www.gradeup.co 1 | P a g e www.gradeup.co GK-Tornado RBI Assistant Mains 2020 Exam Dear Aspirants, This GK Tornado is a complete docket of important Banking Awareness & Current Affairs news and events that occurred in last 5 months (1st June 2020 – 7th November 2020). This file is important and relevant for all competitive exams like Banking, Insurance, SSC and UPSC Exams. News related to RBI 1. RBI imposes monetary penalty on DCB Bank for rule assets towards housing finance for individuals during violations this period should be raised to 40%, 45% and 50%, Note: The Reserve Bank of India (RBI) imposed respectively. monetary penalty on DCB Bank and Jio Payments Bank 5. RBI Issued Draft Rupee Interest Rate Derivatives for various rule violations. The central bank has imposed Directions: a penalty of Rs 22 lakh on DCB Bank for non-compliance Note: The Reserve Bank of India (RBI) issued Draft with certain provisions on marketing/distribution of Rupee Interest Rate Derivatives (Reserve Bank) mutual fund/insurance etc. The penalty has been Directions, 2020 under Section 45 W of the RBI Act, imposed in exercise of powers vested in RBI under the 1934 to allow foreign portfolio investors (FPIs) to provisions of Section 47A(1)(c) read with Section undertake exchange-traded rupee interest rate 46(4)(i) of the Banking Regulation Act, 1949. derivatives transactions subject to an overall ceiling of 2. RBI bars payment system operators from launching Rs 5,000 crore. any new QR codes 6. RBI Mandate Banks to Fully Automate NPA Note: The Reserve Bank of India has barred Payment Recognition Process by June 30, 2021: System Operators (PSOs) from launching any new Note: The RBI issued circular advising banks to switch proprietary QR code for payment transactions. to automatic identification of NPAs, using appropriate IT Currently, there are two interoperable QR codes — UPI systems, from manual identification for regulatory QR and Bharat QR. The decision to continue with the two reporting and bank’s own management information existing Quick Response (QR) codes was based on the system (MIS) requirements. However, over this period recommendations of the committee which was set up by of time, the processes for NPA identification, income the Reserve Bank under the chairmanship of Deepak recognition, provisioning and generation of related Phatak to review the current system of such codes in returns in many banks are not yet fully automated. RBI India and suggest measures for moving towards issued a notification mandating banks to complete the interoperable QR codes. automation of bad-loan recognition and provisioning 3. RBI pegs minimum NOF for housing finance processes by June 30, 2021. companies at Rs 25 cr Note: The RBI fixed the minimum Net Owned Fund 7. RBI’s 3rd Bi-Monthly Monetary Policy Statement (NOF) size for housing finance companies at Rs 25 crore. 2020-21 Released The housing finance companies (HFCs) holding a Key Highlights of the policy are: Certificate of Registration (CoR) and having an NOF of • Keep the policy repo rate under the liquidity less than Rs 25 crore will be required to achieve NOF of adjustment facility (LAF) unchanged at 4.0 per cent. Rs 15 crore by March 31, 2022 and Rs 25 crore by March • The reverse repo rate under the LAF remains 31, 2023. unchanged at 3.35 per cent. 4. RBI revises norms for housing finance firms • The marginal standing facility (MSF) rate and the Note: Reserve Bank of India (RBI) shared final Bank Rate at 4.25 per cent. guidelines for housing finance companies (HFC) Current Policy Rates: highlighting that these NBFCs should have at least 60% Policy Repo Rate 4.0% of their net assets deployed in the business of providing Reverse Repo Rate 3.35% finance for housing by March 31, 2024. RBI notified that Marginal Standing Facility Rate 4.25% any HFC not having 60% of its net assets deployed for Bank Rate 4.25% housing loans must get 50% of its books utilised for such loans by March 31, 2022, 55% by March 31, 2023 and 8. RBI Accepted Kamath Panel Recommendations: 60% by March 31, 2024. Minimum percentage of total 2 | P a g e www.gradeup.co Note: The RBI has accepted the recommendations of the Financial Inclusion and Financial Literacy KV Kamath Committee. On the basis of the (TGFIFL).There are the Strategic Objectives laid down in recommendation of the panel the central bank specified NSFE 2020-2025 and in order to achieve them, the five financial ratios and sector-specific thresholds for document recommends adoption of a ‘5 C’ approach viz. resolution of COVID-19-related stressed assets in 26 Content, Capacity, Community, Communication and sectors. These five ratios are: Total outside Collaboration. liabilities/adjusted tangible net worth (TOL/ATNW), 13. RBI Released Framework for Authorisation of Pan- total debt/EBITDA, current