Current Affairs June 2017 - Finance
1 - ADB and PNB inked $100 million loan to finance Solar Rooftop projects
Asian Development Bank (ADB) and Punjab National Bank (PNB) 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.
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.
2 - India inked loan agreement of 36 million dollar with World Bank
The Government of India, the Government of Himachal Pradesh and the World Bank signed a $36 million loan agreement to support Himachal Pradesh in its efforts to spend money more efficiently by improving the financial planning, budgeting and accounting of public funds in key government departments.
The four key departments that will directly benefit from the program include Finance, Excise and Taxation, Irrigation and Public Health, and the Department of Information Technology.
The loan from the International Bank for Reconstruction and Development (IBRD) has a 5-year grace period, and a maturity of 19 years.
3 - RBI initiates ‘prompt corrective action’ for Dena Bank
The Reserve Bank of India has initiated prompt corrective action (PCA) for Dena Bank in view of high net non-performing assets and negative return on assets. It is the third bank after IDBI Bank and UCO Bank where PCA has been initiated under a revised framework.
The net NPA ratio at the end of the fourth quarter for the bank stood at 10.66% from 9.52% in the third quarter. Return on assets stood at -1.02% and -0.67% for financial year 2015-16 and 2016-17 respectively.
4 - SBI approves 100MW of Grid-Connected Rooftop Solar Projects under the World Bank Program
The State Bank of India (SBI) announced financing of solar rooftop projects worth Rs. 400 crore, with private developers. This would add at least 100 MW of solar rooftop capacity to the grid.
The SBI has availed loan of USD 625 million from the World Bank for on-lending to viable Grid-Connected Rooftop Solar PV (GRPV) projects undertaken by PV developers/aggregators and end-users, for installation of rooftop solar systems on the rooftops of commercial, institutional and industrial buildings.
5 - India to grow at 7.2% in 2017: World Bank
The World Bank’s Global Economic Prospects (GEP) has projected a growth rate of 7.2% for India in the financial year 2017-18 as against 6.8% growth in 2016-17.
In addition, the bank in its report expects India’s growth rate to remain at 7.5% in 2018-19 and 7.7% in 2019-20.
The Bank said the implementation of a multi-tier GST starting 1 July will play an important role in transforming the Indian economy and lead to substantial economic gains. The World Bank has kept the global growth forecast in 2017 and 2018 at 2.7% and 2.9% respectively.
6 - RBI announced the Financial Literacy Week
RBI observed June 5-9, 2017 as Financial Literacy Week across the country in order to emphasize the importance of financial literacy. The literacy week focussed on four broad themes, viz. KYC, Exercising Credit Discipline, Grievance Redressal and Going Digital (UPI and *99#).
The RBI released a booklet FAME (Financial Awareness Messages) that provides basic financial literacy messages for the information of the public. The booklet is available in 13 different languages.
7 - NSE launched its exchange at GIFT City
The National Stock Exchange has launched its exchange, NSE IFSC, at GIFT IFSC, Gandhinagar. The IFSC has been established with the long-term vision to develop GIFT as a major global financial hub, to attract global investors and become price setters for key tradable products.
The NSE IFSC Limited (NSE IFSC) and NSE IFSC Clearing Corporation Limited (NICCL) have been formed as 100% subsidiary companies of NSE and National Securities Clearing Corporation Limited (NSCCL) respectively, to operate as a stock exchange and clearing corporation respectively from GIFT.
8 - Second Bi-monthly Monetary Policy Statement, 2017-18
RBI announced the second Bi-monthly Monetary Policy Statement, 2017-18. The Monetary Policy Committee (MPC) decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.25%. Consequently, the reverse repo rate under the LAF remains at 6.0%, and the marginal standing facility (MSF) rate and the Bank Rate at 6.50%.
The decision of the 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 per cent, while supporting growth.
9 - Vijaya Bank set to develop 100 digital villages
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. The bank has already developed five villages into Digital Villages.
In the Digital Villages, the bank would offer Internet, free Wi-Fi connectivity, mobile payment facilities, ATM cards, online banking and will carry out a door-to-door campaign to educate the villagers.
10 - Axis Bank launched the environmental friendly biodegradable gift cards
Axis Bank has launched a biodegradable card thereby offering its customers a simple way of contributing towards environment-friendly payment solutions. These cards will soon be available on select gift card products and will be acceptable at all domestic merchant outlets and online portals.
These Biodegradable plastic cards look and feel like the usual payment cards but have a positive impact on the environment. These cards can also be recycled.
