www.gradeup.co 1 www.gradeup.co GK Tornado for RBI Assist Main Exam -2020 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 Oct 2019 – 15th February 2020). This file is important and relevant for all competitive exams like Banking, Insurance, SSC and UPSC Exams. News related to RBI February 1. Union Cabinet Approves Amendments to Banking • The Reserve Bank of India (RBI) has increased the Regulation Act to regulate co-operative banks Insurance cover on bank deposits to Rs 5 lakh from Rs Note: 1 lakh effective from February 4, 2020. • The Union Cabinet has approved amendments to the • The cover is provided by a wholly owned subsidiary of Banking Regulation Act to empower India’s Central the RBI, the Deposit Insurance and Credit Guarantee Bank (Reserve Bank of India) to have better control Corporation (DICGC). over urban co-operative banks and multi-state • The DICGC does not directly charge any premium from cooperative banks. the depositor on this insurance. • These amendments will apply to the urban co- • So Now Banks will pay a premium of 12 paise against operative banks and multi-state cooperative banks. 10 paise per Rs 100 deposit. 2. RBI cancels Certificate of Authorisation of Vodafone m- 5. RBI released sixth bi-monthly Monetary Policy review: pesa: The Reserve Bank of India on February 6th, 2020. In this Note: RBI decided to keep key policy rate unchanged. • This cancellation is done after its voluntary Key rates are as below: surrender of authorization. • Now Vodafone m-Pesa cannot continue to transact Note: The repo rate under the liquidity adjustment facility the business of issuance & will no longer have the (LAF) left unchanged to 5.15%. The reverse repo rate right to provide payment facility as a prepaid under the LAF stands same i.e. 4.90%. instrument (PPI). Current Policy Rates: • Vodafone Idea in 2019 has decided to close m-pesa Policy Repo Rate 5.15% vertical after the closure of Aditya Birla Idea Payments Bank Limited (ABIPBL), with which it was Reverse Repo Rate 4.90 % being merged. Marginal Standing Facility Rate 5.40% 3. RBI conducts “Financial Literacy Week 2020”: Bank Rate 5.40% Note: 6. RBI grants 5-year CRR relief to banks for lending to auto, • The Reserve Bank of India (RBI) will conducted the housing and MSMEs: “Financial Literacy Week 2020” from February 10 Note: to February 14, 2020. • In order to boost the credit growth in the country, • The theme of the Financial Literacy Week 2020 is the Reserve Bank of India (RBI) has eased Cash “Micro, Small and Medium Enterprises (MSMEs)”. Reserve Ratio (CRR) requirement of commercial • This year India’s central bank is focusing on the banks for 5- years. Micro, Small and Medium Enterprises. • Now, the banks would not be required to maintain • The Financial Literacy Week 2020 will aim to aware the cash reserve ratio (CRR) for 5- years on their people about the formalisation, collateral free loan, deposits for the amount equivalent to loans lent to discounting of receivables, rehabilitation of stressed automobiles, residential housing, and micro, small units and timely repayment. and medium enterprises (MSMEs) between 31 Jan- 4. RBI hikes Insurance cover on bank deposits to Rs 5 lakh 31 July, 2020 from their net demand and time from Rs 1 lakh: liabilities (NDTL) for maintenance of the CRR. Note: 2 www.gradeup.co January 1. RBI allows “Video based Customer Identification Process”: • Under this facility, an agreement is formed Note: between the consumer and the merchant bodies • The Reserve Bank of India has revised the Know and the payment of the outstanding dues is done Your Customer (KYC) norms for banks and other automatically on the fixed date of the month. lending institutions. • However, the maximum permissible limit under • New amendments in KYC norms by RBI allows this payment system shall be Rs 2,000 per banks and other lending institutions to use “Video transaction. based Customer Identification Process (V-CIP)”. 4. RBI curbs functions of Sri Guru Raghavendra Sahakara • The V-CIP is a consent based alternate method of Bank: establishing the customer’s identity and for Note: customer onboarding from remote areas while • The Reserve Bank of India (RBI) has curbed Sri leveraging the digital technology. Guru Raghavendra Sahakara Bank in Bengaluru, • V-CIP will also provide comfortability to banks and Karnataka from doing business with immediate other regulated entities while holding to the RBI’s effect. Know Your Customer (KYC) norms. • This has been done after finding alleged • The video files recorded as V-CIP are required to irregularities in transactions. be stored bearing the date and time stamp while • The bank’s savings and current account customers ensuring the safety and security of the video files. and depositors can however withdraw cash up to 2. RBI releases “National Strategy for