1. SEBI Board Meeting (March 2023): Significant Takeaways from 16 Major Decisions
At its board meeting on March 29, 2023, the Securities and Exchange Board of India (SEBI) made several decisions to safeguard investors' interests and strengthen the market infrastructure to manage disruptions.
This meeting saw the highest number of announcements made in recent times, with 16 significant decisions and the approval of SEBI's budget estimates for the fiscal year 2023-2024 (FY24) among the 17 items announced.
The 16 Major Decisions and Their Implications :
ESG Related -
1.Balanced Framework for ESG Disclosures, Ratings and Investing
The Board has made several notable decisions in this regard, including the implementation of the BRSR (Business Responsibility and Sustainability Report) Core to improve the reliability of ESG disclosures.
The BRSR Core comprises a limited number of Key Performance Indicators (KPIs) for which listed entities must gain reasonable assurance, and a glide path is specified for its application, starting with the top 150 listed entities (by market capitalization) from FY 2023-24 and subsequently expanding to the top 1000 listed entities by FY 2026-27.
SEBI has approved a legal framework for ESG (Environmental, Social, and Governance) disclosures, ratings, and investing to promote a balanced approach to ESG. The framework includes amendments to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and SEBI (Mutual Funds) Regulations, 1996. The following decisions were made by the Board in this regard:
ESG Disclosures for Value Chain of Listed Entities
i. Specific ESG disclosures and assurance (BRSR Core only) for the value chain of listed entities will be established to promote transparency, with specific thresholds and compliance requirements.
ii. The requirements will be applicable to the top 250 listed entities (by market capitalization) on a comply-or-explain basis starting from fiscal years 2024-25 and 2025-26, respectively.
ESG Ratings
i. ESG Rating Providers (ERPs) must include India/emerging market factors in their ESG Ratings given the unique environmental and social concerns of emerging markets.
ii. ERPs shall offer a specific category of ESG Ratings called “Core ESG Rating” based on the assured parameters under BRSR Core to increase the credibility of ESG Ratings.
ESG Investing
i. SEBI has directed the implementation of special measures to minimise the risk of mis-selling and greenwashing, improve stewardship reporting requirements, and promote ESG investing.
ii. ESG schemes are required to invest at least 65% of their AUM in listed firms that provide assurance on the BRSR Core.
2. Establishing a regulatory framework for Environmental, Social and Governance (ESG) Rating Providers in Securities Market by introducing a new chapter in the SEBI (Credit Rating Agencies) Regulations, 1999
Shareholder Empowerment Related -
10. Amendments to SEBI (Listing Obligations and Disclosure Requirements) Regulations to facilitate more comprehensive and timely disclosure
The Board has approved amendments to the Listing Obligations and Disclosure Requirements (LODR) Regulations after considering feedback from stakeholders. The amendments include :
• Requiring listed entities to disclose material events or information
• Strengthening corporate governance by empowering shareholders at listed companies
• Simplifying the timeline for newly listed entities to submit their first financial results
• Requiring listed entities to fill vacancies for directors, compliance officers, chief executive officers, and chief financial officers within three months of the vacancy to ensure critical positions are not left vacant.
11. Amendments to SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, with the objective of increasing transparency and streamlining certain issue processes
12.Introduction of concept of General Information Document (GID) and Key Information Document (KID) for issuance of Bonds/ Commercial Paper and streamlining of disclosures
i. In order to enhance the ease of doing business for issuers and eliminate the need for multiple filings of placement memoranda for non-convertible securities and commercial paper intended for listing, the Board has approved the establishment of a Green Initiative and Disclosure (GID) framework.
ii. Under this framework, issuers are required to file a GID with the stock exchanges at the time of the first issuance, containing the information and disclosures as per the common schedule. The validity of the GID shall be for 1 year.
iii. Initially, the GID framework will be implemented on a 'comply or explain' basis until March 31, 2024, after which it will become mandatory.
13.Extension of “Comply or Explain” period for Large Corporates (LCs) to meet their financing needs from debt market through issuance of debt securities to the extent of 25% of their incremental borrowings in a financial year
The Board determined that a contiguous block of 3 years will replace the previous contiguous block of 2 financial years as the period of compliance for large corporations to meet their financing needs from debt markets through the issuing of debt securities to the extent of 25% of their incremental borrowings.
14.Extension Of ‘Comply or Explain’ period for the High Value Debt Listed Entities (HVDLEs) in respect of corporate governance norms and simplification of disclosure requirements pertaining to the payment of interest/ coupon and redemption amount
The Board has decided to extend the period for HVDLEs to comply or explain regarding corporate governance standards (i.e., regulations 16 to 27 of the LODR Regulations) until March 31, 2024.
In order to improve the ease of doing business for issuers of non-convertible securities, the disclosure requirements related to the payment of interest/coupon and redemption amount are being simplified and multiple filings are being eliminated.
The Board has also approved the proposal to consolidate the disclosure requirements under Regulation 57 of the LODR Regulations.
Aditya Birla Health Insurance Co Ltd (ABHICL), a company under Aditya Birla Capital Ltd (ABCL), has formed a bancassurance alliance with UCO Bank for distributing its health insurance products.
UCO Bank's extensive network of 3,164 branches and a customer base of over 40 million throughout India will allow ABHICL to reach a broader market. The Aditya Birla Group and MMI Holdings of South Africa own ABHICL through a joint venture.
Important :
(i) ABHICL's range of health insurance products, which includes incentivized wellness benefits of up to 100% Health Returns and chronic management programs, Day-1 coverage for common conditions such as asthma, high blood pressure, high cholesterol, diabetes, wellness coaching on nutrition and fitness, and counselling on mental health, will now be available to UCO Bank's customers and employees through this partnership.
(ii) ABHICL's bancassurance network has expanded with the inclusion of UCO Bank as its 17th partner, providing access to over 80,000 direct selling agents spread across India.
3. Godrej Capital & SBI signs MoU to offer Banking Products & Services
Godrej Capital Limited, the financial services division of the Godrej Group, and State Bank of India (SBI) have inked a Memorandum of Understanding (MoU) to enhance their collaboration. As per the MoU, the bank will offer various financial products and services to Godrej Capital.
The alliance aims to increase the accessibility and affordability of financial products, thereby promoting financial inclusion. The partnership will also enable SBI to capitalize on synergies to empower its customers and accelerate the growth of its economy.
Through the collaboration, SBI will offer banking products, credit cards, wealth management, and insurance products as preferred partners, while also delivering financial solutions to the Godrej group.
4. Axis Bank partners with Shriram Housing Finance for Co-Lending
Axis Bank and Shriram Housing Finance Limited (SHFL) announced a collaboration on March 30, 2023, under the co-lending model using the Yubi Co.Lend platform.
The partnership will allow both lenders to offer secured home loans and MSME loans to borrowers in the middle and low-income groups located in rural and semi-urban areas.
The co-lending will be facilitated by Yubi's technological platform, which will streamline the loan processing as per the co-lending guidelines.
5. IRDAI Releases Liberalised Commission Regulations Benefitting Insurers & Distributors
The Insurance Regulatory and Development Authority of India (IRDAI) recently introduced three new regulations that are expected to significantly impact market participants, including insurers and intermediaries.
The new rules are as follows :
(i) IRDAI (Expenses of Management of Insurers transacting General or Health Insurance business) Regulations, 2023
(ii) Insurance Regulatory and Development Authority of India (Payment of Commission) Regulations, 2023
(iii) IRDAI (Expenses of Management of Insurers transacting life insurance business) Regulations, 2023
The previous practice of "product-wise capping" of commission payable to intermediaries has been replaced by IRDAI's overall 'expenses of management' (EOM) limits, which must be adhered to by insurers. These changes are expected to have significant economic implications for all parties involved.
* The Regulations for Expenses of Management of Insurers transacting General or Health Insurance Business, 2023, as issued by IRDAI
Aim : The purpose of these regulations is to grant insurers flexibility in managing their expenses within the overall limits set based on their gross written premium and to efficiently use their resources to enhance policyholder benefits. These regulations will come into effect on April 1, 2023, and will remain in effect for three years. They will apply to insurers operating in either the general insurance or health insurance sectors.
Important :
Under this regulation -
(i) Standalone health insurers can incur expenses of management (EOM) up to 35% of the gross written premium during a financial year in India, while general insurers can incur EOM up to 30% of the gross written premium in India during a financial year.
(ii) The new regime has eliminated the previous method of calculating allowed limits based on segmented products and replaced it with a single limit based on the total gross written premium of general and health insurers.
(iii) These regulations impose more restrictions on management expenses, encouraging insurers to concentrate on increasing insurance penetration.
** Insurance Regulatory and Development Authority of India (Payment of Commission) Regulations, 2023
Aim : The aim of these regulations is to grant insurers the flexibility to manage their expenses according to their growth objectives and changing insurance requirements, with the aim of increasing insurance penetration. These regulations will come into effect on April 1, 2023. They must be reviewed every three years from the date of notification, unless an earlier review, repeal, or amendment is deemed necessary.
Important :
The IRDAI has introduced new regulations to provide insurers with greater flexibility in managing their expenses, which include an overall cap on commission payments to agents, brokers, and other intermediaries for both life and non-life insurance companies.
The previous product-specific cap has been replaced by a board-approved cap that falls within the permissible expenses. Under the earlier regime, insurers were allowed to pay up to 22.5% of the total premium on two-wheelers and 19.5% of the total premium on other vehicles, such as cars and SUVs.
*** IRDAI (Expenses of Management of Insurers transacting life insurance business) Regulations, 2023
The purpose of these regulations is to allow insurers operating life insurance business in India to manage their expenses effectively within the overall limits based on their gross written premium, while also optimizing their resources to benefit policyholders.
These regulations will become effective on April 1, 2023, and will remain in force for three years.
6. IRDAI Identified LIC, GIC & New India Assurance as D-SIIs for FY23
The Insurance Regulatory and Development Authority of India (IRDAI) has once again identified Life Insurance Corporation of India (LIC), General Insurance Corporation of India Limited (GIC Re), and New India Assurance as Domestic Systemically Important Insurers (D-SIIs) for the Financial year 2022-23. This annual identification and public disclosure of D-SIIs by IRDAI align with the Reserve Bank of India's benchmarking to consider these insurers 'too big (or too important) to fail.'
LIC, GIC, and New India Assurance have been identified as D-SIIs for the second consecutive year, as they were also identified as D-SIIs in the Financial year 2020-21.
D-SIIs :
(i) D-SIIs are insurers that are of significant size, importance in the market, and have domestic and global connections. The failure or distress of these insurers could have a major impact on the domestic financial system.
(ii) As a result, the continuous operation of D-SIIs is crucial to ensure uninterrupted access to insurance services for the national economy.
(iii) In the event of a future crisis, D-SIIs may receive some form of government support.
(iv) D-SIIs are also subject to additional regulatory measures to address systemic risks and moral hazard issues.
(v) Accordingly, they are subject to enhanced regulatory supervision.
7. BharatPe Group Partners with WEP to foster Women Entrepreneurship in India
Bharatpe Group, a prominent fintech company in India, has collaborated with the Women Entrepreneurship Platform (WEP) to assist women entrepreneurs throughout India in their efforts to achieve self-sufficiency and business expansion.
The partnership, which is part of the "BharatPe Cares" Corporate Social Responsibility (CSR) program by the BharatPe Group, is aligned with the company's brand mission of "empowering lives through inclusive fintech solutions."
This initiative is a part of BharatPe's CSR program called PAYBACK.
(i) According to the 6th economic census by the Ministry of Statistics and Programme Implementation(MoSPI), women account for only 13.76% of the total entrepreneurs (8.05 million out of the total 58.5 million entrepreneurs) in India.
(ii) This highlights the need to empower women entrepreneurs in India.
Aim : The objective is to create a supportive environment that brings together women entrepreneurs from all over India and provides them with the necessary expertise and financial and technical skills needed to attain their business objectives.
