ISSUE: APRIL 2020

Edited By

S.P.Mishra

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 EDITOR: S.P.MISHRA

Editor, Mr. Sibaprasad Mishra is qualified as

Contact:9425896166 B.F.Sc, PGDBA (Finance), CAIIB besides having
eMail:bankingupdates2020@gmail.com qualification of Diploma in Treasury Investment
& Risk Management, Certification in SME
Finance and Corporate Banking from IIBF with
Volume Issue Month
First class.

1 4 April 2020 Started his career as a Specialist officer in State

Bank of India and also worked in leading Public
Sector and Private Banks such as Axis Bank and
Central Bank of India. Currently he is working as
Chief Manager in Central Bank of India.
THE MAGAZINE COVERS ALL FIELDS OF
BANKING AND FINANCIAL AWARENESS He also secured all India First Rank in Promotion
OF AND ALSO COVERS THE CONCEPT Process consecutively for Scale II-III (2016) and
OF SOME TOPICS FOR INDEPTH Scale III-IV(2019) in Central Bank of India.
KNOWLEDGE. USEFUL FOR BANK
PROMOTION EXAMINATIONS AND He worked mostly in Corporate Credit, SME &
Agriculture lending department, SLBC Madhya
INTERVIEWS AND ALL THOSE DEALING
Pradesh and headed Large and Very Large
WITH FINANCIAL SERVICES
Branches in Central Bank of India including AD
Branch Head.

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CONTENTS
RBI GUIDELINES ................................................................................................................................ 2
FINANCE & ECONOMY ...................................................................................................................... 9
INVESTMENT/ ARRANGEMENTS .............................................................................................. 12
OUTLOOK/PROJECTIONS............................................................................................................ 12
PARTNERSHIP/TIE-UP ARRANGEMENTS ............................................................................. 12
NEW APPOINTMENTS .................................................................................................................. 13
DEVELOPMENT................................................................................................................................ 13
GENERAL AWARENESS .................................................................................................................. 14
IN SHORT........................................................................................................................................... 15
CONCEPTS ON TOPICS ................................................................................................................... 16
MULTIPLE CHOICE QUESTIONS .................................................................................................. 20

THE BANKING & FINANCIAL UPDATES APRIL 2020 1

 asymmetrical corridor i.e reduction in
RBI GUIDELINES Reverse Repo Rate was higher than
reduction in Repo Rate.
KEY POLICY RATES: Impact: The purpose of higher reduction is
to make it relatively unattractive for banks
to passively deposit funds with the Reserve
Earlier w.e.f Bank and instead, to use these funds for on-
27.03.2020 lending to productive sectors of the
Repo Rate 5.15% 4.40% economy.
Widening of the Monetary Policy Rate
Reverse Repo 4.90% 4.00%
Corridor:
Rate
Bank Rate 5.40% 4.65% In view of persistent excess liquidity, RBI
decided to widen the existing policy rate
Marginal 5.40% 4.65% corridor. Under the new corridor, the
Standing Facility reverse repo rate under the liquidity
adjustment facility (LAF) would be 40 bps
CRR 4.00% 3.00%
lower than the policy repo rate, as against
SLR 18.25% 18.25% existing 25 bps. The marginal standing
facility (MSF) rate would continue to be 25
bps above the policy repo rate.
7 TH BI MONTHLY MONETARY POLICY
COMMITTEE MEETING & RELIF Liquidity Measures:
MEASURES :
Cash Reserve Ratio(CRR) reduced to 3.00 %
for a period on One Year: RBI reduced the
The meeting of the Monetary Policy CRR requirement by 100 basis points from
Committee (MPC), constituted under 4.00 percent to 3.00 percent of net
section 45ZB of the Reserve Bank of India demand and time liabilities (NDTL) with
Act, 1934, was held during March 24-27, effect from the reporting fortnight
2020. beginning March 28, 2020 for a period of
In view of the COVID-19 pandemic, RBI has one year.
preponed the Monetary Policy Committee Insights: Banks are required to maintain
(MPC) meeting and came out with the CRR by way of average daily Cash
following measures in view of the balance with the Reserve Bank as a
economic slowdown amid COVID19 percentage share of its Net demand and
Breakdown. time liabilities (NDTL) based on their NDTL as
Policy Rates: on last Friday of second preceding
fortnight. The actual balance on any day
Repo Rate reduced to 4.40 Percent with
of the fortnight may be more or less than
reduction by 75 basis points.
the required balance but should not fall
Insights: This is a major reduction in Repo below 90% of the required average daily
Rate announced by RBI which will impact cash balance.
in enhancement of liquidity with Banking Now, RBI decided to reduce the
system and the loans linked to Repo Rate requirement of minimum daily CRR
specifically the Retail and MSME loans will balance maintenance from 90 per cent to
get cheaper. 80 per cent, effective from the first day of
Reverse Repo Rate reduced to 4.0 percent the reporting fortnight beginning March 28,
with reduction by 90 basis points. 2020. This is a one-time dispensation
available up to June 26, 2020.
Insights: Reverse Repo Rate sets the floor of Impact: This reduction in the CRR would
the liquidity adjustment facility (LAF) release primary liquidity of about 1,37,000
corridor. This time it created an crore uniformly across the banking system.

