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Monthly GK Banking Capsule 2019

June 2019

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Monthly GK Banking Capsule 2019

June 2019

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MONTHLY GENERAL KNOWLEDGE BANKING & FINANCE CAPSULE

(June 2019)

Banking News

RBI allows banks to use Aadhaar for KYC

• The Reserve Bank of India has said that banks can now use Aadhaar for KYC verification if the customer gives consent.

• RBI also updated Aadhaar to its list of documents eligible for identification of individuals.

• In 2018, the Supreme Court prohibited the use of Aadhaar for KYC due to privacy concerns.

Bank Fraud touched Rs 71,500 Crore in 2018-19

• The Reserve Bank of India has revealed that over 6,800 cases of bank fraud involving an unprecedented ₹71,500 crore were reported in 2018-19.

• This is 74% higher than the amount involved in 5,916 such cases reported in 2017-18.

• The bank frauds were categorised and analysed for 13 sectors, including gem and jewellery.

IOB launches ‘Bank on Wheels’ facility

• Indian Overseas Bank (IOB) launched ‘Bank on Wheels’ facility in 14 of its lead districts in Tamil Nadu and Kerala.

• The mobile van facility will enable the public, especially senior citizens, conveniently get door-step banking facility available at identified locations of the lead districts.

• A dedicated banking correspondent will accompany the vehicle with a micro-ATM inside the van.

India's 1st mutual fund side pocket launched

• Tata Mutual Fund has announced plans to introduce segregated portfolios (side pockets) in three schemes.

• This instance is India’s first formal use of the side pocketing provisions introduced by SEBI in December 2018.

• This is the first time an AMC is actually proposing to carry out the procedure.

RBI removes NEFT, RTGS payment charges

• RBI has removed charges for payments via NEFT and RTGS. This means that payments via NEFT and RTGS would become either free or charges would be low.

• RBI levies minimum charges on banks for transactions routed through its Real Time Gross Settlement System (RTGS) meant for large value instantaneous fund transfers and the National Electronic Funds Transfer System for other fund transfers.

Paytm ahead of major banks in digi transact.

• Paytm Payments Bank has received a target of 501.16 crore digital transactions for the financial year 2019- 20.

• It is higher than the targets set for major banks including HDFC Bank, ICICI Bank, and Punjab National Bank.

• Paytm Payments Bank is only behind the State Bank of India, which has the highest target for digital transactions.

SBI cut interest rate on CC/OD

• State Bank of India announced introduction of repo rate linked home loans from 1 July.

• It will pass on the 25 bps repo rate cut, announced by the Reserve Bank of India yesterday, to some cash credit borrowers.

• The effective repo-linked lending rate (RLLR) for CC/ OD customers is 8% now, while for savings deposits above ₹1 lakh the new rate would be 3%.

State Bank of India (SBI)

• Chairman: Rajnish Kumar

• Headquarters: Mumbai

• Founded on 1st July 1955

Kotak Mahindra penalised by RBI

• The RBI imposed a penalty of Rs. 2 crores on Kotak Mahindra Bank for not complying with the central bank's directions to furnish details of its promoter shareholding.

• The bank was directed by RBI to furnish information about details of the shareholding held by its promoters.

• It also asked the bank to submit details of the proposed course of action or strategy of the bank.

Reserve Bank of India

• 25th Governor: Shaktikant Das


• Founded: 1 April 1935, Kolkata.

Indian Overseas Bank (IOB)

• CEO: R. Subramaniakumar

• Headquarters: Chennai

• Founded on 10th February 1937

Monthly GK Banking Capsule 2019 June 2019

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Kotak Bank

• CEO : Uday Kotak.


Cheque books for no-frills accounts

• The RBI has allowed banks to offer cheque book facility and other services to the no-frills account holders.

• But they could not ask such account holders to maintain any minimum balance for such services.

• As per the norms of no-frills account, account holders are not required to maintain minimum balance and can get certain minimum facilities for free

RBI tightened noose around banks

• The RBI asked banks to ensure their ATMs are grouted to a wall, pillar, or floor by September end, except those installed in high secured premises.

• The RBI has told banks that they will have to pay penalty for keeping ATMs dry.

• Banks can not keep ATMs out of cash for more than 3 hours, doing which will attract penalty and the penalty will be imposed region-wise.

RBI fined HDFC bank Rs. 1 crore

• RBI fined HDFC Bank Rs 1 crore for not reporting frauds and non-compliance with other directions.

• The fine pertains to submission of forged bill of entries (BoEs) by certain importers to HDFC Bank for remittance of foreign currency.