Focus areas : To facilitate the development of an aggregator platform that gives access to peer support, mentorship, networking channels and a range of learning resources.
Important :
(i) The partnership between WEP and BharatPe aims to empower women entrepreneurs and create a level playing field by addressing the challenges they face and providing equal growth opportunities.
(ii) The partnership will also develop a plug-and-play digital infrastructure to bridge existing gaps and support the growth of women entrepreneurs.
Industry reports show that women entrepreneurs in India have the potential to create 150-170 million jobs by 2030, which is more than 25% of the new jobs required for the working-age population.
Promoting women’s entrepreneurship is critical for building a USD 5 trillion economy and will boost the economy through job creation.
8. RBI appoints Neeraj Nigam as New Executive Director
Neeraj Nigam has been appointed as the new Executive Director (ED) of the Reserve Bank of India (RBI) effective from April 3, 2023. He will be responsible for four departments, including consumer education and protection.
Prior to his appointment as ED, Neeraj Nigam served as the director of the Bhopal (Madhya Pradesh) regional office of the RBI. With over 30 years of experience, he has worked in various areas including Regulation and Supervision, human resource management, premises, currency management, and bank accounts in both the central office and regional offices of the RBI.
Additionally, Neeraj Nigam holds the professional certification of Certified Associate of Indian Institute of Banking and Finance (CAIIB).
9. UBI becomes 1st Indian Bank to open SRVA Malaysia for Trade Settlement in rupee
Union Bank of India (UBI) achieved a milestone on April 1, 2023, by becoming the first Indian bank to initiate its 'Special Rupee Vostro Account (SRVA)' in Malaysia to ease transactions between the two countries in Indian rupee. The UBI's corresponding bank in Kuala Lumpur, India International Bank of Malaysia (IIBM), will facilitate the transactions, allowing traders from India and Malaysia to invoice the trade in Indian Rupee.
The Union Bank of India's move to open a 'Special Rupee Vostro Account (SRVA)' in Malaysia through its corresponding bank, India International Bank of Malaysia (IIBM), is a part of India's efforts to safeguard its trade from the impact of the Ukraine crisis. Moreover, it is a step towards reducing the reliance on the US dollar as the dominant reserve currency for international trade.
Objective :
The primary objective of the initiative is to promote global trade and cater to the interests of the global trading community by enabling them to transact in Indian Rupee. On April 1, 2023, the Ministry of External Affairs (MEA) announced that India and Malaysia have been permitted to use the Indian Rupee to settle trade transactions, alongside other currencies such as the Malaysian Ringgit.
This decision comes after the Reserve Bank of India (RBI) allowed the settlement of international trade in Indian Rupee in July 2022. The RBI's move is intended to facilitate trade growth and support the global trading community's interests in Indian Rupee.
Important :
(i) According to UBI, the total trade volume between India and Malaysia in FY22 stood at US$19.4 billion.
(ii) As of March 15, 2023, Indian banks, such as HDFC Bank and UCO Bank, had opened 30 Special Rupee Vostro Accounts (SRVAs) in 18 countries. The first foreign lenders to receive approval were Sberbank and VTB, the largest and second-largest banks in Russia, respectively.
(iii) Malaysia is India's third-largest trading partner in the ASEAN region after Singapore and Indonesia, with bilateral trade worth US$30.1 billion and US$26.1 billion, respectively.
About SRVA :
According to RBI’s decision to permit the settlement of India’s international trade in Indian rupees, the
authorized banks in India must establish and maintain Special Rupee Vostro accounts for the foreign banks with which they trade.These accounts hold the foreign bank’s funds in rupees. When an Indian trader needs to make a payment to a foreign trader in rupees, the amount is transferred to the corresponding Vostro account, and vice versa.
The RBI granted permission for banks from 18 countries, including Malaysia, to open Special Rupee Vostro Accounts (SRVAs) for this purpose.
10. LIC bought Bata India shares for Rs 108 crore; increased its stake to 5.008%
Life Insurance Corporation of India, based in Mumbai, has acquired 6.88 lakh shares of Bata India Limited, a retail company specializing in footwear, for approximately Rs 108 crore.
This has increased LIC's stake in the company from 4.472% to 5.008%, equivalent to 57,48,071 to 64,36,692 equity shares. The purchase was made through open market purchase between January 3, 2022, and March 29, 2023, at an average price of Rs 1569.33 per share.
11. SBI WeCare Senior Citizen FD scheme Last Date Extended by 3 Months
The State Bank of India (SBI) has announced the extension of its "WECARE" special fixed deposit (FD) scheme for senior citizens. The scheme was initially launched in May 2020 with a maturity date of September 2020, and has since been extended twice.
The latest extension of the scheme is for an additional three months, making it available for subscription until June 30, 2023. The scheme is aimed at protecting the income of senior citizens by offering additional interest on term deposits.
12. PhonePe Introduces E-commerce Consumer App “Pincode” on the ONDC Platform
PhonePe, a fintech company owned by Walmart, has announced the launch of a new e-commerce consumer app called "Pincode." The app will be integrated into India's Open Network for Digital Commerce (ONDC) framework and initially launched in Bengaluru (Karnataka) with six major categories including groceries, food, pharmaceuticals, electronics, home decor, and fashion. It will be made available in other cities once it achieves a transaction volume of about 10,000 per day. Walmart is a US-based retail company.
Pincode is PhonePe's second consumer app in approximately seven years.
About ‘Pincode’ :
' Pincode ' is a hyperlocal commerce app available on Google Play and the App Store. The app is centered on the Open Network for Digital Commerce (ONDC) framework, which aims to digitize merchants across multiple seller platforms and foster new opportunities for growth and innovation at scale.
The app will connect consumers with neighborhood stores, providing the convenience of online ordering, discounts, and instant refunds and returns. It focuses on encouraging local merchants and sellers to offer both national and locally manufactured goods.
Note :
It is important to note that PhonePe has been exploring online commerce for some time. In fact, as of August 2022, the company had set aside up to USD 15 million for its entry into the ONDC network. The funds are expected to be deployed over an 18-month period. PhonePe is already competing in the e-commerce industry with its 'Switch' service, which offers similar services to its main rival, Paytm .
13. Pranav Haridasan to be new MD & CEO of Axis Securities
Axis Securities Limited, a subsidiary of Axis Bank, has announced the appointment of Pranav Haridasan as the new Managing Director (MD) and Chief Executive Officer (CEO) for a term of three years. He will take over from the current MD & CEO, B Gopkumar, who will move to Axis Asset Management Company as MD & CEO under the internal succession plan of the Axis Group. Pranav Haridasan was previously the MD and Co-Head of Equities at Axis Capital.
About Pranav Haridasan :
Pranav Haridasan has over 20 years of experience in financial markets across different asset classes. Prior to joining Axis Capital, he worked at Citigroup Global Markets as Director & Head of India/ASEAN Execution Services. He has a track record of upscaling an equity company while focusing on technology, compliance, and operations.
14. IDBI Bank & YES Bank Offers E-Bank Guarantee Service in Collaboration with NeSL
IDBI Bank, in partnership with National e-Governance Services Ltd. (NeSL), has developed an innovative e-Bank Guarantee (e-BG) service that replaces the traditional paper-based Bank Guarantee (BG) issuance process with e-stamping and e-signature.
In a significant milestone, YES Bank has successfully issued its first electronic Bank Guarantee (e-BG) in collaboration with NeSL, an Information Utility (IU) designated by the Insolvency and Bankruptcy Board of India (IBBI). This marks a significant step towards digitization and streamlining of the bank guarantee issuance process, making it more efficient and convenient for businesses and stakeholders involved.
Key notes :
(i) The existing paper-based process for issuing and managing Bank Guarantees (BGs) has been fully digitized through API integration with NeSL's DDE platform, streamlining the BG issuance and maintenance process.
(ii) YES Bank's integration with NeSL is in line with its collaborations with various government-run digital services, such as Central Bank Digital Currencies (CBDC), Open Network for Digital Commerce (ONDC), Account Aggregator (AA), and Government e-Marketplaces (GEM), showcasing its commitment to leveraging digital technologies for enhanced efficiency and convenience in banking services.
What is " e-Bank Guarantee (e-BG) " ?
(i) An e-Bank Guarantee (e-BG) eliminates the need for physical documentation in BG issuance.
(ii) The digital steps in an e-BG include application, preview, confirmation, e-stamping, e-signing, hosting on NeSL's portal, and beneficiary notification.
(iii) NeSL's Digital Document Execution (DDE) platform provides e-Stamp and e-Sign functions, reducing BG issuance time from days to minutes.
(iv) Registration for e-BG users is simple and one-time on NeSL's portal, with API integration available for bulk e-BG users' ERP systems.
(v) NeSL's 24x7 platform offers instantly available e-BGs, accessible to beneficiaries after a quick one-time registration process.
16. RBI Data: Bank credit growth Increased by 15% in FY23, Highest since FY12
As per the data from the Reserve Bank of India (RBI), India's bank credit recorded a year-on-year (YoY) growth of 15% in the financial year 2022-23 (FY23), compared to 9.6% YoY growth in 2021-22 (FY22).
The credit growth in FY23 is the highest since FY12, when it was recorded at 19.3%.
Important :
(i) Bank deposits witnessed a YoY growth of 9.58% in FY23, compared to 8.9% YoY growth in FY22.
(ii) In FY23, the mobilization of bank deposits lagged behind credit disbursements, with Rs 15.78 trillion raised through deposits, as opposed to Rs 13.51 trillion raised in FY22. Meanwhile, credit in absolute terms rose to Rs 17.83 trillion in FY23, up from Rs 10.43 trillion in FY22.
(iii) According to data from the RBI's Scheduled Bank's Statement of Position in India, outstanding credit stood at Rs 136.75 trillion at the end of the last fortnight of FY23 (on March 24, 2023), compared to Rs 118.91 trillion in FY22 (on March 25, 2022). Outstanding deposits stood at Rs 180.43 trillion in FY23, as against Rs 164.6 trillion in FY22.
(iv) The interest rate on one-year term deposits ranged from 5-5.6% around the end of March 2022 and increased to 6-7.25% by the end of March 2023.
(v) The savings deposit rate remained in the range of 2.7-3% in March 2022 and March 2023, according to the data.
17. First Bi-Monthly Monetary Policy of FY24 (Highlights)
The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI), comprising six members, convened for its meeting on April 3rd, 5th, and 6th, 2023, and issued its initial bi-monthly monetary policy statement for FY24 (Financial Year 2023-2024).
Policy Rates :
(i) The MPC has decided to keep the policy rates unchanged with the stance remain focused on the withdrawal of accommodation.
(ii) The Unchanged Policy rates are as follows :
Members :
The meeting of the Monetary Policy Committee (MPC) was presided over by RBI Governor Shaktikanta Das, and the committee comprised of five other members, namely Shashanka Bhide, Ashima Goyal, Prof. Jayanth R. Varma, Michael Debabrata Patra, and Dr. Rajiv Ranjan.
(A) MPC’s Assessments on growth and inflation :
Growth :
India's real gross domestic product (GDP) growth for FY24 is projected to be 6.5 percent, with 7.8 percent in Q1, 6.2 percent in Q2, 6.1 percent in Q3, and 5.9 percent in Q4.
As per the second advance estimate (SAE) released by the National Statistical Office (NSO) on February 28, 2023, India's real GDP growth for FY23 was placed at 7.0 percent.
Inflation :
(i) Consudline inflation increased from 5.7 percent in December 2022 to 6.4 percent in February 2023, primarily due to higher inflation in cereals, milk, and fruits, as well as slower deflation in vegetable prices.
(iii) Core inflation (i.e., CPI excluding food and fuel) remained above 6 percent in January-February 2023.
Note : The Union Government has maintained unchanged policy rates to achieve the medium-term target for CPI inflation of 4 percent within a band of +/- 2 percent, while supporting growth.
