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Recent banking updates 2014

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Recent banking updates 2014

  1. 1. Recent Banking Updates 2014 for IBPS Clerks IV online exam Part – I (Covers June, July and August Months) your A to Z competitive exam guide
  2. 2. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I) Important Note : We are assuming that you have already completed reading our “Banking Awareness Quick Reference Guide 2014” in which we have covered all the Basic and Important Banking Awareness Topics. If you have not read it yet, then download it from the below link and read it first before reading this file. Click below to Download Banking Awareness Quick com Reference Guide Gr8AmbitionZ.June 2014 June 2  State bank of India, has decided that the bank will try to spend 2% of its net profit for the Corporate Social Responsibility (CSR) activities in each financial year. o About CSR  CSR was made 2% compulsory through Companies Act 2013.  Companies Act, 2013 is an Act which regulates incorporation of a company, responsibilities of a company, directors, and dissolution of a company.  Private sector IndusInd Bank has launched video-branch, claiming to be a first-of-its-kind service, enabling customers interact with the staff of the bank through video conference facility. o The video branch service helps customers avail various services like fixed deposit booking, NEFT, transfer service through a video chat with contact centre executive instantly. o The new facility allows customers to interact with their branches through 'Video Branch' app from Google Play Store and Apple App Store on their smartphones.  SBP is launching a branch that will offer some services of beauty parlor along with the safe deposit locker. This is an exclusive account that will work as parlor cum bank. o This is first of such kind.  The Reserve Bank of India has cancelled the certificate of registration of NBFCs for carrying on the business of non-banking financial institution. (a) Siber Financial Services Private Limited. (b) Sri Vishnu Finance & Investment Private Limited. (c) Margdarsi Investment and Leasing Company Private Limited. o The Reserve Bank can cancel the registration certificate of a non-banking financial company under the powers conferred under Section 45-IA (6) of the Reserve Bank of India Act, 1934. June 3  Banks unions have asked the RBI to reduce the number of transactions made from the non home branch ATMs from 5 to 2. o Non home branch ATM is the ATM in which customer do not possesses an account. At present bank allows the customer to make 5 transactions free at the non home branch ATM, if the RBI approves for the bankers decision then it will be reduced to two. o Further the banks have also demanded to increase the interchange fee- the fees charged by the one bank from the other bank, in case the customer makes transactions at the non home ATMs, from Rs. 15 to Rs. 16.50 plus service tax that makes a total of Rs. 18.48. For more materials visit us at 1
  3. 3. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I)  RBI’s Second Bi-Monthly Monetary Policy Statement, 2014-15. o RBI rule out change in lending rate (policy rate) by keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 8.0 per cent and the reverse repo rate under the LAF will remain unchanged at 7.0 per cent. Current (in %) Rates com of April (last time) Reserve Rates CRR 4 No change SLR 22.5 23 Gr8AmbitionZ.Policy Rates Repo Rate 8 No change Reverse Repo 7 No change MSF 9 No change Bank Rate 9 No change o Reduce the liquidity provided under the export credit refinance (ECR) facility from 50 percent of eligible export credit outstanding to 32 percent with immediate effect. o Introduced a special term repo facility of 0.25 per cent of NDTL to compensate fully for the reduction in access to liquidity under the ECR with immediate effect. June 4  ICICI bank has launched a new mobile app for its windows phone customers. o The mobile app iMobile is the new official app of the bank for the windows phone user. o The app will allow them to make payments, funds transfer from one account to another, enquiry of the balance, checking of details of your savings account, checking of credit card details and loan amount etc. June 5  The Reserve Bank of India has invited applications for Prof. K.N. Raj Memorial National Fellowship Scheme for the year 2014-15 from eligible scholars. Applications in soft form need to be sent to the Reserve Bank on or before July 18, 2014. o The theme will be identified by a Steering Committee on Economic and Policy Research (SCEPR) of the Reserve Bank of India. June 6  RBI changed reserve ratios (CRR & SLR) for urban co-operative banks (UCB) and scheduled primary urban co-operative banks. Current (in %) Rates of April (last time) Change Reserve Rates CRR 4 3 Increased by 100 base points SLR 22.5 25 Decreased by 250 base points o Prior, RBI changed only SLR (reducing by 50 base points) of scheduled commercial banks.  Employee provident Fund organization (EPFO) has changed interest rate of 9% from 8.75 on the PF funds.  About EPFO o EPFO is a statutory body of the Government of India under the Ministry of Labour and Employment. o It administers Provident Fund (PF), Pension Scheme and an Insurance Scheme. o It is one of the largest social security organizations in the India in terms of the number of covered beneficiaries and the volume (more than 5 crores) of financial transactions undertaken.  Headquarters: New Delhi.  Chairman: K.K. Jalan. For more materials visit us at 2
  4. 4. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I) June 7  ICICI bank took over the HDFC - bank with highest employer in banking. Previous year HDFC was on the top with maximum employees. And ICICI becomes highest employer in Private sector banking. o About HDFC  HDFC Bank is the fifth largest bank in India by assets. com  It is the largest bank in India by market capitalization.  Headquarters:Mumbai. Gr8AmbitionZ. Managing director: Aditya Puri. o About ICICI  ICICI Bank is fourth biggest bank of India, after SBI, Punjab National Bank and Bank of Baroda.  It is the second largest bank in India by assets and by market capitalization.  Headquarters:Mumbai.  MD: Chanda Kochhar.  Chairman: K.V. Kamath. June 9  The RBI signed the Memorandum of Understanding (MoU) on “Supervisory Cooperation and Exchange of Supervisory Information” with the Financial Services Commission (FSC) and the Financial Supervisory Services (FSS), Republic of Korea (South Korea).  The RBI has now signed 20 such MoUs and one Letter for Supervisory Co-operation. o The Reserve Bank has been signing the Memorandum of Understanding and the Letter for Supervisory Co-operation with supervisors of other countries to promote greater co-operation and share supervisory information among the authorities.  RBI further simplifies KYC Norms for Bank Accounts. o One Documentary Proof of Address if enough to open bank account. o This address may be verified by the bank through ‘positive confirmation’ such as acknowledgment of receipt of (i) letter, cheque books, ATM cards; (ii) telephonic conversation; (iii) visits; etc. o In the event of change in this address, the new address for correspondence should be intimated within two weeks of such a change and address proof should be submitted to the branch within a period of six months. o About KYC  The Reserve Bank of India introduced KYC guidelines for all banks in 2002. o Purpose of KYC: (a) Knowing costumer. (b) Anti - Money Laundering (AML) Standards. (c) Combating of Financing of Terrorism (CFT). (d) Obligations under Prevention of Money Laundering Act (PMLA). June 10  ING Vysya bank has become first to have core banking application in India to be hosted on ''NetApp''. o ING Vysya Bank has selected NetApp's FAS storage system to deliver the necessary throughput, capacity and connectivity across its 553 branches o With NetApp's FAS storage series, we can leverage our core banking system (CBS) to provide innovative products to customers while improving performance by 60% immediately. For more materials visit us at 3
  5. 5. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I)  In order to fulfill BASEL III, RBI issued guidelines on Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure Standards. o The LCR would be binding on banks from January 1, 2015. o With a view to provide a transition time for banks, the LCR requirement would be minimum 60% for the calendar year 2015 and reach 100% by 2019. com January 1 January 1 January 1 January 1 January 1 2015 2016 2017 2018 2019 Gr8AmbitionZ.Minimum 60% 70% 80% 90% 100% LCR o A Quantitative Impact Study (QIS) conducted by the Reserve Bank as on December 2013 on a sample of banks to assess their preparedness for the Basel III Liquidity ratios indicates that the average LCR for these banks varied from 54% to 507%. o About LCR  The liquidity coverage ratio is an important part of the Basel Accords, as they define how many liquid assets have to be held by financial institutions.  LCR Definition : This is highly liquid assets held by financial institutions in order to meet short-term obligations. The Liquidity coverage ratio is designed to ensure that financial institutions have the necessary assets on hand to ride out short-term liquidity disruptions. o Extra Information about BASEL Norms Difference between requirements under BASEL - II & BASEL - III norms Requirements Under Basel – II Under Basel –III Minimum Ratio of Total Capital to RWAs 8% 10.50% Minimum Ratio of Common Equity to RWAs 2% 4.50% to 7.00% Tier I capital to RWAs 4% 6.00% Core Tier I capital to RWAs 2% 5.00%  National Payments Corporation of India, along with some private and public-sector banks has decided to extend the services allowed at the non- home ATMs. o Banks are testing if this plan of offering the several services at the non home ATMs comes out to be feasible they will ask the RBI for the approval. Banks now offer services such as paying telephone bill, electricity bill, DTH recharge at the ATMs. o Banks are working to make the facilities of ordering cheque depositing cash, statement requests and card-to- card transfer inter-operable. o Some banks (like Andhra Bank, Union Bank, Yes Bank) have already started cash transfer between two accounts of different banks via debit card.  The India Post has launched a Banking service 'GO Live' in Vijayawada in Andhra Pradesh. o This core banking solutions (CBS) facility will enable the savings account holders to make the transactions online easily. June 11  Canara bank is planning to enhance nearly 600 of its branches and transform them in to five star categories on par with the international standards. o This project of Canara Bank unveiled as 'Project Shikhar’. o Five star Branch (or) Teynampet branch: These branches will offer the customers all the banking products under one roof and provide greater access to a wide range of services. For more materials visit us at 4
