Banking Current Affairs 2014 17

General Knowledge Today
Banking Current Affairs: October-2014

to April-2017
Published Date: May 1, 2017

Published by: GKTODAY.IN
GKToday 2017 | All Rights Reserved
Suitable for Bank Probationary, Bank Clerical, IBPS Recruitment, NDA, CDS,
LIC/GIC, Railways, SSC, UGC and state / UPSC preliminary Examination.
Banking Current Aairs: October-2014 to April-2017
Contents
RBI asks ARCs to have a minimum net corpus of Rs100 crore by 2019 ............................................... 3
Asset Reconstruction companies (ARCs) ............................................................................................... 3
India's Forex reserves increase by $1.25 billion ............................................................................................. 3
Components .................................................................................................................................................. 3
RBI issues Revised Prompt Corrective Action (PCA) framework for NPAs .......................................... 4
Need for revised framework ..................................................................................................................... 4
Salient guidelines of revised PCA ............................................................................................................. 4
Pradhan Mantri Mudra Yojana crosses loan targets .................................................................................... 5
Signicance ................................................................................................................................................... 5
Pradhan Mantri Mudra Yojana (PMMY) ............................................................................................... 5
Government sets up Inter-Disciplinary Committee to examine framework for Virtual Currencies ..
6
Need ............................................................................................................................................................... 6
Composition ................................................................................................................................................. 6
Mandate ......................................................................................................................................................... 6
Align pay in PSBs to that in CPSEs: BBB ....................................................................................................... 6
RBI keeps repo rate unchanged in rst monetary policy review of 2017-18 ........................................ 7
Policy Rates ................................................................................................................................................... 7
64th National Film Awards .............................................................................................................................. 8
About National Film Awards .................................................................................................................. 10
RBI Board clears proposal to introduce Rs 200 notes .............................................................................. 10
Five State Banks, Bharatiya Mahila Bank merge with SBI ....................................................................... 10
Government lowers interest rates on Small saving schemes by 0.1% .................................................... 11
Cabinet approves amendments to NABARD Act, 1981 ............................................................................ 12
About National Bank for Agriculture and Rural Development (NABARD) ................................. 12
Vodafone, Idea merge to create India's largest, world's 2nd largest telecom company .................... 13
RBI sets up inter-disciplinary standing committee to review cyber threats .......................................... 14
RBI allows multilateral FIs to invest in masala bonds ................................................................................ 15
Union Cabinet approves merger of SBI, 5 associate banks ...................................................................... 15
Government to come out with 2nd PSB recapitalisation plan Indradhanush 2.0 ............................... 16
About Basel III (Third Basel Accord) ................................................................................................... 17
RBI to set up committee on strengthening cyber security ....................................................................... 17
RBI to set up separate Enforcement Department ....................................................................................... 18
RBI keeps key rates unchanged in 6th bi-monthly monetary policy review ........................................ 18
IndiaPost gets payments bank licence from RBI ......................................................................................... 19
About Payments banks ............................................................................................................................. 19
PM Narendra Modi inaugurates Indias rst international exchange at GIFT city ............................. 20
16th meeting of FSDC held in New Delhi .................................................................................................. 20
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About Financial Stability and Development Council .......................................................................... 21

RBI appoints Surekha Marandi as executive director ................................................................................ 22
About Surekha Marandi .......................................................................................................................... 22
RBI extends period of enhanced Prepaid Payment Instruments limit .................................................... 22
About PPI .................................................................................................................................................... 22
Government proposes setting up Financial Data Management Centre ................................................ 23
Viral V Acharya appointed as RBI Deputy Governor ................................................................................ 23
About Viral V Acharya ............................................................................................................................. 23
ICICI Bank launches EazyPay app for Merchants ..................................................................................... 24
RBI opposes proposal to set up separate payments regulator ................................................................ 24
RBI keeps key rates unchanged in fth bi-monthly monetary policy review ....................................... 25
Policy Rates ................................................................................................................................................. 25
Banks to bear liability in case of online security breach: RBI .................................................................. 26
CERT-In warns micro-ATMs against malware attacks ........................................................................... 26
RBI to introduce new 20 & 50 rupee currency notes .............................................................................. 27
Gross NPAs of PSBs touch over 6 lakh crores in July-September 2016 ............................................. 28
Akodara becomes Indias rst Digital Village ............................................................................................. 29
RBI introduces incremental CRR to manage excess liquidity in banking system ................................ 29
Airtel launches Indias rst Payments Bank service in Rajasthan ............................................................ 30
NABARD to disburse Rs 21,000 crore to farmers for Rabi Season ....................................................... 31
About National Bank for Agriculture and Rural Development (NABARD) ................................. 31
RBI doubles cap on PPIs to Rs. 20,000 ....................................................................................................... 32
RBI proposes Islamic window in conventional banks ............................................................................... 32
16 of 22 PSBs skip paying dividends to Government due to mounting NPAs .................................... 33
Special Task Force led by SS Mundra formed to recalibrate ATMs .................................................... 34
City Union Bank launches Indias rst banking robot Lakshmi in Chennai ......................................... 34
RBI issues clarications on Hedging for External Commercial Borrowings ........................................ 35
RBI issues new series of Rs 500 and Rs 2,000 currency notes ............................................................. 36
Rs. 500, Rs. 1,000 notes no longer legal tender ........................................................................................ 37
RBI appoints M Rajeshwar Rao as new Executive Director .................................................................... 37
About M Rajeshwar Rao ......................................................................................................................... 38
HCC becomes rst rm to get debt recast under RBIs S4A Scheme ................................................. 38
RBI allows startups to raise $3 million via ECBs annually ....................................................................... 39
SBI declares Silchar as its 5th zone in North East ..................................................................................... 40
Four PSBs may struggle to pay AT1 bond coupons ................................................................................. 40
Payment Banks need RBIs Prior product approval ................................................................................... 41
RBI Panel moots easing bank branch norms ............................................................................................... 41
RBI cuts repo rate by 25 bps in 4th Bi-monthly Monetary Policy Statement ..................................... 42
SBI becomes rst domestic bank to open branch in Yangon, Myanmar ............................................. 43
Union Government noties constitution of Monetary Policy Committee ............................................ 43
3
About Monetary Policy Committee (MPC) ........................................................................................ 44

Union Government appoints three economists to Monetary Policy Committee ................................ 44
About Monetary Policy Committee (MPC) ........................................................................................ 45
ICICI Bank: First bank to introduce Software Robotics for power banking operations .................. 46
Unied Payments Interface becomes operational ...................................................................................... 46
About Unied Payments Interface (UPI) ............................................................................................. 47
National Payments Corporation of India (NPCI) .............................................................................. 47
RBI asks banks to extend loans to women SHGs at 7% rate ................................................................. 47
About National Rural Livelihoods Mission (NRLM)-Aajeevika ...................................................... 48
Urjit Patel appointed as 24th Governor of RBI .......................................................................................... 48
About Urjit Patel ....................................................................................................................................... 48
India Post Payments Bank Limited incorporated ....................................................................................... 49
About India Post Payments Bank (IPPB) ............................................................................................. 49
SBI board approves merger of 5 associate banks, BMB with itself ....................................................... 50
Union Cabinet approves liberalization of FDI norms for NBFCs ........................................................... 50
Dinesh Kumar Khara appointed as Managing Director of SBI ............................................................... 51
NPA of commercial banks increased by around 4%: Government ........................................................ 51
RBI keeps policy rates unchanged in 3rd bi-monthly monetary policy review ................................... 52
RBI constitutes Tarun Ramadorai committee to look at household nances in India ....................... 53
Union Government xes an ination target of 4 percent for ve years ............................................... 54
RBI launches portal to curb illegal money ................................................................................................... 54
7 Indian companies on 2016 Fortune 500 list ........................................................................................... 55
RBI sets up Sudarshan Sen-headed Working Group on Fin Tech and Digital Banking ................... 55
SBI launches SBI Mingle, a social media banking platform .................................................................... 56
Sudarshan Sen appointed Executive Director of RBI ................................................................................ 57
About Sudarshan Sen ............................................................................................................................... 57
SBI secures $625 million from World Bank for solar programm ......................................................... 57
RIL, SBI ink Subscription and Shareholders' Agreement for payments bank JV ................................ 58
About Payments banks ............................................................................................................................ 58
NS Vishwanathan appointed as deputy governor of RBI ......................................................................... 58
About NS Vishwanathan ......................................................................................................................... 58
AIIB approves rst loans for projects in four countries ........................................................................... 59
ADB approves $500 million loan for bridge over Ganga River in Bihar ............................................. 60
About Asian Development Bank (ADB) ............................................................................................. 60
SBI launches IT Innovation Start-up Fund to assist start-ups ................................................................ 60
Union Cabinet approves merger of 5 associate banks with SBI ............................................................. 61
RBI introduces Scheme for Sustainable Structuring of Stressed Assets ................................................ 61
Axis Bank launches India's rst certied green bond at London Stock Exchange ............................. 62
RBI rates unchanged in 2nd bi-monthly monetary policy review for year 2016-17 .......................... 62
Policy Rates ................................................................................................................................................. 63
4
Reserve Ratios ............................................................................................................................................ 63

Other forecast ............................................................................................................................................ 63
BRICS bank to issue rst Yuan-denominated bonds ................................................................................ 63
Dr. R Seetharaman conferred with 2016 Green Economy Visionary Award ...................................... 63
About Dr. R Seetharaman ...................................................................................................................... 64
Islamic Development Bank to open its rst branch in India at Ahmedabad ....................................... 64
About Islamic Development Bank ........................................................................................................ 64
HDFC Bank launches SmartUp for startups ............................................................................................... 65
SBI seeks to take over 5 associate PSBs, Bhartiya Mahila Bank ............................................................. 65
ICICI Bank launches country's 1st contactless credit card for SMEs .................................................... 66
Indian Air Forces Electronic Maintenance Management System launched ........................................ 66
RBI to issue Rs 1000 banknotes with inset letter R .................................................................................. 67
ICICI Bank signs MoU with BRICSs New Development Bank ............................................................. 67
About New Development Bank ............................................................................................................ 68
Lok Sabha passes Insolvency and Bankruptcy Code, 2015 ..................................................................... 68
NABARD partners with Germany for food security initiative ................................................................ 69
RBL becomes rst private sector bank to open dedicated branch for startups .................................. 69
About RBL Bank ....................................................................................................................................... 70
BRICS New Development Bank approves rst loans for renewable energy projects ....................... 70
About New Development Bank ............................................................................................................ 70
For more details: New Development Bank .......................................................................................... 71
Hero group co-founder Satyanand Munjal passes away .......................................................................... 71
About Satyanand Munjal .......................................................................................................................... 71
India world's largest remittance recipient in 2015: World Bank ............................................................. 71
NPCI launches Unied Payments Interface ................................................................................................. 72
RBI gives nod to Bharti Airtel's payments Bank Unit ............................................................................... 72
DCB Bank launches Indias rst Aadhaar-based ATM ............................................................................ 73
RBI cuts repo rate by 25 basis points to 6.5% ........................................................................................... 73
ICICI Bank launches NFC-based contactless mobile payment solution Touch & Pay ...................... 74
RBI inks information exchange MoU with Bank of Israel ....................................................................... 74
SBI granted operating licence by Myanmar ................................................................................................ 75
SBI Launches SBI e Smart SME to offer Ecommerce Loan .................................................................... 75
About SBI e-Smart SME ......................................................................................................................... 75
SBI opens Japan Desk in New Delhi ............................................................................................................ 75
India's Dinesh Sharma elected to board of directors of AIIB ................................................................. 76
SBI Launches First Dedicated Branch For Startups - SBI InCube ......................................................... 76
ICICI Bank partners with FINO PayTech for payments bank space .................................................... 77
Andhra Bank launches IMPS for money transfer ...................................................................................... 78
Immediate Payment Service (IMPS) ..................................................................................................... 78
RBI imposes Rs 1 crore ne on State Bank of Travancore ..................................................................... 78
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NABARD inks MoU with NRSC for monitoring Watershed Projects .................................................. 79
Recommendations of Deepak Mohanty Committee on Medium-term Path on Financial Inclusion ..
79
RBI extends deadline to exchange pre-2005 notes to June 30, 2016 .................................................. 80
RBI keeps repo rate unchanged in 5th bi-monthly monetary policy review ........................................ 81
RBI allows Indian corporate to issue offshore rupee-denominated bonds outside India ................... 81
Samiran Chakraborty appointed as Chief Economist of Citibank India ............................................... 82
About Citibank India ................................................................................................................................ 82
RBI allows banks to x interest rates on gold deposit scheme ............................................................... 82
RBI, UAE Central Bank ink MoU for supervisory information exchange ............................................ 83
RBI formed Financial Inclusion Fund with Rs. 2000 crore corpus ....................................................... 83
RBI lowers repo rate by 50 basis points to 6.75 per cent ...................................................................... 84
RBI approves 10 entities to set up Small Finance Banks .......................................................................... 85
Gujarat tops in ease of doing business in India: World Bank Report .................................................... 85
RBI, Nepal Rastra Bank ink MoU for supervisory information exchange ............................................ 86
Union Cabinet allows 100 per cent FDI under automatic route for white label ATMs ................... 86
White labeled ATMs ................................................................................................................................ 86
India to join UNs Better Than Cash Alliance to achieve nancial inclusion ....................................... 87
Indian Bank launches IndPay mobile app service ...................................................................................... 87
About Indian Bank ................................................................................................................................... 87
Bandhan, rst micro nance company to start operation as a commercial bank .............................. 87
R Gandhi committee of RBI recommends conversion of UCBs into regular banks .......................... 88
Government Issues Norms for Selection of CEOs and MDs of Smaller PSU Banks ........................ 89
Government launched education loan portal for students seeking loans ............................................. 90
About the portal: ....................................................................................................................................... 90
Reserve Bank of India granted in-principle approval to 11 applicants to start a payments bank ... 91
The selected applicants are: ..................................................................................................................... 91
As per RBI notication for Payment Banks: ........................................................................................ 91
LIC launches maiden unit linked insurance plan (ULIP) .......................................................................... 92
Finance Minister launches two funds for promoting MSMEs and Start-ups ...................................... 92
ICICI Bank launches Smart Vault digital locker facility .......................................................................... 93
Key features of Smart Vault ................................................................................................................... 93
SBI launches mobile wallet app 'Buddy' ...................................................................................................... 93
Key features of SBI Buddy ...................................................................................................................... 94
SBI Foundation .......................................................................................................................................... 94
IDBI appointed Kishor Piraji Kharat as its MD and CEO ........................................................................ 94
About Industrial Development bank of India (IDBI): ....................................................................... 94
RBI suspended licence of seven non-banking nance companies (NBFCs) ........................................ 95
RBI role in issuing licence to NBFCs: ................................................................................................... 95
Union Government appoints two private sector professionals to head BoB, Canara Bank ............. 95
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Union Government unveils Indradhanush Mission for PSBs .................................................................. 96

Facts about Indradhanush Mission ....................................................................................................... 96
Union Government to form Bank Board Bureau ...................................................................................... 97
Facts about Bank Board Bureau ............................................................................................................ 97
Axis Bank launched the First Multi-Currency Contactless Card service in India ............................... 97
How does Axix Banks Contactless Card works? .............................................................................. 98
IRDAI allows Banks to tie up with insurers ................................................................................................ 98
About Bancassurance model .................................................................................................................. 98
ICICI Bank launches Saral-Rural Housing Loan Scheme for weaker sections ................................. 98
Union Government launches Suraksha Bandhan drive in Mission Mode ............................................ 99
RBI allows banks to merge, shift or close branches in urban areas ...................................................... 99
Lok Sabha passes Negotiable Instruments (Amendment) Bill, 2015 ................................................... 100
About Negotiable Instruments Act, 1881 ........................................................................................... 101
HSBC India plans to launch green bonds ................................................................................................. 101
RBI to issue Rs 10 coins to mark International Yoga Day ...................................................................... 101
Features of the coin ................................................................................................................................. 101
Kotak bank launches 'Kotak Bharat' mobile banking app for 'un-banked' regions ......................... 102
RBS to sell private banking business in India to Sanctum Wealth ........................................................ 103
IndusInd Bank acquires RBS' bullion nancing business for Rs 4,100 crore .................................... 103
CSC and HCL forms joint venture to provide technology services, solutions to banks .................. 104
About CSC: .............................................................................................................................................. 104
About HCL: .............................................................................................................................................. 104
IDFC gets banking licence from RBI .......................................................................................................... 104
Anand Krishnamurthy appointed CEO and MD of CSB bank ............................................................. 105
KFC partners IRCTC, to serve meals on trains ........................................................................................ 105
BRICS bank starts its operations from Shanghai, China ........................................................................ 105
About New Development Bank (NDB) ............................................................................................. 106
RBI, Central Bank of Sri Lanka ink currency swap agreement ............................................................ 106
RBI constitutes Deepak Mohanty Committee to frame action plan on nancial inclusion ............ 107
NABARD to provide Rs 30,000 crore credit to farmers for irrigation .............................................. 107
eMudhra launches eSign Services ............................................................................................................... 108
About eMudhra ....................................................................................................................................... 108
China nominates Jin Liqun for President of AIIB ..................................................................................... 108
For more information on AIIB: Click here ........................................................................................ 109
Union Government appoints Sriram Kalyanaraman as MD and CEO of NHB ................................ 109
About National Housing Bank (NHB) ............................................................................................... 109
BSNL launches mobile wallet service Speed Pay .................................................................................... 110
50 nations, including India sign 60-article agreement on China-led AIIB ......................................... 110
Facts about Asian Infrastructure Investment Bank (AIIB) ............................................................... 111
Australia to join China led AIIB ..................................................................................................................... 111
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About Asian Infrastructure Investment Bank (AIIB) ........................................................................ 111

RBI extends deadline for exchanging pre-2005 currency notes till December 2015 ....................... 112
Reasons for withdrawing pre-2005 notes from circulation: .......................................................... 112
HDFC Bank launches 10-second paperless instant loan Scheme .......................................................... 112
Bangladesh Supreme Court uphelds death sentence of Ali Ahsan Muhammad Mujahid ................ 113
RBI allows NRIs to subscribe chit funds ..................................................................................................... 113
Mahendra Kumar Sharma appointed as non-executive Chairman of ICICI Bank ............................ 114
Kotak Mahindra, ING Bank ink MoU for cross-border business ......................................................... 114
RBI lowers repo rate to 7.25 per cent ......................................................................................................... 115
Meena Hemchandra appointed as Executive Director of RBI ................................................................ 115
China develops worlds rst ATM with Facial Recognition Technology ............................................ 116
SBI launches Online Customer Acquisition Solution for loans .............................................................. 116
Four Indians among Forbes worlds 100 most powerful women ......................................................... 117
ICICI bank launches voice password facility for users ............................................................................ 117
SBI inks MoU with Amazon for payment, commerce solutions ........................................................... 118
ICICI Bank's rst Chinese branch inaugurated in Shanghai .................................................................. 118
SBI launches sbiINTOUCH, NFC-enabled Contactless Debit and Credit Cards ............................... 119
Lok Sabha passes Negotiable Instruments (Amendment) Bill, 2015 .................................................... 119
About Negotiable Instruments Act, 1881 ........................................................................................... 120
KV Kamath named as rst President of New Development Bank of BRICS nations ...................... 120
About Kundapur Vaman Kamath ........................................................................................................ 120
About New Development Bank (NDB) ............................................................................................. 120
Indian Army and Bank of India ink MoU on Defence Salary Package ................................................ 121
SBI launches RuPay Platinum debit card ..................................................................................................... 121
Parliament passes Regional Rural Banks (Amendment) Bill, 2014 ....................................................... 122
Key facts about Regional Rural Banks (Amendment) Bill, 2014 .................................................. 122
Bharatiya Mahila Bank wins Asian Banker Achievement Award 2015 ............................................... 122
About Bharatiya Mahila Bank (BMB) ................................................................................................. 123
Bank of Baroda ties up with UAE Exchange for instant money transfer ............................................ 123
ICICI Bank launches Tap-n-Pay, a near-eld communications-enabled payment service .............. 123
Key features of Tap n Pay ..................................................................................................................... 124
PM Narendra Modi launches MUDRA Bank to provide credit to small entrepreneurs .................. 124
Dena Bank inks MoU with Life Insurance Corporation to provide insurance cover ....................... 125
RBI signs $400 million currency swap pact with Sri Lanka .................................................................. 125
India Railways launches RuPay pre-paid debit card service ................................................................... 126
Union Government appoints 9 Executive Directors in Public Sector Banks ...................................... 126
NPCI links 15 crore bank accounts with Aadhaar ................................................................................... 127
About National Payments Corporation (NPCI) ................................................................................ 127
RBI cuts repo rate by 25 basis points to 7.5 per cent ............................................................................. 127
Union Government and RBI sign agreement to keep ination below 6% ......................................... 128
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State Bank of India and Indian Army signs MoU on Defence Salary Package ................................. 128
CCI gives nod to Kotak-ING Vysya Bank merger ................................................................................... 129
ICICI Bank launches India's rst digital bank Pockets ............................................................................ 130
Union Government to infuse Rs. 6,990 crore in nine public sector banks ....................................... 130
RBI Doubles the FOREX Remittance Limit under Liberalised Remittance Scheme (LRS) .............. 131
Background ............................................................................................................................................... 131
RBI keeps key rates unchanged but changes statutory liquidity ratio .................................................. 131
RBI constitutes high level panel on urban cooperative banks (UCB) .................................................. 132
Scientist V K Saraswat joins as full-time member of NITI Aayog ........................................................ 132
RBI signs an information sharing agreement with Brazils Central Bank ........................................... 133
Padma Awards 2015 ....................................................................................................................................... 133
2015 Padma Vibhushan Awards .......................................................................................................... 134
2015 Padma Bhushan Awards .............................................................................................................. 134
2015 Padma Shri Awards ...................................................................................................................... 135
RBI lifts ban on carrying 1,000, 500 bank notes to and from Nepal, Bhutan .................................. 140
SBI signs 100 mn euro loan pact with EIB ............................................................................................... 140
Pradhan Mantri Jan Dhan Yojana features into Guinness book of World Records ......................... 140
RBI cuts repo rate by 25 basis point ............................................................................................................ 141
RBI governor Raghuram Rajan wins Governor of the Year award ...................................................... 141
Kotak Mahindra-ING Vysya merger gets shareholders nod ................................................................. 142
ICICI Bank launches Indias rst contactless credit and debit cards .................................................... 143
ICICI Bank Launches Digital Village Project in Akodara Village of Gujarat ...................................... 143
Key facts about ICICI Banks Digital Village Project ....................................................................... 143
RBI relaxes KYC norms for Non-Banking Financial Companies (NBFC's) ....................................... 144
RBI signs an information sharing agreement with US banking regulators ........................................ 144
Government splits Chairman & MD post in PSU banks and names chiefs for 4 PSU banks ........ 145
RBI extends deadline for withdrawal of pre-2005 currency notes till 30 June 2015 ...................... 146
Lok Sabha passes Regional Rural Banks (Amendment) Bill, 2014 ...................................................... 146
RBI releases nal guidelines for the Bharat Bill Payment System (BBPS) .......................................... 147
Key Facts ................................................................................................................................................... 147
Kotak mahindra Bank to acquire ING Vaisya Bank ................................................................................ 148
Government re-launches Kisan Vikas Patra .............................................................................................. 148
Government to revive District Central Cooperative Banks (DCCBs) in four states ........................ 149
Why Government want to save these DCCBs? ................................................................................ 149
How will government infuse this amount? ........................................................................................ 150
Conditionalities are: ................................................................................................................................. 150
Implications of this decision .................................................................................................................. 150
Government orders to merge NSEL to parent rm FTIL ...................................................................... 150
Public interest ............................................................................................................................................ 151
Challenge by stakeholders ...................................................................................................................... 151
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Ination drops to 2.38% , ve-year low ..................................................................................................... 151

Breakdown of Ination for the month of September ...................................................................... 151
Comparison with ination of previous months and years .............................................................. 152
Change in rate by RBI ............................................................................................................................ 152
India's Current Foreign Exchange Reserves: $311.427 billion ............................................................... 152
Components of Foreign Reserves ........................................................................................................ 153
World Bank Launches Global Infrastructure Facility (GIF) ................................................................... 153
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RBI asks ARCs to have a minimum net corpus of Rs100 crore by

2019
May 1 2017
The Reserve Bank of India (RBI) has asked all the existing asset reconstruction companies (ARCs) to
have a minimum net owned fund (NOF) of Rs100 crore by March 2019. This decision has been
taken by RBI in accordance with its last bi-monthly monetary policy in which it had proposed to
stipulate a minimum NOF of Rs100 crore taking into consideration the enhanced role and greater
cash based transactions carried out by ARCs.
As per amended SARFAESI Act, 2016, ARCs cannot carry on the business of securitisation or asset
reconstruction without having NOF of not less than Rs 2 crore or any other amount stipulated by
the RBI. As per the notification of RBI,
the existing ARCs not meeting the minimum NOF criteria need to achieve the minimum NOF of
Rs100 crore latest by 31 March 2019.
Asset Reconstruction companies (ARCs)
ARC is a company registered under Section 3 of the Securitization and reconstruction of Financial
Assets and Enforcement of Security Interest (SARFAESI) Act, 2002. ARCs are regulated by the RBI.
They are the specialised agencies with a main role of resolving the stressed assets issue of the Indian
banking system. They are involved in buying bad loans from Indian banks to turn them around.
ARCs are similar to the asset management companies present in countries like Malaysia, Korea and
several other countries. Narsimham Committee II (1998) proposed setting up of ARCs on the
similar lines with that of asset management companies present globally. The main advantage of
ARCs is they help the banks to concentrate on normal banking operations rather than dealing with
stressed assets
India's Forex reserves increase by $1.25 billion
Apr 29 2017
According to the Reserve Bank of Indias weekly statistical supplement, Indias foreign exchange
(Forex) reserves have increased by $1.25 billion to reach $371.13 billion from $369.88 billion as on
April 21, 2017. The current reserves are just short of a lifetime high of USD 371.99 billion reached in
the week to September 30, 2016.
Components
The components of Indias Foreign Exchange Reserves include:
Foreign currency assets (FCAs)
Gold
Special Drawing Rights (SDRs)
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RBIs Reserve position with International Monetary Fund (IMF)

FCAs constitute the largest component of the Forex Reserves. It was augmented by $1.23 billion to
$347.48 billion as on April 21, 2017. FCAs consist of US dollar and other major non-US global
currencies. It also comprises of investments in US Treasury bonds, bonds of other selected
governments, deposits with foreign central and commercial banks.
The gold reserves stand at $19.86 billion.
SDRs value has increased $5 million to $1.45 billion.
RBIs reserve position with the IMF stands to $2.33 billion.
RBI issues Revised Prompt Corrective Action (PCA) framework for
NPAs
Apr 15 2017
RBI has come up with a notification titled Revised Prompt Corrective Action (PCA) framework for
banks. The revised framework would apply to all banks operating in India including small and
foreign banks. The new set of provisions will be effective from April 1 based on the financials of
banks as of March 2017. The revised framework will override the existing PCA framework. The
revised framework will be again reviewed after three years.
Need for revised framework
RBI had promised to revise the PCA framework at its first monetary policy review of the current
fiscal held on April 6, as the bad loans including those already restructured reached USD 80 billion or
15% of the system as of March 2017. As per the estimates, the NPAs of state-run banks reached Rs
6.3 lakh crore as of September compared to Rs 5.5 lakh crore at the end of June 2016.
Salient guidelines of revised PCA
Capital, Asset Quality and profitability would be the basis on which the banks would be monitored.
Banks would be placed under PCA framework depending upon the audited annual financial results
and RBIs supervisory assessment. RBI may also impose PCA on any bank including migration from
one threshold to another if circumstances so warrants. RBI has defined three kinds of risk thresholds
and the PCA will depend upon the type of risk threshold that was breached.
If a bank breaches the risk threshold, then mandatory actions include the restriction on dividend
payment/remittance of profits, restriction on branch expansion, higher provisions, restriction on
management compensation and directors fees. Specifically, the breach of Risk Threshold 3 of CET1
(common equity tier 1) by a bank would call for resolution through tools like amalgamation,
reconstruction, winding up among others.
RBI in its discretion can also carry out the following actions:
Recommend the bank owner be it government/promoters/parent of foreign bank branch to
4
bring in new management/board.

Advise banks board to activate the recovery plan as approved by the supervisor.
Advise banks board to carry out a detailed review of business model, the profitability of
business lines and activities, assessment of medium and long-term viability, balance sheet
projections among others.
Review short term strategies and medium-term business plans and carry out any other
corrective actions like the removal of officials and supersession or suppression of the board.
Pradhan Mantri Mudra Yojana crosses loan targets
Apr 14 2017
Loans disbursed under the Pradhan Mantri Mudra Yojana (PMMY) have crossed its target of Rs 1.8
lakh crore in the financial year 2016-17. Loans extended currently stands at Rs 1.80,087 crore. Of
this, a majority of the loans were awarded by banks (Rs 1.23 lakh crore). Non-banking financial
institutions have lent about Rs 57,000 crore. In this years budget, Rs 2.44 lakh crore has been set as a
target for Mudra loans for the financial year 2017-18.
Significance
Significantly, out of the 4 crore borrowers, over 70% of the borrowers were women. Around
20% of the borrowers belonged to Scheduled Caste category, 5% belonged to Scheduled Tribe
category and 35% belonged to other backward classes.
Robust growth in bank loans to unfunded and underfunded segments of the society indicates
that this category of borrowers has emerged as a key driver of demand for credit.
Non-insistence of collateral/guarantor, simple documentation and quick processing are the
three praiseworthy attributes of the MUDRA loans.
Pradhan Mantri Mudra Yojana (PMMY)
The objective of this scheme to launch a Micro Units Development and Refinance Agency
(MUDRA) Bank to support the entrepreneurs of Scheduled castes, scheduled tribes and other
backward classes entrepreneurs in the MSME sector. The scheme was launched on April 8, 2015.
MUDRA cards are the unique feature of this scheme. The card permits access to working capital
through ATMs and card machines.
MUDRA loans can be availed for non-agricultural activities upto Rs 10 lakh and for activities allied
to agriculture such as dairy, poultry bee keeping etc. The scheme provides loans to micro units in
three categories ranging from Rs. 50,000 to Rs. 10 lakh.
Shishu: Loan up to Rs 50,000
Kishore: Loan ranging from Rs 50,000 to Rs 5 lakh
Tarun: Loan ranging from Rs 5 lakh to Rs 10 lakh.
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Government sets up Inter-Disciplinary Committee to examine

framework for Virtual Currencies
Apr 13 2017
The Union government has constituted a time-bound inter-disciplinary committee to come up with
an action plan for dealing with virtual currencies so as to fix the regulatory gaps in the existing
framework governing virtual currencies. The committee is required to submit its report within three
months.
Need
The circulation of virtual currencies, of late, has become a cause of concern. With respect to the
virtual currencies, Reserve Bank of India (RBI) has also cautioned the users, holders and traders of
Virtual currencies about the potential financial, operational, legal, customer protection and security
related risks through press releases in December 2013 and February 2017.
Virtual Currencies, also called as digital/crypto-currencies, are a type of unregulated

digital money that is neither issued by a central bank/public authority, nor is necessarily
attached to a at currency, but is used and accepted among the members of a specic
virtual community. They are capable of being transferred, stored or traded
electronically. The examples of virtual currencies are Bitcoin, Litecoin, Darkcoin,
Peercoin, Dogecoin, Primecoin etc.
Composition
The nine-member inter-disciplinary committee will be chaired by Dinesh Sharma, special secretary
in the economic affairs department. The committee will also have representatives from the
Department of Economic Affairs, Department of Financial Services, Department of Revenue,
Ministry of Home Affairs, IT ministry, Reserve Bank of India, NITI Aayog and State Bank of India.
Mandate
The committee is mandated to:
Take stock of the current status of Virtual Currencies both in India and globally;
Examine the present global regulatory and legal structures governing Virtual Currencies;
Suggest measures for tackling the issues related to Virtual Currencies including issues like
consumer protection, money laundering etc;
Examine other relevant issues related to Virtual Currencies.
Align pay in PSBs to that in CPSEs: BBB
Apr 11 2017
The Bank Board Bureau (BBB) has recommended that Government should bring in reforms in the
compensation process in public sector banks (PSBs) on the lines of Central Public Sector Enterprises
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(CPSEs).
BBB has suggested compensation reforms in PSBs so that best practices can be introduced on the
lines already prevalent in CPSEs.
It will play important role in attracting high-quality talent for non-executive directors and chairmen.
It will also maintain a level-playing field with the private sector with respect to role, responsibility
and remuneration.
About Bank Board Bureau (BBB)
BBB is the super authority (autonomous body) of eminent professionals and officials for
public sector banks (PSBs). It had replaced the Appointments Board of Government.
It is set up in April 2016 as part of seven point Indradhanush Mission to revamp the Public
Sector Banks (PSBs).
Functions: Give recommendations to Government for appointment of full-time Directors as
well as non-Executive Chairman of PSBs.
Give advice to PSBs in developing strategies for raising funds through innovative financial
methods and instruments to deal with stressed assets.
Guide banks on mergers and consolidations and also ways to address the bad loans problem
and among other issues.
Composition of BBB: It has three ex-officio members and three expert members, in addition
to the Chairman. Former Comptroller and Auditor General (CAG) Vinod Rai is first and
incumbent Chairman of BBB.
RBI keeps repo rate unchanged in first monetary policy review of
2017-18
Apr 7 2017
The Reserve Bank of India (RBI) in its first bimonthly monetary policy review of the financial year
2017-18, has kept the key policy rate, the repo rate unchanged, but raised reverse repo rate by 25 bps
to 6%, from 5.75%.
Decision in this regard was taken by monetary policy committee (MPC) which decides interest
rates and all six members of the MPC voted in favour of the decision.
Policy Rates
Repo rate: It is the rate at which RBI lends to its clients generally against government
securities. It was unchanged at 25%.
This was the third successive quarterly review in which the RBI has kept its repo rate
unchanged at 6.25%.
Reverse Repo Rate: It is the rate at which banks lend funds to the RBI. It was raised the
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Reverse Repo (RR) rate by 25 bps to 6%.