(B) Developmental and Regulatory Policies :
Improving Efficiency with the PRAVAAH Portal -
The Reserve Bank of India (RBI) has made the decision to develop a secure web-based centralized portal called 'PRAVAAH' (Platform for Regulatory Application, Validation And AutHorisation) with the aim of enhancing efficiency.
(i) Current Situation :
Various entities are mandated to obtain licenses/authorizations from the RBI to conduct regulated activities, and regulated entities are also required to seek periodic approvals under different statutes/regulations.
Presently, the application and approval processes for these requirements occur through a mix of online and offline modes, resulting in a lack of uniformity.
(ii) Advantages of the PRAVAAH Portal :
To address the challenges of the current process, RBI has developed the PRAVAAH portal. The portal is designed to streamline regulatory processes and enhance the ease of doing business for entities regulated by RBI.
Through the PRAVAAH portal, time limits for decision-making on applications/approvals will be displayed, ensuring transparency and efficiency in the regulatory process.
(iii) The FY24 Union Budget has also highlighted the need to simplify, streamline, and reduce the cost of compliance for financial sector regulators. Time limits will be established to ensure timely decision-making on applications under various regulations, with the goal of enhancing efficiency and reducing regulatory burden.
(iv) RBI has announced its plans to further expand the PRAVAAH portal to encompass all types of applications submitted to the bank across various functions. This extension aims to streamline and centralize the application and approval processes, bringing greater efficiency and ease of use to regulated entities.
(C) Onshore Non-deliverable Derivatives Market :
(i) RBI had earlier granted permission to Banks operating IFSC Banking Units (IBUs) in India to engage in transactions involving INR Non-deliverable derivative contracts (NDCCs) with non-residents and with each other, starting from June 1, 2020.
(ii) In a move to further develop the onshore INR-NDDC market and offer residents greater flexibility in designing their hedging programs, RBI has now allowed banks with IBUs to extend INR NDCCs to resident users in the onshore market.
(D) Centralised Web portal to Search Unclaimed Deposits :
(i) Current Practice :
Currently, deposits that remain unclaimed for 10 years in a bank are transferred to the 'Depositor Education and Awareness' (DEA) Fund, which is maintained by RBI. RBI aims to prevent newer deposits from becoming unclaimed and ensure that existing unclaimed deposits are returned to their rightful owners or beneficiaries. Banks display the list of unclaimed deposits on their websites to facilitate the return of such deposits.
(ii) Development of Web Portal :
To enhance access for depositors/beneficiaries, RBI has decided to develop a centralized web portal for the public. This portal will allow users to search across multiple banks for possible unclaimed deposits based on their inputs. The search results will be improved by utilizing certain AI (Artificial Intelligence) tools. The objective is to streamline the process of returning unclaimed deposits to the rightful owners or beneficiaries and make it more user-friendly through the use of technology.
(E) Pre-Sanctioned Credit Lines at Banks through UPI :
(i) Current Scenario :
Currently, Unified Payments Interface (UPI) transactions are enabled between deposit accounts at banks, sometimes intermediated by pre-paid instruments including wallets.
(ii) Proposed Enhancement :
RBI has proposed enabling transfers to/from pre-sanctioned credit lines at banks through UPI. This means that the UPI network will facilitate payments financed by credit from banks. This enhancement will reduce the time and effort required to obtain loans, as users will be able to access pre-sanctioned credit lines through UPI, making the process more seamless and convenient.
Note : UPI handles 75% of the retail digital payments volume in India, highlighting its widespread usage and significance in the digital payments ecosystem.
(F) RBI to Issue New 5-Year Govt Bonds to Raise Rs 8000 Cr :
(i) RBI to auction new 5-year government bonds, maturing in 2028, raising approx. Rs 8,000 crore in the first FY24 bond auction on April 06, 2023.
(ii) GoI plans to raise up to Rs 33,000 crore through auction of 3 securities maturing in 2028, 2033, and 2052, with an option to retain additional subscriptions up to Rs 2,000 crore for each security.
(G) Additional Domestic Economy Information :
(i) Rabi foodgrain production expected to increase by 6.2% in FY3.
(ii) In FY23, money supply (M3) expanded by 9.0% and non-food bank credit increased by 15.4%.
(iii) India's foreign exchange reserves as of March 31, 2023, were US$ 578.4 billion.
(iv) CAD : Current account deficit (CAD) for Q1-Q3 of FY23 was 2.7% of GDP. In Q3 FY23, CAD narrowed significantly to 2.2% from 3.7% in Q2 FY23. RBI Governor expects CAD to remain moderate in Q4 FY23 and FY24 at a viable and manageable level.
(v) Inward gross remittances reached an all-time high of US$ 107.5 billion in calendar year 2022.
18. South Indian Bank signs bancassurance pact with Chola MS
(i) South Indian Bank Limited (SIB) has signed a bancassurance pact with Cholamandalam MS General Insurance (Chola MS).
(ii) The agreement aims to offer health and general insurance products of Chola MS to SIB's customers.
This partnership will provide SIB customers with access to a wide range of insurance products offered by Chola MS.
(iii) It will also enable Chola MS to offer insurance products specifically designed for SME customers and innovative insurance covers for retail customers of SIB.
(iv) The key product offerings under this partnership include personal accident coverage, home and property insurance, farmer care, EMI insurance, home package, and retail health.
19. IIFL Finance secures $100mn funding from EDC, Deutsche Bank
IIFL Finance Limited has secured long-term funding of $100 million from Export Development Canada (EDC) and Deutsche Bank, with each contributing $50 million.
In this deal, Deutsche Bank played the role of mandated lead arranger, book runner, and co-financier.
IIFL Finance Limited is a non-banking financial company (NBFC) that is supported by Fairfax.
Important :
(i) IIFL Finance Limited has previously received $100 million in funding from EDC in 2019, making this the second loan from EDC.
(ii) In February 2020, IIFL Finance raised $400 million through its debut dollar bond issue, with the maximum approved amount by the Reserve Bank of India being bought back. The remaining amount is scheduled to mature in April 2023.
(iii) The fresh funding obtained at a competitive rate is expected to result in significant savings in borrowing costs compared to the previous fundraise.
(iv) These long-term funds will support IIFL in further strengthening its asset-liability management position and sustaining growth across its core businesses.
20. SEBI Issues Guidelines for Usage of Brand or Trade Name by Investment Advisers & Research Analysts
The Securities and Exchange Board of India (SEBI), the capital markets regulator, has issued a circular regarding the use of brand names or trade names by Investment Advisers (IAs) and Research Analysts (RAs), following its previous publication of guidelines for advertisements by these entities.
The provisions of the circular will be effective from May 1, 2023.
SEBI has issued this circular under the authority granted by Section 11(1) of the Securities and Exchange Board of India Act, 1992, with the aim to safeguard the interests of investors in the securities market and promote the growth and regulation of the securities market.
Important :
(i) SEBI has found that some IAs and RAs have been using their brand name/trade name/logo more prominently than their registered name with SEBI in their advertisements, websites, publications, and other documents, which may mislead investors.
(ii) SEBI has issued recommendations to maintain transparency, requiring the display of the registered name, logo, registration number, and complete address of the IA/RA on various platforms.
(iii) SEBI has also mandated the inclusion of a disclaimer stating that registration with SEBI, membership in BSE Administration & Supervision Ltd. (BASL) [in the case of IAs], and certification from NISM do not guarantee performance or provide assurance of returns to investors.
(iv) SEBI has prohibited the use of its logo by IAs and RAs.
(v) SEBI has released new rules on the advertisement code for IAs and RAs to enforce compliance with the advertisement code.
(vi) The provisions of this circular will be effective from May 1, 2023, and are outlined in the Securities and Exchange Board of India (Investment Advisers) Regulations, 2013, and Securities and Exchange Board of India (Research Analysts) Regulations, 2014.
(vii) SEBI issued this circular under the authority granted by Section 11(1) of the Securities and Exchange Board of India Act, 1992, with the aim to safeguard the interests of investors in the securities market and foster the growth and regulation of the securities market.
(viii) SEBI has directed all registered IAs and RAs to ensure compliance with its decision on the advertisement code, which encompasses forms of communication, disclosures in advertisements, prohibitions in advertisements, and other obligations.
(ix) The code applies to various forms of communication, such as pamphlets, circulars, brochures, research reports, written content for publications, and displays in newspapers, magazines, signboards, mail, text messages, messaging apps, and other mediums that can influence investment choices.
(x) Communication channels may also include social media platforms, radio, telephone, television, tape recording, or any other type of internet communication.
(xi) Furthermore, IAs and RAs are required to provide information in their advertisements about their registered office addresses, membership status, registration number, logo, brand name, and other relevant details as mandated by SEBI.
21. Razorpay partners with UIDAI to process payments for online Aadhaar services
Razorpay (Razorpay Software Private Limited) has joined forces with UIDAI (Unique Identification Authority of India) to facilitate payments for online Aadhaar services, offering citizens a seamless and secure payment experience.
UIDAI allows Aadhaar holders to update their Aadhaar data, such as names and addresses, online for a fee of Rs.50. With over 80,000 such transactions processed daily on the UIDAI website, a robust payment solution was required to ensure high success rates for such a large volume of transactions.
Razorpay will eventually support over 70% of the total daily transactions on the UIDAI portal, providing a reliable payment gateway for online Aadhaar services.
22. CCI Approves Acquisition of SREI Infrastructure Finance by NARCL & IDRCL
On April 6, 2023, the Competition Commission of India (CCI) approved the acquisition of shares and control over SREI Infrastructure Finance Limited by National Asset Reconstruction Company Limited (NARCL) and India Debt Resolution Company Limited (IDRCL) under Section 5(a) of the Competition Act, 2022.
The acquirers are NARCL and IDRCL, while the target is SREI Infrastructure Finance Limited. The proposed transaction involves the acquisition of a majority of the equity share capital of the target as per the resolution plan submitted by NARCL in relation to the corporate insolvency resolution process of the target and its wholly-owned subsidiary, SREI Equipment Finance Limited (SIFL), initiated under the Insolvency and Bankruptcy Code, 2016.
It's important to note that NARCL's resolution plan was approved by the Committee of Creditors of SREI Infrastructure Finance on February 14, 2023.
Green Channel notification :
The Proposed Transaction, which involves horizontal overlaps or vertical or complimentary linkages between the activities of the target and acquirers, is being notified under the Green Channel route as per Regulation 5A(1) read with Schedule III of the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 (as amended).
NARCL :
NARCL, incorporated under the Companies Act 2013, is a "bad bank" established with the mandate to take over stressed assets of banks and assist them in cleaning up their balance sheets. NARCL focuses on legacy stressed assets with an exposure of Rs 500 crore and above in the Indian banking system.
IDRCL :
IDRCL's main objective is to offer debt management services, including the resolution of stressed assets, to NARCL.
Note : IDRCL advises NARCL on the acquisition of stressed financial assets or companies and assists NARCL for the optimal resolution of the acquired assets or companies.
23. RBI simplifies the application process for registration of CICs
On April 10, 2023, the Reserve Bank of India (RBI) conducted a comprehensive review of the system for processing applications for registration of Core Investment Companies (CICs) with the aim of making the process smoother and more user-friendly.
The application form has been redesigned to be structured and aligned with the existing CIC regulations. As part of the efforts to streamline the registration process, the number of documents required to be submitted along with the application form has been reduced from 52 to 18.
24. SEBI Approves Setting Up Rs. 3,000-Crore Rescue Facility for Debt Mutual Funds
(i) The Securities and Exchange Board of India (SEBI) has decided to establish the Corporate Debt Market Development Fund (CDMDF) as an Alternative Investment Fund (AIF) with an initial corpus of Rs 3,000 crore to act as a backdrop facility for the purchase of investment-grade corporate debt securities during times of stress.
