A Monthly Newsletter of Indian Institute of Banking & Finance

(ISO 21001 : 2018 CERTIFIED)

Volume No. : 17 Issue No. : 6 January 2025 No. of No.

Pages
of -Pages
8 -8

MISSION
VISION To develop professionally qualified and
To be premier Institute for competent bankers and finance professionals
developing and nurturing competent primarily through a process of education,
professionals in banking and finance training, examination, consultancy /
field. counselling and continuing professional
development programs.

Online
Examination
Mock Test
E-Learning
Face Book

You
Tube

Training

Video
Lecture INSIDE
Top Stories...............................................2
Banking Policies.....................................2
Banking Developments..........................3
Regulator Speaks....................................3
Economic Wrap Up................................4
New Appointments................................4
Forex.........................................................5
Glossary...................................................5
Financial Basics......................................5
Institute's Training Activities................6
News from the Institute.........................6
Market Roundup....................................7
Green Initiative.......................................8
"The information / news items contained in this publication have appeared in various external sources / media for public use or consumption and
are now meant only for members and subscribers. The views expressed and / or events narrated/ stated in the said information / news items are as
perceived by the respective sources. IIBF neither holds nor assumes any responsibility for the correctness or adequacy or otherwise of the news items
IIBF
/ events VISION
or any information whatsoever."
 Top Stories - Banking Policies

TOP STORIES

Key Highlights of RBI’s Monetary Policy meeting (December 4-6, 2024)

The Reserve Bank of India’s (RBI’s) Monetary Policy Committee meeting was held from December 4-6, 2024. Its
key highlights are as follows:
• Repo rate kept unchanged at 6.5%.
• Standing Deposit Facility (SDF) rate kept unchanged at 6.25%.
• Marginal Standing Facility (MSF) rate and Bank Rate stay at 6.75%.
Statement on Developmental and Regulatory Policies: Key highlights
• Cash Reserve Ratio (CRR) reduced by 50 bps in two equal tranches of 25bps each to 4%.
• To attract more capital inflows, the RBI has raised interest rate ceilings on Foreign Currency Non-Resident
Bank [FCNR (B)] deposits. Banks can now raise fresh FCNR(B) deposits of 1 year to less than 3 years
maturity at rates not exceeding Alternative Reference Rate (ARR) plus 400 bps and deposits with maturity
between 3 to 5 years at rates not exceeding ARR plus 500 bps.
• FX-Retail platform to be linked with the Bharat Connect platform to expand the reach and enhance user
experience.
• A new benchmark, Secured Overnight Rupee Rate (SORR) based on the Secured Money Markets, to be
launched.
• To enable maximum small and marginal farmers get coverage in the formal credit system, limit for collateral-
free agriculture loans will be raised from Rs. 1.6 lakh to Rs. 2 lakh per borrower.
• Small Finance Banks can now extend pre-sanctioned credit lines through the Unified Payments Interface
(UPI).
• RBI will set up a committee to develop a Framework for Responsible and Ethical Enablement of Artificial
Intelligence (FREE-AI) in the Financial Sector.
• The Podcast facility, to be introduced as an additional medium of communication.
• To identify Mule bank accounts, an AI solution called MuleHunter.AI, is to be launched.
• An initiative for open regulation, ‘Connect 2 Regulate’, to be launched.
SEBI introduces MF Lite framework for passive mutual funds
SEBI has launched the Mutual Funds Lite (MF Lite) framework to enhance investment diversification and
facilitate the entry of new players into the mutual fund industry. The framework applies to passive funds based
on domestic equity indices with an Assets Under Management (AUM) of Rs. 5,000 crore or more, all G-Secs,
T-bills and State Development Loans (SDLs)-based domestic target maturity debt and domestic constant
duration passive funds. It also includes gold and silver ETFs, Fund-of-Funds (FoFs) investing in gold or silver
ETFs, overseas ETFs and FoFs with a single underlying overseas passive fund and funds investing exclusively in
a single domestic or overseas index.

Banking Policies
RBI lays down broad principles for lenders relating to their participation in Government Debt Relief Scheme
RBI has laid down certain broad principles for lenders relating to their participation in Government Debt
Relief Scheme (DRS). Regulated Entities (REs) may decide on participating in a particular DRS notified by a

IIBF VISION 2 January 2025

 Banking Policies - Banking Developments - Regulator Speaks

Government, based on its Board approved policy, subject to the extant regulatory norms. Lenders have to ensure
that the borrowers to be covered under DRS to avoid subsequent non-admission by the authorities on technical
grounds. Any waiver of accrued but unrealised interest and/or sacrifice of principal undertaken by lenders in the
borrower accounts of beneficiaries of the DRS, either as part of the implementation of the DRS or subsequent to
its implementation, will be treated as a compromise settlement, attracting prudential treatment.
RBI to banks: Reduce inoperative/frozen accounts urgently
Concerned by the increasing inoperative accounts/unclaimed deposits in several banks, the apex bank has asked
banks to urgently take steps for reducing the number of inoperative/frozen accounts and make the process of
activation of such accounts smoother and hassle free. RBI has suggested that banks may enable seamless KYC
updation through mobile/internet banking, non-home branches and Video Customer Identification Process.
They can organise special campaigns for facilitating activation of inoperative/frozen accounts. Starting from
the quarter ending December 31, 2024, banks will report the numbers of such accounts/deposits on a quarterly
basis, to the respective Senior Supervisory Manager (SSM) through DAKSH portal.