  6. 6. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I)  Country’s largest leading bank State bank of India is set to come up with mobile point of sales devices across the country. o SBI has signed a contract with POS provider Ezetap to setup mobile point of sales devices across the country. o Mobile POS has the power to transform the payment without much difficulty and at cheaper cost these can be deployed all over the country. com o This SBI-Ezetap platform will assist the bank to provide many value-added services for merchants and consumers from a single, secure point of sale device and application. Gr8AmbitionZ.June 12  RBI said One Document is enough to open Bank account in RRB’s and State/ Central Cooperative Banks (StCBs/ CCBs) o Customers may submit only one documentary proof of address (either current or permanent) while opening a bank account or while undergoing periodic updation. o In case the address mentioned as per ‘proof of address’ undergoes a change, fresh proof of address may be submitted to the branch within a period of six months. o Prior to this RBI one Document rule was fist kept to 2nd Scheduled Commercial Banks, now it is allowed to RRB’s, StCB’s and CCB’s.  RBI has allowed Australia and New Zealand Banking Group (ANZ) to open second banking branch in the country. o ANZ already have its one Branch in Mumbai. o RBI has allowed foreign banks to establish Maximum upto 17-18 branches in a year. But for each branch opening Foreign bank have to take permission from RBI. o Standard chartered bank is having largest network among foreign banks in India.  Rules for opening of new branches/ shifting of existing branches/ Closure of Branches/ Merger of Branches o The opening of new branches and shifting of existing branches of banks is governed by the provisions of Section 23 of the Banking Regulation Act, 1949. In terms of these provisions, banks cannot, without the prior approval of the RBI.  ABEP: Each bank has to give Annual Branch Expansion Plan (ABEP) to RBI to get approval RBI (to open branch). o Opening of new Branch:  Domestic scheduled commercial banks (other than RRBs) are presently permitted to open branches without prior approval from Reserve Bank of India. But At least 25 percent of the total number of branches opened during a financial year must be opened in unbanked rural (Tier 5 and Tier 6) centers. o Shifting of Branches:  Shifting within the Centre (City/Town/Village) : Domestic scheduled commercial banks (other than RRBs) without approval can shift Branches within same city. If out of same city, permission should be taken.  Shifting of Rural Branches : Banks have been given freedom to shift a branch to any location within the Block of Rural Area without seeking prior approval from RBI. As such, these cases should not be included in the ABEP for our approval. If out of same Block, permission should be taken. o Opening of new branch (or) Shifting of existing Branch in Abroad.  For this Domestic scheduled commercial banks have to take prior approval from RBI and Apex Bank of the foreign Country. o Foreign Banks: For more materials visit us at 5
  7. 7. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I)  The general permission granted to domestic scheduled commercial banks above will not be applicable to foreign banks.  Foreign banks are required to bring an assigned capital of US$25 million upfront at the time of opening the first branch in India.  From Second Branch onwards foreign banks will be required to submit their branch expansion plan on an annual basis to RBI. com  There will be Maximum Limit of branches that can be opened by each foreign Bank.  ATMs would not be included in the number of branches for Foreign Banks. Gr8AmbitionZ. ''Branch''  A "Branch" would include all branches, i.e., full-fledged branches, specialised branches, satellite offices, mobile branches, Extension Counters, off-site ATMs (Automated Teller Machines), administrative offices, controlling offices, service branches (back office or processing centres), etc. June 13  RBI to come out with ''Payment banks''. o Reason for payment bank: because there is huge potential for financial inclusion with focus on remittances by involving payment system product. o About Payment bank  Payment bank will offer banking services like opening account, allowing payments and remittances.  However, it will not extend loans and invest the deposits in government securities.  Payment banks are recommended by the NachiketMor committee. June 18  18 PSU banks have failed in setting up the number of ATMs they have decided to set up by the end of the 2013-14. o As per the plan a total of 34,668 onsite ATMs were to be installed by PSU banks during the last fiscal, but the banks failed to set up these many ATMs leaving nearly 9,300 branches without the ATM machines. As per the records the banks have failed in established 9,337 less ATMs machines. o The Installation of the ATMs by the PSU banks is a major task of the govt. to ensure the financial inclusion. There are roughly about 1.4 lakh ATMs of public and private sector banks in the country.  SBI announced its future plan to bring the ATMs, under a remote surveillance system by the end of this fiscal year. o About remote surveillance system:  In addition to the monitoring of these 24X7 running ATMs, this security system will also provide the remote locking of counters and shutting down machines during eventualities. At present bank is having total number of 1,831 ATMs in odhisa and is planning to add more ATMs in the state.  The seven telecom companies that have signed agreements with NPCI are Airtel, Idea, Tata Communications, Aircel, Uninor, Videocon and Quadrant. o National Payments Corporation of India (NPCI) has convinced these seven telecom companies to provide access to their unstructured supplementary service data (USSD) channel to all bank accounts, Hota said. o If above agreement came into work Mobile money services to soon come within common man's reach.  Former CMD of Allahabad Bank, Subhalakshmi Panse has joined the board of Federal Bank as an Independent Director. For more materials visit us at 6
  8. 8. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I) o SEBI has issued new norms for public issuance of debt securities under which such offers have to be of minimum Rs. 100 crore, while issuers would need to make additional disclosures and attain atleast 75 per cent subscription. o SEBI has fixed a base issue size of at least Rs. 100 crore. o NCD’s norms for companies:  SEBI said entities coming out with public issue of non-convertible com debentures (NCDs) would have to provide granular disclosures in their offer document, with regards to the 'object of the issue'.  Also, an entity has to make additional disclosures in the offer document about details of money utilized Gr8AmbitionZ.from the previous issues of the issuer as well as the group companies. o Issue of debt securities by the NBFC’s and non- NBFC’s  Market watchdog said that the minimum subscription for public issue of debt securities has to be 75% of the base issue size for both non-banking finance companies (NBFCs) and non-NBFC issuers.  Further, the regulator said that amount earmarked for 'general corporate purposes' would not exceed 25% of the amount raised by the issuer in the proposed issue.  The new norms would be applicable from July 16. June 19  The RBI has asked banks to disclose sector-wise advances in the ‘Notes to Accounts’ to the financial statements from the financial year 2014-15 onwards. o Within the sector-wise advances, the central bank called for disclosure on priority sector (agriculture and allied activities, advances to industries sector eligible as priority sector lending, services, and personal loans) and non-priority sector advances (agriculture and allied activities, industry, services, and personal loans).  The central bank said banks may also make disclosures on sub sectors where the outstanding advances exceed 10 percent of the outstanding total advances to that sector. o For instance, if a bank’s outstanding advances to the mining industry exceed 10 percent of the outstanding total advances to ‘Industry’ sector it should disclose details of its outstanding advances to mining separately under the ‘Industry’ sector. June 20  RBI permitted residents and non-residents, [except Pakistanis and Bangladeshis] to carry up to Rs 25,000 in Indian currency notes while leaving the country. o As per Foreign Exchange Management (FEMA) Act, a resident can carry to Nepal or Bhutan, Indian currency without any limit in denominations not exceeding Rs 100. o Prior norms for Indians and foreigners o Prior, maximum allowed (Indians) travelling abroad was up to Rs 10,000. And foreigners were not allowed to carry Indian currency while leaving the country.  RBI announced new features in RTGS System, which is even faster and smother than earlier. o The maximum time a transaction would be in “normal” queue is 10 minutes. o All transaction will be made automatically changed to “urgent” mode. o Settlement charges will be 10% of the balance. June 21  Bank of Maharashtra (BoM) launched MahaSecure, a digital banking app. For more materials visit us at 7
  9. 9. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I) o If facilitates secure access to Internet banking for both retail and corporate customers of the bank by protecting Internet banking users from sophisticated online attacks.  Bhartiya Mahila Bank has signed a MOU with Gujarat Chamber of Commerce and Industry to help women of Gujarat. o The BMB would address financing needs in terms of technology upgradation, marketing, diversification by utilising the services of the industry chamber. com  SBI has proposed its future plan to come up with the contactless payment cards. o Yet to be finalized product will allow the customers to use to for making the payments for the metro Gr8AmbitionZ.travelling.  United bank of India (UBI) has launched its merchant payment services on mobile phones. Using the immediate payment service (IMPS) provided by the National Payment Corporation of India UBI will offer this service. o Payment Services:  A mobile payment is a mode of payment using mobile phones. Instead of using methods like cash, cheque, and credit card, a customer can use a mobile phone to transfer money or to pay for goods and service  Electronic instant mobile money transfer service through mobile phones by IMPS technology.  An IMP (Immediate Payment Service) is an indigenous project of NPCI, started in 2010. June 23  The RBI asked all banks and financial institutions to provide information and documents to the Special Investigation Team (SIT). o About SIT on BlackMoney:  Narendra Modi government sets up SIT on black money, chaired by former Justice M.B. Shah in aim to bring back Black money. June 24  The RBI permitted the Non-Deposit taking NBFC (NBFCs-ND) to act as Business Correspondents (BCs) for commercial banks. o This was done with an aim of spread financial inclusion. o NBFCs-ND can be engaged as BCs subject to following conditions  It should be ensured that there is no comingling of bank funds and those of the NBFC-ND appointed as BC.  There should be a specific contractual arrangement between the bank and the NBFC-ND to ensure that all possible conflicts of interest are adequately taken care of.  Banks should ensure that the NBFC-ND does not adopt any restrictive practice such as offering savings or remittance functions only to its own customers and forced bundling of services offered by the NBFC-ND and the bank does not take place.  This permission is not applicable to NBFCs accepting public deposits or NBFCs-D.  Background  On recommendation of Nachiket Mor Committee for accelerating the flow of credit to those at the bottom of the pyramid and enlargement of catchment area of the Business Correspondents (BCs), including through possible inclusion of new entities as BCs.  SBI started fellowship program for rural development called “SBI Youth for India fellowship”. For more materials visit us at 8