• The penalty was imposed in exercise of powers vested in RBI under the provisions of Section 47A(1)(c) and Section 46(4)(i) of the Banking Regulation Act, 1949.

IndusInd Bank to merge with BFIL

• IndusInd Bank announced 4 July, 2019 as the effective date of the merger with Bharat Financial Inclusion Ltd (BFIL).

• M R Rao, current CEO of BFIL, will become the CEO of IndusInd Financial Inclusion Ltd (IFIL).

• The Business Correspondent network of BFIL will operate under IFIL.

Induslnd Bank

• CEO: Romesh Sobti


• Founded: 1994

RBI fined South Indian Bank

• The RBI has imposed a fine of Rs. 10 lakh on South Indian Bank for violating norms regarding bank guarantees.

• The penalty follows references from a government department and a private party alleging non-payment of invoked bank guarantees by the lender.

• Examination in this regard revealed a violation of RBI directions on 'Guarantees and Co-acceptances'.

South Indian Bank • CEO: V. G. Mathew

• Headquarters: Thrissur

• Founded: 29th January 1929

NHB tightened norms on HFC's leverage

• The National Housing Bank (NHB) has tightened its rules on leverage and capital adequacy ratio for housing finance companies (HFCs).

• It now mandates HFCs to bring down their total borrowings to not more than 12 times their net owned funds as on 31 March 2022.

• The capital adequacy ratio for HFCs has been increased to 13% by March 2020, 14% by March 2021 and 15% by March 2022.

Canara Bank updated rules for cash deposits

• From July 1, 2019, Canara Bank customers can deposit cash of up to Rs 50,000 for free only thrice a month.

• From the fourth transaction or for cash deposits of over Rs 50,000, there will be a service charge of Rs 1 per thousand, with a minimum of Rs 50 and a maximum of Rs 5,000 plus GST.

• For current account/overdraft/open cash credit account holders a minimum Rs. 100 will be charged.

Indiabulls and Lakshmi V. Bank merg. approved

• Competition Commission of India (CCI) has approved the merger of the Indiabulls Housing Finance and Lakshmi Vilas Bank.

• Shares of Lakshmi Vilas Bank hit the upper circuit of 10% after CCI approved its merger with Indiabulls Housing Finance.

• The combined entity, with employee strength of 14,302, will have a loan book size of ₹1.23 lakh crore for the first nine-month period of 2018-19.

Lakshmi Vilas Bank

• CEO: Parthasarathi Mukherjee

• Headquarters: Chennai

• Founded: 1926

HDFC Bank

• CEO: Aditya Puri


• Founded: August 1994

Canara Bank

• CEO: R. A. Sankara Narayanan

• Headquarters: Bengaluru

• Founded: 1st July 1906


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Financial News

RBI proposes new liquidity norms for NBFCs

• RBI has issued draft guidelines on liquidity management for the NBFCS and proposed a liquidity coverage ratio for large NBFCs.

• It covers all deposit taking NBFCs and non-deposit taking NBFCs with an asset size of ₹5,000 crore and above.

• Company fixed deposits (FDs), unlike bank FDs, don’t come with insurance.

RBI to observe fin lit week from June 3-7

• The Reserve Bank of India will observe Financial Literacy Week across the country from 3rd to 7th June 2019.

• The theme this year is - 'Farmers and how they benefit by being a part of the formal banking system'.

• In a release, the apex bank said, posters and leaflets will be used to spread awareness and spread the message of financial literacy among the farming community.

India Per-capita income showing a rise of 10%

• In 2017-18, the monthly per-capita income had stood at ₹9,580.

• The country's per-capita income is estimated to have risen by 10% to ₹10,534 a month during the financial year ended March 2019.

• The gross national income (GNI) at current prices is estimated at ₹188.17 lakh crore during 2018-19, as compared to ₹169.10 lakh crore during 2017- 18, rising by 11.3%.

GDP growth slumps to 5.8% in March quarter

• India’s GDP grew at 5.8% in the January-March 2019 quarter, dragging down the full year growth to a five-year low of 6.8%.

• The unemployment rate in the country rose to a 45-year high of 6.1% in 2017-18

• The data showed that 7.8% of the employable urban youth and 5.3% of employable rural youth was without jobs. Additionally 6.2% male and 5.7% of females across the country were jobless.

FICCI survey predicted GDP growth of India at 7.1% for FY20

• FICCI's (Federation of Indian Chambers of Commerce and Industry) economic outlook survey projected India's median GDP (Gross Domestic Product) 7.1% for FY20 and 7.2% for FY21.