Marginal Standing Facility (MSF) Rate: It is rate at which the scheduled banks can borrow
funds overnight from RBI against government securities. It is a very short term borrowing
scheme for scheduled banks. It was cut to 5%.
Bank Rate: It is rate charged by the central bank for lending funds to commercial banks. It
was set to 5%.
It influences lending rates of commercial banks. Higher bank rate will translate to higher
lending rates by the banks.
Cash Reserve Ratio (CRR): It is the amount of funds that the banks have to keep with the
RBI. It was unchanged at 4%. The RBI uses the CRR to drain out excessive money from the
system.
Statutory Liquidity Ratio (SLR): It was unchanged 20.50%. It is amount that banks have to
maintain a stipulated proportion of their net demand and time liabilities (NDTL) in the form
of liquid assets like cash, gold and unencumbered securities, treasury bills, dated securities etc.
Key Facts
The policy decision taken by RBI was consistent with its neutral policy stance with the
objective of achieving the medium-term target for retail inflation i.e. 4%.
The RBI held that the future course of monetary policy would largely depend on incoming
data on how macroeconomic conditions are evolving.
It has set its inflation projection to an average of 4.5% in the first half of 2017-18 and 5% in
the second half. It has kept GVA growth projection unchanged at 7.4% for FY18 as compared
with 6.7% in FY17.
The central bank also allowed banks to invest in Real Estate Investment Trusts (REITs) and
Infrastructure Investment Trusts (InvITs) in a bid to spur investments in core infrastructure
sectors.
64th National Film Awards
Apr 7 2017
The 64th National Film Awards for year 2016 were announced on 07 April 2017. Marathi film
Kasaav won the award in the Best Feature Film category and Fireflies in the Abyss won in the Non-
Feature Film Category.
Telugu drama film Sathamanam Bhavathi directed by Satish Vegesna was selected as the Best
Popular film providing wholesome entertainment.
Background
Over 300 films vied for the honours this year. The winners in feature films category were chosen by
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jury headed by Filmmaker Priyadarshan and winners in non-feature category were chosen by jury
headed nationally acclaimed cinematographer and writer Raju Misra.
The 64th National Film Awards in the various categories are as follows
Best Feature Film: Kasaav (Marathi).
Non-Feature Film: Fireflies in the Abyss.
Best Popular Film Providing Wholesome Entertainment: Sathamanam Bhavathi
Best Direction: Rajesh (Ventilator)
Best Actor: Akhay Kumar (Rustom)
Best Actress: Surabhi Lakshmi (Minnaminungu)
Best Supporting Actress: Zaira Wasim (Dangal)
Best Child Artist: Adhish Praveen (Kunju Daivam), Saj (Noor Islam), Manohara (Railway
Children)
Best stunt choreography: Peter Hein (Pulimurugan)
Best Childrens Film: Dhanak (Hindi)
Best Film on social issue: Pink
Best Male Playback Singer: Sundara Iyer (Joker)
Best Female Playback Singer: Thume jaake
Best Screenplay (original): Syam Pushkaran (Maheshinte Prathikaram)
Best Screenplay (adapted): Sanjay Krishnaji patel (Dashakriya)
Best Editing: Rameshwar Ventilator
Sound designer: Jayadevan (Kaadu Pookunna Neram)
Best production design: 24
Best Costume Designer: Sachin (Marathi film)
Best Environmental film including agriculture: The Tiger who crossed the line
Best Make-up Artist: MK Ramakrishna
Best Music Direction: Babu Padmanabha (Kannada Lama)
Special Mention: Kadvi Hawa (Hindi), Mukthi Bhavan (Hindi), Majirathi Keki (Assamese),
Sonam Kapoor (Neerja).
Special Jury award: Mohanlal( Pulimurugan), Janatha Garage and Munthirivallikal
Thalirkkumbol.
Best feature films in regional languages: Madipur (Tulu), Joker (Tamil), Wrongside Raju
(Gujarati), Pelli Chupulu (Telugu), Dashakriya (Marathi), Bisarjan (Bengali), Maheshinte
Prathikaram (Malayalam), Ke Sara Sara (Konkini), Reservation (Kannada) and Neerja
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(Hindi).
About National Film Awards
The National Film Awards are most prominent film award ceremonies in India. It was
established in 1954. Since then awarded annually.
Winners in different categories of these awards are selected by the national panel of Juries
appointed by Union Government. These awards are presented by the President of India in
the official ceremony.
RBI Board clears proposal to introduce Rs 200 notes
Apr 5 2017
The board of the Reserve Bank of India (RBI) has cleared a proposal to introduce banknotes of Rs200
denomination. The decision was taken at the RBI board meeting held in Mumbai in March 2017.
The process of printing the new Rs 200 notes is likely to begin after June 2017 once the government
officially approves the new denomination.
Earlier in November 2016, RBI had announced the withdrawal of Rs 500 and Rs 1,000 currency
notes, amounting to around 86% of currency in circulation of Rs 17.9 trillion. Since then, it has
replaced these denominations with the new Rs 2,000 and redesigned Rs 500 bank notes.
RBI board: It has 14 members including governor and four deputy governors. The board also has
economic affairs secretary and financial services secretary as its members.
Five State Banks, Bharatiya Mahila Bank merge with SBI
Apr 3 2017
Five associates and the Bharatiya Mahila Bank have officially merged with countrys largest lender
State Bank of India (SBI). With this merger, SBI joins the league of top 50 banks globally in terms of
assets.
The five associate banks are: State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State
Bank of Mysore, State Bank of Patiala and State Bank of Travancore.
Key facts
With this merger, SBIs market share has increased to 22.5-23% from 17% with total business
of over 37 lakh crore rupees.
The merged entity now has a deposit base of more than Rs. 26 lakh-crore and advances level
of Rs 18.50 lakh crore accounting for one-fourth of the deposit and loan market in the
country .
SBI now has 2.77 lakh employees, 50 crore customers and more than 25,000 branches and
58,000 ATMs. Its total customer base of the SBI now has reached to 37 crore across the
country.
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Post-merger, all the customers of associate banks will now enjoy the benefits of a wide array
of digital products and services offered by SBI.
Comment
The merger will help SBI to rationalise its branch network by relocating some of the branches to
maximise reach. This will also help to optimise its operations and improve profitability. It will also
bring in substantial cost saving and synergy in treasury operations. Moreover, the combined entity
will enhance the productivity, mitigate geographical risks, increase operational efficiency and drive
synergies across multiple dimensions of the SBI.
Government lowers interest rates on Small saving schemes by 0.1%
Mar 31 2017
The Union Finance Ministry has lowered interest rates on all nine small saving schemes by 0.1% for
the April-June quarter as compared to January-March quarter.
These schemes includes Public provident fund (PPF), National Savings Certificate (NSC), Kisan
Vikas Patra, Sukanya Samriddhi Account, Senior Citizens Savings Scheme. It does not include Post
Office Savings Account.
Key Facts
Investments in the PPF scheme will fetch lower annual rate of 7.9% from previous rate of 8%.
5-year National Savings Certificate will also fetch lower annual rate of 7.9% from previous
rate of 8.
Kisan Vikas Patra (KVP) investments will yield 7.6%
Sukanya Samriddhi Account Scheme, will offer 8.4% annually, from 8.5% at present.
Senior Citizens Savings Scheme will offer 8.4% for the 5-year. The interest rate is paid
quarterly.
Term deposits of 1-5 years will fetch a lower 6.9-7.7 % that will be paid quarterly.
The 5-year recurring deposit has been pegged lower at 7.2%.
However, interest on savings deposits has been retained at 4% annually.
The Ministry also has notified that rates of small saving schemes will be linked to government bond
yields. The move is expected to prompt banks to lower their deposit rate in line with the small
savings rate as offered by government. Since April 2016, interest rates of all small saving schemes are
recalibrated on a quarterly on the basis market-linked interest rates system
What are small saving schemes?
Small Savings Schemes are more of social welfare schemes .They are government run schemes that
provide higher interest rate. These schemes are meant for small investors backed by a sovereign
guarantee and tax benefits.
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Cabinet approves amendments to NABARD Act, 1981

Mar 23 2017
Union Cabinet has approved proposal for amending National Bank for Agriculture and Rural
Development Act, 1981.
Decision in this regard was taken in the Union Cabinet meeting chaired by Prime Minister Narendra
Modi in New Delhi.
Cabinet Approvals
Amendments in Act to increase authorized capital of NABARD from Rs. 5,000 crore to Rs.
30,000 crore and further increase it beyond Rs. 30,000 crore in consultation with RBI, as
deemed necessary from time to time.
It also includes certain other amendments including changes in long title and certain sections
to bring Handlooms and Medium Enterprises in NABARDs mandate.
Transfer of 0.4% equity of RBI in NABARD amounting to Rs. 20 crores to the Union
Government.
Comment
Increase in authorized capital will enable NABARD to respond to the its commitments
undertaken, in respect of Long Term Irrigation Fund (LIF) and Governments decision
regarding on-lending to cooperative banks.
It will enable NABARD to augment its business and enhance its activities, thus facilitating
promotion of integrated rural development and securing prosperity of rural areas by
generating of more employment.
The transfer of entire shareholding of RBI held in NABARD to the Union Government will
remove the conflict in RBIs role as banking regulator and shareholder in NABARD.
About National Bank for Agriculture and Rural Development (NABARD)
NABARD is an apex development bank in India. The Union Government holds the majority
stake in it.
Headquarters: Mumbai, Maharashtra.
Established: 1982 on the recommendations of Shivaraman Committee to implement the
National Bank for Agriculture and Rural Development Act, 1981.
It has been entrusted with matters concerning policy, planning and operations in the field of
credit for agriculture and other economic activities in rural areas in India.
It is active in developing financial inclusion policy and is a member of the Alliance for
Financial Inclusion.
Mandate: Facilitate credit flow for promotion and development of agriculture, small-scale
industries, cottage and village industries, handicrafts and other rural crafts.
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Support all other allied economic activities in rural areas, promote integrated and sustainable
rural development and secure prosperity of rural areas.
Vodafone, Idea merge to create India's largest, world's 2nd largest
telecom company
Mar 21 2017
Kumar Mangalam Birla-led telecommunications major Idea Cellular has agreed to merge with the
Vodafone India, Indian unit of the UK headquartered Vodafone Plc.
The blockbuster merger will create worlds second largest (after China Mobile) and Indias largest
telecom company by overtaking Bharti Airtel Ltd.
Key Facts
The merged entity will have almost 400 million customers with 35% customer and 41%
revenue market share. It will have revenue of Rs. 81,600 crore and an operating profit of
Rs.24,400 crore.
Together, Vodafone India and Idea Cellular have debt of Rs. 1.08 trillion. The merger is
expected to be completed in 2018.
The brand strategy for the new firm will be developed in due course. Kumar Mangalam Birla
will be the chairperson of the merged entity.
Vodafone will own 45.1% in the combined entity, while Kumar Mangalam Birla and other
promoters of Idea Group will own 26% and the rest will be owned by the public.
The merged entity would hold 1850 MHz, including circa 1645 MHz of liberalised spectrum
acquired through 7 auctions.
It will be capable of building substantial mobile data capacity, utilising the largest broadband
spectrum portfolio with 34 3G carriers and 129 4G carriers across the country.
The merger will be completed by 2018, subject to approvals from shareholders, creditors,
stock exchanges, SEBI, telecom department and Competition Commission of India (CCI).
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RBI sets up inter-disciplinary standing committee to review cyber

threats
Feb 28 2017
The Reserve Bank of India (RBI) has set up of an inter-disciplinary standing committee on cyber
security to review the threats inherent in the existing and emerging technology.
The 11-member committee will be headed by Meena Hemchandra, RBI Executive Director. It can
co-opt more experts and also operate through a framework of sub-committees to examine specific
issues.
Key Facts
The committee will study adoption of various security standards and protocols, interface with
stakeholders.
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Based on study, it will suggest appropriate policy interventions to strengthen cyber security
and resilience.
Background
Based on the recommendations of the Expert Panel on Cyber Security and Information Technology
Examination, RBI had issued guidelines to banks in June, 2016 mandating cyber security
preparedness for addressing cyber risks. Since then banks have taken several steps to strengthen their
defences, but the diverse and ingenious nature of cyber-attacks necessitates an ongoing review of the
cyber security landscape and emerging threats. Even the statement on Developmental and
Regulatory Policies also was issued along with the Sixth Bi-monthly Monetary Policy Statement,
2016-17 proposing constitution of inter-disciplinary Standing Committee on Cyber Security.
RBI allows multilateral FIs to invest in masala bonds
Feb 17 2017
The Reserve Bank of India (RBI) has permitted multilateral and regional financial institutions (FIs)
to invest in masala bonds, rupee denominated bonds issued by Indian entities.
This decision will allow multilateral agencies like Asian Development Bank (ADB) and BRICS led
New Development Bank (NDB) to invest in these bonds. It also provides more choices of investors
to Indian entities issuing rupee-denominated bonds abroad.
What are Masala bonds?
The Masala bonds refer to rupee-denominated bonds through which Indian entities can raise money
from foreign markets in rupee, and not in foreign currency. Basically, they are debt instruments that
are typically used by corporates to raise money from investors. The issuance of rupee denominated
bonds, Indian entity is protected against the risk of currency fluctuation, typically associated with
borrowing in foreign currency. Masala bonds also help in internationalization of the rupee and in
expansion of the Indian bond markets. These bonds are usually traded on the London Stock
Exchange (LSE) and not in India.
Note
The first Masala bond was issued by the International Finance Corporation (IFC), the investment
arm of the World Bank dubbed as Uridashi Masala Bonds in November 2014. The Housing
Development Finance Corporation (HDFC) was the first Indian company to issue rupee-
denominated bonds masala bonds on London Stock Exchange (LSE) in July 2016. International
Financial Corporation was first time issued green masala bonds in August 2015 to raise private
sector investments that address climate change in India. Canadas British Columbia province was the
first foreign government to issue of masala bonds.
Union Cabinet approves merger of SBI, 5 associate banks
Feb 16 2017
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The Union Cabinet chaired by the Prime Minister Narendra Modi has approved the merger of State
Bank of India (SBI) with five of its associate/subsidiary banks.
These five subsidiary banks are State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State
Bank of Mysore, State Bank of Patiala and State Bank of Travancore.
The Union Cabinet also approved the introduction of a Bill in Parliament to repeal the State Bank of
India (Subsidiary Banks) Act, 1959 and the State Bank of Hyderabad Act, 1956.
Key Facts
The acquisition under Section 35 of the SBI Act, 1955 will result in the creation of a stronger
merged entity. It will minimize vulnerability faced by subsidiary banks to any geographic
concentration risks.
It will improve operational efficiency and economies of scale resulting into in improved risk
management and unified treasury operations. Existing customers of associate banks will
benefit from SBIs global network.
The merger will lead to better management of high value credit exposures through focused
monitoring and control over cash flows rather than separate monitoring by six different
banks.
The merger will also result in recurring savings, estimated at more than Rs. 1,000 crore in
first year, because of reduced cost of funds and enhanced operational efficiency.
Comment
The acquisition of subsidiary banks of SBI is considered an important step towards strengthening the
banking sector through consolidation of public sector banks (PSBs). It is in pursuance of the
Indradhanush action plan of the Central Government. In 2015, SBI was ranked 52 in the world in
terms of assets, however the merger will allow its entry un top 50. The merger does not include
Bharatiya Mahila Bank (BMB) and its proposal is still under consideration.
Government to come out with 2nd PSB recapitalisation plan
Indradhanush 2.0
Feb 13 2017
The Union Government is planning to come out with Indradhanush 2.0, a comprehensive plan for
recapitalisation of public sector lenders.
Indradhanush 2.0 will be finalised by Reserve Bank of India (RBI) after completion of Asset Quality
Review (AQR) which is likely to be completed by end of March 2017.
It aims to clean up the balance sheets of PSBs to ensure banks remain solvent and fully comply with
global capital adequacy norms, Basel-III. Besides, revised programme of capitalisation will be also
issued as part of it.
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Background
The RBI had embarked on the AQR exercise from December 2015 and had set a deadline of
March 2017 to complete the exercise.
As part of it, RBI had asked banks to recognise some top defaulting accounts as non-
performing assets (NPAs) and make adequate provisions for them.
Under Indradhanush roadmap announced in 2015, the Union Government had announced
an infusion of Rs. 70,000 crore in state-run banks over four years.
Banks also were allowed to raise a further Rs. 1.1 lakh crore from the markets to meet their
capital requirement in line with global risk norms, Basel-III.
In line with the plan, PSBs were given Rs. 25,000 crore in 2015-16, and a similar amount was
earmarked for the current fiscal 2016-17. Besides, Rs. 10,000 crore each will be infused in
2017-18 and 2018-19.
About Basel III (Third Basel Accord)
Basel III is a global, voluntary regulatory framework on bank capital adequacy, market
liquidity risk and stress testing. It was agreed by Basel Committee on Banking Supervision
(BCBS) members in 201011.
It focuses primarily on the risk of a run on the bank, requiring differing levels of reserves for
different forms of bank deposits and other borrowings.
It does not, supersedes the guidelines known as Basel I and Basel II for the most part, rather
works alongside them. In March 2014, RBI had extended Basel III deadline up to March 31,
2019, instead of as on March 31, 2018.
Note: Basel series of norms are broad supervisory standards formulated by BCBS to ensure
that financial institutions have enough capital on account to meet obligations and absorb
unexpected losses.
RBI to set up committee on strengthening cyber security
Feb 9 2017
The Reserve Bank of India (RBI) has decided to set up an inter-disciplinary Standing Committee
on cyber security to examine various threats and suggest measures to deal with it.
The committee will suggest appropriate policy interventions to strengthen cyber security and
resilience in a bid to strengthen cyber security system.
Functions of Committee
Review the threats inherent in the existing or emerging technology on an ongoing basis.
Study adoption of various security standards and protocols and also act as interface with
stakeholders.
Suggest appropriate policy interventions to strengthen cyber security and resilience
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Background
The committee has been set up based on the recommendations of the expert panel on information
technology examination and cyber security headed by Meena Hemachandra. In recent times, banks
have taken steps to strengthen their defences against cyber-attacks, but the diverse and ingenious
nature of recent attacks has necessitated an ongoing review of the cyber security landscape and
emerging threats.
Recent Cyber-attacks
In 2016, as many as 32.14 lakh debit cards were compromised in the cyber-attacks. It was the biggest-
ever breach of debit card data in India. Of the debit cards affected, about 26.5 lakh were Visa and
Master Card-enabled and 6 lakh were RuPay enabled. To tackle the threat, RBI had issued swift
guidelines to banks, mandating cyber security preparedness for addressing cyber risks.
RBI to set up separate Enforcement Department
Feb 9 2017
The Reserve Bank of India (RBI) has decided to set up separate Enforcement Department to
effectively monitor banks in case they violate regulations and speed up regulatory compliance.
The department will be operational from April 1, 2017 i.e. the next financial year (2017-18). It will
mainly deal with the penalties imposed on banks for violation of norms.
Key Facts
Currently, the penalties are determined by the banking and non-banking supervision
departments against banks violating rules.
The Enforcement Department will serve as centralised department to deal with penalties
imposed on banks. This will help RBI follow-up and maintain a record on banks
performance.
It will deal with cases of non-compliance with regulations noticed either through the
surveillance process or otherwise.
Background
Regulation, enforcement and surveillance are three important facets of financial sector oversight
mechanism. Regulations determine the framework in which financial entities function so that
transparency, prudence and comparability are ensured on the one hand and customer interests are
protected on the other. Surveillance is the process through which adherence to the regulations is
monitored. Currently, in the RBI, there is a clear demarcation of the surveillance and regulatory
functions, but it was not in the case with enforcement of rules.
RBI keeps key rates unchanged in 6th bi-monthly monetary policy
review
Feb 8 2017
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The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) headed by RBI
Governor Urjit Patel has kept the key policy rates unchanged.
It was central banks sixth bi-monthly and last policy for the financial year 2016-17 and overall the
third by the MPC. All six members of the MPC voted in favour of holding rates.
Besides, RBI also changed its stance from accommodative to neutral. It also lowered GDP growth
forecast for the current fiscal to 6.9%. However the apex bank expects a rebound in GDP growth to
7.4% in 2017-18.
Policy Rates
Repo rate under the liquidity adjustment facility (LAF): Unchanged at 6.25 percent.
Reverse repo rate under the LAF: Unchanged at 5.75 per cent.
Marginal standing facility (MSF): Unchanged at 6.75 per cent.
Bank Rate: Unchanged at 6.75 per cent.
Reserve Ratios Cash Reserve Ratio (CRR) of scheduled banks: Unchanged at 4.0 per
cent of net demand and time liability (NDTL).
Statutory Liquidity Ratio (SLR): Unchanged 20.50 per cent.
IndiaPost gets payments bank licence from RBI
Jan 30 2017
IndiaPost under Department of Posts (Union Ministry of Communications and Information
Technology) received final payments bank licence from the Reserve Bank of India (RBI).
With this, India Post became the third entity after Bharti Airtel and Paytm to receive final payments
bank licence to roll-out of banking operations commercially under the permit.
Key Facts
As per the initial road map, each post office in the country will offer the post bank services.
The department of post has an existing network of around 1,55,000 post offices currently.
IndiaPost plans to open 650 new branches for the payment bank. These branches will be co-
located with the existing post offices.
About Payments banks
Payments banks are a new model of banks conceptualised by the Reserve Bank of India (RBI)
to meet governments financial inclusion target.
It will be set up as a differentiated bank and will confine its activities to acceptance of demand
deposits, remittance services, Internet banking and other specified services but cannot
undertake lending services.
Payments banks can accept deposits up to Rs. 1 lakh per account from individuals and small
businesses. They can issue ATM/debit cards but not credit cards. They can also issue
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other prepaid payment instruments.

They can distribute non-risk sharing simple financial products like mutual funds and
insurance products. Non-resident Indians (NRIs) are not be allowed to open accounts in
payment banks.
This new model of banking allows mobile firms, supermarket chains and others to cater to
banking requirements of individuals and small businesses.
PM Narendra Modi inaugurates Indias first international exchange
at GIFT city
Jan 11 2017
Prime Minister Narendra Modi inaugurated Indias first international exchange India INX at the
International Financial Service Centre (IFSC) of GIFT (Gujarat International Financial Tech) City
Gandhinagar, Gujarat.
India INX is a wholly-owned subsidiary of the Bombay Stock Exchange (BSE). It will enable Indian
firms to compete on equal footing with offshore firms.
Key Facts
India INX will initially trade in equity derivatives, currency derivatives, commodity
derivatives including index and Stocks. Subsequently, it will offer depository receipts and
bonds once required infrastructure is ready.
It will work for 22 hours in a day working from sunrise to sunset i.e. starting when Japan
exchanges begin and close when US markets end. It will have 250 trading members including
commodity and overseas brokers.
India INX is one of the most advanced technology platforms with turnaround time of 4
seconds. It will facilitate international investors and NRIs to trade from anywhere in the
world.\
It will provide benefits in terms of waiver of security transaction tax, commodity transaction
tax, dividend distribution tax, long term capital gain tax and income tax.
16th meeting of FSDC held in New Delhi
Jan 6 2017
The 16th meeting of the Financial Stability and Development Council (FSDC) was held in New
Delhi. It was chaired by Union Finance Minister Arun Jaitley.
It was attended by heads of all financial sector regulators as its members. It reviewed the major issues
and challenges facing the economy.
Key Highlights of the meeting
Indian Economy: India appears to be much better placed because of improvement in its
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macroeconomic fundamental despite fragile world economy. It reviewed the major issues and
challenges facing the economy.
Banking: The status of NPAs of public sector banks and measures taken by the government
and the RBI for tackling the stressed assets were reviewed. It also discussed about further
action to be taken in this regard.
Financial inclusion/ financial literacy: Discussed about the various initiatives taken by
the government and regulators for promoting financial inclusion/ literacy. It also discussed
further measures for promoting the same.
Technology: Discussed issues pertaining to Fintech, digital innovations and cyber security. It
also discussed on further steps to be taken.
Demonetisation: It will help in eliminating the shadow economy and tax evasion. It will
have a positive impact on GDP and fiscal consolidation in the long run.
Besides, a brief report on the activities undertaken by the FSDC sub-committee chaired by RBI
Governor Urjit Patel was placed before the FSDC meeting.
About Financial Stability and Development Council
The Central Government had established Financial Stability and Development Council
(FSDC) in December 2010 with the Finance Minister as it Chairman.
The idea to create it was first mooted by the Raghuram Rajan Committee on Financial
Sector Reforms in 2008.
It is a super regulatory body for regulating financial sector which is a vital for bringing
healthy and efficient financial system in the economy.
The FSDC envisages to strengthen and institutionalise mechanism of (i) maintaining
financial stability, (ii) Financial sector development, (iii) inter-regulatory coordination along
with monitoring macro-prudential regulation of economy.
Composition of FSDC
Chairman: Union Finance Minister.
Members: Heads of the financial sector regulatory authorities (i.e, RBI, SEBI, IRDA,
PFRDA), Finance Secretary and/or Secretary, Department of Economic Affairs (Union
Finance Ministry), Secretary, Department of Financial Services, and Chief Economic Adviser.
FSDC can invite experts to its meeting if required.
Two Core functions
Act as an apex level forum to strengthen and institutionalize the mechanism for maintaining
financial stability.
Enhance inter-regulatory coordination and promoting financial sector development in the
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country.
Other functions
Focus on financial literacy and financial inclusion.
Monitor macro-prudential supervision of the economy.
Assess the functioning of the large financial conglomerates.
RBI appoints Surekha Marandi as executive director
Jan 4 2017
The Reserve Bank of India (RBI) has appointed Surekha Marandi as its Executive Director (ED). She
was appointed in place of U S Paliwal who retired on December 31, 2016.
In her new role, she will look after Consumer Education and Protection Department, Financial
Inclusion and Development Department, and Secretarys Department of the RBI.
About Surekha Marandi
Prior to her promotion as Executive Director, she had served as Principal Chief General
Manager and Chief Vigilance Officer in the Reserve Bank over a span of three decades.
She has rich experience of three decades in regulatory and supervisory, financial inclusion and
development and human resource management areas in the RBI.
She has also served on the Boards of United Bank (UB) and Bank of Baroda (BOB). She holds
a Masters Degree from Jadavpur University.
Note: RBI has 11 Executive Directors who are in charge of various departments.
RBI extends period of enhanced Prepaid Payment Instruments limit
Dec 31 2016
The Reserve Bank of India (RBI) has extended the period of enhanced Prepaid Payment Instruments
(PPI) limit of Rs 20,000 as part of efforts to promote digital payments. The limit has been extended
till the completion of review of the PPI guidelines.
However, the balance in such PPIs cannot exceed Rs 20,000 at any point of time and the merchants
can transfer funds from such PPIs to their own linked bank accounts up to Rs 50,000 per month,
without any limit per transaction.
About PPI
PPIs are methods that facilitate purchase of goods and services against the value stored on such
prepaid instruments. These instruments can be issued as online wallets, mobile accounts, mobile
wallets, smart cards, magnetic stripe cards, internet accounts, paper vouchers and any such
instruments used to access the prepaid amount. The value stored on such instruments represents the
value paid for by the holder, by debit, by cash to a bank account or by credit card.At present, 47 non-
bank entities and 45 banks are operating payment systems for PPI.
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Government proposes setting up Financial Data Management Centre

Dec 30 2016
The Union Government has proposed setting up Financial Data Management Centre (FDMC) based
on recommendation of a committee set up under the Department of Economic Affairs (DEC).
The Committee was headed by Ajay Tyagi, Additional Secretary in Union Finance Ministry and has
submitted its report and a draft bill titled The Financial Data Management Centre Bill, 2016.
Functions of FDMC
Standardise data from all financial sector regulators in a single database and provide analytical
insights based on the data to ensure stability in the economy.
Take measures to standardise data from regulators, enable financial service providers to
submit data in a standardised electronic format, analyse data and maintain a financial system
database.
Establish, operate and maintain the financial system database along with collecting financial
regulatory data and providing access to it.
Provide analytical support to the Financial Stability and Development Council (FSDC) on
issues relating to financial stability.
Background
In 2015, FSDC first had suggested the creation of such a body, after Reserve Bank of India (RBI) had
objected to share company-specific data with FSDC. RBI had given reason that FSDC is not a
statutory bod in nature, and sharing such data would be a breach of confidentiality. To resolve this
issue, Union Finance Minister Arun Jaitley in his 2016-17 Budget Speech announced setting up of
statutory FDMC under the aegis of the FSDC to facilitate integrated data aggregation and analysis in
the financial sector.
Viral V Acharya appointed as RBI Deputy Governor
Dec 28 2016
The Union Government has appointed Viral V Acharya (42) as new Deputy Governor at the
Reserve Bank of India (RBI). He will have regular three-year tenure.
His appointment was cleared by the Appointments Committee of the Cabinet (ACC) chaired by
Prime Minister Narendra Modi in New Delhi.
He will fill the post that fell vacant after Urjit Patel after he was made RBI Governor to succeed Rajan
with effect from September 2016. The existing three Deputy Governors of RBI are S S Mundra, R
Gandhi and N S Vishwanathan.
About Viral V Acharya
He is an alumnus of IIT, Mumbai, with a degree of BTech in Computer Science and
Engineering in 1995 and PhD in Finance from NYU-Stern in 2001.
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He was with London Business School (2001-08) and served as the Academic Director of
Coller Institute of Private Equity (2007-09) and Senior Houblon-Normal Research Fellow at
Bank of England (2008).
He also has served as Director, NSE-NYU Stern Initiative on the Study of Indian Capital
Markets. He also was member of SEBIs International Advisory Board.
Prior this appointment, he was serving as the C V Starr Professor of Economics in the
Department of Finance at the New York University Stern School of Business (NYU-Stern).
He is known for his research in theoretical and empirical analysis of systemic risks of the
financial sector, its regulation and genesis in government-induced distortions.
His research areas also span across agency-theoretic foundations, credit and liquidity risks as
well as their general equilibrium consequences.
He also has co-authored in the past at least three papers with the former RBI governor
Raghuram Rajan. He had once called himself poor mans Raghuram Rajan.
ICICI Bank launches EazyPay app for Merchants
Dec 24 2016
ICICI Bank, Indias largest private sector bank has launched EazyPay mobile application for
merchants that allows all-in-one acceptance payments platform.
This app consolidates all digital wallets, QR code, Unified Payments Interface (UPI), and credit &
debit cards modes of payments. With this, ICICI Bank became first bank in the country to roll out
all-in-one payments platform.
Key Facts
Eazypay app is sustainable payment mode compared to current peer-to-peer digital
applications.
It has open architecture which makes it distinct from other digital payments that are
actually closed-loop prepaid instruments.
Using it customer can make payments through any bank account using UPI or internet
banking or using credit or debit card details on smartphone on a link forwarded by the
merchant.
It has no issue of hitting the limit as the money flows directly into the bank account of
merchant. It also has its in-built billing application for merchants.
It also allows merchants to receive payments from ICICI Banks own e-wallet Pockets.
RBI opposes proposal to set up separate payments regulator
Dec 17 2016
The Reserve Bank of India (RBI) has opposed a move to establish a separate entity to regulate
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payments and settlements as recommended by Ratan Watal Committee for Digital Payments.
The 11-member committee was notified in September 2016 by the Union Finance Ministry to
review existing payment systems in country and recommend appropriate measures for encouraging
Digital Payments.
What is the issue?
One of the committees terms of reference was to study and recommend changes in the regulatory
mechanism under various acts such as the RBI Act, Payments and Settlement Act, and the
Information Technology Act among others. Based on it, the committee had recommended making
regulation of retail payments independent from the function of RBI to give digital payments boost. It
had called for establishing separate Payments Regulatory Board (PRB) as an independent body for
retail payments and suggested that RBIs regulation must be kept only for SIPS (systemically
important payment system).
What RBI says?
According to the global practice both the SIPS and retail payment systems are under the central bank
for a variety of reasons including issues of inter-connectivity between the systems and the role of the
central bank as the lender of last resort (LOLR). RBI has mooted a monetary-policy-committee-style
structure for the PRB, where outcomes are decided independently, but implementation remains with
the banking regulator.
RBI keeps key rates unchanged in fifth bi-monthly monetary policy
review
Dec 8 2016
The Reserve bank of India (RBI) in its fifth bi-monthly monetary policy review for year 2016-17 has
kept key rates unchanged.
Decision in this regard was taken by RBIs six-member Monetary Policy Committee (MPC) headed
by Governor Urjit Patel. This decision was taken on the basis of an assessment of the current and
evolving macroeconomic situation.
Policy Rates
Repo rate under the liquidity adjustment facility (LAF): Unchanged at 6.25 percent.
Reverse repo rate under the LAF: Unchanged at 5.75 per cent.
Marginal standing facility (MSF) and Bank Rate: Unchanged at 6.75 per cent.
Statutory Liquidity Ratio (SLR): Unchanged 20.75 per cent.
The policy repo rate where kept unchanged citing global and domestic uncertainties that posed
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upside risks to inflation. The MPC also has cut Gross Value Added (GVA) growth estimates for the
economy in the fiscal year ending March 2017 to 7.1% from 7.6% earlier.
Thus, RBI has retained its accommodative monetary policy stance with the objective of achieving
consumer price index (CPI) inflation at 5% by Q4 of 2016-17 and the medium-term target of 4%
within a band of +/- 2 per cent, while supporting growth.
Banks to bear liability in case of online security breach: RBI
Dec 7 2016
The Reserve Bank of India (RBI) has clarified that banks will have to bear the full liability in the
event of any security breach or compromise in the authorised card network.
Banks issuing the cards will offer the payment authentication solutions of the respective card
networks on an optional basis to their customers.
RBI held that
Only authorised card networks will offer such payment authentication solutions with
participation of card issuing and acquiring banks.
For this purpose customers consent must be taken while making this solution available to
them.
Customers opting for this facility will go through a one-time registration process. They are
required to enter card details and additional factor authentication by issuing bank.
Thereafter, registered customers will not be required to re-enter card details for every
transaction at merchant locations that offer this solution, thus save time and effort.
The card details already registered will be the first factor while the credentials used to login to
the solution would be the additional factor of authentication.
Besides, RBI also has relaxed additional factor authentication (AFA) norms for online transactions up
to Rs. 2,000. This decision was taken in a move to save time for customers amid the governments
push for digitization of payments.
CERT-In warns micro-ATMs against malware attacks
Dec 5 2016
The premier cyber security agency CERT-In has cautioned bankers, customers and traders against
skimming and malware attacks on micro ATMs and Point of Sale (POS) terminals.
The move comes as usage of POS and micro-ATMs counters have witnessed a sharp surge post
demonetisation. It has asked to adopt high-end encryption to plug possible breaches.
In this regard, CERT-In has issued two specific advisories for micro-Automated Teller Machines and
POS terminals.
What are potential threats?
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Skimming: It is the theft of classified credit/debit card data. Using this method, a hacker
(thief) can obtain the victims card number using a small electronic device near the card
acceptance slot and store hundreds of card details at a time.
Social engineering attack: It can be engineered at these banking and POS facilities, by
gaining trust of the card owner as the fraudster poses as a member of staff.
What the CERT-In advisory says?
Micro-ATMs security features must be strong and updated in order to check attempts by
hackers who stealthily plan to steal private customer and bank data.
Point to Point Encryption (P2PE) should be used to minimise this risk as it will encrypt the
card data and keep it encrypted to the maximum extent throughout its life.
Banks and micro ATM operators must use some counter-measures to thwart cyberattacks.
Micro ATM must not transmit any confidential data unencrypted on the network. It must
automatically log out the operator and lock itself after a period of inactivity.
Operators must keep all micro ATM software, application, anti-virus regularly updated and
educate the customer about basic functionalities and security best practises.
Customers must render due diligence of securing their PIN and not sharing vital details with
strangers.
Micro ATM: It work with minimal power and connect to central banking servers through a GPRS
network. It enables the un-banked rural population to access banking services in their villages or
towns. It offers facilities of deposit, withdrawal, balance enquiry, issuance of mini-statement and
funds transfer.
CERT-In (Indian Computer Emergency Response Team): It is the nodal agency that deals with
cyber security threats like hacking and phishing. It is government organisation under Union
Ministry of Electronics and Information Technology. It aims to strengthen security-related defence
of the Indian Internet domain.
RBI to introduce new 20 & 50 rupee currency notes
Dec 5 2016
The Reserve Bank of India (RBI) is going to issue new currency notes of Twenty and Fifty rupees
denomination in the Mahatma Gandhi Series-2005.
All old the previous currency notes of old Rs. 20 and Rs. 50 denomination issued by the Bank will
continue to be legal tender.
Key Facts
The 50 rupees note will be without inset letter in both the number panels.
The 20 rupees note will be with inset letter L in both the number panels.
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Both notes will bear signature of incumbent RBI Governor Dr. Urjit R Patel. The year 2016
will be printed on the reverse of both the notes.
Earlier in November 2016, the Union Government had decided to ban Rs 500 and Rs 1000
denomination bank notes, in a move to curb black money. Subsequently a new Rs 500 banknote and
Rs 2000 with advance security features were also issued. However, Rs 1000 notes have not been
issued yet.
For more information: (i) How Currency is Issued in India? (ii) Demonetisation and Its Implications for
India
Gross NPAs of PSBs touch over 6 lakh crores in July-September
2016
Nov 30 2016
The Union Government has announced that the gross non-performing assets (NPAs) of the Public
sector banks (PSBs) have touched around 66 lakh 40 thousand in the three months period from July
to September 2016.
As on September 30, 2016 gross NPAs of the PSBs in the country rose to Rs. 6,30,323 crore as
against Rs. 5,50,346 crore by end of June 2016. It shows increase of Rs. 79,977 crore NPAs on
quarter on quarter basis during this period.
Steps taken by Government
The incidence of NPAs is high in sectors like infrastructure, power, road textiles, steel etc. So, the
Union Government has taken sector specific measures to tackle the menace of NPAs. These
measures aim at improving resolution or recovery of bank loans. They are enactment of Insolvency
and Bankruptcy code, 2016 followed by amendment of the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act (SARFAESI) and Recovery of Debt due to
Banks and Financial Institutions (RDDBFI), Act. In addition, six new Debt Recovery Tribunals
(DRTs) have been established.
What are Non-Performing Assets (NPAs)?
NPAs are loans made by a bank or finance company on which repayments or interest
payments are not being made on time.
Thus, NPAs are any asset of a bank which is not producing any income and are also called
non-performing loans.
The loan is considered to be a NPA once the borrower fails to make interest or principal
payments for 90 days.
In case of Agriculture/Farm Loans, the NPA varies for of Short duration crop loan (interest
not paid for 2 crop seasons), Long Duration Crops (interest not paid for 1 Crop season).
What are negative effects of NPAs?
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Large number of NPAs affects the profitability & liquidity of the banks. It adversely affects the value
of bank in terms of market credit and widens assets and liability mismatch. It results in inflating the
cost of capital for economic activities and banks may charge higher interest rates on some products
to compensate NPAs.
Akodara becomes Indias first Digital Village
Nov 29 2016
Akodara village in Sabarkantha district of Gujarat has earned the coveted tag of becoming Indias first
digital village.
The village with a total population of 1,191 people and 250 households uses a various cashless system
for payments of goods and services. All transactions in the village are carried out through digital
modes like SMS, net-banking or debit cards.
Key Facts
The village was adopted by ICICI Bank under its Digital Village Project in 2015 and made
cashless by adopting digital technology.
The project was launched in January 2016 by Prime Minister Narendra Modi and ICICI Bank
MD and CEO Chanda Kochar to mark 60-year-celebration of the ICICI groups existence.
All households in village have savings account in local ICICI Bank branch. The bank has
provided training to villagers to embrace digital technology to reduce dependence on cash.
The village has almost 100% financial rate and all mobile banking is done in Hindi, English
and Gujarati languages. It also has its own official website.
The villagers most important transactions selling agri-produce at the local market or mandi
or selling milk at the co-operative society have been made cashless.
It has primary, secondary and higher secondary schools equipped with smart boards,
computers and tablets.
It can be said that this village has become prime example of how e-banking can be practically
implemented in Indian villages without much difficulty to make India cashless economy.
RBI introduces incremental CRR to manage excess liquidity in
banking system
Nov 28 2016
The Reserve Bank of India (RBI) has introduced an incremental Cash Reserve Ratio (CRR) of 100%
for fortnight to absorb excess liquidity in the banking system following demonetisation.
CRR is the proportion of deposits that banks have to keep as cash with the RBI (or the central bank).
Banks do not earn any interest on CRR balances kept with the RBI.
What RBI decision says?
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Banks have to maintain 100% CRR for incremental deposits they received between
September 16, 2016 and November 11, 2016.
The incremental CRR requirement will be temporary measure and it is within RBIs liquidity
management framework.
However, overall CRR requirement will stay at 4%. The incremental CRR will be reviewed
on December 9, 2016 or even earlier.
Background
After Union Government announced demonization of old Rs. 500 and Rs. 1,000 notes on November
8, 2016, banks started depositing and exchanging those notes. The deposits in banks had swelled by
Rs.3.24 lakh crore between September 16 and November 11, 2016. The last fortnight of September
2016 saw deposit mobilisation jump by Rs.3.5 lakh crore.
Implications
It is intended to absorb a part of the surplus liquidity arising from the return of specified bank
notes to the banking system.
Thus, it leaves adequate liquidity with banks to meet the credit needs of the productive
sectors of the economy
It will only have a marginal impact on banks cost of funds since it was a temporary measure.
Airtel launches Indias first Payments Bank service in Rajasthan
Nov 24 2016
Airtel Payments Bank Limited or Airtel Bank became the first payments bank in the country to
launch live banking services in Rajasthan.
The pilot phase of the Airtel bank launched in Rajasthan aims at testing systems and processes ahead
of a full scale pan Indian launch.
Key Facts
Airtel Payments Bank is a subsidiary of Bharti Airtel Limited. Mahindra Bank holds 19.9%
stake in it.
Airtel retail outlets across Rajasthan will act as banking points. They offer a range of basic,
convenient banking services as per Payments Bank guidelines issued by RBI.
Customers can open bank accounts by using Aadhaar based e-KYC. Airtel subscribers mobile
number will function as a bank account number.
The bank will accept deposits not exceeding Rs 1 lakh. It cannot perform lending activities,
except while giving loans to its employees on approval of the board.
It intends to give an interest rate of 7.25% per annum on deposits in savings accounts.
It will be offering customers the convenience of cashless purchase of goods/services using
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their bank accounts/wallets, contributing to of financial inclusion and banking for all.
Though payment banks are allowed to issue debit card facility, but Airtel Payments Bank will
be not offering this facility right now.
Background
In August 2015, RBI had had given in-principle approval to 11 applicants to set up payments bank by
February 2017. So far, out of these 11 applicants, Tech Mahindra Ltd, Cholamandalam Investment
and Finance Co, and billionaire Dilip Shanghvi have opted out.
NABARD to disburse Rs 21,000 crore to farmers for Rabi Season
Nov 24 2016
The Union Government has allowed National Bank for Agriculture and Rural Development
(NABARD) to disburse Rs 21,000 crore to help cash-starved farmers to sow Rabi crops.
The money will be disbursed by NABARD to District Central Cooperative Banks (DCCBs) which
will enable them to pass on grant funds to the primary agriculture cooperatives.
The farm cooperatives will further pass it to farmers for meeting crop loan requirements in Rabi
season. Besides, banks also have been asked to ensure regional rural banks (RRBs) and district
cooperative banks have required cash available to satisfy the sowing needs of farmers.
Background
The Union Governments demonetisation move which has swept away 86% of currency in
circulation, has badly hit farmers leaving them without cash just ahead of the Rabi sowing season.
Due to restrictions placed on bank withdrawals after demonetisation announcement has badly hit the
farmers ahead as they are left with very little cash to buy seeds and fertilisers. It is estimated that
more than 40% of small and marginal farmers take crop loans from cooperative institutions. District
Central Cooperative Banks (DCCBs) receive their cash from currency chests of banks and state
cooperatives. Thus, disbursement of funds from NABARD will help in the smooth flow of credit for
farmers to enable them to undertake Rabi requirements.
About National Bank for Agriculture and Rural Development (NABARD)
NABARD is an apex development bank in India. The Reserve Bank of India (RBI) holds the
majority stake in it.
Headquarters: Mumbai, Maharashtra.
Established: 1982 on the recommendations of Shivaraman Committee to implement the
National Bank for Agriculture and Rural Development Act, 1981.
It has been entrusted with matters concerning policy, planning and operations in the field of
credit for agriculture and other economic activities in rural areas in India.
It is active in developing financial inclusion policy and is a member of the Alliance for
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Financial Inclusion.
Mandate: (i) Facilitate credit flow for promotion and development of agriculture, small-scale
industries, cottage and village industries, handicrafts and other rural crafts.
(ii) Support all other allied economic activities in rural areas, promote integrated and
sustainable rural development and secure prosperity of rural areas.
RBI doubles cap on PPIs to Rs. 20,000
Nov 23 2016
The Reserve bank of India (RBI) has increased the per month limit of Prepaid Payment Instruments
(PPIs) to Rs. 20,000 from Rs. 10,000 and to Rs. 50,000 for merchant bank.
This decision was taken due to sudden increase in demand for digital wallets (especially mobile
wallets) after Government announced demonetisation of Rs. 500 and Rs. 1000 notes.
Key Facts
The prepaid PPIs could be also issued to merchants if they provided a self-declaration in
respect of their status and bank account and also to be kept on record by the issuer.
Funds transfer from such PPIs will be permitted only to the merchants own linked bank
account and upto an amount of Rs. 50,000 per month, without any limit per transaction.
Thus, this decision will boost mobile wallet transactions following the withdrawal of high-
value notes. The measures will be applicable till December 30, 2016.
What are Prepaid Payment Instruments (PPIs)?
PPIs are methods that facilitate purchase of goods and services against the value stored on
such instruments.
The value stored on such instruments represents the value paid for by the holder, by debit, by
cash to a bank account or by credit card.
These prepaid instruments can be issued as online wallets, mobile accounts, mobile wallets,
smart cards, magnetic stripe cards, internet accounts, paper vouchers and any such
instruments used to access the prepaid amount.
RBI proposes Islamic window in conventional banks
Nov 21 2016
The Reserve Bank of India (RBI) has proposed the opening of Islamic window in conventional banks
for gradual introduction of Sharia-compliant or interest-free banking in the country.
In this regard, RBI has also prepared a technical analysis report and submitted to the Union Finance
Ministry for its consideration.
What is the issue?
Islamic or Sharia banking is a finance system based on the principles of not charging interest.
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The charging of interest is prohibited under Islam.

