggish as compared to last year.

3. CENTRE READY TO WAIVE INTEREST ON INTEREST DURING MORATORIUM PERIOD: The Central Government has informed the Supreme Court that it is ready to waive certain interest levies on loans up to Rs 2 crores under the moratorium period. This essentially means compound interest or interest on interest will be scrapped for loans taken out for certain purposes like housing, education, credit-card dues, MSME loans, personal loans, auto loans, professional and consumer loans. This move will bring relief to millions of borrowers. The government will bear the burden of money.

4. “GRAM SAMPARK ABHIYAN” INITIATIVE LAUNCHED BY PUNJAB NATIONAL BANKS: Punjab National Bank has launched a financial inclusion and literacy initiative called “Gram Sampark Abhiyan”. The campaign is centred on four key themes—digital, credit, social security and financial literacy that will include various activities and will prescribe the cherished theme of “Atmanirbhar Bharat”. Under this campaign, the bank’s 3,930 rural and 2,752 semi-urban branches will aim to reach 526 districts with two camps per branch every month.

5. INDIA POST PAYMENTS BANK ATTAINS 3.6 CRORE CUSTOMERS AMID PANDEMIC SCENARIO: The government backed India Post Payments Bank (IPPB) is gaining ground amid a Covid-19 pandemic scenario. The bank has attained a total customer base of 3.6 crores and has completed over Rs. 38,500 crores of financial transactions cumulatively until September 15,2020. IPPB launched its operations just two years ago had crossed the milestone of one crore customer base in August 2019. Aadhaar Enabled Payment System Service (AePS) has been a game changer of sorts for IPPB.

6. SBI TO PARTNER HINDUSTAN UNILEVER LTD TO PROVIDE DIGITAL SOLUTIONS TO SMALL RETAILERS: State Bank of India has partnered with Hindustan Unilever (HUL) to offer digital and financing solutions for small store owners and distributors of HUL. SBI will provide paperless instant overdraft facility to retailers to enable payments to distributors. It will also provide UPI-based solutions to HUL’s retailers to assist with cashless payments.

7. MANY RULES FOR DRIVING LICENCE, USE OF CREDIT CARDS, HOME LOANS AND HEALTH INSURANCE MODIFIED: The government has introduced issue of Uniform vehicle Registration Cards (RC books) and driving licences across India from October 1, 2020. The driving licence will have an advanced microchip with many features. The issue of RC books will be paperless. All banks have been directed by RBI not to unnecessarily issue international facilities to customers’ cards unless the customer demands for it. The customer will now get the option to register for preferences like opt-in and opt-out services, spend limit and other services for online transactions. A lot of changes have also been initiated in health insurance policies.

8. CORPORATE RELATIONSHIPS NOW MORE IMPORTANT THAN BIG-TICKET LENDING FOR SBI: State Bank of India has changed its approach of serving Corporate clients to beyond extending supply of credit. The bank’s Chairman Mr Rajnish Kumar said that the new approach involves giving solutions to a variety of needs of the corporates and their stake holders like supply chain vendors, distributors and employees. Earlier the approach was just limited to extend credit to corporates but now the time has come to strengthen the relations by extending a host of solutions to these corporates and their stake holders.These value additions will go a long way in strengthening the relationship into a win-win scenario for the bank and the Corporate client.

1. SBI PLANNING TO MONETIZE ITS INTEGRATED DIGITAL BANKING PLATFORM “YONO”: State Bank of India is planning to monetize its flagship digital banking platform “YONO” by allowing smaller banks and regional rural banks to use it. Very soon SBI may carve out the integrated digital platform into a separate entity. Other lenders would need to connect with YONO API (Application Programming Interface) for using the platform. YONO is a profitable platform with over 2.7 crore users.

2. GOVERNMENT NEEDS TO CAP MDR ON DEBIT CARDS TO PROMOTE DIGITAL TRANSACTIONS: A study done by the Indian Institute of Technology (IIT) Mumbai has suggested that the government needs to cap the Merchant Discount Rate (MDR) on all types of debit and pre-paid cards at a lower rate with a view to promote digital transactions. The IIT, Mumbai suggested that there could be anupper ceiling of Rs 150/-. The study also suggests that for small and medium merchants accepting POS based payments and having a turnover of up to Rs 2 crore, the MDR for all types of cards may be fixed at 0.25% for transactions upto Rs 2,000/- and at 0.6% for transactions exceeding Rs 2,000/-.

3. SBI LAUNCHES e-FACILITY FOR RESTRUCTURING OF RETAIL LOANS FOR BORROWERS AFFECTED BY COVID-19 STRESS: State Bank of India has launched e-Facility on its website to help retail customers check their eligibility for one-time loan restructuring announced by RBI. Instead of customers actually visiting the branches to check their eligibility, the bank has provided a slot on its website whereby the customer can initially check his eligibility. An eligible customer however, will have to later visit the branch to complete other formalities.

4. AXIS BANK PARTNERS WITH BAYER’S “BETTER LIFE FARMING”INITIATIVE: Axis Bank has partnered with life sciences firm Bayer for its Better Life Farming (BLF) initiative for providing enhanced and holistic financial solutions to small farmers and rural farming communities. Through this partnership, Axis Bank will offer end-to-end financial solutions and services such as affordable priced farm loans, deposits, withdrawals and payments solutions. Digital financial solutions and doorstep delivery of these services will be a part of the said program to ensure convenient and hassle-freetransactions.

5. VARIOUS STATE TRANSPORT AUTHORITIES TO ADOPT CONTACTLESS SOLUTIONS: Across India, many state transport authorities are inviting banks, fintech companies and payment network providers to replace their traditional ticketing systems with contactless solutions. The said move is aimed at aligning with the latest trend of social distancing and hygiene norms in light of Covid-19 outbreak. Uttar Pradesh, Gujrat and Rajasthan transport authorities have issued tenders for contract, calling for bids from banks and digital service providers to help scale their technology requirements to offer contactless ticketing solutions.

6. SCHEDULED BANKS COLLECTIVELY RECORD HIGH INFLOW OF DEPOSITS DURING APRIL-AUGUST’20 PERIOD: All Scheduled Banks collectively received about Rs.6,09,763 crores of deposits in the first five months (April to August) in this financial year as againstRs. 2,21,737 Crores in the same period during the previous year amounting to a jump of about 2.75 times. This inflow of deposits comes despite a drastic deposit rate cuts across banks. This kind of trend shows the preference of depositors towards safety of bank deposits.

7. NBFC DELINQUENCIES MAY RISE UPTO 250 bps IN FINANCIAL YEAR 20-21: Rating agency Crisil Ratings has reported that Non-Banking Finance Companies (NBFCs) are likely to see up to 250 basis points (bps) increase in their delinquencies (bad loans) in the current fiscal. The effect of Covid-19 pandemic and intermittent lockdowns will increase the asset quality challenges of these NBFCs because of vulnerability in borrowers cash flows. The report further states thatin home loans, the largest NBFC segment, asset quality is expected to be better than other segments.

8. INDIAN RAILWAYS EYES OVER $4 BILLION INVESTMENTS WITH WORLD CLASS PRIVATE PASSENGER TRAINS: Recently the central government has announced two major initiatives of seeking private investmentin Indian Railways. One is running private passenger train services on Indian Railways network and the other is the redevelopment of railway stations across the country. These two projects have the potential of bringing an investment of over $7.5 billion in the next five years. The private investors will be responsible for finance, design procurement, maintenance, operation of trains along with setup and upgradation of the depot for train maintenance.

1. SBI CARD PLANNING TO PROVIDE THE FACILITY OF SEEING CREDIT SCORES TO ITS CUSTOMERS: SBI Card is working on the process of providing its customers the facility to see their credit bureau scores when they log in to their credit card accounts. This is a customer friendly initiative which the SBI card is planning to implement and the idea is mooted by SBI Card MD and CEO Mr Ashwini Kumar Tiwari, who took charge last month. Once this is implemented the customer would be able to see his credit score as he logs into his account.

2. RBI ASKS BANKS TO FULLY AUTOMATE NPA RECOGNITION PROCESS: The Reserve Bank of India has mandated banks to fully automate NPA Classification and provisioning calculation process. All borrower accounts have to be covered under the new regime. All banks have been asked to complete the process by June 30, 2021. This is being implemented to ensure the completeness and integrity of classification of all loan accounts and their upgradation, provisioning calculation and Income Recognition process. The new guidelines will include all borrower accounts, including temporary overdrafts, irrespective of the size or sector.

3. BANKING REGULATION (AMENDMENT) BILL PASSED IN LOK SABHA TO BRING COOPERATIVE BANKS UNDER RBI: Considering the deteriorating condition of cooperative banks in the country, Lok Sabha has passed the Banking Regulation (Amendment) Bill, 2020. The bill proposes amendments to the Banking Regulations Act, 1949, whereby all cooperative banks will come under the supervision of the Reserve Bank of India.

4. TITAN WATCHES TIES UP WITH SBI TO LAUNCH CONTACTLESS PAYMENT WATCHES: Titan has partnered with State Bank of India to introduce new contactless payment watches powered by SBI YONO App. Through this partnership, Titan and SBI are launching a range of stylish new watches with contactless payment facility. With this launch, SBI account holder can tap his/her Titan Pay Watch on the contactless Payment POS machine without the need of swiping or inserting his/her SBI bank card. Payments of up to Rs 2,000/- can be made through this mode. The exclusive collection of watches is attractively priced between Rs 2,995/- to Rs 5,995/-.

5. ICAI SEEKS EXTENSION OF FY-19 GST ANNUAL RETURN FILING DEADLINE BY 3 MONTHS: The Institute of Chartered Accountants of India (ICAI) has written to GST Council seeking extension of 2018-19 GST annual returns filing deadline by 3 months till December 31, 2020. The last date for filing annual return for 2018-19 fiscal for GST registered taxpayer is September 30, 2020. ICAI in its representation, has said that majority of taxpayers are working partially due to the Covid-19 pandemic and hence the relaxation should be given.

6. AMAZON TO HIRE 1 LAKH PEOPLE TO KEEP UP WITH ONLINE SHOPPING SURGE: Amazon will be hiring another 1,00,000 people to keep up with a surge of online orders. The new appointments will help in packing, shipment and sorting. The company has already hired 1,75,000 people earlier this year to keep up with rush of orders.

7. FINANCIAL HEALTH OF ALMOST 20% URBAN COOPERATIVE BANKS IS VERY WEAK: There are 1,482 urban and 58 multi state co-operative banks across the country with Rs 8.60 crore depositors, having a total savings of close to Rs 5 lakh crores. Out of this, as many as 277 Urban Co-operative Banks (UCBs) have “weak” financial status. Since it is equally important to protect the interests of the depositors, the Lok Sabha has passed the Banking Regulation (Amendment) Bill through which the supervision of all Cooperative banks will now be looked after by RBI.

8. INDIA RATINGS REVISES BANKING SECTOR OUTLOOK TO NEGATIVE: India Ratings& Research has revised its outlook on the banking sector to negative from stable for the second half of the current fiscal year. The downward revision is due to the expected spike in stressed assets, higher credit costs and muted growth prospects in light of the covid-19 pandemic. The agency further states that the banks’ modest capital buffers will deplete further in FY-21 due to the provisioning requirements.

9. SMALL FINANCE BANKS WILL REQUIRE Rs. 5,000-6,000 CRORES EQUITY INFUSION: ICRA, the rating agency has reported that Small Finance Banks (SFBs) may need an equity infusion of close to Rs. 5,000-6,000 crores for the industry to attain a Compound Annual Growth Rate (CAGR) of 15-20% till financial year 2023 and to absorb losses. The report further said that the industry as a whole is expected to report losses at consolidated level in the current fiscal driven by high operating costs and elevated credit costs of around 3.5 to 4%.

1. HDFC BANK PLANS TO INCREASE NUMBER OF BANK CORRESPONDENTS TO 25,000: In a bid to expand its rural reach, HDFC Bank is planning to increase the strength of its banking correspondents (BCs) to 25,000 by March’21. At present the bank has 11,000 BCs. The bank strives to provide best of the banking services even in remote parts of the country. A customer in remote villages will get all banking facilities close to his house through the BCs.

2. SBI INCLUDES COVID-19 TREATMENT UNDER MEDICAL INSURANCE SCHEME FOR RETIRED EMPLOYEES: State Bank of India has included Covid-19 treatment under its medical insurance scheme for its retired employees. After reviewing the present scheme, it has been decided to include Covid-19 as an infectious disease along with some other similar and relevant diseases in the existing list of ailments covered under hospitalisation in SBI Heath Care Scheme. The number of diseases covered has been now expanded to 25 from the existing 20. In line with the government guidelines related to Covid-19 treatment under home quarantine the Bank has decided to allow expenditure of Rs 25,000/- for home treatment.

3. SOME TOP BANKS SEE SURGE IN SUSPICIOUS DEALINGS: Some large banks like SBI, ICICI Bank, Bank of Baroda have started red-flagging transactions that defy traditional company patterns after witnessing a substantial spike in suspicious bank (which include cash and overseas transactions) transactions since the start of Covid-19. Some companies where banks have noticed a sudden spurt in trading or increased dealings in unrelated goods and services or there is a sudden outflow of funds to other countries. Since April’20 these banks have seen a jump of around 30% to 50% transactions in some companies’ transactions as suspicious patterns.

4. YES BANK REPAYS ENTIRE Rs 50,000 CRORES SPECIAL LIQUIDITY FACILITY DUES TO RBI: Yes Bank has fully repaid Rs. 50,000 crores to RBI it had borrowed under the Special Liquidity Facility (SLF). Theamount has been repaid much before the due date as the bank received string customer liquidity inflows. Ithas also raised Rs. 15,000 crores through a Further Public Offer (FPO) and post the FPO the bank’s Pro-forma Common Equity Tier (CET) I ratio has increased to 13.4% from 6.6% at the end of June’20, bringing the bank’s capitalisation largely in line with the private sector peers.

5. SUPREME COURT GRANTS RELIEF TO BORROWERS, EXTENDS LOAN MORATORIUM PERIOD TILL SEPTEMBER 28, 2020: The Supreme Court virtually extended the loan moratorium period till September 28, 2020, granting relief to borrowers. It has also asked the banks not to declare any loan accounts as NPA (those accounts which are not declared as NPA as on 31ST August’20) till further orders.

6. BANKS DO NOT WANT UNIFORM PROCESS FOR EACH CATEGORY OF DEBT RECAST: Reserve Bank of India has permitted lenders to classify Covid-affected borrowers into three categories—mild, moderate and severe for restructuring. Banks are not in favour of a uniform process for all categories of borrowers. Banks are also concerned about the hurdles in signing the Inter-Creditor Agreements (ICAs) for resolution of accounts where there is more than one lender. Any lender who does not sign ICA will have to make 20% extra capital provisioning.

7. 70% OF BANKING SECTOR DEBT AFFECTED BY COVID-19 IMPACT: The Indian economy shaking to come into shape well before the Covid-19 pandemic outbreak, has been affected very badly after the outbreak. The report by the RBI expert committee headed by K V Kamath brings this issue very clearly. The report notes that the pandemic has affected even the best of the companies and businesses that were otherwise viable before the outbreak. 19 sectors which were not under any stress before the pandemic have now been affected by it and this accounts for 15.5 lakh crores of debt. Retail and wholesale trade are the worst affected with outstanding debt of 5.4 lakh crores.

8. SBI’S “YONO” APP IS NOW WORTH MORE THAN $ 40 BILLION, BECOMES THE BIGGEST START-UP BY ANY BANKS: Within 3 years of its launch, State Bank of India’s digital banking platform “YONO” (You Only Need One) has a valuation of over USD 40 billion. YONO App has been adding around 70,000 new users daily and as of now it has a total of 27 million registered users.

9. I-T DEPARTMENT PREPARES TO IMPLEMENT FACELESS INCOME-TAX APPEALS: The Income Tax Department is preparing to implement faceless income tax appeals from September 25, 2020. The department has already implemented faceless assessment facility for all tax payers from August 13, 2020. The department is also trying to explore whether cases of penalty and transfer pricing could be included in the faceless regime. The regime of faceless system will lead to reduced compliance burden, lower cost and reduced litigation.

1. HDFC BANK ADOPTS SINGLE TEAMAPPROACH TO DRIVE INNOVATIONS: HDFC Bank has started creating dedicated teams by taking executives from various business functions to execute different projects. This has been adopted with an aim to speed up product innovation. The bank has formed nearly a dozen such agile teams having up to 40 members each drawn from across various business functions/departments. The said approach has so far delivered three projects—Instant account opening, Know Your Customer (KYC) and Fixed Deposit renewals. The bank is working on 10 other projects.

2. RESERVE BANK OF INDIA REJIGS PRIORITY SECTOR GUIDELINES: With a focus on inclusive development, RBI has revamped its priority sector guidelines by increasing the weightage for loans given in underpenetrated districts, increasing the targets for lending to small & marginal farmers, weaker sections including loans for setting up health infrastructure. The target for lending to small & marginal farmers is increased from 8% to 10% by 2023-24 and the target for lending to weaker sections has gone up from 10% to 12%. Bank finance to start-ups of upto Rs 50 crores, loans to farmers for installation of solar power plants and Compressed Bio Gas (CBG) have been included under priority sector.

3. RBL BANK LAUNCHES CARDLESS CASH WITHDRAWAL FACILITY THROUGH ATM: RBL Bank has launched cardless cash withdrawal facility from ATMs, leveraging the Instant Money Transfer (IMT) system. The bank has tied up with Empays Payment Systems, a global financial technology provider to offer the said service. Now the RBL Bank customers can withdraw cash without their debit cards from 389 IMT-enabled ATMs of the bank or more than 40,000 other bank ATMs across the country.

4. PNB HOUSING FINANCE SET TO LAY OFF ABOUT 5-7% OF ITS EMPLOYEES: PNB Housing Finance Ltd is all set to lay off about 5 to 7% of its employees in an attempt to rationalise cost amid shrinking business. The company has asked about 80-100 employees to leave. PNB Housing has a market cap of Rs 4,863 crores and Rs 68,000 crores outstanding loans and has more than 1,500 employees.

5. INCOME TAX DEPARTMENT LAUNCHES FUNCTIONALITY FOR BANKS TO CHECK ITR FILING STATUS OF ENTITIES: The Income Tax Department has launched a functionality for scheduled commercial banks to check the status of income tax returns filed by entities based on their PAN no. To ensure filing of returns by these persons and keep a track on cash withdrawals by non-filers and also to curb black money this has been implemented.

6. SMALL BORROWERS MAY GET PRINCIPAL PAYMENT RELIEF AS PART OF ONE-TIME RESTRUCTURING OF LOANS: Banks and Non-Banking Finance Companies (NBFCs) may offer a six-month moratorium on principal repayments for retails and MSME borrowers as part of the one-time restructuring of loans that the RBI has allowed. Customers seeking a debt revamp will be asked to make regular interest payments, while the principal will be restructured or the tenor may be extended, depending on the repayment capacity. The intension is to restructure loans only for the needy customers.

7. SUPREME COURT SAYS BANKS SHOULD NOT DECLARE FRESH NPAs TILL FURTHER ORDER: The Supreme Court of India has passed an interim order saying that the accounts not declared as Non-Performing Assets (NPAs) as on Aug’31ST will not be declared as NPA till further notice. Meantime the Supreme Court will continue hearing about the bunch of petitions demanding waiver of interest or waiver of interest on interest on the suspended EMIs during moratorium period till 10TH Sept’ 2020.

8. NITI AAYOG BATS FOR BANK CONSOLIDATION AND PRIVATISATION: NITI Aayog has prepared a blueprint for the banking sector, with consolidation and privatisation in focus. The Aayog think tank has asked the government to retain control over top 4 banks--- SBI, Punjab National Bank, Canara Bank and Bank of Baroda. It has recommended for privatisation of three small banks—UCO Bank, Punjab & Sind Bank and Bank of Maharashtra on priority basis. As for the remaining five state run banks—Bank of India, Union Bank of India, Indian Overseas Bank, Central Bank and Indian Bank, the government may either amalgamate them with the four large banks or trim its stake in these five banks over a stipulated time-frame to 26%.

9. KAMATH PANEL MAY SUGGEST DIFFERNTIATED RECAST PLAN: The K V Kamath committee appointed by RBI is preparing the criteria for debt recasts is likely recommend differentiated restructuring for identified accounts. The committee has identified six problematic sectors including aviation, real estate, automobile, infrastructure and power and has prepared solutions for 29 out of 307 identified sectors. The committee will also vet the resolution plans for all the accounts where the exposure is more than Rs 1,500 crores.

1. BANKS BOARD BUREAU RECOMMENDS DINESH KHARA AS NEXT SBI CHAIRMAN: The Banks Board Bureau (BBB) has recommended Mr. Dinesh Khara as the next Chairman of State Bank of India. Mr. Khara is the senior most Managing Director at SBI. Mr. Khara’s nomination will be now put up before the appointments committee of the cabinet (ACC) which is chaired by the Prime Minister. The present Chairman Mr Rajnish Kumar is slated to retire in the first week of October’20. The Bureau also has recommended Mr C S Shetty, another MD at SBI as the reserve candidate.

2. STATE BANK OF INDIA GETS GLOBAL RECOGNITION FOR HR INITIATIVE “NAYI-DISHA”: State Bank of India has got global recognition for its HR initiative “NAYI-DISHA” which over the course of 1.5 yearshas trained 2.40 lakhs of employees. Through “Nayi-Disha” the bank has successfully deployed programs, strategies, modalities, processes, systems and tools to achieve measurable results. SBI has appreciated the workforce for its commitment towards customer service excellence while serving with the same rigour even in the remotest corners of the country.

3. PRADHAN MANTRI JAN-DHAN YOJANA SCHEME COMPLETES 6 YEARS, BENEFITS 40.35 CRORE PEOPLE: The Pradhan-Mantri Jan-Dhan Yojana (PMJDY) which was launched six years ago as a national mission for financial inclusion has benefited 40.35 crores of people. The PMJDY has provided every adult with bank account through which many government benefits like direct benefit transfers, Covid-19 financial assistance, PM-Kisan, Life & Health insurance cover were routed through these accounts.

4. FACIAL RECOGNITION, IRIS SCANS MAY BE USED FOR WELFARE SCHEME BENEFITS:Facial-recognition and IRIS scans could soon be used for Aadhaar authentication of beneficiaries using Jan-Dhan Bank accounts to access Direct Benefits Transfer pay-outs and domestic transfers. The National Payments Corpn of India (NCPI) and UIADAI, has in initiated a test rollout of facial recognition with four banks, namely ICICI Bank, Yes Bank, RBL Bank and Fino Payments Bank. Facial recognition only needs a smartphone or other device running Android version 7 and above, while IRIS checks require a specialised machine.

5. NON-BANKING FINANCE COMPANIES OFFER COVID-19 INSURANCE COVERS TO ITS GOLD LOAN CUSTOMERS: The Non-Banking Financial Companies (NBFCs) offering gold loans to its customers have come up with a new scheme after RBI permitted banks to offer loans up to 90% of the gold value pledged by the customers. Several NBFCs are now offering Covid-19 Insurance covers to their gold loan customers. These NBFCs have tied up with many general insurance companies for this.

6. AADHAAR AUTHENTICATION FOR NEW GST REGISTRATION IS NOW ACTIVE: Aadhaar authentication for new Goods & Services Tax (GST) registration has now been activated. This will enhance ease of doing business as for those who opt for Aadhaar authentication, new GST registration will be issued within 3 working days and would not need to wait for physical verification. However, for those not opting for Aadhaar authentication for GST registration, it would take up to 21 working days.

7. CAUTIOUS PSBs SET ASIDE BULK OF THEIR PROFITS AS PROVISIONS: The 12 Public Sector Banks (PSBs) have set aside about 80% of their aggregate operating profits they made in June’20 quarter as provisions being cautious on accounts under moratorium. This is higher than the comparable amount of nearly 60% set aside by private sector banks but lower than 130% that the PSBs set aside in March’20 quarter.

8. RBI PUSHES BANKS TO RAISE CAPITAL OVER BAD-DEBT PILE UP: Reserve Bank of India (RBI) is pushing banks and Non-Bank Finance Companies (NBFCs) to raise capital to brace for a possible pile-up in bad loans in coming months. Private Sector banks such as ICICI Bank and HDFC Bank have responded by raising over Rs 50,000 crores. BUT Public Sector Banks are very slow in raising the capital. Some big banks like SBI BoB and Union Bank have initiated the process of raising money. But if these banks fail to raise money then the government will have to pump in additional capital.

9. BANKS PREFER TO PARK FUNDS IN G-SECS THAN TO GIVE OUT RISKY LOANS: Considering the weak credit demand and the risks that are involved in lending combined with the effect of Covid-19 pandemic yet to play out in full, these banks are preferring to invest in safer government securities (G-secs). The cautious approach by banks is despite the RBI’s and government’s push to increase lending across sectors. Between March 27, 2020 to 31 July, 2020, outstanding credit shrunk by Rs 1.06 trillion while banks’ investment in G-secs rose by Rs 5.90 trillion.

1. BANKS & PAYMENT OPERATORS WANT TO RENDER CONTACLESS DIGITAL SERVICES: Top retail banks, technology companies, ATM manufacturers, Point-of-Sale (PoS) deployers, card network operators and UPI players are all sensing the opportunities in rendering their respective services “Contactless”. Increased apprehension among consumers during this Covid Pandemic towards physical modes of payments is giving rise to a new category of digital payments spends which are “Contactless” in nature. The latest mantra is removing any unnecessary touch thereby making payments safer.

2. PSU BANKS FACE FRESH CAPITAL SHORTAGE: Moody’s Investors Service in one of its latest reports has said that the sharp slowdown in India’s economic growth due to Covid Pandemic will hurt Public Sector Banks (PSBs) asset quality and drive up credit costs. And this will weaken their capital buffers. This means these banks need to pump in an additional capital of Rs 1.9 lakh crores to Rs. 2.1 lakh crores in the next two years to restore loss-absorbing buffers. The most likely source of capital to plug these capital shortfalls is the government despite of its completion of a large recapitalisation just a few months ago.

3. HFCs REQUIRE Rs 3.8 TO 4.5 TRILLION TO MEET REFINANCING REQUIREMENTS THIS FISCAL: As per a latest ICRA report, Housing Finance Companies (HFCs) are likely to see a muted portfolio growth and would require Rs 3.8 to Rs 4.5 Trillion to meet their refinancing requirements in the current financial year. The pandemic effect is expected to lower the housing credit growth to 5-8%.

4. AXIS BANK LAUNCHES HIRING INITIATIVE “GIG-A-OPPORTUNITY”: Axis Bank has plans to employ nearly 1,000people under its new hiring initiative “Gig-A- Opportunity”, a model devised to attract skilled talent that can work with bank remotely, from anywhere in the country. The hiring model comprises of two working patterns, first is full-time permanent job and the second is based on the duration of the project. Earlier the mindset was that for working you have to come to the office, but nowthis Work-From-Home concept has changed many things.

5. 4 PSU BANKS TO BECOME PRIVATE BY END OF THIS YEAR: The government has drawn a list of four Public Sector Banks namely Punjab & Sind Bank, Bank of Maharashtra, UCO Bank and IDBI Bank, in which it directly or indirectly holds majority of stake, and wants to disinvest equity. The government may privatise these four PSU banks as early as by the end of this financial year. The move is made in an effort to generate revenue to the government, which is severely hit by the coronavirus crisis.

6. BANKS MAY RECAST LOANS WORTH Rs 8.4 LAKH CRORES: As per a report by India Ratings & Research, banks may restructure loans worth Rs 8.4 lakh crores, or around 7.7 % of the total bank credit. The banks may segregate loans for debt restructuring plan. Bankers are busy preparing a restructuring plan to determine the eligibility and ensure borrowers do not misuse the one-time loan restructuring package to be offered to stressed individuals and companies. There is a plan to divide them into two segments--- customised and standardised, Corporate borrowers will be offered customised solutions because of the complexity of their loan contracts and involvement of multiple banks. Individual borrowers will be given a standardised package if they can show substantial loss of income because of Covid-19 pandemic.

7. ALL FUTURE COMMUNICATION WITH TAX PAYERS WILL BE THROUGH NATIONAL e-ASSESSEMENT CENTRE UNDER FACELESS ASSESSMENT: The Income Tax Department has issued guidelines for implementation of faceless assessment, making the National e-Assessment Centre (NeAC) as the main gateway for communication with the tax payer. The Central Board for Direct Taxes (CBDT) has notified NeAC and various Regional e-Assessment Centres across 20 cities for implementing faceless assessment scheme.

8. CRISIL PEGS LOSS FOR COMMERCIAL VEHICLE MAKERS AT Rs 6,000 CRORES: As per a report submitted by CRISIL, Commercial Vehicle (CV) makers are likely to report a los of Rs 6,000 crores in this fiscal, on the back of a continued decline in sales. This continuous decline in sales volumes with a continuous stress on the working capital would result in six-fold increase in net losses.

9. COVID-19 EFFECT ON MSMEs, 3 OUT OF 4 UNITS WORKING AT BELOW CAPACITY: 9 out of every 10 of India’s 63 million Micro, Small & Medium Enterprises (MSMEs) have restarted operations after the lockdown due to Covid-19 pandemic but only one out of four units (25%) is producing at half of its capacity, largely on account of poor demand, poor logistics and financial crunch. Rest of the 75% units are not even working at half of their capacity.

1. SBI FACILITATES FARMERS TO REVIEW THEIR LIMIT ON KISAN CREDIT CARD THROUGH “YONO APP”: State Bank of India has introduced a review feature in its YONO App and has named it “YONO-KRISHI”. The feature facilitates farmers to revise loan limit on their Kisan Credit Cards (KCCs) without the need to visit the branch. KCC review option in the App will help the farmers to apply the same in just 4 clicks from the comfort of their homes without any paperwork.

2. HDFC BANK LAUNCHES AGRICULTURE LOANS FOR MILITARY AND PARA-MILITARY PROFESSIONALS: HDFC Bank has launched as Agri-loan facility targeted at 45 lakh military and para-military professionals for catering to their family’s agricultural needs back home. The product is named as “Shaurya KGC Card” which entails both short-term loans for cropping and also long-term loans for farm investments for a period of upto 5 years which will be reviewed at regular intervals.

3. RBI SLAPS Rs 10 LAKH PENALTY ON FOUR CO-OPERATIVE BANKS FOR LAPSES IN REGULATORY COMPLAINCE ISSUES: The Reserve Bank of India has imposed a total penalty of Rs 10 lakhs on four co-operative banks for deficiencies in regulatory compliance. In this, Rs 5 lakhs has been imposed on Jowai Urban Co-op Bank Ltd for contravention of the directions issued by RBI on “Exposure Norms and Statutory Restrictions.

