BANKING - 2019 March

March 1

PNB ranks highest in implementation of ‘Reforms agenda’
EASE Reforms for Public Sector Banks - measures performance of each PSB on 140 objective metrics across 6 themes, including customer responsiveness, credit off-take and digitalization.
Fraud-hit Punjab National Bank has been ranked first among public sector banks in the implementation of ‘reforms agenda’, followed by Bank of Baroda and State Bank of India.
The EASE (Enhanced Access and Service Excellence) report has shown significant enhancement in PSB performance on the back of Government’s 4R’s strategy- recognition, recovery, recapitalization and reforms.
iii. PNB which topped the list with a score of 78.4 out of 100 in the EASE-index was followed by BoB (77.8), SBI (74.6), and Oriental Bank of Commerce (69).
PNB has shown "strong performance" in the parameters like customer responsiveness, responsible banking, credit off-take and financial inclusion. Releasing the report, Finance Minister ArunJaitley said such rankings brings about competitiveness and encourages banks to perform better than peers.

Cabinet nod for Rs. 1,450 crore to purchase RBI stake in National Housing Bank
The Cabinet approved payment of the face value of the subscribed share capital of Rs.1450 crore in National Housing Bank (NHB) to Reserve Bank of India (RBl) consequent to amendments made to the NHB Act, 1987 in 2018.
NHB is an apex agency established to operate as the principal agency to promote housing finance institutions in India. The wholesale financing role of NHB will get strengthened with the transfer of ownership to Government, thereby making possible augmented funding support to housing finance companies.
The expenditure of Rs. 1,450 crore is to be met out of Gross Budgetary Support 2018-19. The beneficiaries are the Reserve Bank of India and the Housing Sector.

RBI constituted a task force to ensure stability of external value of Rupee
The Reserve Bank of India has constituted an eight-member task force on offshore rupee markets, headed by UshaThorat, former Deputy Governor, to look into issues related to the markets and recommend appropriate policy measures to ensure the stability of the external value of the rupee.
The terms of reference of the task force include assessing the causes behind the development of the offshore rupee market.
Study the effects of the offshore markets on the rupee exchange rate and market liquidity in the domestic market and recommend measures to address concerns, if any that may arise out of offshore rupee trading.
The task force will also propose measures to generate incentives for non-residents to access the domestic market, and examine the role, if any, that the International Financial Services Centres (IFSCs) can play in addressing these concerns.

March 2

AIIB approved USD 455 Million loan for the Andhra Pradesh Rural Roads Project
The Asian Infrastructure Investment Bank (AIIB) will provide a loan of USD 455 million to finance the Andhra Pradesh Rural Roads Project, which will connect about 3,300 habitations with a population of more than 250, and benefit around two million people.
The project is likely to improve the life of a common man living in the remote and isolated areas in the state of Andhra Pradesh.
It is to improve road transport connectivity in previously unserved communities by providing all-weather rural roads in all 13 districts of Andhra Pradesh.
Under the project, there are plans to construct rural roads to provide first connectivity, construct cross drainage works and bridges to complete missing links and structures.

Commemorative notes to be released to mark Gandhi's 150th birth anniversary
To mark the 150th birth anniversary of Mahatma Gandhi, a UAE-based company will globally release 12 bank notes of zero value, the first-ever limited edition commemorative series.
The first two notes of the 12-part series, with just 5,000 pieces to be printed in each design, will go on sale at select outlets globally and online platforms while the remaining will be released in phases till October 2.
The special notes have been designed by Dubai-based Indian artist Akbar Saheb who is also the main illustrator for Prime Minister Narendra Modi's book "Mann Ki Baat".
Each note will feature memorable incidents from the personal and political life of Gandhi as a tribute to his legendary status.
The first (of two) note being released shows the "Promise to Mother" in 1888, the three vows the young Gandhi made to his mother Puttlibai before leaving for his law studies to England.
The second note features the historic incident of 1893 when the young lawyer Gandhi was thrown off a train at Pietermaritzburg railway station in South Africa, from a "Whites Only" compartment.
Numisbing Group is a Dubai - based arts and numismatics (collection of Coins and Currencies) company, founded in 2012, and has an exclusive gallery called "71 Arts" featuring the works of royal, Islamic and Arabic painting of top artists, including M.F. Husain and Akbar Saheb.