However, in recent times both the Union Government and the RBI have been exploring the
possibility of introduction of Islamic banking for a while to ensure financial inclusion of those
sections of society that have remain excluded due to religious reasons.
How RBI going to implement it?
Initially, RBI is planning to introduce a few simple products similar to conventional banking
products through the Islamic window. But it will be after necessary notification issued by the Union
Government. In later stage, full-fledged Islamic banking with profit-loss sharing complex products
may be considered on the basis of experience gained in course of time.
What are difficulties in implementing Islamic window in conventional banks?
Indian banks have no experience in the Islamic or Sharia banking. There are also lots of complexities
of Islamic finance. There are also various regulatory and supervisory challenges involved in the
matter.
16 of 22 PSBs skip paying dividends to Government due to mounting
NPAs
Nov 21 2016
As many as 16 of 22 public sector banks skipped paying dividends to Government in fiscal 2015-16
due to issue of mounting bad loans.
It has led to a 67% decline in government receipts to Rs. 1,444.6 crore. Only six PSBs have declared
dividends, though at a lower rate for the fiscal ended March 2016.
PSBs which skipped dividend payments included Allahabad Bank, Bank of India, Bank of Baroda,
Central Bank of India, Canara Bank, Corporation Bank, Punjab National Bank, Dena Bank and
Syndicate Bank.
During 2015-16, the highest dividend was paid by State Bank of India (SBI) to the government at Rs.
1,214.6 crore, 22% lower than in the previous fiscal.
Under the existing guidelines
Profit-making PSBs have to pay a minimum dividend of 20% of their equity or 20% of their
post-tax profit, whichever is higher.
The Union Government which is the majority shareholder in all the PSBs has witnessed a
67% decline in dividend receipts from PSU banks at Rs. 1,444.6 crore.
What is the issue?
Balance sheets of most of the PSBs have been under stress due to the clean-up exercise
targeted at non-performing assets (NPAs).
Banks have been given time till March 2017 to clean up their balance sheet. Due to heavy
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provisioning for bad loans, many banks posted losses in last quarter of the previous fiscal.
In 2014-15, the Gross NPAs of the PSU banks had surged from 5.43% (Rs 2.67 lakh crore) to
9.32% (Rs 4.76 lakh crore) in 2015-16 of the total advances.
Special Task Force led by SS Mundra formed to recalibrate ATMs
Nov 15 2016
The Reserve Bank of India (RBI) has formed Special Task Force to speed up the process of
recalibration of automated teller machines (ATM) to dispense the new denomination notes.
The Special Task Force will be headed by S.S Mundra, Deputy Governor, RBI. Representatives from
the Union Finance and Home ministries, RBI, State Bank of India, ICICI Bank, HDFC Bank, Axis
Bank and the National Payments Corporation of India (NPCI) will be its members.
Besides, representative from each of ATM original equipment manufacturers (OEMs), cash in transit
(CIT) companies and white label ATM (WLA) operators will be invited to the Task Forces
deliberation
Terms of the reference of Task Force
Expeditious reactivation of all ATMs in a planned manner.
Draw up an action plan and ensure its implementation for quick recalibration of the ATMs to
enable them to dispense the new Rs. 500 and Rs. 2,000 notes.
Why task force has been formed?
After the Union Government had surprisely announced demonitization of old series Rs. 1,000 and
Rs. 500 notes, there was issue of currency crunch across the nation. Following introduction of new
series of Rs. 2,000 and Rs. 500 notes, it has become necessary to recalibrate all ATMs/cash handling
machines to dispense the new design notes. However, the recalibration process will take up to 3
weeks for all the 2 lakh ATMs to operate normally.
City Union Bank launches Indias first banking robot Lakshmi in
Chennai
Nov 12 2016
Indias first banking robot named Lakshmi was launched by the Kumbakonam-based City Union
Bank (CUB) in Chennai, Tamil Nadu. Lakshmi will be first on-site huamanoid (robot) in India.
Currently, CUB has readied only one version of huamanoid banker and but is planning to deploy
25-30 robots at key branches by end of year if Lakshmi proves a hit with customers.
Key Facts
Lakshmi is artificial intelligence powered robot. It can speak English, gesture and engage
in a life-like manner in conversations.
The robot can interact with customers on more than 125 subjects including account balance
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and interest rates on loans.

It will not voice the sensitive financial information like account details rather display it
discreetly on its screen.
What is artificial intelligence?
Artificial intelligence is the branch of computer science concerned with making computers behave
like humans. In contrast to normal hardware and software, artificial intelligence enables a machine to
perceive and respond to its changing environment. The artificial intelligence machines learn
automatically like humans during their processing by assimilating large volumes of information.
RBI issues clarifications on Hedging for External Commercial
Borrowings
Nov 10 2016
The Reserve Bank of India (RBI) has issued the Clarifications on hedging for External Commercial
Borrowings (ECB) in a bid to effectively address currency risk at the systemic level.
The Clarifications were issued by RBI under section 10(4) and 11(1) of the Foreign Exchange
Management Act (FEMA), 1999.
What are External Commercial Borrowings (ECBs)?
ECBs are commercial loans borrowed from foreign sources for financing the commercial
activities in India.
It may be bank loans, securitised instruments, buyers credit, suppliers credit, foreign
currency convertible bonds, etc.
It should be noted that ECBs are not FDI. In case of FDI, foreign money is used only to
finance the equity Capital. But in case ECBs, foreign money is used to finance any kind of
funding other than equity.
What hedging means?
Hedging is an investment mechanism to cut the risk of adverse price movements in an asset.
Usually, a hedge involves taking an offsetting position in a related security.
Highlights of the Clarifications
The ECB borrower will be required to cover both principal as well as coupon payments
through the hedges done, starting from the day of borrowing.
The hedging period will be for the entire life of the liability with a minimum 1 year rollover
option. It will be ensuring that the total exposure is not unhedged at any point of time.
The borrower has to hedge in such a manner that the projected cash flows match the
expectation of the borrowers irrespective of the fluctuations in the foreign currency.
The designated banks will have the responsibility of verifying that 100% hedging requirement
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is complied with.
RBI issues new series of Rs 500 and Rs 2,000 currency notes
Nov 9 2016
The Reserve Bank of India (RBI) has issued new series of notes for 500 rupees and 2,000 rupees
denomination with improved features and newer sizes.
These new series of notes was issued following Prime Minister Narendra Modis announcement that
Rs 500 and Rs 1,000 currency notes now in use will no longer be legal tender.
Key Facts
Both the designs of 500 rupees and 2,000 rupees notes is very friendly towards the visually-
impaired by having features which make it accessible for all sections.
They are Braille-compliant with lines on the side that enable blind people to ascertain their
denomination easily.
2,000 rupees note: It will be for the first time 2,000 rupees note denomination has been
issued. It will be called as the Mahatma Gandhi (New) Series.
The base colour of the note is magenta. Size of the new note is 66mm*166mm.
It has a motif of the Mangalayan, the low-cost mission of ISRO to Mars on the reverse side
and Mahatma Gandhi on front side.
500 rupee note: It has different colour, size, theme, design and location of security features
compared to the old notes. It has portrait and electrotype watermarks.
It will be in a stone grey in colour. The motif Delhis Red Fort is on reverse side and
Mahatma Gandhi on front side. Size of the new note is 63mm*150mm.
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Rs. 500, Rs. 1,000 notes no longer legal tender

Nov 8 2016
The Union Government has announced that Rs. 500, Rs. 1,000 notes will cease to be legal tender. It
was announced by Prime Minister Narendra Modi in a surprise address to nation.
The demonetisation drive of these two currency units was taken to root out the menace of black
money, corruption and fake currency from the country. The currency notes of 100, 50, 20, 10, 5, 2
and 1 rupee will remain unaffected by this decision and remain legal tender.
Key Facts
Persons holding old 500, Rs. 1,000 notes must deposit these notes in their bank or post office
accounts from 10th November till 30th December 2016 without any limit.
Those who are not able to deposit 30th December 2016 can go to the specified offices of RBI
up to 31st March 2017 and deposit the notes after submitting a declaration form.
However, for immediate needs, old 500, Rs. 1,000 notes can be exchanged in any bank, head
post office or sub post office by showing identity proof like Aadhaar card, voter card, ration
card, passport, PAN card or other approved proofs.
The limit for such exchange will be four thousand rupees till 24th November, and will
increase from 25th November till 30th December 2016.
The Reserve Bank of India (RBI) will issue new 500 and Rs. 2,000 notes from 10 November
2016.
There will no restrictions of any kind on non-cash payments by cheques, demand drafts, debit
or credit cards and electronic fund transfer.
What is Demonetisation?
It is an act of stripping a currency unit of its status as legal tender. Demonetization is mandatory
whenever there is a change of national currency. In this process, the new currency unit replaces the
old unit of currency which is retired.
Demonetisation in India
This is not the first time the Government or the RBI has demonetised currency in India. For the first
time in January 1946, Rs 1,000 and Rs 10,000 banknotes were demonetised. However, these two
denominations were reintroduced in 1954 along with currency notes of Rs 5,000. But all these three
denominations were again demonetised in January 1978. The RBI more recently in 2014, had
demonetised all banknotes printed before 2005.
RBI appoints M Rajeshwar Rao as new Executive Director
Nov 7 2016
The Reserve Bank of India (RBI) has appointed M Rajeshwar Rao as Executive Director (ED)
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following voluntary retirement of G Mahalingam.

In his new role, Mr. Rao will look after Department of Statistics and Information Management,
Financial markets Operations Department and International Department of the RBI.
About M Rajeshwar Rao
Rao has a Bachelor of Arts in Economics and a Master of Business Administration (MBA)
from University of Cochin. He is also a Certificated Associate of Indian Institute of Bankers.
He had joined RBI in 1984 and as career central banker has exposure in various aspects of
central bank functioning.
Prior to his appointment as ED, he was the Chief General Manager (CGM), Financial
Markets Operations Department of the RBI.
Previously, he had held charge of the Risk Monitoring Department of RBI and also had
worked as the Banking Ombudsman, New Delhi.
HCC becomes first firm to get debt recast under RBIs S4A Scheme
Nov 6 2016
Construction major Hindustan Construction Company (HCC) became Indias first firm to get debt
recast under RBIs new Scheme for Sustainable Structuring of Stressed Assets (S4A).
The RBI-mandated Overseeing Committee (OC) under the S4A has approved HCCs Rs. 5,000-crore
debt recast passed by an ICICI Bank-led joint lender forum in September 2016.
Under this debt recast of HCC
52% of the debt (nearly Rs. 2,600 crore) was found to be sustainable and can be serviced as per
original terms and conditions, including about interest rate and tenure.
Out of the remaining 48% (Rs.2,400 crore) debt, 1,000 crore debt will be converted into
equity for banks, which could eventually give them 25% stake in the companys post-scheme
equity capital.
The remaining debt of Rs. 1,400 crore would get converted into optionally convertible
debentures to be issued to the lenders. These measures would now go for approval from
HCCs shareholders.
What is Scheme for Sustainable Structuring of Stressed Assets (S4A)?
The RBI had launched S4A scheme to help resolve the corporate debt problem and
strengthen the lenders ability to deal with stressed assets.
Under this scheme, a companys debt is bifurcated into two parts sustainable and
unsustainable based on the cash flows of the companys project.
The sustainable debt cannot be less than 50% of existing debt and will have to be serviced
over the same terms as that of existing facilities.
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The unsustainable debt can be converted into equity, Optionally Convertible Debentures or
Redeemable Optionally Convertible Preference Share with clearly spelt out terms.
Banks can sell this stake or equity to a new owner who will have the advantage of getting to
run the business with a more manageable debt.
Banks or lenders will formulate the resolution plan and implement the same along with
necessary internal approvals.
RBI mandated advisory body called Overseeing Committee (OC) will be constituted, which
will review the resolution plans submitted by the Banks.
RBI allows startups to raise $3 million via ECBs annually
Oct 27 2016
The Reserve Bank of India (RBI) has permitted startups to raise external commercial borrowings
(ECBs) of up to $3 million in a financial year for three year tenure
The new rules issued by RBI aims at boosting innovation and promoting job creation in the country.
It will apply to startups looking to raise foreign borrowings and restrictions on such funds will be
kept minimum.
Key Facts
Under the ECB route, borrowing of startups should be denominated in any freely convertible
currency or in Indian Rupees (INR) or a combination thereof.
In case of borrowing in INR, the non-resident lender, should mobilise INR through
swaps/outright sale undertaken through bank in India.
Under this, Funds can be raised with a minimum maturity of 3 years. There will no cost-
ceiling or restriction on the end use of the funds raised.
The borrowing can be in form of loans or non-convertible, optionally convertible or partially
convertible preference shares and minimum average maturity period will be 3 years.
The ECBs can be raised from a country which is either a member of Financial Action Task
Force (FATF) or either through FATF-Style Regional Bodies.
Overseas branches and subsidiaries of Indian banks and overseas wholly-owned subsidiary or
joint venture of an Indian company will not be considered as recognised lender.
What is External Commercial Borrowings (ECBs)?
Any money borrowed from foreign sources for financing the commercial activities in India
are called ECBs. The Central Government permits ECBs as a source of finance for Indian
Corporates for expansion of existing capacity as well as for fresh investment.
Thus, ECBs are defined as money borrowed from foreign resources including the following:
(i) Commercial bank loans (ii) Buyers credit and suppliers credit (iii) Securitised instruments
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such as Floating Rate Notes and Fixed Rate Bonds etc. (iv) Credit from official export credit
agencies and commercial borrowings from the private sector window of Multilateral
Financial Institutions such as World Bank, ADB, AFIC, CDC, etc.
How ECB is different from FDI?
In case of Foreign Direct Investment, the foreign money is used to finance the Equity Capital. But in
case ECBs, foreign money is used to finance any kind of funding other than Equity.
SBI declares Silchar as its 5th zone in North East
Oct 21 2016
The State Bank of India (SBI) has declared Silchar as its 5th zone in North East to facilitate banking
issues for the customers of the region.
The 5th zone will further help to cater the banking needs of the people of Mizoram, Tripura and
Manipur along with the Barak Valley of North east India. SBI also opened its administrative office at
Silchar, Assam.
Other four zones of SBI in North East are Guwahati, Shillong, Dibrugarh and Jorhat. Earlier, Silchar
was under Guwahati zone. However, due to difficult terrain of the region it was tough on the part of
the bank to address the complaints and issues of the customers in the region.
Presently, SBI has 736 branches across North East together with 3,000 ATMs and 3,000 customer
service points for customer facilitation.
Four PSBs may struggle to pay AT1 bond coupons
Oct 13 2016
Four public sector banks (PSBs) may struggle to make coupon payments on their additional tier 1
(AT1) bond as they have reported heavy losses due to a surge in bad loans.
In this case coupon payment is an annual interest paid on the face value of a bond. It is expressed as a
percentage. AT1 bond is issued under Basel III capital regulations.
Why PSBs finding difficult to pay them?
The main reasons that may affect ability of PSBs to pay coupon on AT1 bonds are decline in
profitability and increasing losses that may wipe out their revenue reserves.
Governments position
Union Government has committed capital support to these PSBs on the coupon on AT1 bonds.
However, this support can only be serviced through PSBs current years profit or from revenue
reserves. Thus, any capital infusion by the government alone cannot help the banks to service
coupon on these bonds.
What are Additional Tier 1 (AT1) Bonds?
AT1 bonds are the hybrid bonds that combine debt and equity elements. They are also called
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as contingent convertible capital instruments (CoCos).

AT1 or Cocos bonds have their roots in financial crisis when governments were forced to
bail out banks. They are the riskiest debt issued by banks and do not have any set maturity
date.
The defining characteristic of AT1 or Cocos bond is that it may be converted into shares
when certain conditions are met.
For example, when a company runs into trouble, the owners lose their stake and the debt
becomes equity, lenders turns into owners. But in case of banks such negotiations are not
possible. The coco bonds are designed to anticipate that process and transform automatically
from debt to equity.
Payment Banks need RBIs Prior product approval
Oct 7 2016
The Reserve Bank of India (RBI) has notified entities that have been granted a payments bank (PB)
licence will need to take specific approval for products they would be offering to customers.
In this regard, RBI has issued separate operating guidelines for payments banks in view to focus on
financial inclusion.
Key Facts
Employee of Payment Bank should be available for sufficient duration at a fixed location to
attend customers. They must at least have 25% of access points in un-banked rural areas.
The main mandate of Payment Banks is to offer remittance services. They will be not allowed
to lend.
Payment Banks can also offer simple financial products like insurance and mutual funds.
The RBI may place suitable restrictions on the design, functioning, or other features of the
product of Payment Banks.
RBI may even discontinue the product launched by Payment banks if it feels that the product
is not suitable for customers.
RBI it will have no objection to payments banks making arrangements with other scheduled
commercial bank or small finance bank.
Background
RBI had granted in-principle licences to 11 payments banks in August 2015. While three out of 11
PBs have dropped out, others will have to start operations within 18 months of receiving in-
principle approval.
RBI Panel moots easing bank branch norms
Oct 7 2016
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The Reserve Bank of India (RBI) Internal Working Group (IWG) on Rationalisation of Branch
Authorisation Policy has proposed easing bank branch norms. It was chaired by Lily Vadera.
It has proposed to relax norms that a bank branch has to follow, like a building, number of
employees etc to facilitate financial inclusion.
Key Recommendations
Bank branches including those manned by business correspondents providing minimum 4
hours of service for 5 days a week, should be allowed to be treated as a full-service branch.
Any other fixed point unit of the bank not complying with minimum working period should
be considered a part-time banking outlet
A part-time banking outlet can be opened in any centre. It will be counted in for computing
requirement of having 25% branches in rural areas.
Redefined the un-banked rural centre (URC) as a rural (tier V and VI) centre that does not
have a core banking solution-enabled banking outlet.
Comment
The acceptance of recommendations will significantly help to reduce costs for a bank while for
opening branches in un-banked rural centres. It will further help to enhance financial inclusion by
taking idea of bank as an outlet that delivers basic banking services. Banks, even without traditional
branches, can use technology to offer services in areas that so far had no access.
RBI cuts repo rate by 25 bps in 4th Bi-monthly Monetary Policy
Statement
Oct 5 2016
The Reserve Bank of India (RBI) in its fourth bi-monthly monetary policy review for year 2016-17
has cut the repo rate by 25 basis points to 6.25%.
This monetary policy decision was taken by the newly constituted Monetary Policy Committee
(MPC). This was also Urjit Patels maiden monetary policy announcement as RBI Governor.
All the six members of MPC unanimously decided to cut key policy rate with the aim of achieving a
midterm inflation target of 4% within a band of plus or minus 2%. With this, RBI moved away from
tradition of RBI governor having the final say on monetary policy decisions.
Policy Rates
Repo rate under the liquidity adjustment facility (LAF): Reduced by 0.25 basis points to
6.25 percent.
Reverse repo rate under the LAF: It was adjusted to 5.75 per cent.
Marginal standing facility (MSF) and Bank Rate: It was adjusted to 6.75 per cent.
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Statutory Liquidity Ratio (SLR):20.75 per cent.
SBI becomes first domestic bank to open branch in Yangon,
Myanmar
Oct 4 2016
Indias largest lender State Bank of India (SBI) has announced the opening up its foreign branch in
Yangon, the capital city of Myanmar. With this, SBI became the first domestic bank of India to open
a branch in Myanmar.
The Yangon branch is the 54th foreign branch of the SBI. This branch further extends the global
presence of Indias largest lender in 37 countries through 198 offices.
The Yangon branch was started after the Myanmarese central bank allowed SBI to open a branch
with the primary objective of extending wholesale banking services to foreign corporates.
Background
India has been a major trading partner of Myanmar for centuries. Since the signing of India and
Myanmar trade agreement in 1970, bilateral trade between two neighbours has been growing
steadily and rose from US 328 million dollars in 1997-98 to US 2.052 billion dollars in 2015-16.
Earlier SBI was also associated with Myanmar since 1861, when the erstwhile Bank of Bengal (BoB)
operated its branch in the then Rangoon. Later the operations of the Rangoon branch of SBI were
taken over by the Peoples Bank of Burma in February 1963 as part of bank nationalisation.
Union Government notifies constitution of Monetary Policy
Committee
Sep 30 2016
The Union Government has notified the constitution of the six members Monetary Policy
Committee (MPC).
In this regard, the Union Finance Minister has used powers designated under the section 45ZB of the
Reserve Bank of India (RBI) Act, 1934 to constitute MPC.
Composition of MPC
Urjit Patel: RBI Governor (Chairperson).
R Gandhi: Deputy Governor RBI in charge of Monetary Policy (Member).
Michael Patra: Executive Director of RBI (Member).
Chetan Ghate: Professor, Indian Statistical Institute (ISI) (Member).
Professor Pami Dua: Director, Delhi School of Economics (DSE) (Member).
Ravindra H. Dholakia: Professor Indian Institute of Management (IIM), Ahmedabad
(Member).
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About Monetary Policy Committee (MPC)

The six member MPC has been entrusted with the task of fixing the benchmark policy rate
(repo rate) required to contain inflation within the specified target level.
It will help in determining the Monetary Policy which in turn adds value and transparency to
monetary policy decisions.
The meetings of the MPC will be held at least 4 times a year and it will publish its decisions
after each such meeting.
The RBI Act was amended by the Finance Act, 2016 to provide for a statutory and
institutionalised framework for MPC.
Composition of MPC: As per the provisions of the RBI Act, out of the six Members of MPC,
three Members will be from the RBI and other three will be appointed by the Central
Government.
Governor of RBI (ex officio Chairperson), Deputy Governor of RBI, in charge of Monetary
Policy (Member), One officer of RBI (Member) and three members appointed by Central
Government as members.
Union Government appoints three economists to Monetary Policy
Committee
Sep 23 2016
The Appointments Committee of Cabinet (ACC) has appointed three economists as the external
appointees on the Monetary Policy Committee (MPC).
They are Pami Dua, Chetan Ghate and Ravindra Dholakia. They will have a fixed four year term and
it is non-renewable.
Pami Dua
She is the Director of the Delhi School of Economics (DSE). She is an expert on econometrics
and forecasting, has a Ph.D. from the London School of Economics.
Her research work spreads across different fields like business cycle analysis,
macroeconomics, econometrics, and forecasting.
She is also the Chairperson of the Agricultural Economics Research Centre (AERC) at the
University of Delhi.
Chetan Ghate
He is a macroeconomist and a professor at the Indian Statistical Institute (ISI), Delhi.
His research focus is on economic growth, economic development, fluctuations and monetary
and fiscal policy in developing and emerging market economies.
He is the only member of the Technical Advisory Committee (TAC) on Monetary Policy who
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becomes a member of the MPC.

Ravindra Dholakia
He is a faculty member of Economics at the Indian Institute of Management (IIM),
Ahmedabad.
He has served as an independent director on the boards of several corporations including
Gujarat State Financial Services, Union Bank of India, Air India, and Gujarat State Petroleum
Corp.
With this, MPCs composition consists of three Reserve Bank of India (RBI) representatives and
three external appointees. They will work to decide interest rates.
RBI will be represented by Governor Urjit Patel (Chairman of MPC), Deputy Governor in-charge of
monetary policy R. Gandhi and executive director M.D. Patra.
About Monetary Policy Committee (MPC)
MPC under the RBI will decide monetary policy by setting interest rates. It aims to bring
significant changes in the power the RBI governor while deciding interest rates.
The RBI will set interest rates according to the majority view of the six-member MPC, with
the Governor having the casting vote in case of a tie.
MPC replaces previous arrangement where RBI Governor along with a Technical Advisory
Committee (TAC) taking decisions on monetary policy including setting interest rates.
In the previous arrangement TAC was only having advisory functions and the RBI Governor
enjoyed veto power over the committee in setting interest rates.
Thus, it is expected to bring value and transparency to monetary policy decisions taken by
central banks which have far-reaching implications on economy, investors, savers and
borrowers.
Functions: Administer the inflation targeting monetary policy regime through determining
the interest rates (policy rate or repo rate) to contain inflation.
It will decide the changes to be made to the interest rates to contain inflation within the
target level set under the inflation targeting regime.
It will meet at least four times a year and make public its decisions following each meeting.
Structure: MPC is formed under the RBI with six members. Three members will be from
the RBI while the other three members will be appointed by the Central Government.
Members from the RBI are Governor who is the chairman of the MPC, a Deputy Governor
and one officer of the RBI.
The government members to MPC will be appointed by the Central Government on
recommendations of a search-cum-selection committee headed by the Cabinet Secretary.
45
ICICI Bank: First bank to introduce Software Robotics for power

banking operations
Sep 9 2016
Indias largest private sector bank ICICI Bank has successfully deployed Software Robotics for
power banking operations.
With this, it becomes first bank in the country and among few globally to deploy Software Robotics.
ICICI Bank has deployed Software Robotics to over 200 business processes across various functions.
The 200 business processes include retail banking operations, agri-business, trade & foreign
exchange, treasury and human resources management, among others
Key Facts
In banking, software robotics emulates human actions to automate and perform repetitive,
high volume and time consuming business tasks cutting across multiple applications.
It leverages recent advancements in artificial intelligence such as facial and voice recognition,
machine learning, natural language processing, and bots among others.
The software robots can perform over 10 lakh (1 million) banking transactions every
working day.
The software robots at ICICI Bank are configured to capture and interpret information from
systems, recognize patterns and run business processes across multiple applications.
Besides, it can execute activities including data entry and validation, automated formatting,
workflow acceleration, multi-format message creation, text mining, reconciliations and
currency exchange rate processing among others.
Significance: The software robots help to bring operational efficiency, higher accuracy and a
massive reduction in processing time for customer services. It will help ICICI Bank to cut
response time to customers by 60 per cent and increase accuracy to 100 per cent.
Unified Payments Interface becomes operational
Aug 29 2016
The National Payments Corporation of India (NPCI) has announced that Unified Payments Interface
(UPI) application has become operational.
The application will allow customers to make easier real-time payments via digital means using
smartphones.
Key Facts
The payment gateway became operational after it received the Reserve Bank of Indias
clearance that allowed banks UPI applications to go live on Google Play Store.
Initially, the UPI will be available only on the Android mobile operating system. It will be
46
going live with 21 banks in the first phase.

About Unified Payments Interface (UPI)
UPI is a flagship product of NPCI that will help India to move towards a cashless economy. It
is a set of standard Application Programming Interface (APIs).
It will provide uniform mobile payment system by leveraging digital trends such as increasing
smart phone adoption and deeper penetration of mobile data.
It will allow customers to send and receive money from their smartphones using virtual
payments address without entering bank account details.
It facilitates virtual address as a single payment identifier for sending and collecting money
and works on single click 2 factor authentication.
It works as a single identifier that will eliminate the need to exchange sensitive information
such as bank account numbers during a financial transaction.
It merges several banking features, seamless fund routing and merchant payments into one
hood. Thus, it will be a single app for accessing different bank accounts.
It also provides an option for scheduling push and pull transactions for various purposes like
sharing bills among peers.
National Payments Corporation of India (NPCI)
NPCI is the umbrella organisation for all retail payments system in India. It is being promoted
the Reserve Bank of India.
It was founded in 2008 as a not-for-profit organisation registered under section 25 of the
Companies Act, 2013.
It has successfully played pioneering role in the development of a domestic card payment
network called RuPay, reducing the dependency on international card schemes.
RBI asks banks to extend loans to women SHGs at 7% rate
Aug 26 2016
Reserve Bank of India (RBI) has asked banks to provide loans up to Rs 3 lakh at 7 per cent interest
rate to Women Self-Help Group (SHG).
This loan scheme must be provided under the National Rural Livelihoods Mission (NRLM)-
Aajeevika scheme during 2015-16.
Key Facts
The revised guidelines on interest subvention scheme under NRLM have been issued after
approval from the Union Ministry of Rural Development.
Under this loan scheme, an interest subvention on credit up to Rs 3 lakhs at 7% per annum
will be provided. All women SHGs will be eligible for it.
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However, SHG availing capital subsidy under Swarnjayanti Gram Swarojgar Yojana (SGSY)
in their existing credit outstanding will not be eligible for benefit under this scheme.
All banks will be subsidised to the extent of difference between the weighted average interest
charged and 7% subject to the maximum limit of 5.5% for the year 2015-16.
Further, SHGs will be provided with an additional 3% subvention on the prompt repayment
of loans.
The funding for this subvention will be provided to the State Rural Livelihoods Missions
(SRLMs) from the allocation for NRLM.
About National Rural Livelihoods Mission (NRLM)-Aajeevika
NRLM-Aajeevika was launched by the Union Ministry of Rural Development in June 2011.
In November 2015, it was renamed Deen Dayal Antayodaya Yojana (DAY-NRLM).
The Mission aided by World Bank aims at creating efficient and effective institutional
platforms of the rural poor.
It seeks to enable rural poor (below BPL) to increase household income through sustainable
livelihood enhancements and improved access to financial services.
It is the largest poverty reduction initiative and the largest programme for women in the
world with its goal to reach out to nearly 70 million rural households.
Urjit Patel appointed as 24th Governor of RBI
Aug 20 2016
Union Government has appointed Urjit Patel (52) as new Governor of Reserve Bank of India (RBI).
He will be 24th Governor of RBI
He will have tenure of three years and shall succeed Raghuram Rajan. Prior to this appointment
(elevation) he was Deputy Governor of RBI. He will be the eighth Deputy Governor to be elevated as
Governor at RBI.
Background
The Appointment Committee of Cabinet (ACC) has appointed Urjit Patel based on the
recommendation of the Financial Sector Regulatory Appointments Search Committee (FSRASC),
headed by the Cabinet Secretary. The Committee undertook an extensive exercise to suggest a panel
of names to the ACC.
About Urjit Patel
Born on October 28, 1963. He had received his doctorate in economics from Yale University
in 1990) and M Phil from Oxford (1986).
By profession he is an eminent economist, consultant and banker. He has two decades of rich
experience across sectors including financial, energy and infrastructure sectors.
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He has worked with the International Monetary Fund (IMF) covering the US, India, Bahamas
and Myanmar desks between 1990 and 1995.
For first time, he was appointed as the Deputy Governor of RBI in January 2013 for three
year term and was later reappointed on January 2016.
He had headed committee to review the monetary policy framework and had proposed
monetary policy committee to set interest rates (currently solely decided by the RBI
governor).
It also had recommended targeting consumer inflation to control volatile prices by shifting
the current focus away from wholesale prices.
Besides, he also had worked closely with several union and state government committees
especially those on market studies, direct taxes, anti-trust laws, Prime Ministers Task Force
on Infrastructure and sectors like telecom, aviation, power and pensions.
Note: The RBI is central bank of India. It regulates banks, prints money and prevents volatility in the
foreign exchange market. It is also the governments banker and lender of last resort.
India Post Payments Bank Limited incorporated
Aug 19 2016
The India Post Payments Bank Limited (IPPBL) has received the Certificate of Incorporation from
the Registrar of Companies, Ministry of Corporate Affairs under the Companies Act 2013.
IPPBL would be the first PSU under the Department of Posts (DoP). With the incorporation, the
Board of the IPPBL is likely to be constituted soon.
Key Facts
The incorporation of the IPPB Ltd paves the way for it to begin hiring of banking
professionals to set up the bank and begin its operations in 2017.
The DoP is expected to complete the roll out of its branches all over the country by
September 2017. This could be the fastest roll out for a bank anywhere in the world.
About India Post Payments Bank (IPPB)
The Union Government has given its approval for setting up IPPB as a Public Limited
Company under the DoP with 100% Government of India (GOI) equity.
The DoP had received the in-principle approval of the RBI in September 2015 to set up the
IPPB. The project will be rolled out in a phased manner in the entire country.
The IPPB will leverage DoPs network, resources and reach to make low-cost, quality and
simple financial services easily accessible to customers in the country.
Benefits of IPPB
Further the cause of financial inclusion by providing basic banking, remittance services and
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payments services to customers.

