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के वल आतं रिक परिचालन के ललये // For Internal Circulation Only Dec 21 – Jan 22

Table of Contents I. State Bank of India ...................................................................................... 6  India's GDP likely to grow more than 9.5% in FY22: SBI research report.......................................................... 7  SBI, Adani Capital sign pact for co-lending to farmers ...................................................................................... 7  SBI contributes ₹10 crore to Armed Forces Flag Day Fund ............................................................................... 7  State Bank of India raises Rs 3,974 crore capital through AT1 bonds ............................................................... 8  SBI: Digital currency to play key role in cross-border deals............................................................................... 8  SBI gets board nod to offload its 6% stake in SBI Mutual Fund via IPO............................................................. 8  SBI, Indian Army renew MoU to offer benefits to army personnel, their families............................................ 9  SBI hikes base rate by 0.1 per cent .................................................................................................................... 9  Follow prudential norms when lending to discoms: Power Secy tells SBI ........................................................ 9  Physical and digital modes of financial services to co-exist in India: SBI chairman ........................................ 10  SBI's PE arm hikes climate fund's target 5 times to Rs 2,000 crore................................................................. 10  SBI picks up minority stake in Sajjan Jindal-led JSW Cement for Rs 100 cr ..................................................... 10  SBI, Union Bank to go ahead with Swiss Challenge auction for KSK Mahanadi Power loans.......................... 11  Banks need additional $70 bn to back $5- trn GDP: SBI's Dinesh Khara ......................................................... 11  SBI Card raises Rs 650 crore through private placement of bonds ................................................................. 11  Financial inclusion critical for India to become $5 tn economy ...................................................................... 12  State Bank of India marks centenary year with Namaste UK .......................................................................... 12  SBI to acquire nearly 10% stake in India International Clearing Corporation ................................................. 12  LIBOR Transition: Systems and processes aligned to support transactions linked to ARR, says SBI ............... 13 II. Financial and Allied Regulators – India .................................................... 14  Retail, MSME credit shows steady growth in November: RBI report.............................................................. 15  Bank credit grows 7% by mid-November, shows RBI data .............................................................................. 15  Credit card spend crosses Rs 1 trillion first time in a month: RBI.................................................................... 15  Number of ATMs in country at over 2.13 lakh, says Finance Ministry ............................................................ 16  PSBs restructure over Rs 58,500 cr loan advanced to 1 mn MSME acc: Govt................................................. 16  No plans to boost cryptocurrency sector in India, FinMin tells Lok Sabha...................................................... 16  Need to ensure safety of CBDCs before introduction: RBI Governor.............................................................. 16  Steps taken to protect bona fide decisions of bankers: FM Nirmala Sitharaman........................................... 17  Non-life insurers' gross direct premium up 5.5% to Rs 15,743 cr in Nov ........................................................ 17  MPC cuts GDP growth projection for Q3, Q4, cites supply crisis and Covid.................................................... 17  Rs 2,000 notes now 1.75% of total banknotes in circulation: Govt................................................................. 18 1

 Rules on banks' investment portfolios to be revamped first time in 21 years................................................ 18  Need to be careful about cyber risks to CBDC: RBI Governor Shaktikanta Das .............................................. 18  Monetary policy committee: RBI holds key rates to boost recovery .............................................................. 19  Reserve Bank to float paper on digital payment charges................................................................................ 19  RBI for raising UPI transaction limit to Rs 5 lakh in select cases...................................................................... 19  RBI enforces 20-digit LEI for cross-border deals above Rs 50 crore ................................................................ 20  RBI announces proposal to push UPI payments through feature phones ...................................................... 20  Deposit insurance reforms to instil confidence in people on banking: PM..................................................... 21  Govt unlikely to announce capital infusion for PSU banks in Budget 2022-23 ............................................... 21  Banks write off Rs 2.02 lakh crore NPAs in FY21, Rs 11.68 lakh crore in last 10 years.................................... 21  Centre was sensitive to fiscal deficit: Garg on CAG's bank recap concerns .................................................... 22  As many as 41,177 posts vacant at public sector banks: Govt ........................................................................ 22  NPAs of Public Sector Banks Doubled to Rs5.40 Lakh Crore in Past Seven Years: Govt.................................. 22  Govt to refund MDR losses to banks on digital payments for FY23 ................................................................ 23  RBI proposes new norms for capital requirement for banks........................................................................... 23  Indian economy recovering well, but Omicron poses a risk: RBI bulletin ....................................................... 23  Capital norms for operational risks of banks to be revised: RBI...................................................................... 24  Scheduled payment banks, SFBs to do government agency business: RBI ..................................................... 24  Government to mull changes in law to cut state’s stake in banks .................................................................. 24  RBI empanels CSB Bank to undertake banking biz of central, state govts ...................................................... 24  MPC Meet: RBI Governor for continued policy support amid headwinds ’emanating from global factors’ .. 25  Profitability of PSBs improved post amalgamation: MoS for Finance............................................................. 25  No Cabinet decision on privatisation of two PSBs: FM Nirmala Sitharaman .................................................. 25  Rates on hold but RBI MPC gets battle ready for economy as Omicron looms .............................................. 26  RBI extends card tokenisation rule by 6 months after industry request......................................................... 26  Govt asks banks to share details of 'interest on interest' charged.................................................................. 27  Banks need to strengthen corporate governance, says RBI report................................................................. 27  RBI authorises RBL Bank to collect indirect taxes............................................................................................ 27  NBFC sector expected to remain buoyant: RBI report .................................................................................... 28  Banking frauds: 4,071 cases involving ₹36,342 cr reported in H1 FY22: RBI................................................... 28  Amount recovered through various channels dropped in 2020-21: RBI report.............................................. 28  Recast scheme to stay afloat, says RBI Trend & Progress report .................................................................... 29  Banks’ gross NPAs decline to 6.9% .................................................................................................................. 29  Bank NPAs ease to nearly six-year low: RBI Trends & Progress report ........................................................... 29  RBI warns of bad loan spike, pencils NPAs at 8.1-9.5% by September............................................................ 30  Retail-led credit model facing headwinds as home loan delinquencies rise, RBI says.................................... 30  Auto-debit bounces above 30% in November................................................................................................. 30 2