This decision was made at the SEBI board meeting in March 2023, with the aim of increasing secondary market liquidity and encouraging optimism in the corporate bond market.
(ii) The Government of India (GoI) has permitted a 10 times utilization of this corpus, bringing the total available capital to Rs. 30,000 crore, and this new corpus is further guaranteed by the Central Credit Guarantee Corporation.
The CDMDF is an initiative aimed at assisting mutual funds (MFs) in navigating liquidity issues in the debt market during large credit emergencies or market disruptions.
(iii) The fund, structured as an AIF, will be backed by the National Credit Guarantee Trustee Company (NCGTC) and will be able to generate funds for the purchase of corporate debt securities during market downturns. The initial funding of Rs 3,000 crore will be contributed by asset management companies (AMCs), with Rs 2,700 crore coming from MF debt schemes and the remainder borrowed from the market as needed.
SBI Mutual Fund (SBI MF), India's largest manager of assets, will be the primary stakeholder of the proposed AIF, and the contributions of AMCs to the corpus will be proportional to their total debt assets.
(iv) Access to the fund for selling securities during market disruptions will be restricted to specific mutual fund schemes in proportion to their contribution. SEBI has also approved the framework for asset purchases made by CDMDF during market downturns and has clarified the roles and responsibilities of Trustees and Boards of AMCs of MFs, with an emphasis on unitholder protection under SEBI regulations.
The regulations have mandated that the Board of the AMC be responsible for safeguarding the interests of unitholders in addition to those of AMC stakeholders. It has also permitted "self-sponsored AMCs" to continue in the mutual fund sector, subject to certain conditions.
25. RBI Issued Outsourcing of IT Services Directions 2023; Simplifies Application process for registration of CICs
The Reserve Bank of India (RBI) has issued the "RBI (Outsourcing of Information Technology Services) Directions, 2023" on April 10, 2023. These directions are aimed at regulating the outsourcing of IT services by banks, NBFCs (Non-bank financial companies), and Regulated Entities (REs) to ensure that customer responsibilities and obligations are not compromised. The Directions will come into effect from October 1, 2023, providing REs with sufficient time to comply with the requirements.
As Regulated Entities (REs) extensively rely on IT and IT-enabled Services (ITeS) to support their business models and offerings to customers, they often outsource a significant portion of their IT activities to third parties, which exposes them to various risks.
To effectively manage these risks, the Reserve Bank of India (RBI) proposed regulatory guidelines on Outsourcing of IT Services in the Statement on Developmental and Regulatory Policies dated February 10, 2022. Subsequently, a draft Master Direction on Outsourcing of IT Services was released for public comments in June 2022. Taking into consideration the feedback received, the final RBI (Outsourcing of Information Technology Services) Directions, 2023 have now been released.
(a) Regulatory and Supervisory Requirements for REs :
(i) Outsourcing of any activity should not diminish RE's obligations, including those of its Board and Senior Management, as per RBI directions.
(ii) RE should ensure that the service provider maintains the same high standard of care as would have been employed by RE if the activity was not outsourced.
(iii) Engagement of IT service provider should not compromise or weaken the reputation of RE, as per RBI guidelines.
(iv) Outsourcing should not impede RE's ability to oversee and manage its activities effectively, whether the service provider is located in India or abroad.
(v) Outsourcing should not impede RBI in carrying out its supervisory functions and objectives.
(vi) Additional requirements related to usage of cloud computing services and outsourcing of Security Operations Center (SOC) services are outlined by RBI.
(b) Comprehensive Assessment :
REs should evaluate the need for IT Services outsourcing based on a comprehensive assessment of attendant benefits, risks, and availability of processes to manage those risks.
(c) Compliance with Statutory and Regulatory Requirements :
REs should consider all relevant laws, regulations, rules, guidelines, and conditions of approval, licensing, or registration when performing due diligence in relation to IT services outsourcing.
(d) IT Outsourcing Policy :
REs intending to outsource IT activities should establish a comprehensive Board-approved IT outsourcing policy.
REs should require their service providers to develop and establish a framework for documenting, maintaining, and testing business continuity plans and disaster recovery plans.
26. Kotak General Insurance ties up with actyv.ai to sell Insurance Products to MSMEs
Kotak Mahindra General Insurance Company Limited (Kotak General Insurance-KGI) has teamed up with actyv.ai to provide basic insurance products to new-age Micro, Small, and Medium Enterprises (MSMEs).
Important :
Kotak General Insurance (KGI) has joined forces with actyv.ai, leveraging its Artificial Intelligence (AI)-powered platform, to provide customized small Over The Counter (OTC) insurance products, including health and commercial policies.
This collaboration aims to promote the sustainability of small businesses by extending essential insurance coverage to the final leg of the industrial value chain. Furthermore, enterprises utilizing actyv.ai's platform will now have the opportunity to offer group insurance to their distributors, retailers, and suppliers through this partnership with Kotak General Insurance.
27. ICICI Bank introduces EMI facility for UPI payments by scanning QR code
(i) ICICI Bank has introduced an easy EMI (Equated Monthly Installment) facility for UPI (Unified Payments Interface) payments made by scanning QR code.
(ii) Customers eligible for PayLater, the Bank's 'buy now, pay later' service, can avail of the EMI facility in an instant, easy, and seamless manner.
(iii) This first-of-its-kind facility enhances the affordability of lakhs of the Bank's customers as they can now instantly buy products or services by scanning the required merchant QR code at a store and making payments in EMIs.
(iv) Customers can pay a transaction amount above ₹10,000 in easy instalments of 3, 6, or 9 months.
(v) ICICI Bank was the first bank to introduce the PayLater facility in 2018 to enable customers to buy small ticket items immediately in a completely digital and paperless manner.
(vi) The PayLater facility enables customers to shop online, pay bills, and make payments to any merchant UPI ID at physical stores instantly.
28. HDFC Bank has inked a deal with KEXIM for a credit line worth USD 300 million, while HDFC Mutual Fund has introduced new schemes catering to the large, mid, and small-cap segments
HDFC Bank and Export Import Bank of Korea (KEXIM) recently executed a 'Master Inter Bank Credit Agreement' on April 12, 2023, for a credit line of USD 300 million. The agreement was formally signed by representatives from both banks at GIFT (Gujarat International Finance Tec) City in Gandhinagar, Gujarat.
The purpose of this credit facility is to support the funding requirements of companies that have equity participation from Korean companies, companies with business relationships with Korean companies, and consumers seeking to purchase cars manufactured by Korea-related companies.
Important Points :
(i) The agreement will enable HDFC Bank to expand its business with Korean companies and products, potentially leading to increased growth in their operations.
(ii) This deal could facilitate trade and investment between India and Korea, which may result in the creation of more jobs in India.
(iii) Korea Eximbank, as a Korean government export credit agency, provides loans and credit to support Korean companies engaged in international business activities.
29. Canara Bank and Bharat BillPay have joined forces to enable cross-border bill payments for the Indian diaspora residing in Oman
Canara Bank, in collaboration with NPCI Bharat BillPay Ltd (NBBL) and Musandam Exchange, Oman, has introduced cross-border inward bill payment services for Indians residing in Oman.
NPCI stands for National Payments Corporation of India, and NBBL is a wholly owned subsidiary of NPCI, responsible for facilitating bill payments in India.
Important points :
(i) This initiative will enable Non-Resident Indians (NRIs) to utilize the platform provided by the Bharat Bill Payment System (BBPS) to make bill payments on behalf of their families through Musandam Exchange in Oman.
(ii) Canara Bank becomes the first public sector bank (PSB) in India to offer inbound cross-border bill payment services through BBPS, with the introduction of this feature.
(iii) Musandam Exchange, managed by Canara Bank, becomes the first exchange house in Oman to go live with cross-border inbound bill payments.
(iv) The cross-border bill payment service is already operational in Kuwait, facilitating inbound remittances for various bill categories such as electricity, water, mobile phone, gas, credit card bills, and more.
30. HDFC Mutual Fund launches schemes for Large, Mid & Small-Cap Segments
HDFC Asset Management Co. Ltd., the investment manager of HDFC Mutual Fund (HDFC MF), has introduced three new schemes, namely HDFC S&P BSE 500 Index Fund, HDFC NIFTY Midcap 150 Index Fund, and HDFC NIFTY Smallcap 250 Index Fund. These schemes offer investors the opportunity to diversify their portfolio across large, mid, and small-cap segments.
The subscription for these schemes opened to the public on April 6, 2023, and will close on April 18, 2023. These schemes are open-ended and replicate/track the performance of S&P BSE 500, NIFTY Midcap 150 Index, and NIFTY Smallcap 250 Index, respectively.
Important Points :
(i) These investment schemes are suitable for investors with a low risk tolerance who wish to broaden their portfolio.
(ii) The schemes do not involve any 'entry load' or 'exit load', meaning that investors do not need to pay any additional charges to invest in or exit from the schemes.
31. On its 35th Foundation Day, SEBI reveals a new logo featuring a modern design
(i) On April 12, 2023, the Securities and Exchange Board of India (SEBI) unveiled a new logo as part of its 35th Foundation Day celebrations. The logo was formally unveiled by Madhabi Puri Buch, Chairperson of SEBI, at the SEBI Head Office in Mumbai, Maharashtra. The event was attended by former Chairpersons and former & present Whole Time Members of SEBI.
(ii) The new logo features a modern design while retaining the traditional blue palette. It represents a unique combination of SEBI's rich traditions and its new data and technology-based approach in its three areas of mandate in the securities market: development, regulation of the securities market, and investor protection.
(iii) The new logo reflects SEBI's commitment to being a facilitator in the growth of the economy through capital formation, while also retaining its consultative approach in policy making and embracing the power of data and technology.
32. India's exports in FY23 surged by 6% to reach USD 447 billion, while imports witnessed a substantial increase of 16.5% to reach USD 714 billion
Union Minister Piyush Goyal, from the Ministry of Commerce and Industry (MoCI), has announced that India's exports have achieved a remarkable 6% increase to reach a record high of USD 447 billion in the financial year 2022-23 (FY23). This is a significant rise from USD 442 billion in FY22. Meanwhile, imports have also surged, increasing by 16.5% to USD 714 billion from USD 613 billion in FY22.
The growth in exports can be credited to the robust performance of sectors such as petroleum, pharmaceuticals, chemicals, and marine, which have witnessed strong growth in outgoing shipments.
Union Minister Piyush Goyal shared this data while on a 3-day visit to France and Italy from April 11-13, 2023, where he held meetings with leaders and top executives from these countries to further strengthen trade and investment ties.
Important updates on India's export performance :
(i) India's overall exports, including goods and services, have recorded an impressive 14% increase, reaching a historic high of USD 770 billion in FY23, compared to USD 676 billion in FY22 and USD 500 billion in FY21.
(ii) Service exports from India have also shown remarkable growth, surging from USD 254 billion in 2021-2022 to USD 323 billion in 2022-2023, marking a significant 27.16% increase. This growth can be attributed to the thriving business processing, accounting, and Information Technology (IT) sectors.
(iii) Several goods sectors have witnessed notable growth, including oil meals, electronic goods, tobacco, oil seeds, rice, coffee, fruits and vegetables, leather goods, ceramics, pharmaceuticals, marine products, chemicals, and ready-made textiles.
33. RBI approves re-appointment of Sanjay Agarwal as MD & CEO of AU SFB for 3 years
The Reserve Bank of India (RBI) has granted approval for the re-appointment of Sanjay Agarwal as the Managing Director (MD) and Chief Executive Officer (CEO) of AU Small Finance Bank (AU SFB), based in Jaipur, Rajasthan, for a term of 3 years commencing from 19th April 2023. Additionally, Uttam Tibrewal has been re-appointed as the Whole Time Director of AU SFB for a period of 3 years, also effective from 19th April 2023.
