BANKING & FINANCIAL AWARENESS JUNE 1ST WEEK

BANKING & FINANCIAL AWARENESS JUNE 1ST WEEK  BY B.K SHARMA


1.RBI keeps repo Rates unchanged in 2nd Bi-monthly Monetary policy 2017-18

i. the Monetary Policy Committee (MPC) decided to:
Keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.25 per cent.
Consequently, the reverse repo rate under the LAF remains at 6.0 per cent, and
The Marginal Standing Facility (MSF) rate and the Bank Rate at 6.50 per cent.
Cash Reserve Ratio (CRR) remains unchanged at 4%.
As per RBI's report, the decision of the Monetary Policy Committee (MPC) is consistent with a neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 percent, while supporting growth.

NOTE-
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 primary objective of monetary policy is to maintain price stability while keeping in mind the objective of growth. Price stability is a necessary precondition to sustainable growth.

2.Shaktikanta Das retires as Economic Affairs Secretary
Economic Affairs Secretary Shaktikanta Das retired after serving the government for 37 years in various capacities.
After Das' retirement, Corporate Affairs Secretary Tapan Ray has taken additional charge as the Economic Affairs Secretary

 3.FM to attend AIIB annual meet in Korea
Finance Minister Arun Jaitley will attend the annual meeting of China-led Asian Infrastructure Investment Bank to be held in mid-June in South Korea.
The Finance Minister is scheduled to attend Board of Governors meeting on 14-15 June. This year's meeting is being co-hosted by the Bank and Korea, and will be held in Jeju Island.
Points to Remember                           
AIIB aims to promote economic development of the region by supporting major infrastructure projects.
India is the second largest shareholder of AIIB with 7.5 per cent stake after China which has 26.06 per cent voting shares. Russia and Germany have 5.93 per cent, 4.5 per cent stake respectively.

4. RCom-Aircel merged wireless company to be called Aircom
Reliance Communications' executive Punit Garg said that the merged wireless company with Aircel will be called Aircom.

5.ADB and PNB signs $100 million loan to finance solar rooftop projects
The Asian Development Bank (ADB) and the Punjab National Bank (PNB) has signed a $100 million loan to be guaranteed by the Government of India that will finance large solar rooftop systems on industrial and commercial buildings throughout India.
The PNB will use the ADB funds to make further loans to various developers and end users to install rooftop solar systems. 
This is the first tranche loan of the $500 million multi tranche finance facility Solar Rooftop Investment Program (SRIP) approved by ADB in 2016.

6.Demonetization led to ‘material impact on spending’: Fitch
In its latest Global Economic Outlook (GEO), Fitch said Indian GDP growth slowed “significantly” to 6.1% in March quarter from 7% in December quarter.
“Domestic demand accounted for the bulk of the slowdown”, finally did have a material impact on spending.
Consumption growth fell substantially to 7.3%, from 11.3% in the fourth quarter of 2015-16.
“More worryingly, investment dipped into negative territory (-2.1%).

 7.ICICI Bank commissions solar-powered ATMs 200

ICICI Bank commissioned over 200 solar powered ATM sites in the last one year as part of its efforts to reduce carbon footprint and use more clean energy.

BANKING & FINANCIAL AWARENESS JUNE 1ST WEEK  BY                                      B.K SHARMA

 8.GST: Credit card bill, insurance premium to get costlier

 Financial services and telecom have been put in the 18% GST slab, while customers currently pay 15% for such services.
GST will be levied at the rate of 2.25% on premium payment for endowment policy. Currently, customers pay 1.88% service tax on endowment policies.

9.Economy expected to grow by 7.5 % in current fiscal: NITI Aayog

  • According to the NITI Aayog Vice Chairman Arvind Panagariya, the country economy is expected to grow by 7. 5% in the current fiscal.
  • NITI Aayog is working on reducing fiscal deficit to 3% of the GDP by next financial year and revenue deficit to 0.9% by 2019-20.
  • The agenda also includes creating a tiered regulation of universities and college to provide greater autonomy to top universities.
  • The Aayog will develop a composite gender based index to reflect the status of women in the country and enhance the welfare of women, children, youth, minorities, SC, ST, OBC and divyangs.
  • The Aayog proposes to introduce skill based education and extracurricular activities as mandatory part of school curricula and design innovative conditional cash transfer schemes to encourage girls' education.


10.BoB, Small Farmers Agribusiness Consortium ink MoU
Bank of Baroda (BoB) has entered into a Memorandum of Understanding (MoU) with Small Farmers Agribusiness Consortium (SFAC).
Under this MoU, BoB would play an active role in providing collateral free loans to Farmers Producer Companies (FPC) for which credit guarantee cover up to 85 percent of the loan amount maximum up to Rs 1 crore will be made available by SFAC.
SFAC is an autonomous society promoted by Ministry of Agriculture, Cooperation and Farmers' welfare.