THE BANKING & FINANCIAL UPDATES APRIL 2020 2

Marginal Standing Facility reduced to 4.65
Per cent: Consequent to change in Repo
Rate, the Marginal Standing Facility (MSF)
rate stands adjusted from 5.40 per cent to
4.65 per cent.
Insights: Banks are allowed to avail liquidity
support from RBI through Marginal Standing
Facility under which scheduled commercial
banks can borrow additional amount of
overnight money from the Reserve Bank by
dipping into their Statutory Liquidity Ratio
(SLR) portfolio up to a limit which is 2% of
NDTL at present at a higher rate of interest.
In view of the exceptionally high volatility in
domestic financial markets and to provide
comfort to the banking system, RBI
increased the accommodation under the
marginal standing facility (MSF) from 2 per
cent to 3 per cent of NDTL out of the SLR
securities.
Impact: This measure will be applicable up
to June 30, 2020. This measure should
provide comfort to the banking system by
allowing it to avail an additional ` 1,37,000
crore of liquidity under the LAF
Targeted Long Term Repo Operations
(TLTRO) up to Rs.1.00 Lakh Crore:
To mitigate the adverse pressure on cash
flows across sectors, the Reserve Bank will
conduct auctions of targeted term repos of
One year to three years tenor of
appropriate sizes for a total amount of up
to Rs.1,00,000 crore.
Operational Guidelines: Will be same as
that of Long Term Repo Operation ( LTRO).
What is LTRO: In order to ensure sufficient
liquidity in the Banking system at
reasonable cost in order to facilitate the
transmission of monetary policy actions
and flow of credit to the economy, on 6th
February 2020, LTRO scheme have been
introduced through which Banks can avail
long term credit of 1-3 year against
collateral of eligible securities at Repo
Rate. This should encourage banks to
undertake transmission of Policy rate
reductions seamlessly to borrowers so as to
augment credit flows to productive sectors.
Accordingly, it has been decided that from
THE BANKING & FINANCIAL UPDATES APRIL 2020
the fortnight beginning on February 15,
2020, the Reserve Bank shall conduct term
repos of one-year and three-year tenors of
appropriate sizes for up to a total amount
of ₹ 1,00,000 crore at the policy repo rate.
LTROs conducted under this scheme will be
in addition to the existing LAF and MSF
operations.
LTROs will be conducted on CBS (E-KUBER)
platform. The operations would be
conducted at a fixed rate. Banks would be
required to place their requests for the
amount sought under LTRO during the
window timing at the prevailing policy repo
rate. Bids below or above policy rate will
be rejected.
The minimum bid amount would be Rupees
one crore and multiples thereof. The
allotment would be in multiples of Rupees
one crore. There will be no restriction on the
maximum amount of bidding by individual
bidders.
The eligible collateral for LTROs and the
applicable haircuts will remain the same as
applicable for LAF.
All other terms and conditions as
applicable to LAF, will also be made
applicable to the LTROs.
Deployment of Funds availed under TLTRO:
Liquidity availed under the scheme by
banks has to be deployed in investment
grade corporate bonds, commercial
paper and non-convertible debentures
over and above the outstanding level of
their investments in these bonds as on
March 25, 2020. Banks shall be required to
acquire up to fifty per cent of their
incremental holdings of eligible instruments
from primary market issuances and the
remaining fifty per cent from the secondary
market, including from mutual funds and
non-banking finance companies.
Investments made by banks under this
facility will be classified as held to maturity
(HTM) even in excess of 25 per cent of total
investment permitted to be included in the
HTM portfolio. Exposures under this facility
will also not be reckoned under the large
exposure framework.
The banks will have to maintain amount of
specified securities for the amount
3
received in TLTRO in in its HTM book at all
times till maturity of TLTRO.
Under TLTRO scheme, banks will have to
invest the amount borrowed under TLTROs
in fresh acquisition of securities (i.e., over
and above their outstanding statement in
specified securities it was holding as on
March 26, 2020) from primary/secondary
market.
The specified securities acquired under
TLTRO scheme will be classified in HTM
category. However, if a bank decides to
classify such securities under AFS/HFT
category at the time of acquisition, it will
not be allowed to later shift such securities
to HTM category and it should maintain
sufficient records to demonstrate and
separately identify securities purchased
under TLTRO scheme within the AFS/HFT
portfolio. Further, all regulations applicable
to securities classified under AFS/HFT
including those on valuation, will be
applicable on such specified securities.
The banks have already been given
sufficient time to deploy funds availed
under TLTRO scheme. It has now been
decided to allow up to 30 working days for
deployment in specified securities for those
banks who have availed funds under the
first tranche of TLTRO conducted on March
27, 2020. However, if a bank fails to deploy
funds within the specified time frame, the
interest rate on un-deployed funds will
increase to prevailing policy repo rate plus
200 bps for the number of days such funds
remain un-deployed. This incremental
interest will have to be paid along with
regular interest at the time of maturity.
Insights: The LTRO is a tool under which the
central bank provides one-year to three-
year money to banks at the prevailing repo
rate, accepting government securities with
matching or higher tenure as the collateral.
While the RBI‟s current windows of liquidity
adjustment facility (LAF) and marginal
standing facility (MSF) offer banks money
for their immediate needs ranging from 1-
28 days, the LTRO will provide liquidity
support for 1- to 3-years at floating Rate of
Interest at Repo Rate.
Impact: The measure may sterilize the
effect of large sell-offs in the domestic
THE BANKING & FINANCIAL UPDATES APRIL 2020
equity, bond and forex markets which
have intensified redemption pressures.
These three measures relating to TLTRO,
CRR and MSF will inject a total liquidity of
`3.74 lakh crore to the system.
Regulation and Supervision:
3 Months moratorium on Term Loan
installments: All commercial banks, co-
operative banks, all-India Financial
Institutions, and NBFCs are being permitted
to allow a moratorium of three months on
payment of installments in respect of all
term loans falling due between March 1,
2020 and May 31, 2020. The repayment
schedule for such loans as also the residual
tenor will be shifted across the board by
three months after the moratorium period.
Interest shall continue to accrue on the
outstanding portion of the term loans
during the moratorium period.
3 Months deferment of Interest payment on
Working Capital Facilities: In respect of
working capital facilities sanctioned in the
form of cash credit/overdraft, lending
institutions are being permitted to defer the
recovery of interest applied in respect of all
such facilities during the period from March
1, 2020 up to May 31, 2020 (“deferment”).
The accumulated accrued interest shall be
recovered immediately after the
completion of this period.
Impact: The moratorium/deferment is
being provided specifically to enable the
borrowers to tide over the economic fallout
from COVID-19. Hence, the same will not
be treated as change in terms and
conditions of loan agreements due to
financial difficulty of the borrowers and,
consequently, will not result in asset
classification downgrade. The lending
institutions may accordingly put in place a
Board approved policy in this regard.
The moratorium on term loans, the
deferring of interest payments on working
capital and the easing of working capital
financing will not qualify as a default for the
purposes of supervisory reporting and
reporting to credit information companies
(CICs) by the lending institutions. Hence,
there will be no adverse impact on the
credit history of the beneficiaries.
4
Easing of Working Capital Financing: In
respect of working capital facilities
sanctioned in the form of cash
credit/overdraft, lending institutions are
allowed to recalculate drawing power by
reducing margins and/or by reassessing the
working capital cycle for the borrowers.
Such changes will not result in asset
classification downgrade.
Deferment of Implementation of Net Stable
Funding Ratio (NSFR) by 6 Months to Oct 1
2020:
Basel Committee on Banking Supervision
(BCBS) had introduced the Net Stable
Funding Ratio (NSFR) which reduces
funding risk by requiring banks to fund their
activities with sufficiently stable sources of
funding over a time horizon of a year in
order to mitigate the risk of future funding
stress.
Net Stable Funding Ratio = (Available
amount of stable funding ÷Required
amount of Stable funding) × 100 which
should be more than 100%
As per the prescribed timeline, banks in
India were required to maintain NSFR of 100
per cent from April 1, 2020. It has now been
decided to defer the implementation of
NSFR by six months from April 1, 2020 to
October 1, 2020.
Deferment of Last Tranche of Capital
Conservation Buffer by 6 Months to 30
September 2020:
The capital conservation buffer (CCB) is
designed to ensure that banks build up
capital buffers during normal times (i.e.,
outside periods of stress) which can be
drawn down as losses are incurred during a
stressed period. As per Basel standards, the
CCB was to be implemented in tranches of
0.625 per cent per annum in phases and
the transition to full CCB of 2.5 per cent was
set to be completed by March 31, 2019. It
was subsequently decided to defer the
implementation of the last tranche of 0.625
per cent of the CCB from March 31, 2019 to
March 31, 2020. Considering the potential
stress on account of COVID-19, it has been
decided to further defer the
implementation of the last tranche of 0.625
per cent of the CCB from March 31, 2020 to
September 30, 2020. Consequently, the
THE BANKING & FINANCIAL UPDATES APRIL 2020
pre-specified trigger for loss absorption
through conversion/write-down of
Additional Tier 1 instruments (PNCPS and
PDI) shall remain at 5.5 per cent of risk-
weighted assets (RWAs) and will rise to
6.125 per cent of RWAs on September 30,
2020.
Growth & Support:
 Since the last MPC meeting of February
2020, the Reserve Bank has injected
liquidity of `2.8 lakh crore through
various instruments, equivalent to 1.4
per cent of our GDP. Together with the
measures announced today, RBI‟s
liquidity injection works out to about 3.2
per cent of GDP.
 Turning to growth in India, the implied
real GDP growth of 4.7 per cent for
Q4:2019-20 in the second advance
estimates of the National Statistics
Office, released in February 2020, within
the annual estimate of 5 per cent for
the year as a whole is now at risk from
the pandemic‟s impact on the
economy. GDP Growth target for FY
2020-21 is estimated at 5.50%.
Fully Accessible Route‟ (FAR) for
investment by non-residents in
Government Securities:
With reference to the announcement
made in the Union Budget 2020-21 that
certain specified categories of Central
Government securities would be opened
fully for non-resident investors without any
restrictions, apart from being available to
domestic investors as well without any
investment limits. Accordingly, RBI
introduced a separate route viz., Fully
Accessible Route (FAR) for investment by
non-residents in securities issued by the
Government of India. This scheme shall
operate along with the two existing routes,
viz., the Medium-Term Framework (MTF)
and the Voluntary Retention Route (VRR).
The Reserve Bank shall notify the
Government securities that shall be eligible
for investment under the FAR (hereinafter,
„specified securities‟). In addition, all new
5
issuances of Government securities of 5- Syndicate Canara
6. Lakshadweep
year, 10-year and 30-year tenors from the Bank Bank
financial year 2020-21 will be eligible for
investment under the FAR as „specified
securities‟.
Participation of Banks in Offshore
Investment by Foreign Portfolio
Non-deliverable Rupee Derivative
Investors (FPI): Investment limits:
Markets:
As per RBI Notification dated 27 March
Authorised Dealer Category-1 Banks and
2019, the limit for FPI investment in Central
operating International Financial Services
Government securities (G-secs), State
Centre (IFSC) Banking Units (IBUs), shall be
Development Loans (SDLs) and corporate
eligible to offer non-deliverable derivative
bonds shall be 6%, 2%, and 9% of
contracts involving the Rupee, or
outstanding stocks of securities,
otherwise, to persons not resident in India.
respectively, in FY 2019-20. Further, the
Banks can undertake such transactions
allocation of increase in G-sec limit over
through their branches in India, through
the two sub-categories – „General‟ and
their IBUs or through their foreign branches
„Long-term‟ – has been set at 50:50 for the
(in case of foreign banks operating in India,
year 2019-20. The entire increase in limits for
through any branch of the parent bank).
SDLs has been added to the „General‟ sub-
category of SDLs. Non-deliverable derivative contract
(NDDC) means a foreign exchange
Now, as per RBI Notification dated 30
derivative contract involving the Rupee,
March 2020, the limit for FPI investment in
entered into with a person not resident in
corporate bonds is increased to 15% of
India and which is settled without involving
outstanding stock for FY 2020-21.
delivery of Rupee.
Legal Entity Identifier: Extension of
Amalgamation of PSBs - Assignment deadline:
of SLBC/ UTLBC Convenorship:
As per RBI guidelines, the dead line for
Consequent to amalgamation of 10 PSBs requirement of Legal Entity Identifier (LEI)
into 4, RBI has decided to change in for participation in non-derivative markets
allocation of SLBC/UTLBC convenor Banks for entities with Net Worth up to Rs.200.00
as mentioned hereunder: crores was 31.03.2020 in Phase-III. But in the
Existing context of the difficulties arising from the
New
SLBC/ outbreak of novel coronavirus disease
Sr. SLBC/
State/ UT UTLBC (COVID-19), and with a view to enabling
No. UTLBC
Convenor smoother implementation of the LEI system
Convenor
Bank in non-derivative markets, the timeline for
Union implementation (Phase III) is extended up
Andhra Andhra
1. Bank of to 30.09.2020.
Pradesh Bank
India
Syndicate Canara Priority Sector Lending - Lending by
2. Karnataka
Bank Bank
banks to NBFCs for On-Lending:
United Punjab
3. Tripura Bank of National
Vide RBI Notification dated 13 August 2019,
India Bank
bank credit to registered NBFCs (other than
United Punjab
MFIs) for on-lending were made eligible for
4. West Bengal Bank of National
classification as priority sector ( only the
India Bank
fresh loans sanctioned by NBFCs out of
Oriental Punjab
bank borrowings. However, loans given by
5. Delhi Bank of National
HFCs under the existing on-lending
Commerce Bank
guidelines will continue to be classified

