April 1, 2024 0

The Banking Updates

Email: admin@thebankingupdates.com
67
8261802533
The Banking & Financial Updates April 2024
 1
Regd. Office: Bhubaneswar

The Banking Updates Email: admin@thebankingupdates.com

bankingupdates2020@gmail.com

Platform for Banking Studies 8261802533

Volume 05 Issue 04 April 2024 ABOUT US

The Banking Updates is a platform managed
CONTENTS by experts having Rich academic track record
Topic Page and experience in different verticals of
RBI Guidelines 02 banking.
Govt./Regulators Corner 06
We publish monthly magazine covering every
Business, Finance & Economy 07
Partnership/New Products 09 developments relating to banking and financial
Outlook 10 world and release e-books covering various
New Appointments 10 aspects of banking.
Current Affairs (Developmental aspects) 10
The magazine covers all fields of banking and
Banking Subject updates 13
Important MCQs 17 financial awareness and also covers the
Recalled Questions 18 concept of some topics for in-depth
knowledge. The contents will be useful for
bank promotion examinations and interviews
BENCHMARK POLICY RATES
and all those dealing with financial services.
Rate Last Change Benchmark
Repo Rate 08.02.2023 6.50%
SDF Rate 08.02.2023 6.25%
MSF 08.02.2023 6.75%
Bank Rate 08.02.2023 6.75% Subscribe the e-magazine
Fixed Reverse Repo Rate
CRR 11.04.2020
3.35%
4.50%
now to get all updates on
SLR 11.04.2020 18.00% Banking and Finance at one
RESERVES POSITION place every month.
Total reserves US$ 642.63 bn
(as on 22.03.2024)
Foreign Currency Assets US$ 568.26 bn
(as on 22.03.2024)
Gold (as on 22.03.2024) US$ 51.48 bn
CLICK HERE TO
Aggregate deposits
(as on 08.03.2024)
Rs.204.20 Lakh crores
SUBSCRIBE
Outstanding Bank credit Rs.163.13 Lakh crores
(as on 08.03.2024)

THE BANKING FRONTLINE

(Daily Banking & Financial News)
April 1, 2024

Click here for daily updates (Send request with name and Bank name)

Click here to
join us on CLICK HERE TO DOWNLOAD
THE BANKING UPDATES APP
Telegram
The Banking & Financial Updates April 2024
 2

system in an encrypted form and displayed in the

RBI GUIDELINES CBP platform with robust security. The information
displayed through the CBP‘s platform shall be visible
CARD ISSUERS SHALL PROVIDE AN OPTION TO
only to the cardholder and shall neither be accessed
THEIR CUSTOMERS TO CHOOSE FROM MULTIPLE
CARD NETWORKS: At present, the authorized card nor be stored by the CBP.
networks tie-up with banks / non-banks for issuance of  Prior approval shall not be required by the banks and
credit cards and the choice of network for a card issued NBFCs registered with the Reserve Bank (NBFCs –
to a customer is decided by the card issuer (bank / non- ICC, HFC, Factor, MFI, and IFC) to become a co-
bank) and is linked to the arrangements that the card branding partner of card-issuers.
issuers have with card networks and it is observed that  No card-issuer shall dispatch a card to a customer
some arrangements existing between card networks unsolicited. In case of renewal of an existing card, the
and card issuers are not conducive to the availability of cardholder shall be provided an option to decline the
choice for customers. On this matter, RBI vide its same if he/she wants to do so before dispatching the
th
notification dated 6 March 2024 has directed that; renewed card. Further, in case a card is blocked at
 Card issuers shall not enter into any arrangement or the request of the cardholder, replacement card in
agreement with card networks that restrain them from lieu of the blocked card shall be issued with the
availing the services of other card networks. explicit consent of the cardholder.
 Card issuers shall provide an option to their eligible New Provisions added to the directions are;
customers to choose from multiple card networks at  Total Amount Due is the total amount (net of credit
the time of issue. For existing cardholders, this received during the billing cycle, if any) payable by
option may be provided at the time of the next the cardholder as per the credit card statement
renewal. (Shall not be applicable to credit card generated at the end of a billing cycle.
issuers with number of active cards issued by them  Interest shall be levied only on the outstanding
being 10 lakh or less in number.) amount, adjusted for payments/refunds/reversed
The directions shall be effective six months from the transactions.
date of this circular.  Card-issuers shall provide the list of payment modes
AMENDMENTS IN CREDIT CARD & DEBIT CARD authorised by them for making payment towards the
ISSUANCE AND CONDUCT DIRECTIONS 2022: RBI credit card dues, in their websites and billing
th
vide notification dated 7 March 2024, notified the statements. Further, card-issuers shall advise
following major amendments on ‗Credit Card and Debit cardholders to exercise due caution and refrain from
Card – Issuance and Conduct Directions; making payments through modes other than those
authorised by them.
 Card-issuers may issue business credit cards to
 Any debit to the credit card account shall be done as
business entities/individuals for business expenses.
per the authentication framework prescribed by the
However, in such cases, the card-issuers shall put in
Reserve Bank from time to time, and not through any
place an effective mechanism to monitor end use of
other mode/instrument.
funds.
 For business credit cards wherein the liability rests
 Any request for closure of a credit card shall be
fully with the corporate or business entity (principal
honoured within seven working days by the credit
account holder), timeframe provided for payment of
card-issuer, subject to payment of all dues by the
dues and adjustment of refunds may be as agreed
cardholder. Failure on the part of the card-issuers to
between the card-issuer and the principal account
complete the process of closure within seven working
holder.
days shall result in a penalty of ₹500 per calendar
 In case card-issuers, at their discretion, decide to
day of delay payable to the cardholder, till the closure
block/deactivate/suspend a debit or credit card, it
of the account provided there is no outstanding in the
shall be ensured that a standard operating procedure
account.
is followed as approved by their Board. Further, it
 Card-issuers do not follow a standard billing cycle for
shall also be ensured that
all credit cards issued. In order to provide flexibility in
blocking/deactivating/suspending a card or
this regard, cardholders shall be provided option
withdrawal of benefits available on any card is
(earlier it was a one-time option) to modify the billing
immediately intimated to the cardholder along with
cycle of the credit card at least once, as per the
reasons thereof through electronic means (SMS,
cardholders‘ convenience.
email, etc.) and other available modes.
 No bank shall issue debit cards to cash credit/loan
accounts. However, it will not preclude the banks REPORTING AND ACCOUNTING OF CENTRAL
from linking the overdraft facility provided along with GOVERNMENT TRANSACTIONS FOR MARCH 2024:
Pradhan Mantri Jan Dhan Yojana accounts or Kisan The Government of India has decided that the date of
Credit Card accounts with a debit card. closure of residual transactions for the month of March
 The co-branding partner (CBP) shall not have access 2024 be fixed as April 10, 2024. In view of the ensuing
closing of Government accounts for the financial year
April 1, 2024

to information relating to transactions undertaken

through the co-branded card. Post issuance of the 2023-24, receiving branches should adopt special
card, the CBP shall not be involved in any of the arrangements such as courier service etc., for passing
processes or the controls relating to the co-branded on challans/scrolls etc., to the Nodal/Focal Point
card except for being the initial point of contact in branches so that all payments and collections made on
case of grievances. However, for the purpose of behalf of Government towards the end of March are
cardholder‘s convenience, card transaction related accounted for in the same financial year. The
data may be drawn directly from the card-issuer‘s nodal/Focal Point branches will be required to prepare

The Banking & Financial Updates April 2024

 3

separate set of scrolls, one pertaining to March 2024 conventions.

residual transactions and another for April transactions  Special attention must be given on extending
during the first 10 days of April 2024. guidance and support, particularly to smaller entities
CUT-OFF TIME FOR UPLOADING OF GST, ICEGATE within the sector, and sharing best practices aligned
AND TIN 2.0 LUGGAGE FILES: After the with statutory and regulatory policies.
operationalization of NEFT 24X7 and RTGS 24X7,  Act as the collective voice of its members in
agency banks authorised to collect Goods and Service engagements with the Reserve Bank, government
Tax (GST), Custom and Central Excise Duties authorities or other regulatory and statutory bodies, in
(ICEGATE) and Direct Taxes under TIN 2.0 channel India.
shall upload their luggage files in RBI‘s QPX/e-Kuber on  Collect and share relevant sectoral information to the
all days except the Global holidays, which are January Reserve Bank to aid in policymaking.
26, August 15, October 2, all non-working Saturdays, all  Encourage a culture of research and development
Sundays and any other day declared holiday by RBI for within the sector to encourage innovation while
Government Transactions due to exigencies. It is to be ensuring highest standards of compliance and self-
ensured that these luggage files are uploaded in RBI‘s governance.
QPX/e-Kuber on or before 1800 hours prescribed by RESPONSIBILITIES OF THE SRO TOWARDS
O/o Principal Chief Controller of Accounts, Central MEMBERS: The primary responsibility of the SRO
Board of Indirect Taxes & Customs and O/o Principal towards its members would be to promote best business
Chief Controller of Accounts, Central Board of Direct practices and in particular should discharge the
Taxes. No extension in cut-off time will be allowed to following responsibilities towards its members:
agency banks by RBI beyond 1800 hours for uploading  Frame a code of conduct to be followed by its
of these luggage files in QPX/e-Kuber‖. members and monitor adherence to the code.
OMNIBUS FRAMEWORK FOR RECOGNISING SELF-  Develop a uniform, reasonable and non-
REGULATORY ORGANISATIONS (SROS) FOR discriminatory membership fee structure.
REGULATED ENTITIES (RES) OF THE RESERVE  Disseminate sector-specific information through
BANK OF INDIA: Self-Regulatory Organisations periodicals, bulletins, pamphlets, magazines, etc.
(SROs) enhance the effectiveness of regulations by  Establish a grievance redressal and dispute
drawing upon the technical expertise of practitioners and resolution/ arbitration framework for its members and
also aid in framing/ fine-tuning regulatory policies and offer counselling on restrictive, unhealthy and such
also help in fostering innovation, transparency, fair other practices which may be detrimental to growth of
competition, and consumer protection and shall the sector.
complement the extant regulatory/ statutory framework  Promote knowledge of statutory/ regulatory provisions
for better compliance. In deliverance of this role, the and provide necessary resources for exchange of
SRO shall frame necessary best practices/ standards/ expertise and experience among members. It may
codes within the regulatory framework prescribed by also arrange for training programmes for skill
RBI for voluntary adoption by its members and these development and awareness programs on
shall not be a substitute to the prescribed regulatory contemporary issues for its members.
framework for REs. As announced in the Statement on  Educate public about operations of REs, grievance
Developmental and Regulatory Policies dated October redress mechanisms available to them and spread
06, 2023, RBI has issued an omnibus framework for awareness in general about the sector.
recognizing SROs for the REs of the Reserve
Bank.Existing SROs already recognized by the Reserve RESPONSIBILITIES OF THE SRO TOWARDS THE
Bank shall continue to be governed by the terms and REGULATOR: The SRO shall discharge the following
conditions under which they were recognized, unless responsibilities towards the Regulator:
this framework is specifically extended to such SROs.  Keep the Reserve Bank regularly informed of the
developments in the sector. It shall also promptly
CHARACTERISTICS OF AN SRO: An SRO is expected inform the Reserve Bank about any violation by its
to operate under the oversight of the regulator, and member of the provision of the guidelines issued by
should have the following characteristics: RBI.
 Sufficient authority which is derived from membership  Carry out any work assigned to it by the Reserve
agreements to set ethical, professional and Bank and examine the proposal or suggestion
governance standards and enforce these standards referred to it.
on the members.
 Submit an Annual Report to the Reserve Bank, within
 Objective, well-defined and consultative processes to three months of completion of the accounting year.
make rules relating to conduct of its members. The SRO shall also submit the periodic/ adhoc
 Develop standards for improving compliance culture returns as may be prescribed by the Reserve Bank.
and adherence to the rules and regulations framed by  Engage in periodic interactions with the Reserve
the Reserve Bank. Bank.
 Devise and implement standardized procedures for  Reserve Bank may, if it deems necessary, inspect the
April 1, 2024

handling disputes among members. books of the SRO or arrange to have the books
 Suitable surveillance methods for effective monitoring inspected by an audit firm.
of the sector.
ELIGIBILITY CRITERIA FOR THE APPLICANT: The
OBJECTIVES OF THE SRO: An SRO is expected to entities intending to function as an SRO shall, therefore,
achieve the following objectives:: fulfil the following eligibility criteria:
 Promote a culture of compliance among its members  The applicant shall be set up as a not-for-profit
by encouraging progressive practices and company registered under Section 8 of the