• Minimum and maximum growth estimate stood at 6.8 per cent and 7.3 per cent.

• Wholesale Price Index (WPI) based inflation rate is projected at 3.1% in 2019-20 with a minimum and maximum range of 2.1 per cent and 4 per cent, respectively.

•

• Consumer Price Index (CPI) based inflation forecasted at 4% for 2019-20 with a minimum and maximum range of 3.5 per cent and 4.1 per cent, respectively.

RBI sets up task force on secondary market

• The RBI constituted a task force to suggest policy and regulatory interventions required for the development of the secondary market in corporate loans, including loan transaction platform for stressed assets.

• The task force will be headed by Canara Bank Chairman T N Manoharan.

• Secondary loan market in India is largely restricted to asset reconstruction companies.

RBI sets up committee for housing finance

• The Reserve Bank of India (RBI) has set up a committee to look into the current state of mortgage securitisation in the country.

• It will identify the issues faced by the securitisation market and give suggestions to develop it going ahead.

• Bain & Co's senior advisor Harsh Vardhan has been appointed as the chairperson of the committee.

RBI to cut Repo rate by 25BPS on weak growth

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• The RBI’s monetary policy committee (MPC) will cut the key policy rate by 25 basis points (bps) as inflation cooled and economic growth slowed to a five-year low,

• Basis point (BPS) refers to a common unit of measure for interest rates and other percentages in finance.One BPS is equal to 1/100th of 1%, or 0.01%, or 0.0001, and is used to denote the percentage change in a financial instrument.

Consumer Price Index for Industrial Workers

• The All-India CPI-IW for April, 2019 increased by 3 points and pegged at 312.On 1-month percentage change.It increased by (+) 0.97 % between March and April,2019 when compared with the increase of (+) 0.35% between the corresponding months of previous year.

• A Consumer Price Index measures changes in the price level of market basket of consumer goods and services purchased by households.

India will be 5th largest economy in 2019

• India is forecast to become the world's fifth largest economy in 2019, reaching a total GDP size exceeding $3 trillion, and overtaking its former colonial ruler, the United Kingdom.

• By 2025, Indian GDP is also forecast to surpass Japan, which will make India the second-largest economy in the Asia-Pacific region.

RBI cuts repo rate by 25 bps to 5.75%

• RBI Monetary Police Committee unanimously cut repo rate,the rate at which it lends to banks by 25 basis points from 6% to 5.75%.

• The bank also changed the monetary policy stance from neutral to accommodative.

• This is the third straight interest-rate cut under RBI Governor Shaktikanta Das, who also heads the Monetary Policy Committee (MPC).

Govt. to bolster employment, economic growth

• PM ordered the formation of two new Cabinet committees that will focus on employment and economic growth.

• The committees are constituted under PM's chairmanship.

• The Cabinet Committee on Employment and Skill Development constitutes of 10 members including Amit Shah,FM Nirmala,Piyush Goyal,Narendra Singh,Ramesh Pokhriyal,Dharmendra Pradhan,MahendraPandey,Santosh Gangwar and Hardeep Singh.

Govt may announce infusion of ₹4,000cr in PSU

• The government is likely to announce infusion of about ₹4,000 crore in three public sector general insurance companies to shore up their capital-National Insurance Company,Oriental Insurance Company and United India Insurance Company.

• The capital infusion will help them improve their financial health to an extent that the proposed merger of the general insurance firms.

Nirmala to attend G20 meeting in Japan

• Finance Minister Nirmala Sitharaman will attend the 2-day meeting of G-20 Finance Ministers and Central Bank governors in Japan on June 8-9, 2019.

• It is the first overseas visit of Sitharaman as the Finance Minister.

• The main aim is to focus on the risks and challenges of overseas trade and investment in infrastructure which are faced by our country.

RBI relaxed stressed asset norms

• The RBI issued a new prudential framework for resolution of stressed assets, effectively replacing its controversial 12 February 2018 circular.

• Three major changes mark the new circular.

• The central bank has made it voluntary for lenders to take defaulters to the bankruptcy court.

• The framework now applies to a larger universe of lenders.

• Penal provisions have been introduced for lenders.

India called upon G-20 countries

• India has called upon the G-20 countries to urgently fix the issue of taxing profits made by digital economy companies in countries where they do not have a significant physical presence.

• Finance Minister Nirmala Sitharaman addressed the 2-day meeting of the G-20 Finance Ministers and central bank Governors at Fukuoka in Japan on 9 June 2019.