March 3

ADB agreed to grant USD 926 Million Loan for Mumbai Metro Rail Project
The Asian Development Bank (ADB) and the Government of India signed a USD 926 Million LoanAgreement today to operationalise two lines for the Mumbai Metro Rail System that will ease the distress of millions of commuters each day and help provide a cleaner.
The project will fund 63 six-car trains, signaling and safety systems, and help establish a new dedicated metro operations organization to manage the entire metro network in Mumbai.
The Mumbai Metropolitan Region Development Authority (MMRDA) will implement the project.
The Project also marks ADB's first co-financing with the Shanghai-based New Development Bank, which will provide $260 million toward the metro systems project. The MMRDA will implement civil works and other related components for the lines 2A, 2B, and 7. emerged as the largest fintech lending platform, launched by Prime Minister Narendra Modi three months ago, has emerged as the country’s largest online lending platform, with loan sanctions exceeding over Rs. 35,000 crore.
The portal was launched in November to provide credit of up to Rs. 1 crore to micro, small and medium enterprises (MSMEs) in just 59 minutes or less than an hour, in a bid to make banking transparent and hassle-free.
The report stated that loans worth Rs. 300 billion have been provided and disbursements of around Rs. 250 billion have been done.
Loan disbursal time has been reduced to 7-8 working days.
The Average Ticket Size (ATS) for new borrowers is Rs. 27 lakh and Rs. 34 lakh for repeat borrowers.

March 4

RBI imposes penalties on IDBI and Dena Bank
The Reserve Bank has imposed a monetary penalty of Rs. 2 crore on DenaBank fornon-compliance with various directions.
Reserve Bank of India (RBI) has imposed a monetary penalty of Rs. 1 crore on the IDBI Bank for contravention of its regulatory directions on time-bound implementation and strengthening of SWIFT related operational controls.

RBI levies Rs. 4 crore fine on Karnataka Bank
The Reserve Bank of India has levied an aggregate penalty of Rs. 4 crore on the Karnataka bank for delayed implementation of four of the Society for Worldwide Interbank Financial Telecommunication (SWIFT) related operational controls.
Swift provides a network that enables financial institutions worldwide to send and receive information about financial transactions in a secure, standardized and reliable environment.

March 5

ICICI Bank to buy 9.9% stake in Kisan Finance for Rs. 18 crore.
ICICI Bank will acquire 9.9% stake in Non-Banking Finance Company (NBFC) Kisan Finance for nearly Rs. 18 crore.
ICICI Bank will buy 1.49 crore shares from the Kisan Finance Company.
Kisan Finance was incorporated in December 2017, had registered a net loss of Rs. 48 lakh in 2017-18 at revenue of ₹4 lakh.

RBI levied Rs. 3 crore penalty on City Union Bank Ltd.
RBI has imposed a monetary penalty of Rs. 3 crores on City Union Bank Ltd for delay in adherence to its directives on "time-bound implementation & strengthening of SWIFT - related operational controls".
Swift provides a network that enables financial institutions worldwide to send and receive information about financial transactions in a secure, standardized and reliable environment.

March 6

World Bank to provide an USD 250 Million to boost rural incomes across 13 states in India.
An agreement signed between World Bank and Government of India to provide USD 250-million loan for the National Rural Economic Transformation Project (NRETP).
The World Bank will provide a loan for the NRETP to help women in rural households develop viable enterprises for farm and non-farm products.
The Agreement was signed by Mr. Sameer Kumar Khare, Additional Secretary, Department of Economic Affairs, Ministry of Finance, on behalf of the Government of India and Mr. Hisham Abdo, Acting Country Director, World Bank India, in New Delhi.

SBI, Hitachi Tie-up to launch digital payments platform.
State Bank of India (SBI) and Hitachi Payment Services Pvt Ltd, a wholly-owned subsidiary of Hitachi Ltd has launched their merchant-acquiring joint venture, SBI Payment Services Pvt Ltd (SBIPSPL) in Mumbai for establishing a digital payments platform for India and other countries in the region.
The joint venture SBI has a 74 percent stake and Hitachi Payment Services has 26 percent will facilitate expansion of the digital payments landscape in India via its digital payments platform.

India Signs USD 25.2 Million Loan Agreement with the World Bank for Chhattisgarh Public Financial Management and Accountability Program.
The Government of India, Chhattisgarh and the World Bank signed an USD 25.2 Million Loan Agreement to support the State’s reforms in Expenditure Management.
This support will cover Expenditure Planning, Investment Management, Budget Execution, Public Procurement, and Accountability.
The Chhattisgarh Public Financial Management and Accountability Program, which is the First Bank-Financed State-Level Project in Chhattisgarh in nearly a decade, will also help the State strengthen its Direct Benefit Transfer (DBT) and Tax Administration Systems.

March 7

India signs USD 96 Million loan agreement with World Bank for Uttarakhand Disaster Recovery Project.
Finance Ministry stated the World Bank has been supporting the State Governmentsince 2014 to restore housing and rural connectivity and to build the resilience of communities.
Theadditionalfinancing of USD 96 million will further help in the reconstruction of bridges, road and river bank protection works in the state.