(i) Sanjay Agarwal, a Chartered Accountant and the promoter of AU Small Finance Bank (AU SFB), currently holds the position of MD & CEO. With over 26 years of strategic executive experience, he brings in-depth expertise in Retail Finance, Accountancy, Agriculture & Rural Economy, Banking, Human Resource Management, Credit Risk, and Business Management.
(ii) Uttam Tibrewal, who joined the Board of AU SFB in 2005, has a vast experience of over 23 years in the Financial Service sector. He has a rich background in Agriculture & Rural Economy, Financing small-scale industry, Accountancy, Banking, Risk and Business Management. Currently, he oversees the branch and personal banking, as well as leads various departments including Retail Assets such as Wheels & Secured Business Loans, Home Loans, and Agricultural Small- and Medium-Sized Enterprises (Agri-SME) Loans.
34. SBI Reintroduced Retail term deposit scheme ‘AMRIT KALASH’
On April 12, 2023, the State Bank of India (SBI) announced the reintroduction of the retail term deposit scheme 'AMRIT KALASH'.
The 'AMRIT KALASH' scheme has a tenure of 400 days and offers an interest rate of 7.6% for senior citizens and 7.1% for others.
Initially launched in February 2023, the scheme had a validity from February 15, 2023, to March 31, 2023.
The scheme has now been reintroduced with a validity from April 12, 2023, to June 30, 2023.
The scheme is applicable for domestic retail term deposits, including non-resident Indian (NRI) rupee term deposits (less than Rs.2 crore), new and renewals, term deposits, and special term deposits, for the specific tenure mentioned.
35. Chennai Metro launches Singara Chennai Card in association with SBI
Chennai Metro Rail Ltd (CMRL) in collaboration with State Bank of India (SBI) has introduced the 'Singara Chennai Card' [National Common Mobility Card (NCMC)] to enable seamless transportation for passengers.
SBI provides the card free of charge at the stations, but passengers need to provide identity proof and pay a fee of 1.8% of the amount they recharge the card.
The Singara Chennai cards are now available not only in Chennai metro stations but also in other metros that accept RuPay NCMC cards, including MMRDA (Mumbai Metropolitan Region Development Authority) Mumbai Line 2A & 7, Bangalore Metro, Delhi Metro Airport Line, Kanpur Metro, BEST (Brihanmumbai Electricity Supply and Transport) Buses in Mumbai, and Kadamba Transport Buses in Goa.
The technology for RuPay NCMC cards has been developed by the National Payments Corporation of India (NPCI).
Key notes :
(i) Initially, the Singara Chennai cards are available for purchase at 7 stations in Chennai (Tamil Nadu), including Koyambedu, Chennai Central, Chennai Airport, High Court, Alandur, Thirumangalam, and Guindy. These cards can be used at the automatic gates of all the metro stations.
(ii) The NCMC card features a unique 'Stored Value Area' that can hold up to Rs. 2,000 and can be utilized for offline ticket purchases.
(iii) The NCMC card is an inter-operable transport card designed by the Ministry of Housing and Urban Affairs (MoHUA).
(iv) In the future, these cards will also enable commuters to use MTC buses, suburban trains, tolls, parking, smart cities, and shops across most of India.
(v) (iv) For new card applications and recharging, SBI provides a dedicated website
(https://transit.sbi/swift/customerportal?pagename=cmrl) .
The card balance can be topped up with cash or using online bank accounts.
(vi) The end-to-end ticketing system for CMRL will be managed by Paycraft, a provider of digital financial services.
36. CGTMSE Increased Guarantee Coverage for MSEs from Rs 2 crore to Rs 5 crore
The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) has raised the maximum coverage limit under its Credit Guarantee Fund Scheme for MSEs from Rs 2 crore to Rs 5 crore per borrower for loans extended to Micro and Small Enterprises (MSEs) by lending institutions.
Aim : To promote lending to MSEs by public and private sector banks, Member Financial Institutions, and foreign banks.
The revised guidelines came into effect from April 1, 2023.
About Credit Guarantee Fund Scheme for MSEs :
(i) The CGTMSE was established by the Ministry of MSMEs and SIDBI to implement the Credit Guarantee Fund Scheme for MSEs.
(ii) The scheme was launched in August 2000 to provide collateral-free credit to MSEs and became operational on January 1, 2000.
(iii) The corpus of CGTMSE is contributed by the Government and SIDBI in a 4:1 ratio.
(iv) The scheme covers collateral-free credit (term loan and/or working capital) provided by eligible lending institutions to new and existing MSEs up to the borrowing limit, which has been increased to Rs 5 crore.
(v) The credit guarantee scheme assures a lender that if an MSE unit fails to discharge its liabilities, then the trust would make good the loss to the tune of 75-85 per cent of the credit facility.
37. SEBI Issued Framework on Upfront Contribution by Issuers for LPCC’s Settlement Guarantee Fund
SEBI, on April 13, 2023, introduced a new framework for the upfront collection of charges from eligible issuers during the allotment of debt securities. The aim is to build the Settlement Guarantee Fund of the Limited Purpose Clearing Corporation (LPCC).
The new framework will be implemented from May 1, 2023.
About the Framework :
The Securities and Exchange Board of India (SEBI) has released a new framework for upfront collection of charges from eligible issuers at the time of allotment of debt securities.
The aim is to build the Settlement Guarantee Fund of the Limited Purpose Clearing Corporation (LPCC).
The LPCC will notify eligible issuers as per its risk management policy.
Collection of 0.5 basis points of the issuance value of debt securities per annum will be held and placed in an escrow account before the allotment of debt securities.
The collected amount will be transferred by the stock exchange to the bank account of the LPCC within one working day of the receipt of the amount.
Stock exchanges will disclose the amount details on their websites.
** The new framework will be effective from May 1, 2023.
Note :
The framework was issued in the exercise of powers under Section 11(1) of the SEBI Act, 1992.
38. UPI remains Preferred Medium for Digital Payments in 2022; Bengaluru tops with Rs 6,500cr digital transactions: Worldline Report
(i) The 'India Digital Payments Annual Report 2022' by Worldline India reveals that Unified Payments Interface (UPI) remained the most popular digital payment mode in India in 2022, with a 70% surge in the number of transactions to 74 billion and a 54% growth in the value of transactions to Rs 126 trillion.
The report analyzed both transactions available in public databases and those processed by Worldline India in 2022 (January-December), providing some exclusive insights. A total of 8,792 crore digital payments were made in 2022, valued at Rs 149.5 lakh crore.
(ii) Point-Of-Sale (POS) terminals grew 37% YoY, reaching 7.55 million by the end of 2022. Private Sector Banks hold 74% market share, Public Sector Banks hold 18%, and Payments Banks and Foreign Banks have 7% and 1% respectively. HDFC Bank, Axis Bank, ICICI Bank, SBI, RBL Bank, Paytm Payments Bank, and IndusInd Bank cover 92% of the POS market. Credit card transactions at POS were 1.47 billion and e-commerce transactions were 1.29 billion, while debit card transactions at POS were 2.38 billion and e-commerce transactions were 1.26 billion.
(iii) In 2022, the total number of credit and debit cards in circulation was 1.02 billion, contributing to 7% of transaction volume and 14% of transaction value. Credit card issuance grew by 18% to 81.1 million, while the number of debit cards slightly increased by 0.2% to 939.4 million from 938 million.
The volume of credit card transactions was 2.76 billion, with a value of Rs 13.12 trillion. Out of this, Rs 5.1 trillion were spent at POS, and Rs 8.1 trillion on e-commerce.
The volume of debit card transactions was 3.64 billion, with a value of Rs 7.4 trillion. Out of this, Rs 4.85 trillion were spent at POS, and Rs 2.56 trillion on e-commerce.
The leading users of UPI (as of 2022)
Key points :
(i) In 2022, physical merchants accounted for 43% of transactions by volume and 40% by value, while e-commerce, gaming, and financial services made up 85% of online transactions by volume and 25% by value. Education, travel, and hospitality comprised 15% of online transactions by volume and 75% by value. The number of prepaid payment instruments was 16.23 billion by December 2022, with 13.34 billion being wallets and 288.8 million being cards. The total prepaid cards transactions volume and value was 1.61 billion and Rs 765.5 billion respectively.
(ii) In 2022, the number of transactions through mobile wallets was 5.87 billion and its value was Rs 2.25 trillion. National Electronic Toll Collection (NETC) processed about 3.25 billion transactions worth Rs 509.11 billion, registering a 31% increase in volume and 37% in value as compared to 2021. Transactions volume passing through Bharat Bill Payment Central Unit (BBPCU) in 2022 stood at 985.7 million, while the transactions value was Rs 1.70 trillion, registering 75% growth in volume and 83% in value as compared to 2021.
(iii) Aadhar enabled Payment Service (AePS) transactions recorded over 2.63 billion transactions in volume and Rs 3.42 trillion in value, registering a 24% growth in volume and 20% in value over 2021.
39. HDFC Bank launches Regalia Gold Credit Card
HDFC Bank has launched its super-premium Regalia Gold Credit Card, which is part of its Regalia range of credit cards.
The card is designed to cater to the travel and lifestyle needs of high-income individuals and offers a range of benefits, including rewards for global travel and premium brands via the Regalia Gold catalogue.
Cardholders can also enjoy complimentary airport lounge access globally and convert larger spending into EMI.
The card is also equipped for contactless payments, making it fast, convenient and secure.
40. AU SFB partnered with BBPS to Enable Bill Payment Via Video Banking
AU Small Finance Bank (AU SFB) has become the first commercial bank in India to connect with the Bharat Bill Payment System (BBPS) and offer bill payment services through video banking.
This move is aimed at promoting digital accessibility, enhancing economic capability, and fostering greater financial inclusion. With this service, customers can conveniently pay their bills through video banking without having to visit a bank branch, making it particularly beneficial for senior citizens and individuals with mobility difficulties residing in remote locations.
Customers of AU SFB can access the bill payment service on video banking through -
https://www.aubank.in or AU 10101 app.
41. Sekhar Rao appointed as interim MD and CEO of Karnataka Bank
Sekhar Rao has been appointed as the interim Managing Director (MD) and Chief Executive Officer (CEO) of Karnataka Bank, after the completion of M S Mahabaleshwara's tenure as the current CEO.
42. Indian Banks’ Association (IBA) Constituted 4-Member Working Group on ARCs
The Indian Banks’ Association (IBA) has formed a working group consisting of four members to address various issues related to Asset Reconstruction Companies (ARCs) and submit a report to the IBA, RBI (Reserve Bank of India), and the Union government.
The members of the working group are :
(i) Hari Hara Mishra, Secretary of the Association of ARCs in India
(ii) Purshotam Agarwal, Chief Investment Officer of National Asset Reconstruction Company Limited (NARCL)
(iii) Mythili Balasubramanian, Executive Director of Edelweiss
(iv) Tarun Kumar, Director of Encore Asset Reconstruction Company
About Asset Reconstruction Companies (ARCs) :
It is a financial institution (FI) that buys the NPAs (Non-Performing Assets) or bad loans from banks and FI and helps them to recover from the NPAs. They are registered under RBI and regulated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest (SARFAESI) Act, 2002.
43. RBL Bank launches Unique Digital FD Scheme for New-to-Bank Customers
RBL Bank has launched a new Digital Fixed Deposit (FD) Scheme for new-to-bank customers on April 18, 2023. The scheme offers an interest rate of up to 7.8% and has a term ranging from 15 months to 725 days. Customers can book the Digital FD within a few minutes without having to visit a branch or open a savings account with the Bank.
Some important points to note about the scheme are :
(i) It offers additional benefits such as embedded insurance cover, a seamless savings account opening process, and the ability to track and manage the FD digitally.
(ii) FD holders can opt for insurance cover under a Hospital Daily Cash Benefit policy, which offers daily cash benefits for hospital expenses.
(iii) The Digital FD uses a quick online KYC (Know Your Customer) process, making it easy and hassle-free for customers to open an FD within minutes.