THE BANKING & FINANCIAL UPDATES APRIL 2020 6

under priority sector by banks.) under
respective categories subject to the
following conditions:
Agriculture: On-lending by NBFCs for „Term
lending‟ component under Agriculture will
be allowed up to ₹ 10 lakh per borrower.
Micro & Small enterprises: On-lending by
NBFC will be allowed up to ₹ 20 lakh per
borrower.
Housing: Enhancement of the existing limits
for on-lending by HFCs, from ₹ 10 lakh per
borrower to ₹ 20 lakh per borrower.
Bank credit to NBFCs for On-Lending
allowed up to a limit of five percent of
individual bank‟s total priority sector
lending on an on-going basis. Further, the
above instructions were valid upto March
31, 2020.
Now RBI extended these guidelines for FY
2020-21
Asian Clearing Union (ACU):
permission to Japanese Yen for
settling payments:
The Board of Directors of ACU have
decided to permit Japanese Yen for
settling payments among the ACU member
countries. Accordingly, the Asian Monetary
Unit is now denominated as "ACU Dollar",
“ACU Euro” and “ACU Yen” which shall be
equivalent in value to one US Dollar, one
Euro and one Japanese Yen respectively.
Investment by Banks – Spreading of
MTM losses and Investment
Fluctuation Reserve (IFR):
As per existing guidelines of RBI and more
clarification received on this matter,
Banks are required to mark to market
(MTM) the individual scrips in Available for
Sale (AFS) at quarterly/more frequent
intervals and Held for Trading (HFT) at
monthly/more frequent intervals and
provide for net depreciation, if any.
Further, with a view to building up of
adequate reserves to protect against
increase in yields in future, all banks are
advised to create an Investment
Fluctuation Reserve (IFR) with effect from
the year 2018-19, an amount not less than
the lower of the following:
THE BANKING & FINANCIAL UPDATES APRIL 2020
(a) net profit on sale of investments during
the year
(b) net profit for the year less mandatory
appropriations
shall be transferred to the IFR, until the
amount of IFR is at least 2 percent of the
HFT and AFS portfolio, on a continuing
basis. Where feasible, this should be
achieved within a period of 3 years.
A bank may, at its discretion, draw down
the balance available in IFR in excess of 2
percent of its HFT and AFS portfolio, for
credit to the profit and loss account at the
end of any accounting year. In the event
the balance in the IFR is less than 2 percent
of the HFT and AFS investment portfolio, a
draw down will be permitted subject to the
following conditions:
(a) The drawn down amount is used only
for meeting the minimum CET1/Tier 1
capital requirements by way of
appropriation to free reserves or reducing
the balance of loss, and
(b) The amount drawn down is not more
than the extent the MTM provisions made
during the aforesaid year exceeds the net
profit on sale of investments during that
year.
IFR shall be eligible for inclusion in Tier 2
capital without any ceiling (unlike General
Provisions and Loss Reserves, can be
reckoned as Tier II capital only to the extent
of 1.25% of total credit risk weighted assets.)
as clarified by RBI notification dated
17.03.2020.
Guidelines on Regulation of
Payment Aggregators and Payment
Gateways:
Payment Aggregators (PAs) and Payment
Gateways (PGs) are intermediaries playing
an important function in facilitating
payments in the online space.
PAs are entities that facilitate e-commerce
sites and merchants to accept various
payment instruments from the customers
for completion of their payment obligations
without the need for merchants to create a
separate payment integration system of
their own. PAs facilitate merchants to
connect with acquirers. In the process, they
7
receive payments from customers, pool
and transfer them on to the merchants
after a time period.
PGs are entities that provide technology
infrastructure to route and facilitate
processing of an online payment
transaction without any involvement in
handling of funds.
As per the new RBI guidelines, Existing non-
bank entities offering PA services shall
apply for authorisation on or before June
30, 2021. They shall be allowed to continue
their operations till they receive
communication from RBI regarding the fate
of their application.
E-commerce marketplaces providing PA
services shall not continue this activity
beyond the deadline 30 June 2021. If they
desire to pursue this activity, it shall be
separated from the marketplace business
and they shall apply for authorisation on or
before June 30, 2021.
PGs shall be considered as „technology
providers‟ or „outsourcing partners‟ of
banks or non-banks, as the case may be.
Capital Requirements:
PAs existing as on the date of this circular
shall achieve a net-worth of ₹15 crore by
March 31, 2021 and a net-worth of ₹25
crore by the end of third financial year, i.e.,
on or before March 31, 2023. The net-worth
of ₹25 crore shall be maintained at all times
thereafter.
New PAs shall have a minimum net-worth
of ₹15 crore at the time of application for
authorisation and shall attain a net-worth
of ₹25 crore by the end of third financial
year of grant of authorisation. The net-
worth of ₹25 crore shall be maintained at
all times thereafter.
Settlement and Escrow Account
Management:
Non-bank PAs shall maintain the amount
collected by them in an escrow account
with any scheduled commercial bank.(
With only one scheduled commercial bank
at any point of time)
Amounts deducted from the customer‟s
account shall be remitted to the escrow
THE BANKING & FINANCIAL UPDATES APRIL 2020
account maintaining bank on Tp+0 / Tp+1
basis.
Final settlement with the merchant by the
PA shall be effected not later than on Ts + 1
basis where PA is responsible for delivery of
goods / services. On Td + 1 basis where
merchant is responsible for delivery and Tr +
1 basis where the agreement with the
merchant provides for keeping the amount
by the PA till expiry of refund period.
‘Tp’ – date of charge / debit to the customer’s
account against the purchase of goods / services.
‘Ts’ – date of intimation by the merchant to the
intermediary about shipment of goods.
‘Td’ – date of confirmation by the merchant to the
intermediary about delivery of goods to the customer.
‘Tr’ – date of expiry of refund period as fixed by the
merchant.
Large Exposure Limits for Urban Co-
operative Banks:
As per RBI Notification dated 13.03.2020,
henceforth, the prudential exposure limits
for UCBs for a single borrower/party and a
group of connected borrowers/parties shall
be 15 per cent and 25 per cent,
respectively, of their tier-I capital as on
March 31 of the preceding financial year.
The revised exposure limits shall apply to all
types of fresh exposures taken by UCBs.
UCBs shall bring down their existing
exposures which are in excess of the
revised limits to within the aforesaid revised
limits by March 31, 2023.
UCBs shall have at least 50 per cent of their
aggregate loans and advances comprising
loans of not more than ₹25 lakh or 0.2% of
their tier I capital, whichever is higher,
subject to a maximum of Rs.1 crore, per
borrower/party.
Revision in the target for priority
sector lending – UCBs:
The overall priority sector lending (PSL)
target for UCBs stand increased from 40 per
cent to 75 per cent of ANBC or CEOBSE,
whichever is higher. UCBs shall comply with
the above target by March 31, 2024.
RBI to conduct variable rate Repo
auctions for Rs 1,00,000 crores:
8
The Reserve Bank of India has decided to
conduct the variable rate Repo auctions
as a preventive measure to bridge over
any frictional liquidity requirements caused
by COVID-19. The RBI will conduct fine-
tuning variable rate Repo auctions for Rs
1,00,000 crores in two tranches.
FINANCE & ECONOMY
COVID19 RELIEF MEASURES
ANNOUNCED ON 24.03.2020
Finance minister announced a slew of
measures for extension of statutory and
regulatory compliances in view of the
coronavirus pandemic spreading and
impacting the economy.
Tax Reforms:
 Last date for filing IT returns for FY
2018-19 extended up to 30 June 2020
with reduction in interest on delayed
payment from 12% to 9%.
 Interest on delayed deposit of TDS
reduced from 18% to 9%
 AADHAAR-PAN Linkage deadline
extended from 31st March 2020 to 30th
June 2020.
 Vivaad se Vishwaas scheme
extended to June 30. And no
additional payment of 10% to be paid.
 All compliances under Income Tax
Act, Wealth Tax Act, Benami
Transaction Act, Black Money Act,
Vivaad se Vishwaas, have been
extended to June 30, 2020.
GST:
 Last date for filing all GST returns for
March, April, May and returns under
composition scheme extended to
June 30, 2020.
 For companies with Turnover of less
than 5 cr, no late fee and penalty to
be charged for delayed filing. For
companies with Turn Over above Rs 5
cr, only late payment interest at the
rate of 9% will be charged for
delayed filing of GST.
THE BANKING & FINANCIAL UPDATES APRIL 2020
Customs:
 Sabka Vishwaas scheme for indirect
taxes having last date till March 31
has been extended to June 30,2020.
With no interest to be levied.
 Customs clearance to work 24x7 till
June 30.
COMPANIES:
 In respect of the MCA21 registry, there
is a moratorium being issued from
April 1 till Sep 30 and no additional
fees for late filing.
 The norms for holding mandatory
requirement of Board meeting has
been relaxed for 60 days for next two
quarters.
 For newly incorporated companies,
additional time of six more months is
being given for filing declaration of
commencement of business,
 If there is a company director who
does not comply with minimum
residency requirement of 182 days,
this was treated as a violation. Now
the same has been extended to One
Year.
Insolvency and Bankruptcy Code
 Threshold limit of default for referring
cases into IBC has been enhanced
from Rs One lakh to Rs One Crore to
prevent triggering of insolvency
proceedings for SMEs.
 If it continues like this beyond April,
then sec 7, 9, 10 of the IBC will be
suspended for a period of six months
to stop companies being forced to
insolvency.
Financial Services:
 Debit card holders who withdraw cash
from any bank ATM can do it free of
any charge. for next three months.
 Minimum balance requirement has
been done away with.
 Reduced charges for digital trade
transactions.
9
COVID 19 PM GAREEB
KALYAN SCHEME
To help the economy come out of the
coronavirus shock, Finance Minister Nirmala
Sitharaman on Thursday announced a Rs
1.7 lakh crore package under Garib Kalyan
Yojana that would largely benefit
unorganized sector workers, especially
daily wage workers, and urban and rural
poor.
For Health & Sanitation Workers:
Provide insurance cover worth Rs 50
lakh for sanitation workers, ASHA
workers, doctors, nurses, paramedics
in case they need it as they are on
the frontlines of the corona battle.
Free PDS Distribution: Through PDS, 80
crore poor or two-third of population
would get 5 kg rice or wheat free for
the next three months. This will be over
and above the 5 kg they already get.
Additionally, they will also get 1 kg of
preferred pulse.
For the farmers: First instalment of Rs
2,000 of PM Kisan will be given in first
week of April 2020. A total number of
8.69 cr farmers will get immediate
benefit out of it.
MNREGA: Increase in wage rate from
Rs 182 to Rs 202 per day amounting to
increase of Rs 2000 per worker
benefitting 5 crore people.
For Old age/widows: Additional ex-
gratia of Rs 1,000 in two instalments
over three months would be given to
poor senior citizens over 60 years,
widows and disabled. “This will benefit
3 crore poor senior citizens, widows
and disabled.
In Women Jan Dhan accounts, Govt.
will deposit Ex gratia of Rs 500 per
month for next three months. This will
benefit 20 crore women.
To Women Ujjawala sheme
beneficiaries, Govt. will provide free
cylinders for next three months. This
will benefit 8.3 crore BPL families.
For Women Self Help Groups: Under
the Deen Dayal National Livelihood
Mission, collateral free loan amount
enhanced from Rs.10.00 Lacs to
Rs.20.00 Lacs.
THE BANKING & FINANCIAL UPDATES APRIL 2020
For Un-Organised sector: Government
of India will pay the EPF contribution
both of the employer and the
employee put together 24% for next
three months. This is for those
establishments with up to 100
employees, 90% of them earning
monthly salary less than Rs 15,000.
For organised sector, EPFO regulation
will be amended so that workers can
draw up to 75% for their contingency
expenditure non-refundable advance
or three months of wages in advance
whichever is less. This will benefit 4.8 cr
workers.
For Construction workers: State
government have been directed to
use the welfare fund for building &
construction labourers which has
around Rs 31,000 crore to help those
who are facing economic disruption
because of the lockdown.
The measures come at a time when the US
Senate has passed the $2 trillion aid
package for the US economy that has
been hit hard by the coronavirus
pandemic.
MCA introduces “Companies Fresh
Start Scheme 2020”and revised “LLP
Settlement Scheme, 2020”:
Ministry of Corporate Affairs, has
introduced the “Companies Fresh Start
Scheme, 2020” and revised the “LLP
Settlement Scheme, 2020” which is already
in vogue to provide a first of its kind
opportunity to both companies and LLPs to
make good any filing related defaults,
irrespective of duration of default, and
make a fresh start as a fully compliant
entity.
The USP of both the schemes is a one-time
waiver of additional filing fees for delayed
filings by the companies or LLPs with the
Registrar of Companies during the currency
of the Schemes, i.e. during the period
starting from 1st April, 2020 and ending on
30th September, 2020.
10
UN LAUNCHES GLOBAL HUMANITARIAN
RESPONSE PLAN TO FIGHT COVID-19:
United Nations Secretary-General António
Guterres launched a $2 billion coordinated
global humanitarian response plan to fight
COVID-19 in 51 countries across South
America, Africa, the Middle East and Asia.
JANA SFB ROLLS OUT UPI QR-BASED
LOAN INSTALMENT PAYMENT FACILITY:
Jana Small Finance Bank has rolled out a
Unified Payments Interface (UPI) QR-based
loan instalment payment facility.
INVEST INDIA BUSINESS IMMUNITY
PLATFORM: India‟s national Investment
Promotion & Facilitation Agency, the Invest
India has launched “The Invest India
Business Immunity Platform” to assist
businesses and investors in getting real-time
updates on India‟s active response to
COVID-19.
ICICI Lombard launches policies to
cover Covid-19 patients: Private insurer,
ICICI Lombard has launched a 1 year-long
“covid-19 protection cover” which will pay
100% of the sum insured to the covid-19
positive individual, irrespective of
hospitalization expenses incurred.
SIDBI to launch „Swavalamban
express‟ for new entrepreneurs: to
empower budding entrepreneurs under
its mission swavalamban.
Philippines becomes 1st country to
suspend all financial markets: Phillipines
has become the first country of the world
to suspend all financial markets on
account of COVID19 pandemic.
GoI pledged $10 million for Covid-19
emergency fund for SAARC Nations:
Government of India has pledged $10
million towards a Covid-19 emergency
fund for SAARC Nations. India has also
planned a rapid response team of doctors
and specialists for the South Asian
Association for Regional Cooperation
(Saarc) nations.
(Members country of SAARC: Afghanistan,
Bangladesh, Bhutan, India, the Maldives,
Nepal, Pakistan and Sri Lanka.
THE BANKING & FINANCIAL UPDATES APRIL 2020
Headquarters of SAARC: Kathmandu,
Nepal.)
World Bank announces 12 billion USD aid to
fight coronavirus.
USD 4 million sanctioned by ADB to
member countries to contain Corona Virus.
GoI imposed the Rs 50,000 withdrawal
limit on Yes Bank account holders:
The Union Government imposed temporary
prohibition of the activity of the capital-
starved Yes Bank and capped withdrawals
at ₹50,000 per account after considering
an application made by the Reserve Bank
of India and the Bank was placed under
Moratorium by RBI. The board of Yes Bank
has been superseded by RBI. Former SBI
CFO Prashant Kumar has been appointed
as administrator of Yes Bank. (Yes Bank
established in the Year 2004 with its Head
Quarter at Mumbai).
Paytm subsidiary gets IRDAI‟s
brokerage licence to offer insurance
products: Paytm‟s subsidiary, Paytm
Insurance Broking, has received the
brokerage licence from the Insurance
Regulatory and Authority of India (IRDAI)
Modification in CGTMSE on Tenor of
Working Capital Facility:
In terms of Circular No.149/2018-19 dated
June 07, 2018, CGTMSE had been
approving guarantee to cover the working
capital facility for a maximum period of 10
years (in block of 5 years) including
intervening renewals/enhancements, if
any.
Now, it has been decided to remove the
tenure cap of 10 years for coverage of
working capital facilities under Credit
Guarantee Scheme. However, a review
would be undertaken after each block of 5
years by CGTMSE before renewal of the
guarantee coverage for next 5 years. The
review would be carried out based on
certain parameters depending upon the
amount of the working capital limit.
11