  10. 10. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I) o The program will be covering various issues for the rural development, women’s empowerment, health, education, environmental protection to rural livelihoods. o Headquarters (SBI):Mumbai. o Head : Arundhati Bhattacharya. June 25 com  ICICI Bank has launched co-branded card with DMRC. Gr8AmbitionZ.o It has function as both Credit/ debit card and smart card for Delhi Metro Rail Corporation (DMRC). o It can be your credit/ debit card, and offers the benefit of 10 per cent discount that the DMRC smart card offers. o ICICI Bank, said the bank will be launching similar cards in other metro rail systems, such as those in Mumbai, Bangalore and Hyderabad. o Bank was first to launch such system for the Bangalore Metro.  Two banks (UBS Bank and Credit Suisse bank) have 2/3rd of all Swiss money of Indians. o According to the latest official data disclosed by Switzerland's central banking authority SNB, Indians money in Swiss banks rose by 43 per cent last year to 2.03 billion Swiss francs (nearly Rs. 14,000 crore).  RBI Changed period of maintenance and preservation of records under KYC norms. o Earlier, Authorised Persons are required to maintain and preserve records mentioned therein for a period of at least ten years. o Authorised Persons are now required to maintain and preserve records for a period of at least five years.  Reliance Life insurance unveiled a new plan 'claim guarantee'. o Payment of death claim in the shortest time period of 12 days.  A list of defaulters was prepared and it was decided that the defaulters won’t be allowed to open current account in any other bank, if an account was non-performing (NPA) for any bank. o Due to the sharp rise in NPAs from past two years, the RBI and govt. of India are taking some strict measures to control. o Asset Classification:  Non-performing Asset (NPA):  For term loans/ Overdraft/ Cash Credit/ discounted bills: Interest/ installment of principal remain overdue for a period of more than 90 days.  For agricultural purposes: Interest/ installment of principal remains overdue for two harvest seasons but for a period not exceeding two half years.  Sub-standard Assets  NPA for a period less than or equal to 18 months.  Doubtful Assets  NPA for a period exceeding 18 months.  Bad Assets.  Sub-standard Assets and Doubtful Assets are together called as Bad assets. June 26  Canara Bank has opened a 'Canara Shikhar Branch' in Kerala. o The branch will be offering 'May I Help You’ counter and CanEpxress lobbies featuring a cheque/ cash deposit machine and passbook printing machine. o This Branch also offers Internet banking customers can enjoy free service while paying their bill online. For more materials visit us at 9
  11. 11. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I)  UCO Bank has been awarded the “Platinum SKOCH Inclusion & Deepening Award 2014” for “excellence in banking”. o UCO has adopted 18 villages across 10 States for the uplift of below-poverty-line households. It has trained 46,659 persons, of which 27,000 have become economically self-reliant with a credit linkage of Rs. 590 crore.  RBI recognized e-Aadhaar as an ‘‘Officially Valid Document” under PML com rules. o E-Aadhaar downloaded from UIDAI website may be followed by all payment system participants/ operators under prevention of Money Laundering Act (PMLA), 2002. Gr8AmbitionZ. Sahoo panel report on Depository Receipts. o Important recommendations by panel:  It recommended creation of a Bharat Depository Receipts (BhDR) framework to help the country emerge as a key international financial centre.  DRs should be allowed for foreign securities already accessible to Indian investors.  Indian market should allow trading of depository receipts issued or listed elsewhere.  BhDRs could be issued for both capital raising and non-capital raising purpose.  Proceeds from BhDR issues may be repatriated or used within India.  SEBI should be exclusive regulator.  A complete suite of Bharat Depository Receipts should be allowed. o Benefits:  Indian investors will have a greater choice and ability to diversity.  Indian financial system will become more competitive. June 27  RBI has issued a new directive under which in case any credit card fraud occurs. o Now in case any credit card fraud occurs, banks have to prove that the consumer has acted fraudulently. o Earlier the responsibility of proving themselves innocent was on the customers. o Banking Codes and Standard Board of India (BCSBI) has come up with this new directive which is in favors of the customer rights and protection. o The new rule also increased the cap on customers' liability for unauthorised transactions to Rs. 10,000 from Rs. 1,000 before. All the measures like biometric authentication, sending SMS after every transaction at ATMare to reduce the card frauds. o The customer will also be responsible to any misuse of card until he informs the bank about incidents like loss of card or disclosing the PIN number to someone. o According to the new rules the customer will be protected in cases such as someone hacking into the system.  Banks in Kerala launched debt swap scheme with the private money lenders. o Debt swap scheme named ‘Wrina Mukthi’ due to increase in suicides and related incidents by the victims of the private money lenders. o Loans of up to Rs. 50,000 lent to farmers and artisans o Under the scheme an average rate of 10.25% will be there of all the banks, repayable over a period of three to five years. June 28 For more materials visit us at 10
  12. 12. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I)  Central Bank of India has signed an agreement with the dairy firm Kwality Ltd. City based kwality dairy firm is a huge dairy firm with six plants in Haryana, Uttar Pradesh and Rajasthan with processing capacity of 30 lakh litres a day. o The bank will be providing financial help to the dairy farmers through this agreement. The Company stated that the bank will support milk producer farmers in purchasing the dairy animals and to expand and establish the dairy farms. com JULY 2014 Gr8AmbitionZ.July 1  State Bank of India has launched six digital branches across the nation, as part of its program to offer next generation banking solutions to the mobile and internet-savvy customer base. o Kolkata, Bangalore, Chennai, Ahmedabad and Delhi are the first six cities to have digital branches facility named “sbiINTOUCH”.  IDBI Bank introduced mobile banking service for its customers. o This facility enables the customer to meet all banking needs such as fund transfer, bill payments, visa money transfer, DTH/ mobile recharge and much more from any destination. o Mobile Banking:  Mobile banking is a system that allows customers of a financial institution to conduct a number of financial transactions through a mobile device such as a mobile phone or tablet.  Mobile banking can be performed via SMS or the mobile web or mobile apps.  IMPS (Immediate Payment Service) a technology introduced by NPCI is used to do mobile banking.  Mobile banking is first introduced in 4 banks (SBI, Bank of India, Union Bank of India and ICICI Bank) in August 2010.  Limit: The maximum limit is Rs. 50,000 per day and Rs. 2,50,000 per month.  Anytime: IMPS is available round the clock, 24x7 including weekends and holidays. o Other important terminologies in Mobile banking  Sender: Remitter.  Receiver: Beneficiary.  MMID:Mobile Money Identifier (7 digit number issued by the bank upon registration).  MPIN: Mobile Personal Identification Number (4 digit password).  Bank of Maharashtra was conferred ''Best Bank – Public Sector'' award in BFSI Awards-2014 by World HRD Congress in recognition of its performance in banking category, the bank said in a statement. o The award focuses on the best practices of the BFSI Industry based on the Strategy, Security, Customer Service and the Future Technology Challenges and Innovations.  The growth rate of eight core sectors decelerated to a four-month low of 2.3 per cent in May due to decline in the output of crude oil, natural gas and steel production. The infrastructure industries had registered 5.9 per cent growth in May 2013.  Non-subsidised cooking gas (LPG) was hiked by Rs. 16.50 per cylinder and that of jet fuel by over half-a-per cent after international oil prices surged due to the ongoing Iraq crisis.  France has proposed to give India a 1 billion euro ($1.4 billion) credit line to fund sustainable infrastructure and urban development projects, said France ForeignMinister Laurent Fabius. o India, which has said it needs $1 trillion of investment by 2017 to upgrade its infrastructure, is keen to attract foreign development agencies and companies to help finance new roads, railways and cities. For more materials visit us at 11
  13. 13. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I)  International rating agency Fitch said India's economic growth will accelerate to 5.5 per cent this financial year and 6.5 per cent in FY16.  Government of India and the World Bank signed here a Loan Agreement for World Bank assistance of US $500 million for National Highways Inter-connectivity Improvement Project (NHIIP). o The objective of the project is to improve the National Highway network connectivity to less developed States and enhance institutional capacity of Ministry of Road Transport com and Highways to better manage the highway network. o The Project comprises of upgradation of about 1120 kilometer of existing single/ intermediate lane National Gr8AmbitionZ.Highways in three low income States (Bihar, Odisha and Rajasthan) and in less developed regions of two middle income States (Karnataka andWest Bengal). o The total project size is US$ 1146.05 million. o Ministry of Road Transport and Highways, Government of India is the implementing agency for the Project. July 2  The Indian Banks Association (IBA) has suggested to the RBI that customers who withdraw money from other banks ATMs should be charged. o RBI yet to decide on this issue of, were ATM transition at non-home bank ATM can charge as high as Rs. 20 per transaction. o Home bank network means ATMs of the bank in which you have an account.  Home ministry asks RBI to direct banks to procure ATMs that can generate receipts in Hindi. o ATMs installed in Hindi-speaking states could soon start churning out receipts in Hindi along with English as the home ministry has asked the Reserve Bank of India to direct banks to procure only those ATMs that have such a facility.  Standard Chartered bank has signed an agreement with a leading Insurance company ICICI Prudential Life Insurance Company Ltd. The bank will be entering to in a strategic bancassurance partnership with the company. o Standard Chartered Bank is the largest foreign bank in India in terms of branches. o Under the 15-year agreement, Standard Chartered Bank will distribute ICICI Prudential Life’s life insurance products through its network of 99 branches across 42 cities in India. o Standard Chartered Bank (Headquarters) : London, United Kingdom.  Standard Chartered Bank ended the partnership with Bajaj Allianz (a life insurance Company). o This move of Standard Chartered bank came after it has entered to in Bancassurance partnership with the ICICI prudential. July 3  RBI restored the limit of Overseas Direct Investment taken under automatic route under FEMA, 2004. o With this decision now an Indian company can undertake financial commitment or invest up to 400 percent of the net worth in all its Joint Ventures (JVs) and/orWholly Owned Subsidiaries (WOSs) abroad. o However, RBI decided that any financial commitment exceeding one billion US Dollars or its equivalent in a financial year will require prior approval of the Reserve Bank. This rule is applicable even if total commitment undertaken by an Indian company falls within the eligible limit. o Previous Norms:  Earlier in August 2013, RBI reduced the ODI limit to 100 percent of net worth of company from 400 percent for all Indian companies by considering the prevailed macro economic situation. For more materials visit us at 12
