Bookmark Bookmark

Banking Digest (24-30 June)

 RBI Deputy Governor Viral Acharya resigns

• Reserve Bank of India’s (RBI) Deputy Governor Viral Acharya has quit six months before the scheduled end of his term. He had joined RBI on January 23, 2017.

• Viral Acharya was in charge of the Financial Stability Unit, Monetary Policy Department, Department of Economic and Policy Research, Financial Markets Operation Department, Financial Market Regulation Department, among others at the RBI.

 

RBI advises commercial banks to adopt Education Loan Scheme

• The Reserve Bank of India has advised all Scheduled Commercial Banks to adopt Education Loan Scheme, formulated by Indian Banks Association.

Salient features of the Scheme includes:
• Loan upto Rs 10 lakh for study in India and upto Rs 20 lakh for study abroad.
• Collateral free loans upto Rs 7.5 Lakh under the Credit Guarantee Fund Scheme for Education Loans (CGFSEL).
• No Margin for loan up to Rs 7.50 Lakh.
• Repayment period of 15 years.
• One Year Moratorium for repayment after completion of studies in all cases.


RBI launches Complaint Management System

• The Complaint Management System (CMS) is a software application launched by Reserve Bank of India on its website. It will be used for lodging complaints against banks and NBFCs with a view to improve customer experience in timely redressal of grievances.

• Customers can lodge complaints against any regulated entity on the platform. These complaints will be directed to the appropriate office of the Ombudsman/Regional Office of the RBI. The RBI is also planning to introduce a dedicated Interactive Voice Response (IVR)system to track the status of complaints.

 

RBI relaxes leverage ratio for banks

• The Reserve Bank relaxed the leverage ratio (LR) to 4% for Domestic Systemically Important Banks (DSIBs) and 3.5% for other banks. This has been done to help them boost their lending activities.

• The reduced leverage ratio will be effective from the quarter commencing October 1, 2019. The leverage ratio, as defined under Basel-III norms, is Tier-I capital as a percentage of the bank’s exposures.

 

Govt cuts interest rate on small savings schemes

• The GoI has reduced interest rates for small savings schemes by 10 basis points for the July-September quarter of the 2019-20 financial year.

• Some schemes that will fetch lower interest rates are Kisan Vikas Patra (7.6%), Public Provident Fund (7.9%), Sukanya Samriddhi Account (8.4%).


First Resilient Kerala Program

• The GoI, the Government of Kerala and the World Bank have signed the Loan Agreement of USD 250 million for the First Resilient Kerala Program. The program will focus on strengthening the state’s institutional and financial capacity to protect the assets and livelihoods of poor and vulnerable groups.

• The New Program is part of ‘Rebuild Kerala Development Programme’ aimed at building a green and resilient Kerala.


Facebook launches cryptocurrency “Libra”

• Facebook has announced a digital currency called Libra that will allow its billions of users to make financial transactions across the globe.

• Libra is being touted as a means to connect people who do not have access to traditional banking platforms. Technology to make transactions with Libra will be available as a standalone app – as well as on WhatsApp and Facebook Messenger platforms – as early as 2020.

 

India signs USD 400M loan agreement with World Bank

• India has signed a loan agreement worth 400 million dollar with the World Bank to help treat and eliminate Tuberculosis from the country. The World Bank supported program will cover nine States and it will support the government’s National Strategic Plan to end TB in India by 2025.

• Under the program, GoI provide Direct Benefit Transfers to patients for acquiring the critical nutrition needed during treatment.

 

Max Bupa partners with MobiKwik for health insurance

• Health insurance provider Max Bupa partners with fintech platform MobiKwik to promote bite sized group health insurance products for MobiKwik’s 107 million customersacross the country.

• Bite-sized insurance offerings are over the counter health insurance products, primarily targeted towards working professionals and millennials.

 

World Bank approves $147 Million Loan to the Government of Jharkhand

• The Government of India, the Government of Jharkhand and the World Bank signed a $147 Million Loan Agreement.

• Jharkhand will invest the amount to provide urban services such as water supply, sewerage, drainage and urban road.


RBI allows ARCs to buy financial assets from peers

• The Reserve Bank of India has allowed Asset Reconstruction Companies (ARCs) to buy financial assets from other ARCs. The transactions must be settled in cash between the 2 enitities.

• In view of amendment to the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002, it has been decided to permit ARCs to acquire financial assets from other ARCs.

 

RBI’s committee recommendations for MSME sector

• RBI’s U.K. Sinha led committee give the following recommendations for MSME sector:

• The creation of a distressed asset fund, with a corpus of Rs 5,000 crore, structured to assist MSME units in clusters.
• The formation of a government sponsored Fund of Funds of Rs 10,000 crore to support venture capital and private equity firms investing in MSMEs.
• SIDBI should deepen credit markets for MSMEs in underserved districts and regions.
• SIDBI should develop additional instruments for debt and equity to crystallize new sources of funding for MSMEs and MSME lenders.
• The PSBLoansIn59Minutes.com portal should cater to new entrepreneurs, who lacks information like GSTIN, income-tax returns and bank statement
• The threshold of loan should be enhanced up to Rs 5 crore.
• The introduction of adjusted priority sector lending guidelines for banks to specialize in lending to a specific sector, doubling the collateral free loan limit to Rs 20 lakh and providing insurance coverage to MSME employees by the government.