NPAs plunge to 9.3% in FY19

• The system-wide non-performing assets stock has declined massively to 9.3% in March 2019.

• This is much faster than the RBI's estimate and steeply down from 11.5% in 2018.

• In its half-yearly financial stability report, RBI had estimated that the gross non- performing assets ratio might improve to 10.3% by March 2019 from 10.8% in September 2018.

RBI constituted a committee

• The RBI has constituted a 6-member committee to review the entire gamut of ATM charges and fees.

• Chief Executive of Indian Banks’ Association VG Kannan will chair the committee.

• The committee will review existing patterns of costs, charges and interchange fees for ATM transactions.

• It is to submit its report within two months from the date of its first meeting.

CBDT issued new norms


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• The Central Board of Direct Taxes issued new norms for compounding of offences on 14 June 2019.

• The new guidelines have exclusion provisions, under which, offences under the Black Money and Imposition of Act, 2015, cannot be compounded in normal cases.

• This includes money laundering cases.

• Compounding means that the authorities agree to not prosecute offenders in return for a consideration.

WPI inflation at 2-year low of 2.45%

• Wholesale price-based inflation slipped to 2.45% in May helped by falling prices of food articles, fuel, and power items.

• The Wholesale Price Index (WPI)-based inflation was at 3.07% in April. It was 4.78% in May 2018.

• Inflation in food articles basket was 6.99%, down from 7.37% in April.

• However, onion prices spiked during the month with inflation at 15.89%, against (-) 3.43% in April.

Fitch cut India's growth forecast to 6.6%

• Fitch lowered India's growth forecast to 6.6% for the current fiscal from 6.8% projected earlier.

• In its latest Global Economic Outlook, Fitch retained its GDP growth forecast for the next fiscal (2020-21) at 7.1% and 7.0% for 2021-22.

• In the last fiscal, the Indian economy grew at a 5- year low pace of 6.8%.

• India's GDP growth declined for the fourth consecutive quarter in January-March.

RBI fell short of meeting Basel 3 norms

• RBI has fallen short of meeting the tougher requirements set under the Basel 3 norms as per a report by Basel Committee on Bank Supervision (BCBS).

• The committee reports that RBI is yet to publish the securitization framework and rules on total loss absorbing capacity (TLAC) requirements.

• Globally, the norms held in the banking book had come into effect on 1 January 2018.

Bangladesh: fastest growing economy

• Bangladesh has emerged as the fastest growing economy among the 45 countries of the Asia-Pacific region according to Asian Development Bank (ADB).

• In the financial year, 2018-19 Bangladesh attained a growth rate of 7.9 % which is its fastest rate since 1974.

• Higher public sector investment, stronger consumption demand, were among the key factors of the high growth performance of Bangladesh.

FM chaired 35th GST Council meeting

• The 35th GST Council Meeting was held on 21 June 2019 under the chairmanship of Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman.

• Altogether, 12 Agenda items were discussed during the Council meeting.

• Some of these items were of regular nature like confirmation of the Minutes of the 34th GST Council Meeting, deemed ratification by the Council of notifications.

Panel to review margins on derivatives

• The Securities and Exchange Board of India (SEBI) has decided to set up a working group to review the current framework of margins in the futures and options segment.

• The working group will be headed by NSE Clearing Ltd.

• It will submit its recommendations to the Secondary Market Advisory Committee.

• The existing margin requirement in the derivatives segment is increasing the cost of trading.

US: India's largest merchandise trade partner

• The US overtook China to once again become India's top goods trading partner in 2018-19.

• India’s trade surplus with the US declined to $16.8 billion from $21.2 billion in 2018-19.

• The decline in India’s trade surplus with the US comes amid a year-long trade war.

• Also, India’s dependence on Chinese imports declined to $70 billion from $76 billion a year ago.

SEBI to allow IPOs by tech companies

• SEBI plans to allow technology companies having superior voting right shares to launch their IPOs.

• It is planning to issue a new set of norms for differential voting rights.

• The new norms are particularly aimed at helping new technology companies with asset light business model.

RBI launched CMS for filing complaints

• The RBI has launched an application on its website for lodging complaints against banks and NBFCs.

• It will improve customer experience in timely redressal of grievances.

• RBI Governor Shaktikanta Das launched the Complaint Management System (CMS) i.e. a software application on 24 June 2019.

• The application also improves transparency by keeping the complainants informed.

RBI panel suggested Rs.5000 cr fund for MSMEs

• An RBI committee has suggested a ₹5,000 crore stressed asset fund for domestic micro, small and medium enterprises (MSMEs).