Financial Inclusion” ₹35,000 only till further notice. report: 5. RBI tightens norms for debit, credit card issuance & usage to Note: improve security: • The Reserve Bank of India has released a report Note: “National Strategy for Financial Inclusion (NSFI): • In view of the increasing cases of cyber fraud the 2019-2024“. Reserve Bank of India (RBI) has framed new rules • The National Strategy for Financial Inclusion for under “Enhancing Security of Card Transactions” the period 2019-2024 has been formulated by RBI to further protect debit, credit card transactions. under the aegis of Financial Inclusion Advisory • These directions are issued under Section 10(2) of Committee (FIAC). The report has been ratified by the Payment and Settlement Systems Act, 2007 the Financial Stability Development Council (Act 51 of 2007) & will come into effect from 16 (FSDC). March,2020. • The National Strategy for Financial Inclusion 2019- • Also, now transactions at ATMs and PoS will be 2024 sets forth the vision and key objectives of the done through domestic cards. financial inclusion policies in India to help expand • In addition, RBI directed banks and other card and sustain the financial inclusion process at the issuing companies to allow their customers to national level through a broad convergence of switch on and off their debit and credit cards. action involving all the stakeholders in the 6. RBI ranked 6th among central banks in buying gold abroad: financial sector. Note: • The strategy aims to provide access to formal • The Reserve Bank of India (RBI) has been ranked financial services in an affordable manner, 6th largest buyer of sovereign gold abroad after it broadening & deepening financial inclusion and purchased 25.2 tonnes in the first 10 months of promoting financial literacy & consumer 2019 according to World Gold Council (WGC) protection.” report titled “Outlook 2020: Global economic 3. RBI permits UPI transactions for recurring payments: trends and their impact on gold”. Note: • The central banks of China, Russia, Kazakhstan, • To promote digital payments in India, the Reserve Turkey and Poland have purchased more gold Bank of India (RBI) has permitted processing of e- than India in 2019. mandate for recurring payments through UPI 7. RBI hikes short-term debt investments limit for FPI to 30% (Unified Payments Interface). from 20%: Note: 3 www.gradeup.co • In order to boost the foreign inflows, India’s • As per the amendments, the investment limit central bank, the Reserve Bank of India (RBI) has under VRR has now been increased to Rs 1,50,000 increased the short-term investments by foreign crores (1.5lakh crores) from earlier Rs.75,000 portfolio investors (FPIs) to 30 % from 20 % of the crores. total FPI investment in Central government • For fresh allotment, the investment limit will be securities including Treasury Bills(T-bills) / state Rs. 90,630 crores and will be allotted under VRR- development loans. This rule also applies in combined category. corporate bonds. • The limits of investment will also be available ‘on • These directions are issued under sections 10(4) tap’ and allotted on ‘first come, first served’ basis. and 11(1) of the Foreign Exchange Management • Until the limits are fully allotted, the tap will Act, 1999 (42 of 1999). remain opened. 8. RBI increased Investment Limits Under Voluntary 9. UCBs hit by around 972 cases of fraud worth Rs 221 crore Retention Route: in past 5 fiscals: RBI Note: Note: • Based on the feedback received from the • According to the India’s central bank, the Reserve Voluntary Retention Route (VRR) scheme Bank of India (RBI), there have been about 1000 cases introduced by the Reserve Bank of India (RBI) in of fraud in the urban cooperative banks (UCBs) of the 2009, the RBI in consultation with the govt. made country in the last 5 fiscal years (FY), in which banks certain amendments in the scheme to increase its have incurred losses of 221 crores. operational flexibility. December 1. RBI revised the supervisory framework for Urban Co- requirements under the scheme on voluntary operative Banks: transition of urban co-operative bank into a small Note: finance bank. • To prevent PMC Bank-like scams the Reserve Bank of 3. ‘MANI’ App launched by RBI for visually challenged to India (RBI) has revised the supervisory action Identify currency Denomination: framework for urban co-operative banks (UCBs). Note: • As per the guidelines, UCBs, with deposits of Rs 100 • RBI has launched the ‘MANI’ app for visually crore and above, will constitute the BoM, which will impaired people to identify denomination of the new be a mandatory requirement for opening new currency notes. The full form of ‘MANI’ is “Mobile branches. Aided Note Identifier”. The MANI App also works • A UCB may be placed under supervisory action offline once installed.