www.gradeup.co 1 www.gradeup.co GK Tornado for IBPS PO Main Exams 2019 Dear Aspirants, This GK Tornado is a complete docket of important Banking Awareness & Current Affairs news and events that occurred in last 6 months (1st June 2019 – 25th November 2019). This file is important and relevant for all competitive exams like Banking, Insurance, SSC and UPSC Exams. News related to RBI November 1. RBI Enhances Scope of Non-Resident Rupee 3. RBI supersedes DHFL board to initiate Accounts: insolvency proceedings: • To popularise cross-border transactions in Indian rupee, the Reserve Bank of India has • The Reserve Bank of India (RBI) has enhanced the scope of 'Special Non-resident superseded the board of Dewan Housing Rupee' (SNRR) account. Finance Corporation Limited (DHFL) as it • It allows the persons residing outside India to "intends to shortly" initiate the process of open such accounts for purposes like external insolvency. commercial borrowing and trade credit in • In January, a web portal accused the DHFL Indian rupee. promoters of committing financial frauds by • Any person resident outside India, having a creating shell companies. business interest in India, can open a non- • A total of 32 Indian and foreign banks lent Rs interest-bearing Special Non-Resident Rupee 97,000 crore to DHFL Group companies with Account (SNRR account) with a bank for bona many borrower companies having the same fide transactions in rupees. addresses, directors, and auditors. • The restriction on the tenure of SNRR account, • DHFL is the fourth-largest Indian housing which is currently 7 years, has also been finance company based on loans outstanding as removed. of March. • RBI has also modified norms regarding re- export of unsold rough diamonds from the 4. RBI imposes Rs 5 lakh fine on Oxigen Services special notified zone of Customs without export declaration form (EDF) formality. • The Reserve Bank of India (RBI) has imposed a 2. Banks cannot charge on NEFT transactions fine of Rs 5 lakh on prepaid payment from January 2020: instrument Oxigen Services. • On the third anniversary of demonetisation, the • The move was taken in exercise of powers Reserve Bank of India (RBI) released a report vested under Section 30 of the Payment and titled “Furthering Digital Payments”. Settlement Systems Act, 2007, for non- • In the report with a view to promoting digital compliance of regulatory guidelines. transactions RBI proposed that from January • The fine comes through a speaking order dated 2020, banks can no longer charge savings bank September 17, 2019. account holders for online transactions in the • Oxigen Services facilitates payment processing NEFT system. and money transfer services. • The Reserve Bank of India (RBI) has now mandated banks to do this. October 1. Rs 35 lakh penalty on Tamilnad Mercantile Bank: • The bank has been penalized for non-compliance • The Reserve Bank of India has imposed a penalty of with certain provisions of directions issued by RBI on Rs 35 lakh on Tamilnad Mercantile Bank for violating fraud classification and reporting by commercial norms on fraud classification and notification. banks and select FIs directions 2016. 2 www.gradeup.co 2. NBFC licence for Vreedhi Financial Services: • The Reserve Bank of India has rejected the merger • The RBI has given a non-banking finance company proposal of Indiabulls Housing Finance and Lakshmi licence to Vreedhi Financial Services (VFS). Vilas Bank. • Vreedhi Financial Services objective is to provide • RBI has rejected the application for voluntary credit and other services to micro-enterprises amalgamation of Indiabulls Housing Finance Ltd. operating in tier two-three cities and small towns. and Indiabulls Commercial Credit Ltd. with the • It will address the gap between the addressable and Lakshmi Vilas Bank Ltd. viable credit in the micro-enterprises space which is • The merger was crucial for Lakshmi Vilas Bank as it $123 billion as per the study conducted by the is now under the prompt corrective action International Finance Corporation (IFC). framework of the RBI due to a high level of bad 3. RBI approves merger of DCBs to form ‘Kerala Bank’: loans and insufficient capital. • The Reserve Bank of India approved the 6. RBI reduces repo rate by 25 basis points – On 04th October, amalgamation of 13 district cooperative banks the Reserve Bank of India has reduced the policy repo rate (DCBs) with the Kerala State Cooperative Bank to by 25 basis points (bps). form the proposed “Kerala Bank”. • The repo rate under the liquidity adjustment facility • Except the Malappuram District Cooperative Bank, (LAF) was reduced from 5.40% to 5.15%. all district banks had approved the scheme of • The reverse repo rate under the LAF stands revised amalgamation proposed by the State government at to 4.90%. their respective general body meetings. • The marginal standing facility (MSF) rate and the • RBI also insisted that the