  14. 14. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I)  The decision was taken in order to control the unprecedented appreciation of the dollar when the rupee touched an all-time low of 68.80 rupees. July 4  RBI restored the limit of Overseas Direct Investment (ODI) taken under automatic route by Indian companies. o Indian company can undertake financial commitment or invest up to com 400 percent of the net worth in all its Joint Ventures (JVs) and/orWholly Owned Subsidiaries (WOSs) abroad. Gr8AmbitionZ.o Earlier in August 2013, RBI reduced the ODI limit to 100 percent of net worth of company from 400 percent in order to control the unprecedented appreciation of the dollar when the rupee touched an all-time low of 68.80 rupees. o About Overseas Direct Investment:  Direct investment outside India means investments, either under the Automatic Route or the Approval Route, by way of contribution to the capital or subscription to the Memorandum of a foreign entity or by way of purchase of existing shares of a foreign entity either by market purchase or private placement or through stock exchange.  Under the Automatic Route, an Indian Party does not require any prior approval from the Reserve Bank for making overseas direct investments in an abroad.  Under the Automatic Route, proposals not covered by the conditions under the automatic route require prior approval of the RBI for which a specific application in Form ODI with the documents prescribed therein is required to be made through the Authorized Dealer Category – I banks. July 5  Second largest bank of the country, ICICI bank conducted a Kisan Sampark Programme in 170 villages of Punjab and Haryana. o Objectives of the program:  It a part of its financial inclusion plan the bank organized this program.  The aim of the program was to create awareness among the farmers regarding the agri -banking tools that will assist them.  The program was initiated to develop the savings habit among the farmers. July 7  The central Bank of India was awarded with first prize for promoting the National Language in the bank by Andhra Pradesh State-Level Bankers’ Committee. o National Language in Banks:  According to the Official Languages Act 1963 and Official Languages Rules 1976 all the banks have to implement the Official Language Policy (Hindi).  Dena Bank has signed an agreement with “Universal Sompo General Insurance Company”.  In order to keep a check on the loan misconducts and to provide the loan insurance cover to the borrowers the bank has decided to work with the insurance company. July 8  Central govt. has offered an overdraft (OD) facility of Rs. 5,000 by the bank with which they open an account those untouched by the high-street banks. For more materials visit us at 13
  15. 15. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I) o But there is a gimmick for those availing of the OD: customers should be willing to take financial literacy lessons from lenders. o The government will set up an Rs. 1,000 crore credit guarantee fund that would be 'budget neutral' on the exchequer and funded by NABARD. o The OD offer is part of 'Sampoorn Viteeyea Samveshan' (SVS), which is a comprehensive scheme for financial inclusion. com o The rate of interest of these accounts is proposed to be 3% over the bank's base rate. Of this, 1% would go to the credit guarantee fund and 1% to BC for maintenance of the account. Gr8AmbitionZ.o About SVS :  It is launched for ensuring every district with 1,000 - 5,000 households has access to banking services within 5 km by March 2016; provide financial literacy; provide basic banking for all beneficiaries of government schemes by March 2016; an overdraft of Rs. 5,000; micro insurance and pension scheme for the unorganised sector.  Two banks from India, Axis Bank and Union Bank were among the five new entities authorized to do banking business in the UK, as per latest statistics released by the British regulators. o Other three banks are FCMB (UK) Ltd, UBA Capital (Europe) Ltd and Paragon Bank plc. o Other Indian banks already present in the UK include ICICI Bank, SBI, Bank of Baroda, Canara Bank, Syndicate Bank and Bank of India. July 9  Banks can't insist on minimum 60% marks to extend educational loans: Madras high court. o Banks cannot fix 60% of marks in Plus Two as minimum required for extending education loan to students joining engineering courses, the Madras high court. o Once loan is given to student, it has to continue for whole his tenure of education course, and banks should not consider 60% as minimum marks on yearly merit. July 11  Kisan Vikas Patra (KVP), a small savings instrument is re-introduced to cater to the needs of the girl child. KVP also comes under National Savings Certificate (NSC) with insurance cover. o This scheme will assist the people in fulfilling the needs of girl child like education and marriage, aside of the hiking of PPF investment limit to Rs. 1.5 lakh (from Rs. 1 lakh). o KVP was discontinued in 2011, but the finance minister wants to re-introduce this popular scheme in order to encourage people, who may have banked and unbanked savings to invest in this instrument. o About NSC :  In 2011, as per the recommendation of the Shyamala Gopinath committee on review various parameters of the National Small Savings Fund (NSSF), the returns of small saving schemes were market-linked.  The rates on these instruments were benchmarked to government securities of similar maturity periods. So the returns on PPF are now linked to government securities and the rate applicable for each financial year is declared at the beginning of the year. For FY15, the rate continues to be 8.7%. July 13  A move by certain banking channels to impose charges on savings bank account holders of banks on transactions done through ATMs of other banks, has not received the nod of the authorities concerned. For more materials visit us at 14
  16. 16. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I) o Groups of ATM operators in the private sector are understood to be behind the move to levy charges on every transaction made on ATMs belonging to other banks. o At present, five transactions performed through ATMs of other banks such as balance enquiry and changing of secret identification number are free of charge in a calendar month. The charges levied on the transactions from other ATMs differ with each bank, generally in the range of Rs. 10-20 for cash withdrawal and Rs. 5-10 for balance enquiry. com July 14 Gr8AmbitionZ. Government gave USD 579 mn additional penalty on RIL. o The government has slapped an additional penalty of USD 579 million on Reliance Industries for producing less than targeted natural gas from its KG-D6 block. o With this, the total penalty on RIL for missing the target in four fiscal years beginning 1st April 2010 now stands at a cumulative USD 2.376 billion. o About Penalty in KG-D6 blocks:  The penalty is in the form of disallowing costs incurred. The Production Sharing Contract (PSC) allows RIL and its partners BP Plc and Niko Resources to deduct all capital and operating expenses from the sale of gas before sharing profit with the government.  OilMinister : Dharmendra Pradhan. July 15  RBI has issued fresh norms for issue/transfer of shares by non-resident investors (NRI) in unlisted domestic companies. o This move of RBI is expected to provide more flexibility in foreign direct investment, in which the issue and transfer of shares including compulsorily convertible preference shares and compulsorily convertible debentures shall be worked out as per any internationally accepted pricing methodology on arm’s length basis. o RBI has added that the valuations must be certified by a chartered accountant or a merchant banker registered with capital markets regulator Securities Exchange Board of India. o RBI also warned against provisions guaranteeing an exit price to the investor but conceded that it is fine with the practice of having a lock-in period.  The BMB has launched “BMB rent” a new product to benefit the owners of properties who have rented out their premises. o This loan product is basically designed for the individuals and firms who have rented out their property to the big renowned companies and organizations. o The minimum amount would be Rs. 20 lakh and the maximum amount is Rs. 5 core. July 16  RBI instructed Non-banking financial companies (NBFC) not to charge pre-payment penalties on floating rate term loans. o Two months earlier RBI has also asked the Commercial Banks for the same, now RBI has instructed the NBFC to follow the same. o About floating rate term loans:  Interest rate of loan that is allowed to move up and down with the rest of the market or along with an index. For more materials visit us at 15
  17. 17. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I)  In 1950, after the Second WorldWar, Canada became the first major country to adopt a floating rate.  NABARD launched a financial literacy camp to increase the literacy and awareness among the villagers. o The chief General Manager of the bank has asked the farmers and the others to come and attend the camp that guided them to utilize the services provided by the banks. o On the occasion of 33rd foundation of the bank organized this camp named ''Vidya Saksharatha Abhiyan''. o Established: 12 July 1982. com o Headquarters:Mumbai. o Chairman: Dr. Harsh Kumar Bhanwala. Gr8AmbitionZ.July 17  The RBI has liberalised the remittance scheme for the resident individuals from USD 75,000 to USD 1,25,000 per financial year. o According, now the permission has been granted to remit up to USD 1,25,000 per financial year, under the scheme for any permitted capital or current account transaction or a combination of both. o Further, it is clarified that the scheme can now be also extended to for acquisition of immovable property outside India.  The RBI issued draft guidelines for licensing of payments banks and small banks. o Both these banks will be created with a common objective of furthering financial inclusion by adding value through adapting technological solutions to lowers costs. o Functions of Small Banks & Payments Banks:  Small banks will provide a whole suite of basic banking products, such as, deposits and supply of credit, but in a limited area of operation  Eligibility for small bank includes resident individuals with ten years of experience in banking and finance, companies and societies, NBFCs,Micro Finance Institutions and Local Area Banks.  Payments banks will provide a limited range of products, such as, acceptance of demand deposits and remittances of funds, but will have a widespread network of access points particularly to remote areas, either through their own branch network or through Business Correspondents (BCs) or through networks provided by others. But, cannot give loans.  Eligibility for Payments Bank includes existing non-bank Pre-paid Instrument Issuers (PPIs), Non- Banking Finance Companies (NBFCs), corporate BCs, mobile telephone companies, super-market chains, companies, real sector cooperatives, and public sector entities.  Initial Capital: The minimum paid up capital requirement of both payments banks and small banks is kept at 100 core rupees, of which the promoters’ initial minimum contribution will be at least 40 ercent, to be locked in for a period of five years.  India and Brazil signs 3 agreements. o Cooperation on climate change, biodiversity, afforestation in arid areas, water conservation and protection of wetlands, waste management among other things. o They agreed to establish a bilateral mechanism for consultation on bilateral consular and mobility issues and on bilateral legal cooperation, including issues related to the movement of people between the two countries. o The agreement designated the National Institute for Space Research (INPE), the Brazilian executive agency for earth observation data reception, processing, archiving, and distribution, to take responsibility and to work together with the Indian Space Research Organisation (ISRO).  The Government of India has minted the Rs. 10 coins to commemorate the occasion of "Diamond Jubilee of Coir Board" which the Reserve Bank of India will shortly put into circulation. For more materials visit us at 16