INVESTMENT/
ARRANGEMENTS
ADB to invest 100 million USD in India‟s
infrastructure sector: Asian Development
Bank (ADB) will invest 100 million US Dollars
in India‟s infrastructure sector through the
government-promoted National
Investment and Infrastructure Fund (NIIF) of
India Fund of Funds (FoF). NIIF is India‟s first
sovereign wealth fund that was set up by
the Government of India in February 2015.
(ADB has its Head Quarter at Manila,
Philippines and its current president is Mr.
Masatsugu Asakawa).
World‟s first commercial flying car PAL-V to
be built in Gujarat: World‟s first commercial
flying car named „PAL-V Liberty‟ will be
developed in Gujarat, India. PAL-V stands
for Personal Air-Land Vehicle.
Himachal Pradesh to get US$80 Mn to
improve water management practices: The
Government of India, Government of
Himachal Pradesh have signed a US$80
million loan agreement with the World Bank
to enhance water management practices
and to improve agricultural productivity.
Digital Solutions Exchange “GOKADDAL”
launched in India: World‟s first Digital
Solutions Exchange in the cloud
“GOKADDAL” has been launched in India.
SBI will buy Yes Bank shares worth Rs 7250
crore: SBI will purchase the 725 crore shares
of Yes Bank at a price of Rs 10 per share.
After the purchase, the shareholding of the
State Bank of India (SBI) in Yes Bank will
remain under 49% of the paid-up capital.
OUTLOOK/PROJECTIONS
India‟s GDP Projection by Moody‟s:
Moody‟s cuts India‟s GDP growth to 2.5% in
2020 from the earlier estimate of 5.3 per
cent.
CRISIL cuts India‟s GDP growth forecast to
3.5% for FY 2021: RISIL has reduced India‟s
gross domestic product (GDP) growth
forecast for fiscal 2021 to 3.5 per cent from
THE BANKING & FINANCIAL UPDATES APRIL 2020
5.2 per cent expected earlier. The cut is
due to the coronavirus pandemic.
Fitch Ratings slashes India‟s GDP growth
rate to 5.1% for FY21: Fitch Ratings has
reduced India‟s GDP growth rate from 5.6%
to 5.1% for the fiscal year 2020-21 due to
the Covid-19 impact.
India‟s growth forecast lowered to 5.2% by
S&P for FY 2020: S&P Global Ratings has
reduced India‟s economic growth forecast
from 5.7% to 5.2% for financial year 2020.
Organisation for Economic Co-operation
and Development (OECD) has lowered
growth projections for India to 5.1% for FY
2020.
Moody‟s cuts G-20 growth outlook to 2.1%
PARTNERSHIP/TIE-UP
ARRANGEMENTS
NTPC concludes acquisition of govt‟s stake
in THDC & NEEPCO: NTPC concluded the
acquisition of Centre‟s entire stake in two
hydropower generating firms, Tehri Hydro
Power Complex (THDC) India and North
Eastern Electric Power Corporation
(NEEPCO), at Rs 11,500 crore. Under the
deal, NTPC acquired the latter‟s 74.496 %
equity stake in THDC India Ltd (THDCIL) for
Rs 7,500 crore & its 100% equity in North-
Eastern Electric Power Corporation Limited
(NEEPC) for Rs 4,000 crore respectively.
APEDA signs MoU with SFAC for
development of agriculture sector:
Agricultural and Processed Food Products
Export Development Authority and Small
Farmers Agribusiness Consortium has signed
an MoU for the development of agriculture
and allied sectors as well as its exports for
bringing better value to the stakeholders.
DBS Bank & Bharti AXA tied up for plans
covering Covid-19: DBS Bank India has tied-
up with Bharti AXA to launch a
complimentary insurance plan which will
cover all medical conditions, including
Covid-19. The insurance plan will also
include up to 10 days of hospitalisation
along with a cover of Rs 5,000 per day for a
30-day period.
12
L&T Services and IIT-Kanpur collaborate for
research in industrial cyber security: L&T
and IIT Kanpur will jointly set up a Center of
Excellence (CoE) at the IIT Kanpur campus
and conduct research in the areas of
Honeypot, intrusion detection systems,
malware analysis, blockchain, vulnerability
assessment and penetration testing and
provide cybersecurity awareness and
training programs.
Paytm Payments Bank to now issue Visa
debit cards: PPBL will issue Visa virtual debit
cards to its customers and facilitate them
to transact at all merchants accepting
payments through cards.
Flipkart ties up with Aegon to sell life
insurance policies: e-commerce player
Flipkart has tied up with Aegon Life
Insurance to sell comprehensive instant
digital insurance policies with a sum
assured of up to Rs 10 lakh to its customers.
PhonePe inks partnership with ICICI Bank
for UPI Transactions: PhonePe has tied up
with ICICI Bank for UPI transactions after its
old Banking partner YES Bank has been
placed under moratorium by RBI which
disrupted UPI transactions at PhonePe. (The
parent organization of Phonepe: Flipkart).
Paytm & Hyderabad Metro tie up for QR-
based tickets.
DAY-NULM partners with Amazon for e-
marketing of products: Amazon has
partnered with the Deendayal Antyodaya
Yojana-National Urban Livelihoods Mission
(DAY-NULM) to facilitate e-marketing of
products which are made by Self Help
Groups (SHGs) in urban areas. This kind of
partnership was also done by DAY-NULM
with Flipkart in the past.
RBL Bank inks partnership with Zomato to
launch co-branded credit cards: RBL Bank
(formerly known as Ratnakar Bank ltd) inks
partnership with Online food ordering and
delivery app Zomato to launch co-
branded credit cards, powered by
Mastercard.
THE BANKING & FINANCIAL UPDATES APRIL 2020
NEW APPOINTMENTS
Sameer Aggarwal appointed as CEO of
Walmart India: Sameer Aggarwal has been
appointed as the Chief Executive Officer
(CEO) of Walmart India. He will taker over
as CEO from Krish Iyer with effect from 1st
April 2020.
Karan Bajwa becomes new MD of Google
Cloud India.
Ravinder singh Dhillon becomes new CMD
of PFC.
Prashant Kumar becomes new MD & CEO
of YES Bank: Prashant Kumar (MD of SBI)
has been appointed as Chief Executive
and Managing Director of the Yes Bank.
Sunil Mehta has been appointed as non-
executive chairman of YES Bank.
Bill Gates resigns from Microsoft‟s board.
Amitabh Bachchan becomes brand
ambassador of IDFC FIRST Bank.
Bimal Julka becomes new Chief
Information Commissioner of India.
RBI Deputy Governor N.S. Vishwanathan
resigns before retirement.
Ajay Bhushan Pandey appointed as new
Finance Secretary: The Appointments
Committee of the Cabinet has appointed
the current Revenue Secretary Ajay
Bhushan Pandey as the new Finance
Secretary. He will replace the current
Finance Secretary Rajiv Kumar. Ajay
Bhushan Pandey had earlier worked as the
chief executive officer of Unique
Identification Authority of India (UIDAI)
DEVELOPMENT
COVID19 Assistance by MSDE: All National
Skill Training Institutes (NSTIs) have been
readied by the Ministry of Skill Development
and Entrepreneurship (MSDE) as quarantine
centres to fight the spread of the Novel
Coronavirus (COVID-19).
GoI bans export of anti-malarial drug
Hydroxychloroquine: Government of India
13
has banned the export of anti-malarial
drug Hydroxychloroquine and the
formulations made up of it within the wake
of COVID-19 outbreak which was later on
removed for its export to certain countries.
GoI approves setting up of National
Technical Textile Mission: The Government
of India has approved the proposal of
setting up of National Technical Textiles
Mission with an outlay of Rs. 1480 crores.
The mission would be set up for a period of
4 years from 2020-21 to 2023-24. The mission
focuses on the development in usage of
technical textiles in various flagship missions
as well as programmes of the country.
Facebook launches „Pragati‟ to boost
women entrepreneurship in India:
Facebook India has launched its
(corporate social responsibility) CSR
initiative, Facebook “Pragati” to promote
women entrepreneurship in India.
Facebook Pragati powered by N/Core
(The/Nudge Centre for Social Innovation).
GoI plans to have at least one PMBJP
Kendra in every block: Government of
Indian is planning to have at least one
Pradhan Mantri Bhartiya JanAushadhi
Pariyojana (PMBJP) Kendra in each block
of India by the end of year 2020.
Google India starts skill development
programme called „DigiPivot‟: Google India
has launched a skill programme for women
called „DigiPivot‟ which is designed for
women who are looking to return to their
corporate careers after a break or simply
planning to make mid-career shifts to
digital marketing. The skilling programme
has been developed jointly in partnership
with a career portal service: Avtar & and
the Indian School of Business (ISB).
“Mission Shakti” a department for SHGs to
be opened in Odisha: An exclusive
department for Self Help Group (SHGs)
called “Mission Shakti” will be opened in
Odisha. With this, Odisha will become the
first state to have such kind of department.
It aims for the development of women & is
dedicated to all the women of Odisha.
THE BANKING & FINANCIAL UPDATES APRIL 2020
GENERAL AWARENESS
Casualty evacuation bag : The Defence
Research and Development Organisation
(DRDO) has designed a casualty
evacuation bag to isolate persons infected
with COVID-19.
Goa becomes the 1st state to launch
assessment tool for COVID-19: Goa
becomes the first Indian state to launch a
self-assessment tool for COVID-19. The self-
assessment tool called Test Yourself Goa.
This tool helps people identify if they are
infected by the virus without visiting a
doctor or hospital.
Odisha government launches “Mo Jeeban”
programme: Odisha‟s Chief Minister
