Current Affairs April 2020 - Finance

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1 - SBI lists $100 million green bonds on India INX

State Bank of India has listed green bonds of USD 100 million (about Rs 750 crore) under its USD 10 billion Global Medium Term Note Programme on India INX’s Global Securities Market Green Platform (GSM). SBI has earlier also listed its maiden green bond issuance on India INX of USD 650 million.

The bond issue has been priced after adding 80 basis points over three-month London-Interbank Offered Rate (Libor) and is rated BBB- by Fitch. Generally, funds raised through green bonds are used to finance green projects that do not emit toxic elements.

2 - IRDAI modified Arogya Sanjeevani Policy guidelines

Insurance Regulatory and Development Authority of India (IRDAI) has introduced a standard health cover policy called "Arogya Sanjeevani" that must be offered by all general and standalone health insurers. IRDAI has modified the guidelines of the policy −

• It is set to be cheaper for policyholders.

• IRDAI has allowed insurers to issue the policy contract of Arogya Sanjeevani Policy in the electronic or digital format to the policyholders.

• The maximum sum insured in Arogya Sanjeevani Policy is Rs 5 lakh and minimum sum insured is Rs 1 lakh.

3 - IIM-B & ICICI Securities teamed up to launch fintech incubator programme

ICICI Securities (I-Sec) joined hands with N S Raghavan Centre of Entrepreneurial Learning (NSRCEL), the startup hub at the Indian Institute of Management Bangalore (IIMB), in supporting promising startups in the fintech space through a structured program.

The programme will provide mentorship to these startups. These startups can then glide through to the Go-to-Market stage and work on scaling up through guidance, workshops, shared learning, funding, goal-setting through launch of POCs and extensive business growth opportunities. Startups will be getting exclusive access to IIMB resources and industry connections in Fintech.

4 - PNB Housing Finance signed pact with JICA to raise $75 million

PNB Housing Finance has signed an agreement with Japan International Cooperation Agency (JICA) to raise $75 million with co-financing of $25 million by Citibank based on the Facility for Accelerating Financial Inclusion in Asia. The fund will be utilized to finance mortgage loans in the affordable housing segment.

This would be JICA’s first debt funding in the housing finance sector in India. PNBHF closed the year with healthy assets under management (AUM) of ₹84,000 crore and deposit mobilisation of ₹9,200 crore in FY20.

5 - SIDBI to provide emergency working capital of up to Rs 1 crore to MSMEs

The Small Industries Development Bank of India - SIDBI, will provide emergency working capital of up to one crore rupees to small and medium enterprises (MSMEs) against their confirmed government orders. The SIDBI Assistance to Facilitate Emergency response against Corona virus - SAFE PLUS will be offered collateral free and disbursed within 48 hours. It will be offered at an interest rate of 5%.

SIDBI also had launched SAFE loans, the limit of which has been enhanced from 50 lakh rupees to two crore rupees. The scheme was launched to provide financial assistance to MSMEs engaged in manufacturing of hand sanitizers, masks, gloves, head gear, bodysuits, shoe-covers, ventilators and goggles used in dealing with COVID-19.

6 - RBI launched Twitter campaign to promote digital modes of payment

Reserve Bank of India launched a twitter campaign urging bank customers to adopt digital modes of payment that are convenient and safe. Under this campaign, RBI urged people to use the multiple digital payment options such as NEFT, IMPS, UPI and BBPS that are available 24*7. Bollywood actor Amitabh Bachchan has been selected as brand ambassador of the campaign.

The campaign is launched so that people use digital banking, maintain social distancing and avoid spread of Coronavirus (COVID-19).

7 - Flipkart inked partnership with ICICI Lombard to offer health plan for Covid-19

E-commerce marketplace Flipkart, in partnership with ICICI Lombard and Go Digit General Insurance launched two health insurance policies named as ‘COVID-19 Protection Cover’ and ‘Digit Illness Group Insurance’. About 56% of the Indian population is not covered under any health insurance policy.

‘COVID-19 Protection Cover’ by ICICI Lombard provides an instant Rs.25,000 benefit plan paid to the customer on positive diagnosis of COVID-19 at an annual premium of Rs.159. ‘Digit Illness Group Insurance’ offered by Digit Insurance allows consumers to avail a hospitalization cover up to a sum assured of Rs.1 lakh with an annual premium of Rs.511.

8 - SIDBI launched liquidity support scheme for MSMEs

Small Industries Development Bank of India (SIDBI) has launched a liquidity support scheme for micro, small and medium enterprises (MSMEs) impacted by the COVID-19 outbreak. SIDBI had received Rs 15,000 crore from the Reserve Bank of India (RBI) to provide financial aid to MSMEs.

SIDBI will provide the financing to MSMEs through banks, non-banking finance companies (NBFCs) and micro-finance institutions (MFIs). The tenor of these loans will be 90 days.

9 - HDFC Bank launched Safety Grid campaign for social distancing

HDFC Bank launched its HDFCBankSafetyGrid campaign to encourage and reinforce social distancing. Using the outer grid of the HDFC Bank logo, the Bank has created physical markers on the ground to help people maintain the World Health Organisation (WHO) prescribed social distance while waiting in queue at a shop or in any an establishment.

The physical markers have been created using the outer grid of HDFC bank logo at a distance of 1 meter from each other outside outlets such as pharmacies, grocery stores, ATMs among others.

10 - RBI announced measures to help maintain liquidity & increase credit flow

The Reserve Bank of India cut the reverse repo rate by 25 bps from 4% to 3.75% aimed to discourage banks from deploying surplus funds with it. RBI kept the repo rate unchanged at 4.40%.

