Current Affairs April 2017 - Finance


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News 1 - Interest rates on Small Savings Schemes lowered by 0.1%

Small Savings Schemes

The Government lowered the interest rates on all nine small savings scheme by 0.1% with effect from 1 April 2017.

  • PPF scheme will fetch lower annual rate of 7.9%.

  • 5-year National Savings Certificate will fetch 7.9%

  • Kisan Vikas Patra investments will yield 7.6% and mature in 112 months.

  • Sukanya Samriddhi Account Scheme will offer 8.4% annually (Previously 8.5%).

  • 5-year Senior Citizens Savings Scheme will fetch 8.4%

News 2 - Karnataka Bank and SBI Card launched co-branded credit card

Karnataka Bank

Karnataka Bank and SBI Card announced their collaboration to launch two variants of co-branded credit cards for the customers of Karnataka Bank - Karnataka Bank Platinum SBI Card and Karnataka Bank SimplySAVE SBI Card.

While the Karnataka Bank Platinum SBI Card has been designed keeping in mind the premium customers, the Karnataka Bank SimplySAVE SBI Card is aimed at value conscious consumers and offers rewards and features that enable customers to maximize their savings on their regular spends.

News 3 - Reserve Bank of India to set up a separate Enforcement Department

Enforcement Department

The Reserve Bank of India (RBI) is setting up a separate Enforcement Department. The Enforcement Department (EFD) is opened on April 3, 2017, to separate those who oversee the possible rule breaches and those who decide on punitive actions so that enforcement process operates fairly and is evidence based.

The EFD shall, inter alia, develop a broad policy for enforcement and initiate enforcement action against the Regulated Entities (REs) for violation consistent with such policy. EFD would serve as a centralized department to deal with banks only for enforcement action.

News 4 - RBI decides to permit banks to issue PDI

RBI

Reserve Bank of India (RBI) has decided to permit banks to issue Perpetual Debt Instruments (PDI) qualifying for inclusion as Additional Tier 1 capital and debt capital instruments qualifying for inclusion as Tier 2 capital, by way of rupee denominated bonds overseas.

Some of the measures taken by RBI to deepen the corporate bond market:

  • Foreign Portfolio Investors (FPIs) have been permitted to invest in unlisted corporate bonds.

  • Partial Credit Enhancement ceiling by banks has been raised from 20% to 50% of the issue size.

  • FPIs have been provided direct access to secondary market trading in corporate bond market without involving brokers.

  • Brokers authorized as market makers are allowed to participate in corporate bond repo market.

News 5 - National Payments Corporation of India (NPCI)

NPCI

NPCI has been set up as an umbrella organization owned and operated by the banks. NPCI has been authorised by Reserve Bank of India under the PSS Act, 2007 to operate the following Payment Systems −

  • National Financial Switch (NFS)

  • Immediate Payment System (IMPS)

  • Affiliation of RuPay Cards (debit cards/ prepaid cards) issued by banks and co-branded credit cards issued by non-banking financial companies (NBFCs) or any other entity approved by the RBI

  • National Automatic Clearing House (ACH)

  • Aadhaar Enabled Payments System (AEPS)

  • Operation of Cheque Truncation System

News 6 - SBI enters the ‘Top 50 Global Banks’ league

SBI

The State Bank of India has entered into the league of ‘Top 50 Global Banks’. The merger of five associate banks and Bharatiya Mahila Bank with the SBI has helped increase its balance sheet size to Rs. 41 lakh crore.

Post-merger, the bank now has 2.77 lakh employees, 50-crore customers and more than 25,000 branches and 58,000 ATMs.

It will have a deposit base of more than Rs. 26 lakh crore and advances level of 18.50 lakh crore.

News 7 - Axis Bank made an agreement with Wells Fargo for US remittances

Axis Bank

The Axis Bank Ltd. has signed an agreement with Wells Fargo to offer real-time remittances from NRIs to India. There will be no transaction fee applicable to the money transfers from USA. Wells Fargo is one of the leading banks in the Unites States and has global presence.

This tie-up is the first of its kind with a US banking entity for Axis Bank. There will also be no restrictions on the amount of transfer. Wells Fargo has similar tie-ups with ICICI Bank and HDFC Bank.