 Asset quality set to worsen, but banks resilient enough: RBI report .............................................................. 31  Sarfaesi outperforms IBC in FY21 loan recovery: RBI data .............................................................................. 31  RBI extends deadline for periodic KYC update to March 31, 2022.................................................................. 32 III. National and International Importance .................................................... 33  GDP grows 8.4% in Q2; demand, services drag down economic activities ..................................................... 34  Bank credit to industry revives, but real estate, education loans lag ............................................................. 34  S&P keeps India GDP growth forecast unchanged at 9.5% in FY22................................................................. 34  India's fiscal deficit for April-October at 36.3% of FY22 target ....................................................................... 35  GDP report card: Agriculture sees 4.5% growth in second quarter ................................................................ 35  Festive season retail demand, MSME drive bank loan growth in October ..................................................... 36  UPI breaks 5-month growth streak; transactions decline 0.71% in November .............................................. 36  Paytm Payments Bank gets RBI approval to operate as scheduled bank........................................................ 37  Credit card spends jump 12% to cross Rs 1 lakh crore mark for first time...................................................... 37  International Day Of Banks 2021: Why Do UN Observe the Day Since 2020? ................................................ 38  NCLT allows RBI's plea for bankruptcy proceedings against Reliance Capital................................................. 38  Fitch Ratings cut India's FY22 economic growth forecast to 8.4% .................................................................. 38  Life insurers' new business premium spikes 42% at Rs 27,177 cr in Nov........................................................ 39  Asset quality pressures on micro-lending ease in Q2Fy22: CRIF High Mark ................................................... 39  Treat crypto/digital tokens as securities of a special class: CII........................................................................ 39  Fitch raises outlook for India auto loans to 'neutral' from 'deteriorating' ...................................................... 40  India's economy likely to grow 10.5% in FY22, 9% in FY23: Credit Suisse....................................................... 40  How PSBs played a key role in relieving small biz stress during COVID-19 ..................................................... 40  Reserve Bank may rationalise some payment charges, says industry............................................................. 41  Banks pull out innovative products to woo back corporate customers .......................................................... 41  Banks Lost Rs 2.85 Trillion Due To Loan Default Of 13 Firms: UBFU ............................................................... 42  Micro-loan disbursement up 154.5% QoQ to to Rs 64,899 cr in Sept: MFIN .................................................. 42  CD issuances sharply jump in November......................................................................................................... 43  HC can't pass order under Art 226 directing bank to grant OTS to borrower: SC ........................................... 43  2022 may not be a boom time for banks worldwide, set to face regulatory tightening ................................ 44  CBI files charge sheet against Corporation Bank ex-chairman, others in Rs 79 crore fraud case ................... 44  World Bank unveils replenishment package of IDA to back poorest nations ................................................. 44  ICICI Bank raises Rs 5,000 crore through 10-year bonds................................................................................. 45  IFSCA sets up panel for creating framework for transfer of stressed loans .................................................... 45  Banks recover 60% of over Rs 22,500 crore dues from asset sales of Mallya, Nirav, Choksi.......................... 45  Axis Bank announces will raise up to Rs 5,000 crore by issuing bonds ........................................................... 46  Bankers fear opening up of old NPA sale cases after IT raids.......................................................................... 46 3

 Cash in circulation touches Rs 29 lakh crore despite surge in digital payments ............................................. 46  Banks raise over Rs 37,000 cr via AT1 bonds amid capital ratio concern........................................................ 47  Axis Bank emerges as highest bidder for Citi consumer business ................................................................... 47  Bank deposits in Gujarat rise by 12.4% ........................................................................................................... 47  Banks' improved NPA recovery, declined loan provisioning to continue in 2022: ICRA ................................. 48  Banking sector to see significant reforms in the new year.............................................................................. 48  Airtel Payments Bank surpasses 1 bn transactions mark in Q2....................................................................... 48  State-backed Bad Bank set to begin operations in January second week....................................................... 49  HDFC Bank ties up with IPPB to deliver banking services in semi-urban, rural areas ..................................... 49  World economy to top $100 trillion in 2022 for first time: Report ................................................................. 49  Banking sector to see significant reforms in 2022; privatisation, IDBI Bank disinvestment on agenda ......... 50  Banks poised for next round of growth, say CEOs........................................................................................... 50  MSME, retail loans may see stress rise in coming quarters ............................................................................ 50  India's real GDP likely to maintain 9% growth rate in FY22, FY23: Report...................................................... 51  HDFC Bank to hold more fraud awareness workshops at educational institutions ........................................ 51 IV. Banking Technology and Cyber Security.................................................. 52  Ransomware, fleeceware among top threats of 2021: Avast ......................................................................... 53  UIDAI working with World Bank, UN to take Aadhaar technology overseas .................................................. 53  Explainer: Neo-banks Vs traditional banking................................................................................................... 53  Indian banks behind the curve in tapping payments tech: Kotak ................................................................... 54  Web 3.0 a $1.1 trn growth opportunity for India: USISPF-CrossTower research............................................ 54  U.S. bank regulator urges vigilance as ransomware attacks on the rise ......................................................... 55  Digital lending is all set to get a boost ............................................................................................................. 55  Microsoft takes control of websites used by China-backed hackers............................................................... 55  In pact with NPCI, CUB launches ‘On-the-Go’ wearable keychain for debit card customers.......................... 56  RBI to have on-device wallets in UPI apps for small-ticket transactions......................................................... 56  RBI’s new measures: UPI payment product for feature phones ..................................................................... 56  Pandemic accelerated retail banking innovation, says report ........................................................................ 57  Cryptocurrency cheating cases up from 2 to 54 in yr...................................................................................... 57  Widely used software with key vulnerability sends cyber defenders scrambling........................................... 57  Thirty-fold increase in DDoS cyber attacks in India in festive season ............................................................. 58  Is cryptocurrency used for illicit money laundering? ...................................................................................... 58  Fintech funding soars to $8 b in 2021.............................................................................................................. 58  Technology is causing disruptions in banking, says K V Kamath ..................................................................... 59  Explained: What is tokenisation and why has RBI issued new guidelines?..................................................... 59  SBI Foundation, Social Alpha launch a challenge to support assistive technology start-ups.......................... 60 4

 Google's fight with Joker continues, another app 'deleted'............................................................................ 60  Hackers use AnyDesk in safe mode to launch attacks: Report........................................................................ 60  Kaspersky and Indian Computer Emergency Response Team (CERTIn) continue their strategic partnership for improving mutual Cyber-Security Capabilities........................................................................................... 61  Crypto bourses can’t get cover for cyber risks ................................................................................................ 61  Pvt cryptocurrencies pose immediate risks to customer protection, prone to frauds: RBI ............................ 61  This dangerous WhatsApp scam can access your personal and financial details ........................................... 62  The year of the Doge? 2021 was cryptocurrency's wildest year yet ............................................................... 62 This is non-priced publication with an objective to update readers with latest development in banking and allied areas. News /articles/ reports appearing in this publication are obtained from various websites of banking, finance and related publications. We assumes no responsibility for any typographical error or factual mistake nor for the authenticity and reliability of the contents. 5