Banking Developments
Look-up facility for NEFT, RTGS; banks to comply by April 1
RBI introduced the look-up facility for beneficiary accounts in the Real Time Gross Settlement (RTGS) and
National Electronic Funds Transfer (NEFT) systems to prevent fraud. This facility will allow users to view and
verify the name of the beneficiary before initiating a transaction. The facility will be accessible to remitters
through internet and mobile banking as well as at bank branches for in-person transactions. The RBI has
directed member banks of these systems to implement the facility by April 1, 2025. The feature will be provided
to customers free of charge.
UPI payments allowed from/to PPIs through third-party applications: RBI
Currently, UPI payments from/to a bank account can be carried out using the UPI application of that bank or
of any third-party application provider. However, UPI payments from/to a PPI can only be carried out using
the mobile application provided by the Prepaid Payment Instrument (PPI) issuer. To ease out the process of
making/receiving UPI payments, the RBI has now allowed UPI access for full-KYC PPIs through third-party
applications.

Regulator Speaks
Stronger IBC framework, increased technology usage can help effective resolution: RBI Deputy Governor
In his inaugural address at the International Conclave, jointly organised by the Insolvency and Bankruptcy
Board of India (IBBI) and INSOL India, Mr. M Rajeshwar Rao, Deputy Governor, RBI, reflected on how the
Insolvency and Bankruptcy Code (IBC) can help clean up banks’ balance sheets and leverage its potential for
the key stakeholders from the perspective of financial creditors. In his speech, Mr. Rao listed salient points to
improve the overall resolution ecosystem: First, having a better understanding of the reasons behind defaults;
Second, addressing the delay due to lack of cooperation by some corporate debtors in the insolvency process;
and Third, examining valuation, including insights on how collateral types affect realization versus valuation, the
impact of time on recovery and the relationship between resolution timelines and valuation outcomes. He also
spoke about the use of technology to resolve issues with stressed borrowers by predicting defaults before they
happen based on the borrower’s data, enabling early corrective action; analysing structured and unstructured data
to identify related party or preferential transactions, saving resources for lenders and resolution professionals;
automating routine tasks in post-disbursement credit monitoring.

IIBF VISION 3 January 2025

 Regulator Speaks - Economic Wrap Up - New Appointments

Climate change risks have macroeconomic impact; data collection, flow of resources imperative for
tackling it: RBI Deputy Governor
Speaking at the International Conference, organised by the Institute of South Asian Studies (ISAS) at the National
University of Singapore (NUS), Mr. M Rajeshwar Rao, Deputy Governor, RBI, spoke about how climate related
risks may lead to macroeconomic impact on households, companies and sovereigns, affecting consumption,
production and investment patterns. Considering their exposures to firms in the form of credit, investments and
their own operations, climate risks impact the financial institutions through traditional risks categories of credit,
market, liquidity and operational risks.
Empirical approach, LDMs’ experience can make credit plans more inclusive: RBI Deputy Governor
Speaking at a recent Conference for Lead District Managers (LDMs) of Maharashtra, Mr. Swaminathan J., Deputy
Governor, RBI revealed that around half of the Self-Help Groups (SHGs) are yet to be linked to formal credit, a
large proportion of Small and Marginal Farmers (SMFs) still lack access to bank financing and a lot of MSMEs,
especially those led by women, remain under-served in the financial sector. Therefore, he suggested the adoption
of an empirical approach coupled with the on-ground experience of LDMs, for designing credit plans to address
the credit requirements of such segments, through suitable Potential Linked Credit Plans, as well as, in block and
district-level credit strategies. Giving a different spin to the acronym – LDM – Mr. Swaminathan identified three
attributes viz., (L)iaison, (D)esigning and Development and (M)onitoring and Motivating. Further, he suggested
that LDMs need to emphasise on furthering financial literacy, with special focus on Digital Financial Literacy.

