Banking Awareness Current Affairs

MadGuy Labs
BANKING
AWARENESS
Current Affairs 2018
BA 2018
Contents
1. RBI announced amendments to Reserve Bank of India (Note Refund) Rules, 2009 .......... 3
2. Pradhan Mantri Jan Dhan Yojana Made an open-ended scheme........................................ 3
3. PM Modi launched India Post Payments Bank ...................................................................... 4
4. World Bank Launched World's 1st Blockchain Bond........................................................... 4
5. India Banking Conclave 2018 held in New Delhi ................................................................... 5
6. HAL became the first PSU to transact on TReDS Platform ................................................. 6
7. No ATM to be replenished with cash after 9 pm from next year ......................................... 6
8. PSBs to come out of PCA framework by end of 2018 ............................................................ 6
9. Axis bank : 1st to introduce Aadhaar-based transactions .................................................... 7
10. Recapitalization of Regional Rural Banks will continue ..................................................... 8
11. Sashakt: 5 Pronged Strategy To Deal With NPAs ............................................................... 8
12. RBI set up Board of Management for urban co-operative banks ...................................... 9
13. Govt. Released Draft on Cross-Border Insolvency Resolution ......................................... 10
14. RBI altered definition of ‘relative’ in outward remittances.............................................. 11
15. 22 GMs recommended as executive directors at PSU banks ............................................ 12
16. RBI released draft guidelines to modify loan system ......................................................... 12
17. RBI Compensate Gold Monetisation Scheme..................................................................... 13
18. Financial Literacy Week Started ......................................................................................... 14
19. PayTM launched an initiative ‘AshaKiran’ to educate women ........................................ 15
20. ICBC Launched China's 1st India-Dedicated Investment Fund ...................................... 15
21. SEBI Tightened KYC Norms For FPIs ............................................................................... 16
22. RBI liberalised External Commercial Borrowings ............................................................ 16
23. RBI Revised its KYC Guidelines ......................................................................................... 17
24. SBI India’s most trusted bank , ICICI tops in private sector ........................................... 18
25. Army inked MoU with Axis Bank on Defence Salary Package ........................................ 18
26. Bhanu Pratap Sharma new chairman of Banks Board Bureau........................................ 18
27. RBI tightened monitoring of liberalised remittance scheme ............................................. 19
28. SBI will invest Rs 80 billion in hydropower project of Nepal ........................................... 19
29. 11 public sector banks placed under RBI’s PCA Framework .......................................... 20
30. RBI switched back to GDP model from GVA model ......................................................... 20
31. ICICI , 1st Indian bank to go live on SWIFT’s GPI service ............................................. 21
32. RBI Delayed Adoption of Ind-AS by 1 Year ...................................................................... 21
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33. MoU Between Indian Army And HDFC Bank................................................................... 22
34. SIDBI launched Virtual Assistant' & ' Bankability Kit' ................................................... 23
35. The Reserve Bank Of India | 83rd Establishment Day ...................................................... 23
36. HDFC Bank Signed MoU with Government e-Marketplace ............................................ 24
37. SBI Signed MoU With IMGC .............................................................................................. 24
38. Insolvency and Bankruptcy Board of India inked MoU with RBI ................................... 25
39. Passport mandatory for Bank Loans of >= Rs. 50 crore ................................................... 25
40. India became the member of European Development Bank............................................. 26
41. SBI raised lending rate to 8.15% ......................................................................................... 26
42. RBI Raise Currency Derivative Trade Limit To USD 100 Million .................................. 27
43. RBI Directs Banks to Link SWIFT to CBS by April 2018 ................................................ 27
44. RBI Launched Ombudsman Scheme For NBFCs.............................................................. 28
45. RBI Set up YH Malegam Committee to Monitor Bad Loans ........................................... 28
46. Government will change Base Year for GDP, IIP to 2017-18 ........................................... 29
47. RBI will Set up Ombudsman for NBFCs ............................................................................ 29
48. Axis Bank Launched ‘Evolve’ .............................................................................................. 30
49. Usha Ananthasubramanian ; 1st Woman IBA Chief ........................................................ 31
50. Indian Overseas Bank and NHB tied up for RHISS .......................................................... 31
51. India emerged as top borrower from AIIB in 2017 ........................................................... 32
52. Ravi Menon Named Best Central Bank Governor in Asia-Pacific ................................... 33
53. Forex Reserves reached $409.366 Billion in December 2017 ............................................ 33

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1. RBI announced amendments to Reserve Bank of India (Note Refund)

Rules, 2009
Reserve Bank of India has made amendments to the Reserve Bank of India
(Note Refund) Rules, 2009 to enable the public to exchange mutilated notes in
Mahatma Gandhi (New) series at bank branches and RBI offices, which are
smaller in size compared to the earlier series. The Reserve Bank of India (Note
Refund) Amendment Rules, 2018 have since been notified in the Gazette of
India on September 6, 2018 (enclosed). These rules have come into force with
immediate effect.
• The amended act has been named: The Reserve Bank of India (Note Refund)
Amendment Rules, 2018.
• It directed all branches of banks to exchange mutilated / defective notes of various
denominations.
• This includes the denomination of Rs.10, Rs. 20, Rs. 50, Rs. 100, Rs.200, Rs. 500
and Rs.2000 of the Mahatma Gandhi (New) series.
• These changes have been made effective from September 6, 2018.
• It changed the sub-rule 1 and 2 of rule 8 of Reserve Bank of India (Note Refund)
Rules, 2009.
• Value of the mutilated note of less than50 rupees denomination will be refunded in
full if the undivided area is of the range 31-47% of the note.
• Value of the mutilated note greater than equals to 50 rupees denomination would
have to either be refunded in:
• Half if the undivided area of single largest piece is 40% (round off) and
• Full if the undivided area of single largest piece is 80% (round off).
September 2018
2. Pradhan Mantri Jan Dhan Yojana Made an open-ended scheme

The government decided to make the Pradhan Mantri Jan Dhan Yojana
(PMJDY) an open-ended scheme and added more incentives to encourage
people to open bank accounts. It was declared by finance minister Arun jaitley.
The added benefits are as follows:
• The over-draft limit for account holders has now been doubled to Rs 10,000 and
• The free accident insurance cover for new accounts after August 28 has been
doubled to Rs 2 lakh,
• No conditions will be attached for over-draft of up to Rs 2,000,
• The upper age limit for overdraft facility has been hiked to 65 from the earlier 60
years
Pradhan Mantri Jan Dhan Yojana:

It is financial inclusion program of Government of India, that aims to expand and make
affordable access to financial services such as bank accounts, remittances, credit,
insurance and pensions. This financial inclusion campaign was launched by the Prime
Minister of India Narendra Modi on 15 August 2014.

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• There are approximately 32.41 crore Jan Dhan accounts having a total deposit
balance of Rs 81,200 crore.
• 53% of the account holders are women.
• 30 lakh people have so far availed the over-draft facility.
• 83 per cent of the accounts are seeded with Aadhaar.
September 2018
3. PM Modi launched India Post Payments Bank

The Indian Prime Minister, Narendra Modi launched the India Post Payments
Bank (IPPB) at Talkatora Stadium in New Delhi. The initiative seeks to leverage
the expansive network of the postal department to ensure financial inclusion for
the masses. In fact, simultaneous launch events were held for the IPPBs at 650
branches and 3,250 access points.
The objective of IPPB is to build the most accessible, affordable and trusted bank for the
common man, spearhead the financial inclusion agenda by removing the barriers for the
unbanked and reduce the opportunity cost for the under banked populace through
assisted doorstep banking. It will help significantly expand the reach of the banking
sector in India.
• The payments bank, where the Indian government holds 100 per cent equity, will
leverage the vast network of the Department of Posts (DoP) that has more than three
lakh postmen and Grameen Dak Sewaks.
• All the 1.55 lakh post offices in the country will be linked to the IPPB system by
December 31, 2018.
• The IPPBs will offer a range of products such as savings and current accounts, money
transfer, direct benefit transfers, bill and utility payments, and enterprise and merchant
payments.
• These products, and related services, will be offered across multiple channels (counter
services, micro-ATM, mobile banking app, SMS and IVR), using the bank's state-of-the-
art technology platform.
On August 29, 2018, the Union Cabinet had approved 80 per cent increase in spending
for IPPB from Rs 800 crore to Rs 1435 crore.
The additional sum of Rs 635 crore in the revised cost estimates was on account of Rs
400 crore for Technology Costs and Rs 235 crore for Human Resource Costs.
August 2018
4. World Bank Launched World's 1st Blockchain Bond

The World Bank launched ‘bond-i', the world’s first bond to be created,
allocated, transferred and managed by using distributed ledger technology. This
two-year bond successfully raised 110 million Australian dollars (USD 80.48
million). This was the first time that investors supported the World Bank’s