The Banking & Financial Updates April 2024

 4

Companies Act, 2013. The applicant must have three auctions (from the rate fixing day, i.e., March 22,
adequate net-worth as specified, wherever 2024) of 182 Day T-Bills, plus a fixed spread (1.22
necessary, at the time of inviting applications and percent).
should possess or have the ability to create RBI TAKES ACTION AGAINST JM FINANCIAL
infrastructure to enable it to discharge responsibilities PRODUCTS LIMITED: RBI, in exercise of its powers
of an SRO on a continuing basis. No entity shall hold under section 45L(1)(b) of the Reserve Bank of India
10% or more of its paid-up share capital, either singly Act, 1934, directed JM Financial Products Limited
or acting in concert. (JMFPL) to cease and desist, with immediate effect,
 The applicant must represent the sector and have the from doing any form of financing against shares and
specified membership or should have submitted debentures, including loans against IPO of shares as
roadmap for attaining specified membership within a well as against subscription to debentures. The
reasonable timeline. Company shall, however, continue to service its existing
 The applicant and its directors must have loan accounts through the usual collection and recovery
professional competence and have general reputation process. This action is necessitated due to certain
of fairness and integrity to be established to the serious deficiencies observed in respect of loans
satisfaction of the Reserve Bank. sanctioned by the company for IPO financing as well as
 The applicant must be fit and proper for the grant of NCD subscriptions. During the limited review it was
recognition as an SRO, in all other respects observed, inter alia, that the company repeatedly helped
The minimum membership that may be prescribed by a group of its customers to bid for various IPO and NCD
the Reserve Bank shall be attained ideally at the time of offerings by using loaned funds.
making an application or within a maximum period of RBI APPROVES AMALGAMATION OF FINCARE
two years, from the date of grant of recognition. The SMALL FINANCE BANK LTD. AND AU SMALL
membership of SRO shall be voluntary for the members. FINANCE BANK LTD: The Reserve Bank of India has
GOVERNANCE FRAMEWORK OF THE SRO: The sanctioned the Scheme of Amalgamation of Fincare
SRO shall abide by the following guidelines: Small Finance Bank Ltd. (Transferor Bank) with AU
 The SRO shall be professionally managed and have Small Finance Bank Ltd. (Transferee Bank), in exercise
a suitable provision in their Articles of Association of the powers contained in sub-section (4) of Section
(AoA)/ bye-laws to ensure this. 44A of the Banking Regulation Act, 1949. ll the
 The Directors shall fulfil the 'fit and proper' criteria as branches of Fincare Small Finance Bank Ltd. will
framed by the Board of the SRO on an ongoing basis function as branches of AU Small Finance Bank Ltd.
and have relevant expertise/ experience and be with effect from April 01, 2024.
persons of high integrity. At least one-third of RBI TAKES ACTION AGAINST IIFL FINANCE
members in the Board of Directors including the LIMITED: The Reserve Bank of India in exercise of its
chairperson shall be independent and without any powers under Section 45L(1)(b) of the Reserve Bank of
active association with the category/ class of REs for India Act, 1934, directed IIFL Finance Ltd. to cease and
which the SRO is established. desist, with immediate effect, from sanctioning or
RBI REASSIGNED THE LEAD BANK disbursing gold loans or assigning/ securitising/ selling
RESPONSIBILITY IN 6 DISTRICTS: RBI vide its any of its gold loans. The company can, however,
notification dated 22 March 2024 has informed about continue to service its existing gold loan portfolio
reassignment of Lead Bank Responsibility in following through usual collection and recovery processes. An
districts across the country to be effective from April 01, inspection of the company was carried out by the
2024. Reserve Bank with reference to its financial position as
State District Existing Lead Lead Bank on March 31, 2023, wherein certain material supervisory
Bank Responsibilit concerns were observed in the gold loan portfolio of the
y assigned company, including serious deviations in assaying and
to certifying purity and net weight of the gold at the time of
Kerala Ernakulum Union Bank of State Bank sanction of loans and at the time of auction upon
India of India default; breaches in Loan-to-Value ratio; significant
Kerala Idukki Union Bank of State Bank disbursal and collection of loan amount in cash far in
India of India excess of the statutory limit; non-adherence to the
Madhya Seoni Central Bank State Bank
standard auction process; and lack of transparency in
Pradesh of India of India
charges being levied to customer accounts, etc.
Maharastra Mumbai Bank of India Bank of
City Baroda NEFT SYSTEM HAS ACHIEVED A MILESTONE ON
Maharastra Mumbai Bank of India Bank of FEBRUARY 29, 2024, BY PROCESSING MORE THAN
Suburban Baroda 4 CRORE TRANSACTIONS: NEFT system has
Tamilnadu Salem Indian Bank State Bank achieved a milestone on February 29, 2024, by
of India processing 4,10,61,337 transactions, the highest
RATE OF INTEREST ON GOVERNMENT OF INDIA number of transactions processed in a day so far.
April 1, 2024

FLOATING RATE BOND 2033: The rate of interest on During the previous ten years (2014-23), NEFT and
Government of India Floating Rate Bond 2033 (GOI RTGS systems have registered growth of 700 per cent
FRB 2033) applicable for the half year March 22, 2024 and 200 per cent respectively in terms of volume and
to September 21, 2024 shall be 8.34 percent per 670 per cent and 104 per cent respectively in terms of
annum. It may be recalled that FRB 2033 carries a value. RTGS system had processed its highest ever
coupon, which has a base rate equivalent to the volume of 16.25 lakh transactions in a day on March 31,
average of the Weighted Average Yield (WAY) of last 2023.

The Banking & Financial Updates April 2024

 5

RBI SAYS MORE THAN 97% OF 2,000-RUPEE has downstream investments all other investments,
NOTES RETURNED SINCE MAY 2023: RBI either directly or indirectly in including investment in
announced that over 97% of India's highest- a debtor company of the RE. hybrid instruments.
denomination 2,000-rupee currency notes, which were Note: The debtor company of
withdrawn from circulation in May 2023, have been the RE, for this purpose,
returned. The total value of 2,000 rupee banknotes in shall mean any company to
circulation, which stood at 3.56 lakh crore rupees as on which the RE currently has
May 19, 2023, when the withdrawal of India's highest or previously had a loan or
currency note was announced, has now decreased to investment exposure anytime
8,470 crore rupees as of February 29, 2024, the RBI during the preceding 12
said in a statement. months.
INTEROPERABILITY OF INTERNET BANKING If an AIF scheme, in which Provisioning shall be
SYSTEM IN 2024: RBI GOVERNER: RBI is working to RE is already an investor, required only to the
allow interoperability for internet banking transactions makes a downstream extent of investment by
which is expected to be operational in 2024 and will investment in any such the RE in the AIF
facilitate quicker settlement of funds for merchants, debtor company, then the RE scheme which is
Governor Shaktikanta Das said. The move is aimed at shall liquidate its investment further invested by the
addressing delays in the actual receipt of payments by in the scheme within 30 days AIF in the debtor
merchants and is a part of the regulator‘s payment from the date of such company, and not on
vision 2025. The RBI has approved implementing such downstream investment by the entire investment
a system for NPCI Bharat BillPay Ltd (NBBL). The new the AIF, failing which, they of the RE in the AIF
system will facilitate quicker settlement of funds for shall make 100 percent scheme.
merchants,‖ provision on such
30 BANKS JOIN RBI UDGAM PORTAL FOR investments.
UNCLAIMED DEPOSITS: The Reserve Bank said 30 Investment by REs in the Shall only be
banks are facilitating people to search their unclaimed subordinated units of any AIF applicable in cases
deposits/accounts through UDGAM portal, and the scheme with a ‗priority where the AIF does not
remaining banks are in the process of getting on- distribution model‘ shall be have any downstream
boarded. UDGAM -- Unclaimed Deposits-Gateway to subject to full deduction from investment in a debtor
Access Information -- is an online portal developed by RE‘s capital funds. company of the RE.
RBI. It facilitates the registered users to search The deduction from
unclaimed deposits/accounts across multiple banks in capital shall take place
one place in a centralised manner. "As on March 4, equally from both Tier-
2024, there are 30 banks, which are part of UDGAM 1 and Tier-2 capital.
portal, and they cover around 90 per cent of unclaimed INDIA‟S INTERNATIONAL INVESTMENT POSITION
deposits (in value terms) in DEA Fund of RBI," the (IIP), DECEMBER 2023: The key features of India‘s IIP
central bank said. in end-December 2023 as per data released by RBI are;
RBI MPC MEETING SCHEDULE FOR FY25  Net claims of non-residents on India declined by US$
RELEASED: The Reserve Bank of India (RBI) on March 12.2 billion during October-December 2023 to US$
27 announced the meeting schedule of the Monetary 370.4 billion as at end-December 2023 due to the
Policy Committee (MPC) for financial year 2025. As per higher rise in Indian residents‘ overseas financial
the RBI Act, the MPC must meet a minimum of four assets (US$ 40.7 billion) as compared to the increase
times in a year, with the meeting schedule for a year to in foreign-owned assets in India (US$ 28.5 billion).
be published by the central bank at least one week  The share of debt liabilities in total external liabilities
before the first meeting for that year. Next week, the six- remained at its level a quarter ago (50.4 per cent).
member Monetary Policy Committee (MPC) of the RBI  The ratio of India‘s international financial assets to
will meet on April 3-5. After that, the MPC will meet on international financial liabilities improved to 72.4 per
June 5-7, August 6-8, October 7-9, December 4-6, and cent in December 2023 from 70.9 per cent a quarter
February 5-7, the RBI said in a statement on March 27. ago.
RBI MODIFIES NORMS FOR INVESTMENT IN RBI RELEASES DATA ON LENDING AND DEPOSIT
ALTERNATIVE INVESTMENT FUNDS (AIFs) BY RATES OF SCHEDULED COMMERCIAL BANKS: The
REGULATED ENTITIES: Vide notification dated key points of RBI report on lending and deposit rates of
December 19, 2023 instructions were issued by RBI to scheduled commercial banks (SCBs) (excluding
address certain regulatory concerns relating to regional rural banks and small finance banks) during the
investment by regulated entities (REs) in the AIFs. month of March 2024 are;
Based on representation received from stakeholders,  The weighted average lending rate (WALR) on fresh
RBI has made following modifications to the earlier rupee loans stood at 9.36 per cent in February 2024
instructions; (9.43 per cent in January 2024).
April 1, 2024

Existing guidelines Modifications  The WALR on outstanding rupee loans was at 9.83
In order to address concerns Downstream per cent in February 2024 (9.85 per cent in January
relating to possible investments shall 2024).
evergreening through this exclude investments in  1-Year median MCLR of SCBs remained unchanged
route, it is advised that, REs equity shares of the at 8.80 per cent in March 2024.
shall not make investments debtor company of the  The share of External Benchmark based Lending
in any scheme of AIFs which RE, but shall include Rate (EBLR) linked loans in total outstanding floating

