Banking and Finance Current Affairs | January 2021

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Banking and Finance Current Affairs | January 2021

Banking and Finance - January 2021

28th January, 2021

RBI cancels the Banking License of Shivam Sahakari Bank Ltd

Reserve Bank of India (RBI) has cancelled the license of Maharashtra-based Shivam Sahakari Bank Limited, Ichalkaranji. This will prohibit the bank from carrying out the business of banking including acceptance of deposits from 29th January, 2021. The license of the bank got cancelled by RBI because of inadequate earning prospects and insufficient capital with the bank. The bank failed to comply with many sections of the Banking Regulation Act, 1949. Deposit Insurance and Credit Guarantee Corporation (DICGC) will give the deposits of 99 % of the account holders of the bank upto Rs.5 lakhs under the DICGC Act, 1961.

27th January, 2021

RBI introduces framework for bolstering Grievance Redress Mechanism in the banks

Reserve Bank of India (RBI) has issued a comprehensive framework for bolstering the grievance redress mechanism in the banks. The newly issued framework is in accordance with the ‘Statement on Developmental and Regulatory Policies’ which was issued along with the Monetary Policy statement on 4th December, 2020. The new framework mandates the banks to appoint an Internal Ombudsman (IO), who will function as an objective and independent authority at the apex of the Grievance Redress Mechanisms of the banks.   

Bharti AXA General Insurance rolls-out Krishi Sakha App for the farmers of India

Bharti AXA General Isnurance launched ‘Krishi Sakha’ mobile application as a one-stop shop for the farmers across India. The app will offer relevant information on scientific methods of farming to cater the daily farming needs of the farmers. The app will provide information on techniques to boost soil productivity along with the access to Pradhan Mantri Fasal Bima Yojana (PMFBY) portal for information related to crop insurance. The app will address the needs and risks of the entire crop cycle from pre-sowing to harvesting along with the weather related data for planning the farm operations in advance.

22nd January, 2021

RBI proposes 4-tier norms for tighter regulation of NBFCs

Reserve Bank of India (RBI) has proposed bank-like four-tier norms for strict regulation of the Non-Banking Financial Companies (NBFCs) by releasing a Discussion Paper on ‘Revised Regulatory Framework on NBFCs- A Scale Based Approach’. The discussion paper envisages a 4-layered supervisory and regulatory framework for the NBFCs which will be applicable to the top 25 to 30 NBFCs in India. RBI has invited comments on the Discussion Paper from the NBFCs, Market participants and other key stakeholders within 30 days. The regulatory structure will comprise of Base Layer, Middle Layer, Upper Layer and Top Layer.

20th January, 2021

ICICI Bank becomes the 1st India bank to offer instant KYC verification for the Forex partners

Industrial Credit and Investment Corporation of India (ICICI) Bank has become the 1st India Bank to allow the authorized money changers partnered with ICICI to help the customers of other banks in availing ‘ICICI Bank Forex Prepaid Card’ through a newly launched mobile application ‘InstaFX’. The InstaFX app will enable faster KYC verification and validation of customers. The ‘ICICI Bank Forex Prepaid Card’ will be activated within few hours of customer verification and validation.   

19th January, 2021

RBI releases the 2020 list of institutions that are ‘too big to fail’

Reserve Bank of India has released the 2020 list of Domestic Systematically Important Banks (DSIB’s) which is also called as the list of institutions that are too big to fail. According to the list, State Bank of India (SBI), Industrial Credit and Investment Corporation of India (ICICI) Bank and Housing Dvelopment Finance Corporation Limited (HDFC) Bank have retained their place in the list divided into five buckets. SBI has been placed in bucket three whereas HDFC and ICICI Bank have been placed in the bucket one in the list.

18th January, 2021

Nitin Gadkari unveils Yes Bank’s MSME proposition

Union Minister of Micro, Small and Medium Enterprises (MSMEs), Shree Nitin Gadkari launched Yes Bank’s MSME proposition ‘Yes MSME’ virtually on 18th January, 2021. Yes Bank proposes to strengthen the MSMEs with speedy access to funds, knowledge partnerships and digital solutions. Yes MSME will also provide collateral-free credits up to Rs. 5 crores. Yes MSME aims to support the MSMEs in expanding their business, sustain momentum and accelerate growth. Yes MSME has been launched during the SME Carnival that started on 18th January, 2021.  

13th January, 2021

RBI formulates a Working Group for studying transactions made by digital lending apps

Reserve Bank of India (RBI) has formulated a Working Group for studying the digital lending transactions made by online portals and apps. RBI’s Executive Director, Jayant Kumar Das has been appointed as the Chairman of the 6-membered Working Group which will look into the unregulated online money lending operations carried out by the Instant Money Lending applications and web portals. The Working Group with 4 internal members of RBI and 2 external members will submit its report within three months.   