4. SEBI FINES SBI, LIC, BANK OF BARODA FOR VIOLATING MUTUAL FUND NORMS: Market regulatory SEBI has imposed a penalty of Rs 10 lakh each on SBI, LIC and Bank of Baroda (BoB) for not complying with Mutual Fund norms. SBI, LIC and BoB are sponsors of SBI MF, LIC MF and Baroda MF respectively, and they hold more than 10% stake in these companies. In addition, SBI, LIC and BoB are also sponsoring UTI AMC and hold more than 10% stake individually and this is not in conformity with the requirement of Mutual Fund Regulations.

5. MFI COLLECTIONS RECOVER BY 70% AFTER LIFTING OF COVID-19 RESTRICTIONS: The collections of Microfinance Institutions (MFIs), which had plunged to near zero in April’20 on account of the Covid-19 pandemic lockdown, has rebounded to 70-75% in July’20 on account of gradual lifting of restrictions. The collections had diminished to single digit in April’20 but now has recovered 70-75% in July’20. While the bounce back has been faster than expected, improving it to the pre-pandemic levels of 98-99% would be more important from an asset quality perspective.

6. DEBIT, CREDIT CARD USE CLIMBS BACK TO PRE-COVID LEVEL: Value of transactions through credit and debit cards have reached pre-COVID levels after witnessing a major drop in April’20. The same has jumped 111% in June’20 as compared to April’20 Transactions using debit, credit cards soared to Rs 1,05,266 crores in June’20, more than double the figure of Rs 49,807 crores in April’20. The jump in the said transactions indicates a pickup in consumer spending after crashing during lockdown period. The economy is suffering from lot of layoffs and salary cuts, but the above figures show that this has not deterred the spending habits.

7. RBI TIGHTENS CORPORATE GOVERNANCE NORMS FOR CORE INVESTMENT FIRMS: The Reserve Bank of India has revised set of guidelines for Core Investment Companies (CICs), tightening corporate governance and disclosure norms for these entities. A CIC is a Non-Banking Financial Company (NBFC) which carries on the business of acquisition of shares and securities and holds not less than 90% of its net assets in the form of investment in equity shares, bonds debentures, debt or loans in group companies.

8. DEUTSCHE BANK INFUSES Rs 2,700 CRORES INTO INDIA BRANCHES: Germany’s largest bank Deutsche Bank has infused Rs 2,700 crores into its India Branch operations, taking its total investment in Indian branches to Rs 18,200 crores. The bank had invested Rs 3,800 crores in 2019.The fresh capital will be used to support further expansion of its branches in India. Deutsche Bank in India caters to Corporate, Investment Banking and private banking clients.

9. DOMESTIC ROAD TRANSPORT SECTOR LIKELY TO CONTRACT BY 18-20% IN FY 20-21: Rating Agency ICRA, in its report has said that the domestic road transport sector is likely to contract by 18-20% on account of Covid-19 pandemic induced challenges. It has revised the outlook on the logistics sector from “Stable” to “Negative” given the present circumstances.

10. YOU MAY SOON BE ELIGIBLE FOR GRATUITY EVEN WITHOUT 5 YEARS ON THE JOB: Gratuity is paid by a company to its employee for the services rendered by the employee during his/her tenure in the company. Under the current rules, an employee has to work for the company for 5 continuous years to be eligible for gratuity payment. But with shorter job tenures increasingly becoming more common, the government is considering easing of this key eligibility requirement.

1. RBI ALLOWS ONE-TIME RESTRUCTURING OF LOANS: The Reserve Bank of India has allowed a one-time restructuring of loans without classifying them as NPAs to help companies and individuals manage financial stress caused by Covid-19 pandemic.

2. RBI SETS UP PANEL FOR ONE-TIME RESTRUCTURING OF LOANS: Reserve Bank of India (RBI) is constituting an Expert Committee under Mr. K V Kamath for one-time restructuring of loans which shall make recommendations to RBI on the required financial parameters, along with sector-specific benchmark ranges for such parameters to be factored into the resolution plans. Many large bank heads have pitched in for a sector-specific one-time loan restructuring package after the end of the six-month loan repayment moratorium which ends on 31ST August, 2020.

3. RBI ASKS BANKS NOT TO OPEN CURRENT ACCOUNTS FOR CUSTOMERS HAVING CASH CREDIT/OVERDRAFT FACILITIES: With a view to improve credit discipline, RBI has barred banks from opening current accounts for customers who have availed cash credit or overdraft facilities. Stressing on the need for credit discipline, RBI has said that rather than opening a new current account the customer must be advised to route all his transactions through the existing cash credit or overdraft facility.

4. SBI TAPS FACEBOOK MESSENGER FOR ONGOING "GHAR SE BANKING" CAMPAIGN: State Bank of India has started a new scheme called “Ghar Se Banking” for its customers by downloading its YONO App, YONO Lite, SBI Quick and BHIM SBI Pay and the bank is leveraging conversational marketing via Facebook Messenger. In times of physical distancing it is essential to stay in touch with the customer, consequently the conversational marketing digital solutions such as Facebook Messenger can prove to be very effective method.

5. NOW GOLD JEWELLERY TO FETCH HIGHER LOAN AMOUNT: The Reserve Bank of India has raised the loan-to-value ratio for gold loans to 90% to mitigate the impact of Covid-19 pandemic on households. This means that one can get a gold loan upto 90% of the gold value. Earlier the margin was kept at 75%.

6. NOW ONLINE SYSTEM FOR CUSTOMER GRIEVANCVES IS A MUST: Reserve Bank of India has made Online Dispute Resolution (ODR) compulsory for banks. It is technology-driven and customer friendly system for resolving customer disputes relating to digital payments using zero or minimal manual intervention. RBI has instructed authorised Payment System Operators (PSOs) of banks and non-banks to place the system for ODR.

7. UPI TRANASACTIONS HIT A NEW HIGH OF 149 CRORES IN JULY: The number of payment transactions on Unified Payments Interface (UPI) hit anall-time high of 149 crore transactions in July 2020 with the value of transactions reaching 2.91 lakh crores. This is as per the NPCI data. Thew figure was 134 crores in June 2020.

8. NOW CAs DOCTORS, LAWYERS CAN ALSO GET LOAN UNDER MSME EMERGENCY CREDIT SCHEME: The government has decided to relax the eligibility criteria for getting loan under Emergency Credit Line Guarantee Scheme (ECLGS) to cover professionals such as doctors, CAs and lawyers to benefit from it. Although there is no enhancement in the overall credit limit of Rs 3 lakh crore yet, the said additional beneficiaries are estimated to be sanctioned loans upto about Rs 1 lakh crore.

9. INCOME TAX RETURNS DATE FOR ASSESSMENT YEAR 2019-20 EXTENDED: The Central Board for Direct Taxes (CBDT) has extended the last date for filing ITR for assessment year 2019-20 ( period covering 01/04/2018 to 31/03/2019) FROM 31St July 2020 to 30TH September 2020, in view of the constraints faced by the tax payer due to the Covid-19 pandemic and also to ease the compliances.

10. RBI TO ALLOW OFFLINE PAYMENTS THROUGH CARDS ON PILOT BASIS: The Reserve Bank of India has announced a scheme on pilot basis for offline retail payments using cards and mobile devices to encourage customers to go for digital transactions even in those areas that lack internet connectivity. RBI has proposed to allow a pilot scheme for small value payments in offline mode with built-in features for safeguarding interest of users.

11. RBI TO ENHANCE SECURITY FEATURES FOR CHEQUES ABOVE Rs 50,000: RBI has announced that it plans to introduce a mechanism called “Positive Pay” in order to enhance safety features of cheques of value of Rs 50,000/- and above. Under the mechanism all such cheques will be processed for payment by the drawee bank based on the information passed on by its customer at the time of issuance of cheque. Operational guidelines in this regard will be issued separately soon.

1. VERY FEW TAKERS FOR BANK LOANS: The Industry body Associated Chambers of Commerce & Industry of India (ASSOCHAM) has expressed that presently there are very few takers for Bank Loans. It feels that reeling under the debt-ridden balance sheets and economic uncertainties in the face of Covid-19 crisis, the Indian Industry is left with little appetite for any more loans. With this, most of the bank deposits are either being parked with RBI or used by the Central Bank to fund ever-increasing government borrowings. Barring a few, most of the sectors witnessed de-growth in credit deployment.

2. ABOUT 84,545 BANK FRAUD CASES REPORTED DURING 2019-2020: As per the information revealed by RBI as sought under RTI, around 84,545 fraud cases involving about Rs 1.85 lakh crores were reported by scheduled commercial banks and select Financial Institutions during 2019-20. The period covered is between April 1, 2019 to March 31, 2020.

3. YES BANK LOOKS TO CARVE OUT TECHNOLOGY PLATFORM AND TO TRANSFER STRESSED ASSETS TO SUBSIDIARIES: Yes Bank Ltd is looking to carve out its technology platform and transfer its stressed assets into two separate subsidiaries. The bank is also looking to get equity partners in these two businesses later. The bank is planning to create a structure for what will be an in-house bad bank that will house all its bad loans and also buy bad assets from other lenders as well. A consultant to design this project will be appointed in the next 2-3 weeks, after which the bank would approach RBI for approval. The bank would also create a separate subsidiary for its technology platform that could be valued at around $ 7 billion.

4. STATE OWNED BANKS TO NEED MORE CAPITAL TO SAFEGUARD AGAINST STRESS: Fitch Ratings Agency has said that state-owned banks will need more capital support from the government to mitigate the anticipated risks. Several large-scale banks have recently announced their plans to raise a total of USD 6 billion in fresh equity from capital market but Fitch Ratings feels that Indian state-owned banks’ plan to raise capital from private sources will not be sufficient to mitigate anticipated risks unless supplemented with additional capital support from the government.

5. INCOME TAX DEPARTMENT TO SHARE TAX-PAYERS INFORMATION WITH 10 CENTRAL INTELLIGENCE PROBE AGENCIES: The Income Tax Department will sign an MOU with counter-terrorism platform National Intelligence Grid (NATGRID) to facilitate automatic exchange of information linked to bank accounts, PAN, Tax Returns and any other mutually agreed information with 10 agencies. The Tax department already shares information on tax assessees with over 50 notified agencies.

6. MSME SECTOR IS THE MOST ADVERSELY AFFECTED SECTORS DUE TO COVID IMPACT: Micro, Small & Medium Enterprises (MSME) segment is the most badly affected sector due to the Covid-19 crisis. Even as majority of sectors have witnessed sizeable recovery but MSME segment is the worst affected which has suffered from massive labour migration, production halt, cash flow crunch during the lockdown and the recovery in this segment looks bleak in the next six months.

7. GOVERNMENT WORKING ON APLAN TO REVAMP INDIA POST--- COULD SOON TURN IT INTO A FULL-FLEDGED BANK: Loss making India Post, having a size and workforce hugely disproportionate to its shrinking role, may reinvent itself by converting it into a full-fledged bank. The government is discussing a plan to convert India Post into a bank by bringing the 14,000 strong branch networks of Regional Rural Banks (RRBs) under the fold of India Post. India Post itself runs 1.56 lakh post offices. The Government will wield control over the proposed bank via a holding company, of which the RRBs, where the government already holds 50% will become the subsidiaries. The existing India Post Payments Bank also will be a subsidiary of the holding company.

8. MUTUAL FUND INVESTMENT VIA SYSTEMATIC INVESTMENT PLAN RISES TO OVER Rs 50,000 CRORES IN H-1 OF 2020: The Mutual Funds Industry has garnered over Rs 50,000 crores through the route of Systematic Investment Plans (SIPs) in the first six months of 2020, up by 3% as compared to last year. SIP has been a preferred route for retail investors to invest in mutual funds as it helps them to reduce market timing risk. Inflow into SIP have averaged to about Rs 8,350 crores in the past 6 months.

9. INDIA’S FOREX RESERVES REACH A NEW PEAK: According to the latest data released by RBI, India’s Forex Reserves continued to hit a new high level as they rose by $ 1.275 billion for the week ended July 17 to $ 517.63 billion. Of this, $ 476.88 billion was held in Foreign Currency Assets (FCAs) comprising of US Dollar, Euro, Pound Sterling and Japanese Yen. Gold component was $ 34.743 billion.

1. BANK NPAs MAY RISE BY 4% DUE TO COVID PANDEMIC: The Reserve Bank of India in its annual Financial Stability Report (FSR) has indicated that the Gross Non-Performing Asset (GNPA) ratio of all banks may increase from the present 8.5% to 12.5% by March 2021. This is due to the sharp slowdown in the economy as a result of lockdown imposed to fight the Covid-19 pandemic. The FSR also predicts a contraction of GDP by 4.4%, Gross Fiscal Deficit of 10.9% and Consumer Price Inflation of 4.1%. The six-month loan moratorium extended by banks could distort the NPA picture. RBI said that since the impact of moratorium is still uncertain and evolving, the exact nature of how the same will impact the quality of banking asset is difficult to ascertain accurately.

2. MORE BANKING SECTOR REFORMS NEEDED TO IMPROVE EFFICIENCY AND ACCOUNTABILITY: The banking reforms that started in 2015 in right earnest has achieved a lot. But looking at the massive banking frauds that have happened since 2015 coupled with rising Non-Performing Assets (NPAs), a lot more needs to be done. This is probably the best time to complete the banking sector reforms as activity in the banking industry is at an all time low. But the restructuring of operations to increase the efficiency and accountability in the Public Sector Banks (PSBs) has however still not been effectively implemented. The process is a bit complex and will take a lot of time, but it is the real repair work without which the PSBs will never be able to perform or deliver.

3. INVESTMENT IN TECHNOLOGY UPGRADATION MUST FOR SURVIVAL OF BANKS: SBI Chairman Mr. Rajnish Kumar has said that Banks and Financial Institutions need to make enough investment in technology upgradation for survival in this era of digital banking. He opined that in this era of digital banking any institution or bank which is not investing enough resources both in terms of manpower as well as the financial investment in digital and latest technologies will not be able to survive. Going forward, mobile banking transactions would take over and become the most preferred digital channel even more that the internet. Mr Kumar also emphasised the need to focus on the cyber security aspect with proliferation of digital banking.

4. GOVERNMENT KEEN ON ONE-TIME RESTRUCTURING OF LOANS BY RBI: The government is keen on Reserve Bank of India allowing a one-time restructuring of loans by banks because of the stress being faced by many borrowers in the wake of Covid-19 pandemic. The decision on restructuring and details of such a move would be up to the RBI. Many bankers have already spoken in favour of one-time restructuring of loans rather than the extension of the moratorium be RBI. The six months moratorium which ends on August 31, 2020 has allowed a breather to the borrowers and at the same time it also allows the banks to keep the accounts as standard asset. Banks fear that after the moratorium period ends on August 31ST, many borrowers may not have sufficient capital/cash flow to start paying EMIs and this may lead to rise in defaults.

5. GOVERNMENT PLANS TO REDUCE NUMBER OF PSU BANKS TO JUST FIVE: The government is looking to privatise mare than half of its state-owned banks to reduce the number of government owned banks to just five as part of overhaul of the banking industry. The first part of the plan would be to sell majority stakes in Bank of India, Central Bank of India, Indian Overseas Bank, UCOI Bank, Bank of Maharashtra and Punjab & Sind Bank, leading to an effective privatisation of these state-owned banks. The idea is to have 5 to 6 Public Sector Banks (PSBs). At present India has 12 PSBs. Such a plan is currently being formulated by the government and this would be put before the cabinet for approval.

6. WhatsApp TO WORK WITH PARTNERS IN INDIA TO ENHANCE ACCESS TO FINANCIAL PRODUCTS: The Facebook-owned company WhatsApp has been working for more than a year now with banking partners in India to see how it can supplement their digital presence and accelerate the pace of financial access across segments. WhatsApp wants to open up with more partners over the coming years to help simplify and expand banking services, especially to the rural and lower income segments. The company will also support multiple pilots to test potential solutions to solve problems related to distribution of financial products.

7. BRICK-AND-MORTAR BANK BRANCHES TO LOSE RELEVANCE: Ms Arundhati Bhattacharya, Former Chairman of SBI and presently head of SalesForce India has said that the relevance of traditional (physical) bank branches will gradually decline even as they will continue to co-exist with internet and mobile banking. According to Bhattacharya, going forward one will see these workplaces evolve to look different. While physical banks will still be there because people trust branch banking scenariobut the importance of these branches will come down as customers will be able to access and do everything from comfort of their homes.

1. BANKERS FEEL SUPPORT HAS TO BE EXTENDED TO BORROWERS UNTIL CASH FLOWS IMPROVE: Majority of banks feel that lockdown has halted the economic activities in the country since March’20 and now the borrowers need support from them till their cash flows return to normalcy. The economic activities which have been hampered due to Covid-19 pandemic lockdown, due to which most of the borrowers are facing problem with their cash flows. Loan repayment is done from cash flows. This problem might creep into the second quarter of the present fiscal as well. So, there is a need for forbearance and support. However, more such support might also lead to an increase in the NPAs in the banking sector.

2. BANKS & NBFCs SANCTION Rs 1.23 LAKH CRORE LOANS TO MSMEs UNDER CREDIT GURANTEE SCHEME: Indian Banks and NBFCs have sanctioned about Rs. 1,23,099 crores under the Emergency Credit Line Guarantee Scheme (ECLGS) to pandemic hit MSMEs. Out of the sanctioned loan amount, Rs. 68,311 crores have already been disbursed by 12 Public Sector Banks, 22 Private banks and 21 NBFC as on July 15, 2020. Out of this, Rs 69,135 crores has been sanctioned by PSBs while Rs 54,209 crores has been sanctioned by private sector banks. Among the PSBs, SBI stands at the top where loans worth Rs 20,910 crores, followed by Punjab National Bank and Canara Bank.

3. NBFCs SEEK SPECIAL FUND FOR SMALL & MEDIUM SIZE PEERS: Non-Banking Finance Companies (NBFCs) have written to Finance Ministry, seeking a separate fund for Small & Medium sized NBFCs. The demand is to set up a fund through development finance institutions like Small Industries Development Bank of India (SIDBI) and National Bank for Agriculture & Rural Development (NABARD) that would offer Term Loans with a minimum tenor of 3 to 5 years. The letter also states that all small NBFCs irrespective of their rating and latest profit & loss accounts, be made eligible to borrow through this fund.

4. SBI TO INSTITUTE “WORK-FROM-ANYWHERE” INFRASTRUCTURE: State Bank of India will institute “Work-From-Anywhere” infrastructure. Chairman Mr Rajnish Kumar said the present focus will be on cost reduction, rationalisation and reskilling of workforce, improving staff productivity and redeployment of workforce from admin offices to sales roles. Following the global practices, the bank will institute “Work-From-Anywhere” (WFA) infrastructure to facilitate work from any location, while taking care of social aspects of work-life balance.This initiative is expected to save Rs. 1,000 crores through cost optimization and will be a key component of their business continuity during times of Covid-19.

5. NOW PAY TDS ON CASH WITHDRAWALS ABOVE Rs. 20 LAKHS: The Central Board for Direct Taxes (CBDT) has a data on cash withdrawals which indicated a huge amount of cash being withdrawn by persons who have never filed Income Tax Returns. Hence the Income Tax Department has implemented TDS on cash withdrawals above Rs 20 lakhs. It has initiated a new functionary for banks and post offices through which they can ascertain the TDS applicability rates on cash withdrawals above Rs. 20 lakhs in case of non-filers and above Rs 1 crore in case of filer of Income tax returns.

6. CORONAVIRUS WILL COST BANKS OVER $2 TRILLION GLOBALLY IN LOSSES ON LOANS: Global banks will face a combined loan loss of $ 2.1 trillion by the end of 2021 as a result of the coronavirus crisis. This is as per the estimates made by credit ratings agency S&P. The Global estimates for this year will be around $ 1.3 trillion. Around 60% of the losses are likely to be in Asia-Pacific region.

7. RBI ASKS ARCs TO ADOPT FAIR PRACTICES CODE TO PROHIBIT UNLAWFUL MEANS FOR DEBT RECOVERY: Reserve Bank of India (RBI) has asked Asset Reconstruction Companies (ARCs) to adopt a board-approved “Fair-Practice Code” which, among other things, should prohibit the use of uncivilised, unlawful and questionable means for recovery of loans. The code should also ensure transparency and fairness in operation.

8. JOB LOSES, PAY CUTS AND LOW INTEREST RATES IMPACT BANK DEPOSITS: Job losses, pay cuts and lowest interest rates on deposits seem to be pushing the people to withdraw their bank deposits. Bank deposits of all scheduled commercial banks collectively declined by a whopping Rs 74,727 crores in the fortnight ending June 19, 2020 as against Rs 1,11 242 crores in the previous fortnight ended June 5, 2020, according to data published by RBI. The major reasons being the low level of economic activity hit by the pandemic and also people, unhappy with the nominal returns by way of very low interest rates have become bold enough to withdraw bank deposits and invest in Mutual Funds, equity markets and Corporate deposits.

1. THE NPA LEVELS OF TOP 5 PRIVATE SECTOR BANKS MAY DOUBLE IN FINANCIAL YEAR 2021: Top 5 Private Sector Banks (HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank & IndusInd Bank) may see their Bad Loans -- Non-Performing Assets (NPAs) double to 5% this fiscal ( 2020-21) due to the poor loan offtake and moratorium driven contraction in net interest margins. These five banks collectively control 25% business of the banking system as a whole and 75% business of the private banking space. This is according to a report by India Ratings. In FY 2019 (2018-19) the slippages of these 5 banks was 2.3% and in FY 2020 (2019-20) it was 2.7%.

2. TRADERS BODY DEMANDS EXEMPTION OF MINIMUM BALANCE NORM IN CURRENT ACCOUNT: A traders’ body has asked RBI to instruct banks to exempt current accounts held by small businesses from maintaining minimum balance in view of the hardships being faced by these small businesses due to the ongoing Covid-19 pandemic The Federation of All India Vyapar Mandal (FAIVM) has written a letter to RBI to look into the issue and act accordingly.

3. SBI TO DIGITISE MSME LENDING: State Bank of India is looking to re-energise its Micro, Small & Medium Enterprises (MSMEs) lending vertical by digitising the module and putting top people in key business pockets to acquire new customers. SBI’s MSME portfolio has shrunk by over 7% in FY 2020 to Rs 2.68 crores from Rs 2.89 crores. About 9.5% of this portfolio has turned into NPA. SBI is also working on unveiling a pre-approved merchant loan through its Yono app Platform. The onus will be on digitisation and using analytics as risk management tool to boost client acquisition. The bank is deputing senior officers to SME vertical in about 80 locations across India.

4. TDS FORM HAS BEEN AMENDED TO INCLUDE MORE DETAILS: The Income Tax Department has amended the TDS form, making it more comprehensive and mandating deductors to state reasons for non-deduction of tax. The Central Board of Direct Taxes (CBDT) has amended Income Tax Rules to include TDS on e-commerce operators, dividend distributed by mutual funds and business trusts, cash withdrawals (above Rs 1 crore), professional fees and interest. The government has accordingly revised the Form 26Q and 27Q where details of TDS amount deducted and deposited on various resident and non-resident payments are furnished.

5. GOVERNMENT MAY REVIEW CAPITAL REQUIREMENT BY PSU BANKS AFTER SECOND QUARTER: The Finance Ministry may assess the capital requirement of public sector banks after September 2020 as there would be greater clarity about the spike in bad loans. There is a widespread fear that the Non-Performing Assets (NPAs) of banks will witness a huge surge due to the economic slowdown triggered by Covid-19 outbreak and resultant lockdowns. If the NPAs rise then this will need higher provisioning by banks as per the guidelines.

6. ALL YOUR SHARE TRADING, OTHER DATA WILL BE NOW WITH INCOME TAX DEPARTMENT: Many small retail investors trade in equities on a regular basis, resulting in small capital gains or losses. But many of these retail customers casually ignore mentioning the details in their Income Tax Returns (ITR) due to unaivaibility of data on capital gains. However, things are now going to change as a formal Memorandum of Understanding (MoU) has been signed between Central Board of Direct Taxes (CBDT) and Securities & Exchange Board of India (SEBI) for exchange of data between the two organisations due which sharing of data/information will be continuous and automatic. This will make disclosure of information on equity and equity related transactions more stringent.

7. MOODY’S WARNS BANKS OF INCREASED CYBER CRIMES: Global ratings agency Moody’s Investors Service has warned Indian banks of increased risks of cyberattacks during ongoing Covid-19 pandemic as employees are still adjusting their work from home routines and lenders are shifting their physical processes into digital. These attacks can be in the form of phishing emails, malware attacks and social engineering frauds. Banks digital customers are a natural target for fraudsters. Moody’s further said that banks can mitigate these risks by having a strong corporate governance, proper cybersecurity frameworks, policy enforcements and reporting.

8. PUNJAB NATIONAL BANK DECLARES ITS Rs 3,688 CRORE EXPOSURE TO DHFL AS FRAUD: Punjab National Bank (PNB) has declared its Rs 3,688 crores exposure to bankrupt lender Dewan Housing Finance Corporation (DHFL) as fraud. Under the rules set by the banking regulator, 100% provisioning is required in fraudulent accounts spread across a period of 4 quarters. So far PNB has made a provision of Rs 1,246 crores in the account. SBI, Union Bank of India and IndusInd Bank have already red-flagged DHFL account as fraud.

1. AXIS BANK DECIDES TO WIND-UP ITS UK BASED SUBSIDIARY: Axis Bank said it has decided to wind up its UK Subsidiary and the move will not have any material impact on its financial position. The Bank was reviewing its international strategy and as a part of this, has adopted a clear objective to focus on the Indian banking market and harness the potential in India. The bank is targeting for surrendering the banking license of Axis Bank UK Ltd in UK by the end of April 2021. The bank has assured that it will ensure transparency and fairness in dealing with all its employees and customers of Axis Bank UK Ltd throughout this winding down process.

2. NO RELIEF FOR “MUDRA-SHISHU” LOAN BORROWERS DURING LOCKDOWN: Mudra Shishu Loan borrowers opting for the moratorium on their existing debts will not get the 2% interest subvention under Centre’s Covid-19 relief package before the expiry of the repayment holiday. The subvention of 2% will only begin from June’20 for the next one year for only those borrowers who have opted out of the moratorium offer.

3. RBI ASKS BANKS TO SPEED UP ATM UPGRADES AS DEADLINE LOOMS LARGE: Most of the Indian banks are staring at penalties from RBI over missed deadlines on compliance with ATM security and cash management norms introduced by RBI over the last two years which banks say is not feasible enough to carry out the changes due to meddling in the fee structure. Most of the banks have not initiated upgrades on cassette swap, e-surveillance, installing digital locks and upgrading the Operating System as their cost analysis of such an overhaul is significantly higher than RBI’s estimates. Presently only 5% of the total ATMs have been upgraded.

4. NBFCs, HFCs WITH MORE THAN 6% NET NPAs WILL NOT BE ELIGIBLE FOR SPECIAL LIQUIDITY SCHEME: During May’20 the Union Cabinet had approved a special liquidity scheme for stressed Non-Banking Finance Companies (NBFCs) and Housing Finance Companies ( HFCs) to be channelled through a Special Purpose Vehicle (SPV).Now RBI has said the NBFCs and HFCs with more than 6% of Net Non-Performing Assets (NPAs) will not be eligible to receive support from the Rs 30,000 crore Special Vehicle Liquidity Scheme. The NBFCs will also need to have a capital adequacy above 15% and for HFCs it needs to be 12% as on March 31, 2019. And these NBFCS and HFCs should have made net profit in at least one of the last two preceding financial years (FY 2017-18 and FY 2018-19).

5. GOVERNMENT EXTENDS THE TERM OF UNION BANK OF INDIA CEO BY ANOTHER TWO YEARS: The Finance Ministry has said that it is extending the term of Mr Rajkiran Rai, CEO of Union Bank of India by another two years. Mr. Rai’s term which was ending on June 30, 2020 has now been extended till May 31, 2022. Mr Rai had taken over as CEO of Union Bank of India on July 1, 2017.

6. LOAN RECASTS WILL ONLY DEFER THE PROBLEM, NPAs MAY ZOOM UP BY AROUND 14% DUE TO COVID-19 EFFECT:The global rating agency, S&P has said that the loan recast (moratorium) will only defer NPAs recognition and it will not solve the problem. The rating agency also said that operational outrages and recession because of pandemic will have a deeper and longer impact on lenders and estimated that the gross Non-Performing Assets (NPAs) ratio to rise up to 14% in FY 2021 from 8.5% in FY 2020. The agency further said that the Covid-19 pandemic may set back the recovery plans of Indian Banks by years, which could hit credit flows and ultimately the economy will suffer.

7. IRDAI ASKS INSURANCE COMPANIES TO LAUNCH STANDARD COVID-19 HEALTH COVER WITH THE SAME NAME: With the spread of Covid-19 pandemic, the Insurance Regulatory & Development Authority of India (IRDAI) has asked the Health and General Insurance companies to launch short-term Covid-19 standard policy by July 15,2020 with a specific common name and features as per the guidelines issued b y the IRDAI. IRDAI has instructed that the nomenclature of the product shall be “Corona-Rakshak Policy”, succeeded by the Company name and no other name will be allowed. The minimum Sum Insured will be Rs 50,000/- and maximum sum assured will be Rs 2,50,000/-.

8. MSMEs TO BE KEY BENEFICIARIES IN GOVERNMENT’S DEFENCE PROCUREMENT UNDER PM’S ATMANIRBHAR VISION: Micro, Small & Medium Enterprises (MSMEs) will be the prime vendors in procurement of defence equipment by the government from the industry for Rs 31,130 crore approved by Defence Acquisition Council (DAC). The equipment are going to be manufactured in India involving Indian Defence Industry with the participation of several MSMEs as prime vendors. The approvals come amid the government’s call for economic self-reliance along with promoting local products under PM Modi’s “Vocal for Local” campaign.

1. GOOGLE PAY CLARIFIES THAT ALL TRANSACTIONS THROUGH GPAYARE FULLY PROTECTED: Google Pay (Gpay) has clarified that all transactions made through its platform—Gpay are fully protected by any redressal processes as laid out by the guidelines issued by RBI and the National Payments Corporation of India (NPCI). The statement comes against certain news floating in the media that any issues arising while transferring money through Gpay app cannot be redressed under law as the app is unauthorised. Google pay has clarified against this and said this can be clarified on NPCI website.