ratio, debt service coverage India Umbrella Entity for Retail Payments: ratio (DSCR), average debt service coverage ratio Note: Reserve Bank of India (RBI) released the (ADSCR). “Framework for authorization of pan-India Umbrella 9. RBI issued a notice on Compliance functions in Entity for Retail Payments”. In this regard, the apex bank banks and role of CCO: has invited applications from eligible companies by Note: Reserve Bank of India has released a notice on February 26, 2021.The Board for Regulation and Compliance Functions in Banks and the Role of Chief Supervision of Payment and Settlement Systems Compliance Officer (CCO) whose term has to be at least (BPSS), will be the final authority to issue authorisation three years. Banks must appoint a CCO to ensure an for setting up umbrella entity / entities for retail effective compliance culture, independent corporate payments comprising of Automated Teller Machines compliance function, and a strong compliance risk (ATMs), White Label PoS (point of sale system), management programme The person holding the Aadhaar-based payments and remittance. The minimum position should be a senior-level executive, preferable paid-up capital of the umbrella entity should be Rs 500 general manager and above. crore. 10. RBI Released Revised Guidelines for the Priority 14. RBI ceased Banking operations of Aditya Birla Idea Sector Lending: Payments Bank: Note: Reserve Bank of India (RBI) reviewed the Priority Note: Reserve Bank of India has ceased the Banking Sector Lending (PSL) Guidelines to align it with operations by the Aditya Birla Idea Payments (ABIP) emerging national priorities amid COVID-19 impact. The Bank under Banking Regulations Act 1949 with effect new sector included under PSL funding are: (i) Start-ups from July 28, 2020. Now the bank company could not (up to Rs 50 crore); (ii) loans to farmers for installation able to work successfully and applied for voluntary of solar power plants for solarisation of grid connected winding up by the Vodafone Idea Limited which agriculture pumps and (iii) loans for setting up holds 51% in ABIP bank and the remaining 49% by Compressed Bio Gas (CBG) plants. Grasim Industries Limited. Aditya Birla Idea Payments 11. RBI Released Annual Report 2019-20; India’s Bank had received the banking licence from the RBI in Growth Projected at -4.5%: April 2017 for carrying on the business of a payments Note: Reserve Bank of India (RBI) released its Annual bank. It had commenced business from February 22, Report for 2019-20. It is Report of the Central Board of 2018. Aditya Birla Idea Payments Bank was promoted Directors on the working of the Reserve Bank of India by Grasim Industries Limited and Vodafone Idea Limited (RBI) for the year ended June 30, 2020 submitted to the with 51 and 49 per cent shareholdings respectively. Central Government in terms of Section 53(2) of the 15. RBI announces ‘positive pay’ feature to help avert Reserve Bank of India Act, 1934.In the report, RBI cheque frauds: projected that India’s growth at minus 4.5% for 2020- Note: The Reserve Bank of India (RBI) has announced to 21. It will be (-) 3.7% in the single hit scenario and (-) introduce a mechanism of ‘Positive Pay’ feature for all 7.3% in the double hit scenario in FY2020-21.On the cheques of value Rs 50,000 and above. This feature global front, the growth is projected at (-) 6.0% in the helps to avert cheque frauds. The limit of Rs 50,000 will single hit scenario and (-) 7.6% in the double hit cover approximately 20 per cent of transactions by scenario in FY20-21. volume and 80 per cent by value. Positive pay is a fraud- 12. RBI Releases National Strategy for Financial prevention system offered by most commercial banks to Education 2020-2025: companies to protect them against forged, altered and Note: The Reserve Bank of India has released revised counterfeit checks. National Strategy for Financial Education. It was 16. RBI releases the Financial Stability Report, July released by Mahesh Kumar Jain, Deputy Governor, 2020: Reserve Bank of India (RBI). This NSFE 2020-2025, has Note: The Reserve Bank of India has released the 21st been prepared by the National Centre for Financial Issue of the Financial Stability Report (FSR). The FSR Education (NCFE) in consultation with all (four) the reflects the collective assessment of the Sub-Committee Financial Sector Regulators viz. RBI, SEBI, IRDAI and of the Financial Stability and Development Council PFRDA along with Department of Financial Services (FSDC) on risks to financial stability and the resilience of (DFS) under the aegis of the Technical Group on the financial system. The Report also discusses the 3 | P a g e www.gradeup.co issues relating to the development and regulation of the convenience of making payments anytime and financial sector.