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development activities in a transaction that is fully managed using the

blockchain technology from start to finish.
Bond-i:
Bond-I is Ethereum blockchain bond denominated in Australian dollars, making it
Kangaroo bond (referring to foreign bonds issued in Australia in local currency). World
Bank had chosen Commonwealth Bank of Australia (largest bank in Austria) was chosen
as sole arranger for this bond.
World Bank has often been at forefront of financial innovation. It had issued the first
globally traded and settled bond in 1989 as well the first electronic bond in 2000. The
launch of blockchain operated bond is of part of World Bank’s broader strategic focus to
harness potential of latest technologies.
Blockchain Technology:
Blockchain is decentralized incorruptible digital ledger for storing data across peer-to-peer
network. It decentralizes information without it being copied. Information is held on
blockchain through shared database which can be accessed on real-time basis. This
database is not stored on physical servers but on cloud, which makes it easy to store
unlimited data.
August 2018
5. India Banking Conclave 2018 held in New Delhi

India Banking Conclave (IBC) 2018 was held in New Delhi from 23-24, 2018. It
was organised by Centre for Economic Policy Research (CEPR) along with its
knowledge partner and government Think Tank, NITI Aayog. The conclave was
aimed at making India’s banking sector more adaptable to face multiple future
challenges in the coming years.
India Banking Conclave (IBC) 2018 :
IBC 2018 focused engaging corporates, law and policy makers of country, academicians
and professionals on common platform to make all stakeholders share their views on all
impending issues including bad debts and non-performing assets (NPAs) that have been
accumulated in unbiased manner.
IBC 2018 aimed to serve as effective platform for varied stakeholders connected to India’s
banking and financial sectors.
Centre for Economic Policy Research (CEPR) :
CEPR is network of over 1100 researchers who are based mainly in universities
throughout Europe and collaborate in research and its dissemination. It aims to enhance
quality of economic policy-making within Europe and beyond by fostering high quality,
policy-relevant economic research and disseminating it to decision-makers in public and
private sectors. It is funded by a registered, European charity founded in 1983 by Richard
Portes, FBA, CBE.
August 2018

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6. HAL became the first PSU to transact on TReDS Platform

State-owned aerospace and defence manufacturer Hindustan Aeronautics (HAL) became the first
public sector enterprise (PSU) to make transaction on RXIL TReDS platform. It executed its first
digitised invoice discounting transaction on RXIL TReDS platform by accepting digital invoice
uploaded by Nasik-based MSME (micro category) vendor Narendra Udyog. This transaction was
financed by Bank of Baroda.
RXIL- TReDS platform :

TReDS is online electronic institutional mechanism for facilitating the financing of trade
receivables of micro, small and medium enterprises (MSME) through multiple financiers.
RXIL is India’s first TReDS platform operating since January 2017. It promoted by National
Stock Exchange (NSE), Small Industries Development Bank of India (SIDBI), State Bank
of India (SBI), ICICI Bank and Yes Bank.
It enables MSMEs to gain control of their receivables with enhanced visibility and
timeliness. In October 2017, Union Government had mandated all major PSUs to join
TReDS platform to facilitate payments to MSME (micro, small and medium enterprises)
vendors.
August 2018
7. No ATM to be replenished with cash after 9 pm from next year

Union Home Ministry has issued new Standard Operating Procedures (SoPs)
for cash refilling of automated teller machines (ATMs) after certain time period.
It comes in view of rising incidents of attacks on cash vans, cash vaults, ATM
frauds and other internal frauds leading to increased sense of sense of
insecurity. It will come into effect from 8 February 2019.
• No ATM will be replenished with cash after 9 PM in cities and 6 PM in rural areas from
next year. The announcement was made by the Union Home Ministry through a
notification. The Ministry said that the deadline for putting money in the ATMs located in
Naxal-hit areas will be 4 PM.
• It said that private cash handling agencies must collect money from the banks in the
first half of the day and transport notes only in armoured vehicles.
• Two armed guards will accompany crisp notes in transit as per a new directive issued
by the Home Ministry.
• The new Standard Operating Procedures (SoPs) will come into effect from February 8,
2019 in view of the spurt in incidents of attacks on cash vans, cash vaults, ATM frauds
and other internal frauds leading to increased sense of insecurity.
• There are over 8,000 privately owned cash vans plying across the country, operated by
non-bank private agencies and they handle over Rs 15,000 crore daily on behalf of
banks.
August 2018
8. PSBs to come out of PCA framework by end of 2018

Union Government is expecting that public sector banks (PSBs) placed under
RBI's Prompt Corrective Action (PCA) framework will come out of it by the end

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of this year. As many as 11 out of 21 state-owned banks are currently under

PCA framework.
• Operational performance of PSBs has improved in April-June 2018 quarter, with

steep reduction in net losses, increase in recoveries and significant improvement
in provision coverage ratio.
• Besides, Government is also providing PSUs with adequate capital when required.
• Some of the capital has already been given, as recoveries are taking place and
there is a possibility that some banks will not need it in the future.
• As of now, there is no bank that is breaching the regulatory norms prescribed by
RBI.
Prompt corrective action (PCA) framework :

PCA framework is a supervisory tool of RBI, which involves monitoring of
certain performance indicators of banks to check their financial health as an
early warning exercise and to ensure that banks don't go bust.
Its objective is to facilitate banks to take corrective measures including those
prescribed by RBI, in timely manner to restore their financial health.
It also provides opportunity to RBI to pay focussed attention on such banks by
engaging with management more closely in those areas.
PCA framework is invoked on banks when they breach any of three key
regulatory trigger points (or thresholds).
They are: Capital to risk weighted assets ratio, Net non-performing assets
(NPA) and Return on Assets (RoA).
Depending on the risk thresholds set in PCA framework, banks are put in two
types of restrictions, mandatory and discretionary depending upon their
placement in PCA framework levels.
The mandatory restrictions are on dividend, branch expansion, director's
compensation while discretionary restrictions include curbs on lending and
deposit.
August 2018
9. Axis bank : 1st to introduce Aadhaar-based transactions

Axis bank has become the first bank in the country to introduce Iris Scan
Authentication feature for Aadhaar -based transactions through its micro ATM
tablets.
This is being run as a pilot project in 8 branches of rural Punjab, Haryana, Gujarat and
Andhra Pradesh. The bank will be launching the same process for loan processing,
insurance, eKYC account opening and others sections mostly extending to the semi-
urban and urban regions as well.
A Customer needs to select the desired service (funds transfer, cash withdrawal) and
feed-in their Aadhaar numbers in the micro ATM. Next they will choose ‘IRIS’ as the
desired mode of authentication. Verification will be done in 3-5 seconds. The transaction
will be completed after the biometric details are verified from the UIDAI database.

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The micro ATM tablets which are STQC certified and UIDAI compliant registered
devices do not require debit cards, passwords, PINs, and user IDs.The Iris scan
technology is completely contactless and provides up to 98.2 per cent authentication
success rate.
July 2018
10. Recapitalization of Regional Rural Banks will continue

Union Cabinet has approved extension of scheme of recapitalization of
Regional Rural Banks (RRBs) for next three years (upto 2019-20). This will
enable RRBs to maintain minimum prescribed Capital to Risk Weighted Assets
Ratio (CRAR) of 9%. It will ensure strong capital structure and minimum
required level of CRAR. This will facilitate financial stability of RRBs and enable
them to play greater role in financial inclusion and meeting the credit
requirements of rural areas.
• The scheme of Recapitalization of RRBs was started in 2010-11 and was extended
twice in the year 2012-13 and 2015-16.
• The last extension was upto March 2017.
• Total amount of Rs. 1107.20 crore, as Central Government share, out of Rs. 1450
crore, was released to RRBs upto March, 2017.
• The remaining amount of Rs.342.80 crore will be utilized to provide recapitalization
support to RRBs whose CRAR is below 9%, during the extended three years
period.
• This will be in addition to announcement made in 2018-19 Budget of allowing
financially strong RRBs to raise capital from sources other than Central
Government, State Government and Sponsor Bank.
• The identification of RRBs requiring recapitalization and amount of capital to be
provided will be decided in consultation with NABARD.
Regional Rural Banks (RRBs) :
• RRBs were set up as a government-sponsored, regional based rural lending

institutions under Regional Rural Banks Act, 1976.
• They are scheduled commercial banks (Government banks) and are configured as
hybrid micro banking institutions, combining local orientation and small scale
lending culture of cooperatives and business culture of commercial banks.
• RRBs are jointly owned by Central Government, concerned State Government and
Sponsor Banks with the issued capital shared in the proportion of 50%, 15% and
35% respectively.
July 2018
11. Sashakt: 5 Pronged Strategy To Deal With NPAs

Union Finance Minister Piyush Goyal approved the Sunil Mehta Committee’s
suggestions of a 5-pronged strategy to tackle the Non-Performing Assets
(NPA).The committee led by Punjab National Bank Chairman Sunil Mehta has
submitted its draft report titled 'Sashakt' to the Finance Ministry with a strategy