2. COOPERATIVE BANKS BROUGHT UNDER RBI SUPERVISION: The cabinet has approved an ordinance which will bring the cooperative banks under the supervisory powers of Reserve Bank of India. RBI’s powers on scheduled banks would be hence applicable on cooperative banks as well. The decision to bring 1,540 cooperative banks under RBI’s supervision will give an assurance to more than 8.6 crore depositors in these banks that their money amounting to Rs 4.84 lakh crores will stay safe. The cooperative banks will come under RBI supervision with immediate effect from the date of President’s approval of the ordinance. The proposal had been already announced in the budget this year.

3. YES BANK LAUNCHES MOBILE PAYMENT APP “YUVA PAY”: Yes Bank has launched its digital wallet app “Yuva Pay” in partnership with UDMA Technologies to enable contactless payments for its customers.The digital wallet issued under minimum KYC regulations to Yes Bank will offer bill payments via Bharat Bill Pay and provide Unified Payments Interface (UPI) facility to customers. Through the app, customers can pay their utility bills, make insurance renewals, FASTag recharges, EMI payments and use the app for making payments at retail outlets. The Customers can also use this as a normal banking app also.

4. BANKS GO FOR “STRESS TEST” TO ASSESS THE IMPACT OF COVID-19 ON NPAs: Banks have undertaken stress test to assess the level of bad loans (Non-Performing Assets – NPAs) caused due to the economic slowdown triggered by the outbreak of Covid-19 pandemic. Sine the financial year 2019-20 has ended and the first quarter of financial year 2020-21 is nearing completion, it is prudent to undertake the stress test to have a better view of the financial health. The exercise requires building and reporting worst-case scenario on asset quality side and subsequent capital requirement. This will help the management and the regulatory body (RBI) in taking proper steps.

5. MSME SECTOR GETS ANOTHER PUSH FROM THE GOVERNMENT, DISTRESSED MSMEs TO GET Rs 20,000 CRORE GUARANTEE COVER: The distressed Micro, Small & Medium Enterprises (MSMEs) got one more push from the government with the launch of a Credit Guarantee Scheme. The government, with an aim to bolster manufacturing sector, has rolled out a subordinate debt scheme to provide a Rs 20,000 crore guarantee cover to 2 lakh MSME units. This will entail a sub-debt facility to the promoters of those operational MSMEs that are distressed or have become Non-Performing assets (NPAs) as on 30/04/2020. It also guarantees cover to the promoters who can take loan from the banks to further invest in their stressed MSME units as equity.

6. FITCH RATINGS REVISES OUTLOOK OF MOST BIG INDIAN BANKS TO NEGATIVE: Global ratings agency Fitch has revised the ratings of 9 large Indian Banks to negative from Stable due to the impact of the escalating Covid-19 pandemic on the Indian economy. These banks include the country’s largest banks like SBI, ICICI Bank, Bank of India, Axis Bank, Bank of Baroda, Punjab National Bank among others. The negative outlook on Indian Banks reflects an increasing strain on the government’s ability to provide extraordinary support, due to the government’s limited fiscal space and significant deterioration in fiscal metrics due to the challenges from Covid-19 pandemic.

7. SUPREME COURT RULES OUT A COMPLETE INTEREST WAIVER ON LAONS DURING MORATORIUM PERIOD: The Supreme Court (SC) has rightly ruled out the possibility of a complete interest waiver on loans during the moratorium period. Considering the arguments by banks and RBI that the borrowers cannot pay while the banks need to pay to the depositors, the SC has given this ruling. However, the SC has asked the banks, RBI and the government to have a re-look on the issue as to how much benefit can be provided to the borrowers. This has left the window open for some relief to borrowers and now it may be left to individual banks to decide on this.

8. PAN-AADHAAR, TAX SAVING, FORM-16, BELATED ITR FILING DEADLINES EXTENDED: Several direct tax deadlines have been further extended. As per the new deadlines, linking of PAN with Aadhaar is extended till March 31, 2021. The deadline for filing belated or revised tax return for FY 2018-19 has been extended to July 31, 2020. The deadline for making tax saving investments to claim tax breaks under Section 80 C for FY 2019-20 has been further extended to July 31, 2020 and the date of issuance of TDS certificates (Form 16 and Form 16A) has been extended to August 15, 2020.

1. TOTAL MORATORIUM LOAN AMOUNT IN THE BANKS’ BOOK SLIDING DOWNWARDS: The total loan book under moratorium for banks and large NBFCs has come down as many customers have opted out after initially opting for it. This is as per a report by Macquarie Capital Securities. The report says that as per the feedback received by senior management of many banks, there has been a decline in the total loan book under moratorium by about 25%. Customers who had earlier opted for the moratorium without reading the fine print, notably the compounded interest that they will have to pay for the moratorium period, have changed their mind and have opted out.

2. NEARLY 15% OF MUDRA LOAN PORTFOLIO IN SBI HAS TURNED BAD: About 15% of State Bank of India’s Mudra Loan portfolio has turned bad. Reserve Bank of India had raised concerns over the growing stress on the government’s loan scheme for Micro enterprises. SBI had sanctioned Rs 33,800 crores of Mudra loans in Financial year 2019. The Shishu Mudra Scheme under which loans upto Rs 50,000 are disbursed have seen the highest delinquency ratio. Now the bank has adopted digital process for lending under the scheme and has tasted some success in containing non-performing assets. The new model is called e-Mudra.

3. FINANCE MINISTRTY ASKS BANKS TO CUT COSTS: The Finance Ministry has issued a stern order to Public Sector Banks (PSBs) to defer “avoidable” expenditure until the next fiscal. The ministry has directed these banks to place its order on spending on publicity and conferences before their boards. The Ministry said that in the context of Covid-19 pandemic, it is necessary that banks take appropriate measures to ensure productive use of their financial resources for core business activities. The banks have been asked to rationalise expenses by weighing their operational profitability and cost to income ratio.

4. DEPOSITORS SEEK RBI PROTECTION AGAINST WAIVER OF BANK INTEREST FOR MORATORIUM LOANS: The All India Bank Depositors Association (AIBDA) has expressed apprehension that banks will stop paying interest on deposits if the Supreme Court allows complete waiver of interest on moratorium loans due to Covid-19 pandemic effect. The Association feels that if the banks are not allowed to charge interest from borrowers on the loan amount for the moratorium period then they will not be in a position to fulfil their obligation towards depositors. Hence AIBDA has asked RBI to freeze interest rates on deposits at pre Covid levels.

5. INDIA’S FOREX RESERVES CROSS $ 500 BILLION: India’s forex reserves crossed $ 500 billion for the first time in the week ended June 5, 2020. Unlike 1991, when India had to pledge its gold reserves to stave off a major financial crisis, the country can now comfortably depend on its soaring foreign exchange reserves to tackle any economic scenario. Due to the Covid-19 pandemic effect the situation out there is gloomy on the economic front with GDP set to contract for the first time in 40 years and manufacturing activity is at all time low. Added to this, the current tussle with China on border issues may have adverse effects on the economy. But the soaring Foreign exchange reserves is one cheerful news. Since the lockdown in March 2020, the forex reserves have surged by $31.8 billion, hitting an all-time high of $ 501.7 billion on June 5, 2020.

6. NEW DRAFT NORMS—50% OF HFCs ASSETS MUST BE HOUSING LOANS: In a proposed review of the existing norms for Housing Finance Companies (HFCs), the Reserve Bank of India has now clearly defined the Housing Finance Business. As per the new norms, 50% of HFCs assets (loans) should be in the form of housing loans and 75% of that should be for individual borrowers. The proposed norms are formed after the blowout at DHFL, where chunk of retail loans was found to have been diverted to group companies. Housing Companies will be allowed to achieve this target in phased manner—60% by March 21, 2022, 70% by March 31, 2023 and 75% by March 31, 2024.

7. GOVERNMENT SHOULD HAVE A SAY ON PRUDENTIAL BANKING NORMS: RBI’s Central Board Director Mr Swaminathan Gurumurthy has suggested that the government should have a say on prudential norms, and that it should not be a viewed as something against RBI’s independence. He further opined that the government and RBI should sit together and offer a one-time restructuring option to all those accounts which are declared as Non-Performing Assets.

1. SBI LAUNCHES AADHAAR-BASED ONLINE SAVINGS ACCOUNT OPENING FACILITY: State Bank of India (SBI) has launched its Aadhaar-based instant digital savings account opening facility by using its YONO platform. YONO is SBI’s integrated banking platform. The “Insta Savings Bank Account” will offer a complete paperless and instant digital savings account opening with just PAN and Aadhaar number. The account thus opened will have all the regular features of a normal savings bank account. The bank will issue a basic personalised RuPay ATM-cum debit card to such Savings bank account holders.

2. BANKING THROUGH WHATSAPP IS THE NEW DIGITAL MEDIA BUZZ: As Indian banks are providing their branch banking services through digital media alternatives during lockdown, WhatsApp has sensed an opportunity in its biggest market to capture a new user segment—Retail Banking. The Facebook owned messaging platform has further scaled its existing partnerships with some of the biggest names in Indian Banking—HDFC Bank, ICICI Bank, Kotak Mahindra Bank Axis Bank etc. The Application Programming Interface (API) integration have allowed these banks to provide basic services such as balance enquiry, credit card statements and in some cases even opening of savings bank accounts as well through WhatsApp. WhatsApp has 2 billion users worldwide and 400 million users in India. It has availed the services of 10 developer platforms to backend API integrations.

3. BANK UINIONS DEMAND REGULAR SANITIZATION OF BRANCHES: The United Forum of Bank Unions (UFBU), an umbrella organisation of bank unions has demanded regular sanitization of branches. Worried about the health and safety of its employees and the death of as many as 11 of its employees so fardue to the Covid-19 pandemic, it says these additional steps are needed to ensure safety of staff. Besides this, UFBU is also demanding Rs. 1,000/- daily allowance and Rs 50 lakh insurance cover for bank staff as provided to health workers. The bank employees are facing problems due to non-availability of transport and reduced number of security staff and workers responsible for cleanliness of branch premises.

4. ICICI BANK REDUCES EMPLOYEE NOTICE PERIOD FROM 90 DAYS TO 30 DAYS: ICICI Bank in a communication to its employees said it has reduced the employee notice period from the existing 90 days period to 30 days.The reduced notice period, as per the communication will be applicable from June 17, 2020 and will apply to employees in Managerial posts of its internal MMII grade and below.

5. UNION BANK CREATES NEW ORGANISATIONAL STRUCTURE WITH 18 ZONAL OFFICES: Union Bank of India, with merged entities of Corporation Bank and Andhra Bank has created a new organisational structure having 18 zonal offices and 125 regional offices. The bank has established 4 new Zonal Offices in Chandigarh, Jaipur, Mangalore and Vishakhapatnam. Additionally, it has opened 32 new regional offices. Post amalgamation, Union Bank of India has become the 5TH largest Public Sector Bank. Now it has more than 9,500 branches and 13,500 ATMs. The bank has launched “Regional Heads Booklet” which will be a one-stop manual which comprehensively covers all roles and responsibilities of Regional heads.

6. IBC SUSPENSION WILL MAKE WAY FOR MORE FRAUDS: The government’s decision to suspend initiation of fresh insolvency proceedings for the next 6 months from March 25, 2020 might be a good move for companies truly impacted by Covid-19 outbreak and lockdown but it may also lead to certain frauds. As per the ordinance, proceedings under the Insolvency & Bankruptcy Code (IBC) cannot be filed for defaults during the suspension period of six months. The promoters of companies that have the capacity to pay the dues could force a default and never be held accountable and while the creditors cannot initiate cation under IBC and though they have other measures on hand outside IBC, the promoters will get sufficient time and may siphon off assets, manipulate the books or divert cash flows and exit the business.

7. RBI PLANS TO OVERHAUL CORPORATE GOVERNANCE STRUCTURE OF BANKS: The Reserve Bank of India plans to overhaul the corporate structure of Indian Banking system. The likely changes include limiting the terms of directors and Chief Executive Officers and placing more responsibility on the board of directors. Board of Directors would be responsible for remuneration and the performance and would be accountable for the risk taken by a bank.

8. GOVERNMENT ROLLS OUT FACILITY OF FILING “NIL” GST RETURN THROUGH SMS: The government has now allowed filing of “NIL” GST monthly return in FORM GSTR-3B through SMS. This would substantially improve the GST compliance for over 22 lakhs registered tax payers who had to otherwise log into their account on the common portal and file their returns every month. Now these tax payers with NIL liability may file their “NIL” returns through SMS mode.

1. BANKS SEEK RBI NOD TO RECAST Rs 3 LAKH CRORE LOANS MINUS DOWNGRADE: Banks have asked the Reserve Bank of India to allow them to restructure loans worth about Rs 3 lakh crores given to aviation, hospitality and commercial realty without downgrading these assets in their books. These sectors are among the worst-hit by the Covid-19 pandemic and subsequent lockdown. As on April 2020, banks had an exposure of Rs 2.3 lakh crores to commercial realty, Rs 45,862 crores to hospitality business and Rs 30,000 crores to aviation firms. Banks have told the RBI that without the restructuring relief, Non- Performing Assets (NPAs) in their balance sheet will swell.

2. COMPANIES KEEN TO CONTINUE “WORK FROM HOME”: Most of the Indian Companies are likely to encourage most of their employees to continue functioning from home for the next 2-3 months as they are not willing to let their employees expose to the Covid-19 risk immediately. And most of the companies have realised that since the present system of “Work from Home” concept is working well and hence don’t want to risk the health of their employees. Most of the companies are very cautious in their approach and don’t want their employees rushing back to office even though the lockdown has been eased in several parts of the country.

3. PSBs LURING MSMEs WITH PRE-APPROVED LOANS: Public Sector Banks (PSBs) are trying to reach out to Micro, Small & Medium Enterprises (MSMEs), which are their existing customers, for loans under the “Atmanirbhar Bharat” package that has promised Rs 3 lakh crores in Collateral free loan. Messages of Pre-approved loans on attractive interest rates are being sent to these MSME customers. In some cases, Pre-approved loan sanction letters are also being sent to the existing MSME customers. As per data available till May 2020, total sanctions touched Rs 13,000 crores while the disbursements stood at Rs 6,000 crores.

4. GOVERNMENT’S CREDIT SCHEME UNDER “ATMANIRBHAR BHARAT” ONLY ON PAPER, BANKS RELUCTANT TO EXTEND COLLATERAL-FREE LOANS: The government has launched the “Guaranteed Emergency Credit Line” loan scheme under which banks are supposed to sanction collateral-free loans to MSMEs, banks are not to insist on any collateral security from Micro, Small & Medium Enterprises (MSMEs). But All India Manufacturers Organisation (AIMO) has said that the Guaranteed Emergency Credit Line” without collateral security is only on paper as most of the loans extended to mostly those existing customers who have already availed loan from the bank by giving collateral security and whose value of the security is almost two times the present outstanding loan amount. AIMO says that this is as per the feedback received from companies that have applied for loan under the scheme.

5. BANKS TO INSTALL CONTACT-LESS ATMs TO CUT DOWN ON TOUCH: With reduced hand contact being the order of the day due to the Covid-19 pandemic, banks are all set to deploy “Contact-less ATMs”. A prototype has been developed by Payments Company AGS Transact Technologies, which uses the bank’s mobile app to interface with the ATM after scanning a QR code on the screen. To use the contact-less ATM, the customer has to use the bank’s smartphone app to scan a QR code on the screen and enter the amount and ATM Pin in his mobile, and collect the cash without touching the machine.

6. RBI TELLS SC--Rs 2 LAKH CRORE WILL BE LOST IF INTEREST IS WAIVED OFF DURING MORATORIUM, BUT SC BENCH HAS OTHER VIEWS: RBI has told the Supreme Court that it cannot waive interest on loans thus charged during the moratorium period, as it would affect the financial stability of the banking sector and this would jeopardise the interests of the depositors. It is estimated that the interest payable on these loans will be Rs 2.01 lakh crores or equivalent to 1% of India’s Gross Domestic Product (GDP). RBI has further clarified that the moratorium was only a deferral and not a waiver on payments. But Supreme Court has observed that such a stand was detrimental and sought a response from the Finance Ministry. The Supreme Court expressed that “while on one end you are granting moratorium, on the other there is no relief on interest which is more detrimental in such challenging times. The Bench said there were two aspects under consideration, no interest during moratorium and no interest to be charged on interest. SC has set the next hearing in the matter for June 12th.

7. MOODY’S INVESTOR SAYS RETAIL AND SME LOANS TO DETERIORATE NOW: Moody’s Investors Service said that the quality of retail and Small & Medium Enterprises (SMEs) loans will also deteriorate and the risks to the financial system will rise. Some sectors were already under strain before Covid-19 crisis. For NBFCs both assets and liabilities will come under strain now. NBFCs sector has an exposure of around 15% of the total bank loans. In the auto chain sector, the most exposed banks are private sector banks. The Moody’s report now says the quality of retail and SME sector will also deteriorate, which amounts to 44% of the total loans.

1. FITCH PROJECTS INDIAN ECONOMY TO CONTRACT 5% THIS FISCAL: Fitch Ratings has made a forecast of a 5% contraction of Indian Economy in the current fiscal. This is on account of slump in economic activities due to the Covid-19 pandemic lockdown. Fitch has also made further cuts to world GDP forecasts in its latest Global Economic Output (GEO) Report for May’20 but the biggest forecast cut was for India. But the report also points out that the Indian economy is expected to rebound to 9.5% in 2021-22. Meanwhile a SBI Research report has noted that the Indian economy faces a huge loss in June quarter of the present fiscal and the GDP could contract by more than 40% during this period.

2. OVER 6 LAKH STORES MAY BE SHUT DUE TO LOCKDOWN EFFECT: Leading consumer goods companies have predicted that over 6 lakh kirana outlets may have closed down during lockdown, hurt by liquidity crunch or return of the owners to their native villages and the fear is that these shops may not reopen. The stress could be seen also in mobile handset sector, with All India Mobile Retailers Association estimating that around 60% of the 1,50,000 stores selling smartphones have not opened after the sale of non-essential goods was allowed. These closures may further delay recovery of the market.

3. FISCAL DEFICIT WIDENS TO 4.6% OF GDP IN 2019-20: The fiscal deficit (Gap between the government’s revenue and expenditure) widened to 4.59% of Gross Domestic Product (GDP) for the fiscal year 2019-20, surpassing the government’s revised target deficit of 3.8%. The Fiscal deficit was at Rs. 9.35 lakh crores in March ’20, 22% higher than the targeted figure of Rs 7.66 lakh crores. The government’s net GST tax revenue was at Rs 21,412 crores in April’20, revealing a massive 70% decline as against a collection of Rs. 71, 637 crores in April last year. This will hugely impact the fiscal deficit for the next fiscal year.

4. INSTANT PAN CARD ONLINE THROUGH AADHAAR FACILITY LAUNCHED: Finance Minister Ms Nirmala Sitharaman has formally launched the facility of instant PAN Card through Aadhaar based e-KYC on real time basis. The process of applying for the instant PAN is very simple. The applicant has to go to the e-filing website of the Income Tax Department and provide his/her valid Aadhaar number and submit the OTP thus generated on the Aadhaar registered mobile no.

5. REVISED 26-AS FORM NOW INCLUDES REAL ESTATE, SHARE TRANSACTION DETAILS: The Income tax department has introduced the revised Form 26AS, which contains details of Tax Deducted at Source (TDS) which will also include information pertaining to property and share transactions. With this, the Form 26AS has been revamped to Annual Information Statement which will contain comprehensive information relating to specified financial transactions, payment of taxes, demand/refund and pending/completed proceedings undertaken by a tax payer in a particular financial year that has to be mentioned in the income tax returns. To implement this, the Budget 2020-21 had introduced a new section 285BB in the Income Tax Act.

6. SBI READY TO ENTER MICRO MARKET SECTOR, SOFT LAUNCH ON JUNE 1, 2020: State Bank of India is all set to enter Micro Market vertical from June 2020 onwards. It will enter the tiny financial vertical of Micro Financing and has asked SBI Life Insurance Chief Executive Mr. Sanjeev Nautiyal to head the initiative. SBI has decided to go ahead with its plan to launch the specialised cell for small borrowers despite the rising odds against that line of financing in the aftermath of Covid-19 outbreak. SBI will be using its strong network of 7,500 rural branches to venture into this initiative.

7. FITCH WARNS OF BIG HIT TO ASSET QUALITY OF INDIAN BANKS: Fitch Ratings has said that increased pressure to lend will erode the assets quality of Indian banks by 200 to 600 basis points for at least next two years. The latest measures announced by RBI, including an extension of 90-day moratorium on repayments of term loans and allowing banks to fund interest on working capital loans, will put a heavy burden particularly on state owned banks. The lockdown to contain the Covid-19 virus has taken a severe toll on businesses. The report said that the impact for micro, small & medium business sectors is structural and a meaningful revival is unlikely even when the lockdown ends.

8. US PRESIDENT TRUMP ANNOUNCES END OF RELATIONSHIP WITH WORLD HEALTH ORGANISATION: US President Donald Trump has announced that United States of America (USA) will terminate its relationship with World Health Organisation (WHO) and will be redirecting those funds to other worldwide and deserving, urgent global public health needs. Mr Trump has remarked that China had not properly reported information it had about the coronavirus to the World Health Organisation and further said that China had pressurised the WHO to mislead the world about the virus. Trump has launched a blistering attack on China, including a slew of retaliatory measures that will plunge US-China relations into deeper crisis.

1. RBI EXTENDS EMI MORATORIUM BY ANOTHER THREE MONTHS: The Reserve Bank of India (RBI) announced an extension of the moratorium on term loan EMIs by another three months till August 31, 2020. The earlier 3-month moratorium was ending on May 31, 2020. This makes it a total of 6 months moratorium on term loan EMIs staring from March 1, 2020. The interest shall continue to accrue on the outstanding portion of the term loan during the moratorium period. Availing such a moratorium however will not lead to a down grading of the borrower’s credit rating or affect the risk classification of the loan.

2. LOCKDOWN PERIOD CASH DEMAND ALMOST DOUBLE THE LEVELS OF LAST YEAR’S ELECTION PHASE: Cash demand during the lockdown period is almost double the amount of what was witnessed during last year’s election period. The currency circulation between April 1, 2020 and May 15, 2020 amounted to Rs 1.42 lakh crores. This is almost double the amount of Rs 72,984 crores which was in circulation during last year’s election phase. The recent increase in circulation during lockdown reflects higher cash withdrawals by customers and the fact is the cash thus withdrawn is not coming back to the banking system which indicates that customers have withdrawn cash and are holding cash with them envisaging certain emergencies during lockdown.

3. BANK OF BARODA TO APPOINT AGENCIES TO MONITOR Rs 4 LAKH CRORE NBFC LOANS: Bank of Baroda has taken the lead to monitor the entire Non- Banking Finance Companies (NBFCs) loan portfolio on behalf of all the banks. The NBFC sector (including some big ones like Bajaj Finance, Tata Capital, HDB Financial, Tata Motor Finance M&M Finance, etc) have an exposure of Rs 4 lakh crores to the banking system. Bank of Baroda will appoint an agency to monitor the said exposure. Monitoring agency would be assessing the asset quality, cash holdings, likely siphoning off transactions if any, flag non-business transactions among host of other requirements. Bankers are worried over the performance of these NBFC credit and they want an assessment of the actual credit quality of their books and see the potential stress build-up.

4. KOTAK MAHINDRA BANK BECOMES FIRST INDIAN BANK TO ALLOW VIDEO KYC: Kotak Mahindra Bank has introduced video-KYC (Know Your Customer) facility for customers opening new Savings account on the bank’s digital platform, thus becoming the first private bank to offer video based “zero-contact” account opening service. The initiative is presently being offered on a pilot basis for savings accounts. With video KYC, verification of documents and signature are completed via a video call with representative from the bank without any physical interface.

5. BAD LOANS IN BANKING SECTOR MAY RISE BY Rs 5.5 LAKH CRORE THIS FISCAL DUE TO COVID-19 EFFECT: With economic activities coming to a standstill due to the Covid-19 pandemic crisis, total slippages of loans to bad loans in the banking system may rise up to Rs 5.5 lakh crores in the current fiscal. The India Ratings and Research has said this in one of its report. While the slippages from the corporate sector may rise by Rs 3.4 lakh crores, for non-coroprate sector it may be Rs 2.1 lakh crore. The rating agency has further reported that most of the sectors in the country are likely to face varying degrees of revenue contraction due to demand and supply disruptions on account of pandemic crisis. This additional slippage of Rs 5.5 lakh crore is 5.7% of the gross bank credit.

6. GRAPPLING WITH FEAR OF COVID-19, INVESTORS START MOVING TOWARDS BANK FDs: Risk-averse investors are moving their money to state owned bank fixed deposits and top rated finance companies as stock market remains volatile and debt funds have become riskier after Franklin Templeton closed six of its credit risk fixed income schemes because of redemption pressure and liquidity problem caused by Covid-19 crisis. Panic-stuck investors have rushed to redeem their investments in credit risk funds of asset management companies. This indicates that investors are no longer willing to take risks in the debt portion of their portfolio.

7. MORATORIUM TO STRAIN NBFC LIQUIDITY EVEN FURTHER: The recent moratorium of term loans for customers is likely to cause a lot of hardship for Non-Banking Finance Companies (NBFCs) as these firms operate with very little short term liquidity and they normally manage the liquidity by matching cash inflows from loan repayments by customers with cash outflows to repay their liabilities. And moratorium on loan repayments will result in substantial decline in cash inflows over the next few months. Customers will also start defaulting even after the moratorium period.

1. 72% OF OUTSTANDING BANK CREDIT IN RED ZONE: The Ministry of Health & Family Welfare has classified the country into 3 zones—Green, Orange and Red based on the Covid-19 cases, with varying levels of restrictions on economic activity across the zones. Now a latest report has revealed that 72% of outstanding bank credit and 62% of bank deposits are in the Red Zone districts. Due to the severe restrictions on the level of economic activities there would be delay in the resumption of economic activity in red zone andthis could put pressure on the lenders’ asset quality. As of December 2019, the overall bank credit stood at Rs 100.70 Lakh crores while deposits were Rs 132.90 lakh crores. Out of this, the outstanding bank credit of Rs 72 lakh crore and deposits of 82.50 lakh crores are in red zone. This is as per a report by Care ratings.

2. BANKING LOBBY GROUP PROPOSES “BAD BANK” WITH TWO-TIER STRUCTURE: The Banking lobbyhas proposed formulation of “Bad Bank” in the form of an Asset Reconstruction Company (ARC) which could have a two-tier structure where the government would own 100% of the reconstruction company with an investment of Rs 10,500 crores. Banks may shift Rs. 70,000 crores of bad loans at a value net off the regulator determined provisions and would review the stressed accounts post the lifting of moratorium and could decide to shift more assets with additional capital from the government. This is as per the IBA proposal.

3. GOVERNMENT CHANGES DEFINITION OF MSMEs, REVISES INVESTMENT LIMIT: The government has revised the definition of Micro, Small & Medium Enterprise (MSME) sector by revising the investment limit and by adding an additional criterion of “Turnover” in the new definition. In the new definition, the government has also done away with the distinction between manufacturing and services sector. As per the revised definition, any firm with an investment of up to Rs. 1 crore and turnover under Rs. 5 crores will be classified as “Micro”, a company with investment up to Rs. 10 crores and a turnover up to Rs. 50 crores will be classified as “Small” and a firmwith an investment up to Rs. 20 crores and turnover under Rs 100 crores will be classified as “Medium”

4. WITH IBC SUSPENDED, THE NEW BUZZ IS “PRE-PACKED INSOLVENCY”: The Union Cabinet has decided to put the Insolvency & Bankruptcy Code, 2016 (IBC) in abeyance by suspending the admission of new cases into insolvency for the next 6 months to address the hardship of business houses being dragged into bankruptcy due to the pandemic fuelled distress. The move has resonated well with the lenders, who have already suggested a two-year suspension of IBC in light of what they estimate is going to be the time it would take for the markets to normalise. In place of IBC, a new system of Pre-Packaged Insolvency or “Pre-Pack” has come into replace. A pre-pack is a mix of an out-of-court restructuring scheme and formal insolvency process where the terms of sale are pre-negotiated and finalised with approvals of creditors prior to filing for insolvency with the court.

5. IMPS TRANSFERS IN APRIL’20 PLUNGE TO 2-YEAR LOW: The economic impact of the lockdown is reflected in the sharp drop in retail interbank transfers under the Immediate Payment System (IMPS) transactions platform. The total transactions under IMPS in April’20 was 12.2 crores, which is half of the transactions that were effected under this platform in February’20. The impact is also seen in Unified Payment Interface (UPI) platform as well in April’20.

6. FINANCE MINISTRY’S Rs 75,000 CRORE PACKAGE MAY LOWER COST OF FUNDS FOR NBFCs & MICROFINANCE COMPANIES:The Finance Ministry’s announcement of Rs. 75,000 crore package to help the NBFCs and Micro Finance Companies may see borrowing costs fall and liquidity increase for these NBFCs and Micro Finance Companies. The Ministry’s proposed special fund of Rs. 30,000 crores and partial credit guarantee scheme worth Rs 45,000 crores could ease fears that some lenders had due to tight liquidity position. The two schemes could help these firms raise money, and also lend to MSMEs. The government will guarantee all the securities under the Rs. 30,000 crores scheme while the Rs. 45,000 crores scheme comprises a guarantee of up to 20%.

7. RELIEF FOR TAXPAYERS AS ITR FILING DEADLINE EXTENDED: Tax Payers who are yet to file their income tax returns for FY 2019-20 can take a sigh of relief as the deadline for filing income tax returns has been extended till November 30, 2020. Likewise, the deadline for filing tax audit returns is also extended till October 231, 2020. The said extension will give the much-needed time for the tax payers to compile their data required for filing the tax.

1. KOTAK MAHINDRA BANK DECLARES 10% PAY CUT FOR STAFF WITH OVER Rs 25 LAKH ANNUAL SALARY: Kotak Mahindra Bank has decided on a 10% pay cut for its employees earning above Rs 25 lakhs per annum for the year 2020-21. This move comes after the top management of the bank voluntarily surrendered 15% of their pay for 2020-21. The Covid-19 pandemic is expected to have a heavy impact on the economy and many corporates have been cutting salaries. The moveto recalibrate the salaries is driven by the objective of business stability.