Facilitate spread of financial services like insurance, pensions, mutual funds to customers
especially from rural areas and the unbanked and under-banked segments.
Generate opportunities for propagating financial literacy across the country by using state of
the art banking and payments technology.
Generate new employment opportunities for skilled banking professionals.
Encourage citizens to move towards a cashless economy by creating the largest bank network
in the world in terms of accessibility.
For more details: Payment Banks
SBI board approves merger of 5 associate banks, BMB with itself
Aug 19 2016
The State Bank of Indias (SBIs) board of directors has approved merger of its five associate banks
and Bharatiya Mahila Bank (BMB) with itself.
These five subsidiaries are State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore,
State Bank of Travancore and Bharatiya Mahila Bank.
Key Facts
The board has finalised the share swap ratio for three of the listed subsidiaries and BMB.
It also approved merger of two unlisted associate banks State Bank of Patiala and State Bank
of Hyderabad with it.
The merger will create a global-sized bank with assets worth over Rs 37 lakh crore. It will
make SBI one of the top 50 global financial powerhouses in the world.
The merged entity will have network of 22,500 branches and 58,000 ATMs serving a
customer base of over 50 crore.
SBI has close to 16,500 branches, including 191 foreign offices across 36 countries while the
five subsidiary banks have nearly 6,000 branches.
For more details: Cabinet Approval
Union Cabinet approves liberalization of FDI norms for NBFCs
Aug 11 2016
The Union Cabinet has approved liberalization of foreign investment norms for the non-banking
finance companies (NBFCs) to improve the ease of doing business.
Decision in this regard, Union Cabinet meeting chaired by Prime Minister Narendra Modi in New
Delhi.
Cabinet has approved
Foreign investment in NBFCs can now come under the automatic route provided they are
regulated by any of the financial sector regulators.
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Entities not regulated by any of the regulators (RBI, SEBI, PFRDA etc.)/government agencies
will need approval from the Foreign Investment Promotion Board (FIPB).
Minimum capitalisation norms as mandated under FDI policy have been eliminated as most
of the regulators have already fixed minimum capitalisation norms.
What is a Non-Banking Financial Company (NBFC)?
A NBFC is a financial institution that provides banking services without meeting the legal
definition of a bank, i.e. one that does not hold a banking license.
It is established as a company registered under the Companies Act, 1956 but its operations are
often still covered under a countrys banking regulations.
NBFCs may be engaged in the business of loans and credit facilities, savings products,
investments and money transfer services.
What is difference between banks and NBFCs?
NBFCs business activities are akin to that of banks as they can lend and make investments;
however there are a few differences between them.
NBFCs cannot accept demand deposits. They cannot issue cheques as they do not form part
of the payment and settlement system.
Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not
available to depositors of NBFCs, unlike in case of banks.
Dinesh Kumar Khara appointed as Managing Director of SBI
Aug 10 2016
Dinesh Kumar Khara was appointed Managing Director (MD) of State Bank of India (SBI), Indias
largest lender.
His appointment was confirmed by the Appointments Committee of the Cabinet (ACC) headed by
Prime Minister Narendra Modi. He has been appointed for the period of three years.
Prior to this appointment he was working as MD and chief executive of SBI Funds Management Pvt.
Ltd.
Besides, ACC also appointed Ashok Kumar Garg and Raj Kamal Verma as executive directors of
Bank of Baroda (BoB) and Union Bank of India (UBI), respectively.
Gopal Murli Bhagat and Himanshu Joshi were also appointed as executive directors of Corporation
Bank and Oriental Bank of Commerce (OBC), respectively.
NPA of commercial banks increased by around 4%: Government
Aug 9 2016
The Union Government has announced that the Non-Performing Assets (NPA) of commercial
banks have increased by around 4% in the last one year (March 2015 to March 2016).
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It was announced by Union Minister of State for Finance (MoS) Santosh Gangwar in a written reply
to the Rajya Sabha.
Key facts
The NPA of banks was 5.43 percent in March 2015 which has risen to 9.32 percent in March
2016.
The high incidences of NPAs are mainly related to power, road, steel, textiles and other
sectors.
NPA amounts are related to 417 stalled infrastructure projects where public sector banks have
invested is over 66478 crore rupees.
Union Government has taken several steps to revive these stalled projects. Besides, the
Reserve Bank of India (RBI) has also issued guidelines for restructuring of loans.
What are Non-Performing Assets (NPAs)?
NPAs (also called non-performing loans) are loans made by a bank or finance company on
which repayments or interest payments are not being made on time.
The loan is considered to be a NPA once the borrower fails to make interest or principal
payments for 90 days.
In case of Agriculture/Farm Loans, the NPA varies for of Short duration crop loan (interest
not paid for 2 crop seasons), Long Duration Crops (interest not paid for 1 Crop season).
Thus, NPA is any asset of a bank which is not producing any income. It affects the
profitability & liquidity of the banks.
It adversely affects the value of bank in terms of market credit and widens assets and liability
mismatch.
It results in inflating the cost of capital for economic activities and banks may charge higher
interest rates on some products to compensate NPAs.
RBI keeps policy rates unchanged in 3rd bi-monthly monetary policy
review
Aug 9 2016
The Reserve Bank of India (RBI) in its third bi-monthly monetary policy review for year 2016-17
has maintained status quo in key policy interest rate.
It was last bi-monthly monetary policy review of RBI Governor Raghuram Rajan who will step
down in September 2016 after completing his term.
Policy Rates
Repo rate under the liquidity adjustment facility (LAF): unchanged at 6.50 per cent.
Reverse repo rate under the LAF: unchanged at 6.0 per cent.
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Marginal standing facility (MSF) rate: 7 per cent.

Reserve Ratios
Cash Reserve Ratio (CRR) of scheduled banks: Unchanged at 4.0 per cent of net demand
and time liability (NDTL).
Statutory Liquidity Ratio (SLR): Unchanged at 21 per cent.
Comment
The policy interest rates were kept unchanged while maintaining an accommodative policy stance on
basis of an assessment of the current and evolving macroeconomic situation in country.
Other highlights
RBI said risks to the inflation target of 5% for March 2017 continue to be on the upside.
The passage of the Goods and Services Tax (GST) Bill augurs well for the growing political
consensus for economic reforms.
Timely implementation of GST will be challenging but it will raise returns to investment
across much of the economy.
It will also even while strengthening government finances over the medium-term. This
should boost business sentiment and eventually investment.
RBI constitutes Tarun Ramadorai committee to look at household
finances in India
Aug 6 2016
The Reserve Bank of India (RBI) has constituted Dr. Tarun Ramadorai committee to study various
facets of household finance in India.
The committee will be chaired by Tarun Ramadorai, Professor of Financial Economics at University
of Oxford. It will also have representation from all financial sector regulators in India.
Terms of References of Committee
Study various facets of household finance in India and benchmark Indias position against
both the peer countries and advanced countries.
Study the reasons behind the deviation of financial allocations of Indian households like the
large household allocation to gold.
Evaluate the design of new systems and the redesign of existing systems of incentives and
regulations to encourage.
Evaluate households demands in financial markets for assets such as pensions as well as
liabilities such as home loans over the coming decade.
Assess the role of new financial technologies and products such as robo-advising,
automatically refinancing mortgages.
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Union Government fixes an inflation target of 4 percent for five years

Aug 6 2016
The Union Government has set an inflation target of four per cent for the next five years i.e. till
March 31, 2021.
In this regard, Union Government will soon set-up Monetary Policy Committee (MPC) to adhere to
the target till March 31, 2021.
Backgroud
This target was fixed after the Union Government and Reserve Bank of India (RBI) had
reached an agreement on a monetary policy framework.
The framework had had set the inflation target at four per cent, plus or minus two per cent.
However, there was no legal backing to it.
The Union Government in June 2016 also had notified rules for setting up the MPC giving
effect to amendments in the RBI Act.
What is Inflation targeting?
Inflation targeting is a monetary policy in which a central bank estimates and makes public a
projected or target inflation rate.
After declaration of target, the central bank attempts to steer actual inflation towards the
target through the use of interest rate changes and other monetary tools.
The key advantage of a target is that it allows to recognise the short run trade-offs between
inflation and growth.
It also enables Central Bank to pursue the inflation target in the long run over the course of a
business cycle.
RBI launches portal to curb illegal money
Aug 5 2016
The Reserve Bank of India (RBI) has launched a website (sachet.rbi.org.in) to curb illegal and
unauthorised pooling of funds by unscrupulous firms.
The website was launched by RBI Governor Raghuram Rajan in Mumbai, Maharashtra. It will help
people obtain information about entities allowed to collect deposits.
Key features of Portal
Facilitate filing, tracking of complaints relating to illegal and unauthorised pooling of funds
by unscrupulous firms
Provide information about whether any particular entity is registered with any regulator or is
permitted to accept deposits.
Help to enhance coordination among regulators and state government agencies to curb
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instances of unauthorised acceptance of deposits by unscrupulous entities.

Incorporates regulations prescribed by all financial regulators that different entities have to
follow.
7 Indian companies on 2016 Fortune 500 list
Jul 22 2016
Seven Indian companies have made it to the latest Fortune 500 list of the worlds biggest
corporations in terms of revenue.
Fortune 500 list is an annual ranking of the worlds wealthiest companies, compiled and published by
the American business magazine Fortune and published globally by Time Inc.
In it companies are ranked by total revenues for their respective fiscal year which has ended on or
before March 31, 2015. Revenue figures of companies mainly include their consolidated subsidiaries,
reported revenues from the discontinued operations and excluding excise taxes.
Key Facts
7 Indian companies are: Indian Oil Corporation (161st), Reliance Industries (215th), Tata
Motors (226th), State Bank of India (232nd), Bharat Petroleum (358th), Hindustan Petroleum
(367th) and Rajesh Exports (423rd).
Global top 10 companies: Walmart (1st), State Grid (2nd), China National Petroleum (3rd),
Sinopec Group (4th), Royal Dutch Shell (5th), Exxon Mobil (6th), Volkswagen (7th), Toyota
Motor (8th), Apple (9th) and BP (10th).
The worlds 500 largest companies generated collectively generated 27.6 trillion dollars in
revenues and 1.5 trillion dollars in profits in 2015.
Together, 2016 Fortune Global 500 companies employ 67 million people worldwide and are
represented by 33 countries.
RBI sets up Sudarshan Sen-headed Working Group on Fin Tech and
Digital Banking
Jul 15 2016
The Reserve Bank of India (RBI) has set up an inter-regulatory Working Group to study the
regulatory issues relating to Financial Technology (Fintech) and Digital Banking in India
The inter-regulatory Working Group will be headed by RBIs Executive Director Sudarshan Sen and
consist of 12 members. It will submit its report within six months from date of its first meeting.
It was constituted based on the recommendation of sub-committee of the Financial Stability and
Development Council (FSDC) in view of the growing significance of Fintech innovations and their
interactions with the financial sector as well as financial sector entities.
Terms of reference of Working Group
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Undertake a scoping exercise to gain a general understanding of the major innovations and
developments, technology platforms involved in Fintech.
Take into consideration how markets as well as the financial sector in particular are adopting
new delivery channels, products and technologies.
Assess opportunities and risks arising for the financial system from digitisation and use of
financial technology.
Suggest how these opportunities can be utilised for optimising financial product innovation
and delivery for the benefit of customers, users and other stakeholders.
Evaluate implications and challenges vis--vis various financial sector functions such as
clearing, intermediation and payments being under taken up by non-financial entities.
Chalk out an appropriate regulatory response with a view to re-aligning and re-orienting
statutory provisions and regulatory guidelines for enhancing Fintech and digital banking.
Also chalk out associated opportunities and simultaneously ways for managing the evolving
challenges and risk dimensions.
SBI launches SBI Mingle, a social media banking platform
Jul 6 2016
Indias largest lender State Bank of India (SBI) recently had launched SBI Mingle, a social media
banking platform for Facebook and Twitter users.
It was launched by SBI Chairman Arundhati Bhattacharya, on the occasion of 61st State Bank Day
(observed on 1st July).
Key Facts
The SBI Mingle will allow SBIs customers to access various banking services via these social
platforms.
To avail services from this platform, customers will have to register for it through a simple
one time registration process using either their social account number or their ATM/Debit
Card details.
Currently, SBI services such as balance enquiry, mini statement, funds transfer within SBI as
well as inter-bank and beneficiary management services are available for Facebook.
On Twitter, customers using hashtags can find out their account balance and view mini
statements.
Besides launching SBI Mingle platform SBI Chairman Arundhati Bhattacharya also launched two
new digital offerings. They are
SBI-Flipkart Partnership: SBI has partnered with home-grown ecommerce giant Flipkart
to offer its consumers the facility of pre-approved EMI Facility on purchases.
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Under this partnership SBI will provide overdraft facility to its pre-qualified set of customers
for transacting on Flipkart for a minimum purchase of 5000 Rupees.
SBI Digital Villages: This initiative aims to transform villages into cash less eco-system by
adopting them.
In its first stage of the initiative, SBI has adopted 21 villages to be moved on the digital
platform. It plans to bring 100 villages under this initiative across the country by 2017.
Sudarshan Sen appointed Executive Director of RBI
Jul 5 2016
Sudarshan Sen has been as Executive Director of the Reserve Bank of India (RBI). He will replace NS
Vishwanathan who was elevated as Deputy Governor of RBI.
In his new role, Sudarshan Sen will look after Department of Banking Regulation, Department of
Co-operative Bank Regulation and Department of Non-Banking Regulation.
About Sudarshan Sen
Sen holds an MBA degree in International Banking and Finance from the University of
Birmingham, United Kingdom.
He has rich experience as the central banker and has a long association with the RBI in the
field of supervision and regulation.
Earlier, he had served as in charge of the Department of Banking Regulation. He also had
served as the Regional Director of Ahmedabad office of the RBI.
SBI secures $625 million from World Bank for solar programm
Jul 4 2016
Indias largest lender State Bank of India (SBI) has signed an agreement worth 4,200 crore rupees
($625 million) with the World Bank to support its grid connected rooftop solar photovoltaic
(GRPV) programme.
The programme also aims at improving the investment climate for solar PV, and increase the ease of
doing rooftop business. It will also support development of the overall solar rooftop PV market.
Key Facts
Under GRPV programme, at least 400 MW solar capacity will be created across the country.
This agreement will help SBI to finance grid connected rooftop solar photovoltaic projects at
very competitive rates.
The investment climate for solar PV projects will be improved through technical assistance to
strengthen the capacity of key institutions.
The eligible beneficiaries under the programme would be developers, aggregators and end-
users.
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Mainly they will set up solar projects on commercial, industrial and institutional rooftops.
RIL, SBI ink Subscription and Shareholders' Agreement for payments
bank JV
Jul 2 2016
Telecom-to-energy conglomerate Reliance Industries (RIL) and Indias largest lender State Bank of
India (SBI) have signed Subscription and Shareholders Agreement to set up payments bank.
As per the agreement, RIL will be the promoter with a 70 per cent equity contribution in the
payments bank and SBI as joint venture will have 30 per cent equity contribution.
Background
RIL-SBI combine was among the 11 entities that were in August 2015 were given licence by
the Reserve Bank of India (RBI) to start a payments bank.
So far two of these Cholamandalam Investment and Finance Co and Sun Pharma, IDFC
Bank and telecom operator Telenor have decided to shelve plans of launching payments bank.
About Payments banks
Payments banks are small deposit-taking institutions that can accept deposits (initially up to 1
lakh rupees per individual).
Besides, they will offer Internet banking, facilitate money transfers and sell insurance and
mutual funds by piggy-backing on existing retail or other networks.
They can also issue ATM/debit cards, but not credit cards. However, they are also not
allowed to lend. Instead, they can invest 75% of their deposits in short-term government
bonds.
NS Vishwanathan appointed as deputy governor of RBI
Jun 29 2016
The Union Government has appointed NS Vishwanathan as deputy governor of the Reserve Bank of
India (RBI).
His appointment was approved by the Appointments Committee of the Cabinet (ACC) presided by
Prime Minister Narendra Modi in New Delhi.
NS Vishwanathan will shall have term will be for three years and will succeed Harun R Khan, who
will superannuates on July 7, 2016 on turning 62.
About NS Vishwanathan
Prior to this appointment, Vishwanathan was executive director in the RBI since April 2014.
He was oversing banking and non-banking regulation departments.
Earlier he had served as Principal Chief General Manager in the Department of non-banking
supervision at RBI.
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He also had served as Chief General Manager of Vigilance at IFCI Ltd, Delhi-based
government owned finance company.
He also had served as a Director of Punjab National Bank (PNB) from September 2012 to May
2013. He was also nominee director at Dena Bank Ltd. from May 2011 to September 2012.
Appointments of RBIs Deputy Governors
The RBI has four deputy governors two from within the ranks and one commercial banker
and an economist to head the monetary policy department.
Previously they were appointed by a panel headed by RBI Governor. But now they are
appointed based on recommendations of the Financial Sector Regulatory Appointment
Search Committee (FSRASC) headed by Cabinet Secretary that also includes RBI Governor.
Present Deputy Governors of RBI are the other being R Gandhi, S S Mundra) and Urjit Patel
(an economist).
AIIB approves first loans for projects in four countries
Jun 27 2016
The China-led Asian Infrastructure Investment Bank (AIIB) has approved first set of loans totalling
US 509 million dollars to finance projects in four countries viz. Bangladesh, Pakistan, Indonesia
and Tajikistan.
These loans for the four projects were approved in Board of Directors meeting of AIIB held at its
headquarters in Beijing, China.
Projects approved
Bangladesh: US 165 million dollars loan for a Power Distribution System Upgrade and
Expansion Project.
Indonesia: US 216.5 million dollars loan for a National Slum Upgrading Project. It is
expected to be co-financed with the World Bank.
Pakistan: US 100 million dollars loan for Shorkot-Khanewal Section of National Motorway
M-4. It will be co-financed with the Asian Development Bank (ADB) and the United
Kingdoms Department for International Development (DFID).
Tajikistan: US 27.5 million dollars loan for the Dushanbe-Uzbekistan Border Road
Improvement Project. It will be co-financed with the European Bank for Reconstruction and
Development (EBRD).
These loans will have an interest rate of London Interbank Offered Rate (LIBOR) plus 1.15 % and a
repayment period of 25 years with 5 years in grace period. These projects spanning in the energy,
transport and urban development sectors will help to bridge the regions critical infrastructure
financing gap. It will also help to strengthen regional connectivity.
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For more details: About Asian Infrastructure Investment Bank (AIIB).

ADB approves $500 million loan for bridge over Ganga River in Bihar
Jun 25 2016
The Asian Development Bank (ADB) has approved a 500 million dollars loan to build a bridge across
the Ganga River in Bihar.
The loan funds will be used to build 9.8 km road bridge in Bihar on the Ganga River. On completion
of the project it will be the Indias longest river bridge.
Key Facts
The new river bridge will provide a vital transport link between the northern and southern
parts of the state and neighbouring Nepal.
It will make it easier for people to move between jobs and markets, particularly for poorer
communities in the north of Bihar to the south of the river.
In all, the bridge is expected to benefit over nine million people as it is going to serve as an
alternate route to the existing Ganga bridge, which has begun to deteriorate.
The length and height of the bridge has been designed to minimize impacts on the river itself.
The design parameters of the bridge will also ensure that it is able to withstand climate-
related stresses such as a rise in the water level.
About Asian Development Bank (ADB)
ADB is multilateral lending agency based in Manila, Philippines. It is dedicated to reduce poverty in
Asia and the Pacific region through inclusive economic growth, environmentally sustainable growth,
and regional integration. It is collectively owned by 67 members 48 from the region including
India.
SBI launches IT Innovation Start-up Fund to assist start-ups
Jun 19 2016
Indias largest lender State Bank of India (SBI) has launched IT Innovation Start-up Fund to
support start-ups in the financial technology (fintech) space.
The fund has corpus of 200 crore rupees. It will provide assistance of up to 3 crore rupees to a
company registered in India for promoting their business innovations using information technology
for banking and related activities
SBI also has formed a mentoring team to assist start-ups which will facilitate and guide business,
extending help in various areas including additional funding requirement
The team will also monitor and make a report on the progress and the utilisation of the funds by the
start-ups. Besides, it will also give financial and external legal assistance to start-ups as and when
required.
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SBI already has launched InCube, a single window banking relationship support for startups to
provide financial advisory through their dedicated branch in Bengaluru.
Union Cabinet approves merger of 5 associate banks with SBI
Jun 16 2016
The Union Cabinet has approved merger of countrys largest lender State Bank of India (SBI) and its
associate banks in order to bring the state-owned entity on a par with global lenders.
5 associate banks of SBI are: (i) State Bank of Bikaner and Jaipur, (ii) State Bank of Hyderabad, (iii)
State Bank of Mysore, (iv) State Bank of Patiala and (v) State Bank of Travancore.
Apart from these 5 associate banks, the Bharatiya Mahila Bank (BMM) will also be merged with the
SBI.
Key Facts
The merged entity will increase SBIs market share from present 17% to 22.5-23% with total
business of over 37 lakh crore rupees.
It will have one-fourth of the deposit and loan market in the country and SBIs staff strength
will increase by 35-49%.
The merged entity will have nearly 24,000 branches and increase SBIs network by 6,000
branches.
It will also have strong network of about 58,700 ATMs across the country as of March 2016-
end and shall employ around 2.85 lakh people in 2014-15.
Background
The merger move of SBI and its associate banks comes after the Union Government had announced
a road map for bank consolidation during Union Budget of year 2016-17. This was seen as necessary
to meet the huge infrastructure financing needs of the country. This merger also seeks to feature
Indian Bank in the top 50 banks of the world in terms of size as currently no bank in the country
features in it.
RBI introduces Scheme for Sustainable Structuring of Stressed
Assets
Jun 14 2016
The Reserve Bank of India (RBI) has issued guidelines called Scheme for Sustainable Structuring of
Stressed Assets (S4A).
The main aim of these guidelines is to (i) Strengthen the lenders ability to deal with stressed assets
and (ii) Put real assets back on track of entities facing genuine difficulties by providing an avenue for
reworking financial structure.
Key Facts
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The RBI has formulated the S4A as an optional framework for the resolution of large stressed
accounts.
The S4A envisages determination of sustainable debt level of a stressed borrower and
bifurcate outstanding debt into sustainable debt and equity/quasi-equity instruments.
The sustainable debt and equity/quasi-equity instruments are expected to provide upside to
the lenders when the borrower turns around.
The resolution plan will be prepared by credible professional agencies in order to make sure
that entire exercise is carried out in a prudent and transparent manner.
Besides, an Overseeing Committee comprising of eminent experts will be set up by the Indian
Banks Association (IBA) in consultation with the RBI.
The committee will independently review the processes involved in preparation of the
resolution plan under the S4A.
Axis Bank launches India's first certified green bond at London Stock
Exchange
Jun 10 2016
Axis Bank has launched Indias first internationally-listed certified green bond to finance climate
change solutions around the world at London Stock Exchange (LSE).
The proceeds of the bond will be invested by Axis Bank in green energy, transportation and
infrastructure projects. It will play important role in reinforcing Indias commitment to produce
175,000 MW of renewable power by 2022.
The green bonds of Axis Bank were certified by the Climate Bonds Standards Board. It has raised 500
million dollars at the LSE after it launched. This is the first green bond of Axis Bank issued within its
5 billion dollars Medium Term Note (MTN) programme, which has also has been listed entirely on
LSE.
What are Green Bonds?
Bonds basically are debt instruments which help issuer to get capital while the investors receive fixed
income in the form of interest. In case of Green Bonds, the issuer gets capital from the investors only
if the investment (capital) is being raised to fund green projects relating to renewable energy or
emission reductions etc.
RBI rates unchanged in 2nd bi-monthly monetary policy review for
year 2016-17
Jun 8 2016
The Reserve Bank of India (RBI) in its second bi-monthly monetary policy review for year 2016-17
has maintained status quo in key policy interest rate.
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The key policy interest rates were kept unchanged on the basis of an assessment of the current and
evolving macroeconomic situation in the country. RBI has kept its stance on the credit policy
accommodative.
Key Rates are
Policy Rates
Reverse repo rate under the LAF: unchanged at 6.0 per cent.
Marginal standing facility (MSF) rate: 7.00 per cent.
Reserve Ratios
Statutory Liquidity Ratio (SLR): Unchanged at 21.25 per cent.
Other forecast
Growth forecast: pegged at 7.6% for the current fiscal.
Inflation target: It was kept unchanged at 5% for January 2017 with upward bias
Public investment: It is gaining strength and continuing weakness in private investment is
a concern.
BRICS bank to issue first Yuan-denominated bonds
Jun 3 2016
The New Development Bank (NDB) of the BRICS countries is set to issue its first yuan-denominated
bonds to finance sustainable development projects.
The NDBs first five-year yuan-denominated bonds (or green bonds) will be issued after receiving a
rating from international ratings agencies as well as getting authorities approval.
Further, the NDB plans to release more bonds in local currencies including in Indian Rupee if the
banks board and local authorities endorse the project plans
The Shanghai-based New Development Bank (NDB) has been founded by Brazil, Russia, India,
China and South Africa (BRICS). It is headed by eminent Indian banker K V Kamath.
The bank plans to finance sustainable development projects in the emerging markets and developing
countries. It announced its first batch of loans on April 2016, providing US $300 million to Brazil,
US $81 million to China, US $250 million to India and US $180 million to South Africa.
Dr. R Seetharaman conferred with 2016 Green Economy Visionary
Award
Jun 2 2016
Dr. R Seetharaman, Group CEO of Doha Bank, has been honoured with the 2016 Green Economy
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Visionary Award.
He has been awarded with this award for his contribution in environment-friendly activities and
thereby promoting green economy for nearly two decades.
The award was bestowed upon him by Mohammed Jarrah Al-Sabah, Chairman of Union of Arab
Banks at the 2016 Union of Arab Banks (UAB) International Banking Summit held in Rome.
About Dr. R Seetharaman
In 2015, business magazine Forbes had ranked Seetharaman sixth in the Forbes Top Indian
Leaders in the Arab World 2015 list.
R Seetharaman is a recipient of multiple doctorates, first in Global Governance from the
European University (2013) and the second in Green Banking and Sustainability from Sri Sri
University (2015).
He also has received an honorary degree (Doctorate of Laws) from the Washington College.
He was named CEO of Doha Bank in September 2007. Since then, he has overseen the banks
expansion from its base in Qatar to the UAE, India, Singapore and China and other countries.
Doha Bank was incorporated in 1978 and commenced its banking business including its
International Banking services in Doha, Qatar in March 1979.
Islamic Development Bank to open its first branch in India at
Ahmedabad
May 26 2016
Saudi Arabias Islamic Development Bank (IDB) has decided to open its first branch in India at
Ahmedabad, Gujarat.
In this regard, IDB and its private sector arm, Islamic Corporation for the Development of the
Private Sector (ICD), already have met with top officials of the Reserve Bank of India (RBI), EXIM
Bank and Indias other nationalized banks.
This announcement comes as part of MoU signed between IDB and Indias EXIM Bank during
Prime Minister Narendra Modi visit to United Arab Emirates (UAE) in April 2016.
As part of the MoU a US 100 million dollars line-of-credit (LoC) was to be given to IDBs member
countries to facilitate exports.
Besides, IDB also has decided to provide Gujarat state 30 medical vans as part of its social sector
initiatives.
About Islamic Development Bank
The IDB is a multilateral development financing institution based in in Jeddah, Saudi Arabia.
Presently, it has 56 Islamic countries as its members.
It was founded in 1973 by the Finance Ministers at the first Organisation of the Islamic
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Conference (now Organisation of Islamic Cooperation).

IDBs objective is to foster the economic development and social progress of member
countries as well as the Muslim community in accordance with principles of Islamic (Shariah)
law.
HDFC Bank launches SmartUp for startups
May 19 2016
HDFC Bank, Indias second-largest private sector lender HDFC Bank has launched SmartUp, a
dedicated solution for startups to fulfil all their banking needs.
It was launched in association with a Mumbai-based start-up accelerator Zone Startups India (ZSI).
Key facts
SmartUp is tailored to meet all the requirements of a startup. It is a complete banking
solution meant for startups.
It will be offering banking and payment solutions, along with forex and advisory services to
startups.
SmartUp will provide facility of current account. It will include waiver of AMB (average
monthly balance) for the first six months and extendable to 12 months/
It will also include salary account for employees by waiving the minimum number of
employees criteria.
SmartUp will also provide HDFCs PayZapp for business a payment and collection solution
and a dedicated relationship manager.
Accountholders will also get recommendations of regulatory and compliance issues and also
chartered accountant for tax related issues.
Startups will also get the opportunity to showcase their products on SmartBuy to 32 million
HDFC Bank customers.
Zone Startups India (ZSI): It is a joint venture of Canada based Ryerson University and Bombay
Stock Exchange Institute (BSEI). It has been operational for over two years and has helped over 70
startups.
SBI seeks to take over 5 associate PSBs, Bhartiya Mahila Bank
May 18 2016
The countrys largest lender, State Bank of India (SBI) has decided to merge its five associate public
sector banks (PSBs) and the Bharatiya Mahila Bank (BMB) with itself.
In this regard, SBI has informed the Bombay Stock Exchange (BSE) that it is seeking in-principle
approval for acquisition from the Union Government.
5 subsidiary banks are: (i) State Bank of Bikaner and Jaipur, (ii) State Bank of Hyderabad, (iii) State
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Bank of Mysore, (iv) State Bank of Patiala and (v) State Bank of Travancore.
Besides, the boards of the subsidiary banks and the SBI also met individually in Mumbai to begin
merger talks to acquire the businesses including assets and liabilities.
Key facts
The merged entity will increase SBIs market share from 17 per cent to 22.5-23 per cent the
country with total business of over Rs. 35 lakh crore.
It will have one-fourth of the deposit and loan market in the country and SBIs staff strength
will increase by 35-49 per cent.
The merged entity will also increase branch network by 6,000. At present, SBI alone has
more than 15,000 branches in the country.
Background
The merger move comes after the Union Government had announced a road map for bank
consolidation during the 2016-17 Union Budget. This was seen as necessary to meet the huge
infrastructure financing needs of the country. It also seeks to feature Indian Bank in the top 50 banks
of the world in terms of size as no bank in the country features in it.
ICICI Bank launches country's 1st contactless credit card for SMEs
May 13 2016
Indias largest private sector bank ICICI Bank has launched countrys first contactless business credit
card in association with Jet Airways for small and mid-sized enterprises (SMEs).
The card has been christened as the Jet Airways ICICI Bank Business Advantage Card.
Key facts
The card is powered by VISA payWave contactless technology.
The technology enables cardholder to make payments by simply tapping card at contactless
enabled terminals in more than 48 countries including India.
The card can also be used by dipping or swiping at non-contactless merchants.
It offers dual advantage of reward programme on the expenses and repayments of the credit
card.
With this ICICI Bank became the first bank globally to offer a dual advantage reward
programme.
Indian Air Forces Electronic Maintenance Management System
launched
May 12 2016
Indian Air Force has launched its Electronic Maintenance Management System (e-MMS) Project, an
automated military maintenance system.
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It was inaugurated by the Chief of Air Staff, Air Chief Marshal Arup Raha at the Air Force Station in
Pune, Maharashtra.
Key facts
The e-MMS project is one of the largest Maintenance Repair Overhaul (MRO) IT
implementation in the world.
The project has been designed and developed by the Indian IT giant Wipro. IAF had signed
the contract for the project e-MMS with Wipro as a System Integrator (SI) in 2013.
The e-MMS system has a central console that will help IAF to get rid of paper works and
heavy logbooks.
It seeks to seamlessly connect squadrons, wings, commands, and Air Headquarters after its
implementation.
It will transform IAFs paper-based legacy maintenance system to an online system as it will
be implemented in IAFs hierarchy and functioning.
It will help to transform work environment of IAF to become more efficient and also help to
monitor the operational availability of all fleets and systems in real time at various
hierarchical levels.
RBI to issue Rs 1000 banknotes with inset letter R
May 11 2016
The Reserve Bank of India (RBI) will shortly issue banknotes of 1000 rupees denominations with
inset letter R in both the number panels.
These new banknotes will be issued in the Mahatma Gandhi Series 2005. Besides, all the banknotes
in the denomination of 1000 rupees issued by RBI in the past would continue to be legal tender.
New features
The design of these new 1000 rupees banknotes is similar in all respects to the earlier issued
banknotes of same denominations in Mahatma Gandhi Series 2005.
On the obverse side: These banknotes will have all the other security features, including
ascending size of numerals, bleed lines and enlarged identification mark.
On the reverse side: These banknotes will bear signature of RBI Governor Raghuram G
Rajan. It will also have the year of printing 2016 printed.
ICICI Bank signs MoU with BRICSs New Development Bank
May 7 2016
Indias largest private sector lender ICICI Bank has inked a MoU with the BRICS Grouping-
promoted New Development Bank (NDB) for a partnership in bond issuances, co-financing, treasury
management and human resources.
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With this ICICI Bank becomes first financial institution in the country to tie up with the BRICS
Grouping-promoted NDB.
The MoU was signed by BDBs first President and ICICI Bank veteran KV Kamath and ICICI Bank
Chief Chanda Kochhar in Mumbai, Maharashtra.
Key facts
The MoU will help NDB in exploring rupee-denominated bonds in the domestic and
international markets.
It will make both the lenders collaborate to fund development projects in India.
They will also leverage a mutually beneficial partnership in other areas such as treasury risk
management, human resource development and account and cash management services.
The MoU will help NDB to leverage the deep market access and insight of ICICI Bank in the
Indias financial markets.
About New Development Bank
NDB is a multilateral development bank promoted by BRICS nations viz. Brazil, Russia,
India, China and South Africa. It is outcome of 6th BRICS Summit being held in Fortaleza,
Brazil.
It is headquartered in Shanghai, China. It will have a regional office in Johannesburg, South
Africa.
NDB began its operations in July 2015 with an initial capital of 100 billion dollars.
The goal of the bank is to fund infrastructure projects in emerging economies for sustainable
development.
In the NDB, each participant country has been assigned one vote, and none of the countries
have veto power.
Lok Sabha passes Insolvency and Bankruptcy Code, 2015
May 6 2016
The Lok Sabha has unanimously passed Insolvency and Bankruptcy Code, 2015 by a voice vote.
The code seeks to ensure time-bound settlement of insolvency, faster turnaround of businesses and
create a unified data base of serial defaulters.
Highlights of the Code
The Code creates time-bound processes for resolution of the insolvency of companies and
individuals.
These processes will be completed within time-bound 180 days. If insolvency is resolved in
stipulated time, the assets of the borrowers may be sold to repay creditors.
The resolution of the insolvency of processes will be conducted by licensed insolvency
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professionals (IPs). These IPs will be members of insolvency professional agencies (IPAs).
IPAs under insolvency resolution will also furnish performance bonds equal to the assets of a
company.
The Code facilitates establishment of Information utilities (IUs) to collect, collate and
disseminate financial information to facilitate insolvency resolution.
The insolvency resolution for companies will be adjudicated by the National Company Law
Tribunal (NCLT). The Debt Recovery Tribunal (DRT) will adjudicate insolvency resolution
for individuals.
The Code also gives statutory backing establishment of the Insolvency and Bankruptcy Board
of India to regulate functioning of IPs, IPAs and IUs.
For Detailed Analysis: Insolvency and Bankruptcy Code, 2015
NABARD partners with Germany for food security initiative
Apr 30 2016
The National Bank for Agriculture and Rural Development (NABARD) has entered into
collaboration with German Government for a special programme on Soil Protection and Rehabilitation
for Food Security.
The programme is part of the German governments recently introduced special initiative One
World, No Hunger initiative.
As part of the collaboration NABARD is anchoring two programmes viz.
Soil conservation and rehabilitation of degraded land programme in Madhya Pradesh and
Maharashtra.
Innovation of watershed development and climate change adaptation programmes in five
states Telangana, Andhra Pradesh, Gujarat, Maharashtra and Rajasthan.
Germanys One World, No Hunger addresses areas such as food and nutrition security, protection
and sustainable use of natural resources in rural areas, promotion of innovation and promotion of
responsible land use and access to land. India is the only country in Asia chosen for this initiative.
RBL becomes first private sector bank to open dedicated branch for
startups
Apr 20 2016
The RBL Bank (formerly Ratnakar Bank) became the first private sector bank in India to open
dedicated branch for startups.
The dedicated branch was inaugurated at Koramangala, Bengaluru by Nandan Nilekani, noted
entrepreneur and former chairman of UIDAI.
Key facts
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The first exclusive bank branch for start-ups will offer a bouquet of banking products to
service the end-to-end needs of the emerging entrepreneurial eco-system.
The branch will assist entrepreneurs in setting up new enterprises or companies.
It will offer them host of banking products including, foreign exchange services, remittances
and cash management.
The Branch will also provide a range of value added services including legal and tax
formalities, registration etc. through its affiliates and partners.
About RBL Bank
The RBL Bank is a scheduled commercial bank headquartered in the Kolhapur, Maharashtra.
Founded in August 1943, RBL is one of the oldest private sector banks in India.
The Bank currently services approximately 1 million customers and has a total business size
of over 20,000 Crore rupees.
BRICS New Development Bank approves first loans for renewable
energy projects
Apr 18 2016
The BRICS New Development Bank (NDB) has approved its first package of loans worth 811 million
dollars for four renewable energy projects in Brazil, China, South Africa and India.
The decision to approve the first loans was approved by the NDB board of governors on the sidelines
of the International Monetary Fund (IMF) and World Bank spring meetings in Washington DC, US.
Key facts
The NDB in its first loan tranche will provide $300 million to Brazil, $250 million to India,
$180 million to South Africa and $81 million to China.
These funds will be used in area of green and renewable energy projects with a combined
capacity of 2.37MW together.
On completion of these projects, they will help to reduce the amount of harmful emissions by
4 million tons annually.
About New Development Bank
The New Development Bank is a multilateral bank created by BRICS nations viz. Brazil,
Russia, India, China and South Africa.
It had started its operations in July 2015 with initial authorized capital of $100 billion.
It is headquartered in Shanghai, China.
The goal of the bank is to fund infrastructure projects in emerging economies for sustainable
development.
In the NDB, each participant country has been assigned one vote, and none of the countries
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have veto power.