• The committee to study the problems faced by MSMEs was chaired by U.K. Sinha, former chairman of the

Securities and Exchange Board of India. • India’s 63.38 million MSMEs contribute significantly to the

country’s economic growth.


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RBI union moots collegium

• RBI's employees association has called for a collegium of experts to select a new governor and deputy governors so as to ensure the autonomy of RBI.

• As per Section 8 of the Reserve Bank of India Act of 1934, the governor and deputy governors are appointed by the government.

• Acharya, the youngest ever deputy governor, resigned from his position a few weeks back.

Lok Sabha passed SEZ Amendment Bill

• Special Economic Zones (Amendment) Bill, 2019 was passed in the Lok Sabha on 26 June 2019.

• It was initially promulgated as an ordinance in March prior to the announcement of General Elections.

• NK Premachandran of Revolutionary Socialist Party moved a statutory resolution to disapprove the Special Economic Zones (Amendment) Ordinance, 2019.

SEBI tightens norms for MF investments

• Securities and Exchange Board of India tightened norms on investments by Mutual Funds (MFs).

• It came as a reaction to a series of credit-related events that put investor money at risk.

• SEBI said MFs will now be mandated to invest in only listed non-convertible debentures.

• Ajay Tyagi is the chairman of SEBI.

WTO panel ruled in India's favour

• A World Trade Organisation, WTO dispute resolution panel has ruled in favour of India in a case against the United States.

• The panel stated that America's domestic content requirements and subsidies provided by eight of its states in the renewable energy sector are violative of global trade norms.

• The panel concluded in its ruling that the measures of the US are inconsistent.

Payment firms can process abroad: RBI

• The RBI has said foreign payment firms can process transactions outside of the country but the related data should be brought back for local storage within 24 hours.

• Such data must be "deleted from the systems abroad", it added.

• The previous RBI directive in April 2018 didn't specify whether data can be processed abroad or should only be done locally.

Govt cut interest rate on small saving schemes

• The government has reduced interest rate on small savings schemes, including the National Savings Certificate and Public Provident Fund, by 0.1% for the July-September quarter.

• PPF and NSC will fetch an annual interest rate of 7.9% from the existing rate of 8%, while Kisan Vikas Patra will yield 7.6%.

• The Sukanya Samriddhi Account will fetch a lower return of 8.4% from 8.5%.

Business and Economy

• India's automobile retail industry has sought recognition as micro, small and medium enterprises (MSMEs) in the Union Budget 2019- 20 which will be presented on 5 July 2019.

• India’s current account deficit (CAD) widened to $57.2 billion, or 2.1% of GDP, in FY19 from 1.8% a year ago.

Surjit Bhalla Committee on Trade and Policy

• High Level Advisory Group (HLAG) headed by Dr. Surjit S. Bhalla has been constituted by the Department of Commerce.

• The HLAG will investigate ways for boosting India’s share and importance in global merchandise and services trade.

• The Committee has recommended 'Elephant Bonds' as a specialised security product providing funds towards Long Term Infrastructure.

RBI sets base rate of 9.18% for NBFC-MFI

• The Reserve Bank of India has set an average base rate of 9.18% for Non-Banking Financial Companies and Micro Finance Institutions (NBFC-MFI) to be charged from their customers for the quarter beginning 1 July 2019.


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• The Reserve Bank of India sets the average base rate for NBFC-MFIs on the basis of the average of the base rate of the five largest commercial banks.

Govt forms working group for revision of WPI

• On 27 June 2019, the government has set up an 18-member working group for the revision of the current series of Wholesale Price Index (WPI).

• The working group is under the Chairmanship of Ramesh Chand, Member, NITI Aayog.

• The Department for Promotion of Industry and Internal Trade will be the nodal office for the group.

RBI launched CMS for filing complaints

• The RBI has launched an application on its website for lodging complaints against banks and NBFCs.

• It will improve customer experience in timely redressal of grievances.

• RBI Governor Shaktikanta Das launched the Complaint Management System (CMS) i.e. a software application on 24 June 2019.

• The application also improves transparency by keeping the complainants informed.

RBI panel suggested Rs.5000 cr fund for MSMEs

• An RBI committee has suggested a ₹5,000 crore stressed asset fund for domestic micro, small and medium enterprises (MSMEs).

• The committee to study the problems faced by MSMEs was chaired by U.K. Sinha, former chairman of the Securities and Exchange Board of India.

• India’s 63.38 million MSMEs contribute significantly to the country’s economic growth.