2. SBI SCOUTS FOR PR AGENCY TO DEVISE BRAND BUILDING STRATEGIES: State Bank of India is looking to engage with a public relations agency for building its brand value and help it become the preferred choice of customers for their banking needs. SBI has a network of 22,000 branches spread across India. The selected agency will be responsible for developing and implementing public relation activities to be organised by the bank. The selected agency will have to design and implement the bank’s corporate communication strategy with a long-term prospective.

3. WITH LARGE LOAN BOOKS UNDER MORATORIUM, ASSET QUALITY CONCERNS COULD RESURFACE: Banks may see a spike in bad loans after providing the 3-month moratorium which is about to end on 31ST May’20, as the Covid induced lockdown continues to exacerbate the repayment capabilities of the borrowers. Some banks have recently disclosed that at least 33% to 35% of their loan books are under moratorium at the moment. Experts point out that this could become a problem going ahead as borrowers who have availed of the deferment will find it difficult to repay all the accrued interest as soon as the relaxation are lifted. Due to this moratorium, bad loans in the banking sector are expected to rise to 11-11.5% of the total advances by March 2021.

4. GST COLLECTIONS MAY SHOW NEGATIVE GROWTH IN SEPTEMBER: Goods & Services Tax (GST) collections may likely to witness a slow or even negative growth for at least 6 months from March’20 due to the impact of Covid-19 pandemic. An analysis of different scenarios reveal that GST revenue for the past 30 months has been uneven, volatile and far below official targets. Since March’20 the economy is in doldrums due to the pandemic and the GST collections are going to be affected badly.

5. RBI CANCELS MUMBAI BASED CKP CO-OP BANK’S LICENSE: The Reserve Bank of India has cancelled the banking license of the Mumbai-based CKP Co-operative Bank Ltd. The said bank was under “All Inclusive Direction” of the RBI since 2014. As there was no scope for revival of the bank, its license has been cancelled. RBI however, has clarified that 99% of the depositors of the CKP Co-op Bank Ltd will get full payments of their deposits from the Deposit Insurance & Credit Guarantee Corporation (DICGC). As on November 2019, the bank had deposits aggregating to 485.56 crores.

6. DATE FOR FILING GST RETURNS FOR FY-19 EXTENDED TO SEPTEMBER 2020: Goods & Services Tax (GST) assesses are given relaxation on the compliance front. The Finance Ministry has extended the date for filing annual returns for financial year 2018-19 till September 2020. At the same time, “NIL” return can be filed through Short Messaging Service (SMS).

7. GOVERNMENT TO SUPPORT MSMEs MAKING “IMPORT SUBSTITUTE” PRODUCTS: The government is looking to introduce an import substitution policy to replace foreign imports and boost domestic manufacturing in the wake of the current economic scenario due to Covid-19 pandemic. Addressing the Association of Lady Entrepreneurs of India, MSME Minister Mr. Nitin Gadkari said there is a need to focus on import substitution to replace foreign imports with domestic production.

8. COMPANIES ALLOWED TO HOLD AGMs VIA VIDEO CONFERENCING: The Ministry of Corporate Affairs (MCA) has allowed companies to hold their Annual General Meeting (AGM) through video conferencing or other audio-visual means during calendar-year 2020. The move comes on account of the need for continuous adherence to social distancing norms put in place due to Covid-19 pandemic.

9. GOVERNMENT TO FAST-TRACK NEW DEFINITION OF MSMEs: The government is fast-tracking the move to amend the definition of Micro, Small & Medium Enterprises (MSMEs)to allow these entities to grow in size. The plan is likely to be a part of the stimulus package, that is expected to be announced shortly. There have been detailed discussions on the issue with Law Ministry, which is open to allowing the definition change. There are around 6.3 crore MSME units in the country, with over 99% categorised as small units.

1. DIGITAL PAYMENT VOLUMES ON MOST NPCI CHANNELS REPORT A DECLINE: Digital payments on fast growing channels such as Unified Payment Interface (UPI), Immediate Payment Service (IMPS), National Electronic Toll Collection (NETC) have recorded a plunge in volume and value during the month of April’20. Aadhaar enabled Payment System was the only digital channel which recorded increased transactions and this is due to the payouts of government’s relief fund to beneficiaries through this channel. The muted economic condition and the forced freezing of discretionary spends by people due to nationwide lockdown is the reason for the decline.

2. ALL PAYMENTS VIA CARDS CAN NOW BE CONTACT-FREE: The Reserve Bank of India has given the green signal to country’s payment networks like Visa, Mastercard and NPCI to allow contact-free (tap-and-go) functionality on card payments for all purchases at retail outlets and shopping centers. This is a move at making such transactions safer and contact-free during the ongoing Covid-19 pandemic. The banks and the service providers have to upgrade at their level after which the customers can avoid swiping their cards at retail outlets enabled with contact-less point-of-sales devices even for the purchases exceeding the current limit of Rs 2,000/-.

3. BANKS LEND A WHOPPING Rs 1.15 LAKH CRORES TO NBFCs IN MARCH’20: Bank’s lending to Non-Banking Finance Companies (NBFCs) surged in March’20, the highest in a month since 2008. Banks have disbursed almost 1.15 lakh crores to NBFCs in March’20. Credit growth in India has been sluggish for the past two years as demand has slumped due to economic slowdown and companies were getting adjusted to GST regime and also due to bankruptcy code coming in force. But March fiscal year end saw banks disbursing loans to NBFCs to reach their targets.

4. RBI MAY RAISE PROMOTER HOLDING CAP IN PRIVATE BANKS: The Reserve Bank of India is looking to raise the 15% ceiling on promoter shareholding in private sector banks as part of new rules that are being drawn up. The move to balance ownership and control comes as some private banks have sought a relaxation in licensing norm.However, the promoter voting rights may be capped at 15-20%.

5. AXIS BANK ENTERS INTO DEFINITIVE AGREEMENT TO BECOME JOINT VENTURE PARTNER IN MAX-LIFE: Axis Bank has entered into a definitive agreement with Max Financial Services Ltd to become a joint venture partner in Max Life Insurance Co Ltd. The move will make Axis Bank a significant stakeholder in a life insurance venture and will allow it to participate in its long-term capital appreciation. On completion of the transaction, Axis Bank will have 30% equity stake in Max Life and the balance 70% will be retained by Max Financial.

6. LOCKDOWN SCENARIO PUSHES CASH-IN-HAND TO HIGHEST LEVEL: As per a report by The Indian Express, the first two weeks of the lockdown period has pushed the country more towards cash-driven instead of adopting digital payments as urged by the Prime Minister and RBI Governor. During the first fortnight of the lockdown, the share of money in the form of currency being held by the banks and public hit the highest level since 2007-08. The increase is caused by weak demand for credit at the banks in a slowing economy and people’s desire to hold more cash-in-hand amid lockdown and looming economic uncertainty.

7. AUTO COMPANIES HEAD FOR “ZERO” SALES IN APRIL: The Indian automobile industry is set to post almost “zero” sales in the month of April’20, the first time in its history as factories and dealerships are shut due to the nationwide lockdown. Industry experts opine that they are not expecting much improvement in sales in the month of May’20 as well and have warned of a prolonged crisis in the sector because of the Covid-19 on the economy and consumer sentiment.

8. MOST SMEs HAVE RUN OUT OF CASH: As per a survey by community platform LocalCircles, nearly half of the country’s Small & Medium businesses have either exhausted their funds or are as close to doing so as the unparalleled demand crash due to almost stoppage of their businesses due to the extended lockdown have forced them to dig into their own reserves. Almost 50% of the Small & Medium businesses have either already run out of funds or have less than a month’s estimate on-hand before they exhaust their funds.

9. OVER Rs 68,600 CRORE LOANS OF WILFUL DEFAULTERS WRITTEN-OFF: Indian Banks have written-off Rs 68,607 crores of debt of top 50 willful defaulters till September 30, 2019. This has been revealed by RBI in response to a petition filed under RTI Act. The write-offs are technical or prudential in nature, which means the banks have made 100% provisions against the loans. This does not mean the banks have given up the right to recover the loans. As and when they recover the money, it directly adds up to banks’ profits and provisions also come down by that extent.

1. LOAN MORATORIUM MAY WIDEN BANKS’ CREDIT LOSSES: According to a report on the Asia Pacific Region by Moody’s Investor Service, the loan moratorium that India and other countries have implemented amid the Covid-19 crisis may give a temporary relief to the borrowers but it will widen banks credit losses once the directive is withdrawn as banks will restrain from taking proactive recovery action in such cases. It will also affect the asset quality and lower net interest margins.

2. MORATORIUM EFFECT--- 10% PROVISIONING MAY SHAVE OFF Rs 35,000 CRORE BANK PROFITS: The Reserve Bank of India’s directive to all banks to make 10% provision on all moratorium loans will shave at least Rs 35,000 crores off their profits in financial years 2019-20 and 2020-21. This is as per a report by Brickwork Ratings. The new provisioning requirement has to be made for March 2020 and June 2020 quarters and this will impact the banks’ profitability in 2019-20 and 2020-21. The rating agency said its assessment is based on the system-level banks’ ability to manage asset quality in the post-moratorium period.

3. PAYTM PAYMENTS BANK CROSSES Rs 1,000 CRORE IN SAVINGS ACCOUNT DEPOSITS: Paytm Payments Bank Ltd (PPBL) has crossed Rs. 1,000 crore mark in savings bank deposits. According to PPBL, this accelerated rise in savings deposits comes on the back of more people embracing digital banking during Covid-19. The bank has now implemented the option to avail benefits of direct Benefit Transfers ( DBT), which is a scheme by Government of India to transfer the subsidies of various social welfare schemes such as LPG gas subsidy, Old age pension etc directly to the beneficiary’s account.

4. INFORM THE EMPLOYER ABOUT YOUR CHOICE OF TAX REGIME: The government has introduced a revised income tax system in this year’s budget, wherein tax payers would be given the option to shift to new regime with lower tax rates but without the tax exemptions and deductions. Employers will soon start rolling out investment declaration forms, asking its employees to indicate their choice of tax regime. If one wishes to opt for the new tax regime, he/she has to inform the employer through this declaration form. If no declaration is submitted, it is presumed that you would be opting for old regime.

5. GOVERNMENT TO BUY STAKES IN MSMEs GOING FOR PUBLIC: Micro, Small & Medium Enterprises (MSMEs) Minister Mr Nitin Gadkari has said that Rs. 10,000 crores Fund of Funds proposed by the MSME Ministry has been approved by the Finance Ministry and will be placed before the Cabinet soon for clearance. The MSME Ministry has said that the government will buy 15% stake in those MSMEs who wish to go public for raising capital. This 15% stake will be invested from the Fund of Funds. This will be better than the bank lending for growth.

6. AROUND 10% AUTO DEALERS FACE CLOSURE DUE TO COVID-19 EFFECT: Many small and medium sized auto dealers are staring at the prospect of shutting down their shops or merging their businesses with larger dealers as auto sales remain uncertain even after the lockdown is finally withdrawn. There are currently about 15,000 auto dealerships which include 2, 3 and 4 wheelers across India. Last year around 275 auto dealerships were forced to shut their shops citing reasons of choked sales due to slowdown.

7. BANKS TO SEEK EXTENSION OF MORATORIUM ON LOAN REPAYMENTS BEYOND JUNE’20: Lenders are likely to seek extension of the moratorium on loan repayments beyond June’20 as a part of a comprehensive package to support borrowers and revive the economy. Presently the RBI has allowed banks to offer a moratorium of 3 months on payment of instalments of all term loans outstanding as on March 1, 2020. Many senior bankers have opined that it would be very tough for the banks as the onus will be on banks to revive the economy.

8. BIG RELIEF FOR MSMEs IN IT/ITeS AS GOVERNMENT WAIVES OFF RENT FOR UNITS BASED IN TECH PARKS AND EXTENDS INTEREST SUBVENTION SCHEME FOR MSMEs: The government has decided to provide relief to IT/ITeS MSMEs and start-ups based in Software Technology Parks of India (STPI) amid Covid-19 crisis and lockdown. The government will waive off payment of rentals for all small units housed in STPI premises for a four-month period between March 1, 2020 to June 30, 2020. This will provide relief to around 200 IT/ITeS MSMEs operating from these 60 STPI centres. Besides this, the government has also decided to extend the interest subvention scheme for Micro, Small & Medium Enterprises (MSMEs). The Interest Subvention Scheme for incremental credit to MSMEs 2018 which offers 2% interest subvention for all GST registered MSMEs on fresh or incremental loans was till March 31, 2020 but the same has been extended now.

1. BANKS GET RELIEF, THEY GET A FREEZE ON TAGGING OF NPAs FOR 3 MONTHS: Reserve Bank of India has announced freezing of classification of Non-Performing assets (NPAs) for 3 months starting March 1, 2020. Indian Banks’ Association was demanding the same and it has been granted by RBI. This covers the three-month moratorium period on term loan repayments in respect of accounts for which the banks have granted moratorium and which were standard assets as on March 1, 2020. The 90-day NPA norm shall exclude the moratorium period, this means, there would be an asset classification standstill for all such accounts from March 01, 2020 to May 31, 2020.

2. DUE TO CORONA EFFECT THE GST FOR APRIL COULD FALL BY 40%: With the lockdown hitting almost all business activity, GST revenues for the month of April 2020 could be down by 40% of the annual monthly collections of around Rs 1 lakh crore. Currently the collections are just a fifth of the normal levels. FMCG firms will ensure that dip is not beyond 40%.

3. BANK CREDIT GROWS AT SLOWEST IN OVER 50-YEAR LOW IN FY-20: Even as RBI and the government are trying hard to push back credit in order to maintain liquidity in to the system, the bank credit growth fell to a more than a 50-year low in Financial year 2019-20 (FY-20). According to an RBI data, the bank credit for FY-20 grew at a mere 6.1%. The growth rate could have been much worse if banks had not disbursed almost 39% of the annual bank credit in the month of March’20. The growth rate till March 13, 2020 was only 3.8%. In the last fortnight of March 20, the banks disbursed Rs 2.3 lakh crores out of the total of Rs 6 lakh crores in the full year.

4. PUBLIC SECTOR BANKS OVERTAKE PRIVATE BANKS IN FRESH LOAN SANCTIONS: According RBI’s monetary policy report, public sector banks have stepped up loan sanctions, surpassing private sector banks. Notwithstanding a higher rate of NPA and lower Capital to Risk-weighted Assets Ratio (CRAR), the share of public sector banks in total fresh loan sanctions by public sector banks increased to 52.8% from a low of 39.7% in August 2019. The personal loan segment accounted for largest share. But the overall credit growth remained muted with a dip in economic activities.

5. GOVERNMENT PLANS TO SET UP A CHAIN OF 20 LAKH “SURAKSHA STORES” RETAIL SHOPS ACROSS THE COUNTRY: Ahead of extending restrictions on the mobility of goods and persons due to Covid-19 lockdown, the government is planning to set up a chain of 20 lakh retail shops to be named as “ Suraksha Store” across India which will provide daily essentials to all the people while maintaining stringent safety norms. The Suraksha Stores initiative will convert the existing neighbourhood kirana stores into sanitised retail outlets and adhere to safety norms as prescribed by the government.

6. LENDING START-UPS IN DEEP TROUBLE: India’s online lending start-ups that have been providing personal loans to workers and unsecured loans to small enterprises are facing lot of difficulties and a bleak future. Due to Covid-19 many of the small enterprises are shutting their business, these start- ups are facing recovery problems and they are expected to take a significant hit to their loan books with repayment collections slowing down.

7. BANKS KEEPING 3 TIMES MORE CASH IN BRANCHES TO AVOID WORSE SITUATIONS: Banks are keeping 2 to 3 times more cash across their branches to ensure that there is no dearth of currency at the branches or ATMs at a time when there is considerable uncertainty due to the Coronavirus pandemic.

8. BANKS STARE AT HUGE DEFAULTS IN AUTO SECTOR LOANS: The industry experts are predicting that the exodus of cab drivers from Indian metropolis cities to their native due to Covid-19 pandemic will trigger a massive default in vehicle loans. With nearly 60% of the cab drivers engaged by app-based cab riding companies being migrants, the segment represents a huge risk for lenders who have provided loans to nearly 85% of such cabbies.

9. NOW MICRO-FINANCE COMPANIES IN TALKS WITH RBI FOR MORATORIUM AND LIQUIDITY SUPPORT: Concerned about their cash flows in the current covid-109 lockdown period, Micro-Finance Companies are in talks with RBI and the government to include them in the 3-month moratorium and also provide a special liquidity fund.

1. RBI BOARD MEMBER Mr. SATISH MARATHE URGES FOR BANKING SECTOR PACKAGE: In the backdrop of the ill effects of Coronavirus pandemic on the economy, RBI board member Mr. Satish Marathe has urged Prime Minister Shri Narendra Modi for a larger package of sops for the entire banking sector including relaxing NPA recognition, provisioning and downgrades of accounts for an year at least. He said, if the loan account gets classified as NPA due to both lockdown and slowdown, chances of revival of such accounts would be very bleak. As such he has requested for abeyance of all norms relating to income recognition and asset classification, provisioning, downgrading of accounts and reporting to credit information companies for all such accounts that must have got classified as NPAs during the just concluded financial year 2019-20.

2. BANKS ASK CUSTOMERS TO BE CAUTIOUS ABOUT BANK FRAUDS IN RELATION TO LOAN MORATORIUM: Several banks have cautioned their customers against possible attempts by fraudsters as many of them have become active to exploit the 3- month loan moratorium offer. The cyber criminals pretending as officials of banks have been reaching out to borrowers, offering them assistance to avail the loan repayment moratorium scheme for phishing out account details. Banks are sending messages to its customers to be cautious against such frauds.

3. KOTAK BANK LEADERSHIP TO TAKE A 15% SALARY CUT IN FINANCIAL YAER 2021: Kotak Mahindra group’s leadership has voluntarily opted to take a 15% cut in its salaries for financial year 2020-21. Promoter and CEO Mr. Uday Kotak has personally opted to forgo his salary, and will receive only Rs.1/- as salary for the year. Earlier the bank had contributed Rs. 25 crores to PM Cares Fund.

4. MANY BANKS HAVE ROLLED OUT MOBILE ATMs ACROSS THE COUNTRY: Many public and private sector banks like Bank of Baroda, Punjab National Bank, Indian Bank, HDFC Bank, ICICI Bank have rolled out mobile ATMs across the country to help customers to withdraw cash in their localities as the country faces lockdown due to Coronavirus pandemic. Mobile ATM is yet another way of making banking easily accessible to customers in conducting basic banking transactions.

5. CASH PAYMENT COMPANY CMS TO OFFER CASH AT DOORSTEP TO SENIOR CITIZEN: To deal with the social distancing and address the cash withdrawal concerns from banks and ATMs, cash and payments solution company-CMS is offering free doorstep cash delivery to help senior citizen and disabled get cash safely at home and is tying up with many banks. CMS is planning to deploy its 20,000 strong field staff across the country to offer this service. It has already approached many prominent banks in this regard and many have expressed their intent and are working on internal approvals.

6. INDIA’S TOURISM SECTOR MAY LOSE Rs 5 LAKH CRORE AND 4-5 CRORE JOBS COULD BE CUT DUE TO COVID-19 EFFECT: The Coronavirus pandemic would have a huge negative impact on India’s tourism sector. The tourism industry is estimating an overall loss of Rs. 5 lakh crore and job cuts for 4 to 5 crore people. Of the total estimated losses, the organized sector (branded hotels, tour operators, prominent travel agencies) may be hit the hardest with an estimated loss of around 1.60 lakh crores. The union ministry of Tourism said the government is considering helping the sector with soft loans, working capital and deferment on loan repayments.

7. FPI’s PULL OUT RECORD Rs 1.1 TRILLION IN MARCH’20: Foreign Portfolio Investors (FPIs) have withdrawn a record Rs 1.1 trillion from the Indian markets in March 2020 as the Coronavirus pandemic dented investorsentiments worldwide. According to the latest data, FPIs pulled out a net of Rs 61,973 crores from equities and Rs 56,211 crores from bond market in March 2020 taking the cumulative net outflow to Rs 1,18,184 crores. The outflow in March’20 comes after six consecutive months of investments by FPIs since September 2019.

8. 25% OF RETAILERS MAY BE OUT OF BUSINESS AFTER LOCKDOWN IF GOVERNEMNT DOES NOT HELP: According to a report by Retailers Association of India (RAI), around 25% of retailers would require serious infusion of capital to help them deal with the impact of 21-day lockdown due to the Coronavirus pandemic. If not, then they would be out of business. It’s a tough situation and the government needs to interfere.

9. SBI CUTS SAVINGS BANK DEPOSIT RATE TO 2.75%: State Bank of India has lowered its savings bank deposit rate to 2.75% citing adequate liquidity. The rate cut will be effective from April 15TH. Other banks too are expected to follow suit soon.

1. OPTING FOR EMI MORATORIUM WILL COST YOU MORE: As per RBI instructions, banks are ready to defer the loan instalments by three months for borrowers. If one chooses to defer the three equated monthly instalments (EMIs), the same will get added to the loan amount but the interest for these three EMIs would get compounded if not repaid at the end of the period. This could lead to the borrower paying for several months more than his/her usual term depending on the length of the loan if there are no pre-payments. In an illustration, State Bank of India has said that for a loan of Rs 30 lakhs with a remaining maturity period of 15 years, the net additional interest would be approximately Rs 2.34 lakhs, which is equal to 8 EMIs.

2. NBFCs WANT BANKS TO PASS ON MORATORIUM BENEFITS: Non-Banking Finance Companies (NBFCs), have planned to approach RBI on directing banks to mandatorily pass on the benefits of the moratorium to NBFCs. While NBFCs will have to give a three-month moratorium to almost all of its borrowers, they feel as to what is the assurance they will get about the benefit of moratorium from their lenders? Hence, they are presenting their case to RBI and the Ministry of Finance for urgent redressal of their concern.

3. UNION BANK EXPECTS Rs 2,500 CRORE BENEFIT DUE TO AMALGAMATION: Union Bank of India which has amalgamated Andhra Bank and Corporation Bank with it, hopes to reap cost benefits to the tune of Rs 2,500 crore through rationalisation of branches and savings on technology on the combined entity. Union Bank said implementation of all the processes under amalgamation will happen without much disruption to customers and employees of Andhra Bank and Corporation Bank. The combined entity will have 9,500 branches and 12,000 ATMs across the country, out of which they have identified 700 plus branches that will be rationalised because of the proximity. They plan to rationalise around 300 branches in the first year. The technology integration will also take almost a year.

4. BANKS FACE THE SQUEEZE DUE TO LACK OF NEW BUSINESS ON ACCOUNT OF COVID-19: Indian banks will have to brace themselves for a prolonged period of lower profits resulting from a hit in revenues and almost zero new business due to disruptions induced by Covid-19. The banks will see a significant dip in their fee income and they are not expecting to make much business in the first quarter of Financial year 2020-21.

5. RBI GOVERNOR APPEALS PUBLIC TO GO DIGITAL AMID COVID-19 CRISIS: RBI Governor Mr. Shaktikanta Das has appealed all to promote digital transactions amid the Covid-19 scare which has impacted the economy very badly. He has asked the public not to panic and do cash withdrawals, instead he has asked them to do more digital transactions which is the need of the hour.

6. COVID-19: DEPOSITORS WITHDRAW Rs 53,000 CRORE CASH IN 15 DAYS: Indian public has been withdrawing cash from banks to prepare themselves for likely emergencies, with the Covid-19 induced shutdown putting spotlight on access to essential goods. Cash withdrawal from banks hit a 16-month high when public withdrew Rs 53,000 crores during the fortnight ending March 13, according to a data released by RBI. Even though digital transactions have been getting a push, economists say there tends to be a strong element of caution at times of such emergencies due which such huge pile of cash is being withdrawn.

7. REPAYMENT MORATORIUM COVERS ALL LOANS, INCLUDING CREDIT CARD DUES: Reserve Bank of India has clarified that the moratorium on loan repayment between March and May’20 is applicable to all types of retail loans including credit card outstanding balances.

8. RBI REJECTS LENDERS’ CALL FOR ASSET CLASSIFICATION PAUSE: The Reserve Bank of India (RBI) has rejected the request from bankers for standstill in Asset Classification dashing the hopes of bankers and also the companies seeking to avoid the defaulter tag. Bankers also wanted borrowers who have not paid in January-March 2020 period to be covered under this moratorium rule. The move is likely to increase the burden of bad loans on the books of the banks. RBI has said that if a borrower has been in default even before March 1, 2020, such a default cannot be said to be as a result of the economic fallout due to the COvid-19 pandemic, so the benefit of moratorium in respect of payments falling due during March 1 to May 31, 2020 will be extended to only those loans which are regular as on March 1, 2020.

1. SPECIAL LOAN SCHEME BY SBI TO VIRUS AFFECTED BORROWERS: SBI has drawn up a special loan scheme to provide additional funding to borrowers whose operations are impacted by corona virus. The scheme is called Covid-19 Emergency Credit Line (CECL) will be in force up to June 30TH and will be equivalent to 10% of the working capital limit, subject to a cap of Rs 200 crores and it will be available to all standard loan accounts which do not have overdues of over 30 days as on March 16th. It will be in the form of demand loan @ 7.25% interest rate and will not attract any processing fees. The repayment period will be 12 months and the borrower can avail the loan at one go and start repaying only after 6 months but has to be repaid within 12 months. The borrower however, needs to have stocks with enoughmarket value to cover the additional loan amount.

2. NBFCs SEEK MORE TIME, ONE TIME RE-CAST FOR ALL NPAs: Still reeling under the impact of the credit squeeze since late 2018, the NBFC industry has written to RBI and the Finance Ministry to relax bad-loan classification to 270 days and suspend the classification of Non-Performing Assets (NPAs) for two months. They have also sought a one-time restructuring of all loans and an increase in the limits for partial credit guarantee scheme. They are also requesting that all credit rating reviews be put on hold. A long-term line of credit from LIC and banks to larger NBFCs has also been sought.

3. RBI APPOINTS TWO ADDITIONAL DIRECTORS ON YES BANK BOARD: RBI has appointed two additional directors on the board of Yes Bank board. Former Deputy Governor Mr R Gandhi and Ananth Narayan, an associate professor at SP Jain Institute of Management & Research have been appointed as additional directors. The appointment will be for two years. Under the reconstruction scheme, which came into effect from March 4H, RBI can appoint one or more persons as additional directors on the board of Yes Bank.

4. BANK OF BARODA WAIVES DIGITAL TRANSACTION CHARGES FOR THREE MONTHS: Bank of Baroda has said it will not levy any charges on digital transactions for the next three months in the wake of the corona virus pandemic. This is to boost and provide enhanced and uninterrupted banking experience to its customers in these difficult times. To this effect, Bank of Baroda has rolled out the “STAY SAFE… BANK SAFE…” initiative to encourage more customers to avail banking services digitally without visiting branches.

5. Paytm BANK TO ISSUE VISA VIRTUAL DEBIT CARDS TO ITS CUSTOMERS: Paytm Payments Bank Ltd (PPBL) has announced Visa Virtual debit cards to its customers. PPBL said it is targeting to issue over 10 million new digital debit cards in 2020-21. Virtual debit cards would enable its customers to transact at all merchant establishments which are accepting payments through cards. For the first time, the bank’s customers would be able to make international transactions using their visa debit cards.

6. SBI TO INVEST Rs. 7,250 CRORES IN YES BANK: State Bank of India would invest Rs 7,250 crores in Yes Bank for a stake of up to 49%. It will buy 725 crores shares of Yes Bank at Rs 1-0/- per share. Other investors such as Kotak Bank, ICICI Bank, HDFC Bank, Rakesh Jhunjhunwala and R Damani together are expected to pick up a stake of up to Rs 5,000 crores in Yes Bank. Some foreign investors may be roped in at a later stage for additional infusion of capital.

7. MOST AIRLINES WORLD-WIDE MAY GO BANKRUPT BY END OF MAY’20 WITHOUT GOVERNMENT ACTION: Due to Corona Virus pandemic, most of the airlines in the world will be bankrupt by May’20 end and only a coordinated government and industry action can now avoid the catastrophe. This is as per a note by global aviation consultancy firm- CAPA. CAPA says many of the airlines might have probably been driven into technical bankruptcy, or are at least substantially in breach of debt covenants. Cash reserves of most of the airlines are running down as fleets are grounded and most flights which are operating, are not more than half full. Coordinated government and industry action is the need of the hour.

8. INDIAN BANKS SEEK EASIER LOAN REPAYMENT, NPA CLASSIFICATION: Indian Banks want the regulator to ease the rules on loan recovery timelines to give borrowers more breathing space and provide better monetary health they need to pay back, in the backdrop of economy choke-up by the lockdown mandated to contain the spread of Corona Virus. They have requested RBI to defer term-loan instalments for six months, extension of the time period for classification of NPAs on short term loans like cash credits and overdraft facilities from the present 90 days to 180 days.

1. SEVEN INVESTORS JOIN SBI TO PUT OVER Rs 12,000 CRORES INTO YES BANK: State Bank of India will be joined by private lenders ICICI Bank, HDFC Bank, Kotak Mahindra Bank, Axis Bank along with private investors Radhakrishna Damani, Rakesh Jhunjhunwala and Azim Premji Trust in the rescue plan for Yes Bank to invest Rs. 12,000 crores. As per the proposal sent to the Reserve Bank of India, these investors will together hold more than 49% stake. SBI also has recommended appointing of Yes Bank administrator Mr Prashant Kumar as the new CEO of the bank. Besides this, public sector banks will bring in Rs 30,000 crores as bulk deposits. SBI’s shareholding in Yes Bank will remain within 49% of the paid-up capital of Yes Bank.

2. DIGITAL PARCEL KIOSKS FROM INDIA POST TO BE LAUNCHED: India Post is ready to unveil digital parcel locker facility to customers who are not able to take delivery when postman visits them. The digital locker will help customers to get their parcels round the clock as per their convenience. The department will drop the parcels in the digital locker kiosks and inform the customer through SMS with a one-time password for collecting it. Initially the locker facility will be unveiled at two locations in Kolkata and if the same is successful then the same will be implemented in other locations as well.

3. OVER 1 MILLION USERS MIGRATE TO ICICI BANK’S UPI HANDLES: Payments platform Cashfree Payments India Pvt Ltd said that it has migrated over 1 million users from Yes Bank’s UPI (Unified Payments Interface) handles to that of ICICI Bank. The Company’s product, “Autocollect” which allows automatic generation of multiple UPI handles with QR codes had been affected by Yes Bank’s recent collapse. YesBank accounted for 39% of all UPI payments made in the country, the highest among any bank.