Renowned Indian banker Kundapur Vaman Kamath is the President (first) of NDB.
For more details: New Development Bank
Hero group co-founder Satyanand Munjal passes away
Apr 16 2016
The co-founder of Hero Cycles group Satyanand Munjal passed away in Ludhiana, Punjab. He was
99.
He was popularly known as mahatma Satyanand Munjal for being devoted to several social causes
related to the Arya Samaj.
About Satyanand Munjal
He had co-founded hero group with his three brothers including On Prakash.
He had played important role in success of Hero Cycles group staring from bicycle spare parts
business with his three brothers.
He had served as a Co-Chairman and Managing Director (MD) of Hero Cycles Ltd.
Apart from building a business empire, Munjal also propagated teachings of the arya samaj
extensively.
He was known for his philanthropic acts such as Bahadur Chand Munjal (BCM) Arya schools,
Hero DMC Heart Institute, Dayanand Medical College and Hospital (DMCH).
He had undertaken several new initiatives by keeping a regular track of the functioning of
these institutions.
India world's largest remittance recipient in 2015: World Bank
Apr 14 2016
As per recently report of World Bank, India remained the worlds largest remittance recipient in
2015.
It was revealed by the World Banks annual report Migration and Development Brief. In 2015,
India attracted about 69 billion US dollars in remittances, down from 70 billion in 2014
Key Highlights of Report
Other large remittance recipients in 2015 were China (64 billion dollars), Philippines (28
billion), Mexico (25 billion) and Nigeria (21 billion dollar).
Global scenario: In 2015, global remittances which include those to high-income countries
contracted by 1.7% to 581 billion US dollar compared to 592 billion in 2014.
Indian scenario: Remittances to India in 2015 decreased by 2.1 per cent to USD 68.9 billion.
This marks the first decline in remittances since 2009.
Developing countries: Officially recorded remittances to developing countries amounted to
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431.6 billion dollars in 2015, an increase of 0.4 per cent over 430 billion dollars in 2014.
The growth pace of remittances to developing countries in 2015 was seen as the slowest since
the global financial crisis.
Indias neighbours: The growth of remittances in 2015 slowed from 8% in 2014 to 2.5% for
Bangladesh, from 16.7% to 12.8% for Pakistan, and from 9.6% to 0.5% for Sri Lanka.
NPCI launches Unified Payments Interface
Apr 14 2016
The National Payments Corporation of India (NPCI) has launched Unified Payments Interface
(UPI) to revolutionise mobile payment system in the country.
It was launched by the Reserve Bank of India (RBI) Governor Raghuram Rajan. 29 banks have
agreed to join the platform.
UPI seeks to provide uniform mobile payment system by leveraging digital trends such as increasing
smart phone adoption and deeper penetration of mobile data.
Key features of UPI
The UPI is for mobile based payment method that powers multiple bank accounts into a
single mobile application (of any bank) of a participating bank.
It merges several banking features, seamless fund routing and merchant payments into one
hood. Thus, it will be a single app for accessing different bank accounts.
It facilitates virtual address as a single payment identifier for sending and collecting money
and works on single click 2 factor authentication.
The single identifier will eliminate the need to exchange sensitive information such as bank
account numbers during a financial transaction.
It also provides an option for scheduling push and pull transactions for various purposes like
sharing bills among peers.
UIP is an advanced version of NPCIs Immediate Payment Service (IMPS) which is a 24X7
funds transfer service. It provides round the clock availability and faster checkout.
RBI gives nod to Bharti Airtel's payments Bank Unit
Apr 12 2016
The Reserve Bank of India (RBI) has given its in-principle approval to Bharti Airtels payments bank
venture Airtel M Commerce Services Ltd (AMCS).
With this AMCS has become the first entity to receive final approval from the RBI to start a
payments bank. Airtel M Commerce is a subsidiary of Bharti Airtel, a telecom company.
Private sector lender Kotak Mahindra Bank has upto 19.9 per cent stake in Airtel M Commerce.
Note: The Payments Banks are not allowed to lend. Hence, a tie-up with banks will help them source
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loans for their customers.

Background
In August 2015, RBI had granted in-principle licences to 11 entities to start payments banks.
The in-principle approval was valid for 18 months, during that time RBI had asked
applicants to comply with the licensing norms.
Most of the players who received the payments licences are yet to apply for the final licences.
One of them Cholamandalam Distribution Services Ltd. has decided not to go ahead with the
venture.
Some of the other players that have received such differentiated licences are Tech Mahindra,
Vodaphone m-pesa, Reliance Industries, Fino Pay Tech, Vijay Shekhar Sharma, founder of the
mobile wallet Paytm and among others.
DCB Bank launches Indias first Aadhaar-based ATM
Apr 5 2016
DCB Bank has launched an Indias first of its kind Aadhaar-based Automatic Teller Machine (ATM)
usage facility.
Currently, this ATM has been placed in pilot site at DCB Bank at Peninsula Business Park, Lower
Parel, Mumbai.
Key facts
Under this facility, DCB customers can transact using his biometric details instead of the PIN.
Thus it is a cardless and PIN less ATM.
The ATM will dispense cash from the bank account by accepting Aadhaar number and
Aadhaar fingerprint (biometric) of the customer instead of ATM/Debit Card and PIN.
The customer can swipe the card at an ATM or key-in the 12-digit Aadhaar number to start a
transaction.
But at the stage of confirming the identity, it requires biometric details rather than the PIN.
RBI cuts repo rate by 25 basis points to 6.5%
Apr 5 2016
The Reserve Bank of India (RBI) has cut down repo rate by 25 basis points to 6.5 per cent from 6.75
per cent, with immediate effect.
It was announced in the first bi-monthly monetary policy review of the RBI for the 2016-17 fiscal.
First bi-monthly monetary policy for the 2016-17 says
Repo rate: RBI has reduced the policy repo rate under the liquidity adjustment facility (LAF)
by 25 basis points from 6.75 per cent to 6.5 per cent. It is the rate at which RBI lends to the
financial system.
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Cash reserve ratio (CRR): RBI has unchanged CRR and kept it at 4.0 per cent of net
demand and time liabilities (NDTL).
Reverse repo rate: RBI has adjusted (hiked) reverse repo rate under the LAF to 6 per cent. It
is the rate at which banks can keep excess funds with the RBI.
The RBI also introduced number of measures to smoothen liquidity supply so that banks can
lend to the productive sectors.
ICICI Bank launches NFC-based contactless mobile payment
solution Touch & Pay
Mar 16 2016
Indias largest private sector lender ICICI Bank has launched new contactless mobile payment
solution Touch & Pay based on Near Field Communication (NFC) technology.
The payment solution will enable the banks credit and debit customers to make in-store contactless
payments by waving their smartphones near an NFC-enabled merchant terminal.
With this, ICICI Bank becomes first financial institution in the country to leverage the Host Card
Emulation technique which creates virtual cards for physical debit or credit cards of the bank.
On every payment done using this service at a merchant store, one-use unique token will be
generated by the Banks server which will be sent via encryption to the merchant in order to ensure
security of the card details.
Touch & Pay facility will be available at the end of March 2016 at more than 60000 merchants across
the country. It will be also incorporated into the existing Pockets application of the bank.
About Near Field Communication (NFC) technology
NFC is a short-range high frequency wireless communication technology. It basically is a set of
protocols that enable two electronic devices to establish radio data communication with each other
by bringing them closer typically, 10 cm (4 inches) from each other.
RBI inks information exchange MoU with Bank of Israel
Mar 10 2016
The Reserve Bank of India (RBI) has signed a Memorandum of Understanding (MoU) with Bank of
Israel (BOI) for exchange of information pertaining to banking supervision.
It was signed by Parvathy V Sundaram, Chief General Manager-in-Charge, Department of Banking
Supervision on behalf of RBI and Hedva Ber, Supervisor of banks on behalf of BOI.
With this RBI has signed 32 such MoUs, 1 Letter for Supervisory Co-operation and 1 Statement of
Co-operation (SoC).
By signing such MoU/SoC with supervisors of other countries, RBI is seeking to promote greater
co-operation and share supervisory information among the authorities.
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SBI granted operating licence by Myanmar

Mar 7 2016
Indias largest lender State Bank of India (SBI) has been granted preliminary approval to operate
Myanmar.
SBI was granted operating licence by Myanmar Government along with three other Asian banks.
They are Bank for Investment and Development of Vietnam, Sun Commercial Bank of Taiwan and
Shinhan Bank of South Korea.
With this, total 13 foreign banks have now been given permission to operate inside the Myanmar so
far in an attempt to attract overseas investment to the emergent nation.
Under the earlier junta rule, Myanmars banking system was closed for decades to outside
competition. However since 2011 after end a half-century of harsh military rule, Myanmars semi-
civilian government has granted licenses for foreign banks to open business in the country in the
hope of reversing isolation that saw the country become one of Asias poorest.
SBI Launches SBI e Smart SME to offer Ecommerce Loan
Feb 26 2016
Indias largest lender State Bank of India (SBI) has launched SBI e-Smart SME to provide a working
capital loan for sellers on ecommerce platforms.
It was launched by SBI in partnership with ecommerce platform Snapdeal in the presence of banks
chairman Arundhati Bhattacharya and Snapdeal CEO Sri Kunal Bahl.
About SBI e-Smart SME
Sellers on ecommerce platforms can apply for the loan online and get instant sanctioning of
the loan with KYC documents.
In order to assess the sellers creditworthiness for loan sanctioning, the bank will use
proprietary platform data and surrogates information from public domain.
It is exclusive and easy finance that will be made available at lowest interest rates.
Collateral free loan will be granted upto 10 Lakh rupees under MUDRA (Micro Units
Development and Refinance Agency) scheme.
Women entrepreneurs will be given concession of 0.25% on the loans.
SBI opens Japan Desk in New Delhi
Feb 18 2016
Indias largest lender State Bank of India (SBI) has launched Japan Desk, a single window for
inbound Japanese investments in India and vice-versa.
This is a first-of-its-kind initiative that seeks to facilitate Japanese corporates looking to invest in
India with banking and advisory services.
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Key facts
This SBI Japan Desk will also serve as an one-point comprehensive and reliable information
support source for India-bound investments of Japanese companies.
It will also facilitate establishment of banking relationship with Japanese corporates and
Japanese nationals and provide information on industries, sectors etc.
In future, SBI is also planning to set up another dedicated Japan Desk at Chennai, Tamil
Nadu.
India's Dinesh Sharma elected to board of directors of AIIB
Jan 18 2016
Indias Dinesh Sharma has been elected to the board of directors of the China-sponsored Asian
Infrastructure Investment Bank (AIIB).
He has been elected to the 12-member board through a secret ballot. This is the first board of
directors of AIIB in which 57 nations are founding members including India.
The inaugural meeting of the board of the governors of the AIIB also held in Beijing after its formal
launch. The meeting approved by-laws, rules and codes of conduct for the bank.
It should be noted that Union Finance Minister Arun Jaitley is the designated governor of the AIIB
from India. However he was represented by Mr. Sharma at the meeting.
Presently, Dinesh Sharma is serving as Additional Secretary of Union Ministry of Finance.
Comment
The election of India to board of directors of the AIIB is expected to provide significant role
for it as it is the forum that approves the loans for projects.
With authorised capital of 100 billion dollars, AIIB is expected to begin loan approvals before
the end year 2016.
It will provide financial support for infrastructure development and regional connectivity in
Asia in sectors including energy, transportation, urban construction and logistics as well as
education and healthcare.
SBI Launches First Dedicated Branch For Startups - SBI InCube
Jan 15 2016
Indias largest lender, State Bank of India (SBI) has launched dedicated specialized branch for start-
ups called SBI InCube in Bengaluru, Karnataka.
It was announced by BI Chairman Arundhati Bhattacharya in Bengaluru, Karnataka.
SBI InCube
The SBI InCube branch will cater to the specific financial needs by providing advisory
services to the budding entrepreneurs under one roof
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It will assist start-ups in cash management, regulations, taxation, mentoring, foreign

exchange and remittances and other financial services.
InCube in its current form will not fund start-ups i.e. it will not provide loans. However it
will give them loans when they turn more mature.
It will also not help start-ups to raise funds from equity market as it not part of banks
mandate.
InCube branch in Bengaluru will be headed by an assistant general manager and a team of
three other officers.
Soon SBI will be launching these branches in Pune and National Capital Region (NCR).
SBI Exclusif
SBI also has launched wealth management service Exclusif to target the fast-growing affluent
segment in the country.
This service will provide customers a dedicated Relationship Manager to take care of all their
banking and investment needs.
ICICI Bank partners with FINO PayTech for payments bank space
Jan 8 2016
Indias largest private sector lender ICICI Bank has partnered with FINO PayTech to foray into the
payments bank space.
With this partnership, ICICI Bank joins some of the leading lenders of the country that have
partnered with payments banks. For example, Kotak Mahindra Bank (KMB) and State Bank of India
(SBI) have picked up stake in payments banks to be floated by Bharti Group and Reliance Industries
respectively.
Key facts
FINO Paytech along with 10 other entities had received in principle licence from the Reserve
Bank of India (RBI) to start a payment bank.
ICICI Group has purchased about 16 per cent stake in the FINO PayTech making it one of
the largest domestic shareholder.
The tie-up with ICICI Bank will help FINO to extend services which a payments bank is not
allowed to offer. It will also help it to build some banking products and services that they
cannot offer on our own.
Presently, RBI regulations allow universal banks to invest up to 30 per cent in payments bank. RBI
regulations also mandate 51 per cent of the equity of the payments bank should be with domestic
entities.
In case of FINO PayTech it has about 70 per cent stake is with foreign entities. Before starting
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payments bank business it is going to raise capital which will help bring down foreign shareholding
within prescribed limit.
Andhra Bank launches IMPS for money transfer
Jan 6 2016
Andhra Bank has launched Immediate Payment Service (IMPS) at all its branches across the country
to provide inter-bank electronic fund transfer service.
The customer-friendly service was launched by Andhra Bank in association with the National
Payments Corporation of India (NPCI).
It also supports real time instant fund transfer system for inter-bank remittances. However the
maximum caps of transaction of remittances will 2 lakh rupees and the charges will be at the rate of
Rs.5 per transaction.
Immediate Payment Service (IMPS)
IMPS is a multi-channel, multi-dimensional inter-bank electronic fund transfer platform that
allows customers to transfer money electronically within fraction of seconds with all the
standards and integrity maintained for security.
It is round-the-clock real time instant fund transfer system which is not possible in National
Electronic Funds Transfer (NEFT) system. It also safest and most economical electronic fund
transfer service.
RBI imposes Rs 1 crore fine on State Bank of Travancore
Jan 5 2016
The Reserve Bank of India (RBI) has imposed a monetary penalty of one crore rupees on State Bank
of Travancore, an SBI associate bank for violation of some of its instructions.
The monetary penalty was imposed on State Bank of Travancore for violation of its instructions
including reporting of data to Central Repository of Information on Large Credits (CRILC).
Prior to imposing the penalty, RBI had issued a show cause notice to the bank for not having
complied with the directions issued by the bank on submission of accurate data to the CRILC.
Finally RBI came to the conclusion that the bank had violated the instructions or guidelines issued
from time to time after considering the banks reply and information submitted and documents
furnished.
Central Repository of Information on Large Credits (CRILC)
It has been established by RBI to collect, store, and disseminate data on all borrowers credit
exposures. It is mandatory for banks to report all such information under it including classification
of an account as Special Mention Accounts (SMA) on all borrowers having aggregate fund-based and
non-fund-based exposure of 5 crore rupees and above.
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NABARD inks MoU with NRSC for monitoring Watershed Projects

Jan 4 2016
National Bank for Agriculture and Rural Development (NABARD) has signed a Memorandum of
Understanding (MoU) with Hyderabad-based National Remote Sensing Centre (NRSC) for web-
based monitoring of watershed projects.
Under this MoU
Web-based monitoring will be undertaken for India-German Watershed Development
(IGWDP) projects in three states viz. Rajasthan, Gujarat and Telangana.
NRSC will create a separate page for NABARD on Bhuvan web-portal and also develop
customised software tool and mobile application for real time monitoring projects.
It will also seek to add feature in this page for online comparison and visualisation with
respect to activities implemented in the projects sanctioned by NABARD.
NABARD will use this web-based monitoring technology to address problems of monitoring
watershed projects in remote areas, apart from digitisation of the impact of watershed interventions
for long term usage.
It should be noted that NABARD only assists the watershed projects of Union Ministry of Rural
Development by providing funds under Watershed Development Fund (WDF).
Recommendations of Deepak Mohanty Committee on Medium-term
Path on Financial Inclusion
Dec 29 2015
The Reserve Bank of India (RBI) has released the Report on Medium-term Path on Financial
Inclusion submitted by 14-member committee headed by RBI Executive Director Deepak Mohanty.
RBI had constituted the committee in July 2015 to examine the existing policy regarding financial
inclusion and the form a five-year (medium term) action plan. It was tasked to suggest plan on
several components with regard to payments, deposits, credit, social security transfers, pension and
insurance.
Key recommendations
Augment the government social cash transfer in order to increase the personal disposable
income of the poor. It would put the economy on a medium-term sustainable inclusion path.
Sukanya Shiksha Scheme: Banks should make special efforts to step up account opening
for females belonging to lower income group under this scheme for social cash transfer as a
welfare measure.
Aadhaar linked credit account: Aadhaar should be linked to each individual credit account
as a unique biometric identifier which can be shared with Credit information bureau to
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enhance the stability of the credit system and improve access.

Mobile Technology: Banks traditional business model should be changed with greater
reliance on mobile technology to improve last mile service delivery.
Digitisation of land records: It should be implemented in order to increase formal credit
supply to all agrarian segments through Aadhaar-linked mechanism for Credit Eligibility
Certificates (CEC).
Nurturing self-help groups (SHGs): Corporates should be encouraged to nurture SHGs as
part of Corporate Social Responsibility (CSR) initiative.
Subsidies: Government should replace current agricultural input subsidies on fertilizers,
irrigation and power by a direct income transfer scheme as a part of second generation
reforms.
Agricultural interest subvention Scheme: It should be phased out.
Crop Insurance: Government should introduce universal crop insurance scheme covering
all crops starting with small and marginal farmers with monetary ceiling of Rs. 2 lakhs.
Multiple Guarantee Agencies: Should be encouraged to provide credit guarantees in niche
areas for micro and small enterprises (MSEs). It would also explore possibilities for counter
guarantee and re-insurance.
Unique identification of MSME: It should be introduced for all MSME borrowers and
information from it should be shared with credit bureaus.
RBI extends deadline to exchange pre-2005 notes to June 30, 2016
Dec 24 2015
Reserve Bank of India (RBI) has extended the deadline for exchanging pre-2005 currency notes of
various denominations by another six months to June 30, 2016.
From January 1, 2016 such facility for exchanging pre-2005 currency notes will only be available at
identified bank branches and Issue Offices of the RBI.
Earlier in June 2015, RBI had set the last date for public to exchange pre-2005 banknotes notes as
December 31, 2015. It is fourth time RBI has extended the deadline for exchanging pre-2005
currency notes since March 2014.
Till date RBI has shredded over 164 crore pre-2005 currency notes of various denominations,
including of Rs 1,000 with the face value of around Rs 21,750 crore in its regional offices.
Reasons for withdrawing pre-2005 notes from circulation
Security: pre-2005 notes have fewer security features as compared to 2005 and post-2005
currency notes. Thus, lesser will be the chances of its counterfeiting newer currency notes. It
will also remove fake currency notes in circulation which were being pumped in Indian
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economy were copies of pre-2005 notes.

Flushing out black money: The spillover effect of the RBIs decision will be to flush out
black money. Money has value only as long as it is a medium of exchange and store of value.
It loses its value when it ceases to be a medium of exchange.
A disincentive for cash hoarders: With the RBIs announcement, currency hoarders will
be left with no option but to liquidate their unaccounted holdings by spending or exchanging
them. Thus, this is a well thought out exercise by the RBI to capture the money flows into
the system and also help flush out counterfeit notes.
International standard practice: It is an international standard practice to remove old
series notes.
RBI keeps repo rate unchanged in 5th bi-monthly monetary policy
review
Dec 2 2015
Reserve Bank of India (RBI) in its fifth bi-monthly monetary policy review has maintained status
status quo in key policy interest rate.
The key policy interest rates were kept unchanged on the basis of an assessment of the current and
evolving macroeconomic situation in the country.
The Key policy interest rates are
Reverse repo rate under the LAF: unchanged at 5.75 per cent
Marginal standing facility (MSF) rate and the Bank Rate has unchanged at 7.75 per cent.
Continuation of liquidity under overnight repos at 0.25 per cent of bank-wise NDTL at the
LAF repo rate.
Continuation of liquidity under 14-day term repos as well as longer term repos of up to 0.75
per cent of NDTL of the banking system through auctions.
RBI allows Indian corporate to issue offshore rupee-denominated
bonds outside India
Oct 29 2015
The Reserve Bank of India (RBI) has granted permission to the Indian corporate to issue offshore
rupee-denominated bonds (Masala Bonds) outside India.
In this regard, Union Government has considered the matter of taxation of income from such bonds
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under Income Tax (IT) Act, 1961.

Such bonds will attract a withholding tax of 5 per cent and gains arising in case of appreciation of
rupee against the foreign currency. In this case investment made would be exempted from capital
gains tax.
Capital gains tax would be exempted for the Capital gains arising in case of appreciation of rupee
between the date of issue and the date of redemption against the foreign currency in which the
investment is made.
Governments clarification on these bonds comes in the wake of companies such as NTPC, IRFC and
IIFCL are planning to issue rupee-denominated bonds in markets abroad. Even foreign portfolio
investors (FPIs) also had sought clarification on the tax treatment of the instruments.
Samiran Chakraborty appointed as Chief Economist of Citibank India
Oct 28 2015
Samiran Chakraborty has been appointed as Chief Economist of global banking major Citibank for
India.
Prior to this appointment, he was Managing Director (MD) and head at Standard Chartered Bank
for macro research in South Asia.
Chakraborty has more than a decade of rich experience in conducting macro research and covering
various asset classes including currency, credit markets and interest rates.
Earlier, he had worked with Indias largest private sector bank, ICICI as chief economist and also as
faculty for mathematical economics and open-economy macro-economics at Delhi School of
Economics.
About Citibank India
Citibank India is an Indian private sector bank and subsidiary of US based Citigroup, a
multinational financial services corporation.
Established in 1902 in Kolkata. Presently, its headquarters are in Mumbai, Maharashtra.
It operates in 44 full-service branches in 31 cities and has network of over 700 ATMs across
the country. It employs around 7,500 people.
RBI allows banks to fix interest rates on gold deposit scheme
Oct 23 2015
Reserve Bank of India (RBI) has allowed banks to fix their own interest rates on gold deposits under
the Gold Monetisation Scheme.
In this regard RBI has issued guidelines mentioning
Banks are free to set interest rate such as principal and interest on the deposit denominated in
gold.
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Designated banks will accept gold deposits under the Short Term Bank Deposit (1-3 years),
Medium (5-7 years) and Long term (12-15 years) Government Deposit Schemes.
The interest on the gold deposits will be credited in the accounts on the respective due dates
and will be periodically withdrawable i.e. at maturity of the deposits.
Short term bank deposits will be applicable cash reserve ratio (CRR) and statutory liquidity
ratio (SLR).
There is no bar for maximum gold deposit but the minimum deposit at one time should be
raw gold equivalent to 30 grams of 995 fineness standard.
The raw gold should be in the form of coins, bars, jewellery excluding stones and other
metals
Individual banks will determine the provision for premature withdrawal subject to a
minimum lock-in period and along with the penalty.
The designated banks may sell or lend the gold accepted under the deposit to Metals and
Minerals Trading Corporation (MMTC) of India for minting India Gold Coins (IGC) and to
jewellers or sell it to other designated banks.
Earlier, Union Government had given its approval to Gold Deposit and Monetisation Scheme in
order to mobilize a part of an estimated 20,000 tonnes of precious metal lying idle with households
and institutions into the banking system.
RBI, UAE Central Bank ink MoU for supervisory information
exchange
Oct 19 2015
The Reserve Bank of India (RBI) has signed a Memorandum of Understanding (MoU) with the
Central Bank of United Arab Emirates (UAE) on Supervisory Cooperation and Exchange of
Supervisory Information.
It was signed at Abu Dhabi, UAE by Saeed Abdulla Al Hamiz, Assistant Governor of Central Bank of
UAE and Meena Hemchandra, Executive Director of RBI.
By signing the MoU, RBI is seeking to promote greater co-operation and share supervisory
information among the authorities. So far RBI has signed 29 such MoUs, one Letter for Supervisory
Co-operation (LSC) and one Statement of Co-operation (SoC) in this regard.
RBI formed Financial Inclusion Fund with Rs. 2000 crore corpus
Oct 16 2015
Reserve Bank of India (RBI) has established Financial Inclusion Fund (FIF) with Rs. 2000 crore
corpus expanding reach of banking services.
This fund will support the developmental and promotional activities covered under the financial
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inclusion initiatives.
Key facts
FIF has been established as a single entity (fund) by merging Financial Inclusion Fund (FIF)
and Financial Inclusion Technology Fund (FITF).
It will provide support for funding the setting up and operational cost for running financial
inclusion and Literacy Centres.
One of its major objective will be enhanced investment in Green Information and
Communication Technology (ICT) solution.
It will be administered by the reconstituted Advisory Board constituted by Union
Government and will be maintained by NABARD.
Contribution to FIF would be from the interest differential in excess of 0.5 per cent on Rural
Infrastructure Development Fund (RIDF) and Short-Term Cooperative Rural Credit
(STCRC) deposits.
These deposits are held on account of shortfall in priority sector lending kept with NABARD
by banks.
RBI lowers repo rate by 50 basis points to 6.75 per cent
Sep 29 2015
Reserve Bank of India (RBI) has reduced the policy repo rate under the liquidity adjustment facility
(LAF) by 50 basis points from 7.25 per cent to 6.75 per cent with immediate effect.
It was announced in the recently released fourth bi-monthly policy of RBI since January 2015.
4th bi-monthly policy of RBI says that
Policy repo rate under the LAF: Reduced by the 50 basis points from 7.25 per cent to 6.75
per cent.
Cash reserve ratio (CRR): of scheduled banks has kept unchanged at 4 per cent of net
Continuation of liquidity under overnight repos at 0.25 per cent of bank-wise NDTL at the
LAF repo rate.
Continuation of liquidity under 14-day term repos as well as longer term repos of up to 0.75
per cent of NDTL of the banking system through auctions.
Continuation with overnight/term variable rate repos and reverse repos to smooth liquidity.
Background
This surprise repo rate cut decision was taken by RBI on the basis of an assessment of the current
and evolving macroeconomic situation in the country. This decision was taken following abating of
inflationary pressures, full monsoon outturn, no changes in US central bank actions, and greater
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transmission of the RBIs front-loaded past actions.

RBI approves 10 entities to set up Small Finance Banks
Sep 17 2015
The Reserve Bank of India (RBI) has granted in principle approval to 10 entities to set up small
finance banks to provide basic banking services to small farmers and micro industries.
The in-principle approval will enable these entities comply with the guidelines on Small Finance
Banks and will be valid for 18 months.
10 entities are: Au Financiers (India) Ltd, Capital Local Area Bank, Disha Microfin Private Ltd,
Equitas Holdings P Limited, ESAF Microfinance and Investments Private Ltd, Janalakshmi Financial
Services Private Limited, RGVN (North East) Microfinance Limited, Suryoday Micro Finance
Private Ltd, Ujjivan Financial Services Private Ltd and Utkarsh Micro Finance Private Ltd.
As per RBI guidelines, the small finance banks can provide basic banking services in order to
promote financial inclusion.
It will include services like accepting deposits and lending to the unbanked sections such as micro
business enterprises, small farmers, micro and small industries and unorganised sector entities.
Gujarat tops in ease of doing business in India: World Bank Report
Sep 15 2015
Gujarat has been placed to top position in World Banks first ever ranking of States on the ease of
doing business in India.
The World Bank report titled Assessment of State Implementation of Business Reforms was released in
New Delhi under the aegis of the Confederation of Indian Industry (CII).
The inaugural edition of report reflected the ease of doing business in all Indian States at sub-
regional level.
Key facts
All States were assessed over a six-month period from January to June 2015 on the basis of
percentage scores in a 98-point reforms agenda.
The Union Department of Industrial Policy and Promotion, CII, Federation of Indian
Chambers of Commerce and Industry (FICCI and KPMG were involved in the exercise.
Top 5 States: Gujarat (71.14%), Andhra Pradesh (70.12%), Jharkhand (63.09%), Chhattisgarh
(62.45%) and Madhya Pradesh (62.00%).
Bottom 5 states: Mizoram (6.37%), Jammu and Kashmir (5.93%), Meghalaya (4.38%),
Nagaland (3.41%) and Arunachal Pradesh (1.23%).
The largest recipients of foreign investments Maharashtra and Tamil Nadu were placed at
eighth and twelfth position with less than 50 per cent scores.
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The focus of the study for assessment was mostly undertaken on eight key important
parameters: The setting up of a business, complying with environment procedures, allotment
of land and obtaining construction permit, complying with labour regulations, registering
and complying with tax procedures, obtaining infrastructure-related utilities, carrying out
inspections and enforcing contracts.
RBI, Nepal Rastra Bank ink MoU for supervisory information
exchange
Sep 15 2015
Reserve Bank of India (RBI) has inked a Memorandum of Understanding (MoU) with the Nepal
Rastra Bank (NRB) on Supervisory Cooperation and Exchange of Supervisory Information.
The MoU was signed by RBIs Executive Director Meena Hemchandra and Nepal Rastra Banks
Executive Director Narayan Prasad Paudel in New Delhi.
By signing the MoU, RBI is seeking to promote greater co-operation and share supervisory
information among the authorities.
So far RBI has signed 27 such MoUs, one Letter for Supervisory Co-operation (LSC) and one
Statement of Co-operation (SoC) in this regard.
Union Cabinet allows 100 per cent FDI under automatic route for
white label ATMs
Sep 10 2015
The Union Cabinet has allowed 100 per cent foreign direct investment (FDI) under the automatic
route for white label ATM operations (WLAO).
Decision in this regard was taken in Union Cabinet meeting chaired by Prime Minister Narendra
Modi in New Delhi.
This decision will expedite and ease FDI inflows in WLAO further giving a fillip to the governments
ambitious effort to promote financial inclusion in the country, including the Pradhan Mantri Jan
Dhan Yojna (PMJDY).
Prior this approval, foreign investment in WLAO was allowed through the government approval
route which required some processing time and projects were delayed.
White labeled ATMs
Private non-bank companies that own and operate their own brand of ATMs are termed as
White labeled ATMs. They were meant to expand the reach of ATMs in Tier III to VI
centres.
As per RBI guidelines, it is mandatory to non-bank companies owning white labelled ATMs
to provide banking services to customers based on cards (credit/debit/prepaid) issued by
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banks.
India to join UNs Better Than Cash Alliance to achieve financial
inclusion
Sep 2 2015
India has decided to join UN-based Better Than Cash Alliance with a view to reduce cash
transactions in its economy and achieve financial inclusion.
The official announcement in this regard was made on the first anniversary of Governments flagship
financial inclusion programme Pradhan Mantri Jan Dhan Yojana (PMJDY.)
Partnership with this UN alliance is an extension of Indian Governments commitment to reduce
cash transactions in its economy as digitization of payments to achieve financial inclusion a top
priority.
Better Than Cash Alliance is made up of Governments, international organizations and companies.
It accelerates the transition of economy from cash to digital payments in order to reduce poverty and
drive inclusive growth.
Indian Bank launches IndPay mobile app service
Aug 31 2015
State-owned financial services lender Indian Bank has launched IndPay mobile app service to
enables its customers to operate bank accounts anytime from anywhere.
It was formally unveiled by the Indian Bank MD and CEO M K Jain
Key features of IndPay app
Aims at helping banks customers to access their bank accounts from any corner of the
country.
It can be operated through smartphones compatible with Android, iOS and Windows mobile
operating systems.
It will help customers to do transactions like enquiries, transferring funds to any account and
getting mini statements.
About Indian Bank
Indian Bank is one of the oldest bank in India. It was established in 1907 as a private bank.
It is headquartered in Chennai, Tamil Nadu
It was nationalised in 1969 by the Government of India along with other 13 private banks
under Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969.
Bandhan, first micro finance company to start operation as a
commercial bank
Aug 24 2015
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Bandhan Bank has become the first micro-finance company in India to start operation as full-fledged
scheduled commercial bank.
The bank was inaugurated by Union Finance Minister Arun Jaitley in Kolkata, ushering in a new era
in countrys banking sector to reach out to the unbanked population.
Key facts
Bandhan Bank has begun its operations after it had received an in-principle approval from
the Reserve Bank of India in April 2014 and final nod on June, 2015.
It was established in 2001 as a not-for-profit micro-finance enterprise by Chandra Shekhar
Ghosh with an aim to alleviate poverty by empowering women. Later in 2006, it had
transformed itself into a non-banking finance company (NBFC).
Bandhan Bank will now primarily cater to the unorganized sector in India like daily wage
earners and women running small businesses.
Headquarters: It has two divisions viz. micro banking and general banking.
As a bank, it will also offer services like savings, remittance and insurance services. Presently,
it has 501 branches, 2022 service centres and 50 ATMs across 24 states.
Over 71 per cent of its branches are in rural India including 35 per cent in unbanked rural
pockets. State-wise, West Bengal has highest 220 branches, followed by Bihar (67), Assam
(60), Maharashtra (21), Uttar Pradesh and Tripura (20 each) and Jharkhand (15).
It should be noted that prior to starting operation as commercial bank, Bandhan was Worlds largest
Non-Deposit-accepting Microfinance Institution (MFI) and Indias largest microfinance company.
R Gandhi committee of RBI recommends conversion of UCBs into
regular banks
Aug 22 2015
A Reserve Bank of India (RBI) committee has recommended conversion of Urban Cooperative
Banks (UCBs) with business size of 20,000 crore rupees or more into regular banks.
This recommendation was given by the High Powered Committee on UCBs headed by RBI Deputy
Governor R Gandhi in its report.
Recommendations
Conversion of UCBs will not be compulsory for large UCBs and they can continue the way
they operate currently in terms of asset size and balance sheet.
Large UCBs can convert themselves into commercial banks in order to minimise the systemic
risk.
For conversion, smaller UCBs with business size of less than 20,000 crore rupees who are
willing to convert to Small Finance Banks can apply to the RBI.
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Licenses for conversion to operate as UCBs will be issued to well-managed and financially
sound cooperative credit societies having a minimum track record of 5-years.
With the conversion, UCBs will be allowed to grow and proliferate further to meet the
objective of financial inclusion.
Background
The High Powered Committee on UCBs was constituted in January 2015 on the
recommendation Malegam Committee (Expert Committee on Licensing of New UCBs).
Terms and reference of the committee was to examine and recommend on issues of
conversion of UCBs into commercial banks. The committee work was to examine
permissible business lines and appropriate size of UCBs for conversion purpose.
Government Issues Norms for Selection of CEOs and MDs of Smaller
PSU Banks
Aug 21 2015
After the irk raised due to appointment of two private sector bankers to head Bank of Baroda and
Canara Bank the government has issued norms for selection of MDs and CEOs in Mid and Small
Public Sector Banks (PSBs) on 20 August 2015.
The guideline was issued after the approval by the Appointments Committee of Cabinet (ACC)
for selection of MDs & CEOs in Public Sector Banks (PSBs) other than five large Public Sector Banks.
As per the guidelines:
The top post in the PSBs would be filled from the existing pool of executive directors (EDs)
or deputy managing directors (DMDs) in state-owned banks with a remaining service period
of 2 years.
Henceforth the private sector executives would not be the part of the selection process of top
management in the public sector banking space.
The DMDs of IDBI Bank, the EDs of nationalised banks and MDs of associate banks
of SBI who have one year of service experience as ED/DMD/MD and who have two years of
service left are entitled for post of MD & CEO.
Other than five large PSBs, for the remaining banks hiring will be conducted from the pool of
executive directors of the public sector banks itself.
For the five large banks viz. Punjab National Bank, Bank of Baroda, Bank of
India,Canara Bank and IDBI Bank there will be a separate procedure for selection
Selection Methodology:
The section will be done by the interaction of the candidates with three panels of the sub-
committee of the Appointments Board, where the candidates will be rated out of 100 marks.
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50 marks to be awarded for Annual Performance Appraisal Reports (APARs) of five years
and 50 marks assigned on the basis of performance during interaction with the sub-
committee.
Eligibility criteria for executive directors of the nationalized banks:
For the post of executive director the General Managers of nationalized banks and CGMs of
associate banks of SBI who have risen from the associate banks service who have two years of
experience of service are eligible.
Note: There are total 27 PSBs in India 19 Nationalised banks + 6 State bank group (SBI + 5
associates) + 1 IDBI bank (Other Public Sector-Indian Bank) = 26 PSBs + 1 Bhartiya Mahila Bank.
Government launched education loan portal for students seeking
loans
Aug 21 2015
On 20 August 2015, Government launched a web-based portal www.vidyalakshmi.co.in for the
students seeking educational loans.
In order to ensure that no student misses out on higher education due to lack of funds, finance
minister in the Union Budget for 2015-16 had proposed to set a fully IT-based Student Financial Aid
Authority.
In line with this proposal this portal was launched with an aim to administer and monitor
scholarship as well as educational loan schemes under the Pradhan Mantri Vidya Lakshmi
Karyakram (PMVLK).
The launch of this portal also aims to bring all banks providing educational loans under one roof.
About the portal:
The portal has been developed and maintained by NSDL e-Governance Infrastructure
Limited (NSDL e-Gov) under the guidance of Ministry of Finance, Department of Higher
Education, Ministry of Human Resource Development and Indian Banks Association (IBA).
It is a first of its kind portal that provides access to information and makes application for
educational loans provided by banks and also government scholarships under a single
window.
The portal also has a provision to apply to multiple banks for educational loans and facility
for banks to download students loan applications among others.
It also carter facility for banks to upload loan processing status and students can view status of
their loan application and linkage to National Scholarship Portal for information and
application for government scholarships on the dashboard of the portal.
Up till now over 13 banks have registered and 22 educational loan schemes on the Vidya
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Lakshmi Portal.
SBI, Bank of India, IDBI Bank, Canara Bank & Union Bank of India have integrated
their system with the portal for providing loan processing status to students.
Note: PMVLK was launched on 15 July 2015 under the governments ambitious National Skill
Development Mission.
Reserve Bank of India granted in-principle approval to 11
applicants to start a payments bank
Aug 19 2015
Reserve Bank of India granted in-principle approval to 11 applicants to start payments banks. The
Committee of the Central Board (CCB) of RBI has selected 11 entities among the 41 applicant
who has the reach and the technological and financial strength to provide service to the customers
and promote governments initiative of financial inclusion across the country.
The selected applicants are:
Reliance Industries
Airtel M Commerce Services
Tech Mahindra
Vodafone m-pesa
Aditya Birla Nuvo
Department of Posts
Cholamandalam Distribution Services
Fino PayTech
PayTm
National Securities Depository Ltd (NSDL)
Sun Pharma.
As per RBI notification for Payment Banks:
RBI has given in principle approval to these 11 applicants to set payment banks is valid for 18
month period.
The payments banks will be able to take deposits and remittances, internet banking and other
specified services but cannot undertake lending services.
Their holding are restricted to a maximum balance of Rs 1 lakh per individual customer.
They can issue ATM/debit cards but not credit cards and can also issue other prepaid
payment instruments.
They can distribute non-risk sharing simple financial products like mutual funds and
insurance products.
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Non resident Indians will not be allowed to open accounts in payment banks.
Finance Minister had directed RBI to create a framework for licensing payment banks so as to
meet governments financial inclusion target.
It is mandatory for payment banks to hold minimum capital of Rs. 100 crore. FDI of 74 per
cent is allowed in payment bank.
Selection: The applicants were detailed inspected by an External Advisory Committee (EAC) under
the Chairmanship of Dr. Nachiket Mor the Director, Central Board of the Reserve Bank of India.
LIC launches maiden unit linked insurance plan (ULIP)
Aug 19 2015
State run insurer, Life Insurance Corporation of India (LIC) has launched its maiden unit linked
insurance plan (ULIP) product across the country.
The ULIP which is also called as New Endowment Plus offers investment-cum-insurance
provision during the term policy providing dual benefit for the policy holder.
Specifications of ULIP:
It provides dual benefits of risk cover and investment opportunity in market to the policy
holder and also provides option of partial withdrawal under this plan.
ULIP provides four fund options to policy holders in form of bond fund, balance fund,
secured fund, and growth fund to which policy holder can switch over according to their
conveniences.
Policy holders can switch over among the fund options for four times in a given policy for
free of charge.
ULIP provides double death benefit .i.e. it gives assured amount equal to the higher of basic
sum assured or policy holders fund value on death before or after the date of commencement
of risk.
It also provides accident death benefit to rider which provides for an additional amount equal
to accident death benefit sum assured on death due to accident.
The basic sum assured under ULIP is higher by 10 times the annualised premium and 105% of
the total premiums paid.
The minimum lock-in period for ULIP plan is for five years and if surrender before that an
additional charge is levied.
Finance Minister launches two funds for promoting MSMEs and
Start-ups
Aug 19 2015
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On 18 August Finance Minister Arun Jaitley launched two funds the India Aspiration Fund (IAF)
and SIDBI Make in India Loan for Enterprises (SMILE) under Small Industries Development Bank
of India (SIDBI) in line to carter funding for start-ups and to aid small enterprises in India.
SIDBI under the first fund India Aspiration Fund (IAF) would invest in venture capital funds for
meeting the equity requirement of MSME start-ups and for this the initial corpus of Rs. 2,000 crore
has been set. Life Insurance Corp. of India (LIC) will be a partner and co-investor in this fund.
Under second fund the SIDBI Make in India Loan for Enterprises (SMILE) is a debt-fund which will
carter soft term loans to MSMEs to meet debt-to-equity norms and pursue growth opportunities,
SIDBI has set Initial corpus of Rs. 10, 000 crore under SMILE fund.
Finance Ministry has launched these funds under SIDBI to boost MSME and start-ups under Make
in India initiative and expects to create employment for over one lakh person for four to five years.
Ministry also intend to move people from overstaffed agriculture sector to areas such as services and
manufacturing through MSMEs and start-up which fund their own business and creates
employment.
ICICI Bank launches Smart Vault digital locker facility
Aug 18 2015
Indias largest private sector lender ICICI Bank has launched Smart Vault first of its kind fully
automated digital locker facility in India.
It was launched by Managing Director (MD) and CEO of ICICI Bank, Chanda Kochhar in New
Delhi.
Key features of Smart Vault
The locker is equipped with multi-layer security system, including PIN, biometric and debit
cards authentication.
This system has been designed in lines with Make In India programme as it has been
manufactured and designed by Indian partners of ICICI Bank.
Customers can access the vault without any intervention by the branch staff and the facility
will be available to customers even on weekends and post banking hours.
The vault facility uses advance robotic technology to access the lockers from the safe vault.
The lockers will be available in three different sizes and charges will depend on the size.
SBI launches mobile wallet app 'Buddy'
Aug 18 2015
Indias largest banking entity State Bank of India (SBI) launched a Mobile wallet application dubbed
as SBI Buddy.
It was launched by Union Finance Minister Arun Jaitley at a function held at State Bank Bhavan,
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Nariman Point in Mumbai. SBIs first female Chairperson Arundhati Bhattacharya was also present
on the occasion.
Key features of SBI Buddy
Aims at providing convenient and secure digital payment system to its customers.
It was launched in collaboration with Accenture and Mastercard.
The application is available in 13 languages with several features including bill payment, all
types of ticket bookings for movies, flights, payment and cash transfer among others.
It also has features like reminders to recharge, bill payments, dues settlement etc.
At present the app is available only on android based phones and can be downloaded from
Google Play Store. SBI soon is going to launch this app on Apple App Store.
SBI Foundation
State Bank of India also launched SBI Foundation, a subsidiary as an implementing agency
for its corporate social responsibility (CSR) activities.
Union Finance Minister unveiled website and the logo of SBI Foundation on the occasion of
launching the SBI Buddy application.
SBI foundation will encourage, promote and develop causes related to environment,
education, children welfare, women empowerment and manage all the CSR activities of the
SBI Group.
IDBI appointed Kishor Piraji Kharat as its MD and CEO
Aug 18 2015
Industrial Development Bank of India (IDBI) has appointed Kishor Piraji Kharat as its new
Managing Director & Chief Executive Officer.
Kishor Kharat is a graduate in commerce and law who is also a certified associate of the Indian
Institute of Bankers.
He had earlier assumed post of executive director of Union Bank of India and before that he had
served Bank of Baroda for three decades.
He has wide exposure across various verticals of banking, international business, including credit,
information technology and general administration in India as well as overseas.
About Industrial Development bank of India (IDBI):
IDBI was constituted on 1 July 1964 under IDBI Act 1964 based on the model of
Developmental Bank of Canada with a motive to provide direct and indirect finance to
Industries.
Government of India took over the controls of IDBI in 1975 and then transformed into
independent autonomous statutory organisation.
It was regarded as a Public Financial Institution and continued to serve as a DFI for 40 years
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and was formally transformed into a Bank on 28 September 2004. It thus became 28th Public
Sector Bank.
IDBI Bank was earlier known as IDBI Ltd which was change to its existing name IDBI Bank
Ltd on 7 May 2008.
RBI suspended licence of seven non-banking finance companies
(NBFCs)
Aug 18 2015
On 17 August the Reserve Bank of India (RBI) suspends licence of seven non-banking finance
companies (NBFCs).
The seven NBFCs whose licences were suspended are Religare Finance, Artisans Micro Finance,
Eden Trade & Commerce, RCS Parivar Finance, Nott Investments, Dewra Stocks & Securities,
Swetasree Finance.
Being a dormant entity, Religare Finance licence was suspended by RBI as it did not conducted
lending operation for long period of time.
RBI role in issuing licence to NBFCs:
A Non-Banking Financial Company (NBFC) is a company registered under the Companies
Act, 1956, whose principal business is lending, investments and receiving deposits. At present
there are around 12,000 NBFCs in India.
NBFC does not include any institution whose principal business is agricultural activity,
trading activity, industrial activity or sale/purchase/construction of immovable property.
RBI has power under RBI Act 1934 to register, regulate, lay down policy, inspect, issue
directions, supervise and exercise surveillance over NBFCs that meet the 50-50 criteria of
principal business.
Any NBFCs that does not carry out its principal business according to the directions or orders
issued by RBI under RBI Act is eligible for penal action that can also result in cancelling the
Certificate of Registration issued to the NBFC.
Union Government appoints two private sector professionals to head
BoB, Canara Bank
Aug 17 2015
Union government has appointed two private sector banking professionals as Managing Director
(MD) and Chief Executive Officer of Bank of Baroda (BoB) and Canara Bank.
This is the first time that Union government has appointed the two candidates from the private
sector to head the Public Sector Banks (PSBs).
Appointed persons are
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P S jayakumar: MD and CEO of Bank of Baroda (BoB).