Naveen Patnaik launched Mo Jeeban
programme in Odisha for the containment
of COVID-19 pandemic. Through Mo
Jeeban programme, the chief minister of
Odisha urged the people of the state to
take a pledge to stay indoors.
Microsoft & US CDC tie-up to create AI bot
„Clara‟: The U.S. Centers for Disease Control
and Prevention (CDC) has introduced an
AI bot called „Clara‟ to help people in
assessing the potential symptoms of
COVID-19. The CDC has partnered up with
CDC Foundation and Microsoft Azure‟s
Healthcare Bot service to create Clara.
Netflix Inc (NFLX.O) has announced the
formation of $100 million fund to help
workers on film and television productions
that have been impacted due to the
global coronavirus outbreak.
Satyarup Siddhanta becomes 1st Indian to
complete volcanic Seven Summit: Indian
mountaineer Satyarup Siddhanta entered
„Limca Book of Records‟ (LBR) for his
extraordinary achievements, as the first
Indian to climb the highest volcanoes of
each of the 7 continents. He also holds the
record as the youngest mountaineer in the
world to climb both 7 peaks and 7 volcanic
summits.
World Happiness Report 2020: The United
Nations has released World Happiness
Report 2020. The World Happiness Report
ranks 156 countries by how happy their
14
citizens perceive themselves to be. Finland
ranked the highest rank followed by
Denmark. India Ranked 144th in the list.
An Extraordinary Life: A biography of
Manohar Parrikar” is a book on the life of
the former defence minister and Goa chief
minister Manohar Parrikar. The book is co-
authored by veteran journalists Sadguru
Patil and Mayabhushan Nagvenkar.
India ranked 12th globally in „Women On
Board 2020‟ study: India has been ranked
12th in the world as per study titled
„Women On Board 2020‟. The list was
topped by Norway with 40.72% women on
board.
World Consumer Rights Day observed
globally on 15th March: World Consumer
Rights Day is celebrated globally on March
15 every yea to raise global awareness
about consumer rights and needs. Theme
of World Consumer Rights Day 2020: “The
Sustainable Consumer”.
India‟s 1st digital parcel locker service
launched in West Bengal: The Department
of Posts, Kolkata (West Bengal circle), has
launched free digital parcel locker service
in 2 post offices. Under this service,
customers will be able to collect their
parcel from the post office according to
their convenience.
WHO officially declares COVID-19 as a
pandemic: The World Health Organization
has officially declared COVID-19 as a
pandemic. A pandemic is declared when
a new disease for which people do not
have immunity spreads around the world
beyond expectations.( Headquarters of
WHO: Geneva, Switzerland; Director
general of WHO: Tedros Adhanom)
Hyderabad hosts “Wings India 2020”:
Ministry of Civil Aviation and Airports
Authority of India (AAI) along with the
Federation of Indian Chambers of
Commerce and Industry (FICCI) is
organizing “Wings India 2020” event at
Hyderabad. This a civil aviation business
exhibition and air show which is organized
once in every two years.
Union Govt. to make sanitary Napkin
Disposal bags mandatory from January
2021: Union Environment Minister Prakash
THE BANKING & FINANCIAL UPDATES APRIL 2020
Javadekar has stated that Sanitary napkin
makers will be asked to supply a
biodegradable bag with each napkin from
January 2021.
IN SHORT
 IMF declares that World is now in
“Recession “which is even worse
than that of 2009.
 Jharkhand govt launches
PRAGYAAM app to issue e-passes to
everyone associated with essential
services during the nationwide
lockdown.
 COVA Punjab‟ mobile app
launched by Punjab Govt. COVA
stands for Corona Virus Alert.
 Rajasthan Police launches a mobile
app “Raj Cop citizens app” to
enable individuals take permission
for moving out in necessary
conditions during lock down.
 Andhra Pradesh State government
has set up “Mobile Hand-wash
facilities” for the benefit of Slum
Dwellers amidst lockdown in the
state.
 IIT Bombay develops mobile app
„CORONTINE‟ to help the authorities
in tracking the the spread of the
COVID-19 disease.
 Olympic Games Tokyo 2020
rescheduled to year 2021 and will
be held from 23 July to 8 August,
2021 due to COVID19 pandemic.
 Govt. of India forms 11 empowered
groups to deal with coronavirus.
 Northern Railways creates 1st
prototype of hospital isolation
coach for COVID19.
 ICICI Bank launched banking
services on WhatsApp.
 Indian army Chief starts „Operation
Namaste‟ to combat COVID-19.
 India‟s largest COVID-19 hospitals
to be set up in Odisha.
 NBT (National Book Trust) launches
initiative #StayHomeIndiaWithBooks.
 Saudi Arabia‟s King Salman bin
Abdulaziz Al Saud will chair the
15
 Extraordinary Virtual G20 leaders‟
Summit.
 YouTube” has decided to reduce
streaming quality for users in India
until 31st March 2020 to reduce
strain on Internet networks during
the coronavirus pandemic.
 Uttarakhand abolishes quota in
promotion for govt employees.
 Priyanka Chopra works jointly with
WHO to spread awareness over
COVID-19.
 Indian Railways to electrify all
broad-gauge routes by December
2023.
 Arundhati Bhattacharya resigns
from Crisil board.
 7th World Cities Summit to be held
in Singapore. The theme for WCS
2020 is ”Livable and Sustainable
Cities: Adapting to a Disrupted
World”.
 ‟Break the Chain‟ campaign
launched by Kerala govt to
combat coronavirus.
 Niue declared as world‟s first „Dark
Sky Nation‟
 The Mumbai Central station is going
to be renamed as Nana
Shankarseth Mumbai Central
railway station.
 SBI removes minimum balance
charges from all savings bank
accounts.
 India ranks second in Global Animal
Protection Index 2020.
 „Joy Bangla‟ declared as national
slogan of Bangladesh.
 “NIGHA” app launched by Andhra
govt to ensure „clean and healthy‟
elections.
 Tamil Nadu tops in Poshan
Abhiyan‟s participants list.
 NASA named Mars 2020 rover as
“Perseverance”
 Sri Lanka to host 5th BIMSTEC
Summit in September.
 EPFO slashes interest rate on
deposits to 8.5% for 2019-20.
 Kareena Kapoor becomes new
brand ambassador of Puma.
 “Sebi SCORES” mobile app
launched by SEBI for investors to
lodge grievances.
THE BANKING & FINANCIAL UPDATES APRIL 2020
 Luxembourg becomes 1st country
to make public transport free.
 Uttarakhand Govt announces
Gairsain to be its summer capital.
 Govt launches “Humsafar” mobile
app for doorstep diesel delivery.
 China takes presidency of UN
Security Council for March 2020
CONCEPTS ON TOPICS
Gold Monetization
Scheme, 2015
In exercise of the powers conferred on RBI
under Section 35A of the Banking
Regulation Act, 1949 and in pursuance of
the Central Government notification, RBI
issued guidelines on Gold Monetization
scheme 2015 to mobilise gold held by
households and institutions of the country
and facilitate its use for productive
purposes, and in the long run, to reduce
country‟s reliance on the import of gold.
Implementing Institutions: All Scheduled
Commercial Banks excluding RRBs. (termed
as Designated Bank)
Persons eligible to make a deposit:
Resident Indians [Individuals, HUFs,
Proprietorship & Partnership firms, Trusts
including Mutual Funds/Exchange Traded
Funds registered under SEBI (Mutual Fund)
Regulations, Companies, charitable
institutions, Central Government, State
Government or any other entity owned by
Central Government or State
Government].
There are two types of Deposits under the
scheme namely Short Term Bank Deposit
(STBD) and Medium and Long Term
Government Deposit (MLTGD).
Interest on deposits:
 Interest will be paid at simple rate on
the value of gold at the time of making
deposit.
 The principal and interest on STBD shall
be denominated in gold or INR
equivalent of Gold at prevailing market
price at the time of redemption for
16
 principal (The option in this regard shall
be made in writing by the depositor at
the time of making the deposit and
shall be irrevocable).
 In the case of MLTGD the principal will
be denominated in gold. However, the
interest on MLTGD shall be calculated
in Indian Rupees with reference to the
value of gold at the time of the deposit.
 Interest on deposits under the scheme
will start accruing from the date of
conversion of gold deposited into
tradable gold bars after refinement or
30 days after the receipt of gold at the
CPTC (Collection and Purity Testing
Centre) or the bank‟s designated
branch, as the case may be, whichever
is earlier.
Minimum Deposit: The minimum deposit
shall be 30 grams of raw gold. There is no
maximum limit. The quantity of gold will be
expressed up to three decimals of a gram.
Short Term Bank Deposit (STBD):
Period of Deposit:
 3 years (with a facility of roll over).
Deposits can also be allowed for
broken periods (e.g. 1 year 3 months; 2
years 4 months 5 days; etc.)
 The designated banks may, at their
discretion, allow whole or part
premature withdrawal of the deposit
subject to such minimum lock-in period
and penalties, if any, as may be
determined by them.
Interest on Deposits: Designated banks
are free to fix the interest rates on these
deposits.
Redemption of Deposits:
 Redemption of principal and interest at
maturity will, at the option of the
depositor is either in Indian Rupee
equivalent of the deposited gold and
accrued interest based on the price of
gold prevailing at the time of
redemption, or in gold. The option in
this regard shall be made in writing by