The Banking & Financial Updates April 2024

 6

rate rupee loans of SCBs was 56.2 per cent at end- Samridhi for the three-month period from April-June.
December 2023. Accordingly, the interest rate on the Public Provident
 The weighted average domestic term deposit rate Fund (PPF) will continue to be 7.1 per cent, while it will
(WADTDR) on fresh rupee term deposits of SCBs be 8.2 per cent on the Sukanya Samridhi scheme.
increased to 6.44 per cent in February 2024 from Simillarly the RoI under SCSS Scheme remains
6.43 per cent in January. unchanged at 8.20% and under KVP Scheme the RoI
 The weighted average domestic term deposit rate also kept unchanged at 7.50% p.a.
(WADTDR) on outstanding rupee term deposits of MCA RAISES EXEMPTION LIMIT FOR M&A
SCBs was at 6.86 per cent in February 2024 (6.84 WITHOUT PRIOR CCI APPROVAL: The government
per cent in January). on March 8 announced to raise the threshold for smaller
HIGHLIGHTS OF DATA ON SECTORAL business deals, including mergers and acquisitions, to
DEPLOYMENT OF BANK CREDIT (FEBRUARY happen without prior approval of the Competition
2024): Based on sectoral deployment of bank credit for Commission Of India (CCI). When one company buys
the month of February 20241 collected from 41 select another or merges, if the deal for assets is up to Rs
scheduled commercial banks, accounting for about 95 450 crore in India or if the businesses' turnover is Rs
per cent of the total non-food credit deployed by all 1,250 crore, they will be exempted from prior
scheduled commercial banks, RBI released the approval under the Competition Act. The earlier
following figures; threshold stood at Rs 350 crore for value of assets and
 Non-food bank credit registered a growth of 16.5 % in Rs 1,000 crore for turnover. The increased asset and
February 2024 as compared with 15.9 % a year ago. revenue thresholds described above are applicable for a
 Credit growth to agriculture and allied activities period of 2 years, with effect from 7 March, 2024.
remained at 20.1 % YoY in February 2024 (15.0 % a CGTMSE LAUNCHES ODISHA CREDIT GUARANTEE
year ago). SCHEME (OCGS)/ SWATANTRA YUVA UDYAMI
 Credit to industry grew by 8.6 % YoY in February (SWAYAM): CGTMSE in collaboration with the State
2024 as compared with 6.8 %in February 2023. Government of Odisha has launched a Special Credit
 Credit to services sector grew by 21.2 %YoY in Guarantee Scheme "Odisha Credit Guarantee Scheme
February 2024 (20.5 % a year ago). (OCGS)/ Swatantra Yuva Udyami (SWAYAM)" for the
 Personal loans growth moderated to 18.1 % YoY in MSEs situated in the State of Odisha. Under the
February 2024 (20.6 % a year ago) due to scheme 85% of the guarantee coverage will be provided
decelerated growth in vehicle loans and other by CGTMSE as being done hitherto and balance 15%
personal loans. coverage shall be provided by Government of Odisha
for loans upto '95,000/- extended by MLIs, taking the
GOVT. / REGULATORS CORNER overall guarantee coverage to 100%. The enhanced
guarantee coverage will be available upto NPA level of
GOVT. LAUNCHES NUCFDC, SETS TARGET TO 15% of crystallised portfolio (portfolio will be crystallised
ESTABLISH ONE URBAN COOPERATIVE BANK IN as on 31st March every year). In case the NPA level
EACH TOWN: Cooperation Minister Amit Shah exceeds the above limit of 15% of crystallised portfolio,
launched the National Urban Cooperative Finance and the claims will be settled as per the terms of normal
Development Corporation (NUCFDC) in New Delhi and Credit Guarantee Scheme of CGTMSE. The cost of
asked the umbrella body to set up one urban annual guarantee fee shall be borne by the State
cooperative bank in each town. He also said urban Government under the Scheme. All the existing MLIs
cooperative banks should upgrade themselves to (excluding NBFCs and Small Finance Banks) shall be
provide ATM facility, credit/debit cards, clearing system, eligible under OCGS / SWAYAM.
and maintain SLR (statutory liquidity ratio) limit and GOVT. FORMS EXPERT COMMITTEE ON UNIFORM
refinancing. NUCFDC has received the RBI approval to KYC FOR ALL: To reduce the paperwork, time and
function as a non-banking finance company and a self- cost of this process, the Financial Stability and
regulatory organisation for the urban cooperative Development Council (FSDC) has proposed to
banking sector. implement a uniform KYC system to verify customers
FARMERS‟ ENROLMENT IN FASAL BIMA SCHEME across the financial sector. The central government has
RISES 27% IN 2023-24: The government said there formed an expert committee under Finance Secretary
was a 27 per cent increase in farmers enrolled under the TV Somanathan to make recommendations on uniform
flagship crop insurance scheme PMFBY and the share KYC norms, according to reports.
of non-loanee farmers was 42 per cent in the total SEBI ISSUES CIRCULAR TO EXEMPT CERTAIN FPIs
enrollment during 2023-24. However, the increase this FROM ADDITIONAL DISCLOSURE FRAMEWORK:
year has been attributed by Maharashtra and Odisha‘s The market regulator had issued directions to exempt a
decision to completely bear the farmers‘ share of section of foreign portfolio investors (FPIs) who hold
premium. ―During the past eight years of implementation concentrated holdings in one corporate group from the
of the Pradhan Mantri Fasal Bima Yojana (PMFBY), additional disclosure framework issued last August. In a
April 1, 2024

56.80 crore farmer applications have been enrolled and circular dated March 20, SEBI stated that an FPI having
over 23.22 crore farmer applicants received claims,‖ the more than 50 percent of its Indian equity AUM (assets
agriculture ministry said in a statement. under management) in a corporate group shall not be
INTEREST RATES ON SMALL SAVING SCHEMES required to make the additional disclosures as in the
TO REMAIN UNCHANGED IN APRIL-JUNE circular dated August 24, 2023, subject to compliance
QUARTERT: There will be no change in interest rates of with all required conditions.
small saving schemes such as PPF and Sukanya

The Banking & Financial Updates April 2024

 7

CAPPING OF INTEREST SUBSIDY FOR EXPORTERS policyholders throughout their engagement with
TO CONTINUE IN Q1 OF NEW FISCAL: The Centre insurers and distribution channels.
has notified an interest subsidy cap of ₹2.5 crore for CENTRE TO BORROW RS 7.5 LAKH CRORE VIA
individual export units in the first quarter of the DATED SECURITIES IN H1FY25: The Centre will
forthcoming fiscal 2024-25 under the popular interest borrow Rs 7.50 lakh crore via the issuance of
equalisation scheme (IES) for identified sectors and government securities in the April-September period of
MSMEs. The DGFT issued a notification clarifying that a FY25. The Interim Budget for 2024-25 had pegged the
cap of ₹2.50 crore per IEC is imposed till June 30, 2024, Centre's full-year gross borrowing estimate at Rs 14.13
for the quarter starting from April 1, 2024. ―Last May, the lakh crore from the markets. In April-September, the
government introduced a cap of ₹10 crore per importer size of the weekly government bond auctions will range
exporter code (IEC) on the annual net subvention from Rs 22,000 crore to Rs 38,000 crore. Finance
amount. The rates of subsidy were at 3 per cent for Ministry in a release said that the government has
MSME sectors and 2 per cent for the rest. decided to introduce a new dated security of 15-year
SEBI DIRECTS AMFI TO STOP INFLOWS INTO tenor based on the market feedback and in line with
OVERSEAS SCHEMES OF MFs FROM APRIL 1: global market practices.
Capital market regulator SEBI has directed the LIC, GIC Re AND NEW INDIA ASSURANCE
Association of Mutual Funds to stop inflows into COMPANY RETAIN THE 'D-SII' TAG: The public
overseas exchange traded funds from April 1 as it is sector insurance companies, Life Insurance Corporation
approaching the overall limit of $1 billion set by the of India (LIC), General Insurance Corporation of India
RBI. In January 2022, SEBI stopped mutual fund (GIC Re) and the New India Assurance Company
houses from taking fresh subscriptions in schemes continue to be identified as Domestic Systemically
investing in overseas stocks. Important Insurers (D-SIIs) by IRDAI. D-SIIs are
IRDAI ISSUES SERIES OF REGULATIONS, TWEAKS insurance companies which are perceived as ‗too big or
REGULATION ON SURRENDER CHARGES: IRDAI too important to fail‘ (TBTF) based on their size, market
(Insurance Products) Regulations, 2024 merge six importance, and domestic and global
regulations into a unified framework aimed at enabling interconnectedness.
insurers to swiftly respond to evolving market demands,
enhancing the ease of conducting business, and BUSINESS / FINANCE &
boosting insurance penetration. These regulations,
which will be effective April 1, 2024 are as follows in a
ECONOMY
nutshell. WOMEN CONTRIBUTE ONLY 18% TO GDP DESPITE
 The surrender value is expected to remain the same 48% SHARE IN POPULATION: Indian women, despite
or even lower if policies are surrendered within three constituting 48% of the population, contribute only 18%
years of the purchase. For policies that have been to the GDP, found a study by the National Family Health
surrendered from the fourth to the seventh year, the Survey. Bridging the gender gap in employment could
surrender value may see a minor increase. potentially lead to a 30% increase in the country's GDP,
 The IRDAI (Rural, Social Sector, and Motor Third as per the study. Another study, by McKinsey Global
Party Obligations) Regulations, 2024 consolidate 2 Institute (MGI), said advancing women's equality could
erstwhile regulations pertaining to minimum business lead to a $28 trillion increase in the global GDP.
obligations in rural, social sector and motor third party
TERM DEPOSITS FORMED 98% OF INCREMENTAL
business for insurers, as mandated under the
DEPOSIT GROWTH IN APR-DEC: Term deposits
Insurance Act, 1938.
accounted for a whopping 98% of incremental deposits
 Compliance and measurement of these statutory
between April-December 2023, with share of low-cost
obligations have been revised where the unit of
current account and savings account (CASA) falling to a
measurement under the rural obligations will now be
low of 2% during the period, according to RBI‘s quarterly
Gram Panchayat. The scope of social sector has
basic statistical returns on deposits-December 2023
been extended to cover cardholders and beneficiaries
report. Deposits also moved to higher interest rate
under various schemes.
buckets, with the share of term deposits bearing over
 Under the Motor Third Party Obligations, the unit of 7% interest rate rising to 61% of the total term deposits
measurement will be the renewal of insurance in December 2023 from 55% a quarter ago and 34% in
coverage to goods-carrying vehicles, passenger- March 2023.
carrying vehicles and tractors.
 Besides, the IRDAI (Registration and Operations of Paytm PAYMENTS BANK FINED RS 5.49 CRORE
Foreign Reinsurers Branches & Lloyd's India) FOR VIOLATING MONEY LAUNDERING NORMS:
Regulations, 2024 consolidate two regulations and The Financial Intelligence Unit-India has imposed a
aims to foster the systematic development of the penalty of Rs 5.49 crore on Paytm Payments Bank for
reinsurance sector in India by promoting orderly violating money laundering norms, as a few entities and
growth and harmonizing the existing legal and their business network were engaged in illegal activities,
including organising and facilitating online gambling.
April 1, 2024

regulatory framework.
"Further, the money generated from these illegal
 The IRDAI (Protection of Policyholders' Interests and
operations were routed and channelled through bank
Allied Matters of Insurers) Regulations, 2024
accounts maintained by these entities with the Paytm
consolidate eight regulations into a unified structure,
Payments Bank Ltd,"
focusing on several key objectives aimed at ensuring
fair treatment of prospects during solicitation and sale BANKS' NPAs AT RECORD LOWS AS RECOVERIES
of insurance policies and protecting the interests of UP: Banks' bad loans have fallen to record lows as
recoveries from defaulters rise and many who missed