11.India overtakes China to top global retail index: GRDI

India has surpassed China to secure the top position among 30 developing countries on ease of doing business, according to a study that cited India's rapidly expanding economy, relaxation of FDI rules and a consumption boom as the key drivers.
The 2017 Global Retail Development Index (GRDI), ranks the top 30 developing countries for retail investment worldwide and analyses 25 macroeconomic and retail-specific variables.

12.India’s economic growth will accelerate to 7.5% this fiscal: Moody’s
India’s economic growth will accelerate to 7.5 per cent in the current fiscal and the government’s reform push will help achieve 8 per cent GDP growth rate in about four years, according to Moody’s Investors Service.Indian economy grew 7.1 per cent in 2016-17 fiscal.
BANKING & FINANCIAL AWARENESS JUNE 1ST WEEK  BY                                     B.K SHARMA
13.India signs Loan Agreement with the World Bank for USD 36 Million

An agreement for IBRD Credit of USD 36 Million from World Bank for “Himachal Pradesh Public Financial Management Capacity Building Program” was signed in New Delhi.
The programme size is USD 45 million, of which USD 36 million will be financed by the Bank, and the remaining amount will be funded out of State Budget. The programme duration is 5 years
The objective of the project is to improve the efficiency of Public Expenditure Management and Tax Administration in Himachal Pradesh.
.

 14.Finance Ministry asks PSBs to explore acquisition of smaller banks 

 The finance ministry has asked four large PSU lenders to explore opportunities for acquisition of small and mid-sized banks with a goal to create global sized lenders, sources said.So, informally, the finance ministry has sounded them that they should study the possibility for mergers and acquisitions so as to acquire scale and size of State Bank of India (SBI), the sources added.
However, the clear picture would emerge only after the Niti Aayog report sets the tone and tenure of the road map for the second round of consolidation in the banking sector.


15.DEBT RELIEF - 62% of marginal  farmers borrowed from non-institutional lenders,  
According to PRS Legislative Research based on 2013 data  62% percentage of marginal farmers (those with less than 1 hectare of land)   have borrowed from non-institutional lenders Which include moneylenders, family and friends.
This suggests that farm loan waivers—being considered by some state governments—will have minimal impact on marginal farmers. In contrast, in case of large (10+ hectares) and medium (4-10 hectares) farmers, loans from non-institutional sources stand at 21% and 29%, respectively.
Among states, Andhra Pradesh, Telangana and Tamil Nadu have most number of households in debt—at 93%, 89% and 83%, respectively. The all-India average is about 52%.


16.SBI to organise mega farmers' meet 

Ahead of the kharif season, country's largest lender State Bank of India said it will meet nearly 10,000 farmers to understand their credit need and provide finance.
The meeting will be organised at the bank's 15,500 rural and semi-urban branches across the country on June 8.
During the meet, branches will receive applications for fresh loans as well as for renewal or enhancement of existing loan.

17. RBI appoints S. Ganesh Kumar as new Executive Director

The Reserve Bank has appointed Ganesh Kumar as Executive Director (ED) after the voluntary retirement of Chandan Sinha.
As Executive Director, Kumar will look after the departments of Information Technology, Payment and Settlement Systems and External Investments and Operations.

18.India Signs Loan Agreement with the World Bank for USD 39.2 Million
An agreement for IBRD Credit of USD 39.2 Million from World Bank for the project “Assam Citizen Centric Service Delivery” was signed.The programme size is USD 49 million, of which USD 39.2 million will be financed by the Bank, and the remaining amount will be funded-out of State Budget. The programme duration is 5 years.
The objective of the project is to improve access in the delivery of selected public services in Assam.
The Project seeks to enable citizens to access services under the RTPS Act in a timely, efficient, and accountable manner.The Project adopts an integrated approach to improve access and accountability.

19. India GDP growth to remain flat at 7.1% in 2017-18: HSBC
India's economic growth is expected to remain flat at 7.1 per cent in current fiscal as investment is still weak and government spending might not be as high given the fiscal consolidation, says an HSBC report.
20. World Bank keeps 2017 global growth forecast at 2.7%
World Bank maintained its forecast for global growth in 2017 and 2018 unchanged at 2.7 per cent and 2.9 per cent, respectively, as manufacturing and trade are picking up and confidence is improving.
However, it expected the advanced economic growth to slow to 1.8 per cent in 2018 and 1.7 per cent in 2019, in line with its forecasts in January.
21. India’s GDP in Q4 grows 6.1%
India lost its fastest-growing major economy tag in the fourth quarter of 2016-17, with GDP growth coming in at 6.1% compared with China’s 6.9% in the same period. Data from the Ministry of Statistics on Wednesday showed GDP grew 7.1% in the financial year 2016-17, slower than the 8% registered in 2015-16.
The GDP numbers were based on the new 2011-12 base year recently adopted for data including the Index of Industrial Production (IIP) and Wholesale Price Index (WPI).
Top three countries in the list are India China and Malaysia
BANKING & FINANCIAL AWARENESS JUNE 1ST WEEK  BY                                    B.K SHARMA
22.SBI, World Bank finance Rs 400-cr solar projects
 
State Bank of India and the World Bank announced that they had financed 100 MW of rooftop solar projects worth Rs 400 crore in India.

