BANKING AND FINANCE


Monthly Current Affairs January 2016 “BANKING AND FINANCE” key points to Remember.
Replace defective 1,000-rupee notes: RBI to Banks
Out of 300 million defective banknotes that were printed in one of the printing presses of government-owned Security Printing and Minting Corporation of India, about 100 million of those notes have hit the market leaving the general public in a tizzy. About 200 million pieces were transferred to the RBI’s currency chests, some of which was then loaded in banks’ automated teller machines.
PNB launches host of digital banking solutions
The Android app facilitates the customer to use GPS and reach the nearest PNB ATM, it also assists customer to instantly lodge operational issues, reducing the Usha Ananthasubramanian said. Green PIN facility was also launched under which customer can obtain duplicate PIN for debit card instantly through SMS request, it said.
Royal Enfield records 50% sales growth in 2015
Royal Enfield has recorded yet another year of stunning growth. The iconic Bullet maker, which is part of Eicher Motors, has registered 50 per cent growth in its total sales at 4.5 lakh units for the calendar year 2015.
No interviews: PSBs to strengthen exam for clerical posts
Finance Ministry has asked Public Sector Banks (PSBs) to strengthen written examination for recruitment of clerical and sub-staff posts as there will be no interviews for such appointments. The decision to change the recruitment process follows Prime Minister Narendra Modi’s directive that there was no need for holding interviews for lower level posts.
IDBI Bank raises Rs 1,900 crore via BaselIII compliant bonds
Public sector lender IDBI Bank has raised Rs 1,900 crore through two separate Basel-III complaint tier-II bonds on private placement basis. The funds would help the bank to augment its capital adequacy ratio by about 55 basis points. This is in addition to Rs.1,000 crore raised on December 31, 2015 through the issue of similar bonds to EPFO but with 15 years tenure from the date of deemed allotment.
RBI imposes Rs 1 crore fine on State Bank of Travancore
Reserve Bank has imposed a penalty of Rs 1 crore on an SBI associate bank, State Bank of Travancore, for violation of some of its instructions. This action is based on
deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank and its customers.
Reliance capital gets CCI nod to acquire Goldman Sach’s fund arm
Reliance Capital Asset Management, part of the Anil Ambani-led group, said it has got the Competition Commission of India’s (CCI) nod for acquiring Goldman Sachs’s onshore business in India like mutual funds and exchange-traded funds. In October 2015, Reliance Capital Asset Management had said it is acquiring Goldman Sachs’s onshore asset
management business for Rs 243 crore ($37.5 million) in an all-cash deal.
NABARD inks pact with NRSC for webbased monitoring of projects
Country’s apex development bank, NABARD on Jan 4 signed a pact with National Remote Sensing Centre (NRSC) for web-based monitoring of its projects in four states. According to an official statement issued by National Bank for Agriculture and Rural Development, IndoGerman Watershed Development (IGWDP) projects (are located) in three states- Gujarat, Rajasthan and Telangana, and Nabard-assisted watershed projects under Watershed Development Fund.
Andhra Bank launches IMPS for money transfer
Andhra Bank has launched Immediate Payment Service (IMPS) at all its branches in association with the National Payments Corporation of India (NPCI). A multichannel, multi-dimensional platform, IMPS makes payments possible within fraction of seconds with all the standards and integrity maintained for security. The bank said that the IMPS has been enabled across all branches to provide inter-bank electronic fund transfer service “capable of processing person to account remittances.”
Cabinet approves creation of a Credit Guarantee Fund for MUDRA loans
The Union Cabinet, chaired by the Prime Minister Narendra Modi has given its approval for the creation of a Credit Guarantee Fund for Micro Units Development Refinance Agency
(MUDRA) loans and to convert MUDRA Ltd. into MUDRA Small Industries Development Bank of India (SIDBI) Bank as a wholly owned subsidiary of SIDBI. The Fund is expected to guarantee more than Rs 1,00,000 crore worth of loans to micro and small units in the first instance.
