Banking and Finance Current Affairs | May, 2021

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Banking and Finance Current Affairs | May, 2021

Banking and Finance - May, 2021

31st May, 2021

ZebPay rolls-out India’s 1st Crypto-based lending platform

Singapore-based ZebPay has launched India’s 1st Cryptocurrency based lending platform which will enable the investors of cryptocurrency to invest their coins as Fixed Deposit (FD) and get interest from them. The platform will support Bitcoin (BTC), Etherium (ETH), DAI tokens and Tether (USDT). The users of the ZebPay platform can generate up to 3 % returns on BTC, 7 % on ETH and DAI and 12 % on Tether. Investors will be offered with open term as well as fixed term crypto investments.

28th May, 2021

UCO Bank allocates Preferential Shares to the Central Government for a capital infusion of INR 2,600 crores

UCO Bank has allocated 2,03,76,17,554 Preferential Shares (PS) to the Government of India in exchange for the capital infusion of INR 2,600 crores. Government of India infused INR 2,600 crores on 31st March, 2021. Preferential Shares are the share capitals with a fixed rate of dividend. PS empowers the shareholders with a special right to claim dividends during the company lifetime. The shareholders of PS get an option to claim repayment of the capital in case the company packs-up its business.   

26th May, 2021

‘Pockets’ becomes the 1st e-wallet of India to be linked with the UPI Network

‘Pockets’ e-wallet launched by ICICI Bank has become the 1st digital wallet in India to get linked with the Unified Payments Interface (UPI) network. ICICI Bank has collaborated with the National Payments Corporation of India (NPCI) to launch the 1st and the only UPI-ID linked e-wallet in India. This will enable the customers of ICICI Bank to make UPI transactions directly from their e-wallet’s balance using ‘Pockets’ e-wallet without involving their savings account while making the smaller payments.  

25th May, 2021

IFSCA constitutes Expert Committee on Investment Funds

The regulator of Gujarat International Finance Tec-City (GIFT City), International Financial Services Centers Authority (IFSCA) has constituted a 12-member Expert Committee of Investment Funds. The Expert Committee will headed by the Managing Director (MD) of Kotak Mahindra Asset Management Co. Ltd, Nitesh Shah. The Expert Committee will recommend a roadmap for the promotion of Investment Funds at the IFSCA. The committee includes the leaders of Fund Management ecosystem. The main objective of the committee is to develop a consistent and comprehensive regulatory framework for the Investment Funds based on the best practices being followed across the globe.

24th May, 2021

RBI issues guidelines for the amalgamation of DCCBs with State Co-operative Banks

Reserve Bank of India (RBI) has issued guidelines for the amalgamation of District Central Co-operative Banks (DCCBs) with State Co-operative Banks (StCBs) or the amalgamation of DCCB’s with one another. The issuing of guidelines was in the wake of approaches made to RBI by some state governments. The state governments approached RBI regarding the amalgamation of DCCBs with StCBs as a Short Term Co-operative Credit Structure (STCCS). The proposals will be examined and recommended by National Bank for Agriculture and Rural Development (NABARD).

NPCI partners with PayCore for developing SoftPOS Solutions for RuPay

National Payments Corporation of India (NPCI) has partnered with Turkey-based global payments solution company, PayCore for RuPay SoftPOS. PayCore has become one of the certified partners of NPCI for driving cashless payments across the country. RuPay SoftPOS was launched by NPCI on 5th March, 2021 for enabling Near Field Communications (NFC) enabled smartphones to make payments in the Point of Sale (POS). PayCore is already providing its services to SBI Payments and Hitachi Payment.

Mahindra Rural HFL partners with India Post Payments Bank for cash management solutions

Mahindra and Mahindra Financial Limited’s subsidiary, Mahindra Rural Housing Finance Limited (MRHFL) has tied-up with India Post Payments Bank (IPPB) for cash management solution. The partnership, IPPB will provide cash management and collection services to MRHFL via its postal service providers and access points. This will enable the customers of MRHFL to repay their monthly or quarterly loan installments. Anuj Mehra is the Managing Director of MRHFL which is headquartered at Mumbai, Maharashtra.  

22nd May,2021

Aditya Birla Sun Life launches Vision LifeIncome Plus Plan

Aditya Birla Capital Limited’s insurance subsidiary, Aditya Birla Sun Life Insurance has launched ‘LifeIncome Plus Plan’ for offering a flexible savings plan to its customers. The newly launched product will provide flexible bonus payouts along with guaranteed regular income to its policy holders upto 30 years with a life insurance cover. The ‘Vision LifeIncome Plus Plan’ has been designed as a customizable savings plan to suit the financial needs of its customers across all stages of life. The plan is not linked to the stock market.

21st May, 2021

RBI’s board approves transfer of INR 99,122 crores as surplus to the government

Reserve Bank of India’s Board has approved the transfer of INR 99,122 crores as surplus to the Government of India. The surplus to be transferred to the government accounts for 9 months (July, 2020 to March, 2021) which is 50 % higher than the transfer of 2019-2020. The transfer was approved in the 589th meeting of the Central Board of Directors of the RBI which was chaired by Shaktikant Das (Governor of RBI). On the recommendations of Bimal Jalan Committee report, the board decided to maintain the Contingency Risk Buffer at 5.5 %.