  18. 18. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I) o About Coir Board:  The Coir Board is a statutory body established by the Government of India under the 'Coir Industry Act 1953 (45 of 1953)' for the promotion and development of the coir (coconut fibre) industry in India.  Headquarters: Kochi. July 18 com  The RBI has relaxed norms governing import of rough, cut and polished diamonds by doubling the credit time Gr8AmbitionZ.period to 180 days. o Earlier, the time frame was of 90 days. o As per new norms the Clean Credit i.e., Credit given by a foreign supplier to its Indian customer/ buyer, without any Letter of Credit (Suppliers' Credit)/ Letter of Undertaking (Buyers' Credit)/ Fixed Deposits from any Indian financial institution for import of rough, cut and polished diamonds, may be permitted for a period not exceeding 180 days from the date of shipment. o Letter of Credit:  A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. In return for these documents, the beneficiary receives payment from the financial institution that issued the letter on discount.  In the event that the buyer is unable to make payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase.  Given by: Bank.  Given to: Seller.  Here, bank needs to take confirmation from Buyer before giving credit to seller. o Letter of Undertaking:  It is opposite of Letter of credit.  Letter of undertaking means an agreement by which a ship-owner undertakes the following: a. To employ security on the ship; b. To enter an appearance acknowledge ownership; and c. To pay any final decree entered against the vessel whether it is lost or not.  The main purpose behind creating a letter of undertaking is to avoid the creditors from sezing the ship and releasing it on bond.  Given by: Bank.  Given to: Buyer. o Here, bank needs to take confirmation from Seller before giving credit to buyer. July 20  Canara Bank signs Rs. 1,170 crore loan pact for KochiMetro. o About KochiMetro Project:  Cost completion Phase - I of the project is Rs. 5,200 crore.  Kochi is the first Tier - II city in India to be granted a metro under the Central Government's plan to allow cities having population more than 2 million to have a metro rail system.  There are about 8 Tier I cities, 26 Tier - II cities, 33 Tier - III cities and over 5,000 Tier - IV towns, while there are more than 638,000 villages in the country. July 21 For more materials visit us at 17
  19. 19. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I)  RBI gave last date asMarch 31, 2017 to meet SLR norms to Non Scheduled State Coops. Date SLR as percentage of NDTL March 31, 2015 5% March 31, 2016 10% March 31, 2017 Entire SLR as may be prescribed by RBI on that date o In recent monetary policy of RBI, CRR for Non-Scheduled StCBs and com all CCBs from 3.00 per cent to 4.00 per cent. Gr8AmbitionZ. SBI started “Home Loan on wheels”. o This project will be done through vans, which will have a showcase of various home loan products of SBI. o Its first project is started at Chennai. July 22  EPFO will now be allotted with a Universal Account Number (UAN). o This facility of UAN will provide the facility of portability, in case the member shifts the job, he will not need to apply for the transfer of PF account. Initially, the UAN will be provided to members currently contributing to the EPFO by October 15. Shortly the UAN will be made more secure with the PAN/ aadhar authentications. o EPFO had launched the online facility for allotment of employer's code on June 30. It has been informed that this UAN number will be portable for the throughout the entire working time of the EPFO member. o Objective of UAN:  The UAN would be one account number which would be allotted to a subscriber for various schemes run by the EPFO for his entire service period with different employers.  YES Bank and international money transfer company Transfast, have launched an online money transfer service with instant deposits to NRI customer accounts with any bank in India. o This service facilitates real-time deposit of funds to all banks currently connected to the National Payments Corporation of India’s (NPCI) platform for inward remittances and is available 24 hours a day/7 days a week/365 days a year, YES Bank said in a statement. July 23  RBI relaxed the Rs. 1 lakh ceiling on loans for non-agriculture against gold jewellery. o Borrowers can now pledge their gold and get a higher value of loans, provided that the loan-to-value (LTV) ratio does not exceed 75% of the cost of the gold. o Prior to this in January 2014, loans extended against pledge of gold ornaments and jewellery, for other than agricultural purpose was not permitted. o Now gold jewellery loans for non- agriculture is subject to the following conditions: 1. The tenor of the loans shall not exceed 12 months from the date of sanction. 2. Banks, as per their Board approved policy, may decide upon the ceiling with regard to the quantum of loans that may be granted against the pledge of gold jewellery and ornaments for non-agricultural end uses. 3. Interest will be charged to the account at monthly rests and may be recognised on accrual basis provided the account is classified as ‘standard’ account. This will also apply to existing loans. 4. Such loans shall be governed by extant norms pertaining to income recognition, asset classification and provisioning which shall be applicable once the principal and interest become overdue. For more materials visit us at 18
  20. 20. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I)  The central bank to framework to tightly regulate large financial institutions in India, whose failure can seriously impact the functioning of the financial system. o The Reserve Bank of India (RBI) will start announcing the names of Domestic Systemically Important Banks (D-SIBs) by August 2015. The central bank is expected to use a multiple indicator approach to for this classification. o This is similar to the category of too-big-to-fail banks in other countries com based on the bank's size and systemic interconnectedness. o The RBI said it would start disclosing the names of banks deemed as domestic systematically important Gr8AmbitionZ.banks, adding that as per data it had compiled as of March 31, 2013, four to six domestic lenders would qualify under the category. o The central bank said it would create four sub-categories of D-SIB lenders, each with different requirements for additional common equity Tier 1 capital requirements that would range from 0.20% to 0.80% of risk weighted assets. o The banks identified as D-SIBs would be plotted in four different buckets depending upon their systemic importance scores in ascending order and they would be required to maintain additional capital in the range of 1% to 2.5% of their risk weighted assets. o Background:  The Basel Committee on Banking Supervision (BCBS) came out with a framework in November 2011 for identifying the Global Systemically Important Banks (G-SIBs) and the magnitude of additional loss absorbency capital requirements applicable to these G-SIBs. BCBS further required all member countries to have a regulatory framework to deal with Domestic Systemically Important Banks (D-SIBs). July 24  World Bank commits $15-18 bn to India in next 3 years. o The World Bank has committed 15 to 18 billion dollars to India by 2017 to help the country return to a higher growth path which is critical for boosting jobs and reducing poverty. o It will step up its lending to India to 5 to 6 billion dollars annually over the next three years from the earlier commitment of 3 to 5 billion dollars a year. o The World Bank President Jim Yong Kim endorsed the government's commitment on reforms and said the multilateral agency will support the development initiatives with financing as well as knowledge and capacity building. He said, the new government would like to return to a growth rate of 9 percent.  Reserve Bank of India likely to keep benchmark rates 'steady' this fiscal: DBS. o The Reserve Bank of India is expected to be in pause mode in its policy review meet next month, a DBS research report. o The report also indicated that the benchmark rates are likely to remain 'steady' for the rest of this fiscal year. o According to the global financial services major, the government has displayed a proactive approach in calming unseasonal and unwarranted increase in prices of vegetables and fruits. July 25  The Reserve Bank of India has imposed a monetary penalty on 12 banks as under: S. No Name of the Bank Amount of Penalty (in lakh) 1 Andhra Bank 10 2 Axis Bank 15 For more materials visit us at 19
  21. 21. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I) 3 Canara Bank 10 4 Corporation Bank 10 5 HDFC Bank 5 6 ICICI Bank 40 7 IDBI Bank 15 8 IndusInd Bank 10 9 Kotak Mahindra Bank 10 com 10 Ratnakar Bank 5 Gr8AmbitionZ.11 State Bank of Hyderabad 10 12 Yes Bank 10 o The Reserve Bank had carried out a scrutiny of the loan and current accounts of M/s. Deccan Chronicle Holdings Ltd., in certain branches of these banks in late 2013. Based on the findings of the scrutiny, the Reserve Bank issued show cause notices to these banks in March 2014, to which the individual banks submitted written replies.  Monitoring of Foreign Investment in Indian Companies under PIS: The South Indian Bank Ltd. Incorporation in Ban List. o The Reserve Bank of India today advised that the foreign shareholding through Foreign Institutional Investors (FIIs)/ Registered Foreign Portfolios Investors (RFPIs)/Non Resident Indians (NRIs)/ Persons of Indian Origin (PIO)/ Foreign Direct Investment (FDI)/ American Depository Receipts (ADRs)/ Global Depository Receipts (GDRs) in The South Indian Bank ltd has crossed the prescribed threshold limit as per extant FDI policy. o Hence, further purchases of equity shares of this company would not be allowed through Stock Exchanges in India on behalf of FIIs/ RFPIs/ NRIs/ PIOs and through FDI/ ADRs/ GDRs. July 26  182-days Treasury Bills auction: Rs. 6,000 crore under regular auction. o The Reserve Bank of India has announced the auction of 182-days Government of India Treasury Bills for notified amount of Rs. 6,000 crore. The auction will be conducted on July 30, 2014 using "Multiple Price Auction" method. o The allocation to the non-competitive bidders will be outside the notified amount at the discretion of the Bank. The sale will be subject to the terms and conditions specified in the General Notification No. F.2 (12)- W&M/97 dated March 31, 1998 issued by Government of India and as amended from time to time. July 27  Arun Jaitley to address RBI board on August 9. o Finance Minister Arun Jaitley will address the board of the Reserve Bank here on August 9 amid expectations that the central bank will complement government actions by reducing rates to boost growth. o Jaitley, who presented his maiden budget, is likely to inform the RBI board about the steps taken to contain the fiscal deficit and may underline the need to reduce interest rates to promote growth.  Central Bank of India to sell 4 per cent stake to LIC for Rs. 581 crore.  State-run lender Central Bank of India has said it is in the process of selling 4 per cent of its stake to Life Insurance Corporation through an institutional placement for Rs. 581 crore to meet its capital requirement of Rs. 2,000 crore this fiscal. For more materials visit us at 20
