www.gradeup.co www.gradeup.co GK-Tornado IBPS RRB Officer & 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 4.5 months (1st May 2020 – 15th September 2020). This file is important and relevant for all competitive exams like Banking, Insurance, SSC and UPSC Exams. News related to RBI 1. RBI Issued Draft Rupee Interest Rate Derivatives 4. RBI Accepted Kamath Panel Recommendations: Directions: Note: The RBI has accepted the recommendations of Note: The Reserve Bank of India (RBI) issued Draft the KV Kamath Committee. On the basis of the Rupee Interest Rate Derivatives (Reserve Bank) recommendation of the panel the central bank specified Directions, 2020 under Section 45 W of the RBI Act, five financial ratios and sector-specific thresholds for 1934 to allow foreign portfolio investors (FPIs) to resolution of COVID-19-related stressed assets in 26 undertake exchange-traded rupee interest rate sectors. These five ratios are: Total outside derivatives transactions subject to an overall ceiling of liabilities/adjusted tangible net worth (TOL/ATNW), Rs 5,000 crore. total debt/EBITDA, current ratio, debt service coverage 2. RBI Mandate Banks to Fully Automate NPA ratio (DSCR), average debt service coverage ratio Recognition Process by June 30, 2021: (ADSCR). Note: The RBI issued circular advising banks to switch 5. RBI issued a notice on Compliance functions in to automatic identification of NPAs, using appropriate banks and role of CCO: IT systems, from manual identification for regulatory Note: Reserve Bank of India has released a notice on reporting and bank’s own management information Compliance Functions in Banks and the Role of Chief system (MIS) requirements. However, over this period Compliance Officer (CCO) whose term has to be at least of time, the processes for NPA identification, income three years. Banks must appoint a CCO to ensure an recognition, provisioning and generation of related effective compliance culture, independent corporate returns in many banks are not yet fully automated. RBI compliance function, and a strong compliance risk issued a notification mandating banks to complete the management programme The person holding the automation of bad-loan recognition and provisioning position should be a senior-level executive, preferable processes by June 30, 2021. general manager and above. 3. RBI Released Bi-Monthly Monetary Policy 6. RBI Released Revised Guidelines for the Priority Statement 2020-21: Sector Lending: Note: Based on an assessment of the current and Note: Reserve Bank of India (RBI) reviewed the Priority evolving macroeconomic situation, the Monetary Policy Sector Lending (PSL) Guidelines to align it with Committee (MPC) at its meeting on 6th August 2020 emerging national priorities amid COVID-19 impact. decided to The new sector included under PSL funding are: (i) Key Highlights of the policy are: Start-ups (up to Rs 50 crore); (ii) loans to farmers for • Keep the policy repo rate under the liquidity installation of solar power plants for solarisation of grid adjustment facility (LAF) unchanged at 4.0 per cent. connected agriculture pumps and (iii) loans for setting • The reverse repo rate under the LAF remains up Compressed Bio Gas (CBG) plants. unchanged at 3.35 per cent. 7. RBI Released Annual Report 2019-20; India’s • The marginal standing facility (MSF) rate and the Growth Projected at -4.5%: Bank Rate at 4.25 per cent. Note: Reserve Bank of India (RBI) released its Annual Current Policy Rates: Report for 2019-20. It is Report of the Central Board of Policy Repo Rate 4.0% Directors on the working of the Reserve Bank of India (RBI) for the year ended June 30, 2020 submitted to the Reverse Repo Rate 3.35% Central Government in terms of Section 53(2) of the Reserve Bank of India Act, 1934.In the report, RBI Marginal Standing Facility Rate 4.25% projected that India’s growth at minus 4.5% for 2020- Bank Rate 4.25% 21. It will be (-) 3.7% in the single hit scenario and (-) 7.3% in the double hit scenario in FY2020-21.On the www.gradeup.co 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 8. RBI Releases National Strategy for Financial fraud-prevention system offered by most commercial Education 2020-2025: banks to companies to protect them against forged, Note: The Reserve Bank of India has released revised altered and counterfeit checks. National Strategy for Financial Education. It was 12. 