State government would Bank Rate is revised to 5.40%. have to consistently infuse additional capital and • RBI has also reduced the real GDP growth for 2019- also put in place a well-defined governance 20 from 6.9% to 6.1%. structure by amending the KSCS Act. • Last month Government cut the corporate tax rate 4. RBI released Consumer Confidence Survey (September from 30% to 22% to revive the slow growth rate. 2019): • The current inflation of India is 3.21%. • The Reserve Bank of India has released the data of Current rate is as follows: the September 2019 round of its Consumer • Repo rate - 5.15% Confidence Survey. • Reverse repo rate – 4.90% • The survey was conducted in 13 major cities: • MSF rate - 5.40% Ahmedabad, Bengaluru, Bhopal, Chennai, Delhi, • Bank rate - 5.40% Guwahati, Hyderabad, Jaipur, Kolkata, Lucknow, • SLR – 18.75% Mumbai, Patna and Thiruvananthapuram. • CRR – 4% Key Highlights: 7. RBI Consumer Confidence Survey, 2019 – According to RBI • Consumer confidence weakened in September with Consumer Confidence Survey, the consumer confidence both the current situation index and the future dipped to a six-year low. expectations index recording declines. • The federal bank says that this is mainly due to • Households’ sentiments on the general economic decline in employment, income and discretionary situation and the employment scenario declined. spending. They were less optimistic on their income over the • The CSI – Current Situation Index fell to 89.4 year ahead than in July 2019. whereas it was recorded as 95.7 in July. Previously • Respondents perceived an increase in the price the index hit its low in 2013, when it reached 88. level over the last 1 year and a majority of them expect prices to rise further in the coming year. 5. Indiabulls Housing & Lakshmi Vilas Bank merger rejected by RBI: September 1. RBI placed restrictions on PMC Bank – The Reserve Bank customers of Punjab and Maharashtra Cooperative of India has imposed caps on withdrawals made by Banks for 6 months. 3 www.gradeup.co • The imposition was invoked by the central bank 5. RBI orders banks to link lending rate to external interest under Section 35 A of India’s Banking Regulation rate benchmark – The Reserve Bank of India has made act, 1949. mandatory for banks to link retail and MSME loans to • PMC is spread across 6 states and has a network external interest rate benchmarks. of 137 branches. • This new norm will be effective from 1st of Section 35 A of India’s Banking Regulation act, 1949 October. Under this norm, banks have to link all • Section 35A of the Banking Regulation act provides of their new loan products, be it personal, powers to RBI to give directions to banks. housing or auto to an external benchmark rate. • It enables RBI with the power to take action in order • Banks have been allowed to choose any to prevent a banking company acting detrimental to benchmark market interest rate published by the the interests of the depositors. Financial Benchmarks India Private Ltd (FBIL). 2. RBI expands coverage of Bharat Bill Payment System – In • Banks can choose RBI’s repo rate, government of a consumer friendly initiative, Reserve Bank of India (RBI) India’s three-month treasury bill yield published has expanded the scope and coverage of Bharat Bill by the FBIL, government’s six-month treasury bill Payment System (BBPS) to include all categories of billers yield published by the FBIL or any other market who raise recurring bills and payments (except prepaid interest rate published by the FBIL. recharges) as eligible participants, on a voluntary basis. 6. RBI has clarified that non-cash withdrawal transactions • At present, the facility of payment of recurring from ATMs such as balance enquiry cannot be part of bills through BBPS is available only in five free transactions segments i.e. direct to home (DTH), electricity, Key points – gas, water and telecom. • Banks offers their savings account customers a 3. Harsh Vardhan committee submitted its report to RBI certain number of free transactions at ATMs Governor - A panel set up by the central bank to suggest every month and beyond that they levy charges. measures to make the housing finance securitization • Now, the Reserve Bank of India or RBI has market more attractive has recommended that the clarified the list of transactions at ATMs for National Housing Bank (NHB) set up an intermediary with which banks cannot charge their customers. 51% government ownership. Banks cannot charge for these ATM transactions: Note: (i) ATM transactions that fail due to technical reasons like • The Reserve Bank of India had constituted a hardware, software, communication issues will not be Committee on the Development of Housing Finance counted as valid ATM transactions for the customer. Securitisation Market, on May 29, 2019, with Dr. (ii) Other ATM transactions that failed due to non-availability Harsh Vardhan, Senior Advisor, Bain & Co.