4. STATE BANK OF INDIA LOWERS TERM DEPOSIT AND SAVINGS BANK RATES: State Bank of India (SBI) citing adequate liquidity in the system, has lowered its retail term deposit rate by 10 basis points for one year and above tenors. The present term deposit rate for above one-year period stands at 5.90% which is the lowest since 2004. It has also reduced the rate by 50 basis points for deposits up to 45 days. The bank also lowered its savings bank interest rate to 3% for all customers. SBI however, has waived maintenance of average monthly balance charges for all savings bank accounts.

5. PRIVATE SECTOR BANKS ARE SAFE, RBI WRITES TO CHIEF SECRETARIES: Maharashtra government has issued an order asking all its departments and civic bodies not to have deposits in private sector banks in the backdrop of Yes bank fiasco. Now RBI has written to chief secretaries of all the state governments, advising them against transferring funds from private sector banks. The letter says that apprehension on the safety of deposits in private banks is highly mis-interpreted and has asked the respective governments to reconsider their decision. But government of Maharashtra has decided to go ahead and not to take note of the RBI advisory.

6. YES BANK FALLOUT, RBI’S MOVE TO WRITE DOWN AT-1 BOND WILL CAST A DARK SHADOW ON BOND MARKET: The Rs 1 trillion Additional Tier-1 (AT-1) bonds also called perpetual bonds is likely to see a heavy loss of investor appetite after RBI’s proposed announcement of writing- down the AT-1 bonds of Yes Bank. This will force the Yes Bank AT-1 bond holders to take a 100% haircut, would lead to losses to the tune of Rs 10,800 crores. Such a move can drive away investors from bond market in future. According to the Acuite Rating Agency, the bulk of the exposure to Yes Bank’s AT-1 bonds is by Mutual Funds and Banks’ treasuries. Several Mutual Funds have already marked down their exposure to “zero” which would impact investment of unit holders unless the stance taken by RBI changes.

7. LAKSHMI VILAS BANK SEEKS PERMISSION FROM RBI FOR ITS FUND-RAISING PLAN: Lakshmi Vilas Bank (LVB) with its capital adequacy well below the minimum required, has approached the Reserve Bank of India with a plan to raise $ 250-300 million (Rs 1,800-2,200 crores) from overseas investors through the sale of a 49-60% stake. The bank has been in talks with 3-4 overseas investors and one of them has tabled a very positive special deal. LVB management is ready to give up a controlling stake to a long-term investor. LVBs capital adequacy ratio is at 3.46% as against the regulatory minimum of 9%.LVB had raised Rs 1,430 crores in 2018 and 2019 and was all set for a merger with indiabulls Housing Finance, RBI struck it down in October 2019. Overseas investors are allowed to invest up to 49% under the automatic route without the permission of the regulatory but prior approval is required for investing more than 49%.

1. FORMER DMD OF SBI Mr PRASHANT KUMAR TAKES CHARGE AS YES BANK ADMINSTRATOR: Reserve Bank of India has placed Yes Bank under a moratorium. Customers cannot withdraw more than Rs. 50,000/- per account for a month. RBI has superseded Yes Bank board and has appointed Prashant Kumar, former Deputy Managing Director and CFO of SBI as the administrator of Yes Bank. Mr Kumar has taken charge as Yes Bank’s administrator in line with the notification issued by Department of Financial Services and RBI. Finance Minister Ms Nirmala Sitharaman has assured Yes Bank customers that their money is safe and that they need not worry.

2. WOMEN GETTING MORE CREDIT CONSCIOUS: As per a report from Credit Bureau, Women are turning out to be more cautious than men when it comes to borrowing and they are a safer bet for lenders to target as delinquencies by women borrowers too are relatively low. Women borrowers in the age group of 36-50 have risen by 33% since December 2017. As the number of women borrowers has grown, awareness and credit consciousness amongst women borrowers has also improved. For home loans and auto loans, the delinquency of women borrowers is at 0.63% and 0.96%, which is better off by 15 and 10 basis points respectively over the delinquency of male borrowers.

3. SBI TO PICK UP 49% IN YES BANK: State Bank of India is all set to pick up a 49% stake in the crisis hit Yes Bank as Reserve Bank of India stepped in with a “reconstruction” scheme to bail out the country’s fourth largest private sector bank. As per the Draft Reconstruction Scheme 2020, the authorised capital of Yes Bank will be altered to Rs 5,000 crore and the number of equity shares will stand altered to 2,400 crores of Rs 2 /- each, aggregating to Rs 4,800 crore. In this, SBI will have to buy 49% at Rs 10/- per share and it cannot pare down its stake below 26% for three years. SBI will have two nominees to the reconstituted bank’s six-members board. Meanwhile Finance Minister Ms Nirmala Sitharaman has asked the RBI to undertake a comprehensive probe on what went wrong at Yes Bank and fix individual responsibility.

4. MOODY’S DOWNGRADES BANK OF BARODA’S BASELINE CREDIT ASSESSMENT: Moody’s Investor Service has downgraded the baseline credit assessment of Bank of Baroda (BOB) to reflect weakening in asset quality and risk from deteriorating operating environment in India. It has downgraded BOB’s Baseline Credit Assessment (BCA) to “ba3”. BCAs are essentially an opinion on the likelihood of an issuer requiring extraordinary support to avoid a default on its debt obligations. Further, deterioration in asset quality poses risks to BOB’s profitability and capital. Moody has said that bank’s asset quality in Micro, Small and Medium Enterprises (MSMEs) and agriculture portfolio has deteriorated and will continue to weaken further. Another risk factor is BOB’s exposure to Non-Banking Financial Institutions (NBFIs) which is at 16% of its total loan book, is highest among Moody’s rated banks in India.

5. BSNL LOSS WIDENS OVER 2.5 TIMES TO Rs 39,000 CRORE: State-owned telecom firm BSNL’s loss widened by over 2.5 times to Rs. 39,089 crores during April-December 2019. The public sector telecom sector had recorded a loss of Rs. 14,904 crores in the previous financial year 2018-19. The government in October 2019 had approved a Rs 69,751 crores revival package for BSNL and MTNL, including 4G spectrum allocation and Voluntary Retirement Scheme (VRS). The Union Cabinet has already approved the merger of MTNL with BSNL.

6. YOU MAY BE FINED Rs. 10,000/- IF YOU FAIL TO LINK PAN WITH AADHAAR BY THE END OF THIS MONTH: If you do not link your PAN with your Aadhaar by March 31, 2020, then your PAN will become inoperative from April 1, 2020 and you will be fined Rs 10,000/- if you use an inoperative PAN under section 272B of the Income Tax Act. An individual having an inoperative PAN may face trouble in several financial transactions like banking transactions, buying or selling of a property, investments in Mutual funds and stocks. An inoperative PAN is the same as not having a PAN.

7. AROUND Rs 10.52 TRILLION CORPORATE LOANS AT RISK OF DEFAULT OVER SLOWDOWN OF ECONOMY: As per a report by the National Statistical Office (NSO), close to Rs. 10.52 trillion of the corporate debt is at the risk of default over the next three years. This is due to the grapplingslowdown in the economy. The GDP growth has slowed down to nearly seven-year low of 4.7% in October -December 2019. The NSO has pegged the economic growth at 5% for FY 2019-20. India ratings and Research has also reported that the profiles of most of the corporates are likely to remain under pressure due to the sluggish economic growth.

1. GOVERNMENT’S NEW RULES SEEK MORE DISCLOSURES IN AUDIT REPORT: The government has issued new norms for auditors, seeking more disclosures in reports. This comes after a series of corporate scams and frauds surfaced over the past few years. Under the new rules, the auditor needs to provide specific details on whether during at any point of time of the year the company has been sanctioned working capital limits in excess of Rs 5 crore in aggregate from banks or financial institutions on the basis of security of current assets. Also, he has to ensure whether the quarterly returns or statements filed with the banks are in line with the books of account of the company. End use of Term loans availed have to be scrutinised and if any divergence is observed, the same needs to be reported.

2. SLOWING CREDIT OFFTAKE ONE OF THE MAJOR CHALLENGES FOR BANKS: Reserve Bank of India Governor Mr Shaktikanta Das has said slowing credit growth is one of the major challenges for banks. Loan growth in banking system is hovering at around 7% at present. He also asked the banks to be more prudent in lending and highlighted that the quality of appraisal is important. He also said that RBI proposes to take thematic studies across financial institutions.

3. US FIRM HUGHES NETWORK SYSTEMS FEARS CLOSURE OVER UNPAID FEES: US broadband provider Hughes Network Systems may have to shut down its Indian operations due to unpaid levies owed to the government, which could put thousands of banking services at risk. The Supreme Court late last year ordered a number of telecom companies including Hughes to pay billions of dollars owed to the government. Hughes Network Systems provides services to defence, education and banking sectors in the country and it owes Rs 600 crores as dues to Indian government for which it has written to the government that it is facing bankruptcy and can’t pay the said amount. The closure of the company could disrupt connectivity at more than 70,000 banking locations and many critical satellite networks in the Indian Navy, army and railways.

4. BAD LOAN SALE TO ARCs IS AN OPTION AND NOT A PRIORITY NOW: A Reserve Bank of India framework to deal with stressed loans and a Central Vigilance Commission’s (CVC’s) circular pointing out certain irregularities in sale of bad loans to Asset Reconstruction Companies (ARCs) has changed the whole scenario of sale of bad loans by banks to ARCs. Earlier, the ARCs used to pay only 15% cash of the loan amount and the rest through Security receipts (SRs) which were redeemed only after the recovery. Now banks are insisting on 100% cash settlement and bankers feel that now the bad loan sale to ARCs is an option rather than a priority. Data Collated by ARCs shows that banks have put up Rs 46,690 crores of bad loans on sale to ARCs so far in this fiscal, down from Rs. 1.30 lakh crores in the fiscal ended 31STMarch 2019.

5. BANK ATMs START DISPENSING MORE OF Rs 500 NOTES INSTEAD OF Rs 2,000: Bank ATMs have started dispensing more Rs 500 notes than Rs 2,000 denomination notes. Although there is no dictate to banks from the finance ministry, banks on their own have decided to fill their ATMs with smaller denomination notes for the convenience of the customers. According to RBI’s reply to an RTI application, Rs 3,542 million notes of Rs 2,000 denomination were printed during 2016-17,Rs 111.50 million notes during 2017-18 and Rs 46.70 million notes of Rs 2,000 during 2018-19. This indicates that while these high denomination notes would continue to be legal tender but eventually will be phased out.

6. HDFC BANK LAUNCHES CO-BRANDED CREDIT CARD WITH IndiGo: HDFC Bank has joined hands with IndiGo Airlines to launch a co-branded credit card, which will effectively work like a loyalty programme for the air carrier. Labelled as “Ka-Ching”, the card will offer many benefits like complimentary air tickets, lounge access, 5% cashback or reward points on IndiGo bookings and 3% cashback on dining, grocery and entertainment. With over 14 million active cards, HDFC Bank hopes to add 1 million “Ka-Ching” cards over the next two years. The bank also had a similar tie-up with the now defunct Jet airways. And it also has a similar tie-up with Walmart and Times Group.

7. INDIA POST PAYMENTS BANK CROSSES2 CRORE CUSTOMER MARK: India Post Payments Bank (IPPB) has garnered over two crore customers in less than two years of being operational. It had reached the landmark of one crore customers in August 2019, in its first year of operation. On an average IPPB has been opening or maintaining a rate of 33 lakh customers per quarter. With the launch of Aadhaar Enabled Payment System (AePS) in September 2019, IPPB has now become the single largest platform in the country for providing interoperable banking services to the customers of any bank. With AePS services, any person with a bank account linked to Aadhaar can perform basic banking services irrespective of the bank he holds his account with.

1. CHIEF LABOUR COMMISSIONER TELLS IBA AND BANK UNIONS TO RESOLVE THE DIFFERENCES IN 15 DAYS: Indian Banks’ Association (IBA) and bank unions have failed to finalise the wage revision despite several rounds of talks over the years. The 11Th bipartite settlement (wage revision for banks) is due from November 2017. The bank unions are on a continuous agitation, demanding many other things along with wage revision like five-day banking, merger of special allowance with basic pay and updation of pension. The bank unions have called for a three-day strike in March and indefinite strike from April onwards if their demands are not met. The Central Chief Labour Commissioner (CLC) has advised IBA and the agitating bank employees’ unions to resolve their differences over wage negotiations in the next 15 days.

2. GOVERNMENT TO INFUSE Rs 1,300 CRORES IN EXIM BANK NEXT FISCAL: The government has decided to pump Rs 1,300 crores into state-owned Export-Import Bank of India (Exim Bank) to fund its business growth. Last year the government had doubled the bank’s authorised capital from Rs 10,000 crores to Rs 20,000 crores. The present infusion of Rs 1,300 crores will give an impetus to the bank to take new initiatives such as supporting Indian textile industries, likely changes in the concessional finance scheme. Exim Bank, established in 1982, is the apex financial institution for financing, facilitating and promoting the country’s international trade.

3. YONO IS THE LARGEST CONSUMER PLATFORM OUTSIDE e-COMMERCE COMPANIES: State Bank of India’s (SBI’s) digital banking platform YONO (You Only Need One) is the largest consumer platform outside of the E-commerce companies in India. YONO has launched many shopping festivals and offerings such as cardless cash withdrawal at SBI ATMs. In less than 24 months since its launch it has close to 20 million registered users. Mr Rajnish Kumar, the Chairman of SBI said that the bank is already seeing returns on its Rs 800 crore investment in the platform. They have garnered a business of Rs 14,000 crores personal loans which is paying the bank almost the entire cost of building the YONO platform. Mr Kumar adding further on competition front from other digital platform companies said that SBI has fared well and the advantage for SBI is that whereas other companies have to look for customers, SBI is already having a customer base.

4. ZERO UPI INTERCHARGE,PSP FEES MAY HURTPhonePe AND GOOGLE PAY: The National Payments Corporation of India (NPCI) said that it is revising the UPI interchange and payment service provider fees to “zero” for all domestic UPI merchant transactions with retrospective effect from January 1, 2020. The move to do away with these transaction fees comes after abolishment of the Merchant Discount rate (MDR). However, the move may hit revenues of digital players like PhonePe, Google Pay and Amazon Pay which have spent heavily to grab a greater market share in the UPI ecosystem.

5. GOVERNEMNT CONSIDERING STRESS FUND FOR DISTRESSED TELECOM SECTOR: The government is considering the possibility of setting up a stress fund for the telecom sector that could lend to companies to help them meet AGR dues as part of a comprehensive relief package. Other measures being discussed include a deferment of licence fee and spectrum usage charge (SUC) payments. The government is considering whether banks could be asked to create this fund. The telecom industry has also underlined the critical need for a further rise in tariffs to strengthen the long-term health of the sector.

6. FARM LOAN WAIVERS ADD Rs 60,700 CROES TO STATE-RUN BANKS’ BAD LOANS: State-run banks (Public Sector Banks) are facing lot of problems with the bad loans scenario. Now farm loan waivers in Uttar Pradesh, Maharashtra, Tamilnadu and Punjab has added an additional Rs 60,762 crores gross bad loans to the books of banks. Banks like SBI, Punjab National Bank, Bank of Baroda ands Bank of India have increased their Non-Performing Agriculture Credit by at least 30% in December 2019 quarter as compared to last year.

7. ENORMOUS GOLD RESERVES FOUND IN UTTAR PRADESH: With virtually no domestic production, India meets its entire gold demand through imports and this pressures India’s current account. But now the Geological Survey of India and Uttar Pradesh Directorate of Geology & Mining have discovered huge gold reserves to the tune of almost 52,800 tonne in SonaPahadi&Hardi Village areas which is twice the country’s present household stocks.

1. BANKS CONTINUE TO BLEED DUE TO FRESH NPAs: Indian Banks, particularly Public Sector Banks (PSBs) which had reported healthy growth figures in recent quarters, continue to be plagued by high slippages especially from corporate loan book. Top banks like SBI, Punjab National Bank, Bank of Baroda & Bank of India have reported a sharp rise in slippages in the December 2019 quarter. This shows that the trouble is still brewing on the asset quality front. SBI has almost doubled its bad loans to Rs.16,525crores, as it had reported slippages of Rs.8,800 crores in September 2019 quarter. Its slippage ratio increased to 2.94% from 0.87% on an annual basis.

2. RBI ISSUES NOTIFICATION ON CRR LEEWAYFOR NEW RETAIL & MSME LOANS: The Reserve Bank of India said that banks need not maintain the Cash Reserve Ratio (CRR) on new loans (Retail and MSME) for a period of 5 years disbursed between January 31, 2020 to July 30, 2020. The RBI also sought to lower the interest rate for MSME loans by asking banks to link the interest rate to an external benchmark rate. It has also asked the banks for extending the forbearance on asset classification on their MSME portfolios till December 2020.

3. COMMON PORTAL FOR HEALTH INSURANCE CLAIM SETTLEMENTS: The Insurance Regulatory & Development Authority of India (IRDAI) is planning a common portal for health insurance claims. IRDAI is seeking to bring all the stakeholders in the health insurance space--- the insurers, the insured and the hospitals under one roof with an aim to standardise the claim settlement procedure and ensure payment in a time-bound manner. IRDAI has already formed a committee for this and the platform will be developed by Insurance Information Bureau (IIB). This will bring a paradigm shift in the claim settlements.

4. PMO SUGGESTS TO REFER ONLY THOSE NPA CASES ABOVE Rs.200 CRORES TO NCLT: Banks, specially the Public Sector Banks have a tendency to routinely push bad loans to National Company Law Tribunal (NCLT) for resolution which has clogged and overburdenedthe NCLT. In order to de-clog the NCLT, the Prime Minister’s Office (PMO) has suggested that banks need to refer cases to the tribunal only in case the loan amount is above Rs.200 crores. For loans lower than Rs.200 crores the PMO wants the banks to work with the promoters to find long-term solution to prevent closure of the unit and also job losses. It may even offer a One Time Settlement (OTS). But banks normally feel safe to refer the cases to NCLT as they fear that resolutions through OTS or sale to an Assert Reconstruction Company (ARC) could invite scrutiny from investigative agencies.

5. MERGER OF 10 PUBLIC SECTOR BANKS MAY BE DELAYED: The Finance Ministry has announced merger of 10 Public Sector Banks (PSBs) in August 2019. But now the government is treading caution even though the deadline of April -1, 2020 is fast approaching. Prime Minister Mr.NarendraModi wants to see the outcome of the amalgamation of Bank of Baroda, Vijaya bank and Dena Bank. He wants to review and to know in detail as to what benefit it has entailed before taking a final call on the merger of further 10 banks. At the backdrop, Bank of Baroda has reported a loss of Rs.1,407crores for December’19 quarter as total provisions jumped by 54% to Rs.6,365 crores. The bank had posted a profit of Rs.436 croresin December’18 quarter.

6. RBI’S NEW ASSET RECOGNITION NORMS FOR REALTY SECTOR IS CREDIT NEGATIVE: Rating agency Moody’s has said that the RBI’s new asset recognition norms for bank loans to real estate sector is credit negative as it would defer the recognition of such loans. As per the new norms, RBI has allowed banks to extend the repayment period by one year if the project is delayed for reasons beyond the control of the developers. Moody’s report said that while this will alleviate near-term asset quality risk to the banks, it will not address the credit issues faced by the real estate sector as a whole.

7. RBI MAY SOON DECIDE TO SYNC ITS ACCOUNTING YEAR WITH GOVERNMENT’S FISCAL YEAR: As of now the RBI’s accounting year runs from July to June every year while the government follows the April-March fiscal year. RBI may soon decide on aligning its accounting year with the fiscal year of the government. The BimalJalan panel set up to review the economic capital framework of RBI, had recommended both accounting years of RBI and the government should be in sync beginning 2020-21. So, the same is being examined and very soon a decision may be taken on the same.

1. CABINET CLEARS AMENDMENT TO BANKING REGULATION ACT TO STRENGTHEN CO-OPERATIVE BANKS: In order to protect the interest of the depositors, the Union Cabinet has approved certain amendments to Banking Regulation Act to strengthen co-operative banks. At present there are 1,540 co-operative banks with a deposit base of Rs.8.60 lakh crores and having a total savings account balance of about Rs.5 lakh crore.The proposed amendment seeks to enforce banking regulation guidelines of the RBI in co-operative banks, while the administrative issues will be guided by Registrar of Co-operative. Some of the changes will be like appointment of CEO with the permission of RBI, auditsas per the RBI guidelines and RBI can also supersede the board if any co-operative bank is under stress.

2. ORIENTAL BANK OF COMMERCE REQUESTS GOVERNMENT TO GIVE A NEW NAME FOR THE MERGED ENTITY: Oriental Bank of Commerce which will be merged with Punjab National Bank and United Bank of India. The bank’s CEO and Managing Director Mr.Mukesh Kumar Jain has said that “this is an amalgamation of equals” and hence requested Finance Ministry that a new name to be given to the merged entity, which can be a different name altogether or it should reflect all the three old identity of all the three banks so that a sense of equal participation appears in the name. The idea of giving a new name to the merged entity will also boost the morale of all the staff.

3. BANKS MAY TAKE UP TO 2% HIT ON THEIR PROFITSDUE TO HIKE IN INSURANCE COVER ON BANK DEPOSITS: The Finance Ministry, in its latest budget has announced a hike in deposit insurance coverage from Rs.1 lakh to Rs.5 lakhs. A Credit Suisse report estimates an increase in the insurance premium of $ 4 billion (approximately Rs.28,400crores) for the banking system as a whole due to the hike in the deposit insurance coverage. Due to this, banks are likely to take a hit of 0.5 to 2% on their bottom line (profits) from the next financial year. The impact will be more on public sector banks as private banks would find a way to offset their operating costs.

4. EMPLOYER’S CONTRIBUTION TO EPF, NPS OVER Rs.7.5 LAKHS TO BE TAXED: The employer’s contribution over Rs.7.5 lakhs in a financial year to retirement funds such as Employees Provident Fund (EPF), National Pension System(NPS) or any other superannuation fund is proposed to be made taxable in the hands of the employee. This will impact higher basic salary earners negatively. This is another move to tax high income earners. This is bad news for such employees as currently such contributions are tax-exempt in the hands of an employee.

5. NOW FORM 26-AS TO SHOW MORE DETAILS OTHER THAN JUST TDS: The present Union Budget has proposed rationalisation of provisions relating to Form 26-AS as tax payers will now gat a detailed information statement beyond the Tax Deducted at Source (TDS) such as sale/purchase of immovable property, share transactions etc. This will help in filing of Income Tax Returns (ITR) easier. A new Section 285BB has been included which requires to upload a comprehensive annual information statement in respect of the tax payers and such information will include sale/purchase of immovable property, share transactions etc.

6. RBI TO INTRODUCE PAN-INDIA CTS BY SEPTEMBER 2020: Reserve Bank of India is now planning to implement a Pan-India Cheque Truncation System (CTS) from September 2020 due to which the cheque clearing system across India is going to be faster. CTS which is currently operational in major clearing houses of the country, has stabilised and has made large efficiency gains. In view of this, a Pan-India CTS will be introduced and will be made operative by September 2020. Those who are using cheques can expect clearing to become faster and safer across the country.

7. INVESTORS MAY LOOK FOR DIVIDEND YEILDING MUTUAL FUNDS TO ESACPE TAX ON DIVIDEND:Well placed investors usually prefer putting their money in stocks directly rather than investing in mass products like mutual funds. But, after the proposal in the recent budget to tax dividends at the hands of the investors, they may consider investing in dividend yielding mutual funds. This is because the dividends that mutual funds receive on their equity portfolio from investee companies are not taxed. For a High Net Worth investor investing directly in stocks, the dividend thus earned will be taxed as per his tax slab with the highest rate being 42%. There is a tax arbitrage in favour of mutual funds.

8. GOVERNMENT’S DECISION TO DILUTE ITS STAKE IN IDBI BANK IS A CLUE FOR FUTURE OF PUBLIC SECTOR BANKS: Dilution of holdings in banks has been a long-cherished desire of successive governments, despite it being a controversial one. But selling down the remaining 47% stake in IDBI Bank may be just a trickle for now. Given the government’s over 90% stake in most of the banks, it may not be a immediate move for bringing down the stake in all the banks but disinvestment may become the order of the day in the near future.

1. NOW EMPLOYER HAS TO DEDUCT 20%TDS FROM THE SALARY IF PAN AND AADHAAR DETAILS ARE NOT SUBMITTED BY THE EMPLOYEE: The latest rule of Central Board of Direct Taxes (CBDT) which came into effect from January 16Th2020, the employer has to start deducting Tax Deduction at Source (TDS) at the rate of 20% of the salary if the employee does not submit details of the PAN and Aadhaar. This will be applicable for all those who are earning a salary above Rs. 2,50,000/-per annum. Presently 37% of the total direct taxes collected comes from TDS. This as per the Section 206-AA of the Income Tax Act.

2. GOVERNMENT BLOCKS Rs. 40,000 CRORES GST CLAIMS ON RETURN MISMATCH: The Central Board of Indirect Taxes & Customs (CBIC) has frozen tax credits of around Rs. 40,000 croresas the returns did not match, exposing alleged fraud by around 2000 entities. This is apart from the cases where returns were not filed. Companies are entitled to refunds on tax paid by them on inputs in the production chain so that there is no cascading effect of taxes. Major discrepancies in returns and instances of a large number of frauds has prompted the government to take this step.

3. GOVERNEMNT FACES FIRST FALL IN DIRECT TAXES IN TWO DECADES: Amid a sharp fall in economic growth and cut in corporate taxes, the income tax collection for the current year is likely to fall for the first time in last two decades. The government was targeting a direct tax collection of Rs 13.5 trillion for the year ending March 2020, a 17% increase over last year’s collections. However, sharp decline in demand and low economic growth has forced the businesses to cut investment and jobs which has dented the tax collections, thereby prompting the government to lower its target to 5% growth over last year. But it is gauged that despite the best efforts by the tax officials, the tax collection for the current financial year may fall below Rs. 11.5 trillion collected during the financial year 2018-19.

4. BANK DEPOSIT INSURNCE COVER NOW WILL BE Rs. 5LAKHS: The government has proposed the insurance cover on bank deposits to Rs. 5lakhs in the current budget. The move comes after the government and the Reserve Bank of India faced flak over their handling of the closure of Punjab & Maharashtra Co-operative Bank (PMC) leaving thousand of depositors high and dry. Currently, the DICGC Act 1961, provides deposit insurance of Rs 1 lakh and this was last fixed more than 25 years ago.

5. PUBLIC SECTOR BANK EMPLOYEES MAY GET ESOPS IN FUTURE: Public Sector Bank (PSB) employees are paid a fixed-salaries, which does not encourage risk-taking and innovation. Although the PSBs control 70% of India’s banking market, they lack considerably in performance metrics when compared to private banks. Now it is proposed to give Employee Stock Options (ESOPs) to performing employees. Capable employees across all levels in the organisation could be rewarded with ESOPs which will pave the way for working more efficiently for the performing employees and will create a mindset of enterprise ownership for employees.

6. ECONOMIC SURVEY 2020—PSBs NEED A “TECHTONIC” SHIFT: Public Sector Banks (PSBs) that are presently troubled by soaring bad loans and poor performance can look forward to improvise on this with the help of Fintech by using tools like GPS to conduct better due diligence on borrowers to play a meaningful role. This is as per an Economic Survey 2020. With data and analytics taking centre stage in all the industries, PSBs can pool all their data into one entity like in the case of GST Network to improve their analytical capabilities that could provide them an edge over their private peers. Data Science, machine learning and artificial intelligence could help the banks to make a difference to the economy.

7. GOVERNMENT MAY INFUSE FRESH CAPITAL INTO REGIONAL RURAL BANKS: The government is looking to infuse fresh capital into Regional Rural Banks (RRBs) to help them to meet the minimum capital requirement of 9% . The size of the capital infusion may be in the range of Rs. 10,000 to 15,000 crores, which could be spread over a period of five years. Capital infusion to RRBs assumes importance as the government is finding ways to boost credit flow to farm sector. It may also put National Bank for Agriculture & Rural Development (NABARD) at the centre of its effort to address rural and farm distress.

8. STRICTER REPORTING NORMS COMING SOON FOR AUDITORS: The Ministry of Corporate Affairs (MCA) is planning to take major steps to revamp the auditor’s report that accompanies the company balance sheets. The onus will be on statutory auditors to fulfil their professional responsibilities. Besides modifying the Companies Auditors Report Order (CARO), the government is also likely to make changes to the secretarial audit reporting that is mandated under the company law. The entire effort is to provide early-warning signals to policy makers and regulators of the forthcoming disasters in companies.

1. URBAN CO-OPERATIVE BANKS TO REPORT EXPOSURES ABOVE Rs. 5 CRORES TO RBI: Urban Co-operative Banks (UCBs) will now have to report their individual loan exposures exceeding Rs 5 crore, to RBI every quarter. The Central Bank has issued detailed guidelines for reporting such exposure by UCBs to CRILC (Central repository on Information of Large Credits) every quarter. Banks need to submit the said data on large credits within 30 days from the end of each quarter through XBRL reporting platform of RBI (portal for digital business reporting managed by global consortium-XBRL). RBI has also warned about the data accuracy and integrity while submitting the data, failing which they will face panel action.

2. SUSPECTED BIG BANK FRAUD CASES TO BE VETTED BY A PANEL BEFORE PROBE: All suspected big bank fraud cases have to be vetted by a panel before handing it over to agencies such as CBI, to initiate action. The framework has been designed to allow bankers to take decisions without fear and enhance credit flows. The Advisory Board on Banks & Financial Frauds has been set up by the Central Vigilance Commission (CVC) to examine complaints against bankers in consultation with RBI and NitiAayog. The five-member board will act as the first level of examination for all alleged fraud cases involving Rs 50 Crore or more.

3. GOVERNMENT ASKS BANKS TO OPEN 15,000 MORE BARANCHES IN FINANCIAL YEAR 2020-21: The Finance Ministry has asked banks (both public and private sector banks) to open around 15,000 branches in the coming year to reach the un-banked areas. The government has handed over a list of locations where there are no bank branches. The mandate is to open a branch within 15 km radius of a village where there are no banking facilities available. The government wants to meet its financial inclusion agenda so that it can push cheap credit to the unbanked rural areas. As of March 2019, India had more than 1,20,000 branches and a little over 2 lakh ATMs. Of these, only 35,649 branches were in rural areas.