11 - Indian Overseas Bank launched retail mart in Thiruvananthapuram
Indian Overseas Bank (IOB) has launched the Retail Mart, a retail lending concept, in Thiruvananthapuram, Kerala. IOB is the Lead Bank for Thiruvananthapuram district.
The Retail Mart has been designed with an aim to complete all the pre-release formalities at the customer’s doorstep and sanction quality retail loans at a competitive rate of interest with a minimum turnaround time.
The new facility will expeditiously entertain and process housing loans, vehicle loans and other mortgage loans. It is planning to disburse an additional Rs. 100 crore in retail loans during the current financial year.
12 - Canara Bank tied up with New India Assurance Company
Canara Bank has tied up the state-owned general insurer The New India Assurance Co to sell policies through its branches.
The pact allows Canara Bank to offer non-life insurance products to its customers across an extensive network of over 6,000 branches.
The New India Assurance will make offer a bouquet of products — such as motor, home, health, travel, fire, marine, and engineering insurance policies — through branches of Canara Bank.
13 - RBI identified 12 Bank Accounts accounting 25% of NPAs
According to RBI’s Internal Advisory Committee, 12 bank accounts constitute nearly 25% of the gross bad loans for immediate referral and resolution under the bankruptcy law.
As of March 31, 2016, each of the 12 identified accounts was having more than 5,000 crore rupees of outstanding loans, of which at least 60% was classified as non-performing by banks.
Further, based on Internal Advisory Committee’s recommendations, RBI will issue directions to the banks to initiate insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC).
14 - IDBI Bank’s only PSB to receive ‘high’ rating for code compliance
As per the Code Compliance Rating of banks done by the Banking Codes and Standards Board of India (BCSBI) 2017, IDBI Bank has been the only bank out of 26 public sector banks to receive ‘high’ rating for their adherence to code compliance. It has also been among eight private sector banks out of 17 private sector banks to receive such rating.
The other eight private sector banks were Axis Bank, DCB Bank, HDFC Bank, ICICI Bank, IndusInd Bank, Kotak Mahindra Bank, RBL Bank and YES Bank. The code compliance rating was based on five parameters — information dissemination, transparency, grievance redressal, customer-centricity, and customer feedback.
15 - Insolvency and Bankruptcy Board of India notifies Fast Track Insolvency Resolution Process
The Insolvency and Bankruptcy Board of India (IBBI), in exercise of its powers conferred by sections 58, 196 and 208 read with section 240 of the Insolvency and Bankruptcy Code, 2016 (Code), has notified the Insolvency and Bankruptcy Board of India (Fast Track Insolvency Resolution Process for Corporate Persons) Regulations, 2017.
These regulations provide the process from initiation of insolvency resolution of eligible corporate debtors until its conclusion with approval of the resolution plan by the Adjudicating Authority. The process in these cases shall be completed within a period of 90 days, as against 180 days in other cases.
16 - AIIB granted USD 150 MN loan for India Infrastructure Fund
Asian Infrastructure Investment Bank (AIIB) approved two loans and one equity investment totaling US$324 million to support infrastructure projects in India, Georgia and Tajikistan.
These approvals include the Bank’s first equity investment of US$150 million, which will help to attract much needed private investment capital for infrastructure projects in India.
The Fund aims to invest in mid-cap infrastructure companies in India, and to expand the Bank’s equity and loan deal sourcing pipelines in the private sector through its equity participation in this Fund.
17 - Yes Bank united with TerraPay for faster real time remittance
In order to ensure faster real-time money transfer to bank accounts in India and abroad, Yes Bank united with TerraPay.
The partnership has come up with Rupee Drawing Arrangement, which enables TerraPay’s network partners to make instant cross-border money transfer to bank accounts in India.
This union allows Indian migrants globally to walk into TerraPay’s partner outlet anytime and send money to the bank accounts instantly. For bank accounts other than Yes Bank accounts, Yes Bank will disburse funds using the 24*7 immediate payment service.
18 - RBI restricted Central Bank of India's business and expansion
Reserve bank of India has restricted Central Bank of India from business expansion due to loss reported from NPAs. The restrictions will be on lending and branch expansion plans.
RBI has also asked for "prompt corrective action" from bank due to its high bad loans and negative return on assets. RBI has triggered PCAs for four other banks – IDBI Bank, UCO Bank, Dena Bank and Indian Overseas Bank.
The Bank was restricted due to reason that it reported losses for two consecutive years, had negative return on assets and its share of bad loans has crossed 6%.