State Bank of India 6

India's GDP likely to grow more than 9.5% in FY22: SBI research report The country's gross domestic product (GDP) is likely to grow more than 9.5 per cent in fiscal 2021-22, an SBI research report-Ecowrap said. The economy grew at 8.4 per cent in the second quarter of the current fiscal, according to data released by the National Statistical Office (NSO) on Tuesday. The growth in the April-June quarter of this fiscal stood at 20.1 per cent. In October's monetary policy review, the Reserve Bank of India had retained its projection for real GDP growth at 9.5 per cent in 2021-22, consisting of 7.9 per cent in Q2; 6.8 per cent in Q3; and 6.1 per cent in Q4 of 2021-22. We believe that the real GDP growth would now be higher than the RBI's estimate of 9.5 per cent, assuming the RBI growth numbers for Q3 and Q4 to be sacrosanct, the research report said. [Source website : business-standard.com] Published on : 02-12-2021 SBI, Adani Capital sign pact for co-lending to farmers Registered in 2017, Adani Capital is a non-deposit taking systemically important NBFC with total assets under management (AUM) of Rs 1,292 crore as on March 31. State Bank of India (SBI) on Thursday signed an agreement with Adani Capital, the non- banking finance company (NBFC) arm of the Adani Group, for co-lending to farmers for purchase of tractors and farm implement. “This partnership shall help SBI to expand customer base as well as connect with the underserved farming segment of the country and further contribute towards the growth of India’s farm economy. We will continue to work with more NBFCs in order to reach out to maximum customers in far flung areas and provide last mile banking services,” said SBI chairman Dinesh Khara. The Reserve Bank of India (RBI) had issued guidelines on co-lending scheme for banks and NBFCs for priority-sector lending, to improve credit flow towards underserved sectors of economy, the bank said in a release, adding that the model aims to give the borrower the best interest rate and better reach. [Source website : financialexpress.com] Published on : 03-12-2021 SBI contributes ₹10 crore to Armed Forces Flag Day Fund On the occasion of Armed Forces Flag Day, SBI said it has reinforced its constant support to the armed forces by contributing toward children's education. The country's largest lender, State Bank of India (SBI) has contributed ₹10 crore to the Armed Forces Flag Day Fund in its efforts to support the armed forces of the country. On the occasion of Armed Forces Flag Day celebrated on 7 December, SBI said it has reinforced its constant support to the armed forces by contributing toward children's education. As a part of the bank’s philanthropic responsibilities, SBI will sign a memorandum of understanding (MoU) with Kendriya Sainik Board to support and educate the children of war veterans, ex-servicemen, and war widows. Dinesh Khara, chairman, SBI, said, “At SBI, we are strongly committed to an inclusive growth, building communities and aligning with the national priorities. Our contribution to the Armed Forces Flag Day Fund, is a humble gesture to support the welfare of the armed forces. We express our gratitude to soldiers who valiantly safeguard our nation and protect its citizens despite facing enormous hardships.\" [Source website : livemint.com] Published on : 07-12-2021 7

State Bank of India raises Rs 3,974 crore capital through AT1 bonds Union Bank is likely to hit the market next week with AT1 bond issue of Rs 1,500 crore State Bank of India (SBI) has raised about Rs 3,974-crore capital through additional tier 1 bonds (AT1 bonds). The coupon for the AT1 bonds was fixed at 7.55 per cent, cheaper by 17-basis points over the last issuance in September 2021. Bond dealers said the response to SBI’s offering was good. While the indicative size was Rs 4,000 crore, the issue received bids over Rs 6,000 crore. It opted for Rs 3,974 crore with a coupon of 7.55 per cent. In September 2021, the bank had issued AT1 bonds for Rs 4,000 crore at 7.72 per cent. There have been rating upgrades for AT1 bonds in the third quarter, helping it to raise funds at cheaper rates (lower coupon rate) in fresh issues of bonds, dealers said. [Source website : business-standard.com] Published on : 11-12-2021 SBI: Digital currency to play key role in cross-border deals Even as the country awaits clarity on the cryptocurrency regulatory framework, State Bank of India (SBI) managing director C S Setty said the central bank digital currency (CBDC), which are digital assets issued by central banks, is going to be a reality soon and will play a key role in cross border transactions. Currently, the Reserve Bank of India (RBI) is working on two sets of CBDCs - one wholesale account-based and the other retail-based. \"While crypto currency would be an asset class... I think CBDC is eventually going to transform how cross-border transactions take place...my reading is that it is only a matter of time , there is no way countries across the world can stay away from CBDC,\" Setty said while addressing participants at the ISB Leadership Summit 2021 on the 'Future of banking' here on Saturday. He pointed out that the introduction of CBDC is expected to throw up many questions such as - what happens to the intermediation role of the bank and also how it will impact the monetary as well as fiscal policies of the country [Source website : timesofindia.indiatimes.com] Published on : 12-12-2021 SBI gets board nod to offload its 6% stake in SBI Mutual Fund via IPO The State Bank of India (SBI) on Wednesday said it has received board approval for selling its 6 per cent stake in SBI Mutual Fund through the initial public offering (IPO) route. The Executive Committee of Central Board has accorded approval for exploring possibilities to offload 6 per cent stake of the bank in SBI Funds Management Private Limited through IPO route, SBI said in an early morning regulatory filing. This is subject to receipt of all regulatory approvals, it added. SBI Funds Management Pvt Ltd (SBIFMPL) is a Joint Venture between SBI and AMUNDI (France), one of the world's leading fund management companies. AMUNDI Asset Management picked up 37 per cent stake in the fund house in April 2011, according to SBI Mutual Fund website. Accordingly, SBI currently holds 63 per cent stake in SBIFMPL and the 37 per cent stake is held by AMUNDI Asset Management through a wholly-owned subsidiary -- Amundi India Holding. [Source website : bfsi.economictimes.indiatimes.com] Published on : 15-12-2021 8