19th May, 2021

SBI partners with HyperVerge for Video KYC solutions

State Bank of India (SBI) has tied up with California-based HyperVerge for its Video Know Your Customer (KYC) for opening new bank accounts online due to COVID-19. The proposed Video KYC solution will be utilized by SBI for achieving a highly improvised video KYC checks performed by the agents at a greater speed. HyperVerge’s Video KYC has an accuracy of 99.5 % and is totally compliant with the norms of RBI. The regular manual KYC takes 25 minutes which will decrease to 5 minutes after the Video KYC is added to SBI’s platform.

RBI mandates interoperability of the PPIs by March 2022

Reserve Bank of India (RBI) has mandated the interoperability of the Prepaid Payment Instruments (PPIs) by the end of 31st March, 2022 under Section-18 read with Section (10) 2 of the Payment and Settlement Systems Act, 2007. PPIs include mobile wallets like PhonePe, Mobikwik, Paytm. RBI has also proposed to increase the limit of outstanding balance of PPIs from INR 1 lakh to INR 2 lakhs. It has also proposed to allow the cash withdrawal facility for full-KYC PPIs of non-bank PPI issuers.

16th May, 2021

Bank of Baroda launches microsite for supporting employees amid pandemic

Bank of Baroda (BoB) has launched a micro-website for its employees amid the ongoing pandemic. It will serve as an emergency networking platform during the second wave of CVOID-19. The microsite offers data like plasma donors, oxygen cylinders, Remdesivir and hospital beds. It will also provide the details of various Single Point of Contacts (SPOCs) across the zones. The registration facility will enable the employees to register themselves for volunteer work in their cities. The micro-website also offers ‘Need Help’ section for seeking emergency assistance.

13th May, 2021

Airtel Payments Bank rolls-out ‘DigiGold’ for investments in gold

Bharti Airtel’s Airtel Payments Bank has launched ‘DigiGold’ in partnership with SafeGold for making investments in gold. This will enable the users of Airtel Thanks App and the customers of Airtel Payments Bank to invest in 24K gold. The gold purchased through the digital platform will be stored by SafeGold at no additional charges which can be sold through the same app at any time. Airtel Payments Bank is the 1st payment bank of India and it recently increased its savings deposit limit to INR 2 lakh to get in line with RBI’s guidelines.

Eroute Technologies gets RBI’s authorization for issuing Prepaid Payment Instruments

Eroute Technologies Private Limited has been authorized by the Reserve Bank of India (RBI) for issuing and operating the Prepaid Payment Instruments (PPIs) with perpetual validity under the Payment and Settlement Systems Act, 2007. Eroute Technologies is a Non-Banking Financial Company from Uttar Pradesh which is also a part of RBI’s regulatory sandbox initiative on retail payments. Eroute Technologies can now start issuing and operating activities of Semi-Closed PPIs in India. HDFC Bank’s PayZapp and SBI’s YONO are India’s leading PPIs.

SBI Card raises INR 455 crores by issuing bonds

State Bank of India’s SBI Cards and Payments Services has raised INR 455 crores by issuing bonds. The issued bonds will offer coupons at 5.70 % per annum maturing on 10th May, 2024. SBI Cards has allocated 4,550 unsecured taxable and redeemable Non-Convertible Debentures (NCDs) with a fixed rate. The issued bonds will be listed in the wholesale debt market segment of Bombay Stock Exchange (BSE) by SBI Cards. The NCDS have a face value of INR 10 lakhs each will be issued on private placement basis.

12th May, 2021

RBI extends the restrictions of Millath Co-Operative Bank till 7th August, 2021

Reserve Bank of India (RBI) has extended the restriction imposed on Millath Cooperative Bank in Karnataka for 3 months till 7th August, 2021 under Section 35A read with Section 56 of the Banking Regulation Act, 1949. RBI imposed restrictions on the bank on 26th April, 2019. As a part of the restrictions, the bank is not allowed to make any investment, renew any loan and accept any fresh deposits. The depositors of the bank can’t withdraw more than INR 1,000 per day from their accounts.   

Google Pay launches ‘International Money Transfer’ feature for its users in United States

Digital money transfer platform, Google Pay has launched ‘International Money Transfer’ feature for the users of Google Pay in the United States. The feature has been rolled-out in partnership with remittance firms like Western Union Co and Wise. This feature will enable the Google Pay users in US to send and receive money to the Google Pay users in Singapore and India. Google intends to roll-out this feature in around 100 countries with the help of Western Union by the end of 2021.  