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to tackle stress in the banking sector. However, there is no proposal or

recommendation to create a bad bank.The recommendations now await the
approval of the Reserve Bank of India (RBI).
Sunil Mehta committee on bad loans resolution has recommended a five-pronged
strategy Project 'SASHAKT' to deal with Non-performing Assets in the country's
banking system. The five-pronged strategy includes:
1. SME resolution approach,
2. Bank-led resolution approach,
3. AMC/AIF led resolution approach,
4. NCLT/IBC approach, and
5. Asset-trading platform.
• The 'Sashakt' Report highlights nine guiding principles aimed at the operational
turnaround of the banking sector in a manner that will create jobs and enhance the value
of public sector banks.
• Resolution of bad assets below Rs 50 crore within 90 days: Banks will be required
to create a ‘Focused Vertical’ for bad assets below Rs 50 crore and set up a Steering
Committee for resolution of such bad assets within 90 days.
• Resolution of consortium loans between Rs 50-500 crore within 180 days: It

suggested the Bank Led Resolution Approach (BLRA) for loans between Rs 50 and Rs
500 crore. It suggested constitution of an Independent Screening Committee to examine
resolution of such loans within 180 days and if there is no resolution in 180 days, then
these bad assets will be moved to the National Company Law Tribunal (NCLT).
• Resolution of loans above Rs 500 crore: The loans above Rs 500 crore will be dealt
via AMC/AIF-led resolution process. The panel proposed creation of a national Asset
Management Company (AMC) to take over such Non-Performing Assets from banks.
June 2018
12. RBI set up Board of Management for urban co-operative banks

The Reserve Bank of India (RBI) has proposed setting up of Board of
Management (BoM) in all Urban Co-operative Banks (UCBs) having deposits
of over Rs 100 crore within one year to strengthen governance and promote
professional management in these banks. BoM will be in addition to the Board
of Directors (BoD). The BoD will continue to be apex policy setting body and
constitute various committees of board including BoM to assist it to carry out its
functions.
Functions: BoM will look after all administrative functions of UCBs as spelt out in
respective Co-operatives Act. It will be responsible for credit, risk and liquidity
management of UCBs.

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Composition: BoM will be constituted by BoD. BoM will have minimum of 3 members in
UCBs having deposit size up to Rs 100 crore and 5 members in UCBs having deposit size
above Rs 100 crore. The maximum number of members in BoM will not exceed 12.
Criteria: 50% of the members of BoM will consists of persons having special knowledge
or practical experience in respect of one or more of the following matters such as
accountancy, agriculture and rural economy, banking, co-operation, economics, finance,
law, small scale industry, information technology and other matter the special knowledge
useful to UCB.
Implementation: Existing UCBs having deposit size exceeding Rs 100 crore will set up
BoM within period of 1 year and banks less than it may constitute BoM within 2 years.
The expert committee on licensing new urban co-operative banks (2010) constitued under
chairmanship of YH Malegam had recommended that BoM should be constituted in every
UCB, in addition to BoDs. This was reiterated by high powered committee on UCBs
headed by R. Gandhi constituted in January 2015 by RBI.
June 2018
13. Govt. Released Draft on Cross-Border Insolvency Resolution

The Ministry of Corporate Affairs has released draft on cross-border insolvency
in order to strengthen Insolvency and Bankruptcy Code (IBC). It will help banks
access overseas assets of company undergoing resolution. Similarly, Indian
authorities will also be required to cooperate with foreign creditors to domestic
company.
• The draft favours adoption of the UNCITRAL (United Nations Commission on

International Trade Laws) model on dealing with cross-border insolvency.
• As per the draft law, the central government after entering into agreement with
other countries, may bring overseas asset of a domestic corporate debtor into
consideration of insolvency resolution in India.
• While initially the cross-border insolvency framework will apply only to corporate
debtors, it can be extended to cases of personal insolvency resolution as well.
• The draft says India will also cooperate with foreign creditors and enable them to
initiate insolvency against local corporate debtors.
• The existing IBC provides for two Sections –234 and 235 — relating to cross-
border insolvency but these are not adequate to effectively deal with default cases
such as that of Kingfisher Airlines.
• In many of the ongoing cases under the IBC, several companies have assets and
operations outside India, for which a legal framework is required to deal the assets
overseas.
• Existing provisions only allow the Central government to enter into an agreement
with a foreign country for enforcing provisions of the Code.
UNCITRAL Model Law on Cross-Border Insolvency, 1997 :
• The UNCITRAL model law envisages a balance between liquidation and

reorganisation of global companies going in for resolution.
• On the global scale, the UNCITRAL Model Law on Cross-Border
Insolvency, 1997(“Model Law”) has emerged as the most widely accepted

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legal framework to deal with cross-border insolvency issues while

ensuring the least intrusion into the country’s domestic insolvency law.
June 2018
14. RBI altered definition of ‘relative’ in outward remittances

RBI in its latest move makes the ‘maintenance of close relative’, difficult! The
issue of people sending funds abroad under the ‘maintenance of close relative’
category of the Liberalised Remittance Scheme (LRS) is something that the
Reserve Bank of India (RBI) is determined to tackle. The RBI in its latest move
has narrowed the definition of relatives to check the flow of funds.
• From now on, funds under the ‘maintenance of close relative’ category can be sent
only to immediate relatives such as parents, spouses, children and their spouses.
• The RBI in its statement said that “In the context of remittances allowed under LRS
for maintenance of close relatives, it has been decided to align the definition of
‘relative’ with the definition given in Companies Act, 2013 instead of Companies
Act, 1956”.
• Its interesting to know that outward remittances under maintenance of close
relatives had shot up to almost 3 billion dollar in 2017-18 from mere 174 million
dollar in 2013-14. The funds sent under this category have more than doubled
since 2015-16. Overall outward remittances under LRS went up to 11 billion dollar
from 1 billion dollar in the same period.
• That is a huge increase that warrants attention by the central bank and in June
2018 in order to keep things in check, the RBI had made PAN mandatory for
anyone using LRS for remitting money outside the country.
• It is possible that the facility of "maintenance of relatives" under the Liberalised
Remittance Scheme is used for commercial purposes which is not its objective.
That may have prompted the regulator to narrow the definition of relatives.
Liberalised Remittance Scheme :
LRS is facility provided by RBI for all resident individuals including minors to freely remit up to a
certain amount in terms of US Dollar for current and capital account purposes or combination of
both.
The scheme was introduced in February 2004 and its regulations are provided under Foreign
Exchange Management Act (FEMA), 1999.
At present, LRS limit for all resident individuals, including minors, is the USD 2,50,000 (Rs. 1.5 crores)
per financial year.
Under LRS, individuals can make remittances for overseas education, travel, medical treatment,
maintenance to relatives living abroad, gifting and donations
Similarly, individuals are not allowed to send money to countries identified as ‘non-cooperative
jurisdictions’ by Financial Action Task Force (FAFT).
June 2018

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15. 22 GMs recommended as executive directors at PSU banks

Banks Board Bureau (BBB) has recommended 22 general managers to be
elevated as executive directors at the various public sector banks (PSBs). This
is the first major exercise undertaken by reconstituted BBB, headed by newly
appointed Chairman BP Sharma, former Secretary, Department of Personnel
and Training.
These recommendations were based on interactions held by BBB with eligible candidates
from PSBs towards appointment against vacancies in PSBs for the period 2018-19. Now,
Appointments Committee of Cabinet (ACC) headed by Prime Minister will take the final
decision in this regard.
Banks Board Bureau (BBB) :
BBB is super authority (autonomous and self-governing body) of Central Government
comprising eminent professionals and officials to improve governance of PSBs. It was
announced by Union Government in August 2015 as part of seven point Indradhanush
Mission to revamp PSBs. It was set up in February 2016 under chairmanship of former
CAG Vinod Rai based on recommendations of RBI-appointed Nayak Committee. It is
based in Mumbai, Maharashtra.
Function :
Its broad agenda is to improve governance at state-owned lenders. Its mandate also
involves advising government on top-level appointments in PSBs and assisting banks with
capital-raising plans through innovative financial methods and instruments as well as
strategies to deal with issues of stressed assets or bad loans.
BBB comprises of three ex-officio members (from government) and three expert
members, two of which are from private sector in addition to Chairman.
June 2018
16. RBI released draft guidelines to modify loan system

The Reserve Bank of India (RBI) released the draft guidelines to modify the loan
system for delivery of bank credit, making the rules stricter to regulate larger
borrowers enjoying working capital facility from the banking system. The draft
specifies a minimum level of loan component in fund based working capital
finance and a mandatory Credit Conversion Factor (CCF) for the undrawn
portion of cash credit availed of by large borrowers.
• Borrowers having aggregate fund based working capital limit of Rs 150 crore and
above from the banking system, need to withdraw a minimum of 40 percent of the
limit as loan component and the remaining as cash credit, with effect from October
1, 2018.
• The ground rules for sharing of cash credit and loan components will be laid down
by the consortium, subject to guidelines on bifurcation. Under Multiple Banking
Arrangements (MBAs), each bank will have a duty to ensure adherence to these
guidelines at individual bank level.