SBI, Indian Army renew MoU to offer benefits to army personnel, their families State Bank of India Wednesday said it has renewed its memorandum of understanding with the Indian Army to offer specially crafted benefits to all serving and retired Army personnel and their families through its Defence Salary Package (DSP) Scheme. Under the MoU, the bank offers complimentary personal and air accidental insurance (death) covers, additional cover in case of on-duty death, permanent total disability / partial disability covers. It also supports the education of children and marriage of girl child of the deceased Army personnel, the bank said in a release. Going forward, veterans would also be eligible for complimentary personal accidental (death) insurance, irrespective of age. Family pensioners will also be eligible for a bouquet of benefits, it said. \"State Bank of India is humbled in offering a host of curated benefits to Army personnel through its Defence Salary Package (Army), which ensures ease of access to banking facilities to them and their families,\" SBI Chairman Dinesh Khara said in the release. [Source website : bfsi.economictimes.indiatimes.com] Published on : 16-12-2021 SBI hikes base rate by 0.1 per cent Country's largest lender (SBI) has increased benchmark lending rate or base rate by 0.1 per cent, a move that may be followed by other lenders. With the increase the revised base rate is 7.55 per cent, as per the information posted on SBI's website. The new rate is effective from December 15, 2021, it said. The decision is not going to affect those who have taken loan since January 2019 but those before that. SBI has migrated to External Benchmark Lending Rate (EBLR) linked to repo rate since January 2019. There is no change in EBLR rate and this rate changes with change in benchmark interest rate of Reserve Bank ofIndia (RBI). In the December monetary policy, RBI decided to keep the repo rate unchanged at 4 per cent. This was the ninth time in a row when the central bank decided to maintain the status quo on benchmark lending rate to support growth rate. The bank has also revised the benchmark prime lending rate to 12.3 per cent from 12.2 per cent. With regard to domestic term deposits, the bank has decided to raise it by 0.1 per cent for high value deposits over Rs 2 crore. [Source website : economictimes.indiatimes.com] Published on : 17-12-2021 Follow prudential norms when lending to discoms: Power Secy tells SBI Power Secretary Alok Kumar says overall debt of the discoms at the end of FY20 was Rs 5.14 trillion, against a turnover of Rs 7.28 trillion The Union Ministry of Power has pressed upon country’s leading bank, the State Bank of India, to follow the prudential norms while lending to the state-owned power distribution companies (discoms) that are in a financially beleaguered condition. The ministry had earlier urged the central banker Reserve Bank of India (RBI) to direct the public sector banks to follow strict norms while lending to the discoms. The primary lenders to the discoms--state-owned NBFCs Power Finance Corporation and Rural Electrification Corporation (REC)--already follow the norms. Power Secretary Alok Kumar in his letter has said, many discoms are facing solvency and liquidity issues and the debt level of discoms has been rising every year. According to his letter, as reviewed by Business Standard, the overall debt of the discoms at the end of FY20 was Rs 5.14 trillion, against a turnover of Rs 7.28 trillion. “A burgeoning debt and outstanding payables of the discoms to their creditors which are predominantly gencos and transcos is a matter of concern. This poses a challenge to the viability of the power sector, while also adds to the concerns to the stability of the financial sector. Even if most of the loans to discoms are given against state guarantees, the present trend of increasing unpaid government dues and subsidy arrears will make repayment of debt non-feasible in case of defaults,” the letter said. [Source website : business-standard.com] Published on : 17-12-2021 9

Physical and digital modes of financial services to co-exist in India: SBI chairman Khara said SBI has entered into two such partnerships and it is working with some other players as well on the co-lending model. SBI Chairman Dinesh Kumar Khara on Wednesday said physical and digital modes of financial services delivery models will co-exist in India due to a wide geographical space. “In India, we serve a variety of customers. We also serve those who are digital savvy and who would not like to have anything physical but on phone clicks. There are also customers who have financial and digital literacy as a major concern. SBI Chairman Dinesh Kumar Khara on Wednesday said physical and digital modes of financial services delivery models will co-exist in India due to a wide geographical space. “In India, we serve a variety of customers. We also serve those who are digital savvy and who would not like to have anything physical but on phone clicks. There are also customers who have financial and digital literacy as a major concern. [Source website : financialexpress.com] Published on : 22-12-2021 SBI's PE arm hikes climate fund's target 5 times to Rs 2,000 crore SBICap Ventures has already got commitment from European Investment Bank (EIB) for about Rs 215 crore. State Bank of India’s private equity capital arm has scaled up the target for its Climate fund by five times to Rs 2,000 crore on growing emphasis on investments in clean technology and environment- friendly businesses. This climate and environment-focussed fund started off with a corpus of Rs 400 crore. When it approached the market for commitment, it got good traction from global investors. This led to scaling up of its corpus target, SBI group executivessaid. SBICap Ventures, an SBI group company that is managing the fund, has already got commitment from European Investment Bank (EIB) for about Rs 215 crore. It is also talking to financial institutions from Japan and the United Kingdom for commitments. Investment by a Japanese agency is likely to be over Rs 200 crore. Neev Fund II will invest in Indian small and medium-sized enterprises (SMEs). It will provide growth and expansion capital to companies offering solutions for clean energy, electric vehicles, efficient use of raw materials and water as well as circular economy projects. [Source website : business-standard.com] Published on : 22-12-2021 SBI picks up minority stake in Sajjan Jindal-led JSW Cement for Rs 100 cr The capital will support JSW Cement's capacity expansion to 25 million tonne annually. Sajjan Jindal-led JSW Cement said on Tuesday State Bank of India (SBI) has acquired a minority stake in the cement company by investing Rs 100 crore via compulsorily convertible preference shares (CCPS). The conversion of such CCPS into common equity of the company will be linked to the JSW Cement’s business performance and valuation at the time of the proposed initial public offering, said JSW in a press release. \"Financing our growth and expansion strategy with investment from a banking partner such as SBI sets us up very well for our planned IPO in the next 12-18 months. We look forward to a long-term association with SBI as we work towards building a New India by offering world-class environment-friendly cement products,” the release quoted Narinder Singh Kahlon, director finance at JSW Cement, as saying. This capital infusion will support JSW Cement’s capacity expansion from 14 million tonne annually to 25 million tonne. “We plan to go public in December 2022,” said a senior JSW Cement official on condition of anonymity. [Source website : business-standard.com] Published on : 22-12-2021 10