44. SIB introduces 2 Savings Accounts for NRIs – SIB SEAFARER & SIB PULSE
South Indian Bank (SIB) introduced two new saving products for non-resident Indian (NRI) customers on April 18, 2023. The products are called SIB SEAFARER and SIB PULSE and are designed for mariners and healthcare professionals, respectively. These new saving products allow NRIs to maintain either the minimum balance in their savings account or term deposits.
Both SIB SEAFARER and SIB PULSE savings accounts have the following features :
(i) Free and unlimited debit card transactions, NEFT (National Electronic Funds Transfer)/ RTGS & DD / PO.
(ii) Free international debit card, SMS & internet banking services.
45. SBI Board Approves to Raise USD 2 Billion Via Long-Term Debt
On April 18, 2023, the State Bank of India (SBI) approved the examination of the status of long-term fund-raising in single or multiple trenches up to USD 2 billion (about Rs 16,000 crore) under Reg-S/144A, through Public Offer and/or private placement of senior unsecured notes in USD or other convertible currency during FY2023-2024.
SBI plans to raise USD 2 billion through foreign currency bonds in 2023-2024 in single or multiple tranches to augment additional Tier 1 capital and the overall capital base and to strengthen capital adequacy according to Reserve Bank of India (RBI) guidelines.
The Executive Committee of the Central Board of SBI, a public sector lender, made this decision. In March 2023, SBI raised Rs 3,717 crore through an additional tier 1 bond sale.
This was SBI's 3rd Basel III compliant additional tier 1 (AT1) bond sale, and the latest issue closed at a coupon rate of 8.25%.
46. TNeGA signs MoU with Indian Bank for Payment Aggregator Services
On 18th April 2023, Indian Bank, a public sector bank, signed a Memorandum of Understanding (MoU) with the Tamil Nadu e-Governance Agency (TNeGA), a State Nodal Agency under the Information Technology and Digital Service (IT&DS) Department of the Government of Tamil Nadu (TN).
The MoU aims to integrate Payment Aggregator for e-Governance Application of various departments in Tamil Nadu (TN). The signing ceremony was attended by T. Mano Thangaraj, Minister for IT&DS Tamil Nadu, and Mahesh Kumar Bajaj, Executive Director of Indian Bank.
Important :
(i) The Memorandum of Understanding (MoU) signed between the Tamil Nadu e-Governance Agency (TNeGA) and Indian Bank provides a plug-and-play platform for all government departments to address their payment-related needs.
(ii) Indian Bank's Payment Aggregator platform will deliver timely and cost-effective solutions to government departments, ensuring a seamless payment experience for citizens and businesses.
(iii) By facilitating easy access, transparency, and quick service delivery, this MoU will support one of the TN government's top priorities.
(iv) The bank's payment aggregator service will function as a one-stop solution for all payment collection requirements of various TN government departments.
This payment aggregator solution platform facilitates an integrated payment mechanism for online transactions through aggregation and reconciliation services with multiple payment channels, including debit/credit cards, UPI, payment wallets, net banking, e-challans, and e-UPI.
47. InPrime Finserv Received NBFC Licence from RBI
STK Credit Private Limited's subsidiary, InPrime Finserv, which provides financial services to the informal sector, has been granted a Non-Banking Financial Company (NBFC) license by the Reserve Bank of India (RBI) and issued a Certificate of Registration (COR).
Key notes :
(i) InPrime's goal is to revolutionize the way the informal sector accesses formal financial services.
(ii) The company is dedicated to serving the "Prime" segment of India's informal economy, comprising approximately 50 million households with an annual credit requirement of Rs. 5 lakh crores.
(iii) InPrime intends to empower its customers by offering multiple repayment channels and an engaging financial and digital literacy program that promotes self-service.
(iv) InPrime acknowledges the necessity for customized and improved financial services for the underserved Prime segment.
(v) InPrime is fostering financial inclusion in India by launching its operations in Bengaluru (Karnataka) initially and gradually expanding to other regions of Karnataka and Tamil Nadu.
48. CoRover, LIC Collaborate to Launch 1st Phase of AI virtual assistant LIC Mitra
Bengaluru-based startup CoRover has partnered with Life Insurance Corporation of India (LIC) to introduce the first phase of LIC Mitra, a conversational AI-powered chatbot designed to improve LIC's customer service by automating real-time responses to customer inquiries.
Features of LIC Mitra include :
(i) The CoRover.ai-developed chatbot will be accessible on both LIC's website and mobile app, leveraging technologies such as AI, Machine Learning (ML), and Natural Language Processing (NLP) to comprehend and respond to users' inquiries in multiple languages. The LIC Mitra technology also allows users to search using voice commands.
(ii) Questions about LIC products, past premiums paid, upcoming premiums, policy maturity dates, and insurance can be answered using the chatbot.
(iii) Existing customers can use LIC Mitra to check their policy's latest status and receive information such as premium due dates and policy maturity dates. Additionally, customers can utilize the chatbot to determine their first unpaid premium.
49. AIIB to Open First Overseas Office in Abu Dhabi, UAE
The Asian Infrastructure Investment Bank (AIIB) has signed a host member agreement with the United Arab Emirates (UAE) on April 19, 2023, marking the establishment of its first overseas office, an Interim Operational Hub, at Abu Dhabi Global Market, Abu Dhabi, UAE.
During the signing ceremony in Abu Dhabi, the agreement was signed by Jin Liqun, President and Chair of the Board of Directors of AIIB, and His Excellency Dr. Sultan Al Jaber, Minister of Industry and Advanced Technology and UAE Governor of AIIB.
This agreement aligns with the UAE's commitment to strengthen collaboration with international organizations and institutions that are dedicated to promoting sustainable economic development in developing nations.
Key notes :
(i) AIIB is opening an Interim Operational Hub in Abu Dhabi, UAE due to its rapid growth.
(ii) The Hub aims to bring the bank closer to clients and improve engagement with them.
(iii) It will support AIIB's development agenda and finance infrastructure projects for sustainable economic growth.
(iv) The Hub will manage the bank's investment portfolio and enhance project monitoring and implementation services worldwide.
(v) AIIB's proximity to global financial centers and the international infrastructure ecosystem will give it an edge in the market.
50. CRED launches P2P UPI payments on its app
On April 17, CRED launched a UPI-based Peer-to-peer P2P payments system with the introduction of Scan & Pay.
CRED customers can make secure, instant payments to other users via UPI IDs or contact numbers.
The new system offers several features, such as payment reminders for recurrent transactions, proactive nudges during risky payment scenarios, and custom VPAs to protect privacy.
CRED Protect is a feature that prompts members to use a system-generated alias UPI ID to mask personal details like mobile numbers.
The WIN-WIN feature rewards both the payer and recipient of payments made to 'special contacts' with cashbacks credited to their CRED balance.
CRED offers a variety of payment methods, including bill payments, scan-and-pay, tap-to-pay, UPI P2P, CRED Pay, and CRED flash for online merchants.
51. Union Bank of India Secures 1st Rank in EASE Reforms Index for Q3 FY23
The Indian Banks' Association (IBA) published a report on April 20, 2023, regarding the Enhanced Access & Service Excellence (EASE) Reforms Index for Q3 FY23.
Union Bank of India has secured the first position among all Public Sector Banks (PSBs) for the first time by adopting various reforms prescribed for PSBs.
EASE is an initiative of the Department of Financial Services (DFS), Ministry of Finance, under its 5th iteration, which focuses on Enhanced Digital experience, Data-driven, Integrated, and Inclusive Banking, as part of the PSB Reforms Agenda.
Union Bank of India's performance :
(i) Under the EASE 5.0 framework, PSBs are evaluated on 5 themes, and Union Bank of India secured 1st rank among PSBs for adopting various reforms prescribed under 4 themes. These themes include 'Digitally-enabled customer offerings', 'Big data and analytics', 'Modern Technology Capabilities', and 'Employee development and Governance'.
(ii) The bank excelled in areas such as building analytics capabilities for retaining and deepening customer relationships, effective credit monitoring, comprehensive digital collection management system, fraud resilience, and cyber security.
(iii) Union Bank of India also focuses on adopting modern technology capabilities for providing an integrated banking experience, customer-centric digital offerings, and implementing better governance measures, which has helped the bank to maintain its momentum.
52. SEBI Approved – Emkay Global to Sponsor MF Business & Nexus Select Trust for REIT IPO
Emkay Global Financial Services has been granted in-principle approval by the Investment Management Department of the Securities and Exchange Board of India (SEBI) to establish a Mutual Fund business and incorporate an Asset Management Company (AMC).
Established in 1995, Emkay Global Financial Services currently provides a range of services including equity broking, commodity broking, currency broking, lending, depository participant, portfolio/wealth management services, investment banking and global investing.
Currently, there are 44 MF players with total assets under management of about Rs 40 lakh crore with top 10 players accounting for major share of business.
Bajaj Finserv recently obtained a full-fledged Mutual Fund (MF) license and has filed papers to launch seven new fund offers.
In 2021, SEBI granted in-principle approval to Nitin Kamath-led Zerodha Broking and Frontline Capital Services to enter the MF business.
53. IndusInd Bank signs USD100mn agreement with JBIC to provide Credit Facilities to Japanese OEMs in India
On April 19, 2023, IndusInd Bank entered into a long-term credit agreement of USD 100 million with Japan Bank for International Cooperation (JBIC) to provide support to Indian companies interested in buying Japanese construction equipment.
The loan agreement was signed by the IFSC Banking Unit (IBU) of IndusInd Bank's GIFT City branch. This marks the first time JBIC has provided such lending through any IFSC Banking unit at GIFT City.
Mizuho Bank of Japan, Shizuoka Bank of Singapore, and Joyo Bank of Japan will also co-finance this facility.
Objective :
To foster the growth of Japanese construction equipment companies in India through need-based credit facilities.
Key notes :
(i) The agreement is aligned with the objective of the International Financial Services Centres Authority (IFSCA) to establish GIFT City as a hub for raising long-term finance.
(ii) IndusInd Bank will utilize the funds to provide need-based lending facilities to support the growth of Japanese Original Equipment Manufacturers (OEMs) in India. The program will initially cater to the financing requirements of component suppliers, dealers, and final buyers of construction machinery manufactured by selected Japanese OEMs.
(iii) IndusInd Bank's Commercial Vehicle Finance division is a prominent financier of Japanese OEMs in India and plans to strengthen its market share by targeting component suppliers and dealers who are part of the upstream and downstream supply chain of these OEMs.
54. Fasal Partners with SBI to Support Farmers to Get Easy Financial Access
Fasal, an agriculture technology company, announced its collaboration with State Bank of India (SBI) on April 13, 2023, to offer farmers prompt and easy access to financial resources.
The objective of the partnership is to empower farmers to efficiently finance and manage immediate agricultural input requirements while utilizing Fasal's technology solutions to make farming more precise and predictable. The alliance will aid farmers in overcoming cash flow constraints during critical farming cycles by offering prompt, hassle-free, and collateral-free loans at highly competitive rates.
Fasal aims to address various issues across the horticulture value chain and pave the way for India's horticultural transformation through the partnership.
Financial Offering :
(i) The partnership between Fasal and State Bank of India will provide farmers with access to collateral-free loans up to INR 3 lakhs.
(ii) The loans will be provided under the Kisan Credit Card (KCC) scheme, which is well-known for its low interest rate within the farmer credit support system. If a farmer has already exhausted their KCC limit, SBI will offer these financing solutions through other agriculture schemes.
(iii) Initially, the financial offering from Fasal will be available in Maharashtra, Karnataka, Chhattisgarh, and Madhya Pradesh, with plans to expand to other regions in the future. This solution will help farmers manage their cash-flow constraints during key cycles in farming, and enable them to adopt Fasal's technology solution to make their farming more precise and predictable.