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• The amount of the Working Capital Demand Loan (WCDL) will be fixed by banks
in consultation with the borrowers, and the tenure of this loan shall not be less than
seven days.
• Banks will have the discretion to demand repayment of the ‘loan component’ in
instalments or by way of a ‘bullet’ repayment.
• The undrawn portion of cash credit or the overdraft limits sanctioned to the large
borrowers will attract a credit conversion factor of 20 percent with effect from April
1, 2019.
• The current 40 percent loan component will be revised to 60 percent, with effect
from April 1, 2019.
Cash Credit :
The Cash Credit is a type of facility provided by the bank or financial institution in which,
a company can withdraw an amount more than what he holds to his credit against the
security.This security can be a tangible asset such as stock in hand, raw materials or some
other commodity.
June 2018
17. RBI Compensate Gold Monetisation Scheme

The Reserve Bank of India (RBI) amended the Gold Monetisation Scheme,
2015 (GMS) with an aim to enable people to open a gold deposit account
hassle-free. In 2015, the government launched the Gold Monetisation Scheme
with the objective of mobilising the gold held by households and institutions in
the country.
Short term deposits :
• From now onwards, the short-term deposits will be treated as bank's on-balance sheet
liability.
• These deposits will be made with the designated banks for a short period of 1 to 3
years.
• Deposits can also be allowed for broken periods such as for 1 year 3 months or for 2
years 4 months 5 days.
• The rate of interest payable in the case of deposits, for maturities with broken periods,
will be calculated as the sum of interest for the completed year plus interest for the
number of remaining days.
Medium and Long Term Government Deposits :
Features Medium Term Government Long Term
Deposit (MTGD) Government
Deposit
(LTGD)
Duration MTGD can now be made for 5 LTGD can
to 7 years be made for

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12 to 15
years
Rate of interest 2.25% p.a. 2.50% p.a.
Minimum lock-in period These deposits can be These
withdrawn any time after 3 deposits can
years. be
withdrawn
any time
after 5 years.
Interest on premature Sum of Actual market value of Sum of
withdrawal the gold deposit on the day of Actual
withdrawal and Interest market
payable on the value of the value of the
gold at the time of deposit. gold deposit
on the day of
withdrawal
and Interest
payable on
the value of
the gold at
the time of
deposit.
Redemption of principal at maturity :
In the case of Medium and Long Term Government Deposits (MLTGD), the redemption
of principal at maturity will be either in rupees equivalent of the value of deposited gold
at the time of redemption, or in gold, it depends upon preference of the depositor.
June 2018
18. Financial Literacy Week Started

Reserve Bank of India is conducting Financial Literacy Week from June 4 on
the theme ‘Customer Protection’. The week-long event is to focus on creating
awareness among customers of banks. According to RBI, the event will
emphasise on awareness about different financial products, services, digital
applications and good financial practices.
RBI had introduced financial literacy week in 2016 to create a large scale awareness on
key topics. Non-Governmental Organisations collaborate with banks and made this
initiative successful in the past two years. Last year’s theme of the week was, ‘Know Your
Customer’.
The focus of this year is consumer protection messages like, Know your liability. The
customers will be educated upon the safe digital banking practices. RBI underlines that, in
cases of unauthorised electronic banking transactions when informed in 3 days, the
liability of account holder is zero.

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RBI says that resolution of such transactions will be the responsibility of the concerned
bank. The bank should resolve the issue as soon as possible within 90 days from the day
of receipt of the complaint. Other focus point of financial Literacy week includes, creating
awareness about Ombudsman Scheme of RBI.
May 2018
19. PayTM launched an initiative ‘AshaKiran’ to educate women

Paytm Payments Bank has launched an initiative that seeks to empower women
in India’s smaller towns and cities by training them for financial services and
creating new employment opportunities. For the first phase, the bank has
partnered with the UNDP’s Disha Project to mobilise self-help groups and
organise workshops in smaller towns and cities across Maharashtra,
Karnataka, Haryana, Andhra Pradesh and UttarPradesh.
• They would be trained for financial services and creating new employment
opportunities.
• This initiative will enable these women to act as a catalyst in the nationwide roll-
out of Paytm’s bank offerings.
• With this program, the Paytm Payments Bank aims to educate these women about
the financial services and create new employment opportunities across small
towns and cities in India’s banking system.
• It will offer skill development opportunities to rural women by training and certifying
them to act as banking correspondents.
• The bank will continue partnering with other government bodies and other such
organizations to reach out to more women across India.
• The Paytm Payments Bank plans to empower over one million women within the
first year of operations through entrepreneurial opportunities.
May 2018
20. ICBC Launched China's 1st India-Dedicated Investment Fund

Chinese state-run bank Industrial and Commercial Bank of China (ICBC)
launched the country's first India-dedicated publicly offered investment fund,
named as the ‘ICBC Credit Suisse India Market Fund’. This significant move
came just after the first ever informal summit between Prime Minister Narendra
Modi and Chinese President Xi Jinping which was held in April 2018 at Wuhan.
It is the China's first publicly offered fund for investing in India and it will invest in
exchange-traded funds listed on more than 20 exchanges in Europe and in the United
States that are based on the Indian market.
• It will invest in the future of the Indian economy and track the distribution of the
industrial structure across the Indian market.
• The fund will focus on various sectors such as the financial industry, information
technology, alternative consumption, energy, essential consumption, raw materials,
medicine, healthcare and other industries.

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• The fund will also be beneficial for the large investors, it will add a low-relevant asset to
the allocation tool that can effectively improve the effective frontier of the investor's asset
allocation and help the investor to better spread risks and obtain a more stable income.
India-China trade relationship :
The Chinese Ministry of Commerce announced on April 26, 2018 that India’s trade with
China had gone up by more than 22 percent in the first quarter of 2018.
• By the end of 2017, Chinese investments into India added up to more than 8 billion US
dollar, as India has become an important market for infrastructure cooperation among
Chinese companies and a major investment destination.
• A number of Chinese tech companies have already been investing in and acquiring
start-ups in India led by Alibaba and Tencent.
May 2018
21. SEBI Tightened KYC Norms For FPIs

Stepping up its crackdown on money laundering and round-tripping, SEBI
recently came out with a detailed framework for risk-based Know Your Client
(KYC) documentation of foreign portfolio investors (FPIs).
In an FPI structured as a company, a person owning 25 per cent stake would be
considered the beneficial owner (BO). However, if it originates from a high-risk jurisdiction,
any person owning 10 per cent stake or more in such FPI would be considered a BO.
In addition to this, all investors from such jurisdictions would have to comply with
the KYC requirement for category-III FPIs (considered to be High Risk entity).
Among other things, the market regulator made it clear that non-resident Indians (NRIs),
overseas citizens of India (OCI) and resident Indians cannot be beneficial owners of FPIs.
NRIs and OCIs can only obtain an FPI licence on condition that they limit their roles to
investment advisors and do not invest their money. Sebi further sought a comprehensive
list of beneficial owners from the existing FPIs within six months.
April 2018
22. RBI liberalised External Commercial Borrowings

Reserve Bank of India (RBI) liberalised External Commercial Borrowings (ECB)
Policy by including more sectors in the window, with an aim to enable cheaper
access of overseas funds. RBI notified that, it has decided to increase the ECB
Liability to Equity Ratio for ECB raised from direct foreign equity holder under
the automatic route to 7:1.
• This ratio will not be applicable if total of all ECBs raised by an entity is up to USD
5 million or equivalent.

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• In order to harmonise the extant provisions of Foreign Currency and Rupee ECBs
and Rupee Denominated Bonds, it has been decided to set a uniform all-in-cost
ceiling of 450 basis points over the benchmark rate.
• The benchmark rate will be 6 month USD LIBOR (or applicable benchmark for
respective currency) for Track I and Track II. It will be existing yield of the
Government of India securities of corresponding maturity for Track III (Rupee
ECBs) and RDBs.
• It has been decided to allow Housing Finance Companies and port trust to avail
ECBs under all tracks.
• These entities should have a board approved risk management policy. They should
maintain their ECB exposure hedged 100 per cent at all times for ECBs raised.
• Investment raised through ECBs should be avoided to be put in real estate or
purchase of land except for affordable housing, construction and development of
SEZ and industrial parks/integrated townships.
• Also ECB fund should not be invested in share market and equity investment. On-
lending to entities for the above activities is also restricted, according to law.
April 2018
23. RBI Revised its KYC Guidelines

The Reserve Bank of India has revised "Know Your Customer" or the KYC
guidelines. The KYC norms have been revised following the government's
decision to update the 'Prevention of Money Laundering' rules in June 2017.
The RBI made linking of national biometric ID Aadhaar to bank accounts
mandatory.
However, it said this will be subject to the final decision of the Supreme Court on making
of Aadhaar mandatory.
Till now, an Officially Valid Document for address proof together with Permanent Account
Number issued by the Income Tax department and a recent passport size photograph
were the key KYC documents.
According to the new norms, banks must obtain the following documents from an
individual while establishing an account based relationship.
• The Aadhaar number from an individual eligible for enrollment of Aadhaar

• Permanent Account Number or Form No. 60
• Where an Aadhaar number has not been assigned, proof of enrollment for Aadhaar
Residents of Jammu and Kashmir, Assam and Meghalaya have been exempted from this
rule and other customer due diligence options have been provided.
The norms further state that customers already having account-based relationships with
a bank must submit the Aadhaar number before the date notified by the government. If
they fail to do so, the account shall cease to be operational.
On March 31. the government also extended the date for submission of Aadhaar details
for existing bank account holders indefinitely. A date would be notified after the final
judgement in the petition challenging Aadhaar being heard before the Supreme Court.
April 2018