12th January, 2021

India Post Payments Bank ties-up with FSS for promoting financial inclusion of unbanked segments of India

India Post Payments Bank has signed an MoU with Chennai-based Financial Software Systems (FSS) for promoting the financial inclusion of the unbanked and underserved segments of India. India Post Payments Bank will use the Aadhar enabled Payment System of FSS for providing doorstep banking services to the customers. With this collaboration, India Post Payments Bank has become the largest platform in India that provides interoperable banking services to the account holders of any Indian bank.

8th January, 2021

RBI cancels the Banking Business license of Vasantdada Nagari Sahakari Bank

The banking business license of Vasantdada Nagari Sahakari Bank of Osmanabad, Maharashtra has been cancelled with immediate effect by the Reserve Bank of India (RBI) under Section 22 (1) read with Section 56 of Banking Regulation Act, 1949. RBI cancelled the Bank’s license as it failed to comply with the requirements of various sections of the Banking Regulation Act, 1949. More than 99 % depositors will get back their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC) under the DICGC Act, 1961.  

7th January, 2021

PNB ties up with FIRST & IIT Kanpur for setting up Fintech Innovation Centre

Punjab National Bank (PNB) has signed an agreement with Foundation for Innovation & Research in Science & Technology (FIRST) and Indian Institute of Technology (IIT), Kanpur for setting up Fintech Innovation Centre in the Campus of IIT Kanpur. The Fintech Innovation Centre (FIC) will be named as ‘Punjab National Bank- IIT Kanpur Innovation Centre’. The FIC aims to create innovative solutions and products with the help of technological assistance provided by the faculty members of IIT-Kanpur.

SMCB becomes the 1st Urban Co-operative bank in India to receive commercial banking license

Shivalik Mercantile Co-operative Bank (SMCB) has become the India’s 1st Urban Co-operative bank to receive commercial banking license from Reserve Bank of India (RBI) under the ‘Scheme on voluntary transition of Urban Co-operative Bank into Small Finance Bank’. SMCB will now be called as Shivalik Small Finance Bank (SSFB) and will also carry out the business of banking at a commercial level. SSFB intends to commence its business of banking from April 2021. Mr. Suveer Kumar Gupta is the MD and CEO of SMCB which was established on 5th September, 1998.

5th January, 2021

RBI mandates LEI for large value transactions via NEFT/RTGS from April, 2021

Reserve Bank of India (RBI) has officially announced that Legal Entity Identification (LEI) will be compulsory for carrying out transactions above Rs. 50 crores through National Electronic Funds Transfer (NEFT)/ Real Time Gross Settlement (RTGS) from 1st April, 2021. An LEI is a unique 20-digit number global reference number given to the legal entities that carry out global transactions. LEI will promote easy identification of the legal entities in the global database and improve financial risk management. LEIs can be obtained from any Local Operating Unit accredited by Global Legal Entity Identifier Foundation (GLEIF), Switzerland.  

RBI makes Payments Infrastructure Development Fund Scheme operational for 3 years

Reserve Bank of India (RBI) has announced that the Payments Infrastructure Development Fund Scheme (PIDF) will be operational for 3 years from 1st January, 2021. The scheme will have an initial corpus of Rs. 345 crores. The functioning of the scheme will be managed by an Advisory Council headed by RBI Deputy Governor, B P Kanungo. The PIDF scheme aims to increase the number of Payment Acceptance Devices in India and improve the payments acceptance infrastructure by adding 30 lakh touch points every year. Out of the 30 lakh touch points, 20 lakh digital payment acceptance devices will be added.

3rd January, 2021

RBI rolls out Digital Payments Index for tracking India’s digital transactions

Reserve Bank of India (RBI) has launched Digital Payments Index (DPI) for monitoring the digital transactions taking place in the country and for measuring the extent of digitization of payments in India. The Index is based on 5 broad parameters namely- Consumer Centricity, Payment Performance, Payment Enablers, Demand-side factors and Supply-side factors. The online transaction platforms will be compared on the basis of DPI score out of 100. The base period of the DPI will be March, 2018.

1st January, 2021

GoI issues Zero Coupon Bonds for the recapitalization of Punjab & Sindh Bank

Government of India has issued Zero Coupon Bonds worth Rs. 5,500 crores for the recapitalization of Punjab & Sindh Bank. The bank has been allowed by the Ministry of Finance to park the papers at face value instead of the discounted market rate in its Held-To-Maturity (HTM) category. The Zero Coupon Bonds will mature between 2030 and 2035. Government of India holds 83.06 % stakes of Punjab & Sindh Bank. Zero Coupon Bonds are the non-transferable debt securities of the Central government, that trade at deep discounts to render profit at maturity instead of paying interests.