SBI, Union Bank to go ahead with Swiss Challenge auction for KSK Mahanadi Power loans State Bank of India and Union Bank of India have decided to go ahead with the Swiss Challenge auction for the KSK Mahanadi Power loans next week despite observations by income tax officials last week that this method is opaque, implying an unholy nexus between the promoters and the asset reconstruction company, said people aware of the matter. In the Swiss auction process, lenders first hold an auction of the NPA, and the offer made by the highest bidder (also known as anchor bidder) is set at a reserve price. Subsequently, they hold yet another auction, inviting bids at higher than reserve price, but the anchor bidder will get an opportunity to match the best bid. SBI and Union Bank have invited bids for Rs 4101 crore and Rs 1773 crore respectively from ARCs, which is the largest auction of a single loan till date. Four ARCs – Omkara ARC, CFM ARC, Rare ARC and Invent ARC - were raided on December 8 by income tax department which claimed that the Swiss challenge method for selling loans is opaque in nature and that defaulting borrowers can regain control of their companies by funding the ARC using the hawala route, ET reported. [Source website : economictimes.indiatimes.com] Published on : 23-12-2021 Banks need additional $70 bn to back $5- trn GDP: SBI's Dinesh Khara Banks would continue to play a critical role in meeting the needs of corporations The Indian banking system will need additional $70 billion (Rs 5.25 trillion) in capital for banks to support the aim of making India a $5-trillion economy, SBI Chairman Dinesh Khara said on Wednesday. Though banks are well capitalised as of now, to support the rise in economic and investment activity, the banking system needs to ramp up capital base,” Khara said at FICCI-FIBAC 2021. This means banks should continue to stay attractive with the investment community. They should be also in position to raise capital through additional tier 1 bonds at fairly reasonable costs. Banks would continue to play a critical role in meeting the needs of corporations. [Source website : business-standard.com] Published on : 23-12-2021 SBI Card raises Rs 650 crore through private placement of bonds SBI Cards and Payment Services (SBI Card) on Friday said it has raised Rs 650 crore by issuing bonds on a private placement basis. \"We hereby inform that stakeholders' relationship and customer experience committee of the company has approved the allotment of 6,500 fixed rate, unsecured, rated, taxable, redeemable, senior, listed non-convertible debentures (NCDs) aggregating to Rs 650 crore on private placement basis,\" SBI Card said in a release. [Source website : business-standard.com] Published on : 25-12-2021 11

Financial inclusion critical for India to become $5 tn economy Though the pace of financial inclusion has increased, a great deal remains to be done to ensure the masses use banking services more effectively to substantially improve their lives, which, in turn, will help India to become a $5-trillion economy, industry experts said at the Mint Annual Banking Conclave. “Financial inclusion in India is a great story. In terms of having a bank account, I think we have come a long way. There are always a number of people who get added to the banking age, but as far as the existing adult population is concerned a large number of people have already been covered,\" said C.S. Setty, managing director, State Bank of India. “Now we are almost ripe for moving to the next sphere of financial inclusion,\" he added. Bhargavi Zaveri-Shah, from National University of Singapore, said according to a 2019 survey by the National Council for Financial Education, at the pan-India level nearly 87% had a bank account and used it in the last two years. “When it came to a recurring deposit, about 37% actually knew what it was and 18% had one, while 60% knew about term deposit and 14% of them actually had a term deposit,\" she said. [Source website : livemint.com] Published on : 28-12-2021 State Bank of India marks centenary year with Namaste UK The State is celebrating its centenary year in the UK with the launch of a new 'Namaste UK' account, aimed at benefitting Indian students and professionals on long-term visas to be able to set up their banking services in Britain before they set off from India. Backed up by a \"robust\" mobile application called YONO - You Only Need One, SBI UK chief expects further interest in the account in the New Year as more Indian students and professionals make their way to the UK. Additional plans are aimed at New to Bank (NTB) customers, allowing them to use SBI UK remittance facilities without the need to open a bank account. \"Almost 500 accounts a month are being opened through YONO. Its big advantage is also for long-term UK visa holders, who can complete their banking requirements as soon as the visa is issued in India and before they arrive in Britain,\" Sharad Chandak, Regional Head of UK Operations for SBI, told PTI in an interview. [Source website : economictimes.indiatimes.com] Published on : 28-12-2021 SBI to acquire nearly 10% stake in India International Clearing Corporation The strategic investment in IICC is aimed at strengthening the financial markets infrastructure, SBI said State Bank of India (SBI) on Thursday said it will acquire about 10 per cent stake in the India International Clearing Corporation (IICC). IICC is the first international clearing corporation set up at GIFT-IFSC that acts as a central counterparty providing clearing and settlement and risk management services. It clears and settles index and single stock derivatives, currency derivatives and debt securities. SBI said it is expected to complete up to 9.95 per cent stake, subject to a maximum investment of Rs 34.03 crore, by March 32, 2022, in IICC. The strategic investment in IICC is aimed at strengthening the financial markets infrastructure, SBI said in a regulatory filing on Thursday. [Source website : business-standard.com] Published on : 30-12-2021 12

LIBOR Transition: Systems and processes aligned to support transactions linked to ARR, says SBI India’s largest bank said it has already started offering ARR-based products to the customers through its domestic and foreign branches State Bank of India (SBI) on Thursday said all its systems and processes are aligned to support transactions linked to Alternate Reference Rates (ARR) as part of the global LIBOR transition process. India’s largest bank, in a statement, said it has already started offering ARR-based products to the customers through its domestic and foreign branches. January 01, 2022, is crucial for the LIBOR (London InterBank Offered Rate) transition process since all the new transactions will be referenced to new benchmark (ARR) rates from this date as per the recommendations of the Reserve Bank of India (RBI) and other banking regulators across the world. Ashwini Kumar Tewari, Managing Director (International Banking, Technology & Subsidiaries), SBI said, LIBOR Transition is a significant financial event for international financial markets and the Bank has proactively modified its systems and processes to embrace the change from LIBOR to ARR. SBI stated that it is one of the first banks to have signed the ISDA (International Swaps and Derivatives Association) 2020 IBOR (interbank offered rate) Fallbacks protocol on December 11, 2020 and has demonstrated its readiness to embrace ARR by executing several SOFR (Secured Overnight Financing Rate)-linked transactions/deals during the year 2021. [Source website : thehindubusinessline.com] Published on : 30-12-2021 13