United Bank signs Bancassurance deal with HDFC Life.
United Bank of India has signed a bancassurance deal with private life insurer HDFC Life Insurance Company.
Through this partnership, United Bank’s customers will be able to take advantage of HDFC Life’s expertise in life insurance products, distribution and customer service.
United Bank has a strong presence in rural and semi-urban areas, with over 2,000 branches and offices, while HDFC Life is India’s largest non-bank-promoted private life insurer.

Government allows IDBI Bank to handle import, export transactions with Iran.
The government has given a nod to the IDBI Bank to handle import and export transactions with Iran.
This would help the trade between India and Iran amid US sanctions on Iran.
Earlier, UCO Bank used to handle the payments during the previous sanctions.
Iran is the third largest supplier of oil to India, after Iraq and Saudi Arabia.

March 8

National Housing Bank proposes stricter regulations for Housing Finance Companies
This is to prevent them from falling prey to liquidity and credit risks.
The following regulations have been proposed:
Bringing down the public borrowings to 12 times of the Net Owned Fund (NOF) from the existing 16 times, by March 2022.
Capping the ceiling on public deposits at 3 times of the Net Owned Fund (NOF) of the Housing Finance Company (HFC).

World Bank to provide Rs 2,200 crores for Andhra healthcare project.
The World Bank decided to provide a loan of Rs. 2200 crores (USD 328million) to Andhra Pradesh for implementation of the AP Health Systems Strengthening Project (APHSSP).
The loan agreement signed between the Government of India, government of Andhra Pradesh and the World Bank.
The project aims to improve the quality of healthcare, availability and accessibility of primary health services to the majority population of the state.

SBI links Interest on Most Savings Account Deposits to RBI Repo Rate
State Bank of India (SBI) has become the first domestic bank to link the interest rate offers on savings account deposits to an external benchmark to the Reserve Bank of India’s repo rate.
SBI announced the following changes:

Deposits/ Loans
Interest Rate
Savings accounts with deposits above Rs.1 lakh 2.75% below the prevailing repo rate of 6.25%
Cash credit accounts and overdraft facilities over Rs.1 lakh 2.25% over the repo rate
For all other floating rate products, including retail and corporate loans Linked to the 1-year Marginal Cost Lending Rate (MCLR)
For savings account holders with balances up to Rs 1 lakh and borrowers with cash credit and overdraft limits up to Rs 1 lakh Interest rates will remain fixed

(Note: Present RBI’s Repo Rate – 6.25%)

Punjab National Bank (PNB) sanctions loans worth Rs. 689 crore to 1,600 MSMEs via 59-minute loan portal
Punjab National Bank (PNB) has sanctioned loans worth Rs. 689 crore to over 1,600 Micro, Small and Medium Enterprises (MSMEs) through portal as part of its effort to promote MSMEs.
Through portal MSMEs can get loans of up to Rs. 1 crore in 59 minutes or less than one hour.
Under the Mudra Yojana, the bank has offered loan to over 2.69 lakh small entrepreneurs this fiscal (till February 14, 2019).

March 9

India and Asian Development Bank (ADB) Signs USD 26 Million loan agreement for additional financing to Assam Urban Project.
Loan agreement was signed to provide additional financing for improving drainage infrastructure in Dibrugarh town of Assam under the ongoing Assam Urban Infrastructure Investment Program.
Mr. Hoe Yun Jeong, OIC, India Resident Mission signed the Agreement on behalf of ADB and Mr. Sameer Kumar Khare, Additional Secretary (Fund Bank and ADB), Department of Economic Affairs, Ministry of Finance signed on behalf of India.

The Government of India, the World Bank and the representatives of Five States sign the Loan Agreement for Additional Financing of $137 Million for the Dam Rehabilitation and Improvement Project (DRIP)
DRIP will help to rehabilitate and modernize over 220 selected large dams in the States of Karnataka, Kerala, Madhya Pradesh, Odisha, Tamil Nadu and Uttarakhand.
In 2010, the Bank’s Board approved $350 million to finance the Dam Rehabilitation and Improvement Project to improve the safety and sustainable performance of over 220 selected dams in India.
This Ongoing Project has so far benefitted 25 Million Primary Beneficiaries from urban and rural communities providing them water and livelihood opportunities.

March 10

RBI Eases Business Guidelines for White Label ATMs
RBI has eased business guidelines for white label ATMs allowing companies by managing these machines to get cash directly from the central bank.
Also offer non banking services like bill payments and advertise even non financial products in their premises, increasing the revenue earning scope for these companies.
The RBI has allowed the operators to source cash from any scheduled bank including rural and cooperative banks.
White label ATMs provide banking services to the customers of banks on the basis of the cards (debit/ credit/ prepaid) issued by banks.