23.BoI conducts ‘Star Mahotsav’
Bank of India conducted a mass-contact programme, ‘Star Mahotsav’, across its branch network.
The thrust was in contacting every customer at their doorstep for recovery of bad loans, disbursement of retail loan, including housing and vehicle loan, disbursement under MSME and agriculture, and promotion of its products.

24.Uday Kotak to head new Sebi corporate governance panel
The Securities and Exchange Board of India (Sebi) said it has set up a committee under the chairmanship of Uday Kotak, executive vice chairman and managing director of Kotak Mahindra Bank Ltd, to advise it on issues relating to corporate governance in Indian firms.
The 21-member panel includes representatives from other companies, stock exchanges, professional bodies, investor groups, law firms, academicians, research professionals and Sebi officials.


i. Vijaya Bank is going to develop as many as 100 digital villages in various States of the country as part of its initiative to promote digital banking among the rural population.
ii. Speaking on the sidelines of the inauguration of the bank’s 2031st ATM at Pandit Nehru Bus Station in the Vijayawada, Andhra Pradesh, Bank Executive Director B.S. Rama Rao stated that Vijaya Bank is the only public sector financial institution to develop digital villages with focus on rural areas and it has already developed five villages including the one in Guntur district.

NOTE--
  • It is Headquartered in Bengaluru.
  • The Founder of the bank was Sri Attavara Balakrishna Shetty.
  • Present MD & CEO of the Bank is Dr. Kishore Sansi.

26.NHB approves merger between Aadhar Housing Finance and DHFL Vysya Housing Finance


The proposed merger between Aadhar Housing Finance and DHFL Vysya Housing Finance has hit the final lap with it got the nod from housing finance regulator National Housing Bank (NHB). 

 Aadhar Housing Finance Chief Executive Officer Deo Shankar Tripathi stated that it had applied to National Company Law Tribunal (NCLT) for the next stage approval.

Both the companies are owned by Wadhawan family promoted Wadhawan Global Capital Pvt Ltd. International Finance Corporation owns 20% in Aadhar Housing, while DHFL Vysya is fully owned by Wadhawan family.
Aadhar Housing Finance Chief Executive Officer is Deo Shankar Tripathi

NOTE--
  • The government has initiated a plan "Housing for All by 2022" with the focus to build affordable dwelling units for the lower-income group and wage earners
  • National Housing Bank is wholly owned by Reserve Bank of India
  • NHB was set up on July 9, 1988, under the National Housing Bank Act, 1987
  • The Head Office of NHB is at New Delhi
  • Shri Sriram Kalyanaraman is the Managing Director & Chief Executive Officer of National Housing Bank.



i. To emphasize the importance of financial literacy, the Reserve Bank of India is observing June 5-9, 2017 as Financial Literacy Week across the country.
ii. The Week will focus on four broad themes, viz. Know Your Customer (KYC), Exercising Credit Discipline, Grievance Redress and Going Digital.

Static Takeaways-
  • Shri B.P. Kanungo is the newly appointed Deputy Governor of RBI
  • The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.
  • RBI was nationalized in 1949.


i. Leading bourse National Stock Exchange (NSE) launched its international exchange in the Gujarat International Finance Tec-City (GIFT City). NSE IFSC Ltd, the global exchange promoted by NSE, will remain operational for a longer period than NSE during a trading day.
ii. All the trades will be cleared and settled through NSE IFSC Clearing Corporations Ltd. Several products from the currency, commodity and equity segments are expected to get listed on the new exchange which may also introduce other innovative products in line with Sebi regulations.
  • Gujarat International Finance Tec-City is the full form of GIFT City.



29.CBDT extends due date for furnishing SFT to 30th June

  • The Central Board of Direct Taxes (CBDT) has extended the due date for furnishing Statement of Financial Transaction (SFT) to 30th June 2017.
  • A statement of financial transaction is required to be furnished for transactions prescribed under Rule 114E of the Income Tax Rules.
  • The CBDT extended the due date after receiving representations requesting for extension of for filing of the SFT due to the teething problems and the volume of data to be compiled
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BANKING& FINANCIAL AWARENESS JUNE 1ST WEEK BY B.K SHARMA

BANKING & FINANCIAL AWARENESS JUNE 1ST WEEK  BY                                    B.K SHARMA



                                                                                 

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