Financial and Allied Regulators – India 14

Retail, MSME credit shows steady growth in November: RBI report Reserve Bank of India in a statement said that retail loans continued to expand at a double digit rate Growth in bank credit, especially to retail, industry, and agriculture remained steady in November, reflecting the effect of economic upturn and festival demand. In a statement, the Reserve Bank of India (RBI) said that retail loans continued to expand in double digits and recorded a year-on-year (YoY) growth of 11.6 per cent in November, as against the 9.2 per cent growth recorded in November, last year. The growth was driven primarily by consumer durables and vehicle loans. Credit growth to the industry rose 3.8 per cent in November compared with a 0.7-per cent growth in the corresponding period last year. Credit to medium industries showed a robust growth of 48.7 per cent in November compared with 25.7 per cent last year. Micro and small industries loans accelerated 12.7 per cent in November, against 0.6 per cent in the year-ago period. Credit to large industries in November remained broadly at the same level as last year. Many large companies actually repaid old loans or replaced them with fresh credit at cheaper rates. Credit to agriculture and allied activities continued to be robust at 10.4 per cent in November, against 7.0 per cent in November, last year. The loan off- take in the services sector was, however, weak, as reflected in the pace of credit growth. The credit growth to services sector registered a growth of 3.6 per cent in November, against 8.2 per cent a year ago, the RBI said. [Source website : business-standard.com] Published on : 01-12-2021 Bank credit grows 7% by mid-November, shows RBI data The outstanding credit of commercial banks stood at Rs 111.62 trillion, up from Rs 10.4.34 trillion a year ago Reflecting the steady pace of banking business, the credit rose by 6.97 per cent in 12 months ended November 19, 2021, according to Reserve Bank of India data. The outstanding credit of commercial banks stood at Rs 111.62 trillion, up from Rs 10.4.34 trillion a year ago. The year-on-year growth in loans was 7.1 per cent in 12 months ended November 15, 2021. Bankers said this was the first fortnight after the peak of festival season. Yet credit off-take has not shown stickiness. Besides, economic upturn, banks credit outreach across branch network over last months has helped to maintain momentum. [Source website : business-standard.com] Published on : 03-12-2021 Credit card spend crosses Rs 1 trillion first time in a month: RBI Among major credit card players, ICICI Bank has been the most aggressive Buoyed by the festival season euphoria, credit card spends for the first time crossed Rs 1 trillion in a month in October, revealed the latest figures released by the Reserve Bank of India (RBI) on Thursday. Spends in October registered a growth of over 25 per cent month-on-month, despite a high base of last month. On a year–on–year basis, credit card spends jumped 56 per cent. In the corresponding period last year, credit card spends were to the tune of Rs 64,891.96 crore. The earlier highest one-month spend came in September this year at Rs 80,477.18 crore. The month before, spends were nearly Rs 77,981 crore. Spends recorded in the past few months have been much higher than that of pre-pandemic levels. In January and February of 2020, credit card spends were Rs 67,402.25 crore and Rs 62,902.93 crore, respectively. “Credit card spends have been quite robust in the past few months owing to strong economic rebound. Also, October was a festival month. That could have led to higher growth in credit card spends,” said Suresh Ganapathy, associate director, Macquarie Capital. [Source website : business-standard.com] Published on : 03-12-2021 15

Number of ATMs in country at over 2.13 lakh, says Finance Ministry WLA operators are required to deploy a minimum of 1,000 ATMs every year and to maintain a deployment ratio of 1:2:3 for metro and urban, semi-urban and rural regions respectively. The number of ATMs across the country stood at over 2.13 lakh by the end of September this year, and over 47 per cent of these are in rural and semi-urban areas, the Finance Ministry said in Parliament on Monday.According to the RBI data, scheduled commercial banks have installed 2,13,145 ATMs (automated teller machines) up to September 2021. In addition to this, 27,837 White Label ATMs (WLA) were also installed by WLA operators up to September 2021, Minister of State for Finance Bhagwat Karad said in a written reply in the Lok Sabha. “Out of these, 47.4 per cent of the ATMs are installed in the rural and semi-urban centres,” Karad said. To a question on the target to install ATMs by 2022, he said the RBI has apprised that WLA operators are required to deploy a minimum of 1,000 ATMs every year and to maintain a deployment ratio of 1:2:3 for metro and urban, semi-urban and rural regions respectively”. He said the WLA scheme was introduced as an extended delivery channel for banking services, especially in tier III and VI centres. [Source website : financialexpress.com] Published on : 06-12-2021 PSBs restructure over Rs 58,500 cr loan advanced to 1 mn MSME acc: Govt While, as many as 8.5 lakh accounts of individual borrowers of over Rs 60,000 crore have also been restructured Public sector banks (PSBs) effected restructuring of 9.8 lakh accounts of micro, small and medium enterprises, due to the impact of Covid-19 pandemic, amounting to Rs 58,524 crore as of November 26, the government said in Parliament on Monday. While, as many as 8.5 lakh accounts of individual borrowers of over Rs 60,000 crore have also been restructured. \"As per inputs received from public sector banks (PSBs), as on November 26, 2021, resolution plan/restructuring has been implemented by them in 9.8 lakh MSME accounts amounting to Rs 58,524 crore, and in 8.5 lakh accounts of individual borrowers amounting to Rs 60,662 crore, as on November 15, 2021,\" the Finance Ministry said in a written reply in the Lok Sabha. [Source website : business-standard.com] Published on : 07-12-2021 No plans to boost cryptocurrency sector in India, FinMin tells Lok Sabha The RBI has been examining use cases and working out a phased implementation strategy for introduction of CBDC with little or no disruption The finance ministry on Monday told Parliament that the government had no plans for boosting the cryptocurrency sector in India and the proposed Central Bank Digital Currency (CBDC) will not have volatility, which is normally associated with the private virtual currencies. However, there are associated risks with CBDC which need to be carefully evaluated, the Lok Sabha was informed. “As CBDC is backed by the central bank of a country, apart from other benefits, it will not have volatility which is normally associated with the private cryptocurrencies,\" the minister of state for finance told the Lok Sabha in a written reply. [Source website : business-standard.com] Published on : 07-12-2021 Need to ensure safety of CBDCs before introduction: RBI Governor The main concern comes from the angle of cyber security and possibility of digital frauds, which merits more care before it is introduced, said RBI governor Shaktikanta Das Reserve Bank of India (RBI) is in advanced stage of introducing its version of central bank digital currency (CBDC), but is proceeding with caution to make sure security risks are addressed first. The main concern comes from the angle of cyber security and the possibility of digital frauds, which merits more care before it is introduced, RBI governor Shaktikanta Das said on Wednesday in a post-policy press conference. \"Just as a few years ago the major concern was fake Indian currency notes, similar things can also happen when we are launching CBDC,” said the RBI governor. “In the CBDC universe, we will have to be tactful and be careful with regard to ensuring cyber security and taking preemptive steps to prevent any kind of frauds. There will be attempts. So, we have to have a robust system to have firewalls against such things happening,\" Das said. [Source website : business-standard.com] Published on : 08-12-2021 16