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24. SBI India’s most trusted bank , ICICI tops in private sector
The TRA Brand Trust Report 2018 stated that the State Bank of India is the
most trusted bank in the country and ICICI Bank topped the chart among the
private ones. The leader among the private banks is ICICI Bank with an overall
38th rank in 2018.
• According to the report, this year the State Bank of India has topped the chart of
BFSI (Banking and Financial Services Institutions) super category despite seeing
a dip in its overall brand trust index rankings from 13th (in 2017) to 21st (this year).
• ICICI bank rose 9 ranks to become the topmost bank as far as the private banks
are considered.
• In the overall ranking comparing brands, ICICI Bank ranked 38th in 2018.
• The survey was carried out during November-January and it did not take into
account the recent reports of irregularities involving the ICICI bank.
• It was observed that 51 brands from the BFSI sector got listed amongst the 1000
most trusted brands in India in 2018 as compared to 23 brands listed last year.
• The 19 new brands entering the list show that the general trust in the BFSI sector
is rising.
• The public sector bank PNB (Punjab National Bank) which in February 2018
witnessed a multi-crore fraud, was ranked 6th among the PSBs and 297th in the
overall rankings. Since the survey was carried out during November-January and
it did not take into account people’s opinions after the scam. The fraud might affect
next year rankings for the PNB.
April 2018
25. Army inked MoU with Axis Bank on Defence Salary Package
Indian Army has signed Memorandum of Undertaking (MoU) with Axis Bank on
Defence Salary Package. The first MoU between Axis Bank and Indian Army
was signed in 2011 and was renewed in March 2015.
The current MoU is tailor-made to suit e requirements of serving soldiers, pensioners and
families.Under the current MoU, Indian Army personnel will get free personal accident
death cover and free permanent total disability cover of Rs 30 lakh apart from benefits.
Moreover their children will get free educational cover of up to Rs 2 Lakh for children
between the age of 12 and 20 years. Indian Army is hoping that this MoU will benefit large
number of serving and retired Army personnel who are having their accounts with Axis
bank and also provide them opportunity to access modern banking facilities.
April 2018
26. Bhanu Pratap Sharma new chairman of Banks Board Bureau

The Union Finance Ministry has reconstituted Banks Board Bureau (BBB) and
appointed former bureaucrat Bhanu Pratap Sharma as its chairman. It will
replace earlier BBB headed by former Comptroller and Auditor General (CAG)
Vinod Rai as its two-year term ended in March 2018. The reconstituted BBB will
have two-year tenure, same as its predecessor.

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Sharma is retired IAS officer of Bihar cadre (1981 batch) and former Principal Secretary
(Finance) in the Bihar government. He is presently chairman of recruitment and
assessment centre at Defence Research and Development Organisation (DRDO). He had
been health secretary and secretary for personnel and training at Centre, before retiring
in June 2017 from civil service.
Banks Board Bureau (BBB) :
BBB is super authority (autonomous body) of eminent professionals and officials for public
sector banks (PSBs). It was announced by Union Government in August 2015 as part of
seven point Indradhanush Mission to revamp PSBs and started functioning in April 2016. It
had replaced Appointments Board of Government. It is housed in Reserve Bank of India’s
central office in Mumbai, Maharashtra. BBB is considered as the first step towards Bank
Investment Company as recommended by P J Nayak committee.
April 2018
27. RBI tightened monitoring of liberalised remittance scheme

The Reserve Bank of India tightened reporting norms for the Liberalised
Remittance Scheme (LRS) under which an individual can transfer up to USD
2,50,000 abroad in a year. The LRS transactions are currently permitted by
banks based on the declaration made by the remitter.
Currently, the LRS transactions are permitted by banks based on declaration made by
remitter. The monitoring of adherence to limit is confined to obtaining such declaration
without independent verification, in absence of reliable source of information.
Now under tightened reporting norms, daily reporting system by Authorised Dealer (AD)
banks of transactions undertaken by individuals under LRS has been placed, which will
be accessible to all the other ADs. It will be mandatory for banks to upload daily
transaction-wise information undertaken by them under LRS.
Liberalised Remittance Scheme (LRS) :
LRS is facility provided by RBI for all resident individuals including minors to freely remit
upto certain amount in terms of US Dollar for current and capital account purposes or
combination of both. The scheme was introduced in February 2004 and its regulations are
provided under Foreign Exchange Management Act (FEMA), 1999. After it was launched,
the LRS limit was USD 25,000, but it has been revised in stages consistent with prevailing
macro and micro economic conditions.
April 2018
28. SBI will invest Rs 80 billion in hydropower project of Nepal

India’s largest bank, State Bank of India (SBI) will be investing a total of Rs 80
billion in the 900 megawatt (MW) Arun III hydropower project of Nepal.

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The contract for constructing this project has been awarded to Sutlej Jal Vikas Nigam
(SJVN) and SJVN has made an agreement with the SBI to acquire the investment as
a loan.
Indian Government has already granted approval to SJVN to invest Rs. 92 billion in this
project. This project is targeted to be completed by September 2022. On account of
investment, SJVN will take the charge for 25 years excluding the time for the construction.
The further division of the project has been made with the granting of two separate
packages to two Indian companies. Under the Package One, the Jay Prakash Associates
(JP) Limited of India has been awarded with the construction of the Dam and diversion
with an estimated cost of about 18 billion rupees.
April 2018
29. 11 public sector banks placed under RBI’s PCA Framework

The Reserve Bank of India (RBI) has placed 11 public sector banks (PSBs) out
of 21 State-owned banks under its Prompt Corrective Action (PCA) framework
because of deteriorating performance. Three-four more PSBs are expected to
be brought under PCA framework.
The 11 banks already under PCA framework are IDBI Bank, UCO Bank, Bank of India
(BoI), Central Bank of India, Indian Overseas Bank, Dena Bank, Oriental Bank of
Commerce (OBC), Bank of Maharashtra (BoM), United Bank of India, Corporation Bank
and Allahabad Bank.
Objectives :
PCA framework restricts the amount of loans banks can extend, this will definitely put
pressure on credit being made available to companies especially the MSMEs. Large
companies have access to the corporate bond market so they may not be impacted
immediately. Small and medium enterprises will have to bear the brunt due to this move
by RBI.
Prompt Corrective Action (PCA) framework :
PCA is process or mechanism to ensure that banks don’t go bust. Prompt Corrective
Action was initiated by Reserve Bank of India in April 2017. It restricts the bank to indulge
in lending activities. Banks under this framework are restricted from opening new
branches, staff recruitment and increasing the size of their loan book depending on the
risk thresholds set in PCA rules.
April 2018
30. RBI switched back to GDP model from GVA model

The Reserve Bank of India switched back to gross domestic product (GDP)
model from the gross value added (GVA) methodology to provide its estimate
of economic activity in the country. The switch to GDP is mainly to conform to
international standards and global best practices.

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i.Viral Acharya, deputy governor of RBI said that, this change has been done to confirm
with international practice and for ease of comparison.
ii. Worldwide, the performance of economies is measured in terms of GDP. Multilateral
institutions, international analysts and investors also follow this approach.
iii. GVA gives the picture of the state of economic activity from the producers’
side or the supply side. GDP provides the picture from the consumers’ side or the
demand side.
iv. The Central Statistical Office has been employing GDP as the main tool to measure
economic activity since January 2015.
Globally, performance of most economies is gauged in terms of GDP model. This is also
approach followed by multilateral institutions, international analysts and investors because
it facilitates easy cross-country comparisons.
April 2018
31. ICICI , 1st Indian bank to go live on SWIFT’s GPI service

India’s largest private sector lender ICICI Bank became first Indian bank to go
live on SWIFT’s (Society for World Interbank Financial Telecommunication
System) Global Payment Innovation (GPI), an improved cross-border payments
service.
SWFIT GPI was launched in May 2017 to help banks to track their global transactions at
all times, keeping full vigil on payments activity. It covers all payment instructions sent
across network, enabling GPI banks to track all their SWIFT payment instructions at all
times, and giving them full visibility over all their payments activity.
Objectives :
It improves customer experience by increasing speed, transparency and automatically
provides status updates to all GPI banks involved in any GPI payment chain. It allows
banks to confirm when payment has been completed.
SWIFT (Society for World Interbank Financial Telecommunication System) :
SWIFT is global financial messaging service that enables financial institutions worldwide
to send and receive information about financial transactions in secure, standardized and
reliable environment. It is used to transmit messages relating to cross border financial
transactions. It was founded in 1973 and is headquartered in La Hulpe, Belgium.
April 2018
32. RBI Delayed Adoption of Ind-AS by 1 Year

The Reserve Bank has postponed the adoption of the Indian Accounting
Standards (Ind AS) for commercial banks by one year as many banks are not
prepared to migrate to the new accounting system. The earlier deadline for
banks to switch to the Ind AS was from April 1 2018.
The format of the financial statements as prescribed in the Third Schedule of the Banking
Regulation Act which is not amenable for reporting financial statements under Ind AS,
and, therefore, RBI has requested the government to amend the Schedule. RBI will