THE BANKING & FINANCIAL UPDATES APRIL 2020
the depositor at the time of making the
deposit and shall be irrevocable.
 Any premature redemption shall be in
Indian Rupee equivalent or gold at the
discretion of the designated bank.
Interest will be paid at simple rate on
the value of gold at the time of making
deposit.
Other features:
 The deposit will attract CRR and SLR
requirements.
 The short term deposits shall be treated
as bank‟s on-balance sheet liability.
Medium and Long Term Government
Deposit (MLTGD):
Period of Deposit:
 Medium Term Government Deposit
(MTGD) for 5-7 years and Long-Term
Government Deposit (LTGD) for 12-15
years. Deposits can also be allowed for
broken periods (e.g. 5 years 7 months;
13 years 4 months 15 days; etc.).
 Minimum Lock-in Period for Medium
Term Government Deposit (MTGD) is 3
years and Long-Term Government
Deposit (LTGD) is 5 years.
Interest:
 Medium term deposit – 2.25% p.a. and
Long-term deposit – 2.50% p.a. Interest
will be paid at simple rate on the value
of gold at the time of making deposit.
 The periodicity of interest payment on
these deposits is annual and shall be
paid on 31st March every year. A
depositor will have an option to receive
payment of simple interest annually or
cumulative interest at the time of
maturity, in which case it will be
compounded annually. This option shall
be exercised at the time of deposit.
Interest on premature withdrawal after
lock-in period: Interest will be paid after
deduction of penalty as mentioned
hereunder:
17
 depositor submits the receipt for
Type Loc Actual period for which the issuance of the deposit certificate or
of k-in deposit has run (years) not.
dep peri
osit od
in
Commission and charges for Banks:
Designated banks will be paid handling
yrs
charges for MLTGD at a flat rate of 1.5%
>3 and <5 ≥5 and < 7
and commission at the rate of 1% of the
MTG 3 Applicable Applicable
rupee equivalent of the amount of gold
D rate for rate for
mobilized under the scheme.
MTGD minus MTGD minus
0.375% 0.25%
>5 and ≥7 and ≥12 and
<7 < 12 < 15 Sovereign Gold Bond
LTGD 5 Applica Applica Applica Scheme
ble rate ble rate ble rate
for for LTGD for The Sovereign Gold Bond (SGB) Scheme
MTGD minus LTGD was first launched by Government of India
minus 0.375% minus (GOI) on October 30, 2015 in accordance
0.25% 0.25% with Section 3 of the Government Securities
Act, 2006.
Receiving Offices (Ros): Receiving Offices
Redemption at maturity: of this scheme where customer can apply
 In the case of MLTGD, the redemption include Scheduled Commercial Banks
of principal at maturity shall, at the (excluding RRBs), SCHIL, designated Post
option of the depositor, be either in Offices (as notified by GOI) and
Indian Rupee equivalent of the value of recognized stock exchanges viz., National
deposited gold at the time of Stock Exchange of India Limited and
redemption, or in gold. However, any Bombay Stock Exchange Limited. Ros will
pre-mature redemption of MLTGD shall be responsible for servicing of Bond.
be only in INR. However, the interest Eligible Investors: The Bonds under this
accrued on MLTGD shall be calculated Scheme may be held by a person resident
with reference to the value of gold in in India, being an individual, in his capacity
terms of Indian Rupees at the time of as such individual, or on behalf of minor
deposit and will be paid only in cash. child, or jointly with any other individual.
 Where the redemption of the deposit is The bond may also be held by a Trust, HUFs,
in gold, an administrative charge at a Charitable Institution and University.
rate of 0.2% of the notional redemption “Person resident in India”
amount in terms of INR shall be
KYC: PAN is compulsory for an investor in
collected from the depositor.
this instrument along with KYC documents
Other Features: and application.
 The deposit under this category will be Investment limit and unit of holding:
accepted by the designated banks on
 The Bonds are issued in denominations
behalf of the Central Government. This
of one gram of gold and in multiples
deposit will not be reflected in the
thereof.
balance sheet of the designated
 Minimum investment in the Bond shall
banks.
be one gram with a maximum limit of
 The designated banks will credit the
subscription of 4 kg for individuals, 4 kg
STBD or MLTGD, as the case may be,
for Hindu Undivided Family (HUF) and 20
with the amount of 995 fineness gold as
kg for trusts and similar entities notified
indicated in the advice received from
by the government from time to time
CPTC, after 30 days of receipt of gold
per fiscal year (April – March).
at the CPTC, regardless of whether the
THE BANKING & FINANCIAL UPDATES APRIL 2020 18
 In case of joint holding, the limit applies
to the first applicant.
Application through Online Mode: A
customer can apply online through the
website of the listed scheduled commercial
banks. The issue price of the Gold Bonds will
be ₹ 50 per gram less than the nominal
value to those investors applying online.
Subscription in Cash: All payments for
subscription to SGB shall be accepted in
Indian Rupees through cash up to a
maximum of Rs 20,000/-
Cancellation of application: The
cancellation of bonds is permitted till the
closure of issue.
Pricing of Bond: The nominal value of Gold
Bonds shall be in Indian Rupees fixed on the
basis of simple average of closing price of
gold of 999 purity, published by the India
Bullion and Jewelers Association Limited, for
the last 3 business days of the week
preceding the subscription period.
Interest on Sovereign Gold Bonds:
 The Bonds bear interest at the rate of
2.50 per cent (fixed rate) per annum on
the amount of initial investment.
 Interest will be credited semi-annually
to the bank account of the investor
and the last interest will be payable on
maturity along with the principal.
 The applicants are eligible for payment
of interest on the subscription amount
at savings bank rate from the date of
application/realisation of fund up to
the date of allotment i.e. the period for
which the investor is out of funds.
 Any delay on the part of ROs to refund
the amount to any applicant, whose
application is rejected will attract
penalty @ Repo rate +2% for each day
of delay.
Maturity period and pre mature
redemption:
 The Bond shall be repayable on the
expiration of eight years from the date
of issue of the bond.
 Premature redemption of the bonds is
permitted after five year from the date
of issue of such bond, on the date on
which the next interest is payable.
THE BANKING & FINANCIAL UPDATES APRIL 2020
 On maturity and in case of premature
redemption, the Bonds shall be
redeemed in Indian Rupees and the
redemption price shall be based on
simple average of closing price of gold
of 999 purity of previous week (Monday
to Friday) for SGBs issued under tranche
1 to 9 and previous three working days
for tranches issued thereafter at the
rate published by the India Bullion and
Jewellers Association Limited.
Tax Treatment:
 Interest on the Bonds will be taxable as
per the provisions of the Income-tax
Act.
 The capital gains tax arising on
redemption of SGB to an individual has
been exempted.
 TDS is not applicable on the bond.
Nomination Facility: Available
Processing of Applications:
 Applications received from Ros are
processed through e-Kuber Portal of
RBI. The Investor ID generated from RBI‟s
E-Kuber is a unique id which is created
while applying for SGB.
 The Receiving Offices (Ros) are required
to enter the data or carry out bulk
upload for the subscriptions received
by them in RBI‟s E-Kuber portal.
 ROs can also download the certificates
from RBI‟s E-Kuber portal and provide
the same to their customers on request
 SGB is transferable/tradable and mere
possession of Certificate of Holding
should not be construed as proof of
title.
Loan against the Bonds: The bonds may be
used as collateral security for any loan with
LTV as applicable for ordinary gold loan.
The pledge/hypothecation/lien on the
bond held in stock certificate form shall be
recorded and revoked by the banks
providing the loan using the facility
provided in the E-Kuber portal. In case of
dematerialized bonds, the lien is marked by
the depositories in line with the practice
followed for other stocks and shares.
Commission: Commission shall be paid at
the rate of rupee one per hundred of the
total subscription received by the ROs and
19
ROs shall share at least 50% of the monetary policy statement dated
commission so received with the agents or 27.03.2020, decided to increase the
sub-agents for the business procured accommodation under the
through them. marginal standing facility (MSF)
Miscellaneous: from 2 per cent out of the SLR
portfolio to _____ per cent
 Bonds acquired by the banks through a) 4% b)3.50%
the process of invoking c)2.50% d) 3.00%
lien/hypothecation/pledge alone, shall 6. To mitigate the adverse pressure on
be counted towards Statutory Liquidity cash flows across sectors, the
Ratio. Reserve Bank during February 2020
 The application forms and other announced to conduct auctions of
requests may be preserved by the ROs/ targeted long-term repos of what
Depository Participants till the maturity tenor?
of the bond. Premature redemption a) 1 Yr to 3 Yr
request may be preserved for three b) 6 Month to 1 Yr
years from the date of payment of c) 3-9 Month
proceeds. d) 5 Yrs