News 8 - Kotak Mahindra Bank launched 8-11 app to double their customer base

Kotak Mahindra Bank

Kotak Mahindra Bank has launched an 8-11, a digital and paperless account opening system, that can be used anytime, anywhere. It allows customers to open a zero-balance, zero-charge account.

The account can be opened within five minutes using the Kotak Mahindra's mobile banking system. Kotak Mahindra was the first bank to use Aadhar-based OTP, which RBI allowed in December 2016, for account opening.

News 9 - RBI Board approved a proposal to introduce Rs. 200 notes

RBI Board

The board of the Reserve Bank of India has passed the proposal for processing the printing the new Rs. 200 notes after June 2017. The RBI board has 14 members, which includes four Deputy Governors, Economic Affairs Secretary ‘Shaktikanta Das’, Financial Services Secretary ‘Anjuly Chib Duggal’ and RBI Governor Urjit Patel.

It is part of Government’s decision to rework the currency mix. The Indian Government wants to enhance the digital payments and does not intend to increase currency in circulation to the pre-demonetization level.

News 10 - The Rs. 2 lakhs cash transaction limit not applicable for bank, post office withdrawals

Income Tax

The Income Tax department has clarified that the ban on cash transaction in excess of two lakh rupees will not be applicable to withdrawals from banks and post office savings accounts.

Through the Finance Act 2017, the government has banned cash transactions of over two lakhs and said a penalty of an equal amount would be levied on the receiver. The Central Board of Direct Taxes said a necessary notification in this regard would be issued.

News 11 - First Monetary Policy Review of 2017-18

Monetary Policy

The Reserve Bank of India (RBI) has kept the key policy rate, the repo rate unchanged in its first bimonthly monetary policy review of the financial year 2017-18. However, RBI raised reverse repo rate by 25 bps to 6%.

Following the review, the key rates now stand at:

  • Bank Rate – 6.50%
  • Marginal Standing Facility Rate – 6.50%
  • Repo Rate – 6.25%
  • Reverse Repo Rate – 6.00%
  • CRR – 4%
  • SLR – 20.50%

News 12 - RBI gives license nod to Aditya Birla Idea Payments Bank Ltd

Aditya Birla

Reserve Bank of India gave final license to Aditya Birla Idea Payments Bank Ltd, headed by Kumar Mangalam Birla to set up a payments bank. Aditya Birla Idea Payments Bank Ltd is 51:49 joint venture with Idea cellular. RBI has given license with an aim to bring financial inclusion by welcoming small finance banks and payments banks in banking industry.

Payments banks are allowed to accept deposits from individuals and small businesses up to a maximum of Rs. 1 lakh per account. India post payments bank and Airtel payments bank have already started operations.

News 13 - South Indian Bank united with Flyworld Money for remittances

Flyworld

The South India bank entered into agreement with Flyworld Money Exchange, to provide facility of remittances made by Indian expatriates in Australia. Flyworld Money Exchange will provide facility of cost-effective remittances to NRIs in Australia for remittances made in India. This pact will be considered as South Indian Bank’s first remittance arrangement with an exchange house in Australia.

Flyworld Money Exchange provides this facility to customers as well as non-customers by enabling the bank to reach the Indian Diaspora in Australia more efficiently.

News 14 - RBI allowed banks to invest in REITs & InvITs capital

REITs

RBI has allowed banks to invest up to 10 per cent of the unit capital of single Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). The move is aimed to boost spending on infrastructure.

Banks can invest within the overall ceiling of 20 per cent of their net worth permitted for direct investments in shares, convertible bonds/debentures, units of equity-oriented mutual funds and exposures to venture capital funds (VCFs).

News 15 - Pradhan Mantri Mudra Yojana crossed Rs. 1.8 lakh crore target for 2016-17

Pradhan Mantri Mudra Yojana

Loans extended under the Pradhan Mantri Mudra Yojana (PMMY) during 2016-17 have crossed the target of Rs. 1,80,000 crore for 2016-17. Sanctions currently stand at Rs. 1,80,087 crore with final data still awaited from some of the smaller non-banking lenders. The Union Budget has announced a target of Rs. 2.44 lakh crore for Mudra Loans during 2017-18.