  22. 22. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I) o ''We will need Rs. 2,000 crore for our business plans this financial year. We did go to LIC and we are getting around Rs. 581 crore from them'', chairman and managing director Rajeev Rishi said. He however, did not specify a timeline for the deal with LIC. July 28  SBI, PNB, BoB & BoI preparing blueprint to identify takeover targets. com o India's banking sector may be getting ready for a wave of consolidation as the country tries to build Gr8AmbitionZ.institutions of world-class proportions. o Four big state-run banks — State Bank of India, Punjab National Bank of Baroda and Bank of India — have already begun an exercise to identify takeover targets to gain access to franchises that would augment their capabilities, said three top bankers familiar with the move.  Over Rs. 3,350 crore worth NPAs with Union Bank of India. o Union Bank of India has Non - Performing Assets (NPAs) worth about Rs. 3,350 crore from 20 defaulters. Replying to an RTI query, the bank, however, declined to share the names of the defaulters citing "commercial confidence". List of the borrowers cannot be provided as they are of commercial confidence and exempted from disclosure under Section 8(1) (d) of the RTI Act. July 29  RBI cancels Certificate of Registration of M/s Insilco Merchants Private Limited. o The Reserve Bank of India has cancelled the certificate of registration of the Insilco Merchants Private Limited a non-banking financial company (NBFCs) under the powers conferred on it under clause (a) of Section 45-I of the Reserve Bank of India Act, 1934. July 30  Axis bank has initiated “MyIdeaOfProgress”. o To promote its banking services and lure major number of customers the bank has come up with this online initiative. o Through this website the bank has asked the people and the users to share their ideas. Recently bank has also made the leading actress of the bollywood deepika Padukone as its brand ambassador. July 31  S.S. Mundra took over as the Deputy Governor of the Reserve Bank of India (RBI) the fallen vacant in March after former deputy governor K.C. Chakrabarty completion of his term. o Prior to joining the Reserve Bank, Shri Mundra was Chairman and Managing Director, Bank of Baroda, the second largest bank in the country. o As Deputy Governor, Shri Mundra will look after banking supervision, currency management, financial stability, rural credit, customer service, as also, the Reserve Bank’s human resources and security. o Life history & achivements of Subhash Sheoratan Mundra:  Born on July 18, 1954, Shri Mundra began his career as a Probationary Officer in Bank of Baroda in March 1977.  During a banking career spanning 37 years, he has held several challenging positions including heading Bank of Baroda’s European operations (UK) before being elevated as Executive Director of Union Bank of India in September 2010 and further as Chairman of Bank of Baroda in January 2013. For more materials visit us at 21
  23. 23. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I)  Shri Mundra has served on Boards of several multi-dimensional companies, such as, (CCIL), (CDSL), BOB AssetManagement Company (IIFCL), NPCI.  He has served as the Chairman of Committee on Financial Inclusion set up by the Indian Banks’ Association (IBA).  He holds a Masters Degree in Commerce and CAIIB. o About Dept. Governer of RBI com  The RBI performs this function under the guidance of the Board for Financial Supervision (BFS). The Board was constituted in November 1994 as a committee of the Central Board of Directors. Gr8AmbitionZ. RBI have 21-member in Central Board of Directors: the Governor, 4 Deputy Governors, 2 Finance Ministry representatives, 10 government-nominated directors to represent important elements from India's economy, and 4 directors to represent local boards headquartered at Mumbai, Kolkata, Chennai and New Delhi. 4 – Deputy Governors 1 Shri H. R. Khan 2 Dr. Urjit R. Patel 3 Shri R. Gandhi 4 S. S.Mundra AUGUST 2014 August 1  Do Not give Details of Your Bank Account or Credit/Debit Cards on Email/ Phone: RBI Warns Public Again on Phishing Mails/ Calls o Of late, some new methods of frauds have come to the notice of the Reserve Bank of India. An e-mail is sent in the name of a senior official of the Reserve Bank of India which gives an impression of it having been sent from the Reserve Bank and at times even displays the official extension. o The e-mail states that the Reserve Bank has received a large sum of foreign currency from the World Bank or a well-known international institution or a multi-national company for transfer of such funds to the bank account of the e-mail recipient. The reason for such transfer cited in such e-mails is also quite convincing, such as, ‘compensation for internet and cyber-crimes and for reduction of poverty in Asian regions’. August 2  Union finance minister Arun Jaitley disclosed that non-performing assets ( NPAs), or bad loans, of public sector banks have soared to a staggering Rs. 25,809 crore for the financial. Financial year Gross NPA in PSB (in Rs. Crore) % wrt deposits 2013 - 14 2,45,809 4.03 2012 - 13 1,83,854 3.42 2011 – 12 1,97,102 2.94 o The minister said that the Reserve Bank of India ( RBI) has taken a number of steps to recover the bad loans that resulted in recovery of Rs. 33,486 crore in 2014, Rs. 19,832 crore in 2013 and Rs. 17,272 crore in 2012. o The RBI measures include creation of a Central Repository of Information on Large Credits to collect, store and disseminate credit data to banks on credit exposures of Rs. 5 crore and above, formation of joint lenders' forum, corrective action plan and sale of assets. For more materials visit us at 22
  24. 24. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I) o RBI has issued instructions to the banks to review slippages in asset classification in the borrowal accounts with outstanding Rs. 5 crore and above by the Board of directors of the bank and review NPA accounts which have registered recoveries of Rs. 1 crore and above.  Cheque bouncing : SC settles law on where to file a complaint. o The Supreme Court (SC) gave judgement that a complaint about a bounced cheque must only be filed at the place where the bank dishonoured it, settling doubts raised by its own com earlier conflicting judgments on the jurisdiction of a magistrate. o A three-judge bench headed by T.S. Thakur unanimously laid down that the place of dishonour is the right to file a complaint. o Background  The judgment was delivered on a large number of appeals, including those moved by Videocon Industries and Kitchen Appliances Ltd, which raised the question of jurisdiction of the magistrate who can try cases under Section 138 of the Negotiable Instruments Act 1881.  According to this provision of NI-Act, it is an offence to issue cheques without a sufficient balance in the account, if the payment is made to discharge a debt or liability. If the amount is not paid within two weeks (15 days), the payee can file a criminal complaint. o Checque Bouncing in INDIA:  What happens when usually a cheque bounces?  After the bouncing of the cheque, almost every bank in India issues a ''Cheque Return Memo'' to the banker of the person, who received the cheque and deposited in his bank. In legal parlance, he is called the ''payee'' of the cheque. The payee of the cheque can represent it in the bank for payment after informing the drawer (giver) of the cheque for payment. The option is also open to the payee to proceed legally against the drawer of the cheque.  If the cheque was given for the purpose of gifts or any other illegal purpose, then drawer of the cheque cannot be prosecuted.  Section 138 of the Negotiable Instrument Act 1881, prescribes that the payee has to send a notice to the drawer of the cheque within 30 days of receiving the Cheque return memo from his bank. In his notice to the drawer, he can demand the payment to be made to him within 15 days of date of receipt of his notice.  If the drawer does not pay within the 15 days time, then the payee can file a complaint in the court of jurisdictional magistrate within one month of date of expiry of the 15 days time mentioned in the notice to the drawer o Punishment for the drawer of the Cheque  The punishment in such cases might be double of the amount stated in the cheque or a jail term up to 2 years. o Amount of Penalty  Neither the RBI nor the Indian Banks' Association (IBA) has prescribed a maximum or minimum limit for the penalty for cheque-bouncing and it is for individual banks to decide. Bank < Rs. 50,000 Rs. 50,000 – 1 L Technical reasons (signature or over-writing on the cheque) SBI Rs. 102 Rs. 204 Rs. 76 ICICI Rs. 350 Rs. 750 Rs. 150  The CBI arrested six persons including chairman-cum-managing director of Syndicate Bank, SK Jain for allegedly taking bribe of Rs. 50 lakh for increasing credit limit of some companies in violation of banking rules. For more materials visit us at 23
  25. 25. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I) o After keeping a watch on the activities of Jain for last six months on the directive of CBI Director Ranjit Sinha, CBI sleuths finally swooped on his relative and a Madhya Pradesh - based chartered accountant and arrested them while allegedly receiving cash from representatives of companies which have been involved in coal scam. August 3 com  The RBI cancelled the certificate of registration of six non-banking financial company (NBFCs). With this Gr8AmbitionZ.cancellation, these six NBFCs based in Delhi would not be able to conduct business of non-banking financial institution. o These six NBFCs are 1. GE Strategic Investments India (GESII) 2. Profound Exports Private Limited 3. Two Brothers Holding Limited 4. Swank Services Private Limited 5. Praxis Consulting and Information Services Private Limited 6. Credible Microfinance Ltd. (formerly known as "Credible Securities & Finance Pvt. Ltd.")  Power granted to RBI to cancel registration certificate of NBFC o The registration certificate of a non-banking financial company can be cancelled by RBI under the powers conferred under Section 45-IA(6) of the Reserve Bank of India Act, 1934. The business of a non-banking financial institution is defined in clause (a) of Section 45-I of the Reserve Bank of India Act, 1934.  Under the financial inclusion plan, the govt. has decided to expand the banking facilities through mobiles and made them accessible to all the people. It has been noticed that there are nearly 7.5 crore households who do not posses any banking facility. Govt. is making its best efforts to make banking accessible to all, and to have at least two account holders in every household. o At present the inclusion plan covers up to the 58-59% i.e. area having access to banking and the remaining area accounts for 7.5 crore household that do not have any access to the banking. In order to expand banking and making banking accessible across all the households the govt. is planning to have a campaign for inclusion throughout the country. o Where ever possible the new brick and mortar branches and ATMs will be established that will provide banking services. In a period of two considerable development is expected under this plan. August 4  The Credit Information Bureau (India) Ltd (CIBIL) said it will come up with a risk index which will help banks and financial institutions in the process of granting loans and advances to corporates. o About CIBIL :  CIBIL provides credit information about individual customer and business entities that helps banks in taking decision on sanctioning credit to any customer. It maintains account credit information of 350 million accounts of individual consumers and 19 million accounts of businesses.  CIBIL has also recently launched new product for banks called 'Alert' wherein it will send an alert to the bank whenever there is a change in the profile of a customer.  Another product called 'Instant Acquisition of Customers' allows NBFCs to take instant decision on giving credit to customer or not by providing instant credit information about him.  Currently top five states - Maharashtra, Andhra Pradesh, Karnataka, Uttar Pradesh and Tamil Nadu - contributed to almost 50 per cent of all enquiries for credit. For more materials visit us at 24