India to grow at a faster 7.8 percent in fiscal 2016-17: World Bank
The World Bank has projected that India will grow by a robust 7.8 per cent in 2016 and 7.9 per cent in the next two years. World Bank also predicted that India will be the fastest growing economy in the world in the next three years and would outpace China. With the recent fall in oil prices, India remains the bright spot of the global economy as Chinese growth is predicted to slow further.
HDFC targets fund size of Rs. 5000 crore for HCARE-1
To make medium to long term investment in development of mass housing Housing Development Finance Corporation announced that HDFC Capital Advisors, a wholly owned subsidiary of the Corporation has been appointed as an investment manager for the HDFC Capital Affordable Real Estate Fund-1 (HCARE-1). HCARE-1 is a SEBI registered Alternative Investment Fund (AIF) and has been sponsored by the Corporation.
RBI Deputy Governor Urjit Patel gets second term
Reserve Bank of India Deputy Governor Urjit Patel, who drafted historic changes to monetary policy in the country, is likely to get re-appointed after his three-year term ends next month. The government will send Patel’s name to the appointments committee of the cabinet for final approval. Patel, who joined the RBI in January 2013, heads its monetary
policy department and is widely considered to be a trusted lieutenant to Governor Raghuram Rajan.
ICICI Bank partners with FINO PayTech for payments bank space
ICICI Bank will partner FINO PayTech to foray into the payments bank space. ICICI Bank joins some of the leading lenders of the country which have partnered with payments banks that have received licence from the banking regulator. For example, State Bank of India and Kotak Mahindra Bank have picked up stake in the payments banks that will be floated by Reliance Industries and the Bharti Group, respectively.
SBI enters wealth management space;opens branch for start-ups
State Bank of India has became the first public sector lender to launch wealth management service, a space dominated by private and foreign players, to cater to fast-growing affluent segment of the country. The bank also inaugurated a dedicated branch for start-ups which will provide advisory services to the budding entrepreneurs. The wealth management offering – ‘SBI Exclusif’ and the start-up branch – ‘SBI InCube’ were rolled out in Bengaluru.
GOI and WB sign agreement for Neeranchal National Watershed Project
The Government of India has signed a loan agreement with World Bank for the Neeranchal National Watershed Project. The Neeranchal project was approved by the cabinet in October 2015 with a total budget outlay of Rs.2142 crore with the Government share of Rs.1071 crore and the rest 50% by the World Bank.
SBI starts advisory services for startups
State Bank of India (SBI) unveiled a dedicated advisory services branch for startups and wealth management service for high networth individuals (HNIs). SBI becomes the first public sector bank to offer wealth management service. SBI InCube will be a one-stop advisory services facility for entrepreneurs but will not offer loans to startups.
SBI launches SBI E-Smart SME to offer loans to e-commerce sellers
State Bank of India has announced launch of SBI E-Smart SME to offer easy working capital to online e-commerce players. The bank has initially tied up with e-commerce
major Snapdeal to offer instant loans to its sellers. SBI E-Smart SME will use data analytics gathered by Snapdeal to assess the sellers credit worthiness, instead of
traditional lending based on financial statements like balance sheet and income tax returns.
IMF retains India’s economic growth forecast
The International Monetary Fund (IMF) has kept India’s growth projection unchanged at 7.3 per cent in the current fiscal and 7.5 per cent in the next, even as
it cut world economic outlook to 3.4 per cent for 2016. The update released expects Indian economy to be the fastest among major economies. The IMF has pegged the current year’s
growth at 7.3%, same as last year. The global economy is now forecast to grow 3.4% in 2016 and 3.6% in 2017, a reduction in 0.2 percentage point for both the years from the October forecast.
India and UK to cooperate in infra financing
India and UK have agreed to strengthen their economic cooperation in infrastructure and financial services as they vowed to address cross-border tax evasion and avoidance. Finance Minister Arun Jaitley held talks with his UK counterpart George Osborne as part of the 8th India-UK Economic and Financial Dialogue and had a series of meetings
with UK-based investors and fund managers.
India starts anti dumping probe on rubber import from EU, South Korea
GOI has initiated a probe into alleged dumping of rubber variants used for leather goods by the EU, South Korea and Thailand. The Govt initiated after complaints from Reliance Industries and Indian Synthetic Rubber. The move is aimed at protecting domestic players in the sector against cheap imports.