Rakesh Sharma: MD and CEO of Canara Bank.
Apart from these appointments, Union Government also appointed MD and CEO of other three
PSBs who are serving government officials. They are
MO Rego: MD and CEO of Bank of India (BoI).
Kishore Kharat Piraji: MD and CEO IDBI Bank.
Usha Ananthasubramanian: MD and CEO of Punjab National Bank (PNB).
Union government appointment non-executive chairman for 5 PSUs namely Bank of India, Canara
Bank, Bank of Baroda, Indian Bank and Vijaya Bank.
It should be noted that these appointments were made by Union Finance Ministry as part seven
pronged plan called Indradhanush Mission to revamp functioning of PSBs.
Union Government unveils Indradhanush Mission for PSBs
Aug 16 2015
Union Government has launched a seven pronged plan called Indradhanush Mission to revamp
functioning of public sector banks (PSBs).
It was launched by Union Finance Minister Arun Jaitley in New Delhi.
Facts about Indradhanush Mission
The seven shades of Indradhanush mission include appointments, de-stressing PSBs, capitalisation,
empowerment, framework of accountability and governance reforms.
It seeks to achieve the objective of economic growth revival through improving credit and
minimising the political interference in the functioning of PSBs.
Appointments: Selection of non-executive chairman in remaining 6 state owned PSBs till
November 2015.
Appointing MD & CEO of two PSBs as early as possible.
Bank Board Bureau (BBB): It will be a body of eminent professionals to be selected within
6 months i.e. February 2015.
It will become functional from Financial year 2016-17 i.e. form 1st April 2016.
Capitalisation: Infuse 25,000 crore rupees of capital into debt-laden banks in this fiscal in
phased manner. Out of this 20,000 crore rupees would be injected in August 2015.
Rest 5,000 crore rupees will be performance based allocation to be allocated in the last quarter
of 2016.
De-stressing PSBs: To develop vibrant debt market for PSBs in order to reduce lending
pressure on banks.
Strengthen asset reconstruction of companies.
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Empowerment: Provide greater flexibility in hiring of manpower in PSBs.

Framework of accountability: It will seek to streamline vigilance process for quick action
in case major frauds and also include connivance of staff.
Governance reforms in PSBs: Next Gyan Sangam (also known as the Bankers Retreat) will
be held from 14 to 16 January 2016. Employee Stock Option Plan (ESOP) will be initiated for
top management.
Union Government to form Bank Board Bureau
Aug 16 2015
Union Government has decided to set up a Bank Board Bureau (BBB) to monitor key performance
indicators of two dozen public sector banks (PSBs).
It was announced by Union Finance Minister Arun Jailtley as part of a seven-pronged revamp plan
for PSBs dubbed as Indradhanush (rainbow) plan.
Facts about Bank Board Bureau
Bank Board Bureau (BBB) will start the functioning from next financial year i.e. from 1st
April 2016 and the selection of its member will start in the next six months.
It will replace existing system Appointments Board in which appointments for top level jobs
at PSBs are made by an appointments committee led by the Reserve Bank of India (RBI)
Governor.
Composition: The BBB will be a body of eminent professionals and shall consist of only one
government official. It will be six members body with at least 3 former bankers, 2
professionals and secretary, department of financial services representing government.
Functions: Give recommendations for appointment of full-time Directors as well as non-
Executive Chairman of PSBs.
Give advice to PSBs in developing differentiated strategies for raising funds through
innovative financial methods and instruments and to deal with issues of stressed assets.
Guide banks on mergers and consolidations.
Axis Bank launched the First Multi-Currency Contactless Card
service in India
Aug 14 2015
Indias third largest private sector lender, Axis Bank has launched the first Contactless Debit, Credit
and Multi-Currency Forex Card in association with VISA payWave in the country.
Axis Bank will offer a contactless debit/credit cards to its 1.7 million premium customers which also
enables withdrawal of 15 currencies via Multi-Currency Forex facility.
To facilitate contactless cards operations bank will upgrade 50,000, of its point of sale (PoS)
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machines across the country.

How does Axix Banks Contactless Card works?
Axis Bank Contactless cards contain a chip and an antenna (based on radio frequency) that
facilitates seamless, faster and hassle free payments.
The customer has to enter the purchase amount in the contactless PoS terminal and then
simply has to tap the card on the terminal to complete his/her payment wirelessly and in a
secure manner.
The bank has introduced this card in line with RBIs guidelines of promoting PIN-less small ticket
transactions and to provide service to its customers with the global standards.
IRDAI allows Banks to tie up with insurers
Aug 14 2015
The Insurance Regulatory and Development Authority of India (IRDAI) has allowed banks to tie up
with insurers.
This decision was taken as part of the IRDAIs new Bancassurance model guidelines which will be
notified soon. Prior to this decision, banks were not allowed to have insurance agency tie-ups with
more than one insurer.
As per new decision banks can tie up with nine insurers from three segments viz. life, nonlife and
standalone health. It will not be binding on banks and they are free to take their call.
Earlier, IRDAI had constituted a 7 member committee to study the reviewing of the existing
architecture of the Banacassurance model.
About Bancassurance model
Bancassurance is a French term referred as selling of insurance through a banks. Thus it can be
said that Bancassurance= Banks as Insurance Agents. In this case, selling insurance means
distribution of insurance and other financial products of insurance companies through Banks.
Under this model banks act as a major distribution channel for insurers which in turn helps
them to generate profits from alternative source.
This model originated in France and soon spread to other European countries.
In case of India a number of insurers have already tied up with banks under bancassurance
model and some banks already have flagged off selected insurance products.
ICICI Bank launches Saral-Rural Housing Loan Scheme for weaker
sections
Aug 11 2015
Indias largest private sector lender Industrial Credit and Investment Corporation of India (ICICI)
Bank has launched ICICI Bank Saral-Rural Housing Loan Scheme for weaker sections of society.
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The scheme is new home loan proposition of the bank with special interest rate to cater people from
rural areas including women borrowers as well as from weaker sections.
Key facts
Housing loan will be provided at the ICICI Bank Base Rate (known as I-Base) which is
currently at 9.70%.
An eligible customer can avail of loan to purchase, construction or renovation of a home in
the rural areas.
The loan will range from five to fifteen lakh rupees for a period of 320 years and the loan
can be up to 90 per cent of the property value.
This scheme will be available be available in 189 cities across the country.
With the launch of this scheme, the private bank seeks to support the socio-economic development
of a larger section of the society especially economically deprived sections. It also seeks to empower
customers including women borrowers in the rural locations in order to realize the dream of owning
a house.
Union Government launches Suraksha Bandhan drive in Mission
Mode
Aug 10 2015
Union Government has launched Suraksha Bandhan drive in a Mission Mode through
participating insurance companies and banks.
The drive aims at taking forward Union Governments objective of creating a universal social
security system in the country, especially for the poor and the under-privileged sections.
Key facts of Suraksha Bandhan drive
It will facilitate enrolment of these sections under social security schemes such as Pradhan
Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana
(PMJJBY).
Participating Banks will be supported by the participating Insurance Companies. They will
collectively work towards local outreach and awareness building in order to facilitate
enrolments during this drive.
During this drive, enrolling persons will be exempted to submit a certificate of good health
for PMJJBY.
This drive will be supported through the Jeevan Suraksha Gift Cheques of 351 rupees to
facilitate one year payment of premium for PMJJBY and PMSBY.
RBI allows banks to merge, shift or close branches in urban areas
Aug 7 2015
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Reserve Bank of India (RBI) has taken decision to allow banks to merge, shift or close branches in
urban areas on their own discretion.
In this regard, RBI has issued a notification that mention detailed provisions of above decisions. This
move will give banks greater operational freedom but it wont be valid for rural areas.
As per RBI notifcation
Merger, shifting or closure of any rural branch as well as a sole semi urban branch will
require prior approval of the District Level Review Committee (DLRC) or District
Consultative Committee (DCC).
Banks making changes should inform customers of its branch time before actual merger,
shifting or closure of the office.
The banking activity, which include deposit or loan business should not be maintained at
both places. In case of new location as part shifting should be located within 1 km of the
existing location.
The banks should ensure that they continue to fulfill the role entrusted to these branches
under the Direct Benefit Transfer Schemes (DBTS) and other government sponsored
programmes.
It should be noted that the apex bank has allowed banks to shift their some branch in any
centre due rent or space constraints without seeking prior approval of RBI.
Lok Sabha passes Negotiable Instruments (Amendment) Bill, 2015
Aug 7 2015
Lok Sabha has passed Negotiable Instruments (Amendment) Bill 2015 by a voice vote.
The bill seeks to amend The Negotiable Instruments Act, 1881 in order to make cheque-bounce
filing of cases more convenient for check payees (person who receives the cheque).
The bill also seeks to replace an ordinance which was re-promulgated in this regard earlier in May
2015 after it was not passed in Rajya Sabha, though it was passed by the Lok Sabha in the May 2015.
Key features of Bill
Adds provision to specify the territorial jurisdiction of the courts in cases related to bouncing
of cheques which was not present in the parent Act.
It says that cases in this regard need to be filed only in a court in whose jurisdiction the bank
branch of the payee lies.
It also adds provision related to more than one case is filed against the same person before
different courts for bouncing of cheques.
In this matter, the case will be transferred to the court that has appropriate jurisdiction. The
bill also amends the definition of cheque.
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Redefines cheque in the electronic form which is signed in a secure system with a digital
signature or using electronic system and drawn in electronic medium using any computer
resource.
It should be noted that, these amendments to parent Act seek to overturn a Supreme Courts earlier
unfriendly check payee ruling of August 2014. The ruling given by court had mentioned that cases
on the persons who have defaulted their cheque payments could only be filed in courts under which
jurisdiction of the bank account of the accused fell.
About Negotiable Instruments Act, 1881
The Act defines bills of exchange, promissory notes, cheques and creates penalties for issues such as
bouncing of cheques. It also specifies circumstances under which complaints for cheque bouncing
can be filed.
HSBC India plans to launch green bonds
Aug 4 2015
HSBC Indias chairman Naina Lal Kidwai announced to launch green bonds in India for raising
funds for investments in environmental projects. Announcement was done by the HSBC chairman
in a Ficci event held on 3 August 2015.
The total investment attracted by Green Bonds in last two years is 37 million dollars. HSBC is the
fourth largest issuer in the world.
Green Bonds in India was initially launched by Axis Bank and Yes Bank in February 2015 that
attracted investment of 1,000 crore rupees against the target of 500 crore rupees.
What is Green Bond?
A bond is a debt instrument with which a bond issuer gets capital while the investors receive fixed
income in the form of interest. The issuer of green bond gets capital from the investors only if the
investment is being raised to fund green projects relating to renewable energy or emission
reductions etc.
Note: Besides green bonds HSBC is also emphasising on creating Yieldcos. It is a product that
enables access to low cost liquid and generates predicable cash flows by bundling up renewable assets
with long-term power purchase agreements.
RBI to issue Rs 10 coins to mark International Yoga Day
Jul 31 2015
Reserve Bank of India (RBI) will soon issue 10 rupee denomination coins to commemorate
International Yoga Day which is being observed every year on 21 June.
Features of the coin
Coins obverse side: It will bear Lion Capital of Ashoka Pillar in the centre. The legend
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Satyameva Jayate will be inscribed below.

The left periphery will bear word Bharat in Devnagri script which will be flanked. While, on
the right periphery word INDIA in English will be flanked.
Denominational or numeric value 10 and Rupee symbol in the international numerals will be
engraved below the Lion Capital.
Coins reverse side: It will bear the logo of International Day of Yoga along with
inscription Samanjasya evam Shanti ke Liye Yog in Devnagri script.
It will also bear YOGA FOR HARMONY AND PEACE around the logo and design and the date
21 JUNE will be at the bottom of the logo.
Left periphery will bear inscription Antarrashtriya Yog Divas in Devnagri script and the right
periphery will bear INTERNATIONAL DAY OF YOGA in English.
Kotak bank launches 'Kotak Bharat' mobile banking app for 'un-
banked' regions
Jul 30 2015
Kotak Mahindra Bank (KMB) launched a mobile banking app Kotak Bharat aiming to
provide mobile banking services to customers in the remotest regions of India.
Specifications:
The Android-based app is specifically designed to provide banking service to customers in the
under-banked and un-banked regions with provision to use service in their preferred
language.
Initially the service will be provided in Hindi and English language and would also be
available in Marathi, Gujarati, Tamil and Kannada in few months.
Customers can manage their savings/current accounts and credit cards through this app.
Initially will be launch in prominent Hindi belt centre starting from Lucknow and will spread
its service in other state in few months.
The app is compatible on SMS banking keyword process platform where customers could
download the app on their registered mobile number without any separate registration
process.
It also facilitates other value added propositions such as recharging mobile/DTH services, finding
Kotak ATMs & branches, linking Aadhaar number to the account, and even facilitates to avail
services of government schemes like Pradhan Mantri Suraksha Bima Yojana and Pradhan Mantri
Jeevan Jyoti Bima Yojana etc
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RBS to sell private banking business in India to Sanctum Wealth

Jul 30 2015
On 29 July, the Royal Bank of Scotland (RBS) has decided to sell its private banking business in India
to Sanctum Wealth Management, in line of its prior decision to exit the Indian market.
Britains largest public bank Royal Bank of Scotland (RBS) has signed a non-binding framework
agreement with Sanctum Wealth Management, which is a start up firm set by Shiv Gupta. He is also
the present managing director of RBS private banking operations in India.
RBS has four private banking offices in India located in New Delhi, Mumbai, Bengaluru and
Chennai.
The reason behind this decision is to formulate RBS into a stronger, more sustainable and simpler
business for its aim to consolidate its business in the UK and Western Europe.
Note: RBSs net balance sheet revealed at the end of December 2014 showed that its operations in
India has fell by 1.7 billion Euros to 2.0 billion Euros due to reductions in corporate lending for the
sectors like mining & metals, oil & gas and to banks.
IndusInd Bank acquires RBS' bullion financing business for Rs 4,100
crore
Jul 29 2015
IndusInd Bank has acquired the diamond and jewellery (bullion) financing business and related
deposit portfolio of Royal Bank of Scotland (RBS) for 4,100 crore rupees on 28 July 2015.
Britains largest public bank Royal Bank of Scotland (RBS) was in talks with IndusInd Bank to sell off
its bullion financing business and had signed a non-binding agreement in April 2015.
According to the agreement RBSs employees within the diamond and jewellery clients in India
would be transferred to IndusInd Bank.
RBS in 2008, had acquired ABN AMRO Bank the oldest banks in diamond and jewellery financing
and started dealing in bullion financing in India through RBS Mumbai branch.
The reason behind this sell-off comes on the back of RBSs decision in 2013 to exit its banking
operations from India and to consolidate its business in UK and Western Europe.
However, it has decided to retain its back-office operations in India and has moved over 60 back-
offices roles from the UK to India that has workforce of 12,000 people.
Prior to RBSs decision it had shut down its 23 out of 31 branches in India and had also sold off its
credit card business, commercial banking portfolios and mortgage business to Ratnakar Bank Ltd
(RBL) Bank in 2013.
Note: The partnership agreement with ABN AMRO and RBS global knowledge and its ready
bullion financing loan book of 4,500 crore rupees will help IndusInd to engage with the customers in
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the industry globally.

CSC and HCL forms joint venture to provide technology services,
solutions to banks
Jul 27 2015
Computer Science Corporation (CSC) and Hindustan Computer Limited (HCL) to big IT companies
have signed an agreement to form a new company to provide technology services and solutions to
the banking industry.
In the joint statement the partners said that their main focus will be on platform modernisation,
product functionality enhancement and to capitalise their capabilities in addressing global core
banking software market.
According to the agreement CSC that serves in 15 countries with 100 premier banking and financial
services clients, will provide its core banking expertise for software and product development.
Whereas, HCL will provide funds, its banking sales and client engagement expertise and also its
experience in product engineering and application implementation services in order to modernise
the banking industries.
The two entities have agreed to work in accordance to meet the increasing demands for data
analytics services, regulatory compliance and multi-channel deployments from the banking
industries.
About CSC:
Computer Science Corporation (CSC) founded in 1959 is an American MNC having presence in 70
countries that provides information technology (IT) services and professional services.
It has consistently maintained its presence in Fortune 500 company list since 1995 and has bagged
185th rank in 2014 list.
About HCL:
Hindustan Computer Limited incorporated in 1991 by Shiv Nadar and Arjun Malhotra is an Indian
global IT services company that provides services across 31 countries in software consultation, as an
independent software vendor, remote infrastructure management, Life science and Health care,
logistics and many other service sectors.
It is among Forbes Asias Fab 100 companies and is also among the Indias Top 20 largest publicly
traded companies.
IDFC gets banking licence from RBI
Jul 27 2015
Infrastructure Development Financing Company (IDFC). Ltd became second lender to enter the
banking sector since 2004, as the Reserve Bank of India granted Banking licence on 24 July 2015.
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It was Yes Bank that got banking licence in 2004. However, IDFC and Microfinance
Company Bandhan Financial Services Pvt Ltd were granted preliminary bank permits by RBI in
April 2014 and Bandhan got Banking licence from RBI in June 2015 and plans to start its operations
from August 2015, whereas IDFC plans to start operations from 1 October 2015.
IDFC will start its operations with 20 branches and with initial loan book of 55,000 crore rupees.
About IDFC
IDFC is a leading public limited infrastructure finance company that provides end to end
infrastructure financing and project implementation services. It was incorporated in 1997 with main
motive to provide finance for infrastructure projects and advisory services for asset management and
investment banking. Its independent director is ex- Comptroller and Auditor General (CAG) of
India Mr. Vinod Rai.
Anand Krishnamurthy appointed CEO and MD of CSB bank
Jul 27 2015
Anand Krishnamurthy is now the new MD and CEO of Catholic Syrian Bank (CSB) replacing
Rakesh Bhatia who had quit due to personal reason.
This appointment was done by the board of directors of CSB among the three named sent to RBI.
About Anand Krishnamurthy:
Mr. Anand has previously worked with HSBC for 22 years and also headed the Wholesale Banking
and Treasury of CSB for last one year. He was responsible for corporate banking, integrated treasury
operations of the Bank and SME business for CSB.
About The Catholic Syrian Bank (CSB):
The Catholic Syrian Bank is 94 year old private sector bank founded on 26th November 1920. It has
its strong base in Kerala along with significant presence in Karnataka, Tamil Nadu and Maharashtra.
Recently it has filed for an IPO for 400 crore rupees.
KFC partners IRCTC, to serve meals on trains
Jul 25 2015
KFC and the Indian Railway Catering and Tourism Corporation (IRCTC) have entered into
partnership to launch a delivery system for commuters on trains.
Under e-catering service initiatives commuters now can place order for KFC meal while booking
tickets through IRTC website. This service is presently available only on 12 trains passing through
New Delhi railway station and will later expand to Hyderabad, Vishakhapatnam and Bengaluru
stations. KFC initially will provide meal to the limited trains which do not have pantry cars.
BRICS bank starts its operations from Shanghai, China
Jul 21 2015
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The New Development Bank (NDB) created by Brazil, Russia, India, China and South Africa
(BRICS) nations formally started its operations from its headquarters in Shanghai, China.
Chinese Finance Minister Lou Jiwei, Shanghai Mayor Yang Xiong and the banks first President K V
Kamath from India attended the opening ceremony.
About New Development Bank (NDB)
Agreement for establishing NDB was signed during the 6th BRICS Summit being held in Fortaleza,
Brazil in April, 2014. It was formally launched at the 7th BRICS summit held in Ufa, Russia in July
2015.
Purpose: To fund infrastructure projects in the emerging economies. It is seen as an alternative
institute to west dominated World Bank and the International Monetary Fund (IMF).
Capital: It will have initial capital of US 50 billion dollars and will be raised to US 100 billion dollars
within the next couple of years.
Each members role: They will have an equal say in the banks management, regardless of GDP size
and contribute an equal share in establishing a startup capital.
President: Eminent banker Kundapur Vaman Kamath from India is President of Bank for the first
five years i.e. till 2020.
RBI, Central Bank of Sri Lanka ink currency swap agreement
Jul 17 2015
Reserve Bank of India has signed a special currency swap agreement with the Central Bank of Sri
Lanka (CBS).
Under this agreement, Sri Lankan bank can draw up to 1.1 billion dollars for a maximum period of 6
months. It was signed with an intention to mitigate the possible currency volatility in the spirit of
strengthening bilateral relations and economic ties of India with Sri Lanka.
It should be noted that, this special arrangement was signed in addition to the existing Framework
on Currency Swap Arrangement for the SAARC member countries.
Earlier in March 2015, RBI had signed similar Currency Swap Agreement with Sri Lankan bank for
400 million dollars under the SAARC Currency Swap Framework within the overall limit of 2
billion dollars.
SAARC Currency Swap Framework
This Currency Swap Framework is signed between SAARC member countries. It seeks to provide a
backstop line of funding to member countries in order to meet any balance of payments and liquidity
crises.
During the crisis, this fund will be provided till longer term arrangements are made or till the need
for short-term liquidity due to stressed market conditions.
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RBI constitutes Deepak Mohanty Committee to frame action plan on

financial inclusion
Jul 16 2015
Reserve Bank of India (RBI) has constituted a committee to prepare a 5 year action plan to spread the
reach of financial services across country to unbanked population.
The committee will be headed by RBI executive director Deepak Mohanty and comprise total of 14
members
Terms of References of the committee
It will review the existing policy of financial inclusion, including customer protection
framework and supportive payment system.
In this regard it will take into account the recommendations made by various committees set
up earlier.
Objective: Work out a medium-term or five-year measurable action plan for financial
inclusion.
Suggest a monitorable medium-term action plan for financial inclusion. It will cover various
components including payments, credit, deposit, social security transfers, pension and
insurance.
Articulate the underlying institutional and policy framework for financial inclusion. Cover
financial literacy and consumer protection, as well as delivery mechanism of financial
inclusion.
For this the committee will encompass both households and small businesses, with more
emphasis on rural inclusion including group-based credit delivery mechanisms.
It is expected that the Committee is expected to submit its report in four months from the date of its
first meeting. It should be noted that, for promoting financial inclusion, Union government had
launched Pradhan Mantri Jan Dhan initiative (PMJDY) in August 2014.
NABARD to provide Rs 30,000 crore credit to farmers for irrigation
Jul 13 2015
State-run National Bank for Agriculture and Rural Development (NABARD) has set a target of
providing 30,000 crore rupees as credit to farmers for irrigational purpose.
It was announced by Banks Chairman and Managing Director Dr. Harsh Kumar Bhanwala in
Mumbai on the occasion of 34th Foundation Day of NABARD.
This credit will be provided over the next three years i.e. till 2018 and for this NABARD already has
sanctioned 1,000 crore rupees.
This funding will be in addition to the governments 50,000 crore rupees of loans to farmers over the
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next five years (till 2020) under the Pradhan Mantri Krishi Sinchai Yojana (PMKSY).
Besides, it was also announced that NABARD has been accredited as the national implementation
agency for climate change at the rural level by the Green Climate Fund (GCF).
It should be noted that, NABARD is only the banking entity from South Asia to be shortlisted for the
purpose by GEF. The World Bank and Asian Development Bank among others are the 20 such
entities which have already been shortlisted.
eMudhra launches eSign Services
Jul 9 2015
eMudhra Limited, a leading certifying firm in the country for digital signatures launched first of its
kind eSign services in the country as part of the Digital India Vision.
eSign is an online electronic signature service legally valid and secure under the Information
Technology Act, 2000. It will facilitate an Aadhaar holder to digitally sign a document within
seconds.
It seeks to pave the way for a digital transformation into a paperless environment by revolutionising
the way of business and governance conducted in the country.
eMudhra Limited also launched eMlocker which facilitates a person to store important documents
such as Aadhaar cards, PAN cards, electricity bills or any other documents electronically.
About eMudhra
eMudhra Limited is a statutory licensed Certifying Authority of India to issue digital
signature certificates.
Established: in 2008 under the Information Technology (IT) Act, 2000.
eMudhra offers variety of other services including Tax filing Services, Digital Signing
Solutions, PAN Card Online applications. Digital Certificate Authentication System and
Trusted Time Stamping etc.
Its clients are corporates, Banks, government organizations, individuals and several small and
medium businesses.
Digital Signature: It is an electronic signature used to authenticate the identity of the sender and
signer of a message or document. It ensures that original content of the message or document
remains unchanged or tapered after it is send.
China nominates Jin Liqun for President of AIIB
Jul 9 2015
China has nominated its former finance Minister Jin Liqun as the Presidential candidate for $100
billion Asian Infrastructure Investment Bank (AIIB).
Presently, Jin is Secretary General of AIIBs interim secretariat. Prior to this he was chairman of
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China International Capital Corporation (CICC), one of the mainlands largest investment banks.
He also had held various positions at the World Bank. He was the first Chinese national to serve as a
Vice President of Asian Development Bank (ADB) which is controlled by Japan.
Jin headed programmes for South, Central and West Asia and private sector operations during his 5-
year-long tenure at ADB.
President of AIIB
The President of AIIB will be national of a regional member.
Election process: He will be elected an open, transparent and merit-based process by the
Board of Governors of Bank with 75 per cent majority.
This procedure has been mentioned in the Articles of AIIB Agreement which signed by 50
countries in June 2015.
Term: Five years and can be re-elected once.
Comment
Jin Liqun will be elected as AIIB President as China has 26.06 per cent share of the votes (especially
veto) in the bank which is seen as a rival to the U.S. and Europe-dominated banking institutions.
The post of vice-president by virtue may be given to India as it second largest shareholder in the
bank.
For more information on AIIB: Click here
Union Government appoints Sriram Kalyanaraman as MD and CEO of
NHB
Jul 9 2015
Union government has appointed Sriram Kalyanaraman as the Managing Director (MD) and Chief
Executive Officer (CEO) of National Housing Bank (NHB) for a period of five years.
With this he became the first person from private sector to be appointed as head of a public sector
financial institution.
Presently, Kalyanaraman is director-business development Equifax Credit Information Services.
Prior to joining Equifax, he was Director, Business Clients and Asset Products at Deutsche Bank
India.
About National Housing Bank (NHB)
NHB is apex regulator for housing finance sector and a wholly owned subsidiary of Reserve
Bank of India (RBI).
Established: in 1988 under the National Housing Bank Act, 1987.
It is a principal agency to promote housing finance institutions at local and regional levels. It
also provides financial and other support to institutions related to this sector.
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Function: Register, regulate and supervise Housing Finance Company (HFCs) and keep
surveillance on them through On-site & Off-site Mechanisms. It also co-ordinates with other
Regulators.
BSNL launches mobile wallet service Speed Pay
Jul 4 2015
State run telecom giant Bharat Sanchar Nigam Limited (BSNL) launched pre-paid card linked mobile
wallet service Speed Pay.
It was launched by Union Telecom Minister Ravi Shankar Prasad in New Delhi. This service was
launched by BSNL has launched the service in partnership with IT company Pyro.
Features of Speed Pay
Allows BSNL customer to transfer money, pay for services and withdraw cash of up to 1 lakh
rupees.
It also allows its customers to load money even if they are not having a bank account.
Money loaded in this wallet can be transferred to a bank account and can be withdrawn at
any BSNL outlets or bank branches.
BSNL Buzz serive
BSNL also launched another entertainment service named BSNL Buzz in partnership with Celltick.
Under this service, BSNL customer can subscribe to various contents like news, jokes, contest using
smartphone.
It will be delivered on basis of location information services in seven languages. They are Hindi,
Bengali, English, Malayalam, Tamil, Kannada and Telugu.
50 nations, including India sign 60-article agreement on China-led
AIIB
Jun 30 2015
50 founding nations including India have signed 60-article agreement of China-led multilateral Asian
Infrastructure Investment Bank (AIIB).
Australia was the first country to sign the agreement and was followed by 49 other members. Indian
Ambassador Ashok Kantha signed the agreement on behalf of country.
The 60-article agreement provides the legal framework for
Institution of AIIB.
Each members capital share and voting share.
Governance structure of AIIB.
Policy-making mechanism of AIIB.
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Facts about Asian Infrastructure Investment Bank (AIIB)

Designed to finance infrastructure projects including energy, transport and infrastructure
projects in Asia.
AIIB is seen as a rival to the World Bank and Asian Development Bank (ADB) which
managed by most prominent countries like US, Japan and European etc.
Headquarters:Beijing. It will be operational by end of 2015.
Authorized capital: It will be of 100 billion US dollars. The initial subscribed capital will be
around 50 billion US Dollar and the paid-in ratio will be 20 per cent.
Regional character of the Bank: Its regional members (Asian) will be the holding around
75 percent of shares i.e. they will be majority shareholders.
They have been allocated their capital share on quota basis i.e. based on their economic size.
Voting share: for each member country it is based on the size of their economy and not on
authorised capital share to the Bank.
Largest shareholders: China is highest contributor to AIIB with 29.78 billion US dollars i.e.
with a 30.34 percent stake in authorized capital.
China will have 26.06 per cent of the voting rights along with veto powers for certain key
decisions.
India: second largest shareholder with 8.52 per cent stake and voting share of 7.5 per cent.
Russia: third largest shareholder with 6.66 stake and voting share of 5.92 per cent.
It should be noted that there are 57 founder-member countries AIIB. Seven countries were not able
to sign this agreement as it was not ratified by their respective domestic authorities. The seven
countries are Denmark, Malaysia, Kuwait, Holland, Philippines and South Africa and Thailand.
Australia to join China led AIIB
Jun 27 2015
Australia has decided to join the China-led Asian Infrastructure Investment Bank (AIIB) as a
founding member.
In this regard, Australia will contribute paid-in capital of 718.5 million US dollars over next five
years i.e. till 2020. With this investment it will become sixth largest shareholder in AIIB.
About Asian Infrastructure Investment Bank (AIIB)
AIIB is an international financial institution proposed by China which seeks to provide
support to infrastructure projects in Asia.
Headquarters: It is expected to be operational in December 2015.
The bank is also considered as Chinas move to balance the power with the WB, IMF and
ADB which are being controlled/dominated by the US, EU and Japan respectively.
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The authorised capital of AIIB is US $100 billion and the initial subscribed capital is expected
to be around US $50 billion. The paid-in ratio will be 20%.
The bank will lend designed finance to infrastructure projects like construction of roads,
ports, railways etc. in Asia.
India along with other 20 member nations was the founding member of AIIB and had signed
agreement in this regard in October 2014. It should be noted that India is the second-largest
shareholder of AIIB.
RBI extends deadline for exchanging pre-2005 currency notes till
December 2015
Jun 26 2015
The Reserve Bank of India (RBI) has extended the date to exchange pre-2005 bank notes till
December 31, 2015 for third time.
Earlier in December 2014, RBI had set the last date for public to exchange these notes as June 30,
2015.
RBI has urged people to deposit the old design notes in the bank accounts or exchange them at a
bank branch. The apex bank also has stated that the notes can be exchanged for their full value and
all such notes continue to remain legal tender.
Reasons for withdrawing pre-2005 notes from circulation:
Security pre-2005 notes have fewer security features as compared to 2005 and post-2005
currency notes. Thus, lesser will be the chances of its counterfeiting newer currency notes. It
will also remove fake currency notes in circulation which were being pumped in Indian
economy were copies of pre-2005 notes.
Flushing out black money The spillover effect of the RBIs decision will be to flush out
black money. Money has value only as long as it is a medium of exchange and store of value.
It loses its value when it ceases to be a medium of exchange.
A disincentive for cash hoarders With the RBIs announcement, currency hoarders will
be left with no option but to liquidate their unaccounted holdings by spending or exchanging
them. Thus, this is a well thought out exercise by the RBI to capture the money flows into
the system and also help flush out counterfeit notes.
International standard practice It is an international standard practice to remove old
series notes.
HDFC Bank launches 10-second paperless instant loan Scheme
Jun 19 2015
HDFC Bank, Indias second-largest private sector lender has launched a 10-second paperless instant
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loan Scheme for its existing customers.