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 (DFS) under the aegis of the Technical Group on of the financial system. The Report also discusses the Financial Inclusion and Financial Literacy issues relating to the development and regulation of the (TGFIFL).There are the Strategic Objectives laid down financial sector. As per the report, the capital to risk- in NSFE 2020-2025 and in order to achieve them, the weighted assets ratio (CRAR) of Scheduled Commercial document recommends adoption of a ‘5 C’ approach viz. Banks (SCBs) edged down to 14.8 per cent in March Content, Capacity, Community, Communication and 2020 from 15.0 per cent in September 2019.Their gross Collaboration. non-performing asset (GNPA) ratio declined to 8.5 per 9. RBI Released Framework for Authorisation of Pan- cent from 9.3 per cent and the provision coverage ratio India Umbrella Entity for Retail Payments: (PCR) improved to 65.4 per cent from 61.6 per cent Note: Reserve Bank of India (RBI) released the over this period. “Framework for authorization of pan-India Umbrella 13. RBI cancels licence of The CKP Co-operative Bank Entity for Retail Payments”. In this regard, the apex Ltd, Mumbai: bank has invited applications from eligible companies Note: The licence of The CKP Co-operative Bank Ltd., by February 26, 2021.The Board for Regulation and Mumbai to carry on banking business has been Supervision of Payment and Settlement Systems cancelled by the Reserve Bank of India (RBI) with effect (BPSS), will be the final authority to issue authorisation from the close of business on April 30, 2020. RBI has for setting up umbrella entity / entities for retail also approached the Registrar of Co-operative Societies, payments comprising of Automated Teller Machines Pune, to issue an order for winding up the affairs of the (ATMs), White Label PoS (point of sale system), bank and to appoint a liquidator for the bank. Aadhaar-based payments and remittance. The 14. RBI announces Rs 50,000 crore Special Liquidity minimum paid-up capital of the umbrella entity should Facility for Mutual Funds: be Rs 500 crore. Note: The Reserve Bank of 10. RBI ceased Banking operations of Aditya Birla Idea India has announced a Special Liquidity Facility of Rs Payments Bank: 50,000 crore for Mutual Funds. This has been done by Note: Reserve Bank of India has ceased the Banking the central bank in order to ease liquidity pressures on operations by the Aditya Birla Idea Payments (ABIP) the Mutual Funds. This is a measure taken by the RBI to Bank under Banking Regulations Act 1949 with effect mitigate the economic impact of COVID-19 and from July 28, 2020. Now the bank company could not preserve financial stability. Under the Special Liquidity able to work successfully and applied for voluntary Facility for Mutual Funds (SLF-MF), repo operations winding up by the Vodafone Idea Limited which 90 days tenor would be conducted by the RBI at holds 51% in ABIP bank and the remaining 49% by the fixed repo rate. The SLF-MF is on-tap and open- Grasim Industries Limited. Aditya Birla Idea Payments ended. Bank had received the banking licence from the RBI in 15. RBI cancels the licence of Mapusa Urban Co- April 2017 for carrying on the business of a payments operative Bank of Goa Ltd: bank. It had commenced business from February 22, Note: The Reserve Bank of India has cancelled the 2018. Aditya Birla Idea Payments Bank was license of Mapusa Urban Co-operative Bank of Goa Ltd. promoted by Grasim Industries Limited and Vodafone The central bank has issued an order, barring the bank Idea Limited with 51 and 49 per cent shareholdings to carry on banking business, with effect from the close respectively. of business on April 16, 2020. Hence, the Urban Co- 11. RBI announces ‘positive pay’ feature to help avert operative Bank has been refrained from running the cheque frauds: business of ‘banking’. Note: The Reserve Bank of India (RBI) has announced 16. RBI announces measures to mitigate impact of to introduce a mechanism of ‘Positive Pay’ feature for COVID-19: all cheques of value Rs 50,000 and above. This feature www.gradeup.co Note: The Reserve Bank of India has announced a set of Note: The Reserve Bank of India launched a twitter measures to mitigate the effect of COVID-19.