  26. 26. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I)  State bank of Hyderabad has recently unveiled a new campaign SBH smart salary (SSS) for its salaried customers. o It will provide various beneficial offers to the customers like zero balance account, multi option deposits for automatically investing surplus funds over threshold limit of Rs. 10,000 to earn higher rate of Interest. o In addition to this it will also offer the facility of overdraft facility up to three month net salary. o The customers opening account during this campaign can also com enjoy the facility of personal accident insurance cover of Rs. 2 lakh of SBI General Insurance.  HDFC Bank Ltd has opened its branch in Dubai at the International Financial Centre, and will provide wealth services to non-resident Indians based in the UAE. o A bank statement said after Bahrain and Hong Kong, this is HDFC Bank’s third branch overseas. It also operates two more representative offices in the UAE at Dubai and Abu Dhabi which will continue to function.  RBI gave its prediction of GDP growth in the current fiscal is expected to go up to 5.5 per cent from 4.7 per cent in the last financial year. o Prior as per the Finance Ministry estimates, GDP growth in the current fiscal is expected be in the range of 5.4 - 5.9 per cent. August 5  RBI’s 3rd bi-monthly policy Current Rates in June rates (in %) (in %) Reserve Rates CRR 4 No change SLR 22 22.5 Policy Rates Repo Rate 8 No change Reverse Repo Rate 7 No change MSF 9 No change Bank Rate 9 No change  Highlights: o SLR cut by 0.50 pc to 22 pc to unlock banking funds. o Estimates GDP growth at 5.5 pc for current fiscal. o Targets 8% CPI inflation by Jan 2015, 6% by Jan 2016. o Lowers banks' SLR holdings in held-to-maturity category by 0.5 pc to 24 pc. o Next bi-monthly policy statement on September 30. o Section 24 of the BRA, 1949: o Every primary (urban) cooperative bank (scheduled/ non-scheduled) and scheduled commercial bank is required to maintain liquid assets in the form of cash, gold (or) unencumbered approved securities which should not be less than 25 per cent of the total of its demand and time liabilities (NDTL) in accordance with the provisions of Section 24 of the Banking Regulation Act, 1949. o Section 42 of RBI Act, 1934:  Commercial banks, primary (urban) cooperative banks are required to maintain certain amount of cash reserve and liquid assets. The scheduled primary (urban) cooperative banks are required to maintain with the Reserve Bank of India an average daily balance, the amount of which should not be less than 5 per cent of their net demand and time liabilities in India in terms of Section 42 of the Reserve Bank of India Act, 1934. For more materials visit us at 25
  27. 27. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I) August 6  RBI extends the Validity Period of Directions on Mirzapur Urban Co-operative Bank Ltd., Mirzapur. o The Reserve Bank of India has notified that the validity period of directions imposed on Mirzapur Urban Co-operative Bank Ltd., Mirzapur, Uttar Pradesh as on February 11, 2014 has been extended further as per modified directive dated July 31, 2014 for a period of one month i.e. com from August 12, 2014 to September 11, 2014, subject to review. The other terms and conditions remain unchanged. A copy of the modified directive notifying the above modification is displayed at the bank’s premises for information of the public. Gr8AmbitionZ. Banks’ Tier - I capital need for 5 years surges to Rs. 20,000 crore: ICRA. o With the capital requirement of Indian banks likely to go up gradually till 2018 - 19 (FY2019), Tier - I issuances are likely to increase significantly till that year, according to an ICRA report. o Tier - I issuances include common Equity and additional Tier - I or AT1. While the AT1 requirement for this fiscal year 2015 would be around Rs. 20,000 crore, in subsequent years, the annual requirement could be as high as Rs. 40,000 crore – 50,000 crore. o However, these instruments come with significant risk. The guidelines of the Reserve Bank of India (RBI) on Basel III introduce stringent loss absorption clauses for hybrid instruments so that loss absorption kicks in before the “public injection of funds”.  ICICI Bank launches travel card for students going abroad for studies. o ICICI Bank, the country’s largest private sector bank, has announced the launch of the ‘ICICI Bank Student Travel Card’, which enables students going abroad for higher studies to take care of their expenses. o “The card offers both students and parents a convenient, safe and hassle-free way to manage their education-related expenses abroad. While it helps the students pay for expenses such as application fee, university admission and other course - related fees, hostel fee and day-to-day living expenses, their parents can reload the card from India. Also, the card allows withdrawal from ATMs across the globe in local currency”. o The unique feature of the card is that it is bundled with membership of the International Student Identity Card (ISIC). ISIC is the only internationally accepted proof of full-time student status and offers 40,000 benefits and discounts at 120,000 merchant outlets across 130 countries. August 7  Third Bi-monthly Monetary Policy Statement 2014 - 15 by RBI, it has been decided to reduce the Statutory Liquidity Ratio (SLR) of Regional Rural Banks from 22.50 per cent of the Net Demand and Time Liabilities (NDTL) to 22.0 per cent with effect from the fortnight beginning August 9, 2014. o RRB’s are not eligible for Repo, Reverse Repo &MSF, LAF facilities. o All Scheduled Commercial Banks (excluding Regional Rural Banks) and Primary Dealers having SGL and Current Accounts with RBI, Mumbai will be eligible to participate in the Repo auctions.  The RBI has tightened norms for Asset Reconstruction Companies (ARC). o Asset reconstruction companies (ARCs) will have to pay upfront 15% of the bid value of non-performing loans, against 5% earlier. o Also, those planning to buy bad loans will get more time (at least two weeks) to carry out due diligence before bidding for stressed assets. So far, banks have enjoyed complete discretion in deciding the timeframe for due diligence.  Total net profit of all public sector banks (PSBs), including SBI fell sharply by 26.8 per cent to Rs. 37,017 crore for fiscal ended March 2014 over Rs. 50,583 crore in 2012 - 13. o The Gross NPA of the PSBs at the March 2014 stood at Rs. 2.27 lakh crore. For more materials visit us at 26
  28. 28. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I) o Finince Minister: Arun Jaitley. August 8  The RBI sought comments from public on Draft Guidelines for Implementation of BBPS. o Bharat Bill Payment System (BPPS) is an anytime anywhere bill payment system. The proposed guidelines describe the basic requirements of operating the BBPS. com o Bharat Bill Payment System is intended for the implementation of a unified bill payment system across the o It would enable the customers to pay the bills with the help of agents and getting instant confirmation of the payment made. School fees, municipal taxes and utility bills payments would become easier now. o The centralised bill payments infrastructure will consist of two types of entities: 1. Bharat Bill Payment System (BPPS), which will be the standard setting body. 2. Bharat Bill Payment Operating Units (BBPOUs), which will be the authorised operational units. o Background:  Committee under the chairmanship of Shri G. Padmanabhan, Executive Director, RBI was set up to study the feasibility of implementation of an electronic GIRO payment system in the country. Based on the recommendations of the Committee, a Giro Advisory Group (GAG) under the Chairmanship of Professor Umesh Bellur, IIT Bombay, was constituted with the objective of defining a framework that enables the creation of pan-India touch points for bill payments by customers in the country irrespective of the geographical location of the billers.  In its report, the GAG (Umesh Bellur) has recommended a tiered structure for bill payments system in the country, where the proposed Bharat Bill Payment System (BBPS) will be the authorised standard setting body and the proposed Bharat Bill Payment Operating Units (BBPOUs) will be the authorised operational units, working in adherence to the standards set by the BBPS. o GIRO (or) General Interbank Recurring Order:  The word "giro" is borrowed from Dutch "giro" and/or German "Giro," which are both from Italian "giro" meaning "circulation of money''.  Giro transfer, is a payment transfer from one bank account to another bank account and instigated by the payer, not the payee. August 9  CBI adds additional bribe of Rs. 3.5 crore to Syndicate Bank CMD K. Jain. o Crores more, in fact, as fresh evidence unearthed by the Central Bureau of Investigation (CBI) indicates Jain was paid Rs. 3.5 crore by Prakash Industries, one of the companies named in the First Information Report. o According to the intercepts, the bribe of Rs. 3.5 crore was allegedly paid by Prakash Industries to obtain further credit from Syndicate Bank despite it defaulting in the repayment of older loans. o Sources said Prakash Industries had submitted a proposal to Syndicate Bank for sanction of external commercial borrowings of $20 million for paying back foreign currency convertible bonds, and the bribe of Rs. 3.5 crore was allegedly paid for this to be cleared. o The CBI arrested Jain on charges of receiving bribes to extend credit facilities to certain companies. During raids, the agency seized Rs. 21 lakh in cash, gold worth Rs. 1.68 crore and FDRs worth Rs. 63 lakh from Jain. o Prior scam for K. Jain:  Which Sources said the alleged bribe of Rs. 50 lakh paid by Bhushan Steel to Jain for not declaring bad loans of Rs. 134 crore as non-performing assets could be just one of many instalments agreed upon. For more materials visit us at 27