 

Maruti Suzuki inks partnership with BOB for dealer financing

• Automobile manufacturer in India, Maruti Suzuki signed ‘Preferred Financier’ MoU(Memorandum of understanding) with public sector Bank, Bank of Baroda (BOB) to improve credit for dealership inventory financing.

• The alliance with Bank of Baroda will allow Maruti Suzuki an easy financing opportunity to dealers as well as customers. The dealer inventory financing will work in line with the Bank of Baroda’s product program of Supply Chain Finance.

 

Sundaram Finance to acquire stakes of its partner BNP Paribas held in two JVs

• India’s leading Non-Banking Financial Company(NBFC) Sundaram Finance Ltd (SFL) has announced that it set to acquire the stakes held by BNP Paribas in their two joint venture (JV) companies for a total of around Rs 1,000 Cr.

• SFL has agreed to acquire a 49.9 % stake of BNP Paribas held in Sundaram BNP Paribas Home Finance limited (SBPHFL) for about Rs.999.66 crore. SFL currently holds 50.1 percent in the home finance company which is increased to 100% after the acquisition. The company has also acquired a 49% equity stake of BNP Paribas Securities Services held in Sundaram BNP Paribas Fund Services (SBFS) for about Rs. 1.50 crore. SFL currently holds a 51 percent stake in the company.

 

World Bank commits $31.58 mn loan for Uttarakhand Public Financial Management Strengthening Project

• The Government of India, the State Government of Uttarakhand and the World Bank signed a tripartite Loan Agreement of $31.58 million (about Rs 221 crore) for Uttarakhand Public Financial Management Strengthening Project. This will help improve the State’s ability to manage its Financial Systems and lead to Better Utilization of Development Resources.

• The loan agreement was signed by Sameer Kumar Khare, Additional Secretary, Department of Economic Affairs, Ministry of Finance on behalf of the central government, Savin Bansal I.A.S, Additional Secretary, Finance of Uttarakhand on behalf of the Govt of Uttarakhand and Shanker Lal, Acting Country Director, World Bank India.


Oracle launches Crime Mitigation solution for smaller banks

• A multinational software firm based in the United States, Oracle has introduced a new tool that will help small & mid-sized banks to tackle fraud.

• The Oracle Financial Services “Anti Money Laundering Express Edition(AMLXE)” is designed to detect, investigate, and report suspected money laundering and terrorist financing activity.


India inks loan pact worth of $328M with World Bank for Andhra Pradesh

• The World Bank, Government of India and State Government of Andra Pradesh signed a loan agreement worth of $328 million with the World Bank (WB) for improving health services of Andhra Pradesh.

• The Loan Agreement was signed by Mr. Sameer Kumar Khare, Additional Secretary, Department of Economic Affairs, Ministry of Finance, on behalf of the Government of India and Mr. Shanker Lal, Acting Country Director, World Bank on behalf of the World Bank.

 

RBI sets average base rate at 9.18% for NBFC-MFI borrowers for the quarter beginning July 1, 2019

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

• The Apex bank in a circular had informed the NBFCs and MFIs regarding the pricing of credit on the last working day of every quarter.

 

Sarada Kumar Hota took over as NHB MD

• According to the Finance Ministry, Government of India, Canara Bank General Manager (GM)Sarada Kumar Hota has assumed charge as the National Housing Bank (NHB) Managing Director for a period of three years. He succeeds Sriram Kalyanaraman.

• Prior to the appointment, Hota served as the managing director of Can Fin Homes, a subsidiary of Canara Bank.

 

India signs $250 million World Bank loan to develop Rajasthan’s Roads and Highways

• The Government of India, Government of Rajasthan and the World Bank signed a $ 250 Million Loan Agreement for Phase II of Rajasthan State Highways Development Project.

• The Loan Agreement was signed by Mr. Sameer Kumar Khare on behalf of the Government of India and Mr. Shanker Lal, Acting Country Director (India) on behalf of the World Bank. It will be used to support the construction, upgradation, improvement, and maintenance of 766 kms of state highways and district roads.

Ø  RBI Deputy Governor Viral Acharya resigns

 

·           Reserve Bank of India’s (RBI) Deputy Governor Viral Acharya has quit six months before the scheduled end of his term. He had joined RBI on January 23, 2017.

 

·           Viral Acharya was in charge of the Financial Stability Unit, Monetary Policy Department, Department of Economic and Policy Research, Financial Markets Operation Department, Financial Market Regulation Department, among others at the RBI.

 

Ø  RBI advises commercial banks to adopt Education Loan Scheme

 

·           The Reserve Bank of India has advised all Scheduled Commercial Banks to adopt Education Loan Scheme, formulated by Indian Banks Association.