Mudra Loans are available for non-agricultural activities up to Rs. 10 lakh and activities allied to agriculture such as Dairy, Poultry, Bee Keeping etc., are covered. Mudra’s unique features include a Mudra Card, which permits access to Working Capital through ATMs and Card Machines.

News 16 - RBI issues new framework for bad loans

Bad Loans

With an aim to resolve the problem of banks' mounting non-performing assets (NPAs), or bad loans, the Reserve Bank of India (RBI) has issued "Revised Prompt Corrective Action (PCA) framework for banks" with effect from 1st April 2017.

Under the revised framework, if a bank crosses the third level of risk threshold (where a bank's common equity tier I capital falls below the threshold of 3.625 percent by 3.125 percent or more) it will either be amalgamated or merged, or taken over by another entity altogether.

News 17 - Income Tax department launched 'Operation Clean Money-II'

Operation Clean Money-II'

The Income Tax department has identified over 60,000 “high risk” persons for probe under the second phase of the ‘Operation Clean Money’.

The IT Department has identified high-value property deals, outward remittances and large cash sales made by these 60,000 assessees during the demonetisation period. Post demonetisation, the IT Dept. has detected Rs. 9,334 crores of undisclosed income and referred about 400 cases to the Enforcement Directorate and the Central Bureau of Investigation.

News 18 - Bank Boards Bureau draws up 'GRAF' for PSBs

GRAF

The Bank Boards Bureau (BBB) has drawn up an elaborate Governance, Reward and Accountability Framework (GRAF) that integrates elements of organisational structure and processes to ensure high standards of corporate governance. It aims to make PSBs more competitive against private sector rivals as well as prepare them for possible mergers with each other.

The Bureau has also evolved a code of conduct and ethics that can be enforced across all PSBs to ensure the right behaviour.

News 19 - Postal department, SBI to promote cashless transactions

Cashless Transactions

The Department of Posts has joined hands with State Bank of India to promote ‘SBI buddy e-wallet’ and POS machines for cashless transactions at Post Office counters while booking speed post and registered post items.

P K Swain, Chief postmaster general, Punjab circle and Anil Kishora, Chief General Manager, SBI, Chandigarh dedicated SBI buddy e-wallet and SBI POS machines in Chandigarh.

News 20 - I-T CPC in Bengaluru allotted a unique pin code for taxpayers benefit

Taxpayers

The Department of Post has allotted a unique pin code to the Central Processing Centre (CPC), Income tax Department in Bengaluru to ensure better delivery of letters and mails sent by taxpayers and assessees. The new pin code is 560500 while the CPC earlier used to sport the old pin code of 560100.

The CPC is the central database centre of the department, which receives all Income Tax Returns (ITRs), both e-filed and sent through post.

News 21 - IRDAI launched a web portal for insurance self-networking platform

IRDAI

The Insurance Regulatory and Development Authority of India (IRDAI) has launched a web portal for Insurance Self Networking platform for online registration. Insurance companies, brokers and corporate agents can sell and service insurance policies through this platform. The insurers and insurance intermediaries may access it using the following URL: isnp.irda.gov.in

The ISNP portal will offer services like change of policy details like name and address, collection of renewal premiums, surrender or withdrawals, duplicate policy, death/maturity claim and other policy specific services.

News 22 - Grasim received RBI approval to hike FII limit

Grasim

The Reserve Bank has allowed Aditya Birla Group firm Grasim Industries to raise the foreign shareholding to 49 per cent from the existing limit of 30 per cent under the portfolio investment scheme (PIS).

FIIs, NRIs and PIOs (persons of Indian origin) can invest in primary and secondary capital markets in India through portfolio investment scheme (PIS). The RBI monitors ceilings on FII/NRI/PIO investments in Indian companies on a daily basis.

News 23 - Bank accounts to be blocked if not self-certified by April 30, 2017

CBDT

As part of FATCA compliance, the Central Board of Direct Taxes (CBDT) has asked the banks/financial institutions to obtain self-certification from customers by April 30, 2017, to avoid closure of accounts. It has directed the banks to obtain a self-certification for the accounts opened from July 1, 2014 to August 31, 2015.