The 10-second loan Scheme was launched as part of HDFC Banks digital banking platform GoDigital.
With this, HDFC bank became first banking institution to completely automate the entire process of
loan approval and disbursement.
Under this scheme, bank will now disburse personal loans to its customers in just 10 seconds and a
pre-approved loan amount will be available to them 247.
The entire process of availing the loan under this scheme will be completely paperless. In this case,
its customers by using net-banking or mobile banking avail of this loan.
Earlier, the bank had launched PayZapp application to cater to e-commerce space under its digital
platform.
It should be noted that, in financial year 2014-15, 63 per cent of HDFC Banks all transactions were
conducted through various digital channels.
Bangladesh Supreme Court uphelds death sentence of Ali Ahsan
Muhammad Mujahid
Jun 17 2015
Bangladesh Supreme Courts appellate bench upheld the death sentence of war criminal and Jamaat-
e-Islami leader Ali Ahsan Muhammad Mujahid.
Decision in this regard was taken by 4-member bench headed by Chief Justice Surendra Kumar
Sinha. The court has found Mujahid guilty of systematically killing intellectuals in the end of the
1971 Liberation War of Bangladesh.
He is the third Jamaat leader to appeal in appealed in Bangladesh Supreme Court, but court ruled
against them and upheld their death sentences. Two other Jamaat leaders are Quader Mollah and
Kamaruzzaman. They were executed in 2013 and 2015 respectively.
Background
During the liberation war Mujahid was leader of the infamous Al-Badr, a militia group that was
raised by Pakistan to crush the Bangladeshi independence struggle movement during the Liberation
War. Earlier in 2013, International Crimes Tribunal (ICT) had sentenced him to death for his war
crimes such as genocide, conspiracy in killing intellectuals, torture and abduction.
RBI allows NRIs to subscribe chit funds
Jun 12 2015
Reserve Bank of Indian has allowed non-resident Indians (NRIs) to invest in chit fund to encourage
flow of capital into the country.
Decision in this regard was taken after RBI had revised the extant guidelines for subscription to the
chit funds in consultation with the government.
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Henceforth, NRIs on non-repatriation basis will be allowed to invest in chit fund without any
ceiling. However, the subscription to the chit funds by NRIs will be mandatorily brought in through
normal banking channel, including through an account maintained with a bank in India.
The state government may permit any chit fund to accept subscription from NRIs on non-
repatriation basis. It will be permitted by the registrar of chits or an officer authorized by the state
government in accordance with the provisions of the Chit Fund Act, 1982.
Earlier in May 2000, RBI had barred NRIs from investing in a company or firms engaged in the
business of chit fund.
Apart from this decision, RBI also extended the scheme allowing airline companies to raise external
commercial borrowings (ECB) for working capital as a permissible end-use under the approval
route. Now, the ECB scheme will continue till March 31, 2016.
Mahendra Kumar Sharma appointed as non-executive Chairman of
ICICI Bank
Jun 10 2015
Mahendra Kumar Sharma was appointed as non-executive chairman of Indias largest private sector
lender Industrial Credit and Investment Corporation of India (ICICI) Bank.
He will replace K V Kamath who had resigned from top most in order to join as President of the
Shanghai based New Development Bank established by the BRICS nations.
Presently, Sharma is an independent director of two subsidiaries of ICICI Bank viz ICICI Lombard
General Insurance Company and ICICI Prudential Asset Management Company.
Earlier from 2003 to 2011, he also had served as an independent director on the board of ICICI Bank.
Prior to joining ICICI Bank, Sharma was vice-president of Hindustan Unilever (HUL) and was
associated with HUL from 1974 to 2007.
He has a strong understanding of legal and corporate governance matters and had joined HUL in
1974 as a legal manager.
Government Committees: Sharma also had served as a member of the Corporate Law Committee
formed by Union Ministry of Corporate Affairs to redraft the Companies Act. He was also a member
of the Committee on Corporate Governance formed by the Union Government.
Kotak Mahindra, ING Bank ink MoU for cross-border business
Jun 6 2015
Kotak Mahindra Bank and ING Bank have inked a memorandum of understanding (MoU) for
exploring opportunities arising from cross-border business, investment and trade flows across
various regions, including Europe.
It was signed between the two parties and covers an array of co-operation in various areas such as
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trade remittances, finance.

It also includes services related to non-resident Indians, corporate relationships, funding to
counterparties, fee-based products, direct banking and digital strategy and cross-border debt capital
markets, mergers and acquisitions.
Under the ambit of MoU, ING Bank will give its clients from The Netherlands and the other 39
countries commercial banking access to Kotaks services in the vast Indian market. At the same time
it will also offer the combined clients in India the opportunities of INGs international network.
It should be noted that Kotak Mahindra and associates are significant shareholders in Business
Standard Private Ltd. ING Bank holds 6.5 per cent stake in Kotak Mahindra Bank which is Indias
fourth largest private sector lender.
RBI lowers repo rate to 7.25 per cent
Jun 3 2015
Reserve Bank of India (RBI) has reduced the policy repo rate under the liquidity adjustment facility
(LAF) by 25 basis points from 7.5 per cent to 7.25 per cent with immediate effect.
It was announced in the second bi-monthly policy of RBI. It says that
Cash reserve ratio (CRR) of scheduled banks has kept unchanged at 4 per cent of net demand
and time liabilities (NDTL).
Continuation of providing liquidity under overnight repos at 0.25 per cent of bankwise
NDTL at the LAF repo rate.
Liquidity under 14-day term repos as well as longer-term repos of up to 0.75 per cent of
NDTL of the banking system through auctions.
Continuation with overnight/term variable rate repos and reverse repos to smooth liquidity.
This the third time RBI has cut interest rates in 2015. RBI has reduced the rates in order to take
advantage of subdued inflation and to give more support to an economy.
Meena Hemchandra appointed as Executive Director of RBI
Jun 2 2015
Meena Hemchandra was appointed as the Executive Director of Reserve Bank of India (RBI).
With this appointment she will be in charge of RBIs department of banking supervision, non-
banking supervision and department of co-operative banking supervision.
Prior to this appointment Meena Hemchandra was in charge of RBIs Department of Supervision.
Previously, she also had worked in RBIs department of external investment and operations which
manages countrys reserves and Foreign Exchange Department.
She also had served as Principal of Reserve Banks College of Agriculture Banking located in Pune.
She is a chartered financial analyst from Institute of Chartered Financial Analysts of India (ICFAI)
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and also holds a post graduate degree in Economics.

It should be noted that RBI has 11 Executive Directors who are in charge of various departments.
With this appointment the portfolios of other Executive Directors remain unchanged.
China develops worlds first ATM with Facial Recognition
Technology
Jun 1 2015
Researchers from China have successfully developed the first automated teller machine (ATM) with
facial recognition technology.
The machine has unique security feature which does not allow users to withdraw cash unless their
face matches their facial ID.
The first of its kind ATM was developed by researchers from Tsinghua University and technology
firm Tzekwan.
Key facts
The machine has a camera installed in which captures the facial features of the user and then
compares it with photos stored in a database for authentication.
Its technology and software looks at biological features of person and has potential to identify
people even if their facial features have changed.
The machine combines high-speed banknote handling, improved counterfeit-bill recognition
and facial recognition. Thus, help to curb ATM-related crimes.
It provides 20% more accurate authenticity in verifying multiple currencies compared to
present conventional ATMs used globally.
SBI launches Online Customer Acquisition Solution for loans
May 30 2015
Indias largest banking entity State Bank of India (SBI) has launched Online Customer Acquisition
Solution (OCAS), an online platform to apply for loans.
This online platform will enable SBI customers to apply for home, education, car and personal loans
online. On filling the online form for loan requirement depending upon their eligibility customers
will instantly get an e-approval.
Thereafter, the bank officials will contact customers and complete all the loan formalities. The
application will also help customers to upload all necessary documents online, thus empowering the
customer and also reducing the loan processing time.
The public sector bank is also planning to launch a similar platform on the mobile application as part
of its aggressive move to adapt with different modern technology platform, in an attempt to change
the way public sector banking is viewed.
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Four Indians among Forbes worlds 100 most powerful women

May 27 2015
Four Indians have been named in Forbes magazines 12th annual list of Worlds 100 most powerful
women. They are
Arundhati Bhattacharya: First woman (and youngest) Chairperson of State Bank of India
(SBI) was placed at 30th position.
Chanda Kochhar: Managing Director (MD) and CEO of Indias largest private sector lender
ICICI Bank was placed at 35th position.
Kiran Mazumdar-Shaw: Founder, Chairman and MD of Biocon Limited was placed at 85th
position.
Shobhana Bhartia: Chairperson and Editorial Director of the Hindustan Times Group was
placed at 93rd position. It should be noted she has appeared on the list for the first time.
Apart from them, two women of Indian-origin PepsiCo Chief Indra Nooyi (15th position) and Cisco
Chief Technology and Strategy Officer Padmasree Warrior (84th position) also have appeared in the
list.
Top 10 powerful women: German Chancellor Angela Merkel (1st), Hillary Clinton (2nd), Melinda
Gates (3rd), US Federal Reserve Chair Janet Yellen (3th), GM CEO Mary Barra (5th), IMF Chief
Christine Lagarde (6th), Brazilian President Dilma Rousseff (7th), Facebook COO Sheryl Sandberg
(8th), YouTube CEO Susan Wojcicki (9th) and US First Lady Michelle Obama (10th).
About Forbes Worlds 100 most powerful women list
It is an annual list of the 100 most influential women published by Forbes magazine.
The list feature extraordinary entrepreneurs, politicians, celebrity role models, visionary
CEOs, billionaire activists and pioneer philanthropists who are transforming the world.
They are ranked by dollars, media presence and impact.
ICICI bank launches voice password facility for users
May 25 2015
Bank has launched voice password facility for users.
This service will facilitate its customers to make transactions using their voice rather than using
traditional means of authentication like entering id and password.
The voice recognition service authenticates customers based on their speech patterns and allows
them to execute banking transactions through the banks call centre. Thus in this case of transaction
customers voice will act as the password through the call centre.
The technology solution behind ICICI banks voice password facility works on unique voice prints
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which comprise over 100 characteristics. It also includes voice modulation, accent speed and
pronunciation which are impossible to imitate.
This voice print will be stored and matched whenever the customer calls from the registered mobile.
Thus it will provide highest security potential to its customers.
Over 33 million savings bank and credit card customers of ICICI bank will be able to use the service.
SBI inks MoU with Amazon for payment, commerce solutions
May 21 2015
Indias largest public sector lender, State Bank of India (SBI) has signed memorandum of
understanding (MoU) with e-commerce giant Amazon. The MoU seeks to identify and tap the
potential areas of collaboration for payments and commerce solutions between both signatory
parties.
Through this tie, SBI is seeking to enrich customers payment experience and opening up the
windows of e-commerce to its small and medium enterprise (SME) customers base which is the
largest in the country.
While e-tailers like Amazon are set to gain even if a percentage of SBIs SME customers after they
adopt the online payment platform for their businesses.
SBI is also looking to tap Amazons expertise and talent in order to connect potential buyers and
sellers, along with efficient ways of sourcing raw materials for existing customers.
SBI is also seeking to ink similar agreement with other e-commerce players such as Snapdeal and
Paypal for similar payments and commerce solutions.
ICICI Bank's first Chinese branch inaugurated in Shanghai
May 16 2015
ICICI Banks first branch in China was inaugurated in Shanghai, a major global financial hub. It was
inaugurated by Prime Minister Narendra Modi in the presence of ICICI Banks MD and CEO
Chanda Kochhar.
The new branch will begin its operation with 17 banking professionals handling different functions
including finance, operations, corporate banking and treasury. Apart from it, this branch will also
play important role in the growing trade and investment opportunity between India and China.
It should be noted that ICICI Banks Shanghai Branch had received the formal regulatory approval in
March 2015 to commence operations.
Currently ICICI Bank is Indias biggest private sector lender with a total consolidated asset base of
US $ 132 billion and has presence in 17 countries. Earlier in 2003, ICICI Bank had opened a
representative office in China.
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SBI launches sbiINTOUCH, NFC-enabled Contactless Debit and

Credit Cards
May 15 2015
Indias largest lender, State Bank of India (SBI) has launched contact-less credit and debit cards
sbiINTOUCH.
sbiINTOUCH is based upon latest near-field technology (NFC) that enables customer to transact
using the card by just tapping or waving it against the reader of the point-of-sale machine
Cards incorporated with NFC technology are secure and hassle-free. SBI is also proving a fraud
liability cover of 1 lakh rupees on these cards.
With this, SBI has joined league of private lenders like ICICI Bank and HDFC Bank. It should be
noted that ICICI bank was first to introduce contact-less credit and debit cards in India.
RBI rules on contact-less credit and debit cards
Presently, Reserve Bank of India (RBI) allows banks to enable transactions in case of
contactless cards up to Rs. 2,000 without the requiring a separate PIN authentication.
But incase of amounts higher, banks should provide customers with an option of contact
payment and pin authentication requirement.
Lok Sabha passes Negotiable Instruments (Amendment) Bill, 2015
May 13 2015
Lok Sabha on 13 May 2015 passed The Negotiable Instruments (Amendment) Bill, 2015 by a voice
vote.
The Bills amends the Negotiable Instruments Act, 1881 in order to make cheque-bounce filing of
cases more convenient for check payees (person who receives the cheque).
Key facts
The bill adds provision to specify the territorial jurisdiction of the courts in cases related to
bouncing of cheques which was not present in the parent Act.
It says that cases in this regard need to be filed only in a court in whose jurisdiction the bank
branch of the payee lies.
It also adds provision related to more than one case is filed against the same person before
different courts for bouncing of cheques. In this matter, the case will be transferred to the
court that has appropriate jurisdiction.
The bill also amends the definition of cheque. Now it defines it as cheque in the electronic form
which is signed in a secure system with a digital signature or using electronic system and
drawn in electronic medium using any computer resource.
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About Negotiable Instruments Act, 1881

The Act defines bills of exchange, promissory notes, cheques and creates penalties for issues
such as bouncing of cheques.
It also specifies circumstances under which complaints for cheque bouncing can be filed.
KV Kamath named as first President of New Development Bank of
BRICS nations
May 11 2015
Eminent banker Kundapur Vaman Kamath was appointed as first President New Development Bank
(NDB) of BRICS nations.
He will have of five year term after the bank becomes operational within one year.
About Kundapur Vaman Kamath
Born on 2 December 1947 in Mangalore, Karnataka.
Kamath is the Chairman of the Indias largest private sector bank, Industrial Credit and
Investment Corporation of India (ICICI). He was ICICI Banks managing director and CEO
from 1996 to 2009
Kamath also had served as Chairman of Indias second-largest Indian IT services company,
Infosys Limited. He had taken charge from N R Narayana Murthy.
He also had worked with Asian Development Bank (ADB), Manila in its Private Sector
department in 1988. In ADB, he had held various projects in Indonesia, India, China,
Bangladesh and other emerging nations.
He was conferred with Padma Bhushan Award in 2008.
About New Development Bank (NDB)
BRICS group of nations comprising Brazil, Russia, India, China and South Africa in 2014 had
inked a pact to set up NDB and emergency reserve fund.
This agreement was signed during the 6th BRICS Summit being held in Fortaleza, Brazil.
To begin with, the bank will start operating with $50 billion in initial capital with the five
BRICS contributing $10 billion each.
According to the pact, the capital of the bank will be divided equally among the five
participating nations and initially it will focus on infrastructure projects member countries.
The headquarters of the bank will be located in Shanghai, China and it will have a regional
office in Johannesburg, South Africa.
The chairmanship of the bank will be rotational and its first President will come from India
for the first 5 years followed by Brazil and Russia.
Note: BRICS nations comprise 40 per cent of the worlds population and accounts for nearly US $ 16
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trillion in GDP.
Indian Army and Bank of India ink MoU on Defence Salary Package
May 8 2015
Indian Army and Bank of India (BOI) on 8 May 2015 signed Memorandum of Understanding (MoU)
on the Defence Salary Package.
The signed MoU is a revised version of previous and first MoU which was signed in 2011 between
both parties and was valid for a period of three years.
Key facts of revised MoU
The basic features of the MoU are the same as before and are tailor made to suit the
requirements of serving soldiers, pensioners and their families.
Number of additional facilities are incorporated after concerted efforts. It includes the
standard bundle of free and concessional services.
These free services are drafts, cheque books, funds transfers to any bank in India through
RTGS and NEFT, ATM cards etc.
Added additional facilities also include extended Personal Accident Insurance (PAI) cover
upto Rs 10 lacs from current Rs 5 lacs.
PAI is for air insurance, Home Loan Insurance on Army Welfare housing Organisation
(AWHO) for deaths on account of war, external aggression and terrorist attack up to Rs 50
lacs.
By signing this MoU, Indian Army is hoping it will benefit a large number of serving and retired
Army personnel who are having their accounts with BOI. It also seeks to provide them an
opportunity to access modern banking facilities.
SBI launches RuPay Platinum debit card
May 8 2015
Indias largest lender State Bank of India (SBI) has launched a RuPay Platinum debit card in
association with National Payment Corporation of India (NPCI).
The card initially would be issued free to customers maintaining a quarterly balance of 50,000
rupees.
For the convenience of customers, this card has a special feature which is accepted at all payment
channels including ATMs, point-of-sale (PoS) and eCommerce.
RuPay Platinum debit card holders will also get additional benefits like 5 per cent cash back on utility
bill, complimentary concierge services, personal accident death and permanent total disability
insurance cover of Rs 2 lakh, complimentary airport lounge.
It should be noted that, presently SBI has 19.7 crore debit cards in circulation. Of this total debit
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cards in circulation, 4.5 crore are RuPay cards.

Parliament passes Regional Rural Banks (Amendment) Bill, 2014
Apr 28 2015
Parliament has passed Regional Rural Banks (Amendment) Bill, 2014. It was first passed in Lok
Sabha on December 22, 2014 and later in Rajya Sabha on April 28, 2015.
This bill amends Regional Rural Banks Act, 1976 and aims to strengthen the Regional Rural Banks
(RRBs) and deepen their financial inclusion.
Key facts about Regional Rural Banks (Amendment) Bill, 2014
Authorised capital: This amendment bill increases the authorised capital of each Regional
Rural Bank (RRB) from Rs 5 crore to Rs 2000 crore divided into Rs 200 crore of fully paid
share of Rs 10 each.
As per the parent Act the Rs 5 crore share capital of RRBs is split into 5 lakh shares of Rs 100
each.
Issued capital: It also provides that the authorised capital issued by any RRBs shall not be
reduced below Rs 1 crore and shares in all cases to be fully paid up shares of Rs 10 each.
Shareholding: The Bill allows RRBs to raise capital from sources other than the central and
state governments, and sponsor banks.
Board of directors: The Bill adds provision that any person who is a director of an RRB is
not eligible to be on the Board of Directors of another RRB.
It also mentions that directors will be elected by shareholders based on the total amount of
equity share capital issued to such shareholders.
Tenure of directors: The bill raises the tenure of directors to 3 years from existing 2 years.
The Bill also states that no director can hold office for a total period exceeding six years.
Closure and balancing of books: The parent Act had provision which mentioned that the
balance books of RRBs should be closed and balanced by 31st December every year.
However this amendment bill changes this date to 31st March in order to bring RRBs
balancing of books in uniformity with the financial year.
It should be noted that the parent Act of 1976 mainly has provisions for the incorporation,
regulation and winding up of RRBs.
Bharatiya Mahila Bank wins Asian Banker Achievement Award 2015
Apr 27 2015
Bharatiya Mahila Bank (BMB) has won The Asian Banker Achievement Award 2015.
The award was presented to the BMB in the Technology Implementation category of Best
Outsourcing Project (New Bank).
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Usha Ananthasubramanian, Chairman and Managing Director of BMB received the award at a
function held in Hongkong as a part of The Asian Banker Summit 2015.
About Bharatiya Mahila Bank (BMB)
BMB is Indias first all-women public sector bank and was formally launched on November
19, 2013.
Its objective is to focus on the banking needs of the women and promote economic
empowerment.
It also seeks to address the gender related issues and will be helpful in financial inclusion.
In Budget 2013-14, Union Government had approved Rs 1,000-crore seed capital for the
bank.
Headquarter of Bharatiya Mahila Bank is located in New Delhi.
Bank of Baroda ties up with UAE Exchange for instant money
transfer
Apr 26 2015
Leading Indian public sector bank Bank of Baroda (BoB) has partnered with UAE Exchange to offer
Non-resident Indian (NRI) customers an instant cash transfer facility.
In this regard agreement was signed between both parties. This agreement will facilitate customers
can send money within minutes to their desired bank accounts in BoB in India.
This facility is also supported by SMS alert, which will notify the moment the amount is credited in
the bank account of desired customer.
UAE Exchange is a global remittance and foreign exchange (FOREX) company. It serves over 7.9
million customers worldwide and currently has presence in 32 countries with over 750 branches
across 32 countries.
Currently, Bank of Baroda (BoB) has a network of more than 5,000 branches across United States,
Europe, Africa, Australia and Asia. Its financial centres are located in cities like New York, London,
Hong Kong, Singapore and Dubai.
ICICI Bank launches Tap-n-Pay, a near-field communications-
enabled payment service
Apr 21 2015
Bank has launched a payment service Tap-n-Pay. It was launched by bank in collaboration with Tech
Mahindra.
This payment service is based on the near-field communications (NFC) technology which will enable
its customers make over-the-counter payments without using cash.
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Key features of Tap n Pay

NFC technology will allow users to tap NFC enabled tag or mobile phone at the merchants
point-of-sale device to make payments.
It is a prepaid account which will be available to customers of any bank by simply registering
for it and transferring money online from any bank account.
ICICI Bank customers can also transfer money to the Tap-n-Pay account through an SMS.
To start with this service bank has offered it at large campuses of corporate offices.
ICICI Bank and Tech Mahindra also are planning to extend this service across the country.
PM Narendra Modi launches MUDRA Bank to provide credit to small
entrepreneurs
Apr 8 2015
Prime Minister Narendra Modi on 8 April 2015 launched Micro Units Development Re-finance
Agency (MUDRA) Bank in New Delhi.
MUDRA Bank will act as a regulator for Micro-Finance Institutions (MFIs) involved in
manufacturing, trading and service activities to promote their growth.
The Pradhan Mantri MUDRA Yojana will be the main support system for the bank and will be the
part of Small Industries Development Bank of India (SIDBI).
The MUDRA bank was proposed in Budget 2015-16 by Union Government with an initial corpus of
20,000 crore rupees. Apart from this, 3,000 crore rupees also has been earmarked as credit guarantee
corpus.
The envisaged roles for MUDRA Bank include
Formulate policy guidelines for micro-enterprise financing business and registration of MFI
entities.
Undertake rating and accreditation of MFI entities.
Develope standardized set of guidelines in order to govern last-mile lending to micro
enterprises.
Promote appropriate technology solutions for the last mile.
Formulate and operate a credit guarantee schemes in order to provide guarantees to loans and
portfolios that are extended to micro enterprises.
Support promotional and development activities in the sector and create a good architecture
for last-mile credit delivery.
MUDRA Bank will provide financing on 3 stages- Shishu, Kishore and Tarun.
Shishu is first stage in which loan cover upto Rs 50,000 will be given to a business entity at
start of business.
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Kishore is second stage in which loan cover ranging from Rs 50,000 to Rs 5 lakh will be
given.
Tarun is the third stage in which loan cover up to Rs. 10 lakh will be given.
Dena Bank inks MoU with Life Insurance Corporation to provide
insurance cover
Apr 7 2015
State owned Dena Bank has signed Memorandum of Understanding (MoU) with Life Insurance
Corporation (LIC) of India to provide insurance cover to its all Aadhaar-linked savings account
holders in the age group of 18 to 50 years.
LIC will provide insurance cover under the Union Governments flagship Pradhan Mantri Jeevan
Jyoti Bima Yojana (PMJBY) scheme.
Under the MoU
LIC will give a life cover of Rs 2 lakh in case of death of the insured person.
In this regard, a nominal premium of 330 rupees per annum will be charged from account
holder.
Those who join the scheme before completing 50 years can continue to have the risk of life
cover up to the age of 55 years.
RBI signs $400 million currency swap pact with Sri Lanka
Mar 25 2015
The Reserve Bank of India (RBI) has signed a US $400 million currency swap agreement with the
Central Bank of Sri Lanka.
The currency swap agreement will allow central banks of both nations to make withdrawals of US
Dollar or Euro in multiple tranches up to a maximum of USD 400 million or its equivalent.
The agreement will be valid for a period of three years and further economic co-operation between
the two countries. It will also bring in more financial stability in the region.
Background
In SAARCFINANCE Governors meeting held in Nepal in 2012, RBI had announced that it
will offer currency swap facilities aggregating USD 2 billion. This facility will be offered in
both foreign currency and rupee to SAARC member countries.
In this regard, the swap arrangement are signed to provide a backstop line of funding for the
SAARC member countries to meet any balance of payments (BoP) and liquidity crises till
long-term arrangements are made.
The facility will be available to all SAARC member countries including India, Afghanistan,
Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka.
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India Railways launches RuPay pre-paid debit card service

Mar 24 2015
Indian Railways has launched RuPay pre-paid debit card service for the railway passengers.
The service was launched by Indian Railway Catering and Tourism Corporation (IRCTC) in
collaboration with the Union Bank of India (UBI) and the National Payment Corporation of India
(NPCI).
Key facts
By using RuPay pre-paid cards, passengers now can book their tickets, do shopping and pay
service bills.
Initially the service will be available only for booking rail tickets and later on facility of
shopping and bill payments will be upgraded.
These cards will be made available from UBI offices or through IRCTC online.
The cardholder can have a loading limit of Rs 10,000 with partial Know Your Customer
(KYC) detail or with full KYC detail of Rs 50,000 loading limit.
For every month, first five transactions done per card for purchase of train tickets through
IRCTC will be free. Subsequent transaction after free usage limit, customer will be charged
extra Rs 10 per transaction.
For first six months no transaction charges will be levied from the customers for usage of this
services.
It should be noted that RuPay is Indias own card payment gateway network like Master Card and
Visa. It provides an alternative system for banks to provide debit card service.
Union Government appoints 9 Executive Directors in Public Sector
Banks
Mar 12 2015
Union Government has appointed 9 Executive Directors (EDs) in Public Sector Banks (PSBs).
Their appointment was approved by Appointments Committee of the Cabinet on recommendation
of selection panel headed by the Reserve Bank of India (RBI) Governor Raghuram Rajan.
Following 9 Executive Directors (ED) of PSBs were appointed
K. Sahoo- ED of Allahabad Bank.
Pawan Kumar Bajaj ED of Indian Overseas Bank.
Ravi Shankar Pandey- ED of Syndicate Bank.
Kishore Piraji Kharat ED of Union Bank of India.
C.Lodha- ED of Central Bank of India.
Charan Singh- ED of UCO Bank
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Venkata Rama Moorthy- ED of Bank of Baroda.

P. Marathe ED of Bank of India.
Harideesh Kumar B ED of Canara Bank.
NPCI links 15 crore bank accounts with Aadhaar
Mar 7 2015
National Payments Corporation (NPCI) has successfully linked 15 crore Direct Benefit Transfer
(DBT) accounts with the Aadhaar numbers.
With this achievement NPCI has moved a step closer to map its target of linking all 17 crore DBT
accounts with Aadhaar numbers by 30 June 2015.
Under the linking programme of DBT accounts with Aadhaar numbers, Government is seeking to
bring all beneficiaries of all government subsidies/benefit transfers under the programme in order to
plug leakages and save cost.
Apart from this linking programme NPCI is also nodal agency for all retail payment systems under
the Pradhan Mantri Jan Dhan Yojana (PMJDY) which was launched in 2014 to push DBT and
financial inclusion.
About National Payments Corporation (NPCI)
NPCI is an umbrella body for all retail payments system in India. It operates under the aegis
of Reserve Bank of India (RBI) was incorporated in 2008 under the Companies Act.
Its main objective is to facilitate an affordable payment mechanism in order facilitate financial
inclusion and benefit the common man across the country.
It also seeks to consolidate and integrate the multiple systems with varying service levels into
nation-wide uniform and standard business process for all retail payment systems.
RBI cuts repo rate by 25 basis points to 7.5 per cent
Mar 4 2015
The Reserve Bank of India (RBI) on 4 March 2015 has cut down repo rate by 25 basis points to 7.5
percent from 7.75 percent, with immediate effect. However, RBI has kept the cash reserve ratio
(CRR) unchanged at 4 percent.
It is the second change in rates by 25 basis points since January 2015. With this change, RBI is
signaling that it was convinced by the fiscal consolidation measures announced in the Budget.
Reasons behind the rate cut
Disinflation is occurring as per the RBI norms set in January 2014 and at a faster pace than it
was envisaged earlier.
Fiscal consolidation measures announced by Union Government in the Union Budget
2015-16.
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Lower international energy prices and Union Governments intent to shift from spending on
subsidies to spending on infrastructure.
Also the better target mechanism of government through direct transfers to further reduce
subsidies through direct transfers.
Governments decision of cooperative federalism that will transfer significantly larger amount
to the states.
Thus devolving responsibility for funding central programmes as it will make state budget
deficits narrower and the general fiscal deficit will be lower.
Union Government and RBI sign agreement to keep inflation below
6%
Mar 3 2015
Union Government and the Reserve Bank of India (RBI) have signed an agreement on Monetary
Policy Framework in order to move towards the RBI Governor Raghuram Rajans view of inflation
targeting.
Presently, Union Government and RBI give inflation estimates and do not set targets. But as per this
agreement government has set a target for RBI to bring down inflation below
6 per cent by January 2016.
4 per cent for financial year and all subsequent years with band of +/- 2 percent.
This agreement mentions that if RBI fails to meet the target, it will
Report to the government with the reasons for the failure to achieve the target.
Propose remedial actions to be taken.
Further estimate the time period within which the failed target would be achieved.
As per the agreement, this Monetary Policy Framework will be monitored by the RBI and it is
binding on Union Government to take proactive measures for price control.
This agreement will put in place a framework of a modern monetary policy to meet the challenges of
an increasingly complex economy.
Background
The agreement comes in line with the recommendations of the RBIs Urjit Patel committee on
inflation targeting aiming to smoothen the monetary policy.
During the budget 2015-16 speech Finance minister Arun Jaitley also had mentioned that
government will amend the RBI Act to provide for a Monetary Policy Committee and have a
memorandum of understanding with the Reserve Bank.
State Bank of India and Indian Army signs MoU on Defence Salary
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Package
Feb 24 2015
State Bank of India (SBI) has signed a Memorandum of Understanding (MoU) with Indian Army on
the Defence Salary Package (DSP).
Signed MoU is revised version of the first MoU which was signed on DSP between two parties in
2011 and was valid for a period of three years. The revised MoU meets the requirements of serving
soldiers, pensioners and their families.
Key facts about new MoU
MoU include provisions for number of free and concessional banking services like drafts,
cheque books, funds transfers to any other bank in India through Real Time Gross Settlement
(RTGS), free ATM cards etc.
It also includes provision for implementing the Nepal Express Remittance Scheme. This scheme
will benefit of the Nepali Domicile Gorkha Soldiers serving in the Indian Army in order to
instantly transfer funds to Nepal.
MoU adds improved features for linking of the Personal Accident Insurance (PAI) to the
Savings account instead of the debit card.
It also seeks to enhance the PAI amounts and the exemption percentage of margin money for
house and car loans. It also waives off of the processing charges on the loans.
The revised MoU is going to benefit 19.5 lakh pensioners and 10 lakh serving personnel with access
modern banking facilities. These personnels either hold Pay or Pension accounts with SBI.
CCI gives nod to Kotak-ING Vysya Bank merger
Feb 21 2015
The Competition Commission of India (CCI) has given its approval to proposed Rs 15,000-crore
merger deal between Kotak Mahindra Bank and ING Vysya Bank.
CCI in its approval mentioned that this merger is not likely to have an appreciable adverse effect on
competition in India. The CCI also has 0bserved that the ING Vysya does not have significant market
share in any of the relevant markets and there is presence of large players in these markets. So it will
act as a competitive constraint to the parties.
This approval is considered as important step for merging of two banks to form new entity. This
merger will make Kotak Mahindra Bank fourth-largest private bank in India in terms of total
business. The biggest three private banks are ICICI Bank, HDFC Bank and Axis Bank.
Background
In November 2014, Kotak Mahindra Bank had announced that it is acquiring ING Vysya
Bank in an all-stock deal.
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The management of these banks are expecting that the new merged entity will be operational
by April 1, 2015.
The acquisition will help Kotak Mahindra Bank to widen its reach in South Indian market
and also help in acquiring SME customers as ING Vysya Bank was having stronghold in SME
customers.
After merger the combined banking entity will have a widespread network of 1,214 branches
across pan India.
ICICI Bank launches India's first digital bank Pockets
Feb 11 2015
The Industrial Credit and Investment Corporation of India (ICICI) Bank, has launched Indias first
digital Bank on mobile phones, Pockets.
This service will enable users to instantly send money to any e-mail id, mobile number, friends on
Facebook and bank account.
Key facts
Anyone, including those who are not customers of ICICI Bank, can download the e-wallet
from Google Playstore.
This digital banking service will be funded from customers any bank account in the country.
Customers can also choose to add a zero balance Savings Account to this digital wallet, which
will allow them to earn interest on their idle money.
This wallet uses a virtual VISA card which enables the users to transact on any website or
mobile application in India.
Customers can also request for a physical card to use it at any retail outlet.
The users can pay bills, recharge mobiles, book movie tickets, order food, send physical & e-
gifts, split and share expenses with friends by using this e-wallet.
Union Government to infuse Rs. 6,990 crore in nine public sector
banks
Feb 11 2015
Union Government is planning to infuse Rs. 6,990 crore in 9 Public Sector Banks (PSBs) for
enhancing their capital and meeting the global risk norms.
In this regard, Government has allocated Rs.11,200 crore in the Union Budget 2014-15, for the first
tranche of capital infusion in these banks.
Capital infusion in PSBs was decided on the basis of the performance of the bank. In this case
efficiency parameters for all PSBs for last three years were put together. PSBs which were above the
average, were considered for capital infusion.
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Two parameters were chosen to find efficiency parameters of all PSBs. They were weighted average
of return on assets (ROA) and return on equity (ROE) during the last financial year.
9 PSBs are: State Bank of India (Rs 2,970 crore), Bank of Baroda (Rs 1,260 crore), Punjab National
Bank (Rs 870 crore), Canara Bank (Rs 570 crore), Syndicate Bank (Rs 460 crore), Allahabad Bank (Rs
320 crore), Indian Bank (Rs 280 crore), Dena Bank (Rs 140 crore) and Andhra Bank (Rs 120 crore).
RBI Doubles the FOREX Remittance Limit under Liberalised
Remittance Scheme (LRS)
Feb 3 2015
The Reserve Bank of India (RBI) in its monetary policy review has enhanced the limit for foreign
exchange (FOREX) remittances under Liberalised Remittance Scheme (LRS) to $250,000 (Rs. 1.5 crore)
per person per year.
This limit was doubled compared to earlier limit of $125,000 per person per year.
Under the LRS, Indians can open, maintain and hold foreign currency accounts with banks outside
India for carrying out transactions, without permission from the RBI.
Background
RBI has taken this decision after reviewing the external sector outlook as Indias foreign exchange
reserves touched all-time high at $322.135 billion in mid-January 2015 and further exercise in macro
prudential management.
Earlier in 2013, RBI had reduced the limit for FOREX remittances under this scheme to $75,000 as
the rupee came under strong pressure. But later, in June 2014, it was again raised the limit to
$125,000 (Rs. 75 lakh).
RBI keeps key rates unchanged but changes statutory liquidity ratio
Feb 3 2015
The Reserve Bank of India (RBI) has announced sixth Bi-Monthly Monetary Policy Statement.
In its bi-monthly monetary policy statement, RBI has not changed its main lending rate i.e.Repo
Rate and cash reserve ratio (CRR). But changed statutory liquidity ratio (SLR) of scheduled
commercial banks.
On the basis of an assessment of the current and evolving macroeconomic situation, RBI has been
decided to:
Repo rate- kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged
at 7.75 per cent.
Cash reserve ratio (CRR) kept the cash reserve ratio (CRR) of scheduled banks
unchanged at 4.0 per cent of net demand and time liabilities (NDTL).
Statutory liquidity ratio (SLR) reduced the SLR of scheduled commercial banks by 50
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basis points from 22.0 per cent to 21.5 per cent of their NDTL.
Reverse repo rate under the LAF remains unchanged at 6.75 per cent.
Marginal standing facility (MSF) rate- remains unchanged at 8.75 per cent.
Bank Rate remains unchanged at 8.75 per cent.
Earlier on 15 January 2015, RBI had changed repo rate by 25 basis points from 8.0 percent to 7.75
percent.
Statutory Liquidity Ratio: SLR refers to the proportion of its total NDTL that the bank has to
maintain in form of liquid assets. These liquid assets can either be cash or gold or unencumbered
government securities. This directly affects the proportion of funds that the bank can lend.
RBI constitutes high level panel on urban cooperative banks (UCB)
Jan 31 2015
The Reserve Bank of India (RBI) has constituted a high-powered panel on urban cooperative
banks (UCB).
It will be headed by RBI Deputy Governor R Gandhi and comprise of eight member who will be
experienced bankers. They will submit its report within three months from the date of its first
meeting.
This high-powered panel will re-examine and recommend appropriate set of businesses, size,
conversion and licensing terms for the UCB sector.
The Terms of Reference of the high level panel are:
Businesses: Examine the line of businesses that UCBs may be permitted to undertake and
their benchmark in terms of size of business, capital requirement, regulatory regime etc.
Size of UCB: Suggest the appropriate size up to which a UCB may be able to grow without
undue risk to the system.
Conversion Criteria & licensing terms : Suggest the criteria for allowing voluntary
conversion by a UCB and examine whether the time is opportune to give license to new
UCBs.
Determine the modalities of implementing the suggestion of the Malegam Committee.
Especially, whether the 50 per cent in value of deposits should be held by voting members.
Thus, propose a feasible structure that puts majority voting in the hands of contributors of
funds in UCB.
Scientist V K Saraswat joins as full-time member of NITI Aayog
Jan 31 2015
Former DRDO chief Vijay Kumar Saraswat has taken charge as full time-member of National
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Institution for Transforming India (NITI) Aayog.