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continue to have the proforma of financial statements from banks to monitor the progress
lenders are making towards migration to Ind-AS.
Presently, banks and non-banking financial companies currently follow generally accepted
accounting principles (GAAP) standards. According to a February 2016 RBI circular,
commercial banks, barring regional rural banks, had to implement the new accounting
standards from April 1.A key change under the new rules was the need to provision for
accounts based on expected loss, instead of when an account turns into a non-performing
asset (NPA).
Indian Accounting Standards :
Ind AS is global accounting practice on par with International Financial Reporting Standard
(IFRS) 9. It governs the accounting and recording of financial transactions as well as
presentation of statements such as profit and loss account and balance sheet of lender or
a company.
The Ministry of Corporate Affairs (MCA) on 16 February 2015 notified 39 accounting

standards and laid down an Indian Accounting Standards (Ind AS) transition roadmap for
companies. In January 2016, the MCA finally announced Ind AS roadmap for scheduled
commercial banks (excluding regional rural banks [RRBs]), insurers/insurance companies
and NBFCs.
April 2018
33. MoU Between Indian Army And HDFC Bank

An MoU was signed between the Indian Army and HDFC Bank on the Defence
Salary Package. The first MoU between HDFC Bank and the Indian Army was
signed in 2011 and was renewed in Mar 2015. The current MoU is tailor-made
to suit the requirements of serving soldiers, pensioners and families.
The signing in ceremony was chaired by the Director General (MP&PS), Lt Gen S K Saini
and was attended by the top dignitaries of HDFC Bank headed by Ms Smita Bhagat, Head
Government Business and Branch Banking.
Currently Indian Army has MoUs on Defence Salary Package with 11 public and private
sector banks. MoUs are considered for inception and renewal with banks on analyzing
their utility and suitability to the requirements of serving soldiers, pensioners and families.
Under the current MoU apart from other benefits the Army personnel will get free personal
accident death cover and free permanent disability cover of Rs 30 lakhs, free educational
cover of upto Rs 1 Lakh per year for four years for education of dependent child in case
of accidental death of defence personnel and 100% processing fees waived for Car Loans
and Personal Loans.
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34. SIDBI launched Virtual Assistant' & ' Bankability Kit'

SIDBI (Small Industries Development Bank of India) celebrated its foundation
day (2nd April 1990) as the day of Sampark (connect), Sanwad (interaction),
Suraksha (security) and Sampreshan (disseminate). Chairman Managing
Director of SIDBI Mohammad Mustafa launched a series of initiatives from its
Lucknow bank headquarters.
An MoU was signed with The New India Assurance Co. Ltd. and two MSMEs were
issued insurance policies. Chairman SIDBI also launched 'Samridhhi- the virtual
assistant' on banks revamped universal loan portal www.udyamimitra.in. During the day,
a ‘Bankability Kit’ (brought in partnership with Bank of Baroda and IDBI Bank) was
also launched.
A new step forward in commencing Bancassurance services for MSMEs was also taken.
An MoU was signed with The New India Assurance Co. Ltd. and two MSMEs were issued
insurance policies. SIDBI is thus evolving as one stop solution provider.
Samridhhi is the virtual assistant on banks revamped universal loan
portal www.udyamimitra.in. It will answer standard queries of aspirants 24*7.
Bankability Kit covers what bankers look at, how to communicate with banks, the care to
be taken, do’s and don’ts etc.
April 2018
35. The Reserve Bank Of India | 83rd Establishment Day

Having Commenced operations from 1st april 1935, India's central bank ,
Reserve bank of India Celebrated 83rd establishment day on 1st April 2018.
One of the primary regulators of the Indian Financial sector RBI was set up on
the recommendations of the Royal Commission on Indian Currency and
Finance (Hilton Young Commission).
The Reserve Bank of India was established on April 1, 1935, in accordance with the
provisions of the Reserve Bank of India Act, 1934.The Central Office of the Reserve Bank
was initially established in Calcutta but was permanently moved to Mumbai in 1937. The
Central Office is where the Governor sits and where policies are formulated. Though
originally privately owned, since nationalization in 1949, the Reserve Bank is fully owned
by the Government of India.
Appointed by the GOI as according to the Reserve Bank of India Act, a central board of
directors govern the affairs of RBI. The present Governor Mr. Urjit Patel and Deputy
Governors (not more than four) viz NS Vishwanathan, Dr. Viral V Acharya and BP
Kanugno constitute the official directors body. Apart from this, there are 10 non-official
directors from various fields and two Government officials.
The primary functions of RBI :
1) Monetary Policy formulation, implementation and monitoring.
2) Prescribing parameters of Banking Operations.

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3) Managing the Foreign Exchange Management Act,1999.
4) Issuing/Exchanging/Destroying Currency and Coins as required.
5) Merchant Banking function for the Central & State Government
The Reserve Bank of India communicates with various types of audiences. In order to
reach out to the common person, the Reserve Bank releases information in 11 regional
languages spoken by a large section of the population, apart from in English and in Hindi.
March 2018
36. HDFC Bank Signed MoU with Government e-Marketplace

Private sector lender HDFC Bank signed an agreement with the Government e-
Marketplace (GeM) under which the bank will facilitate a host of services to the
public procurement portal for Central and state government organisations.
The MoU is significant as Government e-marketplace will bring transparency and
efficiency in the procurement process with assured and timely payment to the sellers.
GeM provides an end-to-end online marketplace for central and state government
ministries or departments, central or state public sector undertakings, autonomous
institutions and local bodies for procurement of common use goods /services in a
transparent and efficient manner.
About 20 states have already signed an MoU with GeM to use this portal for their
procurements.
March 2018
37. SBI Signed MoU With IMGC

India's largest lender SBI and India Mortgage Guarantee Corporation (IMGC)
signed a pact to offer mortgage guarantee scheme for prospective non-salaried
and self-employed home loan customers.The offering will help increase home
loan eligibility up to 15% within the regulatory norms.
The MoU between SBI and IMGC is a strategic initiative which will enable to improve
housing loan volumes in the non-salaried segment. With the rising demand in affordable
housing segment, this product aims to provide home finance to select target audience at
better terms.
Under this product applicant can avail higher finance based on risk grade of the borrower,
by opting for IMGC default guarantee cover.
SBI further said the MoU with IMGC will pave the way for the bank to introduce many more
products in the mortgage guarantee backed home loan segment to fulfil the needs of
Indians of buying their dream homes.
IMGC is a joint venture between National Housing Bank, Genworth Inc International
Finance Corporation and Asian Development Bank. It is providing mortgage default
guarantee to the lending Institutions in India.
March 2018

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38. Insolvency and Bankruptcy Board of India inked MoU with RBI
The Insolvency and Bankruptcy Board of India (IBBI) signed Memorandum of
Understanding (MoU) with Reserve Bank of India (RBI) for increased
cooperation in effective implementation of insolvency law. The MoU was singed
at time when authorities are working on ways to address huge amount of non-
performing assets (NPAs) in banking sector.
The MoU provides for sharing of information, subject to limitations imposed by applicable
laws and sharing of resources available with each other to extent feasible and legally
permissible. It calls for periodic meetings to discuss matters of mutual interest, including
regulatory requirements that impact IBBI and RBI’s responsibilities, enforcement cases,
research and data analysis, information technology and data sharing.
The Code provides for reorganisation and time -bound and market-determine insolvency
resolution of corporate persons, partnership firms and individuals for maximization of
value of assets. The IBBI exercises regulatory oversight over Insolvency Professionals,
Insolvency Professional Agencies and Information Utilities.
It frames and enforces rules for processes such as corporate insolvency resolution,
individual insolvency resolution, corporate liquidation and individual bankruptcy under
Code.
Both RBI and IBBI are interested in effective implementation of Code and its allied rules
and regulations, through quick and efficient resolution process. Therefore, they agreed to
sign MoU to assist and co-operate with each other for effective implementation of Code.
March 2018
39. Passport mandatory for Bank Loans of >= Rs. 50 crore

The government has made providing passport details mandatory for taking
loans of 50 crore rupees and above to ensure a SWIFT action in case of fraud
and prevent fraudsters from fleeing the country. According to Financial Services
Secretary, all existing loans of over 50 crore rupees, banks have been asked to
collect passport details of borrowers within 45 days.
Passport details of borrowers taking loans of Rs 50 crore and more have been made
mandatory to ensure a swift action in case of fraud and prevent fraudsters from fleeing the
country.
Passport details will help banks to take timely action and inform the relevant authorities to
prevent fraudsters from fleeing the country.
Next step on clean and responsible banking. Passport details must for loans above Rs 50
crore. Step to ensure quick response in case of fraud.
In absence of passport details, banks were hamstrung in taking timely action to prevent
defaulters especially wilful one from fleeing the country.
As part of drive to clean the banking system, the Finance Ministry last week had directed
public sector banks (PSBs) to probe all NPA accounts of over Rs 50 crore for possible
fraud and accordingly report the cases to CBI.