The Indian Government entered an Inter-Governmental Agreement (IGA) with USA for implementation of FATCA coming into force from 31 August 2015. FATCA stands for Foreign Account Tax Compliance Act.

News 24 - Amazon received RBI approval for e-wallet

E-wallet

Amazon India has received the RBI’s approval for an e-wallet. The licence has been issued to Amazon Online Distribution Services on March 22, and is valid for five years. According to RBI's draft guidelines, all entities seeking fresh approvals to launch PPIs will need to have an audited net worth of Rs. 25 crore, which must be maintained at all times.

Amazon had launched its Pay Balance service in order to boost cashless transactions in December 2016. According to RBI data, volume of payments through PPIs rose from Rs. 1320 crores in November to Rs. 2150 crores in March.

News 25 - Central Government amended the Pradhan Mantri Garib Kalyan Deposit Scheme

PMGKDS

In exercise of the powers conferred by clause (c) of Section 199B of the Finance Act, 2016 (28 of 2016), the Central Government amended through a Notification the conditions specified in clause 5 of the Pradhan Mantri Garib Kalyan Deposit Scheme.

Now the effective date of opening of the Bonds Ledger Account shall be the date of receipt of deposits by the Reserve Bank of India (RBI) from the authorized banks. Provided further that the date of deposit shall in no case, be extended beyond 30 April 2017.

News 26 - RBI inaugurated Banking Ombudsman at Chhattisgarh and in J&K

Ombudsman

The Reserve bank of India inaugurated two new Banking Ombudsman offices in Jammu of Jammu and Kashmir and Raipur city of Chhattisgarh. Previously, banking services related complaints from entire Jammu & Kashmir used to fall under the jurisdiction of New Delhi-I banking ombudsman office, so in order to ease services for customers, a new office has been opened in Jammu. Earlier, Bhopal ombudsman office provided banking ombudsman services to Chhattisgarh.

This takes total number of offices to 20 across the country.

News 27 - RBI signed a MoU with the Royal Monetary Authority of Bhutan

Royal Monetary

The Reserve Bank of India signed a Memorandum of Understanding (MoU) on “Supervisory Cooperation and Exchange of Supervisory Information” with the Royal Monetary Authority of Bhutan.

The Reserve Bank has entered into Memorandum of Understanding, Letter for Supervisory Co-operation and Statement of Co-operation with supervisors of a few countries to promote greater co-operation and share supervisory information. With this RBI signed 39 such MoUs, one Letter for Supervisory Co-operation and one Statement of Co-operation as well.

News 28 - SEBI launched a new website

SEBI

SEBI has launched a new version of its website www.sebi.gov.in with enhanced user friendly features such as a better user experience across various devices, enhanced ‘Search’ function, enhanced content with need based search, enhanced speed of loading pages and better responsive web pages.

The new website is compliant with Web Content Accessibility Guidelines (WCAG) 2.0 Level AA for making web content more accessible to differently abled people and conforms to the guidelines for Indian government websites.

News 29 - ICICI Bank data centre rated India's first IGBC Platinum rated project

IGBC

ICICI Bank Data Centre in Hyderabad was honored with IGBC plaque by IGBC Green Data Centre Rating System. With this, ICICI bank Data Centre of Hyderabad becomes India’s first Platinum rated project under IGBC Green Data Centre Rating System. Chanda Kochhar, MD & CEO, ICICI Bank was presented IGBC plaque by IGBC, at a ceremony held in Hyderabad.

ICICI Bank’s Data Centre has contributed to power savings of 15 MW off-site renewable energy by LED based energy efficient lighting fixtures and procurement of green certified products and materials.

News 30 - Finance Ministry agreed 8.65% interest rate on EPF

EPF

Ministry of Finance approved 8.65% rate on Employees Provident Fund (EPF) for 2016-17, which will be credited into the accounts of four crore subscribers. It was approved by Employees' Provident Fund Organisation trustees in December 2015. Previously, government had planned to lower the EPF rate for aligning it with the rates of small savings schemes like PPF.

