Banking and Financial Awareness week 1 March 2019

1. AIIB approved USD 455 Million loan for the Andhra Pradesh Rural Roads Project

• Its objective is to improve road transport connectivity in previously unserved communities by providing them with all weather rural roads in all 13 Districts of Andhra Pradesh.
• This is the third project in Andhra Pradesh signed by AIIB after the projects in Power sector and Water sector.

2. DCB Bank has launched Open Banking Platform for next generation banking solutions

• It will provide seamless integration of banking services by improving the existing banking technology infrastructure and at the same time it will also meet the growing demand for innovative solutions from new-age customers.

3. RBI have bundled NBFCs into a single type to offer operational flexibility

• RBI as announced in last bi-monthly policy decided to create a single categoryfor the NBFCs (non-banking financial companies) by bundling their present three-tier structure.
• The step has been undertaken to provide greater operational flexibility to the NBFCs, reducing the number of categories into which they are divided, on the principle of regulation by activity and not regulation by entity.

4. Reserve Bank India has formalised USD 75-billion swap pact with Bank of Japan

• The pact would act as a cushion against any sharp swings in the local currency whenever the international financial markets turn volatile.
• It will enable availability of USD 75-billion in foreign capital for use as and when the need arises, bringing greater stability to the foreign exchange and capital markets in India
• It will also serve as a second line of defence as India has about USD 398 billion foreign exchange reserves to cushion sudden dollar outflows.
• The BSA would provide an access of 75 billion US dollars to India whereas the earlier BSA had provided for USD 50 billion.
• It will be effective from February 28, 2019.
• With this BSA, India can access the agreed amount of USD 75 billion for its domestic currency, for the purpose of maintaining an appropriate level of balance of payments or short-term liquidity.

5. Rs 300 crore Women’s Livelihood Bond has been launched by World Bank, UN and SIDBI

• It will enable individual women entrepreneurs in sectors like food processing, agriculture, services and small units to borrow around Rs 50,000 to Rs 3 lakh at an annual interest rate of around 13% to 14% or less and have a tenure of 5 years.
• Thus they will be unsecured, unlisted bonds and offer fixed coupon rate of 3% per annum to bond investors.

6. Bank of Baroda have joined hands with German KfW for USD 130m to refinance solar units

• It will refinance the solar projects at a cost of 113 million USD.
• The tie-up is part of an Indo-German Solar Energy Partnership which was signed in 2015.
• The KfW which formerly was known as KfW Bankengruppe (banking group) and is a German government-owned development bank with headquarters in Frankfurt.

7. RBI has extended KYC deadline for digital wallets by six months

• Earlier they were asked to complete their KYC process by the end of February, 2019.
• Now an additional time of 6 months has been provided because of difficulties in undertaking Aadhaar e-KYC and time necessary to put in place other systems for completing the KYC process.

8. Three banks namely Corporation bank, Allahabad Bank and Dhanlaxmi bank are out of PCA framework

• The Board for Financial Supervision (BFS) of the Reserve Bank of India has removed 2 public sector banks- Corporation Bank and Allahabad Bank and 1 private sector bank – Dhanlaxmi Bank from PCA (Prompt Corrective Action) framework.
• Allahabad Bank and Corporation Bank had received Rs 6,896 crore and Rs 9,086 crore respectively which led to increase in their capital funds and also increased their loan loss provision.
• Dhanlaxmi bank was found to be not breaching any of the risk threshold of the PCA Framework, hence was removed out of the PCA Framework.

9. RBI will infuse Rs. 37,500 Crore into the system through OMO

• The infusion will be made through three auctions of Rs 125 billion each during the 2nd, 3rd and 4th week. The aggregate amount auctioned will be Rs 375 billion.

10. PNB has been ranked as the highest in implementation of ‘Reforms agenda’

• The index measured Banks on 140 objective metrics across 6 themes including customer responsiveness, credit off-take and digitalization.
• 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, recapitalisation and reforms.

11. Zimbabwe has started trading new currency RTGS dollar

• The new currency has replaced electronic bank savings called digital dollars and the bond notes.
• It has been started as a measure to try and resolve a chronic monetary crisis.

12. Centre and Asian Development Bank has signed USD 926 million loan agreement to operationalize two lines of Mumbai Metro Rail System

• It is the single largest infrastructure project loan in ADB histroy approved by ADB board.
• When operational in 2022, it is estimated that 2 million passengers a day will use the two new lines.