Korea Exim Bank to give Rs. 4,100 crore Loan for Vizag Metro
The Export-Import Bank of Korea (KEXIM) has come forward to lend a loan of Rs. 4100 crore for the much-awaited Vizag metro rail project.
The state government had earlier sent a proposal in this regard to the Central government, which in turn forwarded it to Korea Exim Bank.

March 12

Bank of Baroda becomes first Public Sector Bank to launch crèche/day-care facility for children of employees
Bank of Barodahas become one of the first public sector banks to launch a crèche/child day-care facility for children of its employees.
The day-care facility has been launched at its Mumbai corporate office in BandraKurla Complex and further being implemented at the head office in Vadodara, Gujarat.
The bank will bear 60% of the cost incurred every month and rest 40% will be borne by the parents.

RBI may soon become world's 10th largest holder of gold
According to the World Gold Council (WGC), India has the 11th largest gold reserve and the current holding pegged at 607 tonnes.
The Netherlands holds the 10th position with 612.5 tonnes, or just about 5.5 tonnes ahead of RBI.
The top spot is occupied by USA with gold reserves of 8,133.5 tonnes, followed by Germany with 3,369.7 tonnes.
International Monetary Fund (IMF) ranks third on the list with total gold reserves of 2,814 tonnes.

Corporation Bank celebrated 114th Foundation Day.
The bank started operating on March 12, 1906, in Udupi, Karnataka under the leadership of Khan Bahadur Haji Abdullah Haji Kasim Saheb Bahadur with a first day business of Rs. 38, 13 Annas and two Paisa.
Bank MD and CEO P.V. Bharathi, Executive Directors Gopal Murli Bhagat and Birupaksha Mishra and other senior officials were present at the occasion.
Headquarters of Corporation Bank is Mangalore and Tagline is A Premier Public Sector Bank, Prosperity for all.
Recently, RBI has imposed a cumulative penalty of Rs. 3.5 crore on Corporation Bank due to some lapses in monitoring of end use of funds and exchange of information with other banks.

March 13

HDFC becomes the third Indian company after Reliance and TCS to achieve a market value of more than Rs. 6 trillion.
On 13th March 2019, HDFC Bank became the third Indian company after Reliance Industries (Rs. 8.52 trillion) and TCS (Rs. 7.49 trillion) to achieve a market value of Rs. 6 trillion, owing to a sudden upsurge in its share prices.
The market capital of HDFC Bank stood at Rs. 6,05,932.79 crore on the Bombay Stock Exchange (BSE) and shares climbed 2.56% to settle at Rs. 2,226.10 apiece.
Recently HDFC Bank became India’s ‘Best Managed Company’ & ‘Best Growth Strategy’, according to Finance Asia Surveyand also ranked 2ndin Environmental and Social Governance (ESG).

Bank of India raises capital of Rs. 660 crore by selling shares to employees.
Bank of India (BoI) has raised Rs. 660.80 crore by issuing shares to employees under Employee Share Purchase Scheme (ESPS).
The bank issued 6,25,52,188 shares of Rs. 10 each to eligible employees, offered a discount of 24.28% on the applicable price to the employees and about 94.70% of total employees participated in the scheme
These shares are issued with a lock-in period of one year.
Employee Share Purchase Scheme (ESPS) is a benefit provided by employers to their employees to buy the company’s stock at a discounted value and the employee is required to contribute a small portion of his / her salary towards the scheme every month.

March 14

SBI offers Doorstep banking service for senior citizens.
State Bank of India (SBI) has launched doorstep banking service for senior citizens over 70 years of age and differently-abled customers.
Eligible customers can avail this service at a nominal fee of Rs. 100 per transaction for financial transactions and Rs.60 for non-financial transactions.
Doorstep banking services are available to KYC- compliant account holders, with a valid mobile number registered with the bank and residing within 5 kilometers radius from their home branch.
For Senior citizens, RBI providing highest interest rate for the five-year term deposits at 8.7%.
RBI relaxes norms for trade credit.
The Reserve Bank of India (RBI) relaxed norms for imports of capital and non-capital goods by raising the trade credit limit to USD 150 million under the automatic route.
RBI has revised framework for 'Trade Credit Policy', reduced the all-inclusive cost (all-in-cost) for overseas loans to benchmark rate plus 250 basis points from the earlier 350 bps.
Trade credits (TCs) refer to the credits extended by the overseas supplier, bank, financial institution and other permitted recognized lenders for maturity for imports of capital and non-capital goods.
According to the revised framework, TCs up to USD 150 million or equivalent per import transaction for oil and gas refining & marketing, airline and shipping companies can be availed under the automatic route.
For others, the limit is up to USD 50 million or equivalent per import transaction.
Earlier, under the automatic route, banks were permitted to approve trade credit up to USD 20 million. TCs beyond USD 20 million were required approval from the RBI.
RBI categorizes IDBI Bank as private sector lender
IDBI Bank has been categorized as a 'private sector bank' for regulatory purposes by Reserve Bank of India (RBI) with effect from January 21, 2019 consequent upon Life Insurance Corporation of India (LIC) acquiring 51 percent of the total paid-up equity share capital of the bank.
IDBI Bank has been under the prompt corrective action framework of RBI that bans it from corporate lending and branch expansions, salary hikes and other regular activities.
Now total government sector banks are 20 in number and after 1st April 2019 merger of 2 more Government Banks Dena and Vijaya Bank in government-owned Bank of Baroda, the number of Government Sector Banks will be reduced to 18.
Recently LIC appointed Hemant Bhargav as Non-Exe Chairman of IDBI Bank.
About IDBI Bank:
Headquarters: Mumbai
Established: 1964
MD & CEO: Rakesh Sharma

RBI announces Fresh Liquidity Infusion through Forex Swaps.
The Reserve Bank of India (RBI) has decided to use a new tool for the first time to enhance liquidity in the system using which it will buy USD 5 billion from the banks in a foreign exchange swap deal that is capable of injecting around Rs. 35,000 crores into the system.
Banks will have to deposit dollar funds with RBI with the condition of buying them back from RBI after 3 years. Minimum bid size for the auction has been fixed at USD 25 million and multiple bids submission by banks will be allowed.
The US Dollar amount mobilized through the auction, to be conducted on March 26, would also reflect in RBI's foreign exchange reserves for the tenor of the swap while also reflecting in RBI's forward liabilities.

Karur Vysya Bank raises Rs 487 crore through issue of BASEL III compliant Tier 2 Bonds
Karur Vysya Bank has raised Rs. 487 crore on private placement basis through 48,700 BASEL III compliant unsecured, redeemable, non-convertible Tier 2 bonds for funding its growth plans.
The Capital Raising Committee of the board in its meeting on March 12 allotted 48,700 BASEL III compliant bonds in the nature of debenture of Rs 1,00,000 each aggregating to Rs 487 crore.
Basel III is an international regulatory framework with a set of reforms to improve the regulation, supervision and risk management within the banking sector.

March 16

SBI launches cardless ATM withdrawals with YONO (You Only Need One) Cash.
State Bank of India (SBI) launched ‘YONO Cash’ for cardless withdrawal of cash at over 16,500 SBI ATMs across the country.
With this facility, customers can initiate the cash withdrawal process on the YONO app and set a six-digit YONO Cash pin for the transaction.
They will also get a six digit reference number for the transaction on their registered mobile number via SMS.
The cash withdrawal has to be completed within the next 30 minutes at the nearest ATMs using both PIN and the reference number received.
This feature on YONO is designed to help its users withdraw cash without a physical debit card and to create a digital universe by integrating the entire transactions ecosystem under one platform in the next two years.

RBI issues guidelines to prevent price-sensitive market abuse
The Reserve Bank of India (RBI) has declared guidelines to prevent misuse of price-sensitive information by participants in markets for financial instruments.
The Important guidelines given by RBI are:
Market participants, either acting independently or in collusion, shall not undertake any action with the intention to manipulate the calculation of a benchmark rate or a reference rate.
No market participant would carry out a transaction or initiate any action with the sole or dominant intention of influencing a benchmark rate or a reference rate.
According to RBI about regulatory action on market abuse, market participants indulging in any such activity are liable to be denied access to markets in one or more instruments for a period that may not exceed one month at a time.

March 17

RBI Names SBI, ICICI and HDFC as Systemically Important Banks
The Reserve Bank of India (RBI) named State Bank of India (SBI), ICICI Bank and HDFC Bank as Domestic Systemically Important Banks (D-SIBs), which in other words mean banks that are too big to fail.
As per the norms, these banks will have to set aside more capital for their continued operation.
Inclusion in D-SIB indicates that failure of any of these banks would have a cascading effect on Indian financial system.
Borrowing costs of these banks from the markets are cheaper than their peers.
Indian bank’s deposits rises 9.8 percent y/y in fortnight to March 01
The Reserve Bank of India’s weekly statistical supplement showed the Indian banks loans rose 14.6% in the two weeks to March 1 from a year earlier and deposits rose 9.8%.
Outstanding loans rose by 891.1 billion rupees ($12.90 billion) to 95.29 trillion rupees in the two weeks to March 1.
Non-food credit rose by 952.1 billion rupees to 94.74 trillion rupees, while food credit fell by 61 billion rupees to 556.4 billion rupees.
Bank deposits rose by 1.11 trillion rupees to 122.30 trillion rupees in the two weeks to March 1.

RBI reiterates No Dilution in February 12 Circular on Stressed Assets
The Reserve Bank of India (RBI) reiterated that there is no dilution in its stance concerning the February 12 circular on stressed assets recognition and resolution.
RBI maintained its stand on all aspects of the revised framework on resolution of stressed assets issued on February 12, 2018.
In the February 12, 2018 circular, RBI had issued various instructions aimed at resolution of stressed assets in the economy, including introduction of certain specific schemes at different points of time.
In view of the enactment of the Insolvency and Bankruptcy Code, 2016, the Reserve Bank decided to substitute the existing guidelines with a harmonized and simplified generic framework for resolution of stressed assets.

March 18

Bandhan Bank gets RBI approval for acquisition of Gruh Finance
The Reserve Bank of India has conveyed no objection for the voluntary amalgamation of Gruh Finance Ltd with Bandhan Bank in a share-swap deal.
The merger would help the bank to achieve product and geographic diversification while improving penetration in its core customer segment.
On the other hand, the housing finance company would get access to a wider distribution network, a larger customer base and low-cost deposit base of the bank.
The swap ratio for the amalgamation will be 568 shares of Bandhan Bank for every 1,000 shares of Gruh Finance.
Gruh Finance Ltd is the affordable housing finance arm of HDFC Ltd.

Jammu and Kashmir Bank to sell stake in PNB Metlife for Rs. 185 crore
Jammu and Kashmir Bank (J&K) has proposed to sell its stake in PNB Metlife India Insurance to private equity player Oman India Joint Investment Fund II for Rs. 185 crore.
According to J&K Bank, the bank has executed share purchase agreement with Oman India Joint Investment Fund II for sale of 4.1 crore shares of PNB MetLife India Insurance Company Ltd and it holds 5 percent stake in the insurance venture.
PNB MetLife India Insurance is a joint venture between MetLife International Holdings Inc (26% stake), Punjab National Bank (26% stake), Jammu and Kashmir Bank, M. Pallonji and Company Pvt Ltd and other private investors.

RBI allows HDFC To hold Only 9.9% In Bandhan Bank
The Reserve Bank of India (RBI) has prohibited India’s largest mortgage lender HDFC from owning more than the regulatory limit of 9.9 percent stake in Bandhan Bank.
HDFC can hold 9.9% in the bank which is the maximum a non-banking finance company can own in a private bank.
HDFC, which will merge its low-cost arm Gruh Finance with Bandhan Bank, had sought approval to hold 14.96%.

RBI proposes to reform Ways And Means Advance system for states
The Reserve Bank of India (RBI) has proposed a rule-based approach in fixing new Ways and Means limits for the state governments by replacing the previous expenditure-based system.
It will set up a panel to recommend parameters of the new system which is aimed at preventing automatic monetization of deficits.
The Reserve Bank of India gives temporary loan facilities to the centre and state governments as a banker to government. This temporary loan facility is called Ways and Means Advances (WMA).
The states have also agreed to link their receipts and payment systems with RBI’s integrated accounting system (eKuber) for greater system efficiency.

March 19

Bank of England recognizes the Clearing Corporation of Metropolitan Stock Exchange of India as a Third-Country Central Counterparty (TC-CCP)
Bank of England (BoE) has granted recognition to the clearing corporation (CC) of Metropolitan Stock Exchange of India (MSEI) for routing trades from the United Kingdom (UK) to India’s stock exchanges.
The move is significant as UK-based foreign institutional investors may be able to route their orders through the MSEI CC for trading in Indian markets once interoperability between CCs kicks in from June 1.
In the year 2017, the European Securities and Markets Authority (ESMA) also recognized the MSEI CC as a third Country Central Counterparty.
Central counterparty clearing (CCP) is a financial institution that takes on counterparty credit risk between parties to a transaction and provides clearing and settlement services for trades in foreign exchange, securities, options, and derivative contracts.
The Metropolitan Stock Exchange (MSE) is one of India's eight stock exchanges recognized by the SEBI. It offers an electronic platform for trading in capital market, futures and options, currency derivatives, Interest Rate Futures (IRF) and Debt Market segments.

Exim Bank extends USD 800 million credit line for financing developmental projects in Maldives
Maldives finance ministry has signed an agreement with India’s Export-Import bank (EXIM) for line of credit (LOC) of USD 800 million to finance the new government’s infrastructure projects.
According to Maldives Finance Minister Ibrahim Ameer, the agreement with EXIM Bank was signed in presence of External Affairs Sushma Swaraj two-day visit to Male which concluded on 18th March 2019.
The LOC is part of USD 1.4 billion finance assistance announced by Indian government during President Ibrahim Mohamed Solih’s state visit in December.
The EXIM Bank loans come with a 1.75% interest rate and a 15-year repayment period after five years of moratorium.

ADB to invest USD 50 million in solar power project developer Avaada
The Asian Development Bank (ADB) will invest USD 50 million in Indian renewable energy independent power producer Avaada Energy Private Limited to expand its solar energy generation capacity in India.
According to the ADB, this investment will contribute to the Indian government’s goal to increase the share of renewable energy generation capacity from about 20% in 2018 to 40% by 2030.
It will also help to reduce India's emission intensity of its gross domestic product by 33-35 per cent by 2030.
The investment will come equally from ADB's Ordinary Capital Resources and Leading Asia's Private Infrastructure Fund (LEAP).
LEAP is a funding arrangement provided by Japan International Cooperation Agency (JICA) which is administered by ADB.

RBI Governor calls for Permanent Status to Finance Commission
The Reserve Bank of India (RBI) governor Shaktikanta Das called for a permanent status to Finance Commission and he is also the member of the 15th Finance Commission.
The RBI governor also called on for a robust expenditure planning without compromising on fiscal consolidation as fiscal federalism gathers momentum in the era of uniform goods and services tax (GST) to address the socio-economic challenges without diluting the goals of fiscal consolidation.
The finance commission or the vitta aayog defines the financial relations between the central and the state governments of India.

March 20

SBI inks pact with Bank of China for business opportunities
The State Bank of India (SBI) has signed MoU with the third largest Bank in the world by capital size Bank of China (BoC) to enhance the business cooperation between both the banks.
It will facilitate the two major banks to provide its clients access to banking products and services of each other and will be mutually beneficial for both the banks and the two largest and fastest growing economies.
SBI already has a branch in Shanghai, China and Bank of China also planning to open its branch in Mumbai, India.

March 21

RBI says no to IDBI Bank name change proposal
The Reserve Bank of India (RBI) has turned down IDBI Bank’s proposal to change its name to either LIC IDBI Bank or LIC Bank.
In January, the Life Insurance Corporation of India (LIC) completed the acquisition of 51% controlling stake in IDBI Bank.
Following the stake transfer, the government holding came down in IDBI Bank to 46.46% from nearly 86 percent.
And also recently RBI changed the categorization of IDBI Bank to a private sector lender from public sector lender following acquisition of majority stake by LIC.

March 23

SBI raises Rs. 1,251.30 crore by issuing Basel III-compliant tier-I bonds
The country's largest lender State Bank of India (SBI) has raised Rs. 1,251.30 crore by issuing Basel III-compliant additional tier-I bonds.
It will help SBI to boost its additional tier 1 capital ratio to meet systematically important bank (D-SIB) criteria to which SBI is mandated to meet.
According to SBI, the Committee of Directors for capital raising deliberated and accorded approval to allot 12,513 non-convertible, taxable, perpetual, subordinated, unsecured Basel lll-compliant additional tier-I bonds, for inclusion in additional tier-I capital of the bank aggregating to Rs. 1,251.30 crore.
Recently the Reserve Bank of India (RBI) has classified SBI along with ICICI and HDFC as domestic systematically important banks (D-SIBs), which are too big to fail. These three banks are needed to comply most stringent capital rules by April 1, 2019.

March 24

RBI again defers Indian Accounting Standards implementation by banks
The Reserve Bank of India (RBI) has deferred the implementation of the new accounting rules, Indian Accounting Standards (Ind AS) for banks till further notice.
This is the second extension provided by the RBI.
Earlier in April 2018, RBI had postponed the implementation of Indian Accounting Standards by the banks by one year.
Indian Accounting Standards (Ind AS) is a set of accounting norms developed by Indian authorities, which converge with the International Financial Reporting Standards (IFRS).

March 25

RBI appoints five-member committee to deepen digital payments
The Reserve Bank of India (RBI) appointed 5-member committee under the chairmanship of Nandan Nilekani to strengthen digital payments as well as to boost financial inclusion through Financial Technology.
This announcement made by Reserve Bank of India (RBI) Governor Shaktikanta Das at the first event of Financial Technology (Fintech) Conclave, which was organized by NITI Aayog in New Delhi.
The purpose of the event is to shape India’s predominance in FinTech, build the future strategy and policy to uplift the financial inclusion.

March 26

RBI imposes Rs. 2 crore penalty on Punjab National Bank for violation of SWIFT norms
The Reserve Bank of India (RBI) imposed a penalty of Rs. 2 crore on Punjab National Bank (PNB) for non-compliance of regulatory directions regarding Society for World Wide Interbank Financial Telecommunication (SWIFT) operations.
According to RBI, recently it has imposed penalties worth Rs. 71 crore on 36 public, private and foreign banks for non-compliance with various directions on time-bound implementation and strengthening of SWIFT operations.(Excluding PNB)
(SWIFT) is a network which enables the financial institutions worldwide to send and receive information about the financial transactions in a secure manner.
The massive Rs 14,000 crore fraud at the PNB was a case of misuse of this messaging software.