FreeCharge Partners MasterCard, Yes Bank to Launch Virtual Card
Mobile wallet player FreeCharge has launched its new virtual card ‘FreeCharge Go’, in partnership with Yes Bank and powered by MasterCard. The integration is now live, and enables universal payments of its app online and offline through a prepaid virtual card, which can be activated in a few seconds.
India signs agreement with World Bank for US$ 250 million
The Financing Agreement for World Bank (IDA) assistance of US$ 250 million for Bihar Kosi Basin Development Project was signed between Government of India and the World Bank on January 20, 2016 at New Delhi.
RBI Simplifies Gold Monetisation Scheme
The Reserve Bank of India has simplified the Gold Monetisation Scheme (GMS) for bulk depositors, aimed to help temple boards to do so. RBI has also allowed banks to sell Ashok Chakra-embossed gold coins manufactured by governmentowned MMTC under the ‘India gold coin’ scheme. MMTC was hitherto selling such coins, introduced last November, only from its 25 centres in the country.

This was a major demand of temple trusts, many having tonnes of gold and willing to deposit part of that under the GMS. Now these depositors need not move gold to a collection centre which could be far away from their storage. Banks may open a branch in an area nearby or the refinery can offer this facility directly to the trust.

HCL acquires UK-based Point to Point for around $11M
HCL Technologies Ltd, India’s fourthlargest software services firm, has agreed to acquire UK-based Point to Point Ltd and Point to Point Products Ltd (jointly referred to as Point to Point or P2P) for £8 million (around Rs 78 crore or around $11 million). The deal amount also includes contingent payments subject to certain financial milestones.
Finance Ministry to hold India Investment Summit on Feb 4-5
In order to attract investments in infrastructure sector, the Finance Ministry will organise a two-day India Investment Summit from February 4, which would see the participation of various global investors. India has been trying to attract foreign investment for Make in India campaign with a view to boost economic growth and generating employment.
RBI Governor included in WEF task force to study global financial system
The World Economic Forum (WEF) has created a new task force with Bank of England Governor Mark Carney and his counterpart at the Reserve Bank of India,Raghuram Rajan, to study the future of the global financial system. The group, which also includes Bank of America Chairman and CEO Brian Moynihan and HSBC Chairman Douglas Flint, met for the first time at the forum’s annual meeting in Davos.
India and Armenia sign Double Taxation Avoidance Convention Amendment
A Protocol to amend the existing Double Taxation Avoidance Convention was signed by the Government of India and the Government of Armenia. The Protocol amends the Double Taxation Avoidance Convention between India and Armenia that has been in existence since 9th September, 2004. The Protocol amends the Article on Exchange of Information for
tax purposes to bring it in line with the updated provisions in the OECD Model.
RBI to issue Rs 10 coins on B R Ambedkar’s 125th birth anniversary
Reserve Bank is going to issue Rs 10 coins to commemorate the occasion of 125th birth anniversary of B R Ambedkar. On the design details, the obverse of the coin will bear the Lion Capitol of Ashoka Pillar in the centre with the legend ‘Satyamev Jayate’ inscribed below, flanked on the left periphery with the word ‘Bharat’ in Devnagri script. And on the right periphery with the word ‘India’ in English and it shall also bear the Rupee symbol and denominational value ’10’ in the international numerals below the Lion Capitol.
India and ADB Sign $80 Million Loan Agreement
The Asian Development Bank (ADB) and the Government of India signed $80 million loan agreement to continue improving infrastructure in two North Eastern State Capital cities. The loan is the third tranche of a $200 million financing facility under the North Eastern Region Capital cities Development Investment Program and will be used for investments
in water supply, solid waste management and sanitation in Agartala and Aizwal.
IMF implements long due quota reforms
The IMF has announced implementation of its long due quota reforms which was approved by the US Congress last year that will give more voting rights to emerging economies like India and China in the functioning of the organisation. For the first time four emerging market countries (Brazil, China, India, and Russia) will be among the 10 largest members of the IMF.