 

Salient features of the Scheme includes:

·           Loan upto Rs 10 lakh for study in India and upto Rs 20 lakh for study abroad.

·           Collateral free loans upto Rs 7.5 Lakh under the Credit Guarantee Fund Scheme for Education Loans (CGFSEL).

·           No Margin for loan up to Rs 7.50 Lakh.

·           Repayment period of 15 years.

·           One Year Moratorium for repayment after completion of studies in all cases.

 

 

Ø  RBI launches Complaint Management System

 

·           The Complaint Management System (CMS) is a software application launched by Reserve Bank of India on its website. It will be used for lodging complaints against banks and NBFCs with a view to improve customer experience in timely redressal of grievances.

 

·           Customers can lodge complaints against any regulated entity on the platform. These complaints will be directed to the appropriate office of the Ombudsman/Regional Office of the RBI. The RBI is also planning to introduce a dedicated Interactive Voice Response (IVR)system to track the status of complaints.

 

Ø  RBI relaxes leverage ratio for banks

 

·           The Reserve Bank relaxed the leverage ratio (LR) to 4% for Domestic Systemically Important Banks (DSIBs) and 3.5% for other banks. This has been done to help them boost their lending activities.

 

·           The reduced  leverage ratio will be effective from the quarter commencing October 1, 2019. The leverage ratio, as defined under Basel-III norms, is Tier-I capital as a percentage of the bank’s exposures.

 

Ø  Govt cuts interest rate on small savings schemes

 

·           The GoI has reduced interest rates for small savings schemes by 10 basis points for the July-September quarter of the 2019-20 financial year.

 

·           Some schemes that will fetch lower interest rates are Kisan Vikas Patra (7.6%), Public Provident Fund (7.9%), Sukanya Samriddhi Account (8.4%).

 

 

Ø  First Resilient Kerala Program

 

·           The GoI, the Government of Kerala and the World Bank have signed the Loan Agreement of USD 250 million for the First Resilient Kerala Program. The program will focus on strengthening the state’s institutional and financial capacity to protect the assets and livelihoods of poor and vulnerable groups.

 

·           The New Program is part of ‘Rebuild Kerala Development Programme’ aimed at building a green and resilient Kerala.

 

 

Ø  Facebook launches cryptocurrency “Libra”

 

·           Facebook has announced a digital currency called Libra that will allow its billions of users to make financial transactions across the globe.

 

·           Libra is being touted as a means to connect people who do not have access to traditional banking platforms. Technology to make transactions with Libra will be available as a standalone app – as well as on WhatsApp and Facebook Messenger platforms – as early as 2020.

 

 

 

Ø  India signs USD 400M loan agreement with World Bank

 

·           India has signed a loan agreement worth 400 million dollar with the World Bank to help treat and eliminate Tuberculosis from the country. The World Bank supported program will cover nine States and it will support the government’s National Strategic Plan to end TB in India by 2025.

 

·           Under the program, GoI provide Direct Benefit Transfers to patients for acquiring the critical nutrition needed during treatment.

 

Ø  Max Bupa partners with MobiKwik for health insurance

 

·           Health insurance provider Max Bupa partners with fintech platform MobiKwik to promote bite sized group health insurance products for MobiKwik’s 107 million customersacross the country.

 

·           Bite-sized insurance offerings are over the counter health insurance products, primarily targeted towards working professionals<span lang="EN-US" style="font-size:12.0pt;mso-bidi-font-size:13.5pt;line-height:115%; font-family:Roboto;color:#3D

You might be interested:

Daily News Digest:04 July 2019

Manoj Kumar Nambiar: Chairman of Microfinance Institutions Network (MFIN)The Managing Director of Arohan Financial Services, Manoj Kumar Nambiar has been appointed as the chairman of Microfinance Inst ...

one year ago

One Liners of the Day, 05 July 2019

Economy To help small and medium businesses (SMBs) scale up their operations, this tech company has announced partnership with Venture Capital (VC) funds in India under its VC Brand Incubator Program ...

one year ago

Shakib Al Hasan became the first player to score 500 runs and take 10 wickets in the World Cup

Shakib Al Hasan became the first player to score 500 runs and take 10 wickets in the World Cup Bangladesh’s all-rounder Shakib made history by becoming the first player to score more than 500 ru ...

one year ago

Centre will increase healthcare expenditure to 2.5% of GDP by 2025

Centre will increase healthcare expenditure to 2.5% of GDP by 2025 The Health Minister Dr Harsh Vardhan said that the government has set a target to raise health services expenditure to 2.5 per cent o ...

one year ago

Inauguration of 34th Sailing Championship held in Hyderabad

Inauguration of 34th Sailing Championship held in Hyderabad The Governor of Telangana and Andhra Pradesh, ESL Narasimhan inaugurated the 34th edition of Hyderabad Sailing Week National Ranking Multi-C ...

one year ago

New Zealand bans single-use plastic bags

New Zealand bans single-use plastic bags New Zealand has officially banned single-use plastic shopping bags and introduced hefty fines for businesses that continue to provide these plastic shopping ba ...

one year ago

Provide your feedback on this article: