Current Affairs Economy & Banking

  The country’s largest lender State Bank of India has signed a pact with the Bank of China to boost business opportunities. SBI has signed an MoU to enhance business synergies between both the banks. Through this pact, both SBI and BoC will gain direct access to their respective markets of operation. Both banks’ clients will be able to use the vast combined network to expand their businesses abroad. SBI has a branch in Shanghai and BOC is opening its branch in Mumbai.
Source- Press Information Bureau (PIB)

 GST council approved a transition plan for new goods and services tax rates on residential properties under which developers of under-construction buildings may either opt to shift to the revised lower rates without input tax credit or stick to the previous rates. Revenue Secretary Ajay Bhushan Pandey informed that for housing projects launched on or after the first of April 2019, the developers will have to adhere to the new GST rates recommended by the council.
Source- DD News

  The Reserve Bank of India (RBI) named State Bank of India (SBI), ICICI Bank and HDFC Bank as Domestic Systemically Important Banks (D-SIBs), which in other words mean banks that are too big to fail. As per the norms, these banks will have to set aside more capital for their continued operation. Inclusion in D-SIB indicates that failure of any of these banks would have a cascading effect on the Indian financial system.
Source: Business Standard

 The State Bank of India has launched a new service called ‘YONO Cash’ for its customers using which customers can withdraw money from ATMs without using debit cards. This facility is available over 16,500 of its ATMs through the You Only Need One (YONO), mobile app platform for the first time in the country. The ATMs enabled for this service will be called as YONO Cash Point.
Source: The Hindu

  Reserve Bank of India provided no objection to Bandhan Bank for the proposed acquisition of Gruh Finance. Gruh Finance Limited is an Ahmedabad headquartered Subsidiary of HDFC Limited. It is a Housing Finance Company (HFC) recognized by the National Housing Bank (NHB) and it was taken over in January by Bandhan Bank in a share-swap deal. India’s largest mortgage lender HDFC can hold 9.9% in the bank, according to its exchange filing. That’s the maximum a non-banking finance company can own in a private bank. HDFC had sought approval for 14.96%.
Source: BloomburgQuint

  The Reserve Bank of India (RBI) has decided to use a new tool for the first time to enhance liquidity in the system using which it will buy $5 billion from the banks in a swap deal that is capable of injecting around Rs. 35,000 crores into the system. Banks will have to deposit dollar funds with RBI with the condition of buying them back from RBI after 3 years. Minimum bid size for the auction has been fixed at $25 millionand multiple bids submission by banks will be allowed. However, the aggregate amount of bids submitted by a single eligible entity should not exceed the notified amount of auction.
Source: Bloombergquint

  State Bank of India (SBI) has launched doorstep banking service for senior citizens over 70 years of age and differently-abled customers. Eligible customers can avail this service at a nominal fee of 100 rupees per transaction for financial transactions and 60 rupees for non-financial transactions. Doorstep banking services are available to KYC- compliant account holders, with a valid mobile number registered with the bank and residing within 5 kilometers radius from their home branch. This service will not be available for accounts operated jointly, minor accounts, and accounts of non-personal nature.
Source- DD News

  As per RBI notification, IDBI Bank has been categorized as a private sector lenderfollowing the acquisition of majority stake by Life Insurance Corporation. IDBI Bank has been under the prompt corrective action framework of RBI that bans it from corporate lending and branch expansions, salary hikes and other regular activities. In January 2019, LIC completed the process of picking up a controlling 51% stake in the nearly crippled IDBI Bank. IDBI Bank has been categorized as a ‘private sector bank’ with effect from January 21, 2019.
Static/Current Takeaways Important For LIC AAO Mains Exam: 
  • Now total government sector banks are 20 in number.
  • After 1 Apr 2019 merger of 2 more Government Banks Dena and Vijaya Bank in Government-owned bank of Baroda, the number of Government Sector Banks will be reduced to 18.
Source- News18

  Markets regulator Securities and Exchange Board of India (Sebi) withdrew the 20%limit on investments by Foreign Portfolio Investors in corporate bonds of an entity. The regulator stated that the restriction is being withdrawn in accordance with a circular issued by the Reserve Bank of India (RBI). In June 2018, Sebi had mandated that no Foreign Portfolio Investors (FPIs) shall have an exposure of more than 20% of its corporate bond portfolio to a single corporate.However, the central bank in February 2019 lifted the restriction in view of market feedback.
Source: Economic Times

  State-owned Punjab National Bank (PNB) has sanctioned loans worth Rs 689 crore to over 1,600 Micro, Small and Medium Enterprises (MSMEs) through the psbloansin59minutes.com portal as part of its effort to promote such industries. Under the Mudra Yojana, the bank has offered loan to over 2.69 lakh small entrepreneurs this fiscal (till February 14, 2019).
Source- The Economic Times



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