Current Affairs Economy & Banking

  On January 14, 2020, the South-Central Railways and SBI signed MoU to implement door step banking in 585 railway stations
  • Highlights
The MoU will enable direct pick up of cash from all the railway stations included in the MoU. Before the agreement, the earnings generated at the railway stations were manually sent to nearest banks that were authorised to collect the deposit on behalf of the Railways. This delayed the remittance of cash because of several factors such as availability of man power, holidays, etc.
  • Major Benefits of the new system
The door step banking will provide uniform cash remittance mechanism in all the railway stations. It will also provide real time information about the cash that is deposited by different stations. This will enable increased accountability and also will help in better supervision. This method will also avoid unwanted accumulation of cash at railway stations.
  • Why not DBT?
The Direct Bank Transfer is not a feasible option at the moment. This is because there are still persons in the interior parts of the country using cash to buy their tickets. Apart from interior parts, cash is still used in urban areas to buy tickets as well. The number of passengers using online to book their tickets have increased since 2011-12. In 2015, around 54% of tickets were booked online as compared to 2012. In 2018 the e-ticket sales have been up by 14%. However, there are still an accountable population using cash to buy their tickets.

 The Reserve Bank of India has released a report “National Strategy for Financial Inclusion (NSFI): 2019-2024“. The National Strategy for Financial Inclusion for the period 2019-2024 has been formulated by RBI under the aegis of Financial Inclusion Advisory Committee (FIAC). The report has been ratified by the Financial Stability Development Council (FSDC). As per the official statement, “the National Strategy for Financial Inclusion 2019-2024 sets forth the vision and key objectives of the financial inclusion policies in India to help expand and sustain the financial inclusion process at the national level through a broad convergence of action involving all the stakeholders in the financial sector. The strategy aims to provide access to formal financial services in an affordable manner, broadening & deepening financial inclusion and promoting financial literacy & consumer protection.”
The report stated the following 6 pillars as part of strategic objectives to achieve the aim of financial inclusion:
  • Universal Access to Financial Services
  • Providing basic bouquet of financial services
  • Access to livelihood and Skill Development
  • Financial Literacy and Education
  • Customer Protection and Grievance Redressal
  • Effective Co-ordination

  The State Bank of India has announced ‘residential builder finance with buyer guarantee’ (RBBG) scheme. The aim of the scheme is to giving a push to residential sales and improve homebuyers’ confidence. The SBI will issue a guarantee for completion of select residential projects to customers who have availed home loans from it. The scheme will focus on affordable housing projects priced up to 2.50 crore rupees in 10 cities initially. Under this scheme, the guarantee would be given by the bank until the project gets the occupation certificate (OC).

  The Reserve Bank of India (RBI) has enabled select banks in India to offer round-the-clock (24×7) trading in the Indian rupee to allow Indians to safeguard their foreign exchange (Forex) risks at any time. The select banks in India offered Indian customers foreign exchange rates only in inter-bank market hours from 9 am – 5 pm. This decision will also make the offshore currency markets in countries like Dubai & Singapore less attractive for Indian investors.

  The Reserve Bank of India (RBI) has launched a mobile app “Mobile Aided Note Identifier (MANI)”. The visually challenged people can identify the denomination of a currency note by using the mobile app “MANI”. The application also works offline once installed. The application scans the currency notes using the camera of the mobile phone and also gives audio output in Hindi and English. The app does not authenticate a note as either genuine or counterfeit.
Source: The Live Mint

 The Union Finance Minister has announced that the Merchant Discount Rate (MDR) charges for businesses with over Rs 50 crore annual revenues will be waived off from January 1, 2020. Also, the digital transactions made using RuPay credit cards, or UPI QR codes will not face any additional charges for merchants or customers from January 1, 2020. All shops, business establishments and companies with an annual turnover of Rs 50 crore or more have been mandated to offer these modes of payment to customers. The Department of Revenue will also notify RuPay and UPI as the prescribed mode of payment for digital transactions without any Merchant Discount Rate (MDR). The Merchant Discount Rate is the percentage of the digital transaction that a merchant pays to banks. This cost is often passed on to the customer. The decision aims to promote the home-grown digital payment pathways like RuPay and UPI, over those promoted by foreign companies, including VISA and MasterCard.
Source: The Hindu

  Central Board of Indirect Taxes and Customs (CBIC) has announced that it has paid Rs 1,12,000 crore as Integrated Goods and Services Tax (IGST) refunds to exporters. According to CBIC, over 83,000 exporters have been benefited by these refunds. The numbers indicated the government’s efforts to fast track refunds under GST especially to exporters. Also, as of now, refunds of only 3,604 crores are pending with Customs. CBIC is using data analytics to identify risky exporter entities that “take input tax credit fraudulently and monetize it by paying IGST and taking refund”. Such exporters are being subject to KYC and verification process before the grant of refund.
Source: The News On AIR

  Finance Minister has launched an e-auction platform “eBkray“. The platform will enable online auction of attached assets by banks. The platform provides navigational links to all PSB e-auction sites, property search feature. It also presents single-window access to information on properties up for e-auction, comparison of similar properties, and also contains videos and photographs of the uploaded properties. Indian Banks Auctions Mortgaged Properties Information (IBAPI) portal is an initiative of Indian Banks Association under the policy of the Department of Financial Services, Ministry of Finance was launched to provide a platform to give details of mortgaged properties to be auctioned online by Banks, starting with PSBs.
Source: The Economic Times

  State Bank of India will introduce One Time Password (OTP)-based ATM cash withdrawals. The step has been taken to reduce the occurrences of unauthorised transactions happening at ATMs. SBI will introduce one-time password for every cash withdrawal of Rs 10,000 and above between 8 am and 8 pm. The OTP-based cash withdrawal will be effective from January 1, 2020 across all SBI ATMs. When an SBI cardholder will enter the amount of cash he/she wishes to withdraw, a screen will appear asking for the OTP. The customer will then have to put the OTP that the bank will send to the registered mobile number. OTP is a system-generated string of numeric characters that allow users to make a single transaction. The facility will not be applicable at other banks’ ATM as this functionality has not been developed in National Financial Switch (NFS).
Source: The Economic Times

 The Reserve Bank of India has directed large cooperative banks to report all exposures of Rs 5 crore and more to the Central Repository of Information on Large Credits (CRILC). The move is aimed at early detection of financial distress. The aggregate exposure will include all fund-based and non-fund based exposures like partial credit enhancement, including investment exposure on the borrower. As per the new rules, Urban Cooperatives Banks are required to submit CRILC report on quarterly basis with effect from December 31, 2019. The CRILC was created by the Reserve Bank of India. CRILC constitutes commercial banks, all India financial institutions and certain non-banking financial companies with multiple objectives, which, among others, include strengthening offsite supervision and early recognition of financial distress.
Source: The Economic Times


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