4. DEBIT/CREDIT CARDS TO BE DISABLED FOR ONLINE TRANSACTIONS IF NOT USED FOR LONG:The Reserve Bank of India has introduced new rules to enhance the security features of debit and credit cards. While issuing and re-issuing the debit and credit cards, banks must ensure that all the debit and credit cards are enabled only for domestic transactions at ATMs and Point-of-Sale (PoS) terminals. If any individual has not used his/her card for online/international/contactless transactions before, such cards will be disabled for these services and if the customer so wishes to use his/her card for online, international and contactless transactions, he/she has to separately apply for these services.

5. RBI SEEKS GOVERNMENT RELIEF FOR TELECOM DUES TO AVOID BAD LOANS: Alarmed by the risk of telecom dues arising out of Adjusted Gross Revenue (AGR) created for large telecom bank exposure, the Reserve Bank of India has requested the government to provide some relief to the telecom players on clearance of dues. RBI has voiced its concerns to the Finance Ministry to consider a moratorium on the AGR. For the banking sector, loans outstanding to the telecom sector stood at Rs. 1.1 lakh crore, or 1.3% of total loans. The total dues from the 15 telecom companies to the government is pegged at Rs 1.47 lakh crores towards Adjusted Gross Revenue (AGR), additional licence fees, spectrum usage charges, penalties and interest.

6. RBI SHOULD ACT AS “LENDER OF LAST RESORT” AND PROVIDE LIQUIDITY TO NBFCs: Expert economists at State Bank of India have opined that Reserve Bank of India should play its role as the “Lender of the Last Resort” and provide liquidity to Non-Banking Finance Companies (NBFCs) against the assets held by the lenders. The NBFC sector has been badly impacted since August 2018 after the collapse of IL&FS and many analysts have blamed the current slowdown in lending by the liquidity starved NBFCs as the reason for the fall in consumption, which is one of the factors resulting in dip in GDP growth.

7. PRIVATE BANKS LAG PUBLIC SECTOR BANKS AND FOREIGN BANKS IN PASSING ON RATE CUT BENEFITS TO ITS BORROWERS: Private banks were the slowest in passing on the falling interest rate cut benefits to their customers. The one-year Marginal Cost of Lending Rates (MCLR) for private banks fell by a meagre 12 basis points to 9.18%, as compared to 45 basis points to 8.3% for Public Sector Banks and 75 basis points to 7.9% for Foreign Banks. The figures were compared between January and December 2019. The reason private banks are less eager to pass on the said benefits to its customeris because of their high cost of funds.

1. SBI LAUNCHES NEW PRODUCT FOR HOME LOAN CUSTOMERS: The State Bank of India has launched a new scheme for its home loan customers. The bank guarantees refund of the principal amount if a builder fails to complete the project within the stipulated time. The scheme is available for apartment projects wherein SBI is the sole lender. The scheme will serve the purpose of boosting the stressed real estate sector and will also give confidence to the buyers as well.

2. MERGER OF COPROPRATION BANK AND ANDHRA BANK WITH UNION BANK OF INDIA—ACCOUNT NUMBERS TO REMAIN SAME AFTER MERGER: Union Bank of India is all set for the merger with Corporation Bank and Andhra Bank wherein its business will double after the merger. April 1, 2020 is the tentative date for the merger. Union Bank of India MD & CEO Mr. Rajkiran Rai spoke on the issue and expressed that they have learnt from Bank of Baroda’s amalgamation which has helped them save several months in implementing the merger process. He said the individual account number will not change when bank branches are merged but the IFSC codes of the merged branch ceases to exist and the new IFSC Code will be informed to the customers.

3. YOU CAN SOON DEPOSIT CASH AT ANY ATM: The National Payments Corporation of India (NPCI) is pushing top banks to make cash deposits an interoperable feature at their ATMs and branches. NPCI believes that an interoperable cash-deposit system enabled through its National Financial Switch (NFS), could help reduce the cost of currency handling for the entire banking system. This will also help ATM operators reduce costs to replenish cash at ATMs as the currency deposited through the machines can be recycled for withdrawal as well. All the major private and public sector banks have been asked to join the interoperable network. However, for banks the major hurdle will be tackling counterfeit currency deposits through this mode.

4. 15,000 STAFF QUIT IN AXIS BANK IN A FEW MONTHS: Axis Bank is witnessing a wave of resignations with at least 15,000 employees leaving the organisation in the last few months as mid and branch level executives are struggling to cope with the management’s new growth drive which is pushing the limits of its employees. Some exits were at the senior level while most of the resignations were at the branches which could hamper its business growth. But Axis bank has clarified that though many have resigned, it has already hired 28,000 people in this fiscal and it would hire another 4,000 in the last quarter of this fiscal.

5. RBI PERMITS KYC PROCESS THROUGH MOBILE VIDEO: The Reserve Bank of India has amended its norms to allow the Know Your Customer (KYC) process to be completed through a mobile video conversation. RBI has also facilitated e-KYC and digital KYC by allowing use of Aadhaar or other e-documents in the customer due diligence process. This makes India one of the rare markets to allow video KYC through an amendment to RBI rules. The amendment is a huge positive step towards achieving the goal of Digital Financial Inclusion.

6. RBI ISSUES ITS FIRST LICENCE TO AN URBAN CO-OP BANK TO CONVERT INTO SMALL FINANCE BANK: The Reserve Bank of India, for the first time has granted an “in-principle” approval to UP based multi-stateUrban Co-operative Bank (UCB)—Shivalik Mercantile Co-Op Bank Ltd to convert into a Small Finance Bank (SFB). Shivalik Mercantile Co-op Bank Ltd which has business operations in UP, Uttarakhand and MP, has a total business size of Rs 1,766 crores and a net worth of Rs 77 crore. The “In-Principle” approval granted will be valid for 18 months to enable the applicant to comply with the requirements as per the scheme. The SFB to start its operations has to have a minimum net worth of Rs 100 crores and minimum promoters’ contribution of 26% of the paid-up capital.

7. UPI TRANSACTION VALUE CROSSES Rs 2 LAKH CRORE MARK: The value of the transactions made using the Unified Payment Interface (UPI) channel has crossed Rs 2 lakh crores in December 2019. The UPI recorded 1.3 million transactions in December 2019 with Rs 2.02 lakh Crores, up from 1.89 lakh crores in the previous month.

8. SIMPLE ITR-1 FORM FOR FILING INCOME TAX RETURNS, NOT FOR INDIVIDUALS PAYING Rs 1 LAKH IN ELECTRICITY BILL AND OWNING A HOUSE JOINTLY: In a significant changes in income tax return filing forms, any individual tax payer owning a house property in joint ownership and those who have paid a total of Rs 1 lakh in electricity bill in a year or incurred Rs 2 lakh expense on a foreign travel cannot file his/her annual income tax return using simple ITR-1 form.

1. SBI, NPCI SEEK PARITY FOR RuPay CARDS: State Bank of India (SBI) and National Payments Corporation of India (NPCI) have sought parity for the RuPay debit cards with the likes of Visa and Mastercard on waiver of processing charges, claiming that otherwise it would put the banks in a disadvantageous position. SBI and other state-run banks are the main issuers of RuPay cards and their worry is that the government’s decision to scrap the processing fees of RuPay cards would cause them revenue loss. According to NPCI, this would discourage the banks to issue RuPay cards and they would instead prefer issuing international cards.

2. PSU BANKS MAY ADOPT NEW LENDING PRACTICE: PSU banks may soon migrate to cash-flow based lending for working capital loans from the existing asset-based funding model. For decades now since the 1970s, Public Sector Banks (PSBs) have given most of the working capital loans on the basis of net current assets of the corporate borrowers and in most of the cases it has resulted in over-funding to some and under-funding to others. The outdated model may soon change as most of the PSBs are proposing a transition from asset-based lending to cash-flow-based lending which may reduce misuse of funds by borrowers and enable banks to figure out ability of the borrowers to service loans on time. The shift will require borrowing entities to share cash flow statements more frequently with banks. SBI has already announced that it would soon start using the model from April 2020.

3. BAD LOAN PROVISIONING MAY TOUCH Rs.30,000 CRORE IN Q-3 OF THIS FINANCIAL YEAR: Indian Banks could be staring at bad loans provisions of an estimated Rs.30,000 croresin the third quarter of the present financial year. This is due to DHFL, Reliance Home Finance and Coffee Day Enterprises loans where resolution has not been finalised. This means the banks may have to fall in line with more provisions in December’19 quarter of this financial year. The bulk of the provisions would be on account of DHFL, which entered the bankruptcy process in December.

4. BANK OF BARODA TIES UP WITH JM FINANCIAL FOR CO-LENDING: Bank of Baroda (BOB) has entered into a strategic co-lending agreement with JM Financial Home Loans Ltd (JMFHL) for offering retail loans to home buyers. The association is expected to create a lending model synergising the expertise of both BOB and JMFHL in providing home loan products. The partnership is expected to accelerate credit delivery to home buyers. Such co-lending alliances will enable Non-Banking Finance Companies to penetrate deeper into home loan market.

5. RBI LAUNCHES “MANI” APP FOR VISUALLY CHALLENGED TO IDENTIFY CURRENCY NOTES: Reserve Bank of India (RBI) has launched a mobile app “MANI” to identify currency notes. The visually challenged persons can identify the denomination of a currency note by using the application, which can also work offline once it is installed. MANI app is an acronym for Mobile Aided Note Identifier, and one has to scan the notes using the camera and the audio output which is in Hindi or English will announce the result. The App is available both on Android and IOS operating systems. However, the App does not authenticate a note as either genuine or counterfeit.

6. IRDAI CONSIDERING CAPITAL INFUSION OPTIONS FOR INSURANCE COMPANIES: The Insurance Regulatory & Development Authority of India (IRDAI) is considering new capital-raising options for insurers if RBI follows on its proposal for banks to cap their stakes in insurance companies to 30%. The proposal made by RBI is aimed at fencing banks from systematic risks arising from non-core businesses. This would also allow banks to focus on increasing credit flow amid slowing economic growth.

7. CBDT TO FINE BUSINESSES WITH Rs.5,000/- PER DAY FOR NOT USING DIGITAL PAYMENT FACILITIES: Central Board of Direct Taxes (CBDT) will fine business houses with Rs.5,000/- per day if they fail to accept payments through digital payment facilities. This is applicable to companies with an annual turnover of over Rs.50 crores. The move is to encourage digital transactions and boost cash-less economy. To make this mandatory, a new section (Section 269SU) has been inserted in the Income Tax Act, 1961.

8. RBI ASKS CO-OPERATIVE BANKS TO CONSTITUTE BOARD OF MANAGEMENT: The Reserve Bank of India has released the final guidelines on the constitution of the Board of Management (BoM) for Urban Co-operative Banks (UCBs). The guidelines provide that Board of Directors of UCBs with more than Rs.100 crore deposits will constitutean BoM and the BoM will have exclusive powers for exercising control over the banking related functions of UCBs. This is the result of the impact of PMC Bank scam which has shaken public confidence in Co-operative banks.

1. SBI TAGS AROUND 24 COMPANIES AS WILFUL DEFAULTERS IN 2019: State Bank of India (SBI), being the largest bank in the country is a lead banker in most of the lending to the corporate sector. SBI has tagged over two dozen corporate borrowers as “Wilful Defaulters” in 2019. Wilful Default cases are the cases where the bank suspects borrowers have not paid up despite having capacity to pay, have diverted bank funds for purposes other than stated initially, have siphoned off funds, or have disposed of the charged assets bought from Bank funds. The bank has already filed suits in the court for recovery of money. SBI has so far reported 163 cases of wilful defaulters and the amount involved was Rs 13,718 crores. This amount is not the total outstanding debt amount from defaulters but the amount identified as diverted or siphoned off.

2. NON-FILING OF GST RETURNSMAY LEAD TO ATTACHMENT OF BANK ACCOUNTS AND ASSETS: Non-filing GST may lead to attachment of bank accounts and assets besides cancellation of registration. This is a part of the Standard Operating Procedure (SOP) issued by Finance Ministry to be followed in case of non-filing of GST returns. Finance Ministry has instructed field officers to provisionally attach assets of the registered GST assesses, including bank accounts, in cases where they think it is needed to protect the revenue interests of Central and State authorities. Such attachments will be resorted to in cases where businesses do not file returns even after a notice is issued to them asking them to file the returns within 15 days.

3. PMC BANK DID NOT CLASSIFY WADHWAN ACCOUNT PROPERLY: The Economic Offence Wing (EOW) has charged the PMC Bank’s management with failing to report the account of Rakesh Wadhwan with an outstanding amount of Rs 1,671 Crores and filing false statements with RBI. The EOW has filed a 32,000-page chargesheet in connection with the multi-crore scam at PMC Bank. The charge sheet says Rakesh and Sarang Wadhwan hatched a criminal conspiracy to cause wrongful gains for their company (HDIL) by taking loans from PMC bank against mortgage facilities without providing security.

4. SLOWDOWN IN ECONOMY MAY WORSEN BAD LOANS SCENARIO:India’s slowing economy could cause gross bad loans in the banking sector to rise again after the first signs of reduction after eight long years. Reserve Bank of India’s Financial Stability Report (FSR) said that the slowdown could cause the Gross Non-Performing Asset(GNPA) ratio of local lenders to increase to 9.9% in September 2020 as compared to 9.3% in September 2019. Because of the slow down, the stress on public sector banks showed that GNPA may rise to 13.5% by September 2020 from 12.7% in September 2019. Private banks could see increase in GNPA to 5.4% from 3.9 % and Foreign Banks to 4.2% from 2.9% in the same period.

5. BANKS FRAUDS RISE TO RECORD Rs 1.13 LAKH CRORE IN THE FIRST HALF OF THIS FINANCIAL YEAR: Frauds reported by banks during the first half of the current financial year touched an all-time high amount of Rs 1.13 lakh crores, owing to delay in detection by bankers. According to RBI report, 4,412 cases of Rs 1 lakh and above were reported during this period. In financial year 2019, banks had reported 6,801 cases of frauds worth Rs 71,543 crores. RBI financial Stability Report (FSR) said that the frauds reported during the year shows a significant time-lag between the date of occurrence of a fraud and its detection.

6. RBI RED FLAGS BANKS’ RELIANCE ON RETAIL LOANS: Reserve Bank of India has red flagged banks’ reliance on retail loans over slowing economy and negative consumer sentiments. Lenders have shifted their focus away from large industrial loans and are concentrating on increasing their retail loan portfolios. RBI feels this diversification strategy, while helpful as a risk mitigation tool, has its own limitations because the slowdown in consumption and overall economic growth may affect the demand for retail loans and will have a diminishing effect on the quality as well. RBI also said that the need of the hour is to kick-start industrial credit and use that to regenerate a successful cycle of capex, investment and growth.

7. RBI MAY SOON ASK BANKS TO CAP STAKE IN INSURANCE FIRMS TO 30%: RBI has expressed concerns about the volatility in financial and insurance sectors. In a bid to shield banks from the risks arising out of their non-banking businesses and boost liquidity in the slowing economy, RBI has directed banks to cap their stakes in insurance companies at 30%. The stake will be capped at 50% for Non-Banking Financial Companies (NBFCs). However, RBI is yet to issue official communication in this regard. The proposed move will have severe impact on banks like SBI, ICICI Bank and Kotak Mahindra Bank as they derive huge chunk of income from their insurance units. The move will also impact insurance companies as majority of them have banks as promoters.

1. UNDER PARTIAL CREDIT GUARANTEE SCHEME GOVT IS PLANNING TO APPROVE PROPOSALS WORTH Rs.20,000 CRORE FOR NBFCs: Over the next two weeks the government is planning to approve proposals worth Rs.20,000 crores under the partial Credit Guarantee scheme for Non-Banking Finance Companies (NBFCs) and Home Finance Companies (HFCs). This will be done with an aim to boost consumption in the economy which presently is seeing a six-year low growth. And this will also support the NBFCs and HFCs. Along with this proposal, the government is also pushing for credit expansion of public sector banks, clearing dues of public sector units, reforms in capital market and speedier refund of taxes. These measures are intended to bring more cash flow and foster consumption which will boost the economy.

2. MANDATORY TO LINK PAN WITH AADHAAR BY DECEMBER 31, 2019: It is mandatory to link your PAN with Aadhaar by December 31, 2019. The Income Tax Department has said that this is being pushed so as to reap seamless benefits of income tax services. If the PAN is not linked with Aadhaar, then the PAN will be invalid after December 31. 2019.

3. SBI TO SHIFT TO CASH-FLOW BASED LENDING BY APRIL 2020: State Bank of India (SBI) will shift to a cash-flow based lending from April 2020 onwards. The bank has the framework ready and some technical developments are underway as the same needs certain changes. The new framework for loan sanctions will apply to large borrowers and as well as to small enterprises. Banks in India have traditionally lent to companies against the assets. Cash-flow based lending is considered to be a more efficient and safe way of mitigating risk as it reduces discretion on the part of the lender.

4. GST COMPENSATION TO 9 STATES AMOUNTS TO Rs.70,000 CRORE IN 2020 FISCAL: The Goods & Service Tax compensation requirement of 9 major states could be as much as Rs.70,000 crore in fiscal 2020. This is as per a estimation report submitted by rating agency ICRA. This could put significant pressure on central government’s accounts which are already under stress from the cut in corporate taxes and other stimulus measures. Considering lower-than-expected GST collections, ICRA estimates this revenue to fall short by Rs.3.5 lakh crore of the target. Apart from this the timing of the release of GST grants to state governments pose a key risk to the cash flows of these states.

5. BANK OF BARODA UNDEREPORTED BAD LOANS BY Rs.5,250 CRORE IN FINANCIAL YEAR 2018-19: Bank of Baroda has under-reported bad loans by Rs.5,250 crores for the financial year 2018-19 (as on 31.03.2019). This is as per RBI’s risk assessment report. There was also divergence in provisioning for bad loans in FY18-19 to the tune of Rs.4,090crores of which the bank has alreadymade provisions of Rs.1,475 crores during the current financial year. Due to this the bank’s net loss for the year ending 31 March, 2019 widened to Rs.10,998 crores from Rs.8,339 crores.

6. BANKS LIKELY TO GET $7.6 BILLION BOOST FROM IBC RECOVERY: India’s banks are set for a $ 7.6 billion (Approximately Rs.54,000crores) gain this month as the country’s bankruptcy court has made sudden progress in clearing the backlog of large advances. Banks are expected to benefit from the recovery of 4 failed companies—Essar Steel India Ltd, Prayagraj Power Generation Co, Ruchi Soya Industries and Rattan India Power Ltd. This is a welcome news for banks which are at present facing further increase in their pile of bad loans. SBI, IDBI Bank, Bank of India, Canara Bank and Bank of Baroda will be the largest beneficiaries among all the banks.

7. DEBT MUTUAL FUND EXPOSURE TO NBFCs FALLS BY 24.43% IN NOVEMBER: As per SEBI data, Debt Mutual Funds continued to cut back on debt instruments issued by Non-Banking Finance Companies (NBFCs). Debt mutual fund exposure towards NBFC sector fell by 24.43% on a year-on-year (y-o-y) basis in November 2019 to Rs.1.83 lakh crores. Debt mutual fund exposure to short-term debt instruments of NBFCs like commercial papers (CPs) stood at Rs.86,701crores, lower by 32.05% on a y-o-y basis.

8. ADVANCE CORPORATE TAX COLLECTION DROPS BY 5.2% IN DECEMBER QUARTER: Advance tax paid by corporates fell by 5.2%in October-December quarter of this fiscal to Rs.73,000crores. Corporates had paid Rs.77,000crores in the same period last year. The drop in advance corporate tax collection is attributed to the economic slowdown and also because of reduction in tax rates. Where-as the advance personal income tax collection rose to Rs.33,000crore from Rs.24,000 crore in the same period last year.

1. INDIA’S FOREX RESERVESCROSS $ 450 BILLION: India’s foreign exchange reserves crossed $450 billion for the first time ever. This is due to the strong inflows which enabled RBI to buy dollars from the market which also helped in checking any sharp appreciation of rupee. As on December 3, 2019 the country’s foreign exchange reserves touched $ 451.7 billion. The country’s import cover now is of 11 months.

2. INDIA POST PAYMENT BANK COMES OUT WITH MANY FEATURES TO MATCH OTHER BANK SERVICES: India Post Payments Bank (IPPB) has come out with several services to match the customer services of all other banks. For savings account they have three variants—regular, digital and basic savings account. They have services for doorstep banking. One can open zero balance accounts as well. And there is no monthly average balance requirement and no limit on cash withdrawal. Anyone above 10 years with proper KYC can open an account with India Post Payments Bank.

3. FDI LIMIT IN INSURANCE COMPANIES MAY BE INCREASED TO 74%: The government may raise the overseas investment (Foreign Direct Investment-FDI) limit to 74% in the February 2020 budget, up from 49%. The Insurance Regulatory & Development Authority of India (IRDAI) has sought views from various stake holders on the matter. This has been planned with a view that the sector wants long-term stable money to be invested in the country. IRDAI is seeking inputs from industry level people on the government instructions and a report is expected to be submitted soon.

4. BANK AUDITORS HAVE TO BE MORE VIGILANT IN FUTURE: Auditing banks is not going to be easy anymore and will become one of the trickiest and most demanding jobs. According to Reserve Bank of India advisory to all banks, banks will have to carry out a more intensive examination of large-advance accounts, the nature of security provided by the borrowers as well as financial statementsof the borrowers. RBI believes that this will lend greater insight into determination of Non-Performing Assets (NPAs)and other areas of concern like frauds. Under the new framework, the bank auditors should display a greater degree of scepticism and independence in scrutinising banks’ exposure to large advances.

5. NBFC GROWTH TO HIT THE LOWEST IN A DECADE:Growth in Assets Under Management (AUM) of Non-Banking Finance Companies (NBFCs) is likely to fall to the lowest in a decade to around 6% to 8%, year-on-year in FY 2020 as a result of high funding costs, recalibration of loan books and slowing economy. Crisil rating agency further states in its report that the growth rate in FY 2019 was 15%. The crisis of confidence in NBFCs which was initially focussed on mismatch in asset-liability (ALM) profiles, has now shifted to concerns over asset quality.

6. LENDERS MEET RBI, MULL 4-MONTH PROGRAMME TO RESOLVE DHFL CASE: Banks have proposed a 4-month programme to resolve the Dewan Housing Finance Ltd ( DHFL) case, the biggest bankruptcy case in financial services after the introduction of Insolvency & Bankruptcy Code (IBC). Lenders have discussed a “timeline” with RBI in this regard. Lenders are looking to rework previous equity investments plans from outsiders with little involvement from the promoters. But they are fighting to retain and incentivise the existing staff who know the borrowers better so that the recovery is faster.

7. DHFL PROMOTERS GAVE PERSONAL GUARANTEES UPTO Rs 80,000 CRORE LOANS: DHFL became the first financial services company to be admitted to the bankruptcy courts after rules were changed last month. The promoters of Dewan Housing Finance Ltd have given personal guarantees to more than Rs 80,000 crore of loans on the firm’s books as on March 2019. Personal guarantees are normally given by the promoters but they assume a new significance in light of the changes to the Insolvency and Bankruptcy Code (IBC) last month. The Ministry of Corporate affairs has extended the scope of IBC to personal guarantees to corporate debtors and this became effective from December 1, 2019. This means personal guarantees can also seek resolution under insolvency process and this will facilitate faster resolution and disposal of cases.

1. INDIAN BANKS NEED $7 BILLION ADDITIONAL CAPITAL TO SUPPORT GROWTH: Fitch ratings has reported that Indian Banks require additional USD 7 billion (Rs 50,000 Crores) equity by 2020-21 to support loan growth and cover bad loans. The report further says that a slowing economy could worsen the asset quality of these banks already grappling with weak recovery and aging provisions. The rating agency has maintained a “negative” outlook on Indian Banks based on its expectations of continued weak performance by the banks.

2. NEFT TRANSACTIONS TO BE MADE AROUND THE CLOCK ON ALL DAYSTHROUGHOUT THE YEAR: RBI has announced that Bank customers will be able to transfer their funds through NEFT (National Electronic Fund Transfer) around the clock on all days including weekends and holidays from December 16, 2019. These transactions after usual banking hours are set to be automated using “Straight Through Processing” modes by banks. But the existing procedure of crediting to the beneficiary’s account or returning the transaction within 2 hours of settlement to the originating bank will continue.

3. PANEL TO ASSESS VALUE OF ASSETS MORTGAGED BY PMC BANK BORROWERS: A co-ordination committee comprising of officials from RBI, the Enforcement Directorate( ED) and Economic Offence Wing (EOW) of the Mumbai Police is working with professional valuers to assess the realistic value of assets mortgaged by corporate borrowers from the failed Punjab & Maharashtra Co-op Bank Ltd ( PMC Bank) with a view to monetising these assets. The bank is currently undergoing a forensic audit which is expected to be finalised by this month end.

4. RBI INVESTIGATING “NET BANKING” BREAKDOWN AT HDFC BANK: A team of experts constituted by RBI is in the process of investigating the reasons for the breakdown of HDFC Bank’s digital banking channels which caused inconvenience to millions of HDFC Bank’s customers who were locked out of their net banking and mobile banking accounts for over 48 hours earlier this week. HDFC Bank has reported that the problem occurred due to some technical glitches and the resolution process took more time. HDFC Bank is the largest private Bank with a customer base of around 50 million, of which over 90% transact through the internet.

5. DATA SHOWS 16% OF REALTY DEBT EXPOSUREIN SEVERE STRESS: Indian real estate’s debt exposure stands at USD 93 billion including advances by Non-Banking Finance Companies (NBFCs) and Housing Finance Companies (HFCs). Of this, around USD 58 billion (62%) is completely stress-free. Additional 22%, ie USD 21 billion is under some stress but has potential to get resolved with due and timely steps. The stress in this segment is largely on recovery of interest and not on principal amount. However, 16% (USD 14 Billion) is under severe stress as they have either limited or extremely poor visibility of debt servicing due to a combination of factors. This is as per a report by Anarock Property Consultants.

6. RBI POLICY REVIEW---- WEAK CREDIT FLOW BIGGEST PROBLEM: Loan growth has been slowing down sharply and remains the biggest problem of RBI. Between March 2019 to November 2019, loans to companies and individuals have increased by just 0.43% to Rs 97.67 lakh crores. That is despite the fact that liquidity is ample and the surplus has averaged to Rs 2 lakh crores over the past many months. Considering these facts, RBI, in its latest credit policy has decided to maintain its accommodative stance and keep repo rates unchanged.

7. MAHARASHTRA GOVERNMENT WANTS PMC BANK TO BE MERGED WITH MSC BANK: The Maharashtra government has suggested merging of Punjab & Maharashtra Co-op Bank Ltd (PMC Bank) with Maharashtra State Cooperative Bank (MSC Bank). State Minister Mr Jayant Patil said that the state’s apex cooperative banking entity, the MSC Bank’s financial health is sound and the merger could definitely help the beleaguered PMC Bank’s aggrieved depositors. He further added that if required, the government will make a recommendation on this possible merger with RBI and if approved, it could take around a couple of months to complete the entire process.

8. INCOME TAX DEPARTMENT REPORTS 23% GROWTH IN TAX REFUNDS: The Income-Tax Department has processed refunds worth Rs 1.46 lakh crores till November 28, 2019, a growth of nearly 23% compared with the same period last year. The number of refunds also has increased to 2.1 crore refunds as compared with 1.75 crore refunds during the same period. The department also expedited more refunds this year as 68% of refunds have been issued within 30 daysof e-verification of I-T Returns.

1. PMC BANK PROBE FINDS ANOTHER GHOST ACCOUNT OPERATOR: Investigations into the Punjab & Maharashtra Cooperative Bank fraud have detected another borrower--- Abchal Group, concealed its identity through password-protected accounts, same as the manner which Housing Development & Infrastructure Ltd (HDIL). These “ghost accounts” are suspected to have been operated by entities with the knowledge of arrested bank officials. Abchal Group loans with Rs 300 crores have gone bad and not much information seems to be publicly available on Abchal Group or its promoters. According to details available with Registrar of Companies (RoC), Abchal Property Investment Pvt Ltd was incorporated in 1992 and the Company is currently stuck off by the RoC.

2. CORPORATE FRAUDS SEE A MASSIVER SURGE: The number of frauds at State Bank of India (SBI) has nearly trebled in the first seven months of the current fiscal in comparison with the whole of FY 18-19. As per a data disclosed in this respect shows that large ticket corporate frauds worth Rs. 26,757 crores were reported to regulators between April to November 2019 as compared with Rs 10,725 crores were reported in FY 18-19. The comparison appears even starker when compared with FY 17-18 when only Rs 146 crore were declared as fraud.

3. GOVERNMENT ASKS STATE-RUN FIRMS TO CLEAR OVER $ 1 BILLION, OWED TO GREEN ENERGY FIRMS: Government has asked state-run firms to provideover $ 1 billion to government power distribution companies to clear long standing debts to green energy firms that could hinder further investment. The Central Government has asked state lenders—Power Finance Corporation Ltd, REC Ltd and IREDA to extend short-term securitised loans to the distribution firms at preferential rates. Adding to the problems of the power generators, the new government of Andhra Pradesh which owes renewable energy firms more than any other state, wants to renegotiate its contracts saying the price it pays are inflated. Commercial banks are unwilling to lend to these firms because of their high outstanding debt.

4. RBI DEPUTY GOVERNOR RED-FLAGS RISING STRESS IN MUDRA LOANS: Reserve Bank of India Deputy Governor Mr M K Jain has raised red flags over rising Non-Performing Assets (NPAs) in loans disbursed under the government’s Mudra Loan Scheme and urged the banks to monitor the repayment capacity of borrowers before disbursement. Mudra, a Government of India loan scheme under which small business can avail collateral-free working capital loan up to Rs 10 Lakh was flagged off in 2015 to ease the credit flow to MSME Sector.

5. LOANS OR BONDS, INDIA’S BANKS ARE GOING SLOW: Frauds, errant borrowers, stretched recovery process and stubborn promoters have shaken Indian banks’ confidence in lending to commercial sector. Due to this, bank loan growth has decelerated sharply over the past six months. What should also worry is the drop in banks’ non-SLR (Statutory Liquidity Ratio) investments. Non-SLR investments are the commercial papers, bonds, debentures and sharesthat banks buy from companies. Earlier companies found it cheaper to issue bands and short-term commercial papers to banks instead of taking loans. This has changed drastically after the collapse of Infrastructure Leasing & Financial Services (IL&FS).