7. To mitigate the adverse pressure on

MULTIPLE CHOICE cash flows across sectors, the
Reserve Bank during February 2020
QUESTIONS announced to conduct auctions of
targeted long term repos of
1. RBI constituted the Monetary Policy appropriate sizes for a total amount
Committee (MPC), under which of up to Rs.___________
section of the Reserve Bank of India a) Rs.2,00,000 crore.
Act? b) Rs.1,50,000 crore.
a) 36A b) 45ZB c) Rs.3,00,000 crore.
C )44ZA d) 49BB d) Rs.1,00,000 crore.
2. As per Monetary Policy decisions 8. Under TLTRO, Banks are required to
released on 27th March 2020, the deploy the funds availed under the
spread of Policy Rate corridor is___ scheme in investment grade
a) 65 bps corporate bonds, commercial
b) 50 bps paper and non-convertible
c) 75bps debentures. Out of that what
d) 100 bps percentage to be acquired from
3. RBI reduced Repo Rate to ___% of Primary and secondary markets
NDTL with effect from the reporting respectively?
fortnight beginning March 28, 2020 a) 50:50 b) 60:40
for a period of one year. C ) 75:25 d) 30:70
a) 4.50% b) 3.50% 9. Up to what percentage of total
C ) 3.00% d) 3.25% investment portfolio, Banks are
4. The requirement of minimum daily permitted to hold securities in HTM
CRR balance maintenance category in general?
reduced from 90 per cent to ___ per a) 20% b) 25%
cent, effective from the first day of C )45% d)15%
the reporting fortnight beginning 10. As a relief measure on account of
March 28, 2020 up to June 26, 2020. COVID19 pandemic, RBI allowed
a) 80% b) 75% moratorium of three months on
C ) 85% d) None payment of instalments in respect
5. In a measure to provide Banks with of all term loans falling due
additional liquidity support through between _____
Marginal Standing Facility, RBI in its