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March 2018
40. India became the member of European Development Bank

The shareholders of European Bank for Reconstruction and Development
(EBRD) have given their approval for India's membership in the international
financial institution. Now to initiate the formal membership, India will purchase
the shares at an estimated cost of around 1 million dollar.
After India becomes the 69th member of EBRD, Indian companies can undertake joint
investments in regions in which the EBRD operates.
The decision is followed by Indian government’s application to seek the EBRD
membership back in December 2017.
EBRD is a multilateral development bank established in 1991 during the dissolution of the
Soviet Union. It is headquartered in London and uses the investment to build market
economies. It supports development in more than 30 countries from central Europe to
central Asia. Though it has members from all around the world, it only lends regionally in
its countries of operations. The EBRD mandates to work only in countries that are
"committed to democratic principles".
It promotes "environmentally sound and sustainable development", and does not finance
"defense-related activities, the tobacco industry, selected alcoholic products, substances
banned by international law and stand-alone gambling facilities."
March 2018
41. SBI raised lending rate to 8.15%

The State Bank raised its lending rates by 20 basis points to 8(point)15 per cent,
with immediate effect, setting the tone for the industry to follow suit. This is likely
to make home and car loans costlier. This is the first lending revision by the
bank since April 2016 and comes a day after it massively raised the retail and
bulk deposit rates.
State Bank of India, the country's largest lender increased marginal cost-based lending
rates (MCLR) across most maturities, effective immediately. SBI raised the key one-year
MCLR or benchmark rate to 8.15 per cent from 7.95 per cent, according to a notification
from the bank.
This is the first time SBI has raised the one-year MCLR or benchmark rate since the
inception of a new lending rate system in April 2016. The rate revision from SBI comes
just a day after the bank raised interest rates on fixed deposits across most maturities.
Another state-run bank PNB also raised its lending rate, effective March 1, 2018. PNB
raised its one-year MCLR rate to 8.30 per cent from 8.15 per cent. After this, ICICI Bank
also raised its MCLR. The marginal cost of funds based lending rate of ICICI Bank is now
7.95% for the overnight rate against the earlier rate of 7.8%, a hike of 15 basis points.
March 2018

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42. RBI Raise Currency Derivative Trade Limit To USD 100 Million
India's central banking institution, the Reserve Bank of India, has raised the
exposure limit under exchange traded currency derivatives (ETCD) trading for
all residents and foreign portfolio investors (FPIs) to USD 100 million across all
currency pairs involving the Indian rupee.
This decision will help the entities indulged in forex transaction to maintain their currency
risk in a more efficient manner. Earlier, a limit of USD 15 million for USD-INR and USD 5
million for other currency pairs of Indian rupee with Euro, Japanese Yen and British Pound
was imposed by RBI.
In the case of any violation, the participant shall be liable to any action that may be
warranted as per the provisions of Foreign Exchange Management Act, 1999. RBI has
been liberalising the norms for ETCD markets.
Instead of the statutory auditor’s certificate, a signed undertaking to the effect from the
Chief Financial Officer (CFO) or the senior most functionary responsible for the company’s
finance and accounts and the Company Secretary (CS) may be produced.
Exchange traded derivative :
It is a financial instrument that trades on a regulated exchange, and whose value is based
on the value of another asset. These are derivatives that are traded in a regulated fashion.
These derivatives can be used to hedge exposure or speculate on a wide range of
financial assets like commodities, equities, currencies, and even interest rates.
February 2018
43. RBI Directs Banks to Link SWIFT to CBS by April 2018

The Reserve Bank of India (RBI) has directed banks to link SWIFT (Society for
World Inter bank Financial Telecommunication System platform) with their core
banking solutions (CBS) by April 30, 2018. This decision is part of RBI’s efforts
to tighten internal controls in banks following Rs 11,400 crore fraud that was
unearthed at Punjab National Bank (PNB). CBS is centralized software used to
support bank’s most common transactions.
To deal with the situation and to tighten the internal controls in banks Reserve Bank of
India has directed the banks to integrate SWIFT (Society for Worldwide Interbank
Financial Telecommunication) with its core banking solutions (CBS) by April 30.
PNB fraud has led many banks to review their internal processes and have started
centralising and linking their processes to CBS. Each bank will have to review their control
systems and technology separately, as their problems and loopholes may differ.
The Society for Worldwide Interbank Financial Telecommunication (SWIFT) provides
a network that helps financial institutions worldwide to send and receive information about
financial transactions in a secure and reliable environment. SWIFT transports financial
messages in a highly secure way and does not hold accounts for its members or perform
any form of clearing or settlement.
February 2018

BA 2018
44. RBI Launched Ombudsman Scheme For NBFCs

The Reserve Bank of India has launched Ombudsman Scheme for non-banking
financial companies (NBFCs) for redressal of complaints against them. The
scheme will provide a cost-free and expeditious complaint redressal
mechanism relating to deficiency in the services by NBFCs covered under the
scheme.
The scheme will cover all deposit-taking NBFCs, and based on the experience gained.
The offices of the NBFC ombudsmen will function at four metro centres – New Delhi,
Mumbai, Kolkata and Chennai.
Under this scheme, any customer or person can file compliant with ombudsman on various
grounds. Only written complaints or those in electronic format will be accepted. The
complaint may be wrt non-payment or inordinate delay in payment of interest, non-
repayment of deposits, lack of transparency in loan agreement, non-compliance with RBI
directives on fair practices code for NBFCs, levying of charges without sufficient notice to
customers and failure or delay in returning securities documents despite repayment of
dues among others.
RBI will appoint one or more of its officers in rank of not less than General Manager
(GM) to be known as Ombudsman to carry out functions. The appointment will for period
not exceeding three years at time. The schemes provide for Appellate mechanism under
which complainant/NBFC will have option to appeal against decision of Ombudsman
before Appellate Authority.
In case of non-implementation of settlement or Award, the complainant may represent to
RBI and RBI may initiate such action under provisions of RBI Act, 1934 as it deems fit.
February 2018
45. RBI Set up YH Malegam Committee to Monitor Bad Loans

PNB Bank Fraud has stunned the common man as well as the bank regulatory
organisation Reserve Bank of India. Stunned by the 11,400 crore fraud, RBI
has formed a committee under the chairmanship of Y H Malegam.
The committee will look into reasons for high divergence observed in asset classification
and provisioning by banks vis-à-vis RBI’s supervisory assessment. It will suggest steps
needed to prevent it, factors leading to increasing incidence of frauds in banks and
measures (including IT interventions) needed to curb and prevent it.
Malegam who served as the Central Board of Directors of RBI will enquire about the issue
associated with the classification of bad loan, rising incidents of frauds and potency of the
audits.
RBI has privately warned the bank of possible misuse and asked them to implement the
precautionary methods about the potential malicious use of SWIFT infrastructure.
Members of the committee :

Bharat Doshi , S Raman , Nandkumar Saravade , A K Misra

BA 2018
The committee was set up in wake up of Rs 11,400 crore SWIFT (Society for Worldwide Interbank
Financial Telecommunication)-related fraud in National Bank (PNB) and RBI’s drive of strengthening
supervisory framework in the country to avoid frauds.
February 2018
46. Government will change Base Year for GDP, IIP to 2017-18
Narendra Modi-led government of India has decided to change the base year
to 2017-18 for the calculation of GDP and IIP. The base rate for the retail
inflation will be revised to 2018 and the ministry will undertake various steps in
the next fiscal beginning April that will improve the statistical system that will
help meet the data requirements in the emerging socio-economic scenario.
During 2018-19, the ministry is proposing to initiate steps to revise the base years of gross
domestic product (GDP), Index of Industrial Production (IIP) and Consumer Price Index
(CPI) to accommodate and factor the changes that take place in the economic scenario
of the country.
GDP stands for Gross Domestic Product which is a method of measuring a country's
growth. It is the total value of the goods and services produced by all the people and
companies in the country within country's boundaries. 2011-12 is the current base rate to
measure India's GDP.
IIP stands for Index of Industrial Production for India. It is used to measure the growth of
various sectors in an economy. It measures short terms changes in the production within
a period of time
It is compiled and published monthly by the Central Statistical Office (CSO) six weeks
after the reference month ends. The current base year is 2011-2012.
February 2018
47. RBI will Set up Ombudsman for NBFCs

The Reserve Bank of India has announced setting up of an ombudsman for
addressing customer grievances in the non-banking finance companies
(NBFCs). This will be started in a phased manner. RBI will start with deposit
taking NBFCs and widen the scope to cover NBFCs with asset size of Rs 100
crore. It is a move to strengthen the customer grievance redressal mechanism
for Non-banking finance companies (NBFCs).
• Referring to the successful working of the banking ombudsman. RBI Deputy

Governor B.P. Kanungo mentioned that the Ombudsman Scheme will be
operationalised by the end of this month.
• The banking ombudsman scheme has been working well and has been accepted
as a preferred mode of customer grievance redressal by public at large, which is
cost free and expeditious.
• Since the NBFCs complaints were increasing, and there is no such redressal
mechanism for the NBFCs unlike the banking and insurance sectors, it was
decided that there should be a scheme for the non-banking financial sector also.