6. HDFC BANK’S SHARE IN OUTSTANDING CREDIT CARDS COMES DOWN TO 25%: HDFC Bank’s share in number of outstanding credit cards dropped to 25% at the end of September 29019 from 30% in March 2016. Rivals SBI and ICICI Bank have increased their share over the same period. A report compiled by Citi Research from RBI data shows that the share of SBI in the number of credit cards stood at 18% as on 30Th September 2019, up from 15% in March 2016, while that of ICICI Bank was 15% with nominal change. But in terms of volume and value of transactions made using credit cards, HDFC Bank continues to be the market leader with share of 26.4%.SBI leads the market share in outstanding debit cards between March 2016 and September 2019 with 30%.

7. GDP GROWTH FALLS BELOW 5% TO 4.5%, LOWEST SINCE MARCH 2013: The country’s economy grew at its lowest in past six-and-a-half years, in July-September 2019 quarter, dragged down by contraction in manufacturing, construction, financial services sector even though public spending has increased from 8.5% to 11.6% in the same period. Data released by National Statistical Office (NSO) showed Gross Domestic Product (GDP) grew by 4.5% in July-September 2019 quarter, slower than 5% in the previous quarter. The slowest reported till now was 4.3% in January-March 2013.

1. 15 FOREIGN BANKS KEEN TO OPEN BRANCHES IN INDIA: As per RBI data, presently 46 foreign banks are already operating in India including 2 banks operating in Wholly Owned Subsidiary (WOS) mode. Foreign Banks require prior approval from RBI for opening branches in India. Now RBI has informed the Finance Ministry that 15 more foreign banks have shown interest in opening their branches in India.

2. FOREIGN EXCHANGE RESERVES TOUCH NEW HEIGHT: Indian Foreign Exchange reserves continue to surge ahead as it stands at USD 447.81 billion as on November 8Th. As per a data released by RBI, the reserves surged by USD 3.51 billion in the first week of November to reach USD 446.81 billion. The increase was mainly on account of a rise in foreign currency assets, a major componentin the overall reserves.

3. FULLY AUTO-POPULATED INCOME TAX RETURNS ON THE CARDS: The government is planning for a fully auto-populated income-tax returns. It is working on the modified form which will include information on tax liability on gains from stock trade, dividends from mutual funds and interest earned from savings bank account. The income tax department has had several rounds of talks with depositories, mutual funds and banks to ascertain the feasibility of more comprehensive returns.

4. NON-FILERS OF GST RERTURNS MAY FACE CANCELLATION OF GST REGISTRATION: The Goods & Servicers Tax (GST) administration is planning to act tough with non-filers of GST returns. It may cancel the GST registration of those non-filers. Filing of returns helps tax authorities to estimate the tax liability and find out how much tax has been paid. The data shows that nearly 20% of the assesses do not file their returns, which affects GST collection. Hence the Central Board of Indirect Taxes (CBIC) has decided to cancel registration of those assesses who have not filed GSTR 3B (Showing tax payments) returns for 6 or more than 6 returns periods and are liable to action as per GST law.

5. PERSONAL GUARANTEES MAY AID BAD LOAN RECOVERIES: An amendment made to the Insolvency and Bankruptcy Code (IBC) last week to include personal guarantees issued by corporate promoters will quicken the recovery process, improve chances of bad loan resolution and more importantly give lenders a strong leverage against erring promoters. In a notification given by the Ministry of Corporate Affairs(MCA), personal guarantees on corporate loans under the bankruptcy code will be effective from December 1ST. This means the assets of promoters who have given personal guarantees to corporate loans can be attached along with the insolvency proceedings against the company.

6. SEBI SAYS LISTED COMPANIES MUST DISCLOSE DEFAULT IN 31 DAYS: The Securities Exchange Board of India (SEBI) has instructed listed companies that they should disclose any defaults in respect of principal or interest within 31 days of such default. The new rule comes into effect from January 2020. The SEBI board has also decided that top 100 listed companies based on market capitalisation will now have to include business responsibility reporting as part of their annual reports. SEBI also decided to reduce the time taken to process a rights issue to T+31 days from T+55 days.

7. GLOBAL INVESTORS MAY NOW SHOW INTEREST FOR BUYING BAD LOANS: The Supreme court judgement in favour of the world’s top steel maker Arcelor-Mittal taking control of debt-ridden Essar Steel is expected to provide a new lease of life for India’s distressed asset market with an estimated fund flow of $3 billion. International investors were watching this case and the judgement clearly lifted global investors sentiment. Now it needs to be seen as to how banks open up to sell their sticky assets.

8. LENDERS SEEK PRIORITY TAG FOR LOANS UNDER REAL ESTATE FUND: Lenders want senior and secure charge on the assets they fund under the recently proposed Rs.25,000crore real estate fund announced by the Government. Out of the Rs.25,000 crores, Rs.10,000 will come from the Government and the rest will be by banks and other financial institutions. The lenders want to ensure that if these projects fail to take off despite the intervention/help, and if the asserts have to be monetized to recover dues, their money will have priority status. In other words, the fund is expected to have a priority charge as compared to existing investors. RBI has always seen commercial real estate exposure by banks as a riskier affair compared to other segments. It has therefore mandated banks to set aside more money as standard asset provisions between 0.75% to 1% for these loans. Typically, banks have to set aside 0.4% of a loan as per provisions for most of the loans.

1. GOVERNMENT PROPOSES TO RAISE INSURANCE COVER ON BANK DEPOSITS: Finance Minister Nirmala Sitharaman said the government will bring legislations on raising insurance cover on bank deposits from the current Rs 1 lakh and regulating multi-state cooperative banks amidst a crisis in PMC Bank which has affected lakhs of depositors. These legislations will be brought during the winter session of Parliament starting on 18TH November. The legislation will amend the necessary Acts and laws to make sure that banking functions undertaken by cooperative banks will be brought under Banking Regulation Act for complying with prudent norms. Also Deposit Insurance is static at Rs 1 lakh since 1993 and this needs a change.

2. BANKS MAY BE GIVEN INCENTIVES TO EXTEND LOANS IN BACKWARD AREAS: RBI Governor Mr. M K Jain has said that there will be incentives to banks to extend loans to poor in backward areas in a bid to promote Financial Inclusion. Mr. Jain said despite impressive growth in agriculture lending, there are still several challenges which need to be tackled. For this the banks need to be given incentives to lend in most backward areas so that demand and supply side issues will be addressed. He also asked NABARD to think of steps by which funds like Rural Infrastructure Development Fund (RIDF) can be earmarked to the most backward credit-starved regions of the country to ensure faster development.

3. BANDHAN BANK MAKES MORE PROFIT THAN 17 PSU BANKS COMBINED IN SECOND QUARTER OF THE CURRENT FINANCIAL YEAR: The aggregate profit of 17 Public Sector Banks was lower than the net profit of Bandhan Bank Ltd alone in the September quarter of the current financial year. While the combined profit of these 17 public sector banks stood at Rs 466.4 crores during the said period, Kolkata based Bandhan Bank alone reported a net profit of Rs 971.8 crores. The consolidated net profit of 17 private sector banks stood at Rs 7583.16 crores during the same period. The PSU Banks saw the growth fall from 8% to 5% year-on-year, while the private banks growth was down from 22% to 14%. The burden of Non-Performing assets (NPAs) continues to take heavy toll on the profitability of these banks.

4. RBI TO CONSIDER ALLOWING e-MANDATES ON UPI : The Reserve Bank of India, in a notificationissued on Friday has said that it will consider allowing electronic mandates on Unified Payments Interface (UPI) soon. RBI also said that it will ask banks not charge its savings bank customers a fee on NEFT transactions from January 2020. In terms of the number of transactions, digital payments have grown at a compounded annual growth rate of 61% over the last 3 years --- from around 680 crores transactions between October 2015 to September 2016, to mare than 2,840 crores of transactions between October 2018 to September 2019.

5. FINANCIAL SERVICE PROVIDERS LIKELY TO BE BROUGHT UNDER INSOLVENCY CODE AMBIT: Ministry of Corporate Affairs (MCA) is in talks with Reserve Bank of India to devise a separate framework to bring NBFCs under the insolvency process. The Centre is exploring the possibility of bringing certain financial service providers within the ambit of Insolvency and Bankruptcy Code (IBC) to help deal with exceptional cases and make them go through the insolvency and liquidation proceedings. In recent years, many top notch NBFCs have had to face severe crunch, causing concern among investing fraternity, especially retail investors. The lenders too were put to a lot of hardship with their inability to recover their exposure to such entities.

6. UNION ABNK OF INDIA POSTS Rs. 1,194 CRORES LOSS: Union Bank of India slipped into the red, reporting a net loss of Rs. 1,194 crores in September quarter of the current financial year, due to jump in provisions, including towards bad loans and divergence in provisioning. Bad loan provisioning jumped by 95% year-on-year to Rs. 3,328 crores, of this, the divergence in provisioning was Rs. 1,588 crores. Union Bank said it has made 15% provisions towards the bank’s exposure to DHFL in the reporting quarter. The bank may make more provisions in the third quarter towards the said account.

7. DEBT RECOVERY TRIBUNAL STOPS DHFL FROM MAKING PAYMENTS: The Pune bench of Debt Recovery Tribunal (DRT) has stopped DHFL from making any further payments to any of its un-secured creditors. A day earlier, Bombay High Court allowed DHFL to make payments to banks and NBFCs that have securitization arrangements with DHFL. Now the banks will have to go to DRT to seek clarification since DRT has appointed a commissioner to monitor and supervise the affairs of DHFL.

1. EOW ARRESTS TWO AUDITORS IN CONNECTION WITH PMC BANK SCAM: The Economic Offence Wing (EOW) has arrested two auditors in connection with PMC Bank scam. The two auditors are JayeshDhirajlalSanghani and KetanPravinchandLakdawala. Both were called for investigation at EOW Office at Mumbai but since they could not provide convincing explanation regarding their alleged role as statutory auditors of PMC Bank, hence both were arrested for further investigation. EOW has sought their police remand.

2. JUST 4 BANKS CLAIM MORE THAN 45% OF UPI’S BIG BILLION OCTOBER FEST: State Bank of India (SBI), HDFC Bank, Axis bank and ICICI Bank are dominating the retail digital payments business, riding high on Unified Payments Interface (UPI) wave which crossed a billion transactions in October 2019. These four banks together account for more than 45% of the total transactions reported on UPI last month. An Economic Times analysis of the trends over the past 4 months showed that these 4 banks have consistently achieved close to 40% share of overall UPI payments. Industry experts say that while the trend is showing healthy signs but the fact that only 4 major banks getting the major share of UPI transactions was a worrying trend.

3. FACTORY OUTPUT SHRINKS TO 4.3%, LOWEST IN ALMOST LAST 8 YEAR: As per the Index of Industrial Production (IIP), factory output shrank to 4.3% in September 2019, the lowest in almost 8 years in this series. It is the lowest since October 2011. The factory output had contracted to 5%in October 2011. This indicates that the economy has further slumped in the second quarter of the current financial year. Industrial Production in the corresponding last year was 4.6%.

4. INDIA’S BAD DEBT PILE EASED DUE TO WRITE-OFFS, UNDERLYING PROBLEM FAR FROM RESOLVED: Indian banks wrote off more than $30 billion worth of bad loans for the past two financial years, helping to lower stressed loans in their books by 8.5%. This is as per Central bank data. The write-offs illustrate the urgent problem of bad loans as borrowers struggle to service the loans in a stuttering economy. As of June 30, 019 the total stressed assets in the books of Indian Banks were at $137.50 billion, down from $150.22 billion a year ago. Moreover, the analysts warn that the shaky NBFC industry could worsen the bad loans scenario in future.

5. GOVERNMENT’S MASSIVE Rs 25,000 CRORE RELIEF TO REAL ESTATE SECTOR: The Finance Ministry has announced a massive Rs 25,000 crore relief to real estate sector to meet the funding requirements of 1,600 stalled projects where money of 4.58 lakh homebuyers are stuck. A special window which will function as an Alternative Investment Fund (AIF), would provide priority debt financing for the completion of stalled housing projects in the affordable and middle-income housing sector. While the government will put Rs. 10,000 crores in AIF, the remaining would come from SBI and LIC, and others may also join too. The fund will also cover Non-Performing Assets (NPAs)and those that have ongoing NCLT proceedings. What classifies as affordable and middle-income housing is those houses that do not exceed 200sqmt carpet area, Homes that are upto or less than Rs 2 crore in Mumbai Metropolitan Region, Homes that are upto or less than 1.5 crore in National Capital Region, Chennai, Kolkata, Pune, Hyderabad, Bangalore and Ahmedabad and upto Rs 1.00 crore in the rest of India.

6. LENDERS MAY ASK RBI TO EASE FRAUD CLASSIFICATION NORMS: Banks are considering asking RBI to ease the classification norms for fraud-hit loan accounts, amid a surge in such cases. Banks currently set aside capital worth the full value of their dues from a fraud-hit loan account over a period of four quarters to cover the risk factor. Now banks are considering to ask the RBI to allow the banks to classify only that part of the loan amount as fraud where fraudulent transactions have been detected, as a forensic audit now helps the bank to identify such transactions where fraud has been committed.

7. ONLY 15% OF THE CASES RESOLVED UNDER BANKRUPTCY LAWS: As per a report by rating agency ICRA, only 15% of the cases have been resolved under the new bankruptcy laws, while the rest have gone for liquidation. Of the 2,542 cases admitted under IBC till date, 1,497 cases are admitted under Corporate Insolvency Resolution Process (CIRP). Only 15% CIRPs have yielded a resolution plan whereas 56% of the cases ended up going for liquidation. ICRA has made a strong case for strengthening the NCLT Infrastructure where timely completion of Corporate Insolvency resolution process initiated under the Insolvency and bankruptcy Code (IBC) continues to remain a challenge.

1. SEBI ASKS BANKS TO DECLARE NPAs DIVERGENCES ON A CONTINUOS BASIS: The Securities Exchange Board of India (SEBI) has asked all banks to disclose any material divergences in their Non-Performing Assets (NPAs) on a continuous basis. The market regulator said that banks must disclose such NPA divergences within 24 hours. Currently such divergences are disclosed by banks in their quarterly financial results. The new rules will apply in situations where the additional provisioning for NPAs assessed by RBI exceeds by 10% of the reported profit before provisions and contingencies. In recent months, there have been several instances of under-reporting of bad loans by lenders, prompting regulatory action by RBI.

2. THREE BANKS REPORT NPA DIVERGENCE A DAY AFTER SEBI ISSUES DIRECTIVE: A day after market regulator SEBI put in place tighter norms regarding reporting of divergence of NPAs, Three banks-- Lakshmi Vilas Bank Ltd, Indian bank and Union Bank reported divergence in their bad loans for the last fiscal ended march 2019. Indian bank has reported a divergence of Rs. 820 crores in its net NPA for 2018-19, while Union bank has reported a divergence of Rs. 998.70 crores. Lakshmi Vilas bank has reported a divergence of Rs 54.90 crores. Thus, the reporting of the said divergence in NPAs has had an impact on the profit/loss metrics of the respective banks for the fiscal ended March 2019.

3. RELIEF FOR PMC BANK DEPOSITORS AS RBI-APPOINTED ADMINISTRATOR MOVES TO SELL ATTACHED ASSETS: The Reserve Bank of India appointed administrator has asked the Economic Offence Wing of Mumbai Police to release properties attached in the Punjab & Maharashtra Cooperative Bank (PMC bank) case so that they can be auctioned. This is a positive move that could provide some relief to aggrieved deposit holders of the bank. The city police will soon seek court approval to hand over the attached assets to RBI administrator. If auctioned, the proceeds of the sale could be infused in the bank and distributed among the depositors on a pro rata basis.

4. 1.3 MILLION INDIAN PAYMENT CARDS DETAILS UP FOR SALE ON “DARK WEB”: Nearly 1.3 million debit and credit card data of Indian banking customers are available on “Dark Web” for open sale. According to ZDNet, the cards’ details is available on Joker’s Stash—one of the oldest card shops on the Dark Web which is known to be the place where major hackers/cyber criminals sell card dumps. The debit and credit cards belonging to multiple Indian banks and are being sold for $100 each, that can fetch up to $130 million for cyber criminals. Security researchers have said that this is one of the biggest card dumps in recent years. Data analysis suggest that the card details may have been obtained via skimming devices installed either on ATMs orPoint of sale (POS) machines.

5. DILUTING GOVERNMENT STAKE BELOW 50%IN PSBs IS NOT THE SOLUTION: Noble laureate Mr. AbhijitBanerjee has opined that the government should privatize Public sector banks (PSBs) to tackle the crisis in the banking sector. But Association of bank unions have expressed disagreement on this issue. The association of bank unions have expressed that diluting the government stake in PSBs is “no Solution”. instead, the unions said, ensuring proper governance in the system and removing political interference will address the problem of NPAs that has weakened the financial health of the PSBs. The bank unions opined that the present problems with the banks is mainly due to economic slowdown, increase in NPAs due to political interference and bad governance in the system.

6. GOVERNMENT CONSIDERING 5-YEAR EXTENSION OF INCOME TAX BENEFITS FOR SEZ UNITS: With exports and investments on a slide and considering the economic conditions prevailing in the country at present, Commerce Ministry is considering a five-year extension of tax benefits for units in Special Economic Zones (SEZs) by extending the clause beyond March 31, 2020. This is to boost the investor sentiments. Removing Minimum Alternate Tax (MAT) on the export turnover is also being considered.

7. CO-OPERATIVE BANKS ARE NOT IN FAVOUR OF CONVERTING INTO SMALL FINANCE BANKS: Urban Co-operative Banks (UCBs) are not in favor of the scheme of RBI to allow them to voluntarily convert into Small Finance banks(SFBs), as it would mean that they would have to give up their “ Universal bank” status and become “Narrow banks”. As Universal banks, UCBs can undertake all banking activities as permitted to commercial banks. SFBs are required to extend 75% of their loans to sectors eligible for Priority Sector Lending (Loans to agriculture, MSMEs, housing and education). Further, at least 50% of SFBs’ loan portfolio should constitute of loans up to Rs.25 lakhs.

1. SBI/OBC EMPLOYEES TO GET DIWALI GIFTS:The top management of State Bank of India and Oriental Bank of Commerce are planning to give Diwali gifts to its employees. The two banks have announced Diwali gifts of sweets/dry fruits/chocolates for their staff worth Rs 1000/- each. Both the banks have instructed branch offices to debit the expenditure in respective branches/offices.

2. BANKS NEED TO RAPIDLY REINVENT TO STRENGHTEN PROFITABILTY: The Mckinsey’s Global Banking Annual Review Report says that at a time when growth in banking sector is sluggish, productivity gains are fading and digital pressures are on the rise, the banking sector should look at implementing radical measures, both organic and inorganic so as to strengthen profitability and boost their returns. The report warns that banks need to rapidly reinvent their business models in the face of continued threat posed by fintech companies and big technology companies that are taking stakes in banking businesses. The report said that growth within India’s Banking Sector has dropped from 22% during 2002-07 to 10.3% from 2010-18.

3. RESERVE BANK BANS USE OF DIRECT SELLING AGENTS TO SOURCE RETAIL LOANS: Now banks, that too private sector banks will have to change the way they have been chasing retail loan customers all this time. The Reserve Bank of India has banned the use of Direst Selling Agents (DSAs) to source retail loans and carry out physical verification of documents of borrowers. RBI believes that agents should playa limited role. KYC procedures, involving verifying borrower’s original documents should be performed by the bank officials and it cannot be outsourced. RBI’s this decision is aimed at reducing incidents of data theft and minimising operational risk for banks.

4. NOW HDFC WEBSITE IN 6 OTHER INDIAN LANGUAGES: Housing major HDFC Ltd has said that it has localized its website in six other Indian languages other than English. The website content is now also available in Hindi, Marathi, Tamil, Telugu, Malayalam and Kannada. Thus, HDFC Ltd is the only Corporate in the financial sector to offer contents on its website in six Indian languages. The growing use of internet and smartphones and rising base in regional language users, particularly in smaller towns has made it important to focus on building digital properties and content.

5. CONTAGION RISK IN FINANCIAL SECTOR—30% OF BANK’S NBFC EXPOSURE COULD TURN BAD: India’s Financial Sector faces heightened risk of contagion, with many finance companies having lost over 50% of their equity value in the past one year. Standard & Poor’s (S&P) report follows a similar warning from Fitch Ratings, which has projected that roughly 30% of banks’ exposure to NBFCs could turn bad and this would be a worst-case scenario, putting further pressure on their capital adequacy and will reverse the ongoing recovery process on Non-Performing Loans.

6. GOVERNMENTTO INTRODUCE ONLINE PROFICIENCY ASSESSMENT TEST FOR INDEPENDENT DIRECTORS: The government has said that it will introduce an online proficiency self-assessment test for independent directors. The test will be conducted by Indian Institute of Corporate Affairs (IICA) from December 2019. The requirement will not be applicable for certain categories of individuals, including those who have served for atleast 10 years as Director or key managerial personnel in a company. Other than those exempted, have to pass the testy within one year from the date of inclusion of their names in the independent directors’ data bank maintained by IICA.

7. HDFC BANK Q-2 PROFIT UP BY 26.7% :During the time where the entire banking sector is lurking under pressure and NPA crisis, HDFC bank has reported a net profit of Rs 6,345 crores for September 2019 quarter of the current financial year, up by 26.7% on year-on-year basis. This is despite the bank witnessing 48% year-on-year jump in total provisions to Rs 2,700 crores. Besides this, the bank also wrote-off loans worth Rs 1,589 crores during the said quarter.

8. INTRODUCING E-INVOICING IN GST WILL BE A GAME CHANGER: The GST Council has approved the introduction of “E-invoicing” or Electronic Invoicing for Business to Business (B2B) transactions from January 2020. Once implemented, it can help arrest tax evasion as it enables pre-populating of GST returns with e-invoice details. Return filing will also become simpler with reconciliation becoming easier. A detailed write-up/note has been released and made available on the GSTN website on “E-Invoicing”.

1. ONLY 17% OF BANKS HAVE SCALED MAXIMUM DIGITAL USE TO ACHIEVE BUSINESS TARGETS: As per a report by Infosys-Finacle, only 17% of the retail banks have deployed maximum digital technology usage. The report says that banks expect mobility and advanced analytics to impact their business the most, but are not ready to apply these technologies to create expected business outcome. Optimal use of digital deployment needs a whole new way of thinking, designing and execution to increase the business. Banks need to transform culture, organisation design, operations and technology ecosystem. The report also mentions that in the next 5 years, the biggest threat to the banking industry would be from large technology companies and fintech start-ups. And whoever makes the maximum use of digital technology would be the winner.

2. SBI SEEKS FINANCE MINISTRY’S INTERVENTION FOR DHFL RESOLUTION: State Bank of India has approached the Department of Financial Services (DFS), seeking its intervention to end the impasse over the resolution plan for Dewan Housing Finance Corporation (DHFL). DFS is a division of Finance Ministry that covers the functioning of banks, financial institutions and insurance companies. SBI has written a letter to DFS, highlighting the relevant points on the issue for speedy process. SBI is a bit apprehensive over a systemic risk if on- going efforts to finalise the resolution plan does not go through then the DHFL funding has to be marked as NPA (Non-Performing Asset) which requires further provisioning.

3. NUMBER OF INCOME TAX PAYERS JUMPS BY 13.8%: The number of income tax payers rose to 84.5 million in assessment year 2018-19, a jump of 13.8% from the previous year. The data released by the Income Tax Department showed that since the introduction of GST in June 2017, the share of income tax receipts also has gone up.

4. FORMER SBI CHIEF CALLS FOR SPECIAL CADRE OF BANK OFFICERS FOR RISK MANAGEMENT: Ms.Arundhati Bhattacharya, the former Chairperson of SBI has expressed that there is a need to create a special cadre for compliance and risk management in every bank. The comment comes at a time when banks’ lending practices have been repeatedly questioned due to many alleged scams, the need for an increased level of attention from the regulator and investigating agencies and a very high quantum of bad loans. She feels that the time has come to create a special cadre for risk and compliance management.

5. AXIS BANK LAUNCHES NEW FIXED DEPOSIT SCHEME: Axis Bank Ltd has launched a new Fixed Deposit Scheme— “Express-FD Scheme”. Express-FD is a digital fixed deposit product which allows even the non-customers of the bank (Those who are not the account holders of the bank) to create a fixed deposit. Anyone can invest in Axis Bank Express-FD by using any savings account from any bank through net banking, debit card or via UPI. A valid PAN and Aadhaarproof is required to open Express-FD online. The customer’s mobile number should be linked with the Aadhaar number as Aadhaar-based OTP is essential to invest in Express-FD. Axis Bank is offering free withdrawal of up to 25% of the fixed deposit amount without any penalty charges. Customers can opt for automatic renewal of the FD or if once the FD is matured, the entire amount will be credited to the customer’s bank account from where it was originated.

6. SBI TOPS CORPORATE LOAN WAIVER LIST: State Bank of India leads the list of Scheduled Commercial Banks who have written-off loans of big borrowers, mostly in the last three years. As per an RTI query, SBI has written-off Rs 76,600 crores of bad loans of 220 defaulters, who owed the bank more than Rs 100 crore each as on March 2019. The RTI query gave the list of Scheduled Commercial Banks with break up of waiver in 2 categories – Rs 100 crore and more, and Rs 500 crore and more. The total waiver of bad loans comes to a staggering Rs 2.75 Lakh Crores. The query also reveals that Rs. 37,700 crores waiver belonged to just 33 borrowers with loans of Rs 500 crore or more.

7. INDIAN BANK TO ROLL OUT PORTALS INVITING CUSTOMERS’ VIEWS ON MERGER: Indian Bank will soon roll out portals inviting customers to share their views on the merger with Allahabad Bank. Indian Bank MD Mrs PadmajaChunduru told that best banking practices of both the banks would be taken for business growth and more benefits will be available to customers through customised products and service offer. She also assured that the amalgamation process would be very smooth without any discomfort to customers of both the banks.

1. RBI OVERHAULS CO-OPERATIVE BANKS’ OLD EMAIL BASED REPORTING SYSTEM: After the PMC Bank debacle, Reserve Bank of India has overhauled the daily reporting system through e-mail by the cooperative banks. In a circular addressed to the Chief Executives of all cooperative banks, RBI has asked all cooperative banks to replace the existing e-mail-based reporting system with a web-based central system. They will have to now make use of RBI’s Central Information System for Banking Infrastructure (CISBI) which is an online portal that presently allotsBasic Statistical Return (BSR) code to branches and offices of all banks. Under the new system, all cooperative banks are required to submit their information in a single proforma online on CISBI portal.

2. GeM SIGNS PACT WITH UNION BANK OF INDIA TO AVAIL VARIOUS SERVICES: The Government e-Marketplace (GeM) has signed a pact with Union Bank of India under which the bank will offer several services to it including transfer of funds. The Commerce Ministry has launched GeM which is a procurement portal which will increase transparency in public procurement of goods and services, which is estimated at about Rs. 8 lakh Crores per year. Union Bank of India will be able to offer an array of services including transfer of funds through GeM pool accounts, advising of performance, bank guarantees and earnest money deposit to the registered userson the portal. Till now, 2,88,212 sellers and service providers have registered with GeM portal to sell 13,48,380 products and 17,627 services.

3. RBI GIVES NOD FOR “KERALA BANK”: The Kerala Government’s long pending dream of setting up its own bank, by merging all its District Co-operative banks is all set to become a reality with the Reserve Bank of India giving the final approval for the move. With its formation, “Kerala Bank” will be the largest banking network in the state. Kerala Bank will be formed by amalgamating all District Co-operative Banks (DCBs) with Kerala State Co-operative Bank. There are 13 DCBs at present. Setting up of the new bank would also be in accordance with the final verdict of some cases pending before the court in this regard.

4. RBI TURNS DOWN INDIABULLS HOUSING FINANCE MERGER WITH LAKSHMI VILAS BANK: RBI has rejected the planned merger between Indiabulls Housing Finance and Lakshmi Vilas Bank after examining the proposal for more than six months, during which multiple approaches were considered to ensure compliance with strict banking sector takeover rules. The much-awaited merger would have given a lot of relief to Indiabulls which has $16 billion in mortgages, advances against property and commercial real estate loans. The Indiabulls group owes as much as $4 billion to the Indian banking system.

5. PSBs START LENDING LOANS BASED ON CUTOMER’S RISK PROFILE: Three Public Sector Banks (PSBs), Bank of Baroda, Union Bank of India and Syndicate Bank have taken the first step in transparently segregating retail loans into their respective versions of prime and subprime risk exposure by using third-party credit scores of potential buyers to offer them different home-financing rates. Under the new external benchmarking regime, Bank of Baroda for example, will be using three credit score slabs from the Credit Information Bureau India Ltd (CIBIL) to price its new home loans. Customers with a high credit score of more than 760 will pay 1% lower (8.1%) rate. Customers with a score between 725-759 will be offered 8.35% interest rate and those with scores between 675-724 will be offered a rate of 9.1%. These rates are linked to external benchmark rate.

6. FOREX RESERVES AT A NEW LIFE TIME HIGH AT $ 437.83 BILLION: The country’ foreign exchange reserves touched a record high of $437.83 billion in the week ending October 4, 2019. This is as per the latest data from RBI. The increase in reserves in the reporting week was on account of rise in Foreign Currency Assets (FCA), a major component of the overall reserves. FCA increased by $3.99 billion to $ 405.61 billion in the reporting week. The country’s reserve position with the IMF also increased by $ 9 billion to $ 3.61 billion as per the data shown by RBI.

7. NATIONAL e-ASSESSEMENT CENTRE LAUNCHED BY INCOME TAX DEPARTMENT: The Income Tax Department has launched the National e-Assessment Centre. With this launch, the Income Tax department would undertake its first phase of faceless assessment. The scheme is expected to result in better quality of assessment orders while reducing potential harassment to tax payers. In the first phase, the department has selected 58,322 cases for scrutiny, for which e-notices have already been served. These cases belong to Assessment year 2018-19.

1. PMC BANK FRAUD TO BE INVESTIGATED BY FORENSIC AUDITOR GRANT THORNTON: Government’s Economic Offences Wing (EOW) has instructed PMC Bank to appoint one forensic auditor to investigate the recent fraud that has been committed in PMC Bank. Accordingly, PMC Bank has roped in Grant Thornton to carry forensic investigations. Grant Thornton is tasked to look into the allegations made by the former Manging Director of the bank on how the bank managed to flout RBI norms. The firm will also look into the modus operandi of the fraud and will see if any employee has been benefitted from it. The firm would work closely with EOW.