The Banking & Financial Updates April 2024

 8

payments have regularised, but lenders are looking at March 11. According to the affidavit, details, including
building buffers anticipating some stress, said CareEdge date of purchase of each electoral bonds, names of the
Ratings. Bad loans fell 21% in the last calendar to Rs purchaser and the denomination of the bonds
4.85 lakh crore, from a year earlier. The ratio of gross purchased have been furnished. The bank has also
bad loans could improve to 2.8% this year from 2.9% furnished to the EC details like date of encashment of
last year. Write-offs stood at Rs 34,000 crore from Rs the electoral bonds, the names of political parties which
29,000 crore in the December quarter last year. received the contributions and the denominations of the
BLOOMBERG TO INCLUDE INDIA'S FAR BONDS IN bonds.
EM LOCAL CURRENCY GOVT INDEX: Bloomberg, the EC PUBLISHES DETAILS OF ELECTORAL BONDS
global financial information and Technology Company, DATA ON ITS WEBSITE: The Election Commission
has made a significant announcement regarding the has published details of the electoral bond data recevied
inclusion of India's Fully Accessible Route (FAR) bonds from SBI on its website. Future Gaming and Hotel
in the Bloomberg Emerging Market (EM) Local Currency Services PR has emerged as the top purchaser of
Government Index and related indices. This decision will electoral bonds at Rs 1,368 crore, with Megha
be phased in over a ten-month period, commencing Engineering and Infrastructures Ltd at the second spot
from January 31, 2025. Indian FAR bonds will initially be with Rs 966 crore. Bharatiya Janata Party (BJP) has
incorporated into the Bloomberg EM Local Currency emerged as the top beneficiary of electoral bonds,
Government indices with a weight equivalent to 10 per encashing bonds worth Rs 6,060.5 crore between April
cent of their full market value as of January 31, 2025. 12, 2019, and January 24, 2024. All India Trinamool
Over the following ten months, the weight of FAR bonds Congress (TMC) secured the second spot, receiving Rs
will progressively increase in increments of 10 per cent 1,609.50 crore via electoral bonds. Congress occupied
of their full market value each month. They will be the third spot, collecting Rs 1,421.9 crore through this
weighted at their full market value in the indices in route.
October 2025. SEBI ISSUES FRAMEWORK FOR BETA VERSION
SIDBI GETS $24.5 MILLION FROM GREEN CLIMATE OF T+0 SETTLEMENT; TO START WITH 25 SCRIPS
FUND FOR ITS AVAANA SUSTAINABILITY FUND: AND LIMITED TRADE TIMING: The Securities and
Small Industries Development Bank of India (Sidbi) has Exchange Board of India (Sebi) on March 21 issued
received $24.5 million from Green Climate Fund (GCF) framework for implementing the beta version of same-
for its maiden anchored project `Avaana Sustainability day or T+0 settlement on an optional basis, in addition
Fund (ASF)' valued at $120 million. GCF, a pivotal to the T+1 settlement cycle. To start with, this option will
component of the historic Paris Agreement, is the be available in the equity cash segment for 25 scrips
world's largest climate fund. The ASF project‘s primary and through a limited set of brokers. All investors will be
objective is to invest in early-stage companies allowed to participate in this segment and trade timing
leveraging technology-led innovation to drive climate for will be between 9.15 am and 1.30 pm.
solutions and sustainability in India. BSE RELEASES LIST OF 25 STOCKS ELIGIBLE FOR
RBI BARS FEDERAL BANK, SOUTH INDIAN BANK T+0 SETTLEMENT CYCLE FROM 28TH MARCH: BSE
FROM ISSUING CO-BRANDED CREDIT CARDS: on March 27 released the list of 25 stocks that will be
Reserve Bank of India has issued notices to Federal eligible for T+0 settlement cycle from March 28. Ambuja
Bank and South Indian Bank to stop issuing new co- Cements, Ashok Leyland, Bajaj Auto, Bank of Baroda,
branded cards. Both the banks said they will continue to BPCL, Cipla, three Tata Group are among the stocks
offer credit cards to new and existing customers in the that will be eligible for the settlement cycle. Indian
non-co-branded segment and will also continue to markets operate on a T+1 settlement cycle for all stocks
service existing co-branded cardholders. currently, which means that the purchase and sale of
SBI PARTNERS WITH Paytm AS THE FOURTH shares will reflect in the demat accounts of investors
BANK FOR ITS UPI BUSINESS: State Bank of India one day after the transaction. With regards to eligibility,
has partnered with One97 Communications, which runs the regulator said that all investors will be eligible to
Paytm brand and app, for its consumer UPI payments. participate in the T+0 settlement cycle if they are able to
Paytm's UPI was powered by Paytm Payments Bank meet the timelines, process and risk requirements as
Limited (PPBL) and since the RBI's action, the mobile prescribed by the market infrastructure institutions.
payments company has been forced to seek bank Trade timing will be between 9.15 am and 1.30 pm. The
partnerships to become a third party application provider price in the T+0 segments will operate with a price
(TPAP), much like its larger competitors PhonePe and band of +100 basis points from the price in the
Google Pay. Paytm had partnered with Axis Bank, Yes regular T+1 market. This band will be re-calibrated
Bank and HDFC Bank for TPAP partnerships earlier. after every 50 basis points movement in the underlying
For most large UPI players, the regulatory body National T+1 market. The surveillance measures as applicable in
Payments Corporation of India insists that they should the T+1 settlement cycle shall be applicable to scrips in
have at least three bank partners. the T+0 settlement cycle. The regulator said that T+0
prices will not be considered in index calculation and
22,217 ELECTORAL BONDS PURCHASED AND
April 1, 2024

settlement price computation. There will be no separate

22,030 REDEEMED: SBI TELLS SC: SBI informed the
close price for securities based on trading in the T+0
Supreme Court that 22,217 electoral bonds were sold
segment.
between April 1, 2019 and February 15, 2024. It also
mentioned that of these, 22,030 bonds were redeemed MUMBAI OVERTAKES BEIJING AS ASIA‟S
during the said period. These details were part of the BILLIONAIRE HUB: In a significant shift, Mumbai has
affidavit submitted by SBI Chairman Dinesh Kumar dethroned Beijing as Asia‘s billionaire capital, marking a
Khara in compliance with the apex court‘s directions on historic milestone in the latest Hurun Global Rich List

The Banking & Financial Updates April 2024

 9

2024. With 271 billionaires, India now stands third Flipkart app.
globally in terms of billionaire count. The report unveils a  Tata Motors Ltd (TML) on March 4 informed the stock
total of 3,279 billionaires globally, with 167 additions in exchanges of its decision to demerge its businesses
the past year. While China maintained its lead with 814 into two separate listed entities, namely the
billionaires, India added nearly 100 new billionaires, commercial vehicles (CV) and passenger vehicles
while China saw a decline of 155. (PV) businesses.
FTSE RUSSELL DEFERS INDIA‟S INCLUSION IN ITS  RBI and the Bank of Indonesia signed an MoU for
EMERGING MARKETS GOVERNMENT BOND INDEX: establishing a framework to promote the use of local
FTSE Russell, a global index provider, has deferred the currencies viz, the Indian Rupee (INR) and the
inclusion of India in its Emerging Markets Government Indonesian Rupiah (IDR) for cross-border
Bond Index (EMGBI), noting that the country would stay transactions.
in its watchlist as certain criteria for inclusion were still  Ministry of Rural Development signs a MoU with IIT
not met. ―India will remain on the FTSE (Fixed Income Delhi to formalize their partnership in applications of
Country Classification Watch List) for the potential geospatial technology and artificial intelligence.
reclassification of its Market Accessibility Level from 0 to  Government of India, ADB sign $181 million loan
1, and consideration for inclusion in the FTSE EMGBI‖, to improve livability and mobility in Ahmedabad.
said FTSE Russell in its latest FTSE Fixed Income  The Centre and the Asian Development Bank
Country Classification Review. (ADB) signed a $23 million loan agreement to
HSBC COMPLETES SALE OF CANADIAN UNIT TO enhance access to quality fintech education,
ROYAL BANK OF CANADA: HSBC Holdings has research, and innovation at the GIFT-City.
completed the C$13.5 billion ($9.96 billion) sale of its  Exim Bank extends $23 mn line of credit to Guyana
Canadian unit, HSBC Bank Canada, to Royal Bank of for aircraft procurement.
Canada (RBC). RBC previously said the acquisition,  HDFC Bank has completed the sale of its stake in
which merges Canada‘s biggest and seventh-biggest education finance arm HDFC Credila for Rs 9,553
lenders, will boost its domestic business as well as its crore to private equity firms BPEA EQT and
position on the global stage. ChrysCapital.
GOVT REIMPOSES ALMM ORDER ON SOLAR PV  SBI Card and Titan launch „Titan SBI Card‟ for
MODULES FROM APRIL 1: The Ministry of New and addressing the consumers‘ aspirational spending
Renewable Energy (MNRE) has re-imposed the needs.
Approved List of Models and Manufacturers (ALMM)  Federal Bank launches RuPay smart key chain –
order for solar photovoltaic (PV) modules from April 1, Flash Pay for contactless payments.
2024. In FY24, the ALMM was put on hold for the entire  Kotak Mahindra Bank has unveiled its latest offering,
fiscal year to provide relief to solar PV manufacturers, the Smart Choice Gold Loan, targeting aspirational
who were faced with limited domestic availability. customers seeking convenient and flexible loan
However in February 2024, the Ministry put the options.
reimposition under abeyance ―till further orders‖. While  Policybazaar Insurance Brokers, PB Fintech‘s
re-imposing the order from April, the MNRE said ―Each Subsidiary, Receives IRDAI Approval for Composite
project where the solar PV modules have been received Insurance Broker License.
at the project site by March 31, 2024 and is unable to  NPCI International Payments Ltd (NIPL) has
get commissioned by that day, on account of reasons partnered with Nepal‘s leading payment network,
beyond the control of the renewable power developer, Fonepay Payment Service Ltd, to enable cross-border
would be examined separately.‖ UPI transactions between India and Nepal.
 IndusInd Bank, in collaboration with Mastercard,
PARTNERSHIP/NEW PRODUCTS introduces ‗Indus PayWear,‘ offering tokenised
wearables for debit and credit cards.
 NPCI International ties up with Greece‟s Eurobank  Aditya Birla Capital, Aditya Birla Finance announces a
for cross-border UPI payments. Scheme of amalgamation for creation of a large
 State Bank of India is mulling to build its own Large NBFC.
Language Model (LLM) to leverage the data it  The Competition Commission of India (CCI) has
possesses. approved the merger of a financial technology
 Info Edge-owned recruitment business Naukri and company, Garagepreneurs Internet Private Limited
real estate business 99acres have been delisted from (GIPL), with the North East Small Finance Bank
Google Play Store, as they have not complied with its (NESFB).
app billing policy for an "extended period of time".  SBI Partners with Aurionpro for Its cutting-edge
However later, Google agreed to reinstate the apps cash management and transaction banking platform,
after a government intervention got the two sides iCashpro+.
talking to resolve a dispute over service fee  Axis Bank has pledged a significant contribution of
payments. ₹100 crore to the National Cancer Grid (NCG), in
April 1, 2024

 Paytm and Paytm Payments Bank to discontinue collaboration with Tata Memorial Centre. This
inter-company pacts amid RBI action. partnership aims to bolster research, innovation, and
 Flipkart unveils its UPI handle to boost India's digital health adoption in oncology over the next five
digital evolution. Powered by Axis Bank, Flipkart UPI years.
will initially be available for Android users. Customers  Reliance Consumer Products Partners with Sri
can register for UPI with @fkaxis handle and can do Lanka‘s Elephant House for Beverage Expansion in
fund transfers and checkout payments using the India.

The Banking & Financial Updates April 2024

 10

 YES Bank partnered with the Indian Olympic namely cement, coal, crude oil, electricity, fertilizers,
Association (IOA) to become the Official Banking natural gas, refinery products and steel. These
Partner for Team India at the Paris Olympics 2024. industries comprise 40.27 percent of the weight of
 Axis Mutual Fund partners with Enparadigm for AI- items included in the Index of Industrial Production
Generated Learning Program. (IIP).
 Life Insurance Corporation of India (LIC) retains its  The Indian government has outlined its borrowing
position as the strongest insurance brand strategy for the first half of the fiscal year 2024-25,
worldwide, maintaining a stable brand value of Rs aiming to raise Rs 7.5 lakh crore from the market
816 billion as per the latest Brand Finance Insurance through the issuance of various bonds, including
100, 2024 report. With a Brand Strength Index score sovereign green bonds.
of 88.3 and an AAA brand strength rating.
 SEBI cancels investment banking licence of Karvy NEW APPOINTMENTS ..
Investor Services.
 Kotak Mahindra Bank has acquired NBFC Sonata  Shri Kishor Makwana assumes charge of Chairman
Finance Pvt Ltd for Rs 537 crore. National Commission for Scheduled Castes
 Axis Bank has announced the introduction of digital (NCSC).
US dollar fixed deposits for NRI customers at the  Govt appoints former bureaucrats Gyanesh Kumar
IFSC Banking Unit (IBU) at GIFT City, Gujarat and Sukhbir Sandhu as election commissioners.
becoming the first Bank to offer such product digitally.  Central Bank of India chief executive M V Rao elected
 Indian travellers in UAE can now make UPI payment as Indian Banks‟ Association Chairman.
using PhonePe at the NEOPAY terminals.  AS Rajeev appointed as Vigilance Commissioner in
the Central Vigilance Commission. Shri Rajeev is a
OUTLOOK career banker with over 38 years of experience
across Syndicate Bank, Indian Bank, Vijaya Bank,
 India‘s unemployment rate dropped to 3.1 per cent and Bank of Maharashtra.
in 2023 from 3.6 per cent in the preceding year, as  Senior bureaucrat Rahul Singh has been appointed
per the latest employment-unemployment indicators as the chairperson of the Central Board of Secondary
report released by the National Statistical Office Education (CBSE).
(NSO).  Kotak Mahindra Bank has appointed Jaideep
 CRISIL raises India's GDP growth forecast to 6.8% Hansraj, the current MD and CEO of Kotak Securities,
from 6.4% for FY25. as the Group President – One Kotak.
 Retail inflation dropped a tad to 4-month low of  Nidhu Saxena appointed as MD & CEO of Bank of
5.09% in February 24 against the 5.1 per cent of Maharashtra.
January However, food inflation moved up to 8.7 per
cent in February (8.3 per cent in January). CURRENT AFFAIRS-
 India's index of industrial production (IIP) slowed DEVELOPMENTAL ASPECTS
down to 3.8 per cent in January 2024, according to
government data released on March 12. UNSPENT CENTRAL FUNDS TO STATES TO BE
 The US consumer price index increased 3.2 percent SETTLED IN REAL TIME FROM APR 1: Starting April
in February from a year ago. 1, the settlement of unspent funds from the Centre to
 Global rating agency Fitch Ratings has raised India‘s states through the single nodal agency (SNA) will occur
growth forecast for the next financial year (FY25) to 7 within a day, eliminating the need to park it outside the
per cent from 6.5 per cent estimated earlier. government account for more than 24 hours. The
Department of Expenditure and the Reserve Bank of
 India‘s manufacturing sector continued its expansion
India are upgrading the SNA system to settle the
in February, as indicated by the HSBC Purchasing
unused amount in real time, thereby preventing disputes
Managers‘ Index (PMI) reaching 56.9, marking its
over interest payments on unspent funds.
highest level in five months.
 The Purchasing Managers‘ Index for India‘s services GOVERNMENT GUARANTEES MINIMUM SUPPORT
sector dropped to 60.6 in February from January‘s PRICE FOR MAIZE, PULSES, COTTON FOR 5
six-month high of 61.8. YEARS: The government will provide a minimum
 International Rating agency Moody‟s Upgrades support price (MSP) guarantee for maize, pulses, and
India‘s GDP Growth Forecast To 6.8% for 2024. cotton for five years. Those who cultivate crops with
 India's current account deficit declined to $10.5 lower water consumption, such as lentils and maize, will
billion or 1.2 per cent of the GDP in October- benefit from the MSP guarantee. The government has
December quarter from $11.4 billion in the previous finalised a process to implement the decision and has
three months and $16.8 billion a year back. developed a portal where farmers will have to register
 S&P Global raises India‘s growth forecast to 6.8% and provide an undertaking that they have diversified
for FY25. their crops. Registered farmers can also sell their
April 1, 2024