19 - Centre made Aadhaar mandatory for transactions above Rs.50,000
With effect from June 1, Centre has made it mandatory to quote the Aadhaar number for opening bank accounts and for transactions exceeding Rs.50,000.
Government had made it mandatory to seed PAN with Aadhaar and quote it in income-tax returns. Section 139AA of the Income-tax Act, 1961 as introduced by the Finance Act, 2017 provides for mandatory quoting of Aadhaar ID, for filing of return of income and for making an application for allotment of Permanent Account Number with effect from 1 July 2017.
20 - RBI restricted Bank of Maharashtra's business and expansion
Reserve bank of India has restricted Bank of Maharashtra from business expansion due to loss reported from NPAs. The restrictions will be on lending and branch expansion plans.
RBI has also asked for "prompt corrective action" from bank due to its high bad loans and negative return on assets. RBI has triggered PCAs for five other banks – Central bank of India, IDBI Bank, UCO Bank, Dena Bank and Indian Overseas Bank.
The bank was restricted due to the reason that it reported losses for two consecutive years.
21 - SBI and Tirumala Milk products unite to provide loans to dairy farmers
South- based company Tirumala Milk Products united with State Bank of India, to provide loans to dairy farmers who supply milk to the Tirumala Milk Products.
The move has been taken to double the number of dairy farmers and enhance the amount of milk it delivers daily from 14 lakh liters to 25 lakh liters by 2020. SBI will offer loans to dairy farmers for construction of shed, purchase of milk cattle, milking machine, and chaff cutter.
Under this scheme, bank provides loans to dairy societies for purchase of automatic milk collection system, transport vehicles and bulk chilling unit.
22 - Bank credit up 6.02 %, deposits rise 11.19 % in June 9 fortnight: RBI
According to the data released by RBI, banks' credit growth grew at 6.02% to Rs. 76,58,212 crore in the fortnight ended June 9 from Rs. 72,22,939 crore in the same period of fiscal 2016.
The data showed that the growth in advances in the reporting period was slightly higher than the previous fortnight ended May 26, 2017. In the fortnight ended May 26, advances had grown by 5.08% with an outstanding loans at Rs. 75,93,546 crore.
In the reporting fortnight, bank deposits grew at 11.19% to Rs. 105,77,947 crore from Rs. 95,13,148 crore in the fortnight ended June 10, 2016.
23 - Axis Bank and Kochi Metro join hands to launch India’s first single wallet contactless, open loop metro card
Axis Bank in association with Kochi Metro Rail Corporation (KMRL) has launched KMRL Axis Bank ‘Kochi1’ Card, India’s first open loop EMV contactless metro card that would make travel a convenient and hassle free experience for commuters in Kochi.
Axis Bank has collaborated with National Payments Corporation of India (NPCI) in developing this transit EMV contactless specification on interoperable open standards.
The prepaid card has integrated benefits and offers a plethora of services to commuters.
24 - RBI announced states’ fiscal deficit mounted to Rs 4.93 trillion in FY16
The gross fiscal deficits of all the states mounted to 4,93,360 crore rupee in the last fiscal from the 18,790 crore rupee in the financial year 1991, according to the latest RBI data.
Most populous state Uttar Pradesh and the largest Rajasthan lead the list of states with highest deficit.
According to the second edition of RBI's statistical publication titled 'Handbook of Statistics on States 2016-17', the gap is projected to improve in the current fiscal. It is estimated to be 4,49,520 crore rupee as per the budget estimates of the states for financial year 2017.
25 - RBI amended Banking Ombudsman Scheme
The central bank has extended the scope of Banking Ombudsman Scheme. Under the amended scheme, a customer would also be able to lodge a complaint against the bank for its non-adherence to RBI instructions with regard to mobile banking/ electronic banking services in India.
As per the amendment, the pecuniary jurisdiction of the Banking Ombudsman to pass an award has been doubled to 20 lakh rupees.
Under the extended scope of Banking Ombudsman Scheme, banks could be penalized for mis-selling third-party products like insurance and mutual funds via mobile or electronic banking.
26 - Banks Board Bureau added 2 more members to its board
The central government increased members in the Banks Board Bureau (BBB), headed by former comptroller and auditor general Vinod Rai by involving two more members.
The two members inducted into the board are former Allahabad Bank chairperson and managing director Shubhalaxmi Panse and private equity player Pradip Shah.
Board has responsibilities of appointments of heads of Public Sector Banks (PSBs), and for full-time directors and non-executive chairperson on the boards of PSBs.