V K Saraswat
He had played a very significant role in the development of the countrys first Liquid
Propulsion Engine, DEVIL.
He was Project Director of Prithvi and had steered the design, development, production and
induction of the first indigenous Surface-to-Surface missile system into the armed forces.
He was Secretary of Defence (Research & Development) and Director General of Defence
Research & Development Organisation (DRDO).
Awards: He was conferred the Padma Shri (1998) and Padma Bhusan (2013).
Background
Earlier on 1 January 2015, Union Government had announced the replacement of 6 decade year old
Planning Commission with new age NITI Aayog to function as both a think-tank and a policy forum
for government.
On 5 January 2015, Prime Minister Narendra Modi as Chairman of NITI Aayog had appointed V K
Saraswat along with eminent economist Bibek Debroy as its full time members and Arvind
Panagariya as its first Vice-Chairman.
RBI signs an information sharing agreement with Brazils Central
Bank
Jan 27 2015
Reserve Bank of India (RBI) has signed a Memorandum of Understanding (MoU) on Supervisory
Cooperation and Exchange of Supervisory Information with Brazils Central Bank- Banco Central do
Brasil (BCB).
This MoU was signed by Anthero de Moraes Meirelles, Deputy Governor for Supervision, BCB and
S.S. Mundra, Deputy Governor, Reserve Bank of India.
RBI by signing such MoU with supervisors of other countries is seeking to promote greater
co-operation and share supervisory information among the authorities.
In this regard, RBI in total has signed 23 such MoUs, one Letter for Supervisory Co-
operation and one Statement of Co-operation (SoC), with different Central Banks of other
countries and overseas regulators/supervisors.
Padma Awards 2015
Jan 26 2015
President Pranab Mukherjee has announced the names of Recipients of this years Padma awards. He
approved conferment of 104 Padma Awards.
Padma Awards, the countrys highest civilian awards, are conferred in three Categories viz.
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Padma Vibhushan, Padma Bhushan and Padma Shri.

This years list comprises 9 Padma Vibhushan, 20 Padma Bhushan and 75 Padma Shri
Awardees. Among these awardees 17 are women and equal number are in category of
foreigners, NRIs, PIOs. While, 4 are posthumous awardees.
The Awards are given in various disciplines- art, social work, public affairs, science and engineering,
trade and industry, medicine, literature and education, sports, civil service, etc.
2015 Padma Vibhushan Awards
It is the second highest civilian award. It is awarded for exceptional and distinguished service.
Sr
Name of the Awardee Discipline State/Domicile
No
1 L. K. Advani Public Aairs Gujarat
2 Amitabh Bachchan Art Maharashtra
3 Prakash Singh Badal Public Aairs Punjab
4 Dr.D.Veerendra Heggade Social Work Karnataka
5 Dilip Kumar Art Maharashtra
6 Swami Rambhadracharya Others Uttar Pradesh
Science &
7 Prof. Malur Ramaswamy Srinivasan Tamil Nadu
Engineering
8 Shri Kottayan K. Venugopal Public Aairs Delhi
Karim Al Hussaini Aga Khan

9 Trade & Industry France/UK
(Foreigner)
2015 Padma Bhushan Awards
It is the third highest civilian award. It is awarded for distinguished service of high order.
Sr No Name of the Awardee Discipline State/Domicile
1 Jahnu Barua Art Assam
Science &
2 Dr. Vijay Bhatkar Maharashtra
Engineering
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Literature &
3 Swapan Dasgupta Delhi
Education
4 Swami Satyamitranand Giri Others Uttar Pradesh
5 N. Gopalaswami Civil Service Tamil Nadu
6 Dr. Subhash C. Kashyap Public Aairs Delhi
7 Dr. (Pandit) Gokulotsavji Maharaj Art Madhya Pradesh
8 Dr. Ambrish Mithal Medicine Delhi
9 Sudha Ragunathan Art Tamil Nadu
10 Harish Salve Public Aairs Delhi
11 Dr. Ashok Seth Medicine Delhi
Literature &
12 Rajat Sharma Delhi
Education
13 Satpal Sports Delhi
14 Shivakumara Swami Others Karnataka
Science &
15 Dr. Kharag Singh Valdiya Karnataka
Engineering
Science &
16 Prof. Manjul Bhargava(NRI/PIO) USA
Engineering
17 David Frawley (Vamadeva)(Foreigner) Others USA
18 Bill Gates(Foreigner) Social Work USA
19 Melinda Gates (Foreigner) Social Work USA
20 Saichiro Misumi(Foreigner) Others Japan

2015 Padma Shri Awards
It is the fourth highest civilian award. It is awarded for distinguished service in any field.
Sr
Name of the Awardee Discipline State/Domicile
No
135
1 Dr. Manjula Anagani Medicine Telangana
Science &
2 S. Arunan Karnataka
Engineering
3 Kanyakumari Avasarala Art Tamil Nadu
Literature &
4 Dr. Bettina Sharada Baumer Jammu & Kashmir
Education
5 Naresh Bedi Art Delhi
6 Ashok Bhagat Social Work Jharkhand
7 Sanjay Leela Bhansali Art Maharashtra
Literature &
8 Dr. Lakshmi Nandan Bora Assam
Education
Literature &
9 Dr. Gyan Chaturvedi Madhya Pradesh
Education
10 Prof. (Dr.) Yogesh Kumar Chawla Medicine Chandigarh
11 Jayakumari Chikkala Medicine Delhi
Literature &
12 Bibek Debroy Delhi
Education
13 Dr. Sarungbam Bimola Kumari Devi Medicine Manipur
14 Dr. Ashok Gulati Public Aairs Delhi
15 Dr. Randeep Guleria Medicine Delhi
16 Dr. K. P. Haridas Medicine Kerala
17 Rahul Jain Art Delhi
18 Ravindra Jain Art Maharashtra
Literature &
19 Dr. Sunil Jogi Delhi
Education
136
20 Prasoon Joshi Art Maharashtra
21 Dr. Prafulla Kar Art Odhisa
22 Saba Anjum Sports Chhattisgarh
Literature &
23 Ushakiran Khan Bihar
Education
24 Dr. Rajesh Kotecha Medicine Rajasthan
25 Prof. Alka Kriplani Medicine Delhi
26 Dr. Harsh Kumar Medicine Delhi
Literature &
27 Narayana Purushothama Mallaya Kerala
Education
Literature &
28 Lambert Mascarenhas Goa
Education
29 Dr. Janak Palta McGilligan Social Work Madhya Pradesh
30 Veerendra Raj Mehta Social Work Delhi
31 Tarak Mehta Art Gujarat
32 Neil Herbert Nongkynrih Art Meghalaya
33 Chewang Norphel Others Jammu & Kashmir
34 T. V. Mohandas Pai Trade & Industry Karnataka
35 Dr.Tejas Patel Medicine Gujarat
36 Jadav Molai Peyang Others Assam
37 Bimla Poddar Others Uttar Pradesh
Science &
38 Dr. N. Prabhakar Delhi
Engineering
Science &
39 Dr. Prahalada Maharashtra
Engineering
137
40 Dr. Narendra Prasad Medicine Bihar
Literature &
41 Ram Bahadur Rai Delhi
Education
42 Mithali Raj Sports Telangana
43 P. V. Rajaraman Civil Service Tamil Nadu
Literature &
44 Prof. J. S. Rajput Uttar Pradesh
Education
45 Kota Srinivasa Rao Art Andhra Pradesh
Literature &
46 Prof. Bimal Roy West Bengal
Education
47 Shekhar Sen Art Maharashtra
Literature &
48 Gunvant Shah Gujarat
Education
Literature &
49 Brahmdev Sharma (Bhaiji) Delhi
Education
Literature &
50 Manu Sharma Uttar Pradesh
Education
51 Prof. Yog Raj Sharma Medicine Delhi
Science &
52 Vasant Shastri Karnataka
Engineering
Science &
53 S. K. Shivkumar Karnataka
Engineering
54 P. V. Sindhu Sports Telangana
55 Sardara Singh Sports Haryana
56 Arunima Sinha Sports Uttar Pradesh
57 Mahesh Raj Soni Art Rajasthan
138
58 Dr.Nikhil Tandon Medicine Delhi
59 H. Thegtse Rinpoche Social Work Arunachal Pradesh
60 Dr.Hargovind Laxmishanker Trivedi Medicine Gujarat
61 Huang Baosheng(Foreigner) Others China
Science &
62 Prof. Jacques Blamont(Foreigner) France
Engineering
Late Shri Syedna Mohammad

63 Others Maharashtra
Burhanuddin(Posthumous)
Literature &
64 Jean-Claude Carriere(Foreigner) France
Education
65 Dr. Nandrajan Raj Chetty(NRI/PIO) Trade & Industry USA
66 George L. Hart(Foreigner) Others USA
Jagat Guru Amrta Suryananda Maha

67 Others Portugal
Raja(NRI/PIO)
Late Shri Meetha Lal Mehta

68 Social Work Rajasthan
(Posthumous)
69 Tripti Mukherjee(NRI/PIO) Art USA
70 Dr. Dattatreyudu Nori(NRI/PIO) Medicine USA
71 Dr. Raghu Rama Pillarisetti(NRI/PIO) Medicine USA
72 Dr. Saumitra Rawat(NRI/PIO) Medicine UK
Literature &
73 Prof. Annette Schmiedchen(Foreigner) Germany
Education
Pran Kumar Sharma alias

74 Art Delhi
Pran(Posthumous)
75 R. Vasudevan(Posthumous) Civil Service Tamil Nadu
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These Padma Awards are conferred by the President of India at a function held at
Rashtrapati Bhawan around March/ April every year
RBI lifts ban on carrying 1,000, 500 bank notes to and from Nepal,
Bhutan
Jan 24 2015
Reserve Bank of India (RBI) has lifted ban on carrying Indian bank notes of Rs 1,000 and 500
denominations to and from Nepal, Bhutan.
In this regard RBI has issued a circular that eased the restriction on export and import of bank notes
of 1,000 and 500 denominations for Nepal and Bhutan.
However, RBI has put a limit of carrying such notes at Rs 25,000 per person.
Earlier in May 2000, RBI had imposed ban following the request of Union government to curb
smuggling of counterfeit currency.
Implication: It will provide a great relief to workers from both nations as well as Indian tourists
travelling to Nepal and Bhutan.
SBI signs 100 mn euro loan pact with EIB
Jan 23 2015
Indias largest bank State Bank of India (SBI), has signed a loan agreement for 100 million euro
(about Rs 700 crore) with European Investment Bank (EIB).
This agreement was facilitated by SBI Capital Markets, a subsidiary of SBI.
It is the third tranche of a total sanctioned loan of 200 million euro by EIB to SBI for lending it to
private businesses in the country.
SBI will utilize this loan to support the development of private sector in country in particular for
small and medium-sized enterprises (SMEs). It will be also utilized social and economic
infrastructure as well as climate change mitigation and adaptation.
Earlier on 25 June and 28 November 2014, first tranche of Euro 55 and second tranche of Euro 45
million was signed between both banks.
Pradhan Mantri Jan Dhan Yojana features into Guinness book of
World Records
Jan 21 2015
NDA governments flagship scheme Pradhan Mantri Jan Dhan Yojana (PMJDY) has entered
into Guinness book of World Records.
Guinness book of World Records has given certificate stating it as most bank accounts opened in one
week.
In one week, 18,096,130 bank accounts were opened as part of the financial inclusion campaign from
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23rd to 29th August, 2014. It was achieved by the Department of Financial Services (Government of
India).
Pradhan Mantri Jan Dhan Yojana (PMJDY)
It was launched by Prime Minister Narendra Modi with the goal of eradicating financial
untouchability of the poor by opening at least one bank account for every family in the
country in less than six months.
It seeks to financially empower the poor by providing them access to formal banking system.
It also seeks to provide platform for Direct Benefits Transfer (DBT) which will curb leakages
in government subsidies and thus saving government exchequer.
Initially, after its launch the scheme had a target of opening 7.5 crore bank accounts by 26
January, 2015, but later it was revised and raised to 10 crore bank accounts.
As on 17th January 2015, PMJDY has achieved feat of opening of 11.50 crore bank accounts
under it in the short span of 5 months since it was launched.
RBI cuts repo rate by 25 basis point
Jan 15 2015
Reserve Bank of India (RBI) has cut down repo rate by 25 basis points to 7.75 percent from 8
percent, with immediate effect.
It was announced ahead of the scheduled date of monetary policy announcement on 3rd February
2015 as part of RBIs 6th bi-monthly monetary policy statement.
RBIs 6th bi-monthly monetary policy statement says that
Repo rate: RBI has reduced the policy repo rate under the liquidity adjustment facility (LAF)
by 25 basis points from 8.0 per cent to 7.75 per cent.
Cash reserve ratio (CRR): RBI has unchanged CRR and kept it at 4.0 per cent of net
Reverse repo rate: RBI has adjusted reverse repo rate under the LAF to 6.75 per cent.
While, RBI has adjusted Marginal standing facility (MSF) rate and the Bank Rate to 8.75
per cent with immediate effect.
RBI governor Raghuram Rajan wins Governor of the Year award
Jan 13 2015
A British magazine has named RBI Governor and well-known economist Raghuram Rajan as the
Governor of the Year in the Central Banking Awards for 2015.
It was announced by British magazine Central Banking.
Governor Raghuram Rajan was chosen for this award by magazine for his disciplined and focused
approach in leading the Reserve Bank of India(RBI) during his first year as Governor.
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It also mentioned that, RBI Governor deserved the award for his deep understanding of the root
causes of Indias economic problems.
About Raghuram Rajan
He is 23 Governor of RBI and had taken charge in September 2013.
Earlier, he was chief economic adviser (CEA) to Indias Ministry of Finance in 2013.
He was chief economist at the International Monetary Fund (IMF) from 2003 to 2007.
He is also a celebrity economist known across the globe for predicting the 2008 global
meltdown.
He has authored many books on economics and is professor of finance at the graduate
business school at the University of Chicago.
Awards:
Fischer Black Prize In 2003, he was awarded this award by the American Finance
Association for contributions to the theory and practice of finance.
Deutsche Bank Prize for Financial Economics- In 2013, he was awarded this award for
his ground-breaking research work which influenced financial and macro-economic policies
around the world.
Best Central Bank Governor award In 2014, he was awarded this award by Euromoney
magazine.
Kotak Mahindra-ING Vysya merger gets shareholders nod
Jan 8 2015
Private sector Kotak Mahindra Bank has received its shareholders nod for merger of Bengalaru-
headquartered ING Vysya Bank with itself.
It was approved by the 99.30 per cent in number representing 99.93 per cent in value of the
shareholders present.
This approval is considered as important step for merging of two banks to form new entity. Now
this merger is subject to the final approval from Reserve Bank of India (RBI), Competition
Commission of India (CCI) and such other approvals.
Background
In November 2014, Kotak Mahindra Bank had announced that it is acquiring ING Vysya Bank in an
all-stock deal.
This merger will make Kotak the fourth-largest private bank in India in terms of total business. The
biggest three private banks are ICICI Bank, HDFC Bank and Axis Bank.
The management of these banks are expecting that the new merged entity will be operational by
April 1, 2015.
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The acquisition will help Kotak Mahindra Bank to widen its reach in South Indian market and also
help in acquiring SME customers as ING Vysya Bank was having stronghold in SME customers.
After merger the combined banking entity will have a widespread network of 1,214 branches across
pan India.
ICICI Bank launches Indias first contactless credit and debit cards
Jan 8 2015
Indias largest private sector bank Industrial Credit and Investment Corporation
of India (ICICI) Bank has launched countrys first contactless debit and credit cards.
These cards will provide its customers to make electronic payments by waving the cards near the
merchant terminal instead of dipping or swiping.
Facts about ICICI Banks contactless cards
These cards are based on the Near Field Communication (NFC) technology and powered by
MasterCard contactless and Visa payWave technologies.
It provide customers with the improved convenience of speed as these cards require
significantly less time than traditional cards to complete a transaction.
It also enhances security features for the customer.
Presently, bank has introduced these cards in cities like Gurgaon, Hyderabad and Mumbai. ICICI
Bank also has provided with over 1200 Electronic Data Capture (EDC) machines that are capable of
accepting contactless payments in these cities.
ICICI Bank Launches Digital Village Project in Akodara Village of
Gujarat
Jan 5 2015
Industrial Credit and Investment Corporation of India (ICICI) Bank has launched its own
version of Digital Village Project by adopting entire Akodara Village in Sabarkantha district of
Gujarat.
It was launched presence of Prime Minister Narendra Modi and ICICI Bank MD and CEO Chanda
Kochar to mark 60-year-celebration of the ICICI groups existence.
Key facts about ICICI Banks Digital Village Project
It is launched in lines with Governments flagship programme of Digital India.
It seeks to provide entire village with services ranging from cashless banking to digitised
school teaching.
As part of this project, banking platform at rural part will be digitized by covering all aspects
of banking like opening an account to sale of goods to purchase of products including milk
from the vendors or local kirana stores.
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In case of school teaching, it will digitized all school records alongwith the Gujarat syllabus
and even teaching methods and tools.
It will also provide necessary infrastructure needed for digisiting entire village in order to
provide villager with the access required to data and information in a digital format.
Besides basic banking facilities like ATMs and other digital banking services, other services
like e-health, e-milk producer group, Wi-Fi connectivity and schools with digital black
boards in the village, along with a host of other digital facilities will be provided under this
project.
About ICICI Bank
It was established in 1955 as ICICI Ltd.
Originally it was set up as an Indian financial institution as the initiative of the World Bank, the
Government of India and representatives of Indian industry to provide project financing to Indian
businesses.
Later in 1994, it got merged to form ICICI Bank.
RBI relaxes KYC norms for Non-Banking Financial Companies
(NBFC's)
Jan 4 2015
Reserve Bank of India (RBI) has relaxed Know-Your-Customers (KYC) norms for Non-Banking
Financial Companies (NBFCs).
In this regard, RBI has amended the KYC norms in order to remove the practical difficulties and
constraints being faced by NBFCs in getting KYC documents at frequent intervals.
Previously, as per the norms it was necessary for NBFCs to undertake KYC once in every 5 years for
low risk category customers and once in two years for both high and medium risk categories.
But as per new norms, full KYC exercise will be required to be done at least every 10 years for low
risk and at least every 8 years for medium risk individuals and entities.
While for the high-risk individuals and entities, it should be done in at least every 2 years.
This full KYC exercise will be done by taking into account whether and when client due diligence
measures have previously been undertaken and the adequacy of data obtained.
However, the new norm does not mention physical presence of clients for such periodic updations.
RBI signs an information sharing agreement with US banking
regulators
Jan 3 2015
Reserve Bank of India (RBI) has signed an information sharing agreement with United States (US)
banking regulators for better coordination with them in supervising financial institutions.
144
Earlier in December 2014, RBI had concluded a Statement of Co-operation (SoC) on Supervisory
Cooperation and Exchange of Supervisory Information with the US banking regulators like Board of
Governors of the Federal Reserve System(FRB), Office of the Comptroller of Currency (OCC) and
Federal Deposit Insurance Corporation (FDIC).
SoC was signed by Michael S Gibson- Director, FRB; Martin Pfinsgraff, Senior Deputy Comptroller-
OCC; Doreen R Eberley, Director-FDIC and Indian counterpart P R Ravi Mohan, Chief General
Manager-in-Charge, Department of Banking Supervision, RBI.
RBI by signing such MoU/SoC with supervisors of other countries is seeking to promote
greater co-operation and share supervisory information among the authorities.
In this regard, RBI in total has signed 22 such MoUs, one Letter for Supervisory Co-
operation and one SoC, with overseas regulators/supervisors.
Background
In September 2014, during Prime Minister Narendra Modis visit to the US, both countries had
issued a joint statement to boost the efforts of the RBI and American banking regulators and
supervisors for exchange of information to enhance the effectiveness of cross border supervision.
Government splits Chairman & MD post in PSU banks and names
chiefs for 4 PSU banks
Jan 1 2015
Government has decided to separate the post of Chairman and Managing Director (MD) and Chief
Executive Officer (CEO) in public sector banks.
With this decision government is breaking the tradition of having the heads of state-run banks act as
both chairman and managing director.
As per the Finance Ministry, the Chairman in public sector banks other than State Bank of India
(SBI) will be a part- time board member. He will preside over the board meetings and will not be an
Executive Chairman.
This means that for the first time, PSU banks will have a non-Executive Chairman, giving
operational responsibility to Managing Director and Chief Executive Officer (CEO).
In pursuance of the decision, the government has appointed four Managing Directors and CEOs of
following 4 PSU banks
Koteeswaran was named as MD and CEO of Indian Overseas Bank.
Srinivas was named as MD and CEO of United Bank of India.
Animesh Chauhan was named MD and CEO of Oriental Bank of Commerce.
Kishore Sansi was named MD and CEO of Vijaya Bank.
Above 4 MDs and CEOs will have tenure of 3 years or till the date of superannuation, whichever is
145
earlier. These appointments were made based on the recommendations of Appointments Board
chaired by the Reserve Bank of India (RBI) Governor.
Government also has decided to go for a fresh selection procedure for the post of Chairman and MD
and CEO in Bank of Baroda, Punjab National Bank and Canara Bank, which are A category large
banks.
RBI extends deadline for withdrawal of pre-2005 currency notes till
30 June 2015
Dec 25 2014
Reserve Bank of India (RBI) has extended the deadline for withdrawal of pre-2005 of various
th
denominations including Rs 500 and Rs 1,000 by six months till 30 June 2015.
RBI also has clarified that all such notes will continue to remain a legal tender and can be exchanged
for their full value.
Pre-2005 currency notes: They do not have the year of printing on the reverse side of note. While
the currency notes issued after 2005, have year of printing is visible at the bottom of the reverse side.
Background
Previously in March 2014, RBI had notified that all currency notes issued prior to 2005 will
be withdrawn from circulation and had set a deadline of July 1 for exchanging the notes.
In this regard, all banks were told to exchange any number of notes for both customers and
non-customers.
After the deadline, banks were notified to exchange the notes only for their customers and
non-customers after they furnish proof of identity and residence.
But this July deadline was extended to 1st January 2015.
Thus by withdrawing all pre-2005 notes, RBI is seeking to curb the menace of fake currency in the
country as post-2005 notes have added additional security features.
Lok Sabha passes Regional Rural Banks (Amendment) Bill, 2014
Dec 23 2014
Lok Sabha has passed the Regional Rural Banks (Amendment) Bill, 2014. It was passed by voice
vote.
This bill amends Regional Rural Banks Act, 1976 and aims to strengthen the Regional Rural Banks
and deepen their financial inclusion.
Key facts
Authorised capital: This amendment bill increases the authorised capital of each Regional
Rural Bank (RRB) from Rs 5 crore to Rs 2000 crore divided into Rs 200 crore of fully paid
share of Rs 10 each. As per the parent Act the Rs 5 crore share capital of RRBs is split into 5
146
lakh shares of Rs 100 each.

Issued capital: It also provides that the authorised capital issued by any RRBs shall not be
reduced below Rs 1 crore and shares in all cases to be fully paid up shares of Rs 10 each.
Shareholding: The Bill allows RRBs to raise capital from sources other than the central and
state governments, and sponsor banks.
Board of directors: The Bill adds provision that any person who is a director of an RRB is
not eligible to be on the Board of Directors of another RRB. It also mentions that directors
will be elected by shareholders based on the total amount of equity share capital issued to such
shareholders.
Tenure of directors: The bill raises the tenure of directors to 3 years from existing 2 years.
The Bill also states that no director can hold office for a total period exceeding six years.
Closure and balancing of books: The parent Act had provision which mentioned that the
balance books of RRBs should be closed and balanced by 31st December every year. However
this amendment bill changes this date to 31st March in order to bring RRBs balancing of
books in uniformity with the financial year.
RBI releases final guidelines for the Bharat Bill Payment System
(BBPS)
Nov 29 2014
Reserve Bank of India issued the final guidelines for the Bharat Bill Payment System (BBPS). It is an
integrated bill payment system offering inter-operable and accessible bill payment service to
customers through a network of agents, enabling multiple payment modes, and providing instant
confirmation of payment.
Key Facts
It will help consumers pay multiple bills like electricity, telephone and school fees at a single
point of transaction.
The National Payment Corporation of India (NPCI) has been appointed as the nodal body
which will set the standards, and also take care of clearing and settlement as the Bharat Bill
Payment Central Unit (BBPCU).
In the two tiered BBPS set-up, there will be authorised operational units called Bharat Bill
Payment Operating Units (BBPOUs) with an agent network under the BBPCU.
RBI has set a Rs 100-crore networth and domestic registration as qualifying conditions for
those seeking to be authorised collection agents.
Participants in the BBPS will include authorised entities such as BPCU, BBPOUs as well as
their authorised agents, payment gateways, banks, billers and service providers, and other
147
entities, including authorised prepaid payment instrument issuers.

Thus, BBPS will help track all the payments being made in economy, including cash payments to
utilities, schools, and telcos among others.
Kotak mahindra Bank to acquire ING Vaisya Bank
Nov 21 2014
Kotak Mahindra Bank has announced that it would acquire Bengalaru-headquartered ING Vysya
Bank in an all-stock deal. The deal will be final after regulatory approvals, including those from the
Reserve Bank of India (RBI) and Competition Commission of India (CCI). The management of the
banks expects that the new merged entity will be operational by April 1, 2015.
The acquisition will help Kotak Mahindra Bank to widen its reach in South Indian market and also
help in acquiring SME customers as ING Vysya Bank was having stronghold in SME customers.
After merger the combined banking entity will have a widespread network of 1,214 branches across
pan India.
The deal will make Kotak the fourth-largest private bank in the country in terms of total business.
The biggest three private banks are ICICI Bank, HDFC Bank and Axis Bank.
Government re-launches Kisan Vikas Patra
Nov 18 2014
On 18th November 2014, Union Government re-launched Kisan Vikas Patra scheme (KVP) in New
Delhi to encourage the habit of small savings among the citizens. The scheme will soon be made
available through designated branches of nationalized banks across the country.
The previous KVP was discontinued in 2011. The scheme was very popular among the investors and
the percentage share of gross collections secured in KVP after its launch in 1988 was in the range of
9-29 per cent against the total collections received under all National Savings Schemes in the
country.
Key facts of the relaunced Kisan Vikas Patra scheme (KVP)
Investment: The KVP will be available to the investors in the denomination of 1000, 5000,
10000 and 50000 rupees with no upper ceiling on investment. The scheme will provide
facility of unlimited investment by way of purchase of certificate from post office in various
denominations.
Liquidity feature: Kisan Vikas Patra scheme has unique liquidity feature, where an investor
can encash his certificates after the lock-in period of 2 years and 6 months and thereafter in
any block of six months on pre-determined maturity value.
KVP certificates: The certificates can also be issued in single or joint names and can be
transferred from one person to any other person. The investment made in the certificate will
148
double in 100 months. The facility of transfer from one post office to another anywhere in
India and of nomination will also be available under the scheme.
Maturity period: With a maturity period of 8 years 4 months, the collections under the
scheme will be available with the Union Government for a fairly long period to be utilized in
financing developmental plans of the Centre and State Governments.
Earlier Kisan Vikas Patra (KVP) Scheme
Earlier Kisan Vikas Patra (KVP)- a certificate savings scheme was launched by the Union
Government on 1st April 1988. This scheme provided facility of unlimited investment by way of
purchase of certificates from post offices in various denominations.
The maturity period of the earlier scheme when it was launched, was 5 years and six months and the
money invested doubled on maturity.
The gross collections under the scheme in the year 2010-11 were 21631.16 crore rupees which was 9
per cent of the total gross collections during the year.
In the year of its closure, the scheme secured gross collections of 7575.95 crores rupees (April 2011
to November 2011).
Implications of new KVP
KVP would serve two purposes: Firstly, it would help poor gullible investors to channelise
their savings towards trusted government scheme instead of some ponzi schemes. Secondly,
it would help to meet the urgent need to raise savings in the country. These savings then
would be used for nation building. Thus such saving instrument will not only earn interest
but also help in development of the country.
Encourage people to save more: In the last 2-3 years, savings rate in country has declined
from a record high of 36.8 per cent to below 30 per cent due to slowdown in the economy. So
it will encourage people to save more.
Government to revive District Central Cooperative Banks (DCCBs) in
four states
Nov 6 2014
The NDA Government has decided to launch scheme in order to infuse Rs 2,375.42 crore to revive
23 District Central Cooperative Banks (DCCBs) in 4 states, which were on the verge of closure.
Of the total amount, state governments will contribute Rs. 1,464.59 crore, Centre Rs. 673.29 crore
and NABARD Rs. 237.54 crore.
Why Government want to save these DCCBs?
There are 23 unlicenced DCCBs at district in four states. Among 23 unlicenced DCCBs, 16
are in Uttar Pradesh, 3 each in Jammu and Kashmir and Maharashtra and 1 in West Bengal.
149
These banks were on the verge of closure.

They have deposits base of about Rs 6,839 crore and loan book of around Rs 3,774 crore.
These deposits are of People from lower strata of society and small businessmen.
So, in order to protect interest of these people, government is planning to stop them from
verge of closure.
How will government infuse this amount?
For the purpose of implementation of the scheme, a tripartite agreement in the form of
Memorandum of Understanding (MoU), stipulating conditionalities and deliverables, will be
signed between the Centre and state and NABARD.
Centres share of Rs 673.29 crore would be released through NABARD as interest-free loan
and would be converted into grant on fulfilment of conditionalities/deliverables outlined in
the scheme.
Conditionalities are:
1. Bringing the NPAs to at least half of the current levels by 31st March, 2017.
2. Making 15 percent growth rate of deposits for next two years.
3. Drawing up of a monthly Monitorable Action Plan.
4. Placement of competent CEOs fulfilling Fit & Proper criteria.
5. Putting Corporate Governance Systems in place.
The assistance from NABARD would be in the form of loan to the respective state
governments under Section 27 of NABARD Act, 1981.
During the implementation of the scheme, operations of these 23 unlicensed DCCBs would
be closely monitored by NABARD and RBI, so that they meet the licensing requirement
within the time frame as prescribed in the scheme
Implications of this decision
The scheme will help in revival of these cooperative banks.
It will result in protecting the interests of depositors and catering to the credit needs of
farmers.
Once revived, these cooperative banks would become eligible for obtaining licenses from RBI
for continuing their operations in rural areas and would also be able to meet CRAR (Capital
to Risk-Weighted Assets Ratio) requirement prescribed by RBI.
Government orders to merge NSEL to parent firm FTIL
Oct 22 2014
The Central Government has passed an order to merge NSEL (National Spot Exchange Ltd.) with
FTIL (Financial Technologies India Ltd)
150
Public interest
The order has been passed by the Ministry of Corporate Affairs. According to Section 396 of the
Companies Act, 1956, the central government can order the merger of two companies if it is
essential in public interest. The clause has been rarely used by the government. However, in this
case, since the subsidiary is cash-strapped and has no funds to pay its dues, the government has
ordered the merger. The merger with the financially viable FTIL will facilitate the recovery of dues
for creditors of the NSEL.
Challenge by stakeholders
According to the law, submissions can be made to the Ministry of Corporate Affairs within 60 days
of the order. The shareholders and stakeholders of FTIL are expected to file submissions with the
Ministry opposing the merger. Through the merger will benefit the victims of the scam perpetrated
by NSEL, it will also dilute the assets of FTIL and affect the investments of the shareholders and
stakeholders of FTIL.
Inflation drops to 2.38% , five-year low
Oct 16 2014
According to provisional estimates for the month of September 2014, WPI (Wholesale Price Index)
based inflation has fallen to 2.38% which is a five year low. This is mainly attributed to the decline in
food and fuel prices. Also, the decline was far greater than the 3.2% that was forecast by analysts.
Breakdown of Inflation for the month of September
Food inflation has fallen to nearly two and a half year low of 3.52%. Inflation in
vegetables has fallen to 14.98%. Inflation in milk, eggs, meat and fish and showed
a market decline. The food basket has been on a declining trend since May itself.
However, in September, the prices of fruits and potatoes rose. Inflation in
manufactured products fell to 2.84%. Overall WPI inflation has been declining for
151
the fourth straight month. Inflation in fuel and power declined to 1.33%
Comparison with inflation of previous months and years
The 2.38% inflation rate is the lowest since 1.78% in October 2009. Wholesale price inflation stood
at 3.74% in August and 7.05% in September 2013. Inflation in manufactured products and fuel and
power segment stood at 3.54% and 4.54% in August 2014.
Change in rate by RBI
The RBI has maintained its key interest rate at the earlier level due to inflationary pressures. It is
unclear whether this record low WPI inflation level will elicit a change in interest rate. The RBI
primarily factors in the CPI (Consumer Price Index) rates while determining policy rates and even
that saw a marked decline to 6.46% in September. Experts say that RBIs CPI based inflation target of
6% to be achieved by January 2016, looks like it is possible if the current trend of declining inflation
continues. RBIs next bi-monthly monetary policy announcement is expected on the 2 nd of
December.
India's Current Foreign Exchange Reserves: $311.427 billion
Oct 12 2014
Indias forex reserves continued their downward journey for the fifth consecutive week, Indias
foreign exchange reserves plunged by $2.754 billion to $311.427 billion in the week to October 3.
The largest fall is seen in US currency assets which make a big component of the overall reserves.
During the last quarter under review, this drop in forex was basically due to drop in valuation of
Indian rupee on the back of a stronger US currency against other global currencies and talks of
withdrawal of quantitative easing by the US. The Federal Reserve has now deferred its tightening
programme to next year, helping rupee to regain some of its lost ground this week.
The foreign currency assets, incorporate the effect of both appreciation and
depreciation of many non-US currencies also, which are held in reserves.
Even the gold reserves showed a negative trend after being stable for weeks. The
reserves fell by $919.7 million. Other components include special drawing rights
152
and Indias reserve position in the IMF which decreased by $22.8 million and
$8.2 million to $4.284 billion and 1.540 billion, respectively.
Components of Foreign Reserves
The components of Foreign Reserves in decreasing order are Foreign Currency Assets, Gold, SDRs
(Special Drawing Rights) and Reserve Position in IMF Trench.
World Bank Launches Global Infrastructure Facility (GIF)
Oct 11 2014
The World Bank (WB) has launched the GIF to specifically cater to the infrastructure needs of the
emerging economies and developing countries. The GIF will channel money towards bankable
infrastructure project in such countries. GIF also places importance on sustainable development. Its
key focus will be on climate friendly infrastructure investments and projects that will boost trade.
The GIF will collaborate with other international and multilateral agencies which provide loans and
financial assistance to countries across the globe. It will also help these agencies with its expertise in
financing, supervising and implementing projects. Another areas where GIF could provide assistance
it ensuring that all regulatory, environmental and social safeguards are met with while investing in
large scale infrastructure projects. GIF will also work with private entities like asset management
companies, private equity firms, pensions and insurance funds and commercial banks to tap into
multiple sources of funding.
153

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General Knowledge Today

Banking Current Affairs: October-2014

Published Date: May 1, 2017

2017 GKToday | All Rights Reserved | www.gktoday.in

About Financial Stability and Development Council .......................................................................... 21

About Monetary Policy Committee (MPC) ........................................................................................ 44

Reserve Ratios ............................................................................................................................................ 63

Union Government unveils Indradhanush Mission for PSBs .................................................................. 96

About Asian Infrastructure Investment Bank (AIIB) ........................................................................ 111

Ination drops to 2.38% , ve-year low ..................................................................................................... 151

2017 GKToday | All Rights Reserved | www.gktoday.in

RBI asks ARCs to have a minimum net corpus of Rs100 crore by

RBIs Reserve position with International Monetary Fund (IMF)

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bring in new management/board.

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Government sets up Inter-Disciplinary Committee to examine

Virtual Currencies, also called as digital/crypto-currencies, are a type of unregulated

Reverse Repo (RR) rate by 25 bps to 6%.

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Cabinet approves amendments to NABARD Act, 1981

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RBI sets up inter-disciplinary standing committee to review cyber

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other prepaid payment instruments.

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Government proposes setting up Financial Data Management Centre

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The charging of interest is prohibited under Islam.

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and interest rates on loans.

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Rs. 500, Rs. 1,000 notes no longer legal tender

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following voluntary retirement of G Mahalingam.

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as contingent convertible capital instruments (CoCos).

cent of net demand and time liability (NDTL).

About Monetary Policy Committee (MPC)

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becomes a member of the MPC.

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ICICI Bank: First bank to introduce Software Robotics for power

going live with 21 banks in the first phase.

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payments services to customers.

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Marginal standing facility (MSF) rate: 7 per cent.