Steps taken to protect bona fide decisions of bankers: FM Nirmala Sitharaman Finance minister Nirmala Sitharaman on Tuesday said the government has finalised a consolidated staff accountability framework for bad loan accounts up to Rs 50 crore and initiated a raft of other measures to protect bona fide commercial decisions of bankers and assuage their fears over any unwarranted hardships for taking key decisions. In a reply in the Rajya Sabha, Sitharaman said these measures include amendments to the Prevention of Corruption Act (PC Act), 1988, requirement of prior permission before initiating investigation against a public servant, setting up of Advisory Board for Banking and Financial Frauds for first level of examination of suspected frauds of banks and financial institutions in excess of `50 crore and finalisation of Consolidated Staff Accountability Framework. In consultation with Central Vigilance Commission, the government has finalised the staff accountability framework, which will come into force from April 1, 2022. State-run banks have been asked to revise their respective staff accountability and other relevant policies, as required, within this framework with approval of their respective boards, she informed the House. “The Staff Accountability Framework is aimed at protecting bona fide decisions taken by the bank officers/workmen while ensuring accountability for wrong doing or inaction. It is meant to identify and punish only those bank officers/workmen who are prima facie responsible for the lapses of non-compliance with laid down systems and procedures or misconduct and/or non-adherence to the ‘due-diligence’ norms,” she said. [Source website : financialexpress.com] Published on : 08-12-2021 Non-life insurers' gross direct premium up 5.5% to Rs 15,743 cr in Nov The 31 non-life insurance companies had written premiums worth Rs 14,919.43 crore in November 2020 The gross direct premium written by non-life insurance companies rose by 5.5 per cent to Rs 15,743.22 crore in November, data from Irdai showed on Wednesday. The 31 non-life insurance companies had written premiums worth Rs 14,919.43 crore in November 2020. Of these, the 24 general insurance companies witnessed a 4.2 per cent increase in their gross direct premium during the month at Rs 13,566.39 crore, Insurance Regulatory and Development Authority of India (Irdai) said. For the five standalone private sector health insurance providers, the gross direct premium in November stood at Rs 1,516.77 crore, a jump of nearly 30 per cent from the year-ago period. However, the two specialized PSU insurers -- Agricultural Insurance Company Ltd and ECGC Ltd -- reported a decline of about 10 per cent in their combined gross direct premium during the month at Rs 660.06 crore. On a cumulative basis, the gross direct premium written by all the insurers during April-November period of FY22 increased 11.72 per cent to Rs 1,42,128.88 crore, as per Irdai data. [Source website : business-standard.com] Published on : 08-12-2021 MPC cuts GDP growth projection for Q3, Q4, cites supply crisis and Covid The economy grew 8.4% in Q2, higher than the MPC's expectations of 7.9% The Reserve Bank of India’s (RBI’s) monetary policy committee (MPC) has slashed its projections on economic growth for the third and the fourth quarters of the current fiscal year (2021-22, or FY22), albeit mildly, due to volatility in commodity prices and financial markets, persisting global supply disruptions, and Omicron. However, higher-than-expected gross domestic product (GDP) growth rate in the second quarter (Q2) of the year prompted the MPC to retain economic growth at 9.5 per cent for FY22. The committee now pegged economic growth at 6.6 per cent for the third quarter (Q3) of the year, down from its earlier projection of 6.8 per cent and 6 per cent for the fourth quarter (Q4) — lower than its earlier forecast of 6.1 per cent. The economy grew 8.4 per cent in Q2, higher than the MPC’s expectations of 7.9 per cent. The cut in the projections came even as the government recently said the economy is showing strong signs of recovery from the devastation caused by the Covid-19 pandemic, with an upswing being reported in 19 of the 22 economic indicators, compared to pre-Covid levels. [Source website : business-standard.com] Published on : 08-12-2021 17

Rs 2,000 notes now 1.75% of total banknotes in circulation: Govt Printing of banknotes of particular denomination is decided by the government in consultation with the Reserve Bank of India The number of Rs 2,000 currency notes in circulation has decreased to 223.3 crore pieces or 1.75 per cent of total notes in circulation (NIC) in November this year, compared to 336.3 crore pieces in March 2018. Printing of banknotes of particular denomination is decided by the government in consultation with the Reserve Bank to maintain desired denomination mix for facilitating transactional demand of public, said Pankaj Chaudhary, Minister of State in Finance Ministry, in a written reply in the Rajya Sabha. \"As against 3,363 million pieces (mpcs) of Rs 2,000 denomination banknotes in circulation on March 31, 2018 constituting 3.27 per cent and 37.26 per cent of NIC in terms of volume and value respectively; 2,233 mpcs were in circulation on November 26, 2021, constituting 1.75 per cent and 15.11 per cent of NIC in terms of volume and value, respectively,\" he said. [Source website : business-standard.com] Published on : 08-12-2021 Rules on banks' investment portfolios to be revamped first time in 21 years The outstanding investment portfolio of commercial banks was at Rs 45.84 trillion as of November 19 this year For the first time in 21 years, the Reserve Bank of India (RBI) will revise norms for investment portfolios of commercial banks to reflect changes in global standards on valuation and measurement, and progress in the domestic market. This could pave the way for banks to transition to the new accounting standards (Ind-AS). The outstanding investment portfolio of commercial banks was at Rs 45.84 trillion as of November 19 this year. The investments are predominantly in government bonds. The current norms are largely based on a framework introduced in October 2000, which drew upon the then prevailing global standards and best practices, the RBI said in a statement released along with the monetary policy review. It would float a discussion paper on review of prudential norms. Banks classify their entire investment portfolio under three heads — ‘held to maturity’ (HTM), ‘available for sale’ (AFS) and ‘held for trading’ (HFT). Investments under the HTM category are capped at 25 per cent of the bank’s total investments. Investments in statutory liquidity ratio securities are eligible for inclusion under the HTM category. Anil Gupta, vice-president and sector head, financial sector ratings, ICRA, said currently banks hold a sizable portion of investments in the HTM category, which is not required to be marked to market. [Source website : business-standard.com] Published on : 09-12-2021 Need to be careful about cyber risks to CBDC: RBI Governor Shaktikanta Das CBDCs may be an electronic version of the paper currency, the RBI said. Apart from cyber risks and the risk of digital frauds, the impact of CBDCs on the consumer behaviour and on banking and currency will be the subject of the ongoing assessment by the RBI. Risks associated with digital frauds and cybersecurity could pose threats to central bank digital currencies (CBDCs), Reserve Bank of India (RBI) governor Shaktikanta Das said on Wednesday. The central bank is working on two sets of CBDCs – one wholesale account-based while the other is retail-based. “The main concern comes from the angle of cybersecurity and the possibility of digital frauds, so we have to be very careful about that. A few years ago, we had major concerns around fake Indian currency notes. Similar things can also happen when you are launching CBDC,” Das said during the post-monetary policy press conference. The RBI will have to be careful with regard to ensuring cyber security and taking preemptive steps to prevent any kind of frauds. There will be need for a robust system to prevent the likelihood of cyber attacks. CBDCs may be an electronic version of the paper currency, the RBI said. Apart from cyber risks and the risk of digital frauds, the impact of CBDCs on the consumer behaviour and on banking and currency will be the subject of the ongoing assessment by the RBI. [Source website : financialexpress.com] Published on : 09-12-2021 18