produce to NCCF, NAFED, and CCI. The government

 Morgan Stanley raises India GDP growth forecast to
will use satellite images and crop insurance data to
6.8% for FY25 on continued capex boost.
verify if farmers have diversified their crops. The
 India's eight core sectors posted a 6.7 percent
government aims to use purchased pulses to create
growth in February against 4.1% last month. It was
buffer stocks, which will later be used to control pulse
7.4 percent in February 2023. he index of Eight Core
prices.
Industries (ICI) measures the combined and individual
performance of production of eight core industries

The Banking & Financial Updates April 2024

 11

GOVT. CUTS LPG CYLINDER PRICES BY ₹100 ON LOK SABHA ELECTION DATES 2024: GENERAL
INTERNATIONAL WOMEN‟S DAY: Prime Minister ELECTION TO BE HELD IN 7 PHASES FROM APRIL
Narendra Modi announced that the government has cut 19 TO JUNE 1, RESULTS ON JUNE 4: Lok Sabha
the price of liquefied natural gas (LPG) by ₹100 as a gift elections 2024 will take place in seven phases from
to women on International Women‘s Day. ―Ujjwala April 19 to June 1 and the counting of votes will take
beneficiaries will now get LPG cylinders for only place on June 4, the Election Commission announced.
₹503, & consumers will get them only for ₹803. Yet Further, assembly elections will be held in Andhra
another compassionate decision by PM @narendramodi Pradesh, Arunachal Pradesh and Sikkim in a single
Ji! Is to continue the subsidy of ₹300 per cylinder to phase while Odisha will vote in four phases. Assembly
more than 10 crore #PMUjjwala beneficiaries for one polls will take place in Arunachal Pradesh and Sikkim on
more year, As of March 1, 2024, there are more than April 19 while Andhra Pradesh will vote on May 13.
10.27 crore PMUY beneficiaries. The total expenditure Four-phase elections will take place in Odisha on May
will be ₹12,000 crore for FY25. 13, May 20, May 25 and June 1. There are many as 97
HOME MINISTRY NOTIFIES RULES FOR crore eligible voters in India, of which 1.8 crore will be
IMPLEMENTATION OF CITIZENSHIP LAW CAA: The first-time voters.
Centre has announced the implementation of the BIHAR‟S BEGUSARAI IS THE WORLD‟S MOST
contentious Citizenship (Amendment) Act, 2019 for POLLUTED CITY: Begusarai in Bihar has been found to
granting citizenship to undocumented non-Muslim be the most polluted city in the world, according to the
migrants from Pakistan, Bangladesh and Afghanistan World Air Quality Report 2023 released by Switzerland-
who came to India before December 31, 2014. With the based IQAir. Also, India ranks third behind Bangladesh
CAA rules being issued, the Modi government will now and Pakistan among five most polluted countries in the
start granting Indian nationality to persecuted non- list of 134 countries. India was ranked the eighth most
Muslim migrants -- Hindus, Sikhs, Jains, Buddhists, polluted country in the 2022 report in a list of 131
Parsis and Christians -- from the three countries. The countries. According to the report, out of 100 top
CAA was passed in December 2019 and subsequently polluted places, 83 are from India. Guwahati is at the
got the president's assent but there were protests in second place while Delhi is at the third place.
several parts of the country against it. The law could not AMUL GOES INTERNATIONAL: DESI DAIRY GIANT
come into effect as rules had not been notified till TO LAUNCH FRESH MILK IN US: For the first time,
now.These rules, called the Citizenship (Amendment) Amul fresh milk will be available outside India, with the
Rules, 2024 will enable the persons eligible under CAA- Gujarat Cooperative Milk Marketing Federation
2019 to apply for the grant of Indian citizenship. (GCMMF) launching four variants of milk in the US
CENTRE REPLACES FAME WITH EMPS TO market, to cater to Indian diaspora and Asian
PROMOTE e2W, e3W, 4-WHEELERS KEPT OUT: The population. GCMMF has tied up with 108-year old
Centre announced a new scheme, the Electric Mobility cooperative organisation Michigan Milk Producers
Promotion Scheme (EMPS), 2024, to promote the sale Association (MMPA) to launch fresh milk in the US
of electric two-wheelers (e2W) and three-wheelers market," The milk collection and processing will be done
(e3W) in the country. Centre has allocated Rs 500 crore by MMPA, while GCMMF will do marketing and
for the new scheme, which will be valid for four months branding of Amul fresh milk.
from now. The upcoming scheme is set to debut on April PRIME MINISTER NARENDRA MODI VIRTUALLY
1, supplanting the current Faster Adoption and INAUGURATES SELA TUNNEL: Prime Minister
Manufacturing Electric Vehicles- Phase-II initiative. To Narendra Modi, on March 09, 2024, virtually dedicated
address the increasing demand and alleviate the burden the Sela Tunnel project to the nation. Constructed by the
on EV makers, the government has lowered the Border Roads Organisation (BRO) at an altitude of
maximum subsidy cap for e2W to Rs 10,000 per 13,000 feet, the tunnel is situated on the road from
vehicle from the previous Rs 22,500, and for e3W to Rs Tezpur, Assam, to Tawang in Arunachal Pradesh‘s
50,000 from Rs 111,505. Both categories of vehicles will West Kameng district. The project, aims to provide all-
receive an incentive of Rs 5,000 per kilowatt-hour weather connectivity and bolster the Armed Forces‘
(kWh). Despite the government offering incentives for readiness in the region.
the e2W and e3W categories, no such incentives will be
CENTRE NOTIFIES 3-10% MGNREGA WAGE HIKE
granted to e4W and e-buses under the new scheme.
FOR 2024-25: The Centre has notified a 3-10 per cent
The ministry of Heavy Industries (MHI) has also signed
increase in the wage rates for MGNREGA workers for
an MoU IIT Roorkee to work together to encourage
the financial year 2024-25. The new wage rates will
innovation and advance the automotive and electric
come into effect from April 1,2024. While Goa (10.56 per
vehicle (EV) sector.
cent) and Karnataka (10.4 per cent) have seen the
FinMin NOTIFIES 15 PC DUTY ON e-VEHICLE highest percentage increase, wage rates in Uttar
IMPORTS: The finance ministry notified the lower 15 Pradesh and Uttarakhand are set to see the lowest
per cent duty rate on the import of electronic vehicles increase at 3 per cent for FY‘24-25. The average
(EV) of a minimum value of USD 35,000, subject to MGNREGA wage increase across India is ₹28 per day.
April 1, 2024

certain conditions, announced under the EV policy. The average wage for 2024-25 will be ₹289 as against
Currently, EV imports attract 100 per cent Customs ₹261 for FY‘23-24. Currently, MGNREGA wages are
duty. The Heavy Industries Ministry had notified a decided based on changes in the CPI-AL (Consumer
'Scheme to promote manufacturing of electric Price Index- Agriculture Labor), which reflects inflation in
passenger cars in India', under which import duty rural areas.
concessions would be given to companies setting up
manufacturing units with a minimum investment of USD
500 million.

The Banking & Financial Updates April 2024

 12

GOVT'S GROSS LIABILITIES ROSE TO RS 160.69  Prime Minister Shri Narendra Modi was conferred
LAKH CRORE AT DEC-END: The finance ministry the Order of the Druk Gyalpo, Bhutan‟s highest
reported a slight increase in the total gross liabilities of civilian decoration, by His Majesty the King of
the government to Rs 160.69 lakh crore by December Bhutan in a public ceremony at the Tendrelthang,
2023 from Rs 157.84 lakh crore in September. Public Thimphu. Prime Minister Modi is the first foreign
debt comprised 90 percent of total gross liabilities during leader to be given this prestigious award.
this period. The quarter saw fluctuations in Indian  India plans to shift from minimum wage to living
domestic bond yields, influenced by factors like wage by 2025.
declining crude oil prices, lower-than-expected domestic  The Nagaland legislative assembly has unanimously
CPI prints, and news about possible inclusion of Indian adopted a resolution against the central government‘s
Government Bonds in a major global emerging market decision to fence the Indo-Myanmar border and
index. suspend the Free Movement Regime (FMR)
agreement with Myanmar, which allows border
CURRENT AFFAIRS & FINANCIAL residents to travel 16 km into each other‘s territory
AWARENESS IN SHORT: without visas.
 Odisha CM Naveen Patnaik Releases Book Titled
 Shehbaz Sharif becomes Pakistan's Prime Minister
‗FIH Odisha Hockey Men‟s World Cup 2023‟.
for a second time.
 Union Minister for Steel and Civil Aviation, Sh.
 IOC to become first Indian firm to manufacture fuel
Jyotiraditya M. Scindia, virtually inaugurated India‘s
for Formula 1 cars.
1st Green Hydrogen Plant in Stainless Steel Sector
 Bank employees to get 17% salary hike; IBA, unions
located at Jindal Stainless Limited, Hisar, on 4th
sign final pact.
March, 2024.
 TVS Motor Company has announced its entry into the
 Defense minister Rajnath Singh unveiled the Acing
French market as the leading Indian two-wheeler
Development of Innovative Technologies with iDEX
maker unveiled its its range of vehicles at the Salon
(ADITI) scheme. The scheme aims to promote
du Deux Roues in Lyon, France.
innovations in critical and strategic defence
 SEBI bars JM Financial from acting as lead
technologies, providing start-ups with significant
manager to new public debt issues.
grants for research and development.
 Sudha Murty nominated to Rajya Sabha by President.
 Government raises Minimum age criteria for Postal
 Maharashtra makes inclusion of mother's name
Voting to 85 Years from 80 years.
mandatory in all govt documents.
 India‘s First Underwater Metro Train Service
 Alphabet Inc-owned Google has joined hands with
Launched In Kolkata By PM Modi.
Election Commission of India (ECI) to prevent spread
 Kerala introduced ‗Iris‘ Its First Generative AI
of false information, promote authorised content and
Teacher.
label AI-generated data during the upcoming general
 India‘s first National Dolphin Research Center
elections.
(NDRC) inaugurated at Patna, Bihar.
 SC asks Centre to give Kerala a financial fillip as a
 Union minister Piyush Goyal, launched the ‗e-Kisan
‗one-time measure‘.
Upaj Nidhi‘ (Digital Gateway) of the Warehousing
 Oil marketing companies (OMCs) cut prices of diesel
Development and Regulatory Authority (WDRA) in
and petrol by ₹2 per litre each across the country
th New Delhi.
w.e.f 15 March 2024, the first revision by the
 Kerala is set to make history in the digital
companies since April 6, 2022.
entertainment landscape with the launch of CSpace,
 Ratan Tata awarded PV Narasimha Rao Memorial
India‘s first government-backed Over-The-Top (OTT)
Award for philanthropy work.
platform.
 Tamil Nadu has the highest number of factories but
 The Tamil Nadu government has launched the
lags in industrial output, Gujarat leads the pack.
„Neengal Nalama‟ (Are you fine?) scheme, a
 Banks to file daily suspicious transaction reports
beneficiary outreach program aimed at reviewing the
during elections, says CEC.
implementation of flagship schemes and addressing
 NHAI InvIT raises Rs 7,300 cr from Canadian pension
the grievances of the public.
funds CPP Investments, OTPP, others.
 Nayab Singh Saini to succeed Manohar Lal Khattar
 The government has directed state-owned banks to
as Haryana‘s New Chief Minister.
submit their business plans till 2026-27 by the end of
 Odisha government led by Naveen Patnaik has
March.
announced an additional 10 days of casual leave
 Narayana Murthy gifts Infosys shares worth Rs 240 cr
for women working in various government
to his 4-month-old grandson.
departments.
 State Bank of India is likely to shift its centralised
 According to the latest data from the Stockholm
global back office and some other foreign exchange
International Peace Research Institute (SIPRI), India
related departments from Kolkata to Mumbai.
was the world‘s top arms importer for the period
 NCLAT directs PSBs to not take coercive action
2019-2023.
against IL&FS, its board till its next hearing on May
April 1, 2024