March 27

Digital lending industry asks RBI to allow direct debit for loan repayment
Indian digital lenders have asked the Reserve Bank of India (RBI) to allow customers with Unified Payment Interface (UPI) 2.0-enabled devices to use the recurring payments feature for such things as the monthly installments on their loans, insurance premiums and mutual fund investments.
And also digital lenders asked to extend the ‘Udaan’ scheme to fintechs and non-banking finance companies and make bank funding mandatory for early-stage fintechs.
In August 2018, the National Payments Corporation of India (NPCI) was launched the upgraded version UPI 2.0.
NPCI is an umbrella organization for all retail payments in India. It was set up under the guidance and direction of the Reserve Bank of India (RBI) and the Indian Banks Association (IBA).
UPI is a mobile platform that facilitates instant fund transfer between two bank accounts without requiring details of the beneficiary’s bank account.

March 28

Bank of Baroda set to develop digital agricultural platform for farmers
Bank of Baroda (BoB) will develop an agriculture digital platform ‘Baroda Kisan’ to provide solutions for agricultural requirements.
Bank of Baroda has signed the agreement with Skymet Weather Services, Weather Risk Management Services, BigHaat, Agrostar India, EM3 Agri Services and Poorti Agri Services.

Government to Infuse Rs. 5,042 crore Into Bank of Baroda
The Finance Ministry has decided to infuse Rs. 5,042 crore into state-owned Bank of Baroda (BoB) ahead of the merger of two other public sector lenders Dena Bank and Vijaya Bank with BoB.
The merger of Dena Bank and Vijaya Bank with Bank of Baroda would be effective from April 1.

Supreme Court warns RBI for failing to disclose information under the Right to Information Act
The Supreme Court (SC) has warned the Reserve Bank of India (RBI) of contempt proceedings for failing to disclose information regarding the annual inspection reports of banks sought under the Right to Information (RTI) Act.
According to Supreme Court, the court gave the RBI one week’s time to comply with the directions or will face further the consequences.

March 29

Punjab National Bank (PNB) sells 13.01% Stake in PNB Housing Finance for Rs. 1851.60 crore
Punjab National Bank (PNB) has agreed to sell a part of 13.01% stake in its housing finance arm PNB Housing Finance (PNBHF) to General Atlantic Group and VardePartners for Rs. 1,851 crore at Rs 850 per share.
After the transaction, PNB will continue to hold a 19.78% stake in the housing finance arm and will remain the promoter and strategic shareholder of the company.

Axis Bank opens its 4,000th branch in Pune
Private sector lender Axis Bank opened its 4,000th branch at EON, Kharadi in Pune.
The new branch was inaugurated by Amitabh Chaudhry (Managing Director and CEO of Axis Bank) and Ravi Narayanan (President and Head Branch Banking of Axis Bank).
According to Axis Bank, the initiative is in line with the government’s vision of providing banking services within 5 km for every Indian citizen.
And also the bank has added 297 branches in the current fiscal (FY-2019) across India.

March 30

ICICI Bank launches digital home loan products up to Rs. 1 crore
Private sector lender ICICI Bank has launched two instantaneous home loan facilities, which would enable instant and paperless home loan approval of up to Rs. 1 crore.
‘Instant Home Loan’, the first service enables pre-approved salaried customers of the bank to avail final sanction letter digitally and instantly for loans up to ₹1 crore for a tenure of up to 30 years (based on the age of the customer) using internet banking facility.
‘Insta Top Up Loan’, the second initiative would enable existing home loan customers of the bank to avail the facility of topping up their loan immediately up to Rs. 20 lakh for tenure up to 10 years in a completely digital and paperless manner.
ICICI Bank has the largest mortgage portfolio among private sector banks in the country.

RBI sets NBFC-MFIs’ average base rate at 9.21% for April-June
The Reserve Bank of India (RBI) has set the normal base rate to be charged from borrowers by Non-Banking Finance Companies (NBFCs) and Micro Finance Institutions (MFIs) at 9.21%.
RBI declares average base rates on the last working day of every quarter, so new rates will be applicable from 1st April 2019.
The average of base rate charged by five largest commercial banks is used to calculate the base rate for NBFC and MFI.

March 31

RBI releases Rs. 19,000 crore Cash Credit Limit for wheat Procurement
The Reserve Bank of India (RBI) has cleared Rs. 19,240.91 crore towards Cash Credit Limit (CCL) for Punjab for the purchase of wheat in the Rabi marketing season.
The release of the CCL would facilitate the state government in making timely payments to farmers against purchases of food grains in the current season, which would begin from April 1 and culminate on May 25.
The central government has fixed the minimum support price (MSP) of wheat at Rs. 1,840 per quintal.