THE BANKING & FINANCIAL UPDATES APRIL 2020 20

 a) March 31, 2020 and June 30,
2020
b) March 1, 2020 and May 31, 2020
c) February 29, 2020 and May 31,
2020
d) February 01, 2020 and June 30,
2020
11. Which of the following measures
was not declared by RBI on 27
March 2020 to tide over COVID19
pandemic faced by borrowers?
a) 3 Months deferment of Interest
payment on Working Capital
Facilities and the accumulated
interest to be capitalized and to
be paid during closure of limit.
b) 3 Months moratorium on Term
Loan instalments and waiver of
interest during such moratorium.
c) Lending institutions are allowed
to recalculate drawing power
by reducing margins and/or by
reassessing the working capital
cycle for the borrowers.
d) Both a & b
12. On account of COVID19
pandemic, RBI decided to defer
implementation of NSFR (Net Stable
Funding Ratio) by ____ months to
____
a) 6 Months to 01.10.2020
b) 3 Months to 01.10.2020
c) 6 Months to 30.09.2020
d) None of the above
13. On account of COVID19
pandemic, RBI decided to defer
implementation of last Tranche of
Capital Conservation Buffer
(0.625%) by _____Months to _____
a) 12 Months to 31.03.2021
b) 6 Months to 01.10.2020
c) 3 Months to 30.06.2020
d) 6 Months to 30.09.2020
14. RBI introduced a separate route
named as __________ for investment
by non-residents in securities issued
by the Government of India without
any restrictions.
a) Fully Automatic Route (FAR)
b) Fully Accessible Route (FAR)
c) Automatic Approval Route
d) None of the above
15. As per RBI Notification dated 30
March 2020, the limit for FPI
THE BANKING & FINANCIAL UPDATES APRIL 2020
investment in corporate bonds is
increased to ____% of outstanding
stock for FY 2020-21.
a) 10% b) 9%
C ) 15% d)6%
16. Banks are advised to create an
Investment Fluctuation Reserve (IFR)
with effect from the year 2018-19
until the amount of IFR is at least
____ percent of the HFT and AFS
portfolio, on a continuing basis.
a) 2% b) 1.25%
b) 3.00% d) 4.00%
17. IFR shall be eligible for inclusion in
_____ capital with a ceiling of____
a) Tier I, 1.25% of RWA
b) Tier II, 1.25% of RWA
c) Tier II without any ceiling.
d) Tier II, 2.50% OF RWA
18. As per latest RBI guidelines, new
Payment Aggregators shall have a
minimum net-worth of ₹______ at
the time of application for
authorization and shall attain a net-
worth of ₹_____ by the end of third
financial year of grant of
authorization and maintain the
same on an ongoing basis
a) Rs.15.00 cr and Rs.25.00 cr
b) Rs.25.00 cr and Rs.50.00 cr
c) Rs.15.00 cr and Rs.20.00 cr
d) None of the above
19. As per the latest guidelines, UCBs
shall have at least 50 per cent of
their aggregate loans and
advances comprising loans of not
more than ₹______ or _____% of their
tier I capital, whichever is higher,
subject to a maximum of Rs.1 crore,
per borrower/party.
a) ₹50 lakh or 0.50% of their tier I
capital
b) ₹25 lakh or 0.2% of their tier I
capital
c) ₹75 lakh or 0.2% of their tier I
capital
d) ₹25 lakh or 0.1% of their tier I
capital
20. The overall priority sector lending
(PSL) target for UCBs stand
increased from 40 per cent to ____
per cent of ANBC or CEOBSE,
whichever is higher which is to be
21
 complied by 31st March 2024 in a d) Rs.2000/-
phased manner. 27. Collateral free loans to women
a) 60% b) 50% SHGs under the DD-NRLM,
c) 65% d) 75% enhanced from Rs.10.00 Lacs to
21. As per COVID19 relief measures ________
announced on 24.03.2020, interest a) Rs.25.00 Lacs.
on delayed payment of TDS b) Rs.15.00 Lacs.
reduced from 18% to___ c) Rs.12.00 Lacs.
a) 12% b) 9% d) Rs.20.00 Lacs.
C ) 15% d) 7% 28. Which Bank during March 2020,
22. For companies with Turnover of less rolled out a Unified Payments
than __________, no late fee and Interface (UPI) QR-based loan
penalty to be charged for delayed installment payment facility?
filing of GST. a) State Bank of India
a) Rs.5.00 cr b) ICICI Bank
b) Rs.2.00 cr c) Jana Small Finance Bank
c) Rs.10.00 cr d) Equitas Small Finance Bank
d) None 29. Which country has become the first
23. Threshold limit of default for referring country of the world to suspend all
cases into IBC has been enhanced financial markets on account of
from Rs One lakh to __________ to COVID19 pandemic ?
prevent triggering of insolvency a) Singapore
proceedings for SMEs. b) Phillipines
a) Rs.10.00 Lacs c) Malasiya
b) Rs.50.00 lacs d) Greece
c) Rs.1.00 cr 30. RBI has placed which Pvt sector
d) Rs.2.00 cr Bank under moratorium owing to
24. To help the economy come out of deteriorating Financial Conditions?
the coronavirus shock, Finance a) PMC Bank.
Minister 24 March 2020 announced b) Yes Bank
a Rs.__________package under c) Karur Vyasa Bank
Garib Kalyan Yojana. d) Indusind Bank
a) Rs 1.7 lakh crore 31. Who has been appointed as MD of
b) Rs 2.00 lakh crore Yes Bank?
c) Rs 1.00 lakh crore a) Y.V.Kamat
d) Rs 1.25 lakh crore b) Prashant Kumar
25. Wage rate under MNREGA c) Sunil Mehta
increased from Rs 182 to Rs _______ d) None
per day amounting to increase of 32. World‟s first commercial flying car
Rs ______ per worker in a year named „PAL-V Liberty‟ will be
a) Rs.202/-, Rs.2000/- in a year developed in which state of india?
b) Rs.225, Rs.2500/- in a year a) Andhra Pradesh
c) Rs.190, Rs.1000/- in a year b) Gujurat
d) None of the above c) Maharastra
26. Under PM Gareev Kalyan Package d) Karnataka
announced on 24 March 2020, 33. World‟s first Digital Solutions
government has decided to Exchange in the cloud named
deposit Ex gratia of Rs ________ per ________ has been launched in
month for three months in Women India.
Jan Dhan account benefiting 20 a) GOKADDAL
crore women. b) GODIGI
a) Rs.1000/- c) DIGICLOUD
b) Rs.500/- d) DIGIEX
c) Rs.200/-

THE BANKING & FINANCIAL UPDATES APRIL 2020 22

34. Flipkart has tied up with whom to mid-career shifts to digital
sell comprehensive instant digital marketing.
insurance policies to its customers? a) DigiPivot
a) ICICI Pru Life b) DigiDhan
b) Aegon Life Insurance c) Digishakti
c) TATA AIA Life Insurance Co d) Digicareer
d) Bharti Axa Life 41. The state which announced to set
35. PhonePe has tied up with which up an exclusive department for
Bank for UPI transactions after its old SHGs for the first time in the country
Banking partner YES Bank has been ___
placed under moratorium by RBI? a) Punjab
a) HDFC Bank b) Andhra Pradesh
b) Kotak Mahindra Bank c) Tamilnadu
c) ICICI Bank d) Odisha
d) SBI 42. India ranked which position in the
36. Deendayal Antyodaya Yojana- United Nations has released World
National Urban Livelihoods Mission Happiness Report 2020 which was
(DAY-NULM) has partnered with topped by Finland?
whom to facilitate e-marketing of a) 78 b) 122
products which are made by SHGs C ) 144 d) 96
across the nation in urban areas. 43. Headquarters of WHO is _______
a) Flipkart and its Director general is
b) Amazon _____________
c) Snapdeal a) Geneva, Switzerland and Tedros
d) Both a and b Adhanom
37. Who has been appointed as new b) New York USA and Audrey
Finance Secretary of India Azoulay
a) Ajay Bhushan Pandey c) Geneva and Audrey Azoulay
b) Ajeet Kumar d) New York, USA and Tedros
c) K.S.Bhalla Adhanom
d) None of the above 44. Which Bank has recently waived
38. Which anti malarial drug was minimum balance charges from all
banned by government of india Savings Bank accounts
which was later allowed to some a) Bank of Baroda
country which are being tried to b) SBI
cure COVID19 pandemic. c) Bank of India
a) Hydroxychloroquine. d) PNB
b) Chloroquine. 45. As part of COVID19 relief package,
c) Hydroxy ethylene Govt. of India, insurance cover of
d) None Rs___ for Health and sanitation
39. Facebook India has launched workers
itsCSR initiative called ___________ to a) Rs.1.00 cr
promote women entrepreneurship b) Rs.50.00 Lacs
in India c) Rs.25.00 Lacs
a) Darpan d) Rs.75.00 Lacs
b) Nari Shakti 46. What is the minimum bid amount
c) Facebook “Pragati” Under Long Term Repo Operation
d) None of these (LTRO)?
40. Google India has launched a skill a) Rs.10.00 Lac
programme for women called b) Rs.25.00 Lac
__________ which is designed for c) Rs.50.00 Lac
women who are looking to return to d) Rs.1.00 cr
their corporate careers after a
break or simply planning to make

THE BANKING & FINANCIAL UPDATES APRIL 2020 23

ANSWERS TO MCQs

1 2 3 4 5 6 7 8 9 10
B A C A D A D A B B
11 12 13 14 15 16 17 18 19 20
D A D B C A C A B D
21 22 23 24 25 26 27 28 29 30
B A C A A B D C B B
31 32 33 34 35 36 37 38 39 40
B B A B C D A A C A
41 42 43 44 45 46
D C A B B D

THE BANKING & FINANCIAL UPDATES APRIL 2020 24