 Smt. Droupadi Murmu conferred Honorary Doctorate

14.
by University of Mauritius.
 India‘s direct selling industry has crossed ₹21000
 World Consumer Rights Day is celebrated annually
crore-mark.
on March 15 across the globe. This year, the theme
 Zomato drops green dress code for riders of ‗pure
for World Consumer Rights Day 2024 was ‗Fair and
veg mode‘ amid social media backlash.
responsible AI for consumers‘.
 Bajaj Group commits Rs 5,000 crore for social
 Mumbai Wins Ranji Trophy 2024 After Beating
initiatives under Bajaj Beyond.

The Banking & Financial Updates April 2024

 13

Vidarbha.  The world‘s first-ever temple designed in the iconic

 Maharashtra Cabinet has announced its decision Om shape has been inaugurated in the village of
to rename Ahmednagar district as ‗Ahilya Nagar‘ in Jadan, Pali district of Rajasthan.
honor of the 18th-century Maratha queen Ahilyabai  Tata Passenger Electric Mobility (TPEM), a unit of
Holkar. Tata Motors, has announced a strategic partnership
 Odisha Chief Minister Naveen Patnaik inaugurated with Hindustan Petroleum Corporation Ltd (HPCL) to
India‘s first indoor athletics stadium and indoor establish a nationwide network of 5,000 public
aquatic centre at the Kalinga stadium in charging stations for electric vehicles (EVs) by the
Bhubaneshwar. end of 2024.
 Government allocates Rs 6212.03 Crore for  Procurement through govt's online marketplace GeM
strengthening Regional Rural Banks. crosses ₹4 lakh crore so far this fiscal.
 Indian banks reported frauds worth Rs 5.3 lakh crore  EC allows transfer, promotion of bank officials during
in last 10 years. model code of conduct, however deferred any fresh
 Florida Governor Ron DeSantis has signed a bill appointments till the elections are over.
that prohibits minors under 14 from having social  Mukesh Ambani‘s Reliance Industries has picked up
media accounts. a 26 per cent stake in Gautam Adani‘s Madhya
 Adani Ports and Special Economic Zone (APSEZ), a Pradesh power project and signed a pact to use the
subsidiary of the Adani Group, has acquired a plants‘ 500 MW of electricity for captive use.
controlling 95% stake in Gopalpur Port located  India‘s foreign exchange reserves have soared to a
in Odisha. The deal, valued at Rs 3,350 crore, new peak, reaching $642.631 billion in the week
solidifies APSEZ‘s position in the ports and logistics ending March 22, marking the fifth consecutive week
sector. of increase, according to the latest data from RBI.

Subscribe the e-Magazine to remain updated always on Banking and Finance for all types of
Promotion, lateral entry and certification exams in Banking & Finance

CLICK HERE TO SUBSCRIBE

BANKING SUBJECT UPDATES

EXTERNAL COMMERCIAL BORROWINGS & TRADE CREDITS
IMPORTANT TERMS USED:
All-in-Cost: It includes rate of interest, other fees, expenses, charges, guarantee fees, ECA charges, but will not
include commitment fees and withholding tax payable in INR. In the case of fixed rate loans, the swap cost plus
spread should not be more than the floating rate plus the applicable spread. Additionally, for FCCBs, the issue related
expenses should not exceed 4 per cent of the issue size and in case of private placement, these expenses should not
exceed 2 per cent of the issue size, etc.
Approval route: Under the ECB/TC framework, ECB/TC can be raised either under the automatic route or under the
approval route. Under the approval route, the prospective borrowers are required to send their requests to the
Reserve Bank through their AD Banks for examination.
Automatic route: For the automatic route, the cases are examined by the Authorised Dealer Category-I (AD
Category-I) banks.
Benchmark rate: Benchmark rate in case of FCY ECB/TC refers to any widely accepted interbank rate or ARR of 6-
month tenor, applicable to the currency of borrowing. Benchmark rate in case of Rupee denominated ECB/TC will be
prevailing yield of the Government of India securities of corresponding maturity.
ECB liability-Equity ratio: For the purpose of ECB liability-equity ratio, ECB amount will include all outstanding
amount of all ECB (other than INR denominated) and the proposed one (only outstanding ECB amounts in case of
refinancing) while equity will include the paid-up capital and free reserves (including the share premium received in
foreign currency) as per the latest audited balance sheet. Both ECB and equity amounts will be calculated with
respect to the foreign equity holder. Where there is more than one foreign equity holder in the borrowing company, the
portion of the share premium in foreign currency brought in by the lender(s) concerned shall only be considered for
calculating the ratio.
Foreign Currency Convertible Bonds (FCCBs): It refers to foreign currency denominated instruments which are
April 1, 2024

issued in accordance with the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depositary
Receipt Mechanism) Scheme, 1993, as amended from time to time.
Foreign Currency Exchangeable Bonds (FCEBs): It refers to foreign currency denominated instruments which are
issued in accordance with the Issue of Foreign Currency Exchangeable Bonds Scheme, 2008, as amended from time
to time. FCEBs are exchangeable into equity share of another company, to be called the Offered Company, in any
manner, either wholly, or partly or on the basis of any equity related warrants attached to debt instruments.
Foreign Equity Holder: It means (a) direct foreign equity holder with minimum 25% direct equity holding in the
borrowing entity, (b) indirect equity holder with minimum indirect equity holding of 51%, or (c) group company with

The Banking & Financial Updates April 2024

 14

common overseas parent.

IOSCO Compliant Country: A country whose securities market regulator is a signatory to the International
Organisation of Securities Commission's (IOSCO‘s) Multilateral Memorandum of Understanding or a signatory to
bilateral Memorandum of Understanding with the SEBI for information sharing arrangements.
EXTERNAL COMMERCIAL BORROWINGS:
External Commercial Borrowings are commercial loans raised by eligible resident entities from recognised non-
resident entities and should comply to the following parameters;
Parameters Foreign Currency (FCY) denominated ECB INR denominated ECB
Currency of
Any freely convertible Foreign Currency Indian Rupee (INR)
borrowing
Forms of ECB Loans including bank loans; floating/ fixed rate Loans including bank loans; floating/ fixed rate
notes/ bonds/ debentures (other than fully and notes/bonds/ debentures/ preference shares
compulsorily convertible instruments); Trade (other than fully and compulsorily convertible
credits beyond 3 years; FCCBs; FCEBs and instruments); Trade credits beyond 3 years;
Financial Lease. and Financial Lease. Also, plain vanilla Rupee
denominated bonds issued overseas.
Eligible All entities eligible to receive FDI and Port All entities eligible to raise FCY ECB; and
borrowers Trusts, Units in SEZ, SIDBI, and Registered entities engaged in micro-finance
EXIM Bank of India. activities, viz., registered Not for Profit
companies, registered societies/trusts/
cooperatives and NGOs
Recognized The lender should be resident of FATF or IOSCO compliant country, However;
lenders  Multilateral and Regional Financial Institutions where India is a member country will also be
considered as recognized lenders.
 Individuals as lenders can only be permitted if they are foreign equity holders or for
subscription to bonds/debentures listed abroad; and
 Foreign branches / subsidiaries of Indian banks are permitted as recognised lenders only for
FCY ECB (except FCCBs and FCEBs). Foreign branches / subsidiaries of Indian banks,
subject to applicable norms, can participate as arrangers/underwriters/market-makers/traders
for Rupee denominated Bonds issued overseas. However, underwriting by foreign
branches/subsidiaries of Indian banks for issuances by Indian banks will not be allowed.
Minimum MAMP for ECB will be 3 years. Call and put options, if any, shall not be exercisable prior to
Average Maturity completion of minimum average maturity. However, for the specific categories mentioned below,
Period (MAMP) the MAMP will be as prescribed therein:
Category MAMP
ECB raised by manufacturing companies up to USD 50 million or its equivalent
1 year
per financial year.
ECB raised from foreign equity holder for working capital purposes, general
5 years
corporate purposes or for repayment of Rupee loans
ECB raised for working capital purposes or general corporate purposes and for
10 years
on-lending by NBFCs for working capital purposes or general corporate purposes
ECB raised for repayment of Rupee loans availed domestically for capital
7 years
expenditure and on-lending by NBFCs for the same purpose
ECB raised for repayment of Rupee loans availed domestically for purposes other
10 years
than capital expenditure and for on-lending by NBFCs for the same purpose
All-in-cost ceiling  For existing ECBs linked to LIBOR whose Benchmark rate plus 450 bps spread.
per annum benchmarks are changed to ARR:
Benchmark Rate plus 550 bps spread.
 For New ECBs: Benchmark rate plus 500 bps
spread.
Other costs Prepayment penalty if any, or penalty for default or breach of covenants, should not be more than
2 per cent on the outstanding principal and will be outside the all-in-cost ceiling.
Negative list for Real estate activities, Investment in capital market, Equity investment, working capital purposes,
which ECB can‘t General corporate purposes, Repayment of Rupee loans, as and On-lending to entities for the
be raised above activities, except in cases as mentioned above.
Exchange rate Change of currency of FCY ECB into INR ECB For conversion to Rupee, the exchange rate
can be at the exchange rate prevailing on the shall be the rate prevailing on the date of
April 1, 2024

date of the agreement for such change or at an settlement.

exchange rate, which is less than the rate
prevailing on the date of the agreement, if
consented to by the ECB lender.
Hedging The entities raising ECB are required to follow Overseas investors are eligible to hedge their
provision the guidelines for hedging issued by regulators. exposure in Rupee through permitted derivative
Infrastructure space companies are required to products with AD Category I banks in India. The

