Current Affairs October 2019 - Banking


1 - Reserve Bank cuts repo rate by 25 basis points

Reserve Bank

The Reserve Bank of India (RBI) has slashed the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 5.15% from 5.40% with immediate effect. Consequently, the reverse repo rate under the LAF stands reduced to 4.90% and the marginal standing facility (MSF) rate and the Bank Rate to 5.40%.

RBI has revised the GDP outlook for 2019-20 to 6.1%, from 6.9% in previous Monetary Policy committee meet. For 2020-21, RBI has revised the GDP outlook to 7.2%. This is the fifth straight cut by RBI in 2019 with a total reduction of 1.35%.

2 - CBDT inked the 300th Advance Pricing Agreement

Pricing Agreement

The Central Board of Direct Taxes (CBDT) has signed the 300th Advance Pricing Agreement (APA).

Three APAs were entered into in September, 2019 (2 Unilateral and 1 Bilateral APA), which has taken the total number of APAs signed by CBDT to 300. During the ongoing fiscal, the total number of APAs entered into has gone up to 29 (27 Unilateral and 2 Bilateral APAs). The Bilateral APA signed in September, 2019 pertains to United Kingdom.

3 - SEBI’s rules may impact investors from Mauritius and Cayman Islands


The Securities and Exchange Board of India (SEBI) has notified that only those foreign portfolio investors located in Financial Action Task Force (FATF) countries or managed by an entity based in a FATF jurisdiction will be allowed to deal in participatory notes (PNs).

Major financial hubs such as Cyprus, Cayman Islands, and Mauritius are not a part of the FATF. The new FPI regulation — based on the HR Khan committee’s recommendations — says that “regulated funds” have to be either from FATF member countries or else in case of unregulated funds the investment manager has to be from FATF member countries.

4 - SBI becomes first Indian bank to have office in Australia’s Victoria


State Bank of India has become the first Indian bank to have a branch in the Australian state of Victoria after it opened its Melbourne office. It will contribute in growing the trade and investment relations between India and Victoria.

Victoria already has the presence of leading Indian businesses, including Cipla, Cyient, HCL, Infosys, Ramco, Samvardhana Motherson Group, TCS, Tech Mahindra, Ugam Solutions, Wipro Zoonga and Zomato.

5 - UCO Bank launched 3 new digital products

UCO Bank

UCO Bank has launched three new digital products - UCash, Digilocker and an app. UCash enables customers to withdraw money from ATMs through mobile banking without using debit card.

Digilocker aims to eliminate the use of physical documents and enables sharing of verified electronic documents. The third product, the new mobile app, integrates four existing apps of the bank - UCO Mbanking, UCO UPI, UCO Mpassbook and UCO Secure- in a single interface.

6 - RBI gave final nod to Kerala government for formation of Kerala Bank

Kerala Bank

The Reserve Bank of India has given its final nod to the Kerala Government for the formation of the Kerala Bank. With its formation, the proposed Kerala Bank will be the largest banking network in the state.

The Kerala Bank would be formed amalgamating the 13 District Co-operative Banks (DCBs) with Kerala State Co-operative Bank. The state government had claimed that the objective of the formation of the Kerala Bank was to strengthen the cooperative sector.

7 - GeM signed MOU with Union Bank of India

Union Bank

Government e-Marketplace (GeM) signed a Memorandum of Understanding (MoU) with Union Bank of India (UBI). UBI will be able to offer an array of services including transfer of funds through GeM Pool Accounts (GPA), advising of Performance Bank Guarantees (e-PBG) and Earnest Money Deposit (EMD) to the registered users on the GeM portal.

The MoU will facilitate a cashless, paperless and transparent payment system on the portal and will create an efficient procurement system for government entities. GeM has already signed MoU with 14 Public Sector and private banks to enable this.

8 - Reliance Mutual Fund is now Nippon India Mutual Fund

Nippon India Mutual Fund

Reliance Mutual Fund has been renamed as Nippon India Mutual Fund (NIMF) after Nippon Life Insurance has fully taken over Reliance Nippon Asset Management. Nippon Life now owns 75%, making it the single largest promoter. Sundeep Sikka will continue as Chief Executive Officer.

Nippon has paid ₹6,000 crore for 75% stake. The 130-year-old Nippon Life is the largest private life insurer in Japan and has assets under management worth $700 billion worldwide.

9 - RBI rejected proposed merger of Lakshmi Vilas Bank with Indiabulls Housing Finance

Lakshmi Vilas Bank

The Reserve Bank of India (RBI) has rejected the proposed merger of Lakshmi Vilas Bank Limited (LVB) with Indiabulls Housing Finance Limited (IBH). The bank had sought approval from the Reserve Bank of India (RBI) on 7 May, 2019.

RBI has placed Lakshmi Vilas Bank under prompt corrective action (PCA) owing to high level of bad loans, insufficient capital adequacy ratio, negative return on assets (RoA) for two consecutive years and high leverage.

10 - Life Insurance Council plan to launch mass media campaign ‘Sabse Pehle Life Insurance’

Life Insurance

Life Insurance Council to launch Indian life insurance industry‟s first joint mass media campaign with the slogan “Sabse Pehle Life Insurance‟. The campaign represents all 24 Indian life insurance companies with the aim to create a common narrative aimed at increasing life insurance awareness in the country.

The campaign slogan ‘Sabse Pehle Life Insurance’ urges Indians to first build a shield of protection by securing their financial future and then build a robust financial plan. The campaign stresses on the importance of life insurance and why it should be a priority for every Indian.

11 - ICICI Bank launched new FD scheme “FD health”


ICICI Bank announced the launch of ‘FD Health’, a Fixed Deposit (FD) offering the dual-benefit of investment growth via FD and protection through a critical illness coverage. The customers will be offered the insurance cover free of cost for the first year and thereafter, they can renew it.

This first-of-its-kind offering in the industry provides the customer a complimentary critical illness cover of Rs. 1 lakh from ICICI Lombard General Insurance Company on opening an FD of Rs. 2 lakh to Rs. 3 lakh for tenure of at least two years.

12 - Mastercard and MS Dhoni united to build ‘Team Cashless India’

MS Dhoni

Mastercard, along with legendary cricketer Mahendra Singh Dhoni, announced the launch of a nationwide initiative to accelerate the acceptance and adoption of digital payments. Titled ‘Team Cashless India’, the initiative brings consumers and merchants to the forefront of the digital payments dialogue. Mastercard will work together with Confederation of All India Traders (CAIT), acquirer banks and fintech companies to support nominated merchants to deploy digital payments acceptance infrastructure.

‘Team Cashless India’ is an important step towards Mastercard’s goal to equip 10 million merchants in India with digital payments acceptance capabilities by 2020.