RBI union moots collegium

• RBI's employees association has called for a collegium of experts to select a new governor and deputy governors so as to ensure the autonomy of RBI.

• As per Section 8 of the Reserve Bank of India Act of 1934, the governor and deputy governors are appointed by the government.

• Acharya, the youngest ever deputy governor, resigned from his position a few weeks back.

Lok Sabha passed SEZ Amendment Bill

• Special Economic Zones (Amendment) Bill, 2019 was passed in the Lok Sabha on 26 June 2019.

• It was initially promulgated as an ordinance in March prior to the announcement of General Elections.

• NK Premachandran of Revolutionary Socialist Party moved a statutory resolution to disapprove the Special Economic Zones (Amendment) Ordinance, 2019.

SEBI tightens norms for MF investments

• Securities and Exchange Board of India tightened norms on investments by Mutual Funds (MFs).

• It came as a reaction to a series of credit-related events that put investor money at risk.

• SEBI said MFs will now be mandated to invest in only listed non-convertible debentures.

• Ajay Tyagi is the chairman of SEBI.

WTO panel ruled in India's favour

• A World Trade Organisation, WTO dispute resolution panel has ruled in favour of India in a case against the United States.

• The panel stated that America's domestic content requirements and subsidies provided by eight of its states in the renewable energy sector are violative of global trade norms.

• The panel concluded in its ruling that the measures of the US are inconsistent.

Payment firms can process abroad: RBI

• The RBI has said foreign payment firms can process transactions outside of thecountry,,,y, but the related data should be brought back for local storage within 24 hours.

• Such data must be "deleted from the systems abroad", it added.

• The previous RBI directive in April 2018 didn't specify whether data can be processed abroad or should only be done locally.

Govt cut interest rate on small saving schemes

• The government has reduced interest rate on small savings schemes, including the National Savings Certificate and Public Provident Fund, by 0.1% for the July-September quarter.

• PPF and NSC will fetch an annual interest rate of 7.9% from the existing rate of 8%, while Kisan Vikas Patra will yield 7.6%.

• The Sukanya Samriddhi Account will fetch a lower return of 8.4% from 8.5%.

Business and Economy

• India's automobile retail industry has sought recognition as micro, small and medium enterprises (MSMEs) in the Union Budget 2019- 20 which will be presented on 5 July 2019.

• India’s current account deficit (CAD) widened to $57.2 billion, or 2.1% of GDP, in FY19 from 1.8% a year ago.

Surjit Bhalla Committee on Trade and Policy

• High Level Advisory Group (HLAG) headed by Dr. Surjit S. Bhalla has been constituted by the Department of Commerce.

• The HLAG will investigate ways for boosting India’s share and importance in global merchandise and services trade.


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• The Committee has recommended 'Elephant Bonds' as a specialised security product providing funds towards Long Term Infrastructure.

RBI sets base rate of 9.18% for NBFC-MFI

• The Reserve Bank of India has set an average base rate of 9.18% for Non-Banking Financial Companies and Micro Finance Institutions (NBFC-MFI) to be charged from their customers for the quarter beginning 1 July 2019.

• The Reserve Bank of India sets the average base rate for NBFC-MFIs on the basis of the average of the base rate of the five largest commercial banks.

Govt forms working group for revision of WPI

• On 27 June 2019, the government has set up an 18-member working group for the revision of the current series of Wholesale Price Index (WPI).

• The working group is under the Chairmanship of Ramesh Chand, Member, NITI Aayog.

• The Department for Promotion of Industry and Internal Trade will be the nodal office for the group.

Financial Schemes & MoUs

PM-KISAN Yojana extended to all farmers

• PM-KISAN Scheme extension to include all eligible farmer families irrespective of the size of land holdings.

• The key element of PM-KISAN is income support of Rs.6000/- to the small and marginal landholder farmer families with cultivable land holding upto 2 hectare across the country which has been now expanded.

• The amount will be released in three 4-monthly instalments of Rs.2000/- each year

IIT Guwahati signs MoU with ISRO

• IIT Guwahati has signed an MoU with the Indian Space Research Organisation (ISRO) to set up an IITG-ISRO Space Technology Cell (STC) at the institute.

• IITG-ISRO STC would be first of its kind in the North-east region to augment research and capacity building processes in the field of space technology.

• The space technology cell will constitute faculty members from IIT Guwahati.

Forest Dept signs MoU for Byculla extension

• The state forest dept and the civic body signed a memorandum of understanding (MoU) for the handing over of around 100 acres of land at Aarey Colony in Goregaon to extend the Veermata Jijabai Bhosle Udyan (Byculla zoo).