The Banking & Financial Updates April 2024

 15

mandatorily hedge 70 per cent of their ECB investors can also access the domestic market
exposure in case the average maturity of the through branches / subsidiaries of Indian banks
ECB is less than 5 years. abroad or branches of foreign banks with Indian
A minimum tenor of one year for the financial presence on a back to back basis.
hedge would be required with periodic rollover.
Change of Change of currency of ECB from one freely Change of currency from INR to any freely
currency of convertible foreign currency to any other freely convertible foreign currency is not permitted.
borrowing convertible foreign currency as well as to INR is
freely permitted.
The ECB framework is not applicable in respect of investments in Non-Convertible Debentures in India made by
Registered Foreign Portfolio Investors.
LIMIT AND LEVERAGE: All eligible borrowers can raise ECB up to USD 750 million or equivalent per financial year
under the automatic route. Further, in case of FCY denominated ECB raised from direct foreign equity holder, ECB
liability-equity ratio for ECB raised under the automatic route cannot exceed 7:1. However, this ratio will not be
applicable if the outstanding amount of all ECB, including the proposed one, is up to USD 5 million or its equivalent.
(The automatic route limit was increased to USD 1.5 billion or equivalent. However, this relaxation was available for
ECBs raised till December 31, 2022)
ISSUANCE OF GUARANTEE, ETC. BY INDIAN BANKS AND FINANCIAL INSTITUTIONS: Issuance of any type of
guarantee by Indian banks, All India Financial Institutions and NBFCs relating to ECB is not permitted. Further,
financial intermediaries (viz., Indian banks, All India Financial Institutions, or NBFCs) shall not invest in FCCBs/
FCEBs in any manner whatsoever.
PARKING OF ECB PROCEEDS: ECB proceeds are permitted to be parked abroad as well as domestically. ECB
proceeds meant only for foreign currency expenditure can be parked abroad pending utilisation. Till utilisation, these
funds can be invested in the following liquid assets (a) deposits or Certificate of Deposit or other products offered by
banks rated not less than AA (-) by Standard and Poor/Fitch IBCA or Aa3 by Moody‘s; (b) Treasury bills and other
monetary instruments of one-year maturity having minimum rating as indicated above and (c) deposits with foreign
branches/subsidiaries of Indian banks abroad. ECB proceeds meant for Rupee expenditure should be repatriated
immediately for credit to their Rupee accounts with AD Category I banks in India. ECB borrowers are also allowed to
park ECB proceeds in term deposits with AD Category I banks in India for a maximum period of 12 months
cumulatively.
LOAN REGISTRATION NUMBER (LRN): Any draw-down in respect of an ECB should happen only after obtaining
the LRN from the Reserve Bank through AD Category I bank.
MONTHLY REPORTING OF ACTUAL TRANSACTIONS: The borrowers are required to report actual ECB
transactions through Form ECB-2 Return through the AD Category I bank on monthly basis so as to reach Reserve
Bank of India, Department of Statistics and Information Management (DSIM) within seven working days from the close
of month.
UNTRACEABLE ENTITIES: An entity should be treated as untraceable, if they are found to be in contravention of
reporting provisions for ECB for past eight quarters or more. Any borrower who has raised ECB will be treated as
‗untraceable entity‘, if entity/auditor(s)/director(s)/ promoter(s) of entity are not reachable/responsive/reply in negative
over email/letters/phone for a period of not less than two quarters with documented communication/ reminders
numbering 6 or more and it fulfills both of the following conditions:
a. Entity not found to be operative at the registered office address.
b. Entities have not submitted Statutory Auditor‘s Certificate for last two years or more.
The followings actions are to be undertaken in respect of ‗untraceable entities‘:
a. File Revised Form ECB, if required, and last Form ECB 2 Return without certification from company with
‗UNTRACEABLE ENTITY‘ written in bold on top. The outstanding amount will be treated as written-off from
external debt liability of the country but may be retained by the lender in its books for recovery.
b. No fresh ECB application by the entity should be examined/processed by the AD bank;
c. Directorate of Enforcement should be informed whenever any entity is designated ‗UNTRACEABLE ENTITY‘; and
d. No inward remittance or debt servicing will be permitted under automatic route.
REFINANCING OF EXISTING ECB: Refinancing of existing ECB by fresh ECB provided the outstanding maturity of
the original borrowing (weighted outstanding maturity in case of multiple borrowings) is not reduced and all-in-cost of
fresh ECB is lower than the all-in-cost (weighted average cost in case of multiple borrowings) of existing ECB. Further,
refinancing of ECB raised under the previous ECB frameworks may also be permitted, subject to additionally ensuring
that the borrower is eligible to raise ECB under the extant framework. Raising of fresh ECB to part refinance the
existing ECB is also permitted subject to same conditions. Indian banks are permitted to participate in refinancing of
existing ECB, only for highly rated corporates (AAA) and for Maharatna/Navratna public sector undertakings.
April 1, 2024

SECURITY FOR RAISING ECB: AD Category I banks are permitted to allow creation/cancellation of charge on
immovable assets, movable assets, financial securities and issue of corporate and/or personal guarantees in favour of
overseas lender / security trustee, to secure the ECB availed by the borrower, subject to satisfying themselves that:
 The underlying ECB is in compliance with the extant ECB guidelines.
 There exists a security clause in the Loan Agreement requiring the ECB borrower to create/cancel charge, in
favour of overseas lender/security trustee, on immovable assets/movable assets/financial securities/issuance of
corporate and/or personal guarantee, and

The Banking & Financial Updates April 2024

 16

 No objection certificate, as applicable, from the existing lenders in India has been obtained in case of creation of
charge.
SPECIAL DISPENSATIONS UNDER THE ECB FRAMEWORK FOR OIL MARKETING
COMPANIES: Notwithstanding the provisions contained above, Public Sector Oil Marketing Companies (OMCs) can
raise ECB for working capital purposes with minimum average maturity period of 3 years from all recognised lenders
under the automatic route without mandatory hedging and individual limit requirements. The overall ceiling for such
ECB shall be USD 10 billion or equivalent.
ECB FACILITY FOR STARTUPS: AD Category-I banks are permitted to allow Startups to raise ECB under the
automatic route as per the following framework:
 Eligibility: An entity recognised as a Startup by the Central Government as on date of raising ECB.
 Maturity: Minimum average maturity period will be 3 years.
 Recognized lender: Lender / investor shall be a resident of a FATF compliant country. However, foreign
branches/subsidiaries of Indian banks and overseas entity in which Indian entity has made overseas direct
investment as per the extant Overseas Direct Investment Policy will not be considered as recognised lenders under
this framework.
 Forms: The borrowing can be in form of loans or non-convertible, optionally convertible or partially convertible
preference shares.
 Currency: The borrowing should be denominated in any freely convertible currency or in Indian Rupees (INR) or a
combination thereof.
 Amount: The borrowing per Startup will be limited to USD 3 million or equivalent per financial year either in INR
or any convertible foreign currency or a combination of both.
 All-in-cost: Shall be mutually agreed between the borrower and the lender.
 Security: The choice of security to be provided to the lender is left to the borrowing entity. Further, issuance of
corporate or personal guarantee is allowed. Guarantee issued by a non-resident(s) is allowed only if such parties
qualify as lender under ECB for Startups. However, issuance of guarantee, standby letter of credit, letter of
undertaking or letter of comfort by Indian banks, all India Financial Institutions and NBFCs is not permitted.
ECB BY ENTITIES UNDER RESTRUCTURING/ ECB FACILITY FOR REFINANCING STRESSED ASSETS: An
entity which is under a restructuring scheme/ corporate insolvency resolution process can raise ECB only if specifically
permitted under the resolution plan.
Eligible corporate borrowers who have availed Rupee loans domestically for capital expenditure in manufacturing and
infrastructure sector and which have been classified as SMA-2 or NPA can avail ECB for repayment of these loans
under any one-time settlement with lenders. Lender banks are also permitted to sell, through assignment, such loans
to eligible ECB lenders, provided, the resultant external commercial borrowing complies with all-in-cost, minimum
average maturity period and other relevant norms of the ECB framework. Foreign branches/ overseas subsidiaries of
Indian banks are not eligible to lend for the above purposes.
Eligible borrowers who are participating in the Corporate Insolvency Resolution Process under IBC as resolution
applicants, can raise ECB from all recognised lenders, except foreign branches/subsidiaries of Indian banks, for
repayment of Rupee term loans of the target company. Such ECB will be considered under the approval route.
Compliance with the guidelines: The primary responsibility for ensuring that the borrowing is in compliance with the
applicable guidelines is that of the borrower concerned.
TRADE CREDITS FRAMEWORK:
Trade Credits (TC) refer to the credits extended by the overseas supplier, bank, financial institution and other
permitted recognized lenders for imports of capital/non-capital goods. Depending on the source of finance, such TCs
include suppliers‘ credit and buyers‘ credit from recognized lenders.
TRADE CREDITS FRAMEWORK: TC for imports into India can be raised in any freely convertible foreign currency
(FCY denominated TC) or Indian Rupee (INR denominated TC), as per the framework given in the table below:
Parameters FCY denominated TC INR denominated TC
Forms of TC Buyers‘ Credit and Suppliers‘ Credit.
Eligible borrower Person resident in India acting as an importer.
Amount under Up to USD 150 million or equivalent per import transaction for oil/gas refining & marketing,
automatic route airline and shipping companies. For others, up to USD 50 million or equivalent per import
transaction.
Recognised lenders For suppliers‘ credit: Supplier of goods located outside India.
For buyers‘ credit: Banks, financial institutions, foreign equity holder(s) located outside
India and financial institutions in IFSCs located in India.
Period of TC The period of TC, reckoned from the date of shipment, shall be up to three years for
April 1, 2024

Capital goods and one year or the operating cycle whichever less for import for non-capital
goods. For shipyards / shipbuilders, the period of TC for import of non-capital goods can
be up to three years.
All-in-cost ceiling per Benchmark Rate plus 350 bps spread for existing Benchmark rate plus 250 bps spread.
annum TCs linked to LIBOR whose benchmarks are
changed to ARR and Benchmark rate plus 300
bps spread for new TCs.

The Banking & Financial Updates April 2024

 17

Change of currency of Change of currency of TC from one freely Change of currency from INR to any
borrowing convertible foreign currency to any other freely freely convertible foreign currency is
convertible foreign currency as well as to INR is not permitted.
freely permitted.
TRADE CREDITS IN SEZ/FTWZ/DTA: TC can be raised by a unit or a developer in a SEZ including FTWZ for
purchase of non-capital and capital goods within an SEZ including FTWZ or from a different SEZ including FTWZ.
Further, an entity in DTA is also allowed to raise TC for purchase of capital / non-capital goods from a unit or a
developer of a SEZ including FTWZ. For TC transactions related to SEZ, date of transfer of ownership of goods will be
treated as TC date. As there will be no bill of entry for sale transactions within SEZ, the inter unit receipt generated
through NSDL can be treated as an import document.
REPORTING: AD Category I banks are required to furnish details of TCs like drawal, utilisation, and repayment of TC
approved by all its branches, in a consolidated statement, during a month, to RBI not later than 10th of the following
month. Suppliers‘ credit beyond 180 days and up to one year/three years from the date of shipment for non-
capital/capital goods respectively, should also be reported by the AD banks. AD Category I banks are also required to
furnish data on issuance of bank guarantees for TCs by all its branches, in a consolidated statement, at quarterly
intervals on the CIMS platform.
Role of ADs: While the primarily responsibility of ensuring adherence to the TC policy lies with the importer, the ADs
are also expected to ensure compliance with applicable parameters of the trade credit policy / provisions of Foreign
Exchange Management Act, 1999 by their constituents.
b. Rajiv Kumar
IMPORTANT MCQS c. MK Jain
d. TV Somanathan
1. As per latest RBI guidelines, any request for 6. The Centre has notified an interest subsidy cap of
closure of a credit card shall be honoured by the _______for individual export units in the first
card issuer within a period of _______by the quarter of the forthcoming fiscal 2024-25 under
credit card-issuer, subject to payment of all dues interest equalisation scheme (IES) for identified
by the cardholder. Failure on the part of the card- sectors and MSMEs export credit.
issuers to complete the process of closure within a. Rs.10.00 cr
that period shall result in a penalty b. Rs.2.50 cr
of_____________. c. Rs.7.50 cr
a. Seven working days and ₹500 per calendar day of d. No cap
delay respectively 7. Which of the following is not a Domestic
b. Five working days and ₹500 per calendar day of Systemically Important Insurers (D-SIIs),
delay respectively identified by IRDAI?
c. Seven working days and ₹500 per working day of a. LIC
delay respectively b. GIC
d. Seven working days and ₹100 per calendar day of c. New India Assurance Co. Ltd
delay respectively d. SBI Generali
2. RBI in March 2024, directed which financial 8. Based on directions of Supreme Court and as per
institution to cease and desist, with immediate the data published by ECI, who has emerged as
effect, from doing any form of financing against top purchaser of electoral bonds sold between
shares and debentures, including loans against April 1, 2019 and February 15, 2024?
IPO of shares as well as against subscription to a. Future Gaming and Hotel Services PR
debentures? b. Megha Engineering and Infrastructures Ltd
a. IIFL Finance c. Golden Globe Hotels Ltd
b. JM Financial Products Limited (JMFPL) d. Adani Power Ltd
c. Muthoot Fincorp 9. SEBI has issued framework for implementing the
d. None of the above beta version of same-day or T+0 settlements on
3. As per the RBI Act, the Monetary Policy an optional basis, which will start with the equity
Committee (MPC) must meet a minimum of cash segment for _________ scrips and through a
_______ times in a year. limited set of brokers.
a. Six a. 30
b. Two b. 25
c. Four c. 50
d. Five d. 10
4. National Urban Cooperative Finance and 10. The Centre and which International Financial
Development Corporation (NUCFDC) is Institute has signed a $23 million loan agreement
headquartered at______ during March 2024 to enhance access to quality
a. Mumbai fintech education, research, and innovation at the
April 1, 2024

b. Kolkata GIFT-City?
c. New Delhi a. ADB
d. Hyderabad b. IMF
5. Govt. of India has formed an expert committee c. World Bank
chaired by _______to make recommendations on d. UNDP
uniform KYC norms. 11. Which Bank has recently launched RuPay smart
a. Michael Patra key chain – Flash Pay for contactless payments?