The government generally ratifies the rate of return approved by the CBT because the EPFO is an autonomous body and provides interest on EPF deposits from its own income.

News 31 - Indian Government to issue Sovereign Gold Bonds 2017-18 – Series I

Sovereign Gold Bonds

Government of India, in consultation with the Reserve Bank of India, has decided to issue Sovereign Gold Bonds 2017-18 – Series I. The Bonds will be sold through banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices and recognized stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange.

Minimum permissible investment will be 1 gram of gold. The investors will be compensated at a fixed rate of 2.50%. The Bonds will be restricted for sale to resident Indian entities including individuals, HUFs, Trusts, Universities and Charitable Institutions.

News 32 - RBI capped bank exposure to REITs, InvITs at 10%

REITs

The RBI allowed banks to invest up to 10% of the unit capital of a Real Estate Investment Trust (REITs) or Infrastructure Investment Trusts (InvITs).In its first bimonthly monetary policy of 2017-18, the RBI had permitted banks to invest in REITs and InvITs.

The banks’ exposure to REITs/InvITs will be within the overall ceiling of 20% of the net worth permitted for direct investments in shares, convertible bonds/ debentures, units of equity-oriented mutual funds and Venture Capital Funds (VCFs).

News 33 - RBI inked a Memorandum of Understanding with the Bank of Guyana

MoU

The Reserve Bank of India signed a Memorandum of Understanding (MoU) on “Supervisory Cooperation and Exchange of Supervisory Information” with Bank of Guyana. The MoU was signed by Dr Gobind N. Ganga, Governor on behalf of Bank of Guyana and Dr. Urjit R. Patel, Governor on behalf of RBI.

The RBI has entered into Memorandum of Understanding, Letter for Supervisory Co-operation and Statement of Co-operation with supervisors of a few countries to promote greater co-operation and share supervisory information. With this RBI has signed 40 such MoUs, one Letter for Supervisory Co-operation and one Statement of Co-operation as well.

News 34 - Manappuram Finance launched co-branded prepaid card with YES Bank

YES Bank

Kerala-based NBFC Manappuram Finance launched its own co-branded prepaid card in tie-up with YES Bank with an aim to promote digital financial transactions.

The 'Manappuram YES Bank Prepaid Money Card' can be pre-loaded up to a maximum amount of Rs. 50,000 and then be used to withdraw money from all ATMs. The card works on MasterCard and RuPay networks. It can be used for online transactions and at merchant establishments with PoS terminals.

News 35 - YES BANK awarded the Golden Peacock Award 2017

Golden Peacock

YES BANK has won the prestigious ‘Golden Peacock Innovative Product / Service Award 2017’ for its innovative mobile technology product, SIMsePAY at the Dubai Global Convention 2017 for the 27th World Congress on Leadership for Business Excellence & Innovation and Presentation of Golden Peacock Awards.

SIMsePAY is a unique innovation that allows any account holder to do money transfers, pay utility bills and other mobile payment services, without the need for smart phones or internet.

News 36 - Paisabazaar.com tied up with Yes Bank

Paisabazaar.com

Paisabazaar.com announced a first of its kind strategic partnership with YES BANK. This is for the first time in the industry that a large financial marketplace has entered into a unique customer level alliance with a bank to offer conditionally approved loans* to their existing customers.

As part of the alliance, YES BANK will help Paisabazaar.com through the Bank’s advanced analytics and data mining capabilities to offer Paisabazaar.com customers with customized and conditionally approved offers across YES BANK’s retail lending products.

News 37 - Indian Bank to offload 7% of shares to public through follow-on offer

Offload

Indian Bank has decided to offload 7% of its shares to the public through a follow-on offer. The bank's Chairman cum Managing Director Kishor Kharat said the move is to reduce promoters’ holding to 75% of the shares. The Union Government is the promoter of the bank holding 82% of shares at present.

The bank has earned a net profit of 319.70 crore rupees last quarter. Indian Bank is the first Indian public sector bank whose Price-to-Book value has reached the level of ‘One,” reflecting its strong performances.



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