55. RBI Granted AD Category-I Licence to AU SFB, Equitas SFB to Deal in Foreign Exchange
AU Small Finance Bank (SFB) has been granted an Authorised Dealer (AD) category-I licence by the Reserve Bank of India (RBI) on 19th April 2023, under Section 10 of the Foreign Exchange Management Act, 1999, which allows the bank to deal in foreign exchange.
The approval is subject to the bank's adherence to relevant regulations. With the licence, AU Small Finance Bank will be able to introduce a variety of foreign currency-related products to serve the importer-exporter sector and conduct inward and outward remittances.
56. RBI accepts Rs 5,500 crore Bids at Switch and Conversion Auction of Government Bonds
On April 17, 2023, the Reserve Bank of India (RBI) accepted bids worth Rs 5,500 crore at an auction for the switching and conversion of 5 Government of India (GoI) bonds, out of the notified amount of Rs 11,000 crore.
The bids for the floating rate bond (FRB) expiring in 2024, which will be converted into the paper to be redeemed in 2032, were accepted at Rs 2,000 crore, against the notified amount of Rs 4,000 crore.
57. RBI Approves Appointment of Kaizad Bharucha as Dy MD & Bhavesh Zaveri as ED at HDFC Bank
Kaizad Bharucha and Bhavesh Zaveri have been appointed by the Reserve Bank of India (RBI) as Deputy Managing Director (DMD) and Executive Director (ED), respectively, of HDFC Bank Limited, one of India's leading private sector banks, for a term of three years starting from 19th April 2023. The recommendation for their redesignation was made by HDFC Bank's Board of Directors to the RBI on 24 November 2022.
This is to be noted that Kaizad Bharucha was already working as the Executive Director of HDFC Bank before being appointed as Deputy Managing Director by the Reserve Bank of India. Similarly, Bhavesh Zaveri was previously serving as the Group Head of Operations, Cash Management, and ATM Products at HDFC Bank before being appointed as an Executive Director by the RBI.
58. Federal Bank inks Banking Correspondent Agreement with Agri fintech KiVi
In April 2023, the Federal Bank partnered with Kisan Vikas (KiVi), an agriculture fintech start-up based in Chennai, through a Banking Correspondent agreement to expand its agriculture lending portfolio in Tamil Nadu.
Aravind K, the Vice-President of Agri-business at Federal Bank, and Joby CO, the Founder and CEO of KiVi, exchanged an agreement to appoint KiVi as the Banking Correspondent for Federal Bank.
59. HDFC Bank gets Relief from RBI on PSL norms ; SEBI Approves transfer of Controlling stake of HDFC AMC to HDFC Bank
In April 2023, the Reserve Bank of India (RBI) provided a relaxation of 3 years for HDFC Bank, India’s largest private sector lender, to meet Priority Sector Lending (PSL) requirements after its merger with Housing Development Finance Corporation (HDFC) Limited.
The RBI has refused to make any exceptions on Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) requirements as sought by HDFC Bank.
The RBI has allowed HDFC Bank to consider a third of the outstanding HDFC loans in the first year of the merger. The remaining two-thirds of the portfolio of HDFC will be considered over the next two years equally. HDFC Bank has to set aside 4.5% of HDFC’s assets as CRR and 18% as SLR after the merger.
CRR is the percentage of deposits which the HDFC Bank has to park with the central bank for which it does not earn any interest, while SLR is a percentage of deposits which are mandated to be invested in government securities.
HDFC bank carries around 24-25% investments in government securities as against the 18% requirement.
At present, HDFC has a 48% stake in HDFC Life Insurance and 50% in HDFC Ergo, and 52.6% stake in HDFC MF.
60. SEBI Approves transfer of Controlling stake of HDFC AMC to HDFC Bank
On 21st April , 2023, the Securities and Exchange Board of India (SEBI) approved the proposed change in ownership of HDFC Asset Management Company Limited (HDFC AMC), a subsidiary of HDFC Limited and the AMC of HDFC Mutual Fund (HDFC MF), to HDFC Bank as part of merging.
SEBI instructed the HDFC AMC to ensure compliance with all other provisions of SEBI(Mutual Funds) Regulations, 1996 and circulars.
Note : This approval will enable the merger of HDFC Ltd into HDFC Bank.
61. Mastercard collaborates with India’s M1xchange to roll out digital invoice discounting for farmers
On April 20 , 2023, Mastercard has collaborated with M1xchange to offer a digital invoice discounting solution to farmers, Farmer Producer Organizations (FPOs), and agri-MSMEs (Micro, Small & Medium Enterprises) through " Farm Pass ", its agri-tech platform.
This solution is the first of its kind for the agriculture sector and will help lenders in underwriting credit offerings through the Trade Receivables Discounting System (TReDS).
As part of the collaboration, M1xchange, an RBI (Reserve Bank of India)-approved facilitator for discounting and sale of receivables to banks and Non-Banking Financial Companies (NBFCs), will bring on board its agri-businesses and lenders. The platform will enable easy access to credit and working capital.
The solution will allow farmers and FPOs to directly connect with buyers, negotiate the best price for their produce with instant payment.
and this aims to benefit 10 million farmers through an auction based mechanism for selecting the best interest rates against the trade.
62. ICICI Bank introduces EMI facility for UPI payments by scanning QR code
On April 11, 2023, the ICICI Bank introduced an easy first-of-its-kind EMI (Equated Monthly Instalment) facility for UPI (Unified Payment Interface) payments made by scanning QR code.
Objective : To improve convenience of the customers and to provide unique solutions to address their evolving credit needs.
Key note :
Customers who are eligible for PayLater, the Bank’s ‘buy now, pay later’ service can avail of the EMI facility in an instant, easy and seamless manner. The facility can be availed across different categories such as electronics, groceries, fashion apparels, travel and hotel bookings.
63. HDFC Bank, Axis Bank Signs the Definitive Agreements with Go Digit Life Insurance
Two of India's biggest private sector banks, HDFC Bank and Axis Bank, have signed definitive agreements with Go Digit Life Insurance, an insurance technology startup, to acquire a 9.94% equity stake each in the company. The payment for each stake is Rs 69.90 crore, which will be made in two tranches. The agreement was signed on April 21, 2023.
The stake acquisition process involves two tranches of payment :
(i) HDFC Bank : HDFC Bank has already made the first tranche of payment amounting to Rs. 10.93 crore for the acquisition of a 9.94% equity stake. According to the bank's definitive agreement, the remaining amount of Rs. 58.97 crore will be invested at its discretion in the second tranche, following the completion of the Initial Subscription.
(ii) Axis Bank : Axis Bank has also made the first tranche payment of Rs. 10.93 crore towards the acquisition.
The transaction is expected to be completed within 3 to 6 months from the date of execution.
Go Digit Life Insurance : Founded by Kamesh Goyal and backed by the Fairfax Group, Digit is a general insurance company that offers a range of services such as car insurance, travel insurance, home insurance, commercial vehicle insurance, and shop insurance.
Go Digit General Insurance Limited was incorporated in the year of 2016 and the company is based in Bengaluru, India.
64. Capacity Utilisation robust but New Orders dip in Q3FY23: RBI’s 60th OBICUS
During Q3:2022-23, the Reserve Bank of India (RBI) conducted the 60th round of the quarterly Order Books, Inventories, and Capacity Utilization Survey (OBICUS), which covered 762 manufacturing companies. The survey aimed to provide a snapshot of the demand conditions in India's manufacturing sector during October-December 2022.
Important key notes :
(A) New Order Book :
(i) In Q3FY23, new order book of manufacturing companies declined to 8.4%, indicating a slowdown in demand.
(ii) Average new order amount decreased from Rs 307.9 crore in Q2FY23 to Rs 212.2 crore in Q3FY23.
(iii) Decline is due to difficult external environment with recession threat in many advanced economies and RBI's aggressive rate hikes.
(iv) Growth of new order books was negative between Q2FY20 and Q1FY21, but grew consecutively in the next three quarters until Q1FY22, registering a staggering 105% growth.
(B) Capacity Utilization :
(i) CU of manufacturing facilities was 74.3% in Q3FY23, up from 74% in Q2, indicating rapid manufacturing activity.
(ii) CU hit a low of 47.3% in Q1FY21, with most units cutting production. Pre-pandemic levels (Q1FY20) were 73.6%.
(C) Inventory Levels :
The average inventory level of manufacturing companies slightly increased by 2.3% to Rs 519.9 crore in Q3FY23 from Rs 508.2 crore in Q2FY23. The inventory levels were the highest during the pandemic in Q4FY20 at Rs 609.9 crore.
65. Reserve Bank of Zimbabwe to Launch Gold-Pegged Digital Currency
The government of Zimbabwe plans to launch a gold-backed digital currency through the Reserve Bank of Zimbabwe (RBZ) to stabilize the local currency and prevent further depreciation against the US dollar.
The digital gold token will allow more Zimbabweans to hedge against currency volatility by exchanging small amounts of Zimbabwean dollars.
Zimbabwe adopted the US dollar as its currency in 2009 due to hyperinflation and reintroduced the Zimbabwean dollar in 2019 to revive the struggling economy.
66. Shreekant M Bhandiwad takes charge as Chairman of Karnataka Vikas Grameena Bank (KVGB)
Shreekant M Bhandiwad has become the new Chairman of the Karnataka Vikas Grameena Bank (KVGB), a regional rural bank in India sponsored by Canara Bank, with its headquarters in Dharwad, Karnataka.
Prior to his appointment, Bhandiwad was the head of the Patna circle of Canara Bank in Bihar.
He has succeeded Puttaganti Gopikrishna, who served as the Chairman of KVGB from 2019 to 2023. Gopikrishna has been repatriated to Canara Bank as the Circle Head in Bengaluru, Karnataka.
About Shreekant M Bhandiwad :
- Postgraduate in agriculture
- Worked as an Agricultural Extension Officer in rural branches of Canara Bank
- Worked as a consultant in Agricultural Consultancy Services of Canara Bank at Head Office in Bengaluru
- Has 29 years of experience in Canara Bank, worked in states such as Haryana, Rajasthan, Bihar and Karnataka in various capacities
- Was Deputy Managing Director of Canfin Homes Ltd, Bengaluru for 3 years.
67. Canara Bank & RBIH Collaborates to Launch ‘Digitalised Submission of Form 15G/15H’
Canara Bank and the Reserve Bank Innovation Hub (RBIH) have collaborated to launch a new customer-friendly service called 'Digitalised Submission of Form 15G/15H' to simplify the process of submitting self-declaration forms.
- The forms, Form 15G and Form 15H, are submitted by individuals to request that their bank does not deduct TDS on interest income as their income is below the basic exemption limit.
- The submission of PAN (Permanent Account Number) is necessary for the form submission. This service aims to make the process easier for customers.
68. Bajaj Allianz General Insurance, actyv.ai Partners to offer Insurance Product
actyv.ai , a Singapore-based licensed corporate agency under IRDAI (Insurance Regulatory and Development Authority of India), has partnered with Bajaj Allianz General Insurance to provide insurance products to MSMEs (Micro, Small & Medium Enterprises) and their business partners through their technology platform.
- The collaboration will use the actyv.ai SaaS (Software as a service) platform with embedded B2B (Business to Business) BNPL (Buy Now, Pay Later) and insurance to offer affordable insurance products.
- Bajaj Allianz General Insurance will use the technology stack of actyv.ai platform to provide innovative insurance products to promote the sustainability of suppliers, distributors, and retailers. Commercial insurance products like Fire and Burglary, as well as health products like Personal Accident, Hospital Cash, Credit Linked Health Plan, and Group Health Plans, will be offered.
69. Hindujas Gets In-Principal Approval from RBI to Raise Stake in IndusInd Bank
The promoters of IndusInd Bank, Hinduja Group, have received in-principle approval from the Reserve Bank of India (RBI) to increase their stake in the bank.
- Currently, they hold a 16.5% stake, and the RBI raised the cap on the stake promoters can hold in a bank to 26% in 2021.