  29. 29. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I)  In its FIR, the CBI has alleged that accused Ved Prakash Aggarwal, Chairman of Prakash Industries, and company director Vipul Aggarwal, were in regular touch with Bansal regarding the clearance of their proposals by Syndicate Bank.  The agency has alleged that several meetings took place between Bansal and Jain on this issue.  Bansal contacted Jain on July 14 and requested him to expedite the Prakash Industries proposal. The very next day, the proposal was cleared by Jain, who conveyed com the development to Bansal.  A day after the arrest of Bhushan Steel vice chairman in the cash-for-loan case at Syndicate Bank, SBI - a big lender to the firm - said it would press for an external agency to take over the day-to-day management of the o Bhattacharya said the bank has an exposure of Rs. 6,000 crore to the steel-maker which is a standard asset at present. o The CBI, which arrested Jain, also arrested Bhushan Steel's vice-chairman and managing director Neeraj Singal. o The Bhushan Steel plant in Odisha is running well and the lenders do not want to expose their assets to any difficulties as a result of the imbroglio. o In the Budget, the government had sounded positive about consolidation in the banking space and Financial Services Secretary GS Sandhu had said the process will kick-start with a merger within the SBI Group this fiscal. August 10  RBI has eased norms for mortgage guarantee companies (MGC), allowing these firms to use contingency reserves to make good the losses suffered by the mortgage guarantee holders without the apex bank's approval. o Now guarantees provided by MGC may be treated as contingent liabilities, for which credit conversion factor would be 50 percent. o The change in the guidelines has been made in the wake of representations received from the industry, and keeping in view the long-term beneficial impact of development of the mortgage guarantee industry. o The extant guidelines provided for a lower appropriation to contingency reserves if provision made towards losses exceeded 35 per cent of the premium or fee earned during a financial year.  A meeting of the Sub Committee of the Financial Stability and Development Council (FSDC) was held in New Delhi. o Issues discussed are:  The Sub-Committee reviewed the domestic macro economy and potential risks facing the financial system. A draft roadmap for creating standards and protocol for setting up account aggregation facility for financial assets was deliberated in the meeting.  The Sub-Committee reviewed the major decisions made in the union budget and discussed the road for implementing them. These included one single demat account for all financial assets; introduction of uniform KYC norms and inter-usability of KYC records across the financial sector; strengthening and deepening the markets for corporate bond, currency derivatives and interest rate futures; and participation of FDIs and FIIs in commodity market.  The Sub-Committee also reviewed the functioning of the various Technical Groups which are under its ambit.  The RBI announced transfer to the Centre its surplus profit of Rs. 52,679 crore (Rs. 526.79 billion), about 60 per cent more than the amount given last year.  Last year, the RBI had transfered its Rs. 33,010 crore (Rs. 330.10 billion) surplus profit to the Centre. For more materials visit us at 28
  30. 30. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I) o The amount will provide some help to the government, which proposes to bring down the fiscal deficit to 4.1 per cent of GDP this fiscal from 4.5 per cent last year. o The Reserve Bank follows the July-June accounting year.  PSU banks' profit falls 27% to Rs. 37,000 crore in FY14 from Rs. 50,583 crore in 2012-13. o The Gross NPA of the PSBs at the March 2014 stood at Rs. 2.27 lakh crore. o PSBs are banks where a majority stake of more than 50% is held by a com government. o There are a total of 27 PSBs in India. o [19 Nationalised banks + 6 State bank group (SBI + 5 associates) + 1 IDBI bank (Other Public Sector-Indian Gr8AmbitionZ.Bank) = 26 PSBs + 1 recent Bhartiya Mahila Bank].  IDFC appointed Ravi Shankar as the head of the proposed bank's financial inclusion and rural business initiative. o Shankar, who joins the company from non-bank lender Fullerton India Credit Company, will be heading the initiative called 'Bharat Bank', a statement from IDFC said. o He will be responsible for conceptualising and building the rural and inclusion business in the IDFC bank and will be based at the corporate office in the country's financial capital, it said. August 11  ICICI bank is now also the leading bank in the list of share in mobile banking payments in the country. The bank has managed to gain over Rs. 1000 crore through Mobile banking. o Reports shown that the total value of transactions across banks in the month of June via the mobile banking channel was Rs. 3985 crore. August 12  State bank of India along with its associate bank is coming up with new idea to launch 4300 cash recyclers. o This is new innovative step that will recycle the currency notes. These cash recyclers will accept and generate notes after reprocessing them. o These new cyclers will replace the old ATMs, the bank will set up these new cash recyclers all across the country by the end of March next year. o The machines are capable of tracking the counterfeit notes deposited or dispensed. The risk of carrying daily earnings home for shopkeepers, traders, cabbies, and others will also be minimised. The recyclers will have the capacity of dispensing and accepting 200 notes at a time. Further the machines will accept the notes of denominations of 50s, 100s, 500s and 1,000s. August 14  Trade deficit rises to $12.22 bn as July o Exports in July stood at $27.72 billion as compared to $25.83 billion in the same month last year. o Imports increased by 4.25 per cent year-on-year to $39.95 billion in July. This is the second consecutive growth in the inbound shipments after remaining in the negative for the past several months. o Trade deficit of $12.22 billion is one-year high as the previous high was $12.49 billion in July 2013. o Trade deficit during this period of financial year stood at $45.31 billion as against $59.91 billion in the same period last year. Exports Imports Goods (top Software, Petrochemicals, agriculture products, Crude oil, gold and precious stones, goods traded) Jewellery, engineering goods, pharmaceuticals, electronics, engineering goods, For more materials visit us at 29
  31. 31. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I) textiles chemicals, plastics, coals Main partners European Union China USA European Union UAE UAE August 15  Switzerland amended ''Federal Act'' on International Administrative com Assistance in Tax Matters. The Act governs the assistance to foreign nations in their pursuit of black money allegedly stashed in Swiss banks. Gr8AmbitionZ.o Switzerland amended the key law under pressure from India and other countries. o These amendments, which have come into force on 1 August 2014, would allow India and other countries to make 'group requests' for information about suspected black money hoarders. o According to one of these amendments, if the foreign authority demonstrates grounds for secrecy regarding certain case documents, the FTA (Federal Tax Administration) may refuse to allow a person entitled to appeal to inspect the corresponding files. o What India Gets?  On the one hand it would allow India and other nations to have information about the hoarder of black money. On the other hand, the roadblocks thwart India’s attempts to seek information on the so-called HSBC list, which Switzerland alleges that Indian and other foreign authorities got hold of after a former bank employee stole data about customers.  The Reserve Bank of India will shortly issue 1000 denomination Banknotes incorporating Rupee symbol, with 'R' inset letter, in theMahatma Gandhi Series - 2005. o All the Banknotes in the denomination of 1000 issued by the Bank in the past will continue to be legal tender.  RBI decreased number of free transactions from non home ATMs allowed to 3 from 5. o Accordingly, the number of mandated free transactions for savings bank account holders at other bank ATMs has been reduced from five to three per month. This will apply for transactions done at ATMs located in six metro centres, namely, Mumbai, New Delhi, Chennai, Kolkata, Bangalore and Hyderabad which are well-served in terms of payment infrastructure. o This reduction will, however, not apply to customers having no-frills/ small/ Basic Savings Bank Deposit Account (BSBDA) type of accounts as well as for transactions done by savings bank account holders at ATMs situated outside these six metro centres. Banks are also free to offer free transactions above this mandated limit. o Further, taking into account the scope for cross-subsidisation and with a view to ensuring more transparency in the pricing of these transactions, banks have been advised to provide their savings bank account holders with at least five free transactions per month at their own ATMs. o RBI has also asked the bank to charge the customer for more than five transactions even from the home branch ATM. o Beyond this, banks may decide to levy transaction charges (not exceeding Rs. 20/- plus applicable taxes per transaction) which are decided in a transparent manner. o Network:  The number of Automated Teller Machines (ATMs), which stood at a little over 27,000 as at end-March 2007, has increased to over 1.6 lakh across the country by end-March 2014.  The Point-of-Sale (POS) infrastructure has increased from 3.2 lakh to 10.65 lakh terminals between end-March 2007 and end-March 2014. It is, however, observed that the development of other payment mechanisms and related infrastructure is more visible in metropolitan areas in the country. For more materials visit us at 30
  32. 32. RECENT BANKING UPDATES FOR IBPS CLERKS IV (PART I) August 16  Central government Launched ''Pradhan Mantri Jan Dhan'' (PMJD) scheme to promote financial inclusion. o The facility of a debit card and an insurance cover of Rs. 1 lakh. o The Union Cabinet has already cleared the two-phase financial inclusion scheme under which bank accounts will be opened for 15 crore poor persons with an overdraft facility of com Rs. 5,000 and accident insurance of Rs. 1 lakh. o The scheme, to be pushed by the government in a mission mode, seeks to provide two accounts to 7.5 crore Gr8AmbitionZ.identified households by August 2018.  The Union Government decided to appoint former RBI governor Bimal Jalan as the head of the Expenditure Management Commission. o He would be tasked to suggest ways for managing public finances by reducing food, fertiliser and oil subsidies to include fiscal deficit. o About ExpenditureManagement Commission (EMC):  The purpose of setting up the commission is to cut-off the spending and review government expenditure to get maximum output.  The Commission will submit its interim report before the Budget of 2015 - 16 and its final report before the Budget of 2016 - 17. August 17  HDFC Bank is India's most valuable brand among service sector. o The first edition of the BrandZ Top 50 Most Valuable Indian Brands reported HDFC bank as the India’s most valuable brand. HDFC bank has even surpassed major telecom company Airtel with a brand value of 9.4 billion dollars. o ICICI bank and SBI are the two other banks in the top list of most valuable brands with the brand value of 8.53 billion dollars and 6.8 billion dollars respectively. o The 50 brands belonged to 13 different categories, of which 17 are multinational corporations (MNCs), 26 are private Indian brands and seven are state-owned brands. o The other brands in the top 10 include Airtel, State Bank of India, ICICI Bank, Bajaj Auto, Asian Paints, Hero MotoCorp, Idea, Kotak Mahindra Bank and Reliance Communications. August 18  HDFC launches first of kind ''ForexPlus card''. o In a first of its kind initiative, 'ForexPlus' card exclusive for people making the Haj and Umrah pilgrimages. o Pilgrims can use this card to make all payments during the pilgrimage in a convenient and secure manner, and avoid carrying Saudi Riyals in cash, which might get misplaced. o The ForexPlus card can be used to withdraw money from ATMs as well. o The Forex card will be immediately handed over to the customer over the counter, and will be activated within 4 hours after submission of all the documents. o The card comes also with a back-up card which can be activated in case of loss or damage of the primary card. o Through this initiative the bank is reaching out to over 1.7 lakh pilgrims across India.  Headquarters:Mumbai, India.  Key people: Aditya Puri (MD). For more materials visit us at 31