Economic Wrap Up
The key highlights of the Monthly Economy Review, November 2024 released by the Department of
Economic Affairs are mentioned below:
• The Index of Industrial Production (IIP) grew by 4% YoY from April-October 2024.
• The services sector performed well in Q2 of FY25, growing by 7.1% from the 6% growth recorded in the
corresponding period of the previous year.
• Food inflation moderated to 9% in November from 10.9% in October, majorly driven by a fall in vegetable
inflation, though it remains in double digits.
• India’s overall exports (merchandise & services) grew well, rising by 7.6% in the first eight months of FY25.
• Merchandise imports grew by 8.3% during April-November 2024, largely due to a rise in non-oil and non-
gold imports.
• In the second half of November 2024, net FPI inflows reached USD 967.1 million, in contrast to a net
outflow of USD 3218.2 million during the first half of the month.
• Foreign Direct Investment (FDI) saw a revival in FY25, with gross FDI inflows increasing from USD 42.1
billion in the first seven months of FY24 to USD 48.6 billion in the same period of FY25, a YoY growth of
15.5%.

New Appointments
NAME DESIGNATION
Mr. Sanjay Malhotra Governor, Reserve Bank of India
Mr. Rama Mohan Rao Amara Managing Director, International Banking, Global Markets &
Technology (IB, GM & IT), State Bank of India
Mr. Amitava Chatterjee Managing Director & Chief Executive Officer, Jammu and Kashmir Bank

IIBF VISION 4 January 2025

 Forex - Glossary - Financial Basics

Forex
Trends in Foreign Exchange
Foreign Exchange Reserves
Reserve (US$ Mn) last 6 months
As on December 27, 2024
Item ₹ Cr. US$ Mn.
1 2
1 Total Reserves 5476869 640279
1.1 Foreign Currency Assets 4721047 551921
1.2 Gold 566843 66268
1.3 SDRs 152881 17873 Note: Data as reported on last Friday of respective Month

1.4 Reserve Position in the IMF 36097 4217

Source: Reserve Bank of India

Base Rates of Alternative Reference Rates (ARRs) for FCNR (B) Deposits as on December 31, 2024 -
Applicable for the month of January 2025

Currency Rates Currency Rates Currency Rates

USD 4.46 AUD 4.35 HKD 5.04674
GBP 4.7 CHF 0.455916 MYR 3.00
EUR 2.916 NZD 4.25 DKK 2.5860
JPY 0.227 SEK 2.622 Source: www.fbil.org.in

CAD 3.3100 SGD 2.5512

Glossary
Passive Funds
In a Passive Fund, the fund manager has a passive role, as the stock selection/buy, hold, sell decision is driven by the
Benchmark Index and the fund manager/dealer merely needs to replicate the same with minimal tracking error. They
hold a portfolio that replicates a stated Index or Benchmark e.g. Index Funds and Exchange Traded Funds (ETFs).

Financial Basics
Corporate Debt Market Development Fund (CDMDF)
The fund has been set-up under Chapter III-C of SEBI (Alternative Investment Funds) Regulations, 2012 (AIF
Regulations) to act as a backstop facility for purchase of investment grade corporate debt securities, to instil
confidence amongst the participants in the Corporate Debt Market during times of stress and to generally enhance
secondary market liquidity by creating a permanent institutional framework for activation in times of market stress.

IIBF VISION 5 January 2025

 Institute's Training Activities - News from the Institute

Institute’s Training Activities

Training Programmes for the month of January 2025
Programmes Dates Location
Programme on Risk Management in Banks/FIs 13th - 15th January 2025 Virtual
Programme on Leadership & Development of Soft 15 - 17 January 2025
th th
Leadership Development Centre,
Skills for Branch Managers Kurla (West), Mumbai
Programme on Balance Sheet Reading & Ratio 15th - 17th January 2025
Analysis
Programme on Cyber Risk Management & IT 16th - 17th January 2025
Security for Banks & FIs
Programme on Effective Grievance Redress 17th - 18th January 2025
Mechanism, a tool for increasing CASA
Programme on Credit Monitoring and Recovery 20th - 22nd January 2025
Programme on Customer Service Excellence 21st – 22nd January 2025
Programme on Discipline Management, 21st - 23rd January 2025
Investigations & Disciplinary Action Procedures in Virtual
Banks & FIs
Programme on Ethical Banking for Sustainability 22nd January 2025
Programme on Internal Audit for Effective 27th - 28th January 2025
Compliance
Programme on Internal Audit Officers of Banks 28th - 29th January 2025
Programme on Business Analytics, Machine Learning 28th - 30th January 2025
and Artificial Intelligence and Its Implication in
Banks
Programme on Advanced Credit Management 28th - 30th January 2025
Programme on IT & Cyber Security - Framework, IT 30th - 31st January 2025 IIBF, Professional Development
Risk Management and Prevention of Cyber Crimes Centre, South Zone, 94, Jawaharlal
Nehru Road Vadapalani, Chennai -
600026

News from the Institute

4th Edition of Inter Bank Quiz Contest - Banking Chanakya
The Institute has launched the fourth edition of the Inter-Bank Quiz contest Banking Chanakya-2024 from
21st November, 2024. The preliminary round has drawn participation from 3783 teams across various banks on pan
India basis. The Quiz contest carries a cash prize of Rupees One Lakh for the National Champions. The National
Finals are scheduled to be held on 18th January, 2025.
IIBF invites papers/proposals under Micro and Macro Research 2024-25
Micro Research is a sort of an essay competition for life members of the Institute (bankers) to present their original
ideas, thoughts and best practices on areas of their interest. Under Macro research, Institute encourages empirical
research in which, the researchers can test their hypothesis through data (primary/secondary) from which, lessons
can be drawn for the industry (banking & finance) as a whole. The last date for receipt of applications under Micro
and Macro Research is 28th February 2025. For more details, please visit www.iibf.org.in

IIBF VISION 6 January 2025

 News from the Institute - Market Roundup

IIBF invites applications under Diamond Jubilee and CH Bhabha Banking Overseas Research Fellowship
(DJCHBBORF) for the year 2024-25
The Institute invites applications under Diamond Jubilee and CH Bhabha Banking Overseas Research Fellowship
(DJCHBBORF) Scheme. The objective of the fellowship is to provide the successful candidate an opportunity to
undertake a research study on the latest developments in the field of banking and finance in India or abroad. The
last date for receipt of applications is 28th February 2025. For more details, please visit www.iibf.org.in
IIBF-PDC North Zone organised Management Development Programme (MDP) on Leadership &
Development of Soft Skills from 2nd - 6th December 2024
The IIBF-PDC North Zone conducted Management Development Programme aimed at enhancing leadership and
soft skills for BFSI professionals from Nepal, as nominated by the National Banking Institute Ltd. The program
emphasized strategic and transformational leadership, emotional intelligence, effective communication, the journey
of digitization in the banking sector and critical topics such as digital banking and cybersecurity in interpersonal
relationships, collaboration and teamwork.
IIBF-PDC North Zone organised a 4-day MDP for the Executives from Microfinance Institutions of Nepal
from 17th - 20th December 2024
The IIBF-PDC North Zone organized a comprehensive 4-day Training Programme for Senior Executives of
Microfinance institutions in Nepal, as nominated by the National Banking Institute Ltd., Nepal. The program was
inaugurated by Mr. Jiji Mammen, Executive Director and CEO, Sa-Dhan. The programme covered various aspects of
microcredit offered in India, along with a comparative analysis with the situation in Nepal. The key topics included
the types of microlenders, financial inclusion and profitability assessment of Microfinance Institutions (MFIs),
effective recovery management, strategies for handling and mitigating loan delinquency issues, client protection in
microfinance, as well as leadership, motivation and performance enhancement.
Bank Quest Theme for upcoming issue
The theme for the upcoming issue of Bank Quest for the quarter January-March, 2025 is “Cyber Risk Management”.
Cut-off date of guidelines/important developments for examinations
The Institute has a practice of asking questions in each exam about the recent developments/guidelines issued by the
regulator(s) in order to test if the candidates keep themselves abreast of the current developments. However, there
could be changes in the developments/guidelines from the date the question papers are prepared and the dates of
the actual examinations. In order to address these issues effectively, it has been decided that: In respect of the exams
to be conducted by the Institute for the period from September 2024 to February 2025, instructions/guidelines
issued by the regulator(s) and important developments in banking and finance up to 30th June 2024 will only be
considered for the purpose of inclusion in the question papers.

Market Roundup

Source: FBIL Source: Weekly Newsletter of CCIL

IIBF VISION 7 January 2025

 Market Roundup - Green Initiative

● Registered with Registrar of Newspapers Under RNI No. : 69228/1998

Source: BSE & NSE

Source: Monthly Review of the Economy, CCIL, December, 2024

Source: Gold Price India

Source: Reserve Bank of India

Green Initiative
Members are requested to update their e-mail address with the
Institute and send their consent to receive the Annual Report
via e-mail.

Printed by Biswa Ketan Das, Published by Biswa Ketan Das, on behalf

of Indian Institute of Banking & Finance, and printed at Onlooker Press
16, Sasoon Dock, Colaba, Mumbai - 400 005 and published at Indian Institute
of Banking & Finance, Kohinoor City, Commercial-II, Tower-I, 2nd Floor,
Kirol Road, Kurla (W), Mumbai - 400 070.
Editor : Biswa Ketan Das

Source: Monthly Review of the Economy, CCIL, December, 2024

INDIAN INSTITUTE OF BANKING & FINANCE

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E-mail : admin@iibf.org.in
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IIBF VISION 8 January 2025