• After the extension, the civic body plans to introduce state-of-the-art facilities at par to the zoos located abroad the expenditure for which, would be around Rs 500 crore.

MCA and SEBI signed MoU

• A MoU was signed between the Ministry of Corporate Affairs (MCA) and SEBI for data exchange between the two regulatory organizations.

• The MoU was signed by Shri K.V.R. Murty, Joint Secretary, MCA and Smt. Madhabi Puri Buch, Whole Time Member, SEBI.

• The MoU comes in the wake of increasing need for surveillance in the context of Corporate Frauds affecting important sectors of the economy.

Tamil Nadu govt, World bank signed agreement

• Tamil Nadu Government(GoTN) and the World Bank signed a $287-million loan agreement for the Tamil Nadu Health System Reform Programme (TNHSRP).

• The main aim is to improve the quality of healthcare and to reduce the burden of noncommunicable diseases (NCDs).

• Tamil Nadu is also dealing with a growing burden of NCDs as they account for nearly 69 percent of deaths in the State.

V.O. Chidambaranar Port Trust inked MoU

• The V.O. Chidambaranar Port Trust, Tuticorin and Central Warehousing Corporation (CWC) signed a MoU on 10 June 2019.

• It will facilitate Direct Port Entry (DPE) of e-sealed factory stuffed export container to the port under ‘Ease of Doing Business’.

MoC, MoU b/w India and Kyrgyzstan approved

• A MoC between India and Kyrgyzstan was approved for collaborative research work on High Altitude Biology and Medicine.

• It will help in understanding the physical and mental picture of soldier system at high altitude.

• A MoU was approved in the field of Legal Metrology between India and Kyrgyzstan. It will be signed from June 13-14, 2019.

MoU between India and Russia approved

• The Union Cabinet approved the MoU on the cooperation between the Ministry of Railways, India and Railway Research Institute, Russia.

• The MoU will facilitate the exchange of information, expert meetings, seminars, technical visits, and implementation of jointly agreed cooperation projects.

• The MoU was signed in April 2019.

MoU between India and Thailand approved

• The Union Cabinet approved a MoU on the cooperation between India and Thailand in the field of Astronomy / Astrophysics / Atmospheric Science.

• The MoU will lead to new scientific results, human resource development through increased scientific


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interaction and training, joint use of scientific infrastructure, etc.

• The MoU was signed in November 2018.

MoU between Indian and Finland approved

• The Union Cabinet, approved a MoU on the cooperation in the area of Cyber Security between India and Finland.

• The MoU intends to promote closer cooperation for exchange of knowledge and experience in detection, resolution and prevention of security related incidents between India and Finland.

• The MoU was signed in January 2019.

MoU between India and Bolivia approved

• The Union Cabinet approved the MoU on the cooperation between India and Bolivia on cooperation regarding Bioceanic Railway Integration Corridor Project.

• The MoU will facilitate exchange of information, expert meetings, seminars, technical visits and implementation of jointly agreed cooperation projects.

• The MoU was signed in March 2019.

Govt to sign MoU for 300 gaushalas

• MP Government is set to sign a MoU with a company that has promised to build 300 Smart Gaushalas over the next 5 years.

• The company will not charge a penny from the government, but will make money by exporting items made from gaumutra, gobar and the stiff hairs on a cow’s tail’.

• The company has sought 50 acres of land for and will spend Rs 11 crore on each of them

Government to revamp Mudra Scheme

• The finance ministry plans to revamp Pradhan Mantri Mudra Yojna (PMMY), to ensure better access to credit for small firms, boost entrepreneurship and promote financial inclusion.

• Under the scheme, collateral-free loan of up to ₹10 lakh falls under three categories—Shishu, Kishore and Tarun.

• Shishu accounts for loans of up to ₹50,000, while ₹50,001 to ₹5 lakh are disbursed under Kishore.

Government set up 713 Krishi Vigyan Kendras

• The Government has set up 713 Krishi Vigyan Kendras and 684 Agricultural Technology Management Agencies at the district level in the country for dissemination of technologies among the farming community.

• This is aimed at meeting the target of doubling the farmers' income by 2022.

• An Inter-Ministerial Committee has been constituted to examine issues relating to doubling of farmers' income

MoUs and Agreement

• IDBI Bank has entered a bancassurance corporate agency agreement with Tata AIG.

• The National Payments Corporation of India (NPCI) has entered into an agreement with the Government of Telangana to offer MeeSeva portal users the option to pay using UPI Collect Request, RuPay Debit and Credit Cards for the services on the portal.