Additional measures announced:

• Targeted long-term repo operations (TLTRO) worth Rs 50,000 crore opened for NBFCc and MFIs

• Special refinance facilities of Rs 50,000 crore provided to NABARD, SIDBI and NHB

• Ways and Advances (WMA) limit of States raised by 60%

• Liquidity Coverage Ratio for banks relaxed from 100% to 80%

• Timeline for resolution under IBC extended by another 90 days from the existing 210 days

• 90-day NPA norms for the moratorium period relaxed

11 - ICICI Bank launched voice-banking services

ICICI Bank has integrated its AI powered multi-channel chatbot, ‘iPal’, with the world’s two most popular voice assistant apps, Amazon Alexa and Google Assistant, to enable its retail banking customers to undertake an array of banking services with just a simple voice command. It will help the customers connect to the bank from home during the Corona pandemic.

To get the benefit of the voice banking offering, customers need to download the Alexa / Google Assistant and link their ICICI Bank account through a secure two factor authentication process.

12 - RBI launches latest round of quarterly survey - OBICUS

The Reserve Bank of India launched its 49^th round of order books, inventories and capacity utilisation survey (OBICUS) of the manufacturing sector. The survey covers the reference period between January-March 2020. The RBI has been conducting the OBICUS of the manufacturing sector on a quarterly basis since 2008.

In the 48^th round of the OBICUS for the quarter October-December 2019 as many as 704 manufacturing companies were covered. As per the last survey, capacity utilisation (CU) had declined to 68.6% in the third quarter of 2019-20 from 69.1% in the previous quarter.

13 - People’s Bank of China raises its stake in HDFC

People's Bank of China (PBOC) has raised its stake from 0.8% to 1.01% in the country's largest housing finance lender HDFC. The stakes comprises of 17.49 million shares of HDFC i.e. nearly 1.75 crore equity shares.

HDFC Ltd owns 19.43% stake in HDFC Bank and 52.7% in HDFC Asset Management Company and 51.45% in HDF Life Insurance Company. HDFC Ltd is a major provider of finance for housing in India, dealing in asset management, venture capital, realty, education, deposits and education loans, etc.

14 - Tata AIA Life Insurance became first to provide additional benefits related to COVID-19

Tata AIA became the first Life Insurance Company to announce additional benefits related to COVID-19 for Policyholders and Agents at no additional cost. Tata AIA Life Insurance will give an additional amount up to Rs. 5 lakhs for death claims due to COVID-19.

Active Tata AIA Life Insurance agents and their families to get medical reimbursement up to Rs. 25,000 for COVID 19 related hospitalization and pre-existing accidental cover that ranges between INR 300,000 – INR 10,00,000 for its Agent workforce.

15 - TCS BaNCS to power Israel’s first fully digital bank

Tata Consultancy Services Ltd. will launch Israel's first fully digital bank. TCS was selected by Israel’s Ministry of Finance to transform its banking sector by building a banking service bureau that would serve as a shared, plug-and-play, digital banking operations platform – powered by the TCS BaNCS Global Banking Platform.

The digital bank, which is yet to be named, is the first to receive a banking license in the country, in over 40 years and is set to launch in 2021.

16 - Singapore’s Caladium raised its stake in Bandhan Bank to 4.49%

Singapore's GIC affiliate Caladium Investment PTE has raised stake in Kolkata-based Bandhan Bank to 4.49% in the March quarter from 3.39% in the December quarter. It now holds 7.2 crore shares in the bank.

Caladium Investment is an affiliate of Singapore’s sovereign wealth fund. Bandhan Bank’s latest shareholding pattern reveals that 13.05% of its total shares are held by foreign investors while the promoter Bandhan Financial Holdings owns 60.95%.

17 - Banking declared as public utility service for six months

The government has declared banking industry as a public utility service for six months till October 21 under the provisions of the Industrial Disputes Act. Bringing banking services under the provisions of this Act means that the banking sector would not see any strikes by employees or officers during the operation of the law starting from April 21.

The notification was issued by the labour ministry against the backdrop of the coronavirus pandemic which has significantly impacted economic activities.

18 - RBI announced Special Liquidity Facility for Mutual Funds of Rs 50,000 crore

The Reserve Bank of India announced a Special Liquidity Facility for Mutual Funds (SLF-MF) of 50,000 crore rupees with a view to easing liquidity pressures on MFs. Under the Special Liquidity Facility for Mutual Funds (SLF-MF), the RBI shall conduct repo operations of 90 days tenor at the fixed repo rate.

The funds availed under the SLF-MF shall be used by banks exclusively for meeting the liquidity requirements of MFs by extending loans, and by undertaking outright purchase of and or repos against the collateral of investment grade corporate bonds, Commercial Papers (CPs), debentures and Certificates of Deposit (CDs).

19 - Indian Overseas Bank launched special scheme for SHGs

Indian Overseas Bank (IOB) has introduced a special borrowing programme for self help groups (SHGs) to help them tide over the challenges inflicted by COVID-19. The maximum loan amount is Rs 5,000 per member of a self help group (SHG) with a cap of Rs 1 lakh for the group.

SHGs with a good track record and a history of minimum two loans from IOB will be eligible for this loan facility, which can be availed till June 30, 2020. Only those SHGs whose existing loans are standard and performing as on March 1, 2020, are eligible to avail loan under this special scheme.

20 - Axis Bank to acquire 29% stake in Max Life Insurance

Axis Bank is looking to acquire an additional 29% stake in Max Life Insurance for an estimated price of Rs. 1,592 crore, raising its total holding to 30%. Max Financial Services currently holds a 72.5% in Max Life and Mitsui Sumitomo Insurance (MSI) owns 25.5% stake.

Axis is looking to purchase around 556 million shares of Max Life Insurance at a price of Rs. 28.61 per share. Post the deal, Max Life will be a 70-30 joint venture between Max Financial Services and Axis Bank.