2. SBI & BANK OF BARODA SQUEEZE MICRO-ATM TRANSACTIONS OF OTHER BANKS: State Bank of India and Bank of Baroda have limited the cash withdrawals of customers using micro-ATMs of other banks in their ATMs. Now they can use the same only four times a month. This could cause a fall in the transactions undertaken through the Aadhaar-enabled Payment System (AePS) route. AePS recorded 201 million transactions in September, a nearly 9% drop from 220 million transactions in July. Through AePS, depositors use biometric credentials to withdraw cash from retail agents instead of swiping their debit cards at ATMs.

3. FACELESS ASSESSMENT OF I-T RETURNS IS NOT MANDATORY FOR TAX PAYERS WITHOUT e-FILING ACCOUNT/PAN CARD : The Income tax department is starting faceless assessment of tax returns from 08TH October 2019. But this is not mandatory for tax payers who do not have an e-filing account. Further, in cases where the department has initiated or conducted raids and instances categorised under “extraordinary circumstances” will not be covered under the e-assessment system.

4. IRDAI ISSUES NEW NORMS TO CURB LIFE INSURANCE MIS-SELLING, MAKES ILLUSTRATIONS MANDATORY: The Insurance Regulatory Development Authority of India (IRDAI) has directed all insurance companies to mandatorily issue benefit illustrations based on two different assumed rates of return as per prescribed format and get these signed by the policy holder and agent/insurer. It should be made part of the policy, write a warning-type advisory/alert about the non-guaranteed portion of the returns and ensure that all terms and conditions are displayed on the main screen in case of digital sales. Insurance Companies have to comply with this norm by December 1ST 2019. This is a strong effort to increase transparency and curb mis-selling of insurance policies.

5. PSU BANKS PUT Rs. 25,000 CRORE NPAs ON SALE: Since there is a lot of delay occurring in resolution process of bad loans under Insolvency Law, some of the public sector banks have sought to sell bad loans worth Rs. 25,000 crores. Bankers are losing money in cases which are awaiting a decision in the National Company Law Tribunal (NCLT), the appellate court or even in the Supreme Court with the process dragging on and on. But on the other hand, Asset Reconstruction Companies (ARCs) also have become more vigilant in buying these NPAs but banks are trying hard to sell these bad assets toARCs to recover their money.

6. NBFCs ARE LIKELY TO BE BROUGHT UNDER INSOLVENCY CODE AMBIT: The government is exploring the possibility of bringing Non-Banking Finance Companies and other Financial Service Providers within the ambit of Insolvency and Bankruptcy Code (IBC). In recent years several top notch NBFCS are facing severe financial and liquidity crunch, causing concern among the investing fraternity, especially retail investors and the lenders who are put to a lot of hardship to recover their exposure to such entities. Hence the government is looking to move to cover such situations and bring these financial service providers within the ambit of IBC which allow the creditors (both secured and unsecured) to drag such companies to the National Company Law Tribunal (NCLT).

7. 4.50 LAKH CRORES WORTH OF REAL ESTATE PROJECTS STALLED: All these years most of the real estate developers were relying on loans from Non-Banking Finance Companies (NBFCs), which has come to a halt a year ago as most of the NBFCs have stopped lending to these real estate developers due to severe liquidity crunch. As a result, most of the developers are unable to complete their projects and many of them have filed for bankruptcy. There are approximately Rs. 4.50 Lakh Crores of un-completed or halted projects in the country and most of the developers are unable to repay their existing loans, leading to more real estate loans to turn sour. Because of this scenario, even banks are reluctant to lend fresh loans to real estate developers. This will have a cascading effect on the economy as a whole in the near future.

1. SBI TO ROLL OUT CO-LENDING MODEL WITH 4-5 NBFCs: State Bank of India is launching a co-lending business model with 4-5 medium and large Non-Banking finance Companies (NBFCs). Once the present hurdles relating to the integration of technology with these NBFCs are removed, the model of co-lending will be launched. It will be completely automated without any manual intervention from customer on-boarding to loan disbursement and monitoring. Under this model, SBI will have an exposure of 70 to 80% while rest will be borne by the NBFCs. Initially this arrangement will be only for priority sector loans. The model is in line with RBI guidelines.

2. MSMEs WILL GET ANOTHER CHANCE TO RECLAIM BANKRUPT COMPANIES: Promoters of Micro, Small & Medium Enterprises (MSMEs) going through insolvency proceedings can take another shot at running their companies. This is based on a Supreme Court ruling which has led to expeditious resolution of insolvencies in this sector. As per the Supreme court ruling, promoters of MSMEs are permitted to be considered for resolution of their own company unlike in the case of other companies as they are exempt from Section 29(A) of the IBC Code, which debars individuals who have defaulted on debt obligations from bidding for stressed assets during the corporate insolvency resolution process.

3. RBI FORMULATES NORMS TO RESOLVE DISPUTES RELATED TO FAILED DIGITAL TRANSACTIONS: RBI has formulated framework on harmonization of Turn Around Time (TAT) for resolution of customer complaints related to failed digital transactions across all authorized payment systems and compensation for such failed transactions.This will boost the customer confidence and will bring uniformity in the processing of failed transactions across the country. In an ATM if a transaction is failed and the customer’s account is debited then the timeline for auto reversal of the failed transaction is 6 days (Including the date of failed transaction). The compensation payable there after is Rs 100/- per day of the delay.

4. RBI INITIATES PROMPT CORRECTIVE ACTION ON LAKSHMI VILAS BANK: Reserve Bank of India has initiated Prompt Corrective Action (PCA) on Lakshmi Vilas Bank Ltd. The Economic Offence wing of Delhi Police is probing allegations of cheating and criminal breach of trust against its directors of the bank board. The bank has taken note of the same for necessary compliance with progress to be reported to RBI from time to time. RBI’s crackdown was on account of high NPAs, insufficient Capital to risk weighted assets ratio and negative return on assets (ROA) for two consecutive years.

5. A SINGLE LOAN ACCOUNT PULLED DOWN 35-YEAR-OLD PMC BANK: Reserve Bank of India has put severe restrictions on Punjab & Maharashtra Co-operative Bank Ltd citing several regulatory lapses, primarily massive under-reporting of Non-Performing Assets (NPAs). A single account is responsible for the downfall of the bank. PMC Bank had granted a loan of Rs 2,500 crore to the now bankrupt real estate firm, Housing Development & Infrastructure Limited (HDIL). PMC Bank’s auditors did not classify the loan to HDIL as NPA despite HDIL defaulting on payments. RBI finally put the restrictions and termed the loan as a complete loss asset. In such cases the bank must make full provision for the loss but in this Case, the bank’s cash reserves stand at Rs 1,000/- crores, well short of Rs 2,500 crore loan granted to HDIL.

6. AS NPA RESOLUTIONS CRAWL, BANKS STARE AT SPIKE IN CREDIT COST: With slower pace of resolution of bad loans, banks are staring at a spike in their credit cost, which is set to rise in the range of 1.9% to 4.6% for the second half of current fiscal. This is as per a report tabled by India Rating. But the report also said that any pickup in stressed asset resolution may result in lower net credit costs. The report also states that further incremental NPA generation for fiscal 2020 and 2021 may come from the agriculture and MSME sectors.

7. RBI LAUNCHES MOBILE APP YONO IN UNITED KINGDOM: State Bank of India has launched its digital banking App ‘YONO” in the United Kingdom. Chairman of SBI Mr. Rajnish Kumar said that “YONO SBI UK” is one of highlights of SBI’s technological capabilities. The app is available both on Apple’s App Store and Google Play Store. YONO SBI UK is described as an enhanced mobile app which is simple, intuitive and user friendly. Customers in UK can carry out almost all their banking needs through this app. SBI is also planning to launch this app at its other operations worldwide.

Indian Economy is passing through a lean patch which is alarming. The current GDP registering a very low growth rate of around 5% is a real cause of concern. Economists and strategists need to gauge whether the slow-down is cyclical, structural or sociological. In simple words, a cyclical slowdown is a part of business cycle having its ups and downs. On the other hand, sometimes the problems of the economy can go deeper, impeding and affecting the production of goods and services and a monetary or fiscal stimulus is not enough to revive the economy. Here the Government has to undertake certain structural policies to revive the economy. But the third dimension of looking at the economic slowdown is sociological, in the sense that the economy suffers due to decline in private consumption which is purely due to low salaries or no salary hikes. Here the income of salaried persons is not growing to outpace price inflation in services sector. Or we can say the wage increase is not compensating or not matching the price inflation in services sector.

There are various factors that can be analyzed to support this sociological cause for decline in economic growth. Firstly, urbanization has resulted in more Nucleus families from Joint family pattern. In Joint Families there were many hands working to earn income and also there was collective consumption of costs and services whereas in nucleus family the costs and services have become concentrated.

Secondly, we do not measure services inflation properly. The weighs of services inflation in consumer price index is inappropriate, demand elasticities do not seem to be worked in at all or perhaps it cannot be done. According to the latest CPI, since August 2014, Healthcare costs have grown by 30%, Recreation cots have grown by 25%, Communication (which includes telephone, mobile, internet etc) costs have grown by 30%, Education by 30%, Personal care by 24% and Domestic aid (Maid servants/drivers etc) has almost grown by 30%.

While inflation in prices of goods may not been much but for services sector it has been abnormal. Had the incomes been rising equally, this may not have mattered much, but they have not. In fact, since 2014, average salary growth has been around 5 % for the last three fiscals and at the same time these very people are also paying taxes (Both Direct and Indirect) to the tune of 55%. So, the salaried person is running from pillar to post to match his earnings with that of the services sector inflation. As a result, he is left with less purchasing power which has resulted in low demand for goods which has affected the economy very badly.

WHAT NEEDS TO BE DONE?
Private consumption has been the main driver for India’s economic growth, contributing about 60% to GDP, and its fall is dragging economic growth further down. Decline in private consumption is mainly due to the fact that there is not much increase in wages for the last three fiscals and at the same time the services sector inflation has grown by leaps and bounds. The focus of the Government needs to be on improvement in wage structures, create more employment which will spur demand and savings. The latest survey by SBI also points out a substantial decline in both urban and rural wage growth as the most crucial factor for low economic growth.

To sum up, we can say that the economic slowdown is more sociological than cyclical or structural. The Government has already made certain structural changes in Corporate taxes which, to some extent will improve manufacturing sector, thereby may result in more employment, better wages and more purchasing power. The Government needs to be more patient now, as it will take some time for the positive results.

1. I-T RETURNS (E-ASSESSMENT) NOW ONLY IN “FACELESS” MODE: The government has notified that henceforth the assessment of Income-Tax Returns (ITR) will be completely “faceless”, which means the assessee and the assessing official would be anonymous to each other. However, the E-assessment Scheme 2019 would provide the assessee to seek a personal hearing but the same would be conducted exclusively through video conferencing. The Income Tax Department would set up a Nationale-Assessment Centre which would serve notices to the assessee specifying the issue for identifying them to issue notice for assessment. The assessee will get 15 days’ time to respond to the notice and file a reply.

2. GOVERNMENT WAIVES 3 YEAR LOCK-IN PERIOD ON INVESTMENTS MADE BY NRI IN IDFBONDS: The government has now waived the 3-year lock-in period on investments made by Non-Resident Indian (NRI) in Infrastructure Debt Funds (IDFs). This has been done to promote funding in infrastructure sector, with an aim to accelerate and enhance flow of long-term debts in infrastructure projects. To attract off-shore investments into IDFs, any amount of interest received by an NRI or Foreign Company from investment in such IDFs will be now taxed at a reduced rate of 5% only.

3. SOON LANDS WILL HAVE AADHAAR LIKE UNIQUE ID NUMBERS: The government will soon start issuing unique numbers for land holdings as part of an exercise which will bring transparency and end dubious land ownership. The Rural Development Ministry has started working on this and soon a standardised unique number for each surveyed plot will be issued. The unique number will have all the details such as State, District, Tehsil or taluka, block level and street information wherever possible along with the information about the plot including the plot size and ownership details. This could subsequently be linked to Aadhaar and revenue court system.

4. RBI PLANS TO STRUCTURE LOAN INTEREST RATES FOR NBFCs AND HFCs: After mandating banks to link their new retail loans to an external benchmark rate, the Reserve Bank of India is now looking at structuring the interest rate regime for Housing Finance Companies (HFCs) and Non-Banking Finance Companies (NBFCs). Unlike banks, at present NBFCs and HFCs do not have any “anchor rate” or a uniform interest-rate determining structure as they do not have any mandate from RBI. But before mandating the interest rates of NBFCs and HFCs, RBI needs to consider the fact that HFCs and NBFCs do not operate in the same market as banks, in the sense that their clientele base is totally different from that of the banks.

5. BANKS EXPOSURE TO POORLY RUN NBFCs WILL HAVE TO TAKE LARGER HAIRCUTS: Reserve Bank of India Governor Mr. Shaktikanta Das has warned that banks that have exposure to poorly run Non-Banking Finance Companies (NBFCs) will have to take more haircuts while resolving the stressed loans given to these NBFCs which are poorly run and who are found wanting on the corporate governance front. The Governor’s comment on NBFCs comes at a time when banks are grappling with resolution of stressed NBFC cases like the case of DHFL which has dues of over Rs. 50,000 crores where in the promoters of DHFL are accused of corporate governance lapses in the past.

6. GOVERNMENT HAS SELECTED BANKS FOR MERGERS ON THE BASIS OF THEIR IT COMPATIBILITIES: The government while choosing banks for mergers, has selected the banks on the basis of their IT compatibility instead of geographic reach. Punjab National Bank, United Bank of India and Oriental Bank of Commerce are using Infosys’s “Finacle Software”, Allahabad Bank and Indian Bank are on TCS’s “BaNCs software”, Canara Bank and Syndicate bank are on “iFlex” platform, while Union Bank, Corporation Bank and Andhra Bank are on “Finacle” Platform. These banks have formed 23 committees covering every aspect of the merger to ensure success of the exercise.

7. BOLD REFORMS IN CORPORATE TAX AFFECTED: The government has announced some bold corporate tax rates to boost the economy which may reverse the slowdown. Aiming to lift business sentiments and spur investments, the corporate tax rate has been slashed to 22% from 30%. Proposed a competitive 15% rate for new investment in manufacturing. CSR funds are made available for incubators, Universities and Research bodies. All these measures may boost exports, further investment expected to create more jobs and rise in demand from fiscal boost may induce companies to hire. Though good measures it may lead to further increase in fiscal deficit from 3.3 to 3.7% of GDP.

1. FUND TO OFFER GUARANTEE FOR HOME LOANS: As a part of proposed housing sector package which is burdened by heavy debt, the government is considering a fund that will provide guarantee for those who won’t otherwise be eligible for a housing loan, allowing them to avail a loan to own a home. This fund will essentially support borrowers who are not rated well and not eligible for a housing loan from any bank. The guarantee could also help lower interest rates for those who are eligible for housing loans. It is hoped that this credit enhancement fund could bring more buyers into the housing market which at present is saddled with high unsold inventory.

2. GOVERNMENT TO ANNOUNCE MEASURES TO BOOST REAL ESTATE SECTOR: The Central Government is likely to come out with major announcements to boost the real estate industry. The package for real estate industry would include additional funds for Housing Finance Companies (HFCs) and norm relaxation for developers seeking bank loans. The government is also considering to create a fund to the tune of around Rs. 8,000 crores to help complete the stalled projects. It is also likely that the ambit of affordable houses will be increased from Rs. 45 lakhs to Rs. 70 lakhs. The government is keen on reviving the real estate sector, which has a multiplier effect on other sectors as well such as cement, steel, hardware besides generating employment.

3. PRIVATE BANKS NOT KEEN ON LINKING RETAIL LOANS INTEREST RATES TO REPO RATE:Private banks are unhappy with Reserve Bank of India’s mandate to link floating rate loans given to retail and MSME sector to an external benchmark rate. Currently only two private banks are offering repo-rate linked retail loans. But from October 1, 2019 onwards all other private lenders will have to offer rates linked to an external benchmark rate. Most of the private banks feel that this effectively suits only the public sector banks which follow one rule to all the customers as per the scheme guidelines but that is not so with the private players which offer different rates to each individual based on his/her liability profiles.

4. SWITZERLAND SHARES FIRST TRANCHE OF ACCOUNT DATA:Switzerland under an automatic information exchange framework MOU has shared account details to Indian Government. But the data pertains to most of the accounts that are already closed due to fear of action. However, the data prepared by all Switzerland -based banks under a direction from the Swiss government for dispatching further to Indian authorities provides full details of the entire flow of funds to and from all the accounts that were active for even a single day in the year 2018. The data can be very useful to create a strong prosecution case against those who had un-accounted money.

5. BANK OF INDIA LAUNCHES "QR" BASED CASH WITHDRAWAL SYSTEM: Bank of India has introduced a new “QR” based withdrawal system from ATMs which does not require an ATM card to withdraw cash. With this the bank has achieved two objectives, an attempt to curb ATM cloning, skimming, ATM-related frauds and also promote card-less cash withdrawal. There will be a “QR Cash” option on the ATM screen, when you select this option it will ask you to enter the amount. Now a QR code will appear which you need to scan through the mobile app on your smart phone. Once confirmed, you are required to insert your M-pin, after which cash will be dispensed by the machine. Presently a maximum limit of Rs. 2,000/- has been set for cash withdrawal which will be enhanced later.

6. RBI PANEL SUGGESTS STANDARD FORMAT OF DOCUMENTS TO PROMOTE HOME LOAN SECURITIZATION MARKET:Securitization involves pooling of loans and selling them to a special purpose institution which then issues securities called Pass-Through Certificates (PTCs) backed by this loan pool. Well-developed securitization market can emerge as a reliable support to other sources of funding. A Reserve Bank of India Committee has suggested standardization of loan documents and setting up of a government sponsored intermediary under the National Housing Bank (NHB) for development of the home loan securitization market. It is also suggested that the government should exempt mortgage-backed securitization from stamp duty.

7. RBI MOOTS NEW RULES FOR SMALL BANK LICENCE: Reserve Bank of India has issued new guidelines for setting up of Small Finance Banks. In a bid to get more participants in this small banking finance space, RBI will only permit small private entities, payment banks, NBFCs, MFIs and cooperative banks to apply and convert into Small Finance Bank (SFB). The government would not entertain proposals from large entities, large industrial houses, public sectorentities, or autonomous bodies. Joint ventures from two or more promoter groups will also not be allowed to apply. While the promoters of universal banks will not be allowed to start an SFB, promoters of Payment banks will be allowed.

1. RBI INSTRUCTS BANKS TO LINK LOANS TO BENCHMARK RATES: The Reserve Bank of India has made it mandatory for banks to link loans (Loans to retail customers and Micro, Small & Medium Enterprises—MSMEs) to external interest rate benchmarks. These external rate benchmarks could be RBI’s repo rate, 3-month or 6-month treasury yield or any other benchmark published by Financial Benchmarks India Pvt Ltd (FBIL). FBIL is owned by Fixed Income Money Market &Derivatives Association of India, Foreign Exchange Dealers’ Association of India and IBA. Further, banks can decide risk premium based on borrower’s credit profile. Interest rate must be reset at least once in 3 months. These new rates will come in to effect from October 1, 2019.

2. UNIFIED PAYMENT INTERFACE (UPI) TRANSACTIONS JUMP SIX TIMES IN 2018-19: According to the Reserve Bank of India’s Annual Report the Unified Payments Interface(UPI) transactions have surged nearly six times in the financial year 2018-19. The spike in UPI transactions comes amid “Robust Growth” in payments and settlement systems. The transactions volume has jumped by 54.3% and in terms of value the increase is 14.2%. The instant payment system-UPI is developed by National Payments Corporation of India (NPCI) which is regulated by RBI.

3. GOVERNMENT SET TO BAIL OUT IDBI BANK: The troubled IDBI Bank is set to get a fresh lifeline of Rs. 9,000 crores of which the government is planning to pay its share of the bailout money that Life Insurance Corporation has been seeking from the government for the past several months. While LIC, which is the majority owner of IDBI Bank, will have to cough up Rs. 4,500 crores as its share, the government is expected to chip in with a matching contribution. The money thus released by the government will be a part of the Rs. 70,000 crore bank recapitalisation plans, of which Rs. 55,000 crores has already been earmarked for state-run banks. The fresh capital thus infused will help IDBI Bank to tide over the latest financial crisis, given that it has a massive pile of NPAs.

4. BANKS UNLIKELY TO SHARPLY TRIM LENDING RATES DESPITE NEW NORMS: The Reserve Bank of India’s move to mandate lenders to link all new floating rates of retail and MSME loans to external benchmark from October 1, 2019 is unlikely to achieve expected results in trimming down the lending rates. Rates may come down by a few basis points, but there will not be any drastic reduction. This is because banks are going to increase their spreads to manage their cost of funds. The government and RBI has stressed the need for passing rate cuts faster to customers and RBI since February 2019 has reduced its benchmark repo rate by 110 basis points but banks are reluctant to reduce their interest rates to such an extent as they grapple with high deposit costs and are also burdened with about $150 billion in stressed assets.

5. RBI’S INCOME SOARS BY 147%: The Reserve Bank of India’s income for the year ended June 30, 2019 grew by 146% year-on-year, allowing it for a record transfer of Rs. 1.76 lakh crore to the government for FY 2019. According to the report the size of RBI balance sheet grew by 13.42% and total income rose by a whopping 146.5%. The gain in income was primarily on account of the foreign exchange gains due to higher yield on securities and change in the method of valuation.

6. BANK FRAUDS RISE TO Rs 71,543 CRORE IN 2018-19: RBI’s annual report showed a jump of 15% in the bank frauds in financial year 2018-19 as compared to last year. The amount involved in fraud cases increased by 73.8%. In Financial year 2018-19, banking sector reported 6,801 frauds involving Rs. 71,543 crores as against 5,916 cases involving Rs 41,167 crores reported in the financial year 2017-18.

7. PSU BANKS LIKELY TO REVAMP MUDRA SCHEME: The Finance Ministry has asked state-run banks to review their Mudra Loans, with an aim to launch a revamped version of the said scheme. All aspects of the Mudra scheme including the geographical reach, bad loans, need for better features, enhanced access to the intended beneficiaries are being reviewed by PSBs. This is part of the ongoing brain storming exercise by the bankers to ease the flow of credit and support the government in its efforts.

8. GDP GROWTH DROPS TO 5% FROM 5.8%: The Gross Domestic Product (GDP) growth for the first quarter of the financial year 2019-20 dropped to 5%, a sharp decline of 0.8% points compared to the last quarter of financial year 2018-19. The GDP growth numbers come at a time when the Indian Economy is going through a very rough patch, which has particularly hit the auto, manufacturing and real estate sectors. Some factors behind the slowdown are substantial drop in consumption in the domestic market, decline in purchasing power and an uncertain world economy. While the government is announcing steps to address the concerns of the Indian Economy, experts have said that measures taken so far are not enough to boost the economy.

1. DHFL WANTS ITS LENDERS TO TAKE 35% HAIRCUT: Dewan Housing Finance Limited (DHFL) which is in troubled waters due to acute liquidity crunch has proposed a 35% haircut to all its lenders as part of its resolution plan. DHFL has submitted the plan under the new resolution framework circular issued by Reserve Bank of India, according to which, 60% lenders by number or 75% by value should approve of an inter-creditor agreement to be effective. Banks are working towards resolving the issue and are also considering further lending for restarting the company’s operations. Out of the exposure of about Rs. 1 lakh crore of DHFL, 38% is in the form of bank loans and remaining is through debt markets, mutual funds, insurance companies and deposits.

2. BANKS ARE PLANNING TO REDUCE ATM TRANSACTIONS: As per a report from Times of India, banks are planning to reduce ATM transactions in view of rising ATM frauds. The report says that the banks want to allow just one ATM transaction pera certain period, between 6 to 12 hours. Further, banks want to strengthen the security system in ATM which will include a two-way communication. Canara Bank has already started the system of sending OTP to the registered mobile number for any withdrawal above Rs. 10,000/-

3. BANKS SUGGEST EASIER FARM LOAN RULES TO REMOVE STRESS: The Finance Ministry had asked all banks to collate suggestions from branch level officials, as any suggestions from grass root level would be more practical in nature. As per the suggestions from banks’ branch level consultations, public sector banks are likely to make a request to the government for allowing farmers to borrow afresh even before clearing their previous bank loan, which would help these farmers to de-stress and gain access to bank funds seamlessly even during natural calamities. Banks also want a more robust loan guarantee architecture for Mudra Loans and are in favour of an umbrella cyber security framework for the entire sector.

4. RBI TO TRANSFER Rs. 1.76 LAKH CRORE FROM ITS SURPLUS RESERVE TO GOVERNMENT: The Reserve Bank of India has approved the transfer of a record Rs. 1.76 lakh crore dividend and surplus reserves to the government. RBI will be transferring Rs. 1,76,051 crores to the government comprising of Rs.1,23,414 crores of surplus for the year 2018-19 and Rs. 52,637 crores as per the revised Economic Capital Framework (ECF). The excess reserve transfer is in line with the recommendation of former governor Mr. Bimal Jalan-led panel constituted to decide the size of capital reserves that the Central Bank should hold.

5. E-COMMERCE NORMS TO BE MANDATORY UNDER CUSTOMER PRETECTION LAW: The government has drafted the E-commerce guidelines under the new Consumer Protection Act, under which stringent action has been prescribed against violators. The proposed guidelines entail a 14-day deadline to effect refund request mandate, e-tailers to display details of sellers supplying goods and services on their website, and moot the procedure to resolve consumer complaints. The companies are required to submit a self-declaration to the consumer affairs ministry stating that they are confirming with the guidelines.

6. BANKS WARY OF INTEREST RATE CUTS: Banks are wary of stashing retail deposit rates beyond a certain basis points, as doing so would make it tougher to garner deposits in a competitive market where incremental savings are hard to come by. Bankers have expressed concerns over the falling deposit rates, especially for senior citizen who largely depend on their interest earnings. Banks are protecting small depositors who account for around 80% of their total deposit portfolio.

7. GOVERNMENT ANNOUNCES MEGA MERGERS OF PUBLIC SECTOR BANKS: The Government has announced four major mergers of public sector banks, bringing down their numbers to 12. This move is aimed at converting state-owned banks to global sized banks. Oriental Bank of Commerce and United Bank of India will be merged with Punjab National Bank, Syndicate Bank will be merged with Canara Bank, Allahabad Bank will be amalgamated with Indian Bank and Corporation Bank, Andhra Bank will be merged with Union Bank of India. 8. GOLD PRICES BREACH THE RECORD OF Rs.40,000 MARK AS RECESSION FEARS DEEPEN : Gold prices breached the record of Rs.40,000per 10 gram for the first time at the bullion market on strong demand from the investors amid growing fears of global economic slowdown.

1. SHADOW BANKING CRACKDOWN BY RBI: Reserve Bank of India is stamping out “ShadowBanking Financiers” at a very fast pace in recent years. In simple terms “Shadow Banking” system refers to unregulated activities by regulated institutions. RBI has cancelled registrations of 1,851 Non-Banking Finance Companies (NBFCs) in FY 2018-19 which is 8 times more than the previous year. RBI has cancelled the permits of these NBFCs as they could not even raise 20 million rupees to meet the regulatory requirements. RBI has also tightened regulations this year by putting in place rules requiring to appoint a Chief Risk Officer and proposing stringent liquidity requirements. The government also plans to bolster RBI’s authority over shadow banking as it has transferred the regulation of Housing Finance Companies to RBI from National Housing Bank. 2. PUBLIC SECTOR BANKS SHUT MANY BRANCHES/ATMs: Public Sector Banks are shutting many of their branches and ATMs in major cities to cut expenses as urban customers are increasingly using digital channels for their banking needs, rendering the costs for maintaining these physical infrastructures as unviable. Economic Times analysis in this regard shows that top 10 state-run banks with largest branch network have shut nearly 5,500 ATMs and 600 branches across the country over the past one year. The biggest of these lenders, SBI has shut 420 branches and 768 ATMs between June 2018 to March 2019. These closures are happening only in metro cities and not in rural or semi-urban areas. Amongst all PSBs, Indian Bank is the only exception which has increased both its ATM and Branch network. 3. LOANS TO DEVELOPERS FROM NBFCs HAS REDUCED TO HALF IN FY-2018-19: The liquidity crisis in NBFC sector is so grave that the net loan disbursal by NBFCs and Housing Finance Companies (HFCs) to Realty Sector (Loans to Developers) has declined by nearly 50% in Financial Year 2018-19 on a year-on-year basis. The net disbursals by NBFCs and HFCs to real estate developers declined from Rs. 52,000 crore in Financial Year 2017-18 to Rs. 27,000 crore in Financial year 2018-19. 4. SBI PLANS TO ESTABLISH NEARLY 10 LAKH “YONO” CASH POINTS: State Bank of India is planning to establish nearly 10 lakh “YONO” cash points in the country in about 18 months’ time. The YONO platform is secure and will eliminate the requirement of using debit cards. A customer can make bill payment and can do digital transactions by using the YONO cash feature. The bank has no plans to discontinue debit cards but increased use of digital platform will itself reduce the requirement of the debit cards.

5. PSBs TO SUGGEST STEPS TO BOOST ECONOMY: At present many a factor such as high GST rates, subdued farm product prices, stagnant income levels, low job generation and natural calamities have led to economic slowdown which has affected almost all the sectors of economy. In a step to shield the country from the onslaught of the ongoing general economic slowdown, the Central government has asked Public Sector Banks (PSBs) to recommend ways and ideas to prop up growth. PSBs have several thousand bank branches across the country and their assessment is necessary as they directly deal with MSMEs and other customers. PSBs have been asked to analyze the ground level economic situation and come out with valid suggestions.

6. FINANCE MINISTRY AMENDS PMLA ACT TO OFFER CLARITY ON DIGITAL KYC: The Finance Ministry has amended the Prevention of Money Laundering Act, 2002 to clarify the various modes of capturing customer details electronically. This would potentially change the way regulated entities such as banks and telecom companies capture these details completely. The move clears the path for RBI and other regulators to come out with precise guidelines. Further, the changes in the ACT will also enable customers to submit Aadhaar details voluntarily, thereby paving the way for remote onboarding, which had stopped after a Supreme Court order last year.

7. SOON ITR FORMS WILL HAVE PRE-FILLED INVESTMENT DATA: The tax payers maysoon get Income Tax Return forms filled with their respective investment data like the dividends from mutual funds, loss on equities and interest income. We have to just check the details for the correctness, pay tax if any and file our returns. Keen to take the pre-filled tax return forms to the next level, the revenue department has initiated talks with market regulator SEBI to explore the idea of getting details of investment in the IT return forms.

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.