New Appointments

Appointments Role Person in Charge Interim chairman of the Jammu and Kashmir (J&K) Bank R K Chibber Home Minister of AP Mekathoti Sucharita Chief Justice of the Delhi High Court. Justice Dhirubhai Naranbhai Patel Ex-Officio members of the think tank Rajnath Singh, Amit Shah,

Nirmala S and Narendra Singh Speaker of the Lok Sabha Om Birla Leader of Rajya Sabha Thawarchand Gehlot State president of Nationalist Congress Party, NCP Shankersinh Vaghela CEO and MD Wipro Abidali Z. Neemuchwala Chairman - ITC Ltd Sanjiv Puri Chairman of Axis Bank Rakesh Makhija Union Minister of Tribal Affairs Shri Arjun Munda Goa’s brand ambassador Namrata Menon

Important Definitions

Terms Definitions


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Repo Rate When RBI provides a loan to the bank for short-term between 1 to 90, RBI takes some interest from the bank which is termed as Repo Rate.

Reverse Repo Rate When bank deposit it's excess money in RBI then RBI provides some interest to that bank. This interest is known as Reverse Repo Rate.

Unified Payment Interface

This interface will integrate the entire payment systems in India. It uses a single application programme interface with a series of Application Programme interface (API’S). The mobile devices are the primary object for all the payments.

The Balance of Trade

The difference between the country’s exports and the value of its imports are known as the Balance of Trade. It normally incorporates trade in services unless mentioned as the balance of merchandise trade. It includes earnings (interest, dividends, etc.) on financial assets.

Marginal standing facility

MSF is the rate through which bank can borrow funds for Short time – Overnight basis. Current MSF is 6.00%

SLR – (Statutory Liquidity Ratio)

Every bank has to maintain a certain % of their total deposits in the form of (Gold + Cash + bonds + Securities) with themselves at the end of every business days. Current SLR is 20.75%.

CRR - (Cash Reserve Ratio)

Cash reserve ratio is the minimum amount of deposits that banks have to maintain with the Central Bank. Current CRR is 4%

Bitcoin Bitcoin is a virtual currency/ cryptocurrency and a payment system. It can be defined as decentralized means of tracking and assigning wealth or economy, it is a software protocol. Bitcoin uses two cryptographic keys, one public (username) and one private (password) are generated. 1Bitcoin= 108 Satoshi.

Scheduled bank

Banks which are included in the 2nd Schedule of RBI Act 1934 are known as a scheduled commercial bank. These banks should fulfil two conditions: Paid up capital and collected funds should not be less than Rs.5 Lacs. Any activity of the Bank should not adversely affect the interests of the customers.

Wholesale Price Index

A wholesale price index (WPI) is an index that measures and tracks the changes in the price of goods in the stages before the retail level – that is, goods that are sold in bulk and traded between entities or businesses instead of consumers

Unified Payment Interface

This interface will integrate the entire payment systems in India. It uses a single application programme interface with a series of Application Programme interface (API’S). The mobile devices are the primary object for all the payments.

Money laundering Money laundering is a process of conversion of illegal money from various sources to appear to have originated from legitimated (Legal) source. The major sources of illegal money are tax evasion, bribe, Smuggling etc

Difference between Capital market and Money market

A capital market is an organised market which provides long-term finance for business. Whereas Money market provides short-term finance for business

A Balance of Payments

A list that states a country’s transactions with other countries for a certain time period (generally 1 year). Payments into the country (receipts) are entered as positive numbers, called credits. Payments out of the country (payments) are entered as negative numbers called debts. A single number summarises the country’s international transactions: the balance of payments surplus.

Bill of Exchange A bill of exchange is a non- interest bearing written order which is used


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primarily in foreign trade which binds one party to pay a fixed amount of money to another party at a decided future date. A bill of exchange is signed by the creditor and accepted by a debtor.

Basel 3 norms

Basel III is an international regulatory accord that introduced a set of reforms designed to improve the regulation, supervision and risk management within the banking sector. ... Largely in response to the credit crisis, banks are required to maintain proper leverage ratios and meet certain minimum capital requirements

Bank Rate Bank rate is also termed as “Discount Rate” The rate through which RBI charges certain % for providing money to other banks without any security for a Long period of time for 90 Days & Current Bank Rate is 6.00%.

Inflation Inflation is a State in which the Value of Money is falling and the Prices are rising, over a period of time.

monthly gk banking capsule 2019 june 2019 - …...monthly gk banking capsule 2019 june 2019 4 | p a...

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