10th May, 2021

RBI revises guidelines for private banks for undertaking government businesses

Reserve Bank of India (RBI) has revised the existing guidelines of ‘Appointment of Scheduled Private Sector Banks as Agency Banks of RBI’ for the authorization of Scheduled Private Sector Banks as ‘Agency Banks’ of RBI for businesses of central as well as the state government. As per the revised guidelines the private sector banks which are not under the Prompt Corrective Action (PCA) framework of RBI will now be allowed to sign the ‘Agency Banking’ agreement with RBI if they wish to undertake the businesses of the government. The revised guideline also extends the ‘Agency Banking’ agreement with the already authorized private sector banks to continue their role in running the government businesses without taking any fresh approvals from RBI.

Bajaj Finance gets RBI’s authorization for issuing Prepaid Payment Instruments

Bajaj Finance has been authorized by the Reserve Bank of India (RBI) for issuing and operating the Prepaid Payment Instruments (PPIs) with perpetual validity. PPIs facilitate purchase of goods and services like fund transfers, remittances, financial services etc against the value stores on/in the financial instrument. There are three main types of PPIs, Closed System, Semi-Closed System and Open System PPIs. Bajaj Finance is India’s 3rd largest Non-Banking Finance Company (NBFC) that focuses on SMEs, Fixed Deposits, Value Added Services along with rural and commercial lendings.  

8th May, 2021

RBI sets up Advisory Group for assisting RRA 2.0

Reserve Bank of India (RBI) has formed an Advisory Group for assisting Regulations Review Authority 2.0. The Advisory group will consist of 6 members and it will be headed by S Janakiram. He is currently serving as the Managing Director (MD) of State Bank of India (SBI). The advisory group will assist RRA 2.0 is reviewing the regulations of RBI and streamline the compliance procedures of the regulatory body for its effective functioning. Apart from Janakiram, the group includes TT Srinivasraghavan, Gautam Thakur, Subir Saha, Ravi Duvvuru and Abadaan Viccaji.

7th May, 2021

EIB and SBI to invest Euro 100 million in SMEs working on sustainability and climate change

European Investment Bank (EIB) and State Bank of India (SBI) will jointly invest Euro 100 million in the equity financing of the Small and Medium Enterprises (SMEs) related to sustainability and climate change. The agreement was signed during the European Union- India Leaders Meeting held in Portugal. SBI has already made investments in a vehicle called ‘Neev Funds’ for fulfilling its impact investing objectives. EIB and SBI have jointly created ‘Neev Funds II’ for completing the investment process. Neev Fund II will provide equity to the SMEs working on reducing climate risks and promoting social; development.   

6th May, 2021

Karnataka Vikas Grameena Bank wins top 5 PFRDA awards

Karnataka Vikas Grameena Bank (KVGB) has won top 5 awards of Pension Fund Regulatory and Development Authority (PFRDA). The top 5 awards bagged by KVGB are – Leadership Capital and Amazing Achievers, Game Changers, Atal Pension Yojana (APY) Makers of Excellence and Lead to Leap. KVGB has played a key role in the implementation of Atal Pension Yojana, Prime Minister Jeevan Jyothi Bima Yojana (PMJJBY) and Prime Minister Suraksha Bima Yojana (PMSBY). The bank has settled 3809 claims under PMJJBY and 706 claims under PMSBY so far.

5th May, 2021

RBI extends Comprehensive Credit Support amid the second wave

Reserve Bank of India (RBI) announced a series of measures and comprehensive strategies for supporting all the stakeholders of the economy amid the second wave of COVID-19 pandemic. RBI has announced Term Liquidity Facility of INR 50,000 crores with 3 years of maturity at current repo rate for easy access to emergency health services. RBI has also permitted the lending of Small Finance Banks to the Microfinance Institutions (MFIs) for on-lending to individuals under Priority Sector Lending (PSL) which was not allowed earlier. RBI has also announced Special Long-Term Repo Operations (SLTRO) worth INR 10,000 crores for SFBs for the next 3 years. RBI has also increased the tenor of OD Facility of State Governments to 50 days.   

Kotak Mahindra Bank selected as the Digital Payments Partner of eNAM

National Agriculture Market (eNAM) has selected Kotak Mahindra Bank as the Digital Payments Partner for facilitating easy online transactions made by the stakeholders of the digital platform like Farmer Producer Organization (FPO), farmers and traders. Kotak Mahindra Bank will provide payment, clearing and settlement services through the integration of its payment portal and system to the payment interface of eNAM. This will enable farmers to have more power in decision making related to pricing and will also provide greater transparency.

3rd May, 2021

RBI slaps ICICI Bank with a fine of INR 3 crores for violating rules

Reserve Bank of India (RBI) has imposed a hefty fine of INR 3 crores on ICICI Bank for violating certain rules of RBI. ICICI Bank contravened certain directions related to ‘Prudential Norms’ for Classification, Valuation and Operation of Investment Portfolio by Banks in July, 2015. The bank has been charged for shifting securities in May, 2017 from HTM (Held To Maturity) category to AFS (Available For Sale) without permission. ICICI Bank violated Section 47 A (1) (c) read with Section 46 (4) (i) of the Banking Regulations Act, 1949.