- The due diligence process takes about 90-180 days as per RBI norms. IndusInd International Holdings Ltd, an entity belonging to Hinduja Group, has a 12.57% stake, while IndusInd Ltd has a 3.93% stake.
70. Monetary Authority of Singapore clears merger of HDFC Investments with HDFC
The central bank and financial regulatory authority of Singapore, the Monetary Authority of Singapore (MAS), has given its approval for the merger of HDFC Investments Limited and HDFC Holdings Limited with their parent company, Housing Development Finance Corporation (HDFC) Limited.
- In addition, as part of the composite scheme of amalgamation, MAS has approved HDFC Bank's acquisition of a 20% or more stake in Griha Pte. Limited.
71. Hari Hara Mishra becomes CEO of the Association of ARC
Hari Hara Mishra has assumed the role of Chief Executive Officer (CEO) of the Association of Asset Reconstruction Companies (ARCs). The Association of ARCs is a non-profit organization and the representative body of all 28 ARCs registered with the Reserve Bank of India (RBI). The Indian ARC Association (IAA) serves as the voice of ARCs in India, and has been active for over eight years.
About Asset Reconstruction Companies (ARCs) :
Asset Reconstruction Companies (ARCs) are specialized financial institutions that purchase Non-Performing Assets (NPAs) or bad loans from banks and other financial institutions to help them recover these NPAs. ARCs are registered with the Reserve Bank of India (RBI) and are regulated by the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI Act, 2002).
72. RBI granted NBFC licence to Neobanking Jupiter; Cancels Adoor Co-operative Urban Bank’s banking licence, allows to operate as NBFC
Jupiter, a neobanking platform, has received a non-banking financial company (NBFC) license from the Reserve Bank of India (RBI), allowing the company to expand its lending business. Previously, Jupiter had been lending in partnership with an NBFC using the Loan Service Providers (LSP) model.
- The private entity Amica Financial Technologies, which operates Jupiter, will now offer loans ranging from Rs 50,000 to Rs 1 lakh under the new licence. This will give Jupiter better control over its lending business, allow direct integrations for Know Your Customer (KYC) checks, and make it easier to offer better services to customers and scale up operations.
- In addition to its lending services, Jupiter offers a user-friendly platform for depositing and withdrawing funds, and has partnered with traditional banks to offer debit and credit cards.
73. RBI cancels Adoor Co-operative Urban Bank’s banking licence, allows to operate as NBFC
The RBI cancelled the banking licence of Adoor Co-operative Urban Bank Ltd, Adoor, Kerala, effective from the close of business on April 24, 2023, under Section 22 read with Section 56 of the Banking Regulation Act, 1949.
- However, the bank is allowed to function as a non-banking institution under Section 36 A(2) read with Section 56 of the Banking Regulation Act, 1949. The cancellation prohibits the bank from conducting the business of "banking" within the meaning of Section 5(b) of the Act, including accepting deposits from non-members, with immediate effect. Adoor Co-operative Urban Bank Ltd must repay unpaid and unclaimed deposits of non-members held by it, whenever demanded, even after being notified as a non-banking institution. The bank was initiated on January 3, 1987.
74. SBI General Insurance Launched Digital-only Health Insurance Plan – Health Edge Insurance
SBI General Insurance Company Limited launched a digital-only health insurance plan called ‘Health Edge Insurance’ in April 2023.
Here are the key features of the plan :
- It is a single comprehensive plan with 9 basic indemnity covers and 18 optional covers to cater to medical exigencies.
- The policy offers multiple sum insured options ranging from 3 to 25 lakhs, and customers can choose long-term policy options for up to 3 years.
- The entry age for purchasing the Health Edge plan is 18 years to 65 years for adults and 91 days to 30 years for children.
- The policy is a fully digital product from SBI General, and the entire process from purchase to claims will be digital.
- The planned treatment under this cover shall be claimed on a reimbursement basis in Indian currency only.
- Customers can opt for a co-payment option, wherein 10% or 20% co-payment will be applied on every admissible claim wherever applicable under this Policy.
- No pre-policy medical checkup is required before issuance of Health Edge policy till 55 years of age.
- The plan includes covers such as the Global Treatment cover which takes care of the medical expenses incurred towards inpatient care outside India, and OPD (Out Patient Department) cover which guarantees the medical expenses incurred for allopathic OPD expenses including Diagnostics and Pharmacy.
75. Reliance General Becomes 1st Insurer to Accept eRupee in Partnership with Yes Bank
Reliance General Insurance, a subsidiary of Reliance Capital, became the first company to accept eRupee (e₹) or RBI's CBDC for premium payments .
Partnership : Accepts eRupee through a partnership with Yes Bank
Enables customers to make premium payments digitally using the bank's platform
Benefits :
- Provides customers with a safe, easy, instant, and green payment solution, enhancing the customer experience
- Eliminates the handling of physical cash
- Offers the same anonymity as a banknote
Current availability :
- Made the physical eRupee QR code available at select branches for walk-in customers to scan and pay instantly
- Customers with an active eRupee wallet with any bank can scan Reliance General Insurance's eRupee QR code to make an immediate payment
Future plans :
- Plans to make eRupee available at all branches nationwide, on its website, and on the Reliance Self-i app within a few months
CBDC or Digital Rupee :
- A digital version of currency notes issued by RBI
- Equal to the legal tender
76. RBI approves re-appointment of Kamakodi as MD & CEO of CUB for 3 years
On April 26, 2023, the Reserve Bank of India (RBI) granted approval for the re-appointment of N Kamakodi as the Managing Director (MD) and Chief Executive Officer (CEO) of City Union Bank (CUB), a private sector bank based in Kumbakonam, Tamil Nadu. Kamakodi's new term is set to last for three years, beginning May 1, 2023.
- Dr. N. Kamakodi has been serving as the MD and CEO of CUB since May 2011. Kamakodi joined CUB as Deputy General Manager (DGM) in 2003 and was subsequently promoted to General Manager (GM) in 2005, and then appointed as Executive Director in 2006.
About City Union Bank (CUB) :
Incorporated on : 31st October, 1904
MD & CEO : Dr N. Kamakodi
Headquarters : Kumbakonam, Tamil Nadu
77. WYLD, World’s 1st Social Currency Payment Card, launched in Mumbai
The San Francisco-based multinational financial services corporation VISA Inc. has powered the launch of WYLD, the world’s first social currency payment card in Mumbai, Maharashtra. The app allows users who have over 1000 Instagram followers and a “ WYLD Score ” of over 100 to apply for the WYLD payment card through the app.
- WYLD has secured USD 350,000 in pre-seed funding, with Better Capital, a British private equity firm leading the investment.
- WYLD allows users to monetize their social media following and earn up to 100% cashback on purchases made with partner brands.
- At present, the platform is only available via invitation to the first 5,000 users on their waitlist of 10,000 potential customers for the beta-testing phase, which began in April 2023.
- The company has partnered with over 200 brands, including Boat, Lenskart, Purplle, etc., across various sectors like fashion, beauty, electronics, restaurants, bars, and events/concerts.
78. NSE Indices revises norms for Exclusion from index in case of Demerger
The subsidiary of the National Stock Exchange (NSE), NSE Indices Limited, has issued fresh guidelines for retaining a demerged entity in its index. According to the new rules, a demerged company will continue to be a constituent of the index only if the exchange conducts a Special Pre-Open Session (SPOS) for the spun-off entity. These guidelines will apply to all scheme of arrangements involving demergers approved by the equity shareholders of the companies on or after April 30, 2023.
Important points :
(i) The objective behind this modification is to decrease the frequency of changes in the index constituents that occur due to corporate actions like demergers.
(ii) The newly listed entity resulting from the demerger will be included in the index at a fixed price, which will be the difference between the closing price of the demerged company one day prior to the ex-date of demerger and the price determined during SPOS.
(iii) The spun-off entity will be taken off from the index after three days. However, if the entity reaches the price band on both days during the first two days, the removal date will be extended by three more days.
(iv) If the exchange fails to conduct SPOS, a suitable replacement will be made to exclude the demerged company from the index one day before the ex-date.
79. NPCI International Partners with PPRO to Facilitate Global e-commerce Payments through UPI
NIPL, a subsidiary of NPCI, has partnered with PPRO, a provider of digital payments infrastructure, to enable cross-border e-commerce transactions through UPI, India's most popular real-time payment system.
- This partnership will allow PPRO's global clients to accept RuPay card and UPI payments from Indian consumers in rupees. It will also simplify the integration of UPI into PPRO's platform through a single connection.
- This will help PPRO's partners tap into the booming Indian e-commerce market, which is expected to reach $111 billion in 2024 and $200 billion by 2026 .
80. RBI Removes Restrictions on Individuals from Opening Interest-earning FCAs in IFSCs
The Reserve Bank of India (RBI) has lifted restrictions that prevented resident individuals from opening interest-earning Foreign Currency Accounts (FCA) in International Financial Services Centres (IFSCs) for investments under the Liberalised Remittance Scheme (LRS). This change was announced on April 26, 2023.
- The RBI also eliminated the requirement to repatriate any funds that remain unused in the FCA account for up to 15 days.
- This decision is expected to help IFSC banks generate more liabilities and access cheaper funds, which could enable them to offer loans at more competitive rates.
- Under prevailing restrictions, resident individuals were only allowed to open a non-interest-bearing Foreign Currency Account (FCA) in International Financial Services Centres (IFSCs) for investing under the Liberalised Remittance Scheme (LRS). Additionally, any funds lying idle in the account for up to 15 days were required to be repatriated to the investor's domestic Indian Rupee account. Furthermore, using FCAs held in IFSCs, resident individuals were prohibited from settling any domestic transactions with other residents.
- To bring alignment with the LRS for IFSCs established under the IFSC Authority Act, 2019, and other foreign jurisdictions, the Reserve Bank of India (RBI) has removed these restrictions and enabled interest-earning accounts. This change is expected to boost activity at Gift City, India's first and only IFSC, as resident individuals will now be able to earn some interest on the money parked in IFSCs under the LRS.
Note :
(i) Resident individuals can remit up to USD 250,000 per fiscal year for any transactions allowed by law, facilitated by authorized dealers through the Liberalised Remittance Scheme (LRS).
(ii) The directions above are issued in accordance with sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999).
81. Razorpay joins with ONDC to offer Payment Reconciliation Service
Razorpay, a fintech payments and banking platform for businesses, partnered with the e-commerce network Open Network for Digital Commerce (ONDC) on April 27, 2023.
- ONDC is a non-profit company set up by the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry (MoCI).
- Razorpay is the first payment gateway to launch a Payment Reconciliation Service for Network Participants (NPs) like buyers, sellers, and logistic partners on ONDC.
- The Payment Reconciliation Service will provide an integrated single view of all transactions for NPs.
- Razorpay's solution aims to provide a seamless and efficient way for NPs to settle funds and process transactions securely on ONDC.
- The Payment Reconciliation Service will help NPs by timely routing settlement information for a given transaction.
- ONDC allows buyers and sellers to transact with each other regardless of the platform they are on.
- The partnership between Razorpay and ONDC will enable Small and Medium Enterprises (SMEs) to access large buyers.
82. Redington & SBI Partners to Offer Solar Loans of up to Rs. 5 crore
Redington Limited (previously Redington (India) Limited) has joined hands with State Bank of India (SBI) to provide Solar Loans up to Rs 5 crore at interest rates that are linked to the rates offered to the bank's prime customers.
- The interest rates for these solar loans vary from 9.5% to 10% as of 27th April 2023, said Pradeep Srikanthan, Vice President of Solar Equipment Group, Redington Limited.
- The government has made it compulsory for all solar modules, whether domestic or imported, to be certified and included in ALMM (Approved List of Models and Manufacturers), a step that is seen as more aimed at protecting the nascent domestic solar manufacturing industry.