The Banking & Financial Updates April 2024

 18

a. Axis Bank a. January 2004

b. Yes Bank b. March 2009
c. HDFC Bank c. September 2013
d. Federal Bank d. July 2001
12. Which Bank has partnered with the Indian
ANSWERS TO MCQs:
Olympic Association (IOA) to become the Official
Banking Partner for Team India at the Paris 1 2 3 4 5 6 7 8 9 10
Olympics 2024? A B C C D B D A B A
a. Bank of Baroda 11 12 13 14 15 16 17 18 19 20
b. SBI D C A B C A C C A B
c. Yes Bank
d. ICICI Bank RECALLED QUESTIONS FROM
13. Which Insurance Company retained its position BANK PROMOTION TESTS
as the strongest insurance brand worldwide,
maintaining a stable brand value of Rs 816 billion UBI SCALE III TO IV DT. 15.10.2023
as per the latest Brand Finance Insurance 100, 1. Which is the approach used to measure operational
2024 report? risk by Banks in India at present as per BASEL III
a. LIC of India guidelines?; (Ans. Basic Indicator approach)
b. American Insurance Agency 2. The digital signature captures public key and
c. Allianz SE, China Life Insurance Co. Ltd. _______ (Ans. Private Key)
d. Nippon Life Insurance Co. 3. Child care facility is provided to which types of
14. Which Bank has announced the introduction of employees? (Ans. Eligibility as per Banks guidelines)
digital US dollar fixed deposits for NRI customers 4. What is the commission payable by RBI to Banks on
at the IFSC Banking Unit (IBU) at GIFT City, receipt/deposit of challans? (Ans. Rs.40/- per
Gujarat becoming the first Bank to offer such transaction in physical mode and Rs.9/- per
product digitally? transaction in electronic mode)
a. ICICI Bank 5. Which ministry has launched the PMSvanidhi
b. Axis Bank scheme? (Ans. Ministry of Housing and Urban
c. HDFC Bank Affairs (MoHUA))
d. Canara Bank 6. What is the maximum quantum of education loan for
15. Which Indian city has been found to be the most vocational/skill development courses in case where
polluted city in the world, according to the World the course duration is above 6 months and up to 1
Air Quality Report 2023? year? (Ans. Rs.75000/-)
a. Gwalior, MP 7. What is the percentage of Risk Weighted Assets, that
b. New Delhi Banks in India have to maintain as Capital
c. Begusarai, Bihar Conservation Buffer comprise of Common equity
d. Meerat, UP Tier-I capital? (Ans. 2.50%)
16. Which Indian state has made inclusion of 8. Who is responsible for formulation of FDI policy in
mother's name mandatory in all govt documents? India? (Ans.The Department for Promotion of
a. Maharastra Industry and Internal Trade (DPIIT) under the
b. Bihar Ministry of Commerce and Industry, is the nodal
c. UP department for the formulation of the
d. Rajastan Government's policy on Foreign Direct
17. Government raises Minimum age criteria for Investment)
Postal Voting to______ 9. The primary legal authority responsible for
a. 75 years investigating and prosecuting money laundering
b. 80 years offences under the PMLA at the national level is;
c. 85 years (Ans. Directorate of Enforcement (“ED”), under
d. 70 years the aegis of the Department of Revenue, Ministry
18. Which State government has recently of Finance.)
announced an additional 10 days of casual leave 10. What is the maximum amount of loan permissible
for women working in various government under Agri Clinic and Agribusiness Centre scheme?
departments? (Ans. Rs. 20 lakh in case of individuals and
a. Assam Rs.100 lakh in case of finance to a group of five
b. Kerala trained persons.)
c. Odisha 11. The due date for debit of premium amount for
d. Rajastan PMJJBY from customers account every year is___
19. The Bihar Startup Fund Trust (BSFT) has signed (Ans. 31sr May)
an MoU with which bank to boost the startup 12. Which type of risk arises when the BC puts his
April 1, 2024

ecosystem in the eastern state? mobile number while opening of account? (Ans.
a. SIDBI Operational Risk/Reputational risk)
b. NABARD 13. What is the full form of CBDC? (Ans. Central Bank
c. SBI Digital Currency)
d. Central Bank of India 14. What is the rate of premium for deposit insurance
20. When was the Competition Commission of India under DICGC? (Ans. 12 paise for Rs.100 sum
(CCI) constituted? assured)

The Banking & Financial Updates April 2024

 19

15. The guarantee cover for loans under PM Svanidhi is metro centers? (Ans. Rs.35 Lakh)
given by_____ (Ans. CGTMSE) 35. What was the theme of the G20 summit 2023 under
16. What is the minimum and maximum number of India‘s presidency? (Ans. Vasudhaiva
members in a Farmers Producer Organization? (Ans. Kutumbakam” or “One Earth · One Family · One
Depends on legal status. Initially the minimum Future”)
number of members in FPO will be 300 in plain 36. Cases of cash shortage more than ₹
area and 100 in North East & hilly areas. However, ______(including at ATMs) to be reported as fraud.
DAC&FW may revise the minimum number of (Ans. 10,000/-)
membership ) 37. Which committee had recommended about working
17. What is the minimum amount of deposit required for capital term loan? (Ans. Tandon committee)
opening Term Deposit through online mode? 38. What is the income ceiling for sanction of loan under
18. A network-attached system set up as a decoy to lure PMEGP? (Ans. No such ceiling defined)
cyber attackers and detect, deflect and study hacking 39. What is the maximum guarantee coverage amount
attempts to gain unauthorized access to information eligible for MSME units under CGTMSE? (Ans. Rs.5
systems is termed as______ (Ans. Honeypot) crs)
19. ―Our account with you‖ represents what kind of 40. What is the full form of SARFAESI? (Ans.
correspondent Bank account? (Ans. Nostro) Securitization and Reconstruction of Financial
20. What is the full form of ANBC? (Ans. Adjusted Net Assets and Enforcement of Security Interest Act)
Bank Credit) UBI SCALE IV TO V DT. 15.10.2023
21. Name of the mobile app launched by RBI for aiding
41. Which is the maximum limit of housing loan?; (Ans.
visually impaired persons to identify the denomination
No limit)
of Indian Banknotes; (Ans. MANI)
42. ________is a digitalised claim settlement module
22. What is the amount of cash remittance above which,
under PMFBY which will help farmers receive the
armed guard is required? (Ans. 50 Lakh. However
disbursed amount electronically to their accounts.
individual Banks guidelines to be followed)
(Ans. DigiClaim)
23. FIR to be lodged when number of counterfeit notes
43. SLR is defined under which act? (Section 24 of
received at counter is more than _____ pieces. (Ans.
Banking Regulation Act)
Four)
44. What is the maximum amount of outward remittance
24. What is the cut-off limit for credit exposures for
allowed per individual under LRS scheme? (Ans.
reporting to CRILC by Banks/FIs? (Ans. Accounts
USD 2.50 Lakh in a financial year).
having aggregate credit exposures of ₹5 crore
45. Forex rates in India are determined by; (Ans.
and above)
Market forces on demand and supply of a
25. The details of Counterfeit Notes detected in the bank
particular currency)
branches during the month shall be reported to RBI
th 46. The delivery of computing services—including
within a period of________ (Ans. By 7 of next
servers, storage, databases, networking, software,
month)
analytics, and intelligence—over the internet (―the
26. A __________is essentially a placeholder
cloud‖) to offer faster innovation, flexible resources,
established for purposes of speculating what the
and economies of scale is termed as; (Ans. Cloud
amount or total of something might amount to so that
computing)
the parties involved can move forward in whatever
47. A shared, immutable ledger that facilitates the
negotiation or planning is underway. (Ans. Ballpark
process of recording transactions and tracking assets
figure)
in a business network is called as; (Ans. Block
27. What is the relationship between Banker and
chain)
customer in case of SI/ Auto debit instructions given
48. For borrowers, where the aggregate exposure of the
by customer for payment of insurance premium?
banking system is______, banks can open current
(Ans. Agent and Principal)
accounts without any restrictions subject to obtaining
28. What will be the MPBF for working capital limit to an
an undertaking from such customers that they (the
MSME unit as per turnover method, if the projected
borrowers) shall inform the bank(s), if and when the
sale is Rs.600 Lakh, and projected level of available
credit facilities availed by them from the banking
NWC and creditors outstanding is Rs.35 Lakh and 20
system cross the limit. (Ans. Less than ₹5 crore)
lakh respectively? (Ans. 150 Lakh – 35 Lakh =
49. RBI's Digital Payments Index (RBI-DPI) stood at
Rs.115.00 Lakh)
______at end-September 2023 (Ans. 418.77)
29. Re-KYC for low risk customer to be done at a
50. What is the maximum amount of compensation that
periodicity of ________ (Ans. 10 Years)
the RBI ombudsman can award? (Ans. Rs.20 Lakh
30. The minimum Leverage Ratio shall be _____% for
and Rs.1 Lakh towards mental agony)
Domestic Systemically Important Banks (DSIBs)?
51. What is the present Repo Rate?
(Ans. 4%)
52. Union Bank of India has designed an innovative
31. Broad money is represented as_________ (Ans.
product Braille Debit Card for blind persons named
M3)
as; (Ans. Union Sparsh)
April 1, 2024

32. What is the maximum limit that can be sanctioned

53. TDS is applicable on interest earned on Fixed
under DRI scheme? (Ans. 15000 and for housing it
Deposits if the amount of interest in a financial year
is 20000)
exceeds_______ (Rs.50000 for senior citizens and
33. KCC limit is fixed for 5 years based on________
Rs.40000 for others)
(Ans. Scale of Finance)
54. Under which circumstance, audited balance sheet is
34. What is the maximum housing loan amount eligible
required in case of processing of credit proposals of
for classification under Priority Sector Lending in
customers? (Ans. In case the customer is

The Banking & Financial Updates April 2024

 20

Company, trust, society etc or where the turnover cheque? (Ans. Section 49A of Banking Regulation
exceeds Rs.1 cr in case of business and Rs.50 Act)
Lakh in case of professionals as per IT Act) 59. Farm credit up to what amount granted to Corporate
55. What is the National cybercrime helpline number? farmers, Farmer Producer Organisations
(Ans. 1930) (FPOs)/(FPC) Companies of Individual Farmers,
56. What is the maximum penalty provision available Partnership firms and Co-operatives of farmers
under RTI act? (Ans. Rs. 25000) engaged in Agriculture and Allied Activities can be
57. Protection to Paying Banker against material classified as farm credit under Priority Sector? (Ans.
alteration in a cheque is available as per which Rs.2.00 crore)
Section of NI Act? (Ans. Section-89) 60. Branch level customer service committee meeting
58. As per which act/section, no person other than a should be conducted at what periodicity? (Ans.
th
Bank/RBI can accept deposits withdrawable by Monthly. 15 of every month)

********************************************************************************************************************************

The fastest and widely circulated magazine &

exclusive magazine on Banking Study.

Get all daily Banking & Financial news, all RBI

notifications; all gazette notifications and changes in
banking related laws, recalled questions every month
at one place to get updated for Bank
promotion/JAIIB/CAIIB examinations.

CLICK HERE TO SUBSCRIBE

Click here for daily Financial updates on WhatsApp

(Send request with name and Bank name)
April 1, 2024

The Banking & Financial Updates April 2024

 21

The Banking Updates

Join us for regular updates and study materials
Mail us to admin@thebankingupdates.com
bankingupdates2020@gmail.com

8261802533

CLICK HERE TO DOWNLOAD

April 1, 2024

THE BANKING UPDATES APP

The Banking & Financial Updates April 2024