BA 2018
• The ombudsman will exercise jurisdiction over the companies it in a phased
manner, starting with deposit-taking NBFCs, and at a later stage will include all
non-banking finance companies which have an asset size of Rs 1 billion and above
with customer interface.
• There are around 20 banking ombudsmen have been appointed with offices mostly
in state capitals.
• One can file a complaint before the banking ombudsman if the reply is not received
from the bank within one month after the bank concerned has received one's
complaint, or the bank rejects the complaint, or if the complainant is not satisfied
with the reply given by the bank.
According to the RBI, an NBFC is a company registered under the Companies Act, 1956,
which could be engaged in the business of loans and advances, shares, stocks, bonds,
debentures, securities, leasing, hire-purchase, insurance, or chit business. However, any
institution whose principal business is that of agriculture, industrial activity, purchase or
sale of any goods, or related to selling, buying or building immovable property; cannot be
termed an NBFC. Apart from that, any non-banking company whose principal business is
of receiving deposits—in lump sum or in instalments—in any manner, will be called an
NBFC.
February 2018
48. Axis Bank Launched ‘Evolve’

Axis bank has launched the 4th edition of ‘Evolve’ in Coimbatore, Tamil Nadu
for its SME (Small and Medium Enterprises) customers. This edition of ‘Evolve’
is titled “Transform your Family Business into your dream company”. This will
empower the SMEs to understand the winning strategies and best practises
that have helped some of the leading family businesses in India grow into
reputable enterprise.
• This edition will span across 30 cities including Nagpur, Surat, Rajkot, Pune,
Vishakhapatnam, Trichy, Kanpur, Ludhiana and Jamshedpur.
• It will equip the SMEs with new-age strategies, live case studies, operational know-
how, regulatory and Government related knowledge skills.
Evolve is a knowledge enhancement series focused on the burgeoning Small and Medium
Enterprises (SME). It was conceptualized in the year 2014. The basic objective of this
initiative is to equip SMEs with new-age strategies, case-studies, operational know-how,
regulatory and governmental affairs etc. that impact their business. All existing SME
Customers of Axis Bank can attend any Evolve session across India. Prior registration is
a must.
• Three Evolve sessions have been held earlier.

• Edition 1 in 2014-2015: The topic was and Social media Marketing and Axis Bank
partnered with LinkedIn, Marketing Unplugged and SMG Convonix and events took
place across 38 cities.
• Edition 2 in 2015-2016: The Topic was How to Scale your business and Axis Bank
partnered with Marketing Unplugged and events across 40 cities
• Edition 3 in 2016-2017: This edition of Evolve highlighted the impact of GST on
SMEs and equipped them to deal with it during the time of implementation.

BA 2018
January 2018
49. Usha Ananthasubramanian ; 1st Woman IBA Chief

The MD and CEO of Allahabad Bank, Usha Ananthasubramanian, has been
elected as the first woman chairman of the Indian Banks’ Association (IBA). The
Managing Committee of the Indian Banks’ Association elected Usha as the
Chairman for the year 2017-18. The Chairman of the State Bank of India,
Rajnish Kumar was elected the Deputy Chairman of the IBA for the year 2017-
18.
• The position of IBA’s Chairman fell vacant after the superannuation of Jatinder Bir
Singh, the Chairman and MD of the Punjab & Sind Bank. . Mrs. Subramanian is
going to replace him who left the position on 31st December 2017.
• The Indian Banks’ Association is the banking sector’s industry body having the
objective to promote as well as develop sound and progressive banking principles,
practices and conventions and to contribute to the developments of creative
banking in India.
• It is a representative body of management of banking in India operating in India -
an association of Indian banks and financial institutions.
• It was formed on 26th September 1946 and has its head office in Mumbai,
Maharashtra.
• At present, 237 banking companies are its members.
• Indian Banks' Association is managed by a managing committee, and the current
managing committee consists of one chairman, 3 deputy chairmen, 1 honorary
secretary and 26 members.
• IBA was formed for development, coordination and strengthening of Indian
banking, and assist the member banks in various ways including implementation
of new systems and adoption of standards among the members.
January 2018
50. Indian Overseas Bank and NHB tied up for RHISS

The Indian Overseas Bank has joined hands with NHB (National Housing Bank)
for implementation of the rural housing subsidy scheme. A memorandum of
Understanding has been signed between the two for the RHISS (Rural Housing
Interest Subsidy Scheme). It is scheme of the central rural development
ministry.
The agreement was signed by R Subramaniakumar, MD and CEO of Indian Overseas
Bank, and Sriram Kalyanaraman, MD and CEO of the National Housing Bank, along with
senior executives of IOB and National Housing Bank.Under this scheme, the interest
subsidy is 3 per cent for a loan amount of Rs 2 lakh with a repayment period of 20 years.
The Indian Overseas Bank has become one of the first public sector banks to implement
the scheme.
RHISS ( Rural Housing Interest Subsidy Scheme ) :

BA 2018
The RHISS (Rural Housing Interest Subsidy Scheme) was officially launched on 24th
January 2017 by our honourable Prime Minister Mr. Narendra Modi. The main reason
behind the launch of this scheme was the lack of proper housing facilities in the rural
areas. Therefore the Ministry of Rural Development launched the PMAY-G Home Loan
Interest Subsidy Scheme- RHISS. This scheme will provide easy and cheap access for
institutional loans at the subsidized interest rates for the construction or modification of
their houses.
Features of this scheme :
In order to empower the rural people to provide them an opportunity to get permanent houses, the
central government has launched this scheme.
The rural people cannot arrange for the funds required for the construction or expansion of their
houses. Therefore these people can take loans up to Rs 2 lakh from financial institutions.
It is not possible for the rural people to pay high rates of interest. Therefore the central government
has offered the interest subsidy of 3 per cent for a loan amount of Rs 2 lakh with a repayment period
of 20 years.
This scheme is the brain child of the Modi government and is therefore funded by the central
government.
Not all individuals will require the full 2 lakhs for making the house. In such a situation, where the
applicants have acquired a credit that is less 2 lakhs, they will be charged with an interest that will be
calculated at 9% rate.
January 2018
51. India emerged as top borrower from AIIB in 2017

India has emerged as a top borrower from the China-sponsored Asian
Infrastructure Investment Bank (AIIB) with USD 1.5 billion worth of loans last
year and USD three billion more in the pipeline.
India's Ambassador Gautam Bambawale met AIIB President Jin Liqun in Beijing and
held in-depth talks on deepening India's engagements with the bank. Next to
India, Indonesia has emerged as the second largest borrower with about USD 600
million loans.
India – top borrower from AIIB:
i. India is the top borrower from AIIB with USD 1.5 billion worth of loans in
2017. Indonesia is in the second position with USD 600 million worth loans.
ii. Also, for 2018, USD 3.5 billion worth loans for Mumbai Metro, Andhra Pradesh’s new
capital Amaravati’s development and irrigation network in West Bengal are in line.
iii. India is also the second largest shared holder in AIIB. China is the largest
shareholder of AIIB.
iv. Lot of countries prefer to borrow from AIIB, as it charges only 1 to 1.5 % interest with
long term repayment and also a five-year grace period.
About Asian Infrastructure Investment Bank (AIIB):
♦ Headquarters – Beijing, China
♦ President – Jin Liqun
January 2018

BA 2018
52. Ravi Menon Named Best Central Bank Governor in Asia-Pacific

The Managing Director of Monetary Authority of Singapore (MAS) was
recognised the leading UK based magazine ‘The Banker’ for his efforts in the
makeover of the financial system of Singapore.
• The reason for selecting Ravi Menon was that the MAS, country's central bank,
stands out for its cutting-edge regulatory approach to fintech while maintaining
macroeconomic stability.
• Singapore's Finance Minister Heng Swee Keat was also named the best banker in
2011. He was then as MAS's managing director.
• Over the last three years, the central bankers of Vietnam, India and Bangladesh
were named for the recognition.
•
The article noted that the MAS was among the first regulators to set up a dedicated
fintech group that focuses on understanding technology's risks and benefits.
January 2018
53. Forex Reserves reached $409.366 Billion in December 2017

According to Reserve Bank of India (RBI), India’s foreign exchange (Forex)
reserves have scaled to a fresh record high of $409.366 billion as on December
29, 2017. The surge was due to a massive spike in foreign currency assets,
which is the key component of the reserves.
Forex Reserves
The forex is reserve assets held by a central bank in foreign currencies. It acts as a buffer
to be used in challenging times and used to back liabilities on their own issued currency
as well as to influence monetary policy. Almost all countries in the world, regardless of the
size of their economy, hold significant foreign exchange reserves.
The components of India’s FOREX Reserves include Foreign currency assets (FCAs),
Gold, Special Drawing Rights (SDRs) and RBI’s Reserve position with International
Monetary Fund (IMF). FCAs constitute the largest component of Indian Forex Reserves.
Key Facts
As on 29 December 2017, FCAs which form a key component of reserves, rose by dollar
4.42 billion from the previous week to dollar 385.103 billion. FCAs are maintained in major
currencies like euro, US dollar, pound sterling, Japanese Yen etc. Movement in FCA
occurs mainly on account of purchase and sale of foreign exchange by RBI, income arising
out of deployment of Forex reserves, external aid receipts of government and revaluation
of assets.
During this period, Gold reserves remained stable at dollar 20.716 billion. Special
drawing rights (SDR) from IMD rose by dollar 8.9 million from the previous week to dollar
1.511 billion. SDR is an international reserve asset created by IMF and allocated to its
members in proportion to their quota at IMF. The Reserve Position in the IMF rose by
dollar 12.1 million to dollar 2.035 billion.


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MadGuy Labs

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1. RBI announced amendments to Reserve Bank of India (Note Refund)

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Pradhan Mantri Jan Dhan Yojana:

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29. 11 public sector banks placed under RBI’s PCA Framework