Monetary policy committee: RBI holds key rates to boost recovery Repo rate unchanged at 4% and reverse repo at 3.35% The Reserve Bank of India (RBI) on Wednesday kept its key policy repo rate and “accommodative” stance unchanged, and said it would lean more on the variable rate than its traditional fixed-rate liquidity absorption facility to drain out excess liquidity from the banking system. Many economists saw it as a stealth reverse rate hike, even as the central bank kept its reverse repo rate untouched at 3.35 per cent. However, by activating most of the money absorption through the 14-day variable reverse repo rate (VRRR) window, complemented by the 28-day reverse repo, the traditional fixed rate reverse repo tool is practically redundant now, economists said. The RBI used the VRRR tool to remove Rs 6 trillion from the banking system by December 3. Now, this will be enhanced to absorb Rs 6.5 trillion on December 17; and further to Rs 7.5 trillion on December 31. “Consequently, from January 2022 onwards, liquidity absorption will be undertaken mainly through the auction route,” RBI Governor Shaktikanta Das said in his streamed policy statement. [Source website : business-standard.com] Published on : 09-12-2021 Reserve Bank to float paper on digital payment charges “To deepen financial penetration, it is important to bring feature phone users into the mainstream digital payments,” the RBI said. The Reserve Bank of India (RBI) has proposed issuing a discussion paper on all aspects of digital payment charges, including the ones incurred while using credit cards, debit cards, prepaid payment instruments, Unified Payment Interface (UPI), among others. The central bank also proposed launching a UPI-based payment product for feature phone users. In its statement on developmental and regulatory policies issued post the monetary policy committee meeting held on Wednesday, the central bank said entities involved in providing digital payment services incur costs that are generally recovered from merchants or customers or is borne by one or more of the participants. While there are both advantages and disadvantages of customers bearing these charges, the regulator said, they should be reasonable and should not become a deterrent in the adoption of digital payments. The RBI’s discussion paper seeks to take feedback on these issues including those related to convenience fee, surcharging, and the measures required to make digital transactions affordable to users and economically remunerative to the providers. The central bank will release a discussion paper on digital payments charges within a month. “The payment charges across various payment systems vary, thereby influencing the usage. “Small ticket payments are preferred on systems with low charges, while high ticket payments are preferred on payment systems like credit cards even at higher charges. Harmonisation of payment charges at lower rates across systems could spur up the overall digital payment volumes further, thereby making it beneficial for users as well as service providers,” said Anil Gupta, vice president and sector head of financial sector ratings at Icra. [Source website : financialexpress.com] Published on : 09-12-2021 RBI for raising UPI transaction limit to Rs 5 lakh in select cases The central bank will shortly issue separate instructions to the National Payment Corporation of India (NPCI) in this regard. The Reserve Bank of India (RBI) has proposed increasing the transaction limit for payments made through Unified Payments Interface (UPI) for the Retail Direct Scheme and initial public offering (IPO) applications to Rs 5 lakh from Rs 2 lakh. The central bank will shortly issue separate instructions to the National Payment Corporation of India (NPCI) in this regard. In a statement on developmental and regulatory policies issued post the monetary policy committee meeting, the central bank said over time the UPI has become a popular payment option for IPOs and reportedly, IPO applications of Rs 2 lakh to Rs 5 lakh constitute approximately 10% of all subscription applications. The transaction limit in the UPI system was enhanced from Rs 1 lakh to Rs 2 lakh in March 2020 and to further encourage the use of UPI by retail investors, the central bank has proposed increasing the UPI transaction limit. The RBI Retail Direct Scheme was launched on November 12 to facilitate retail investors to open a retail direct gilt account to invest in primary issuance and secondary market transactions in government securities (G-Secs). The central bank said UPI is the single-largest retail payment system in the country, with 14 crore transactions per day according to October data, and one of the initial objectives of UPI was to replace cash for low-value transactions. The transaction data analysis shows that 50% transactions through UPI were below Rs 200, indicating its success. [Source website : financialexpress.com] Published on : 09-12-2021 19

RBI enforces 20-digit LEI for cross-border deals above Rs 50 crore The Legal Entity Identifier (LEI) number is used to uniquely identify parties to financial deals worldwide to improve quality and accuracy of financial data systems The Reserve Bank of India (RBI) on Friday made Legal Entity Identifier (LEI) mandatory for cross-border transactions for capital or current account transactions of Rs 50 crore and above, from October 1 next year. LEI is a 20-digit number used to uniquely identify parties to financial transactions worldwide to improve the quality and accuracy of financial data systems. The LEI numbers are maintained in a global LEI database available on the website of the Global Legal Entity Identifier Foundation (GLEIF). LEI has been introduced by the Reserve Bank in a phased manner for over the counter (OTC) derivative, non-derivative markets, large corporate borrowers and large value transactions in centralised payment systems. Banks will have to obtain LEI numbers from local companies undertaking capital or current account transactions of Rs 50 crore and above, for each transaction. [Source website : business-standard.com] Published on : 11-12-2021 RBI announces proposal to push UPI payments through feature phones USSD 2.0, which facilitates UPI for feature phones, accounts for only 0.003 per cent of total UPI volumes and value transactions On Wednesday, the RBI in its “Statement on Developmental and Regulatory Practices”, announced a proposal to popularise UPI payments on feature phones. Although the central bank is yet to release details of the new service, this would be the third iteration of the feature phone payments push in the country. In 2012, the National Payments Corporation of India had launched a USSD (Unstructured Supplementary Services Data)- based mobile banking service called *99#. Initially, the facility was only available to MTNL and BSNL users. It was later expanded to all telecom service providers and linked to Pradhan Mantri Jan Dhan Yojana in 2014. [Source website : business-standard.com] Published on : 12-12-2021 20

Deposit insurance reforms to instil confidence in people on banking: PM At Vigyan Bhawan, the Prime Minister said banks play an important role in the progress of any nation Prime Minister Narendra Modi on Sunday said deposit insurance reforms undertaken by the government will instil confidence in account holders on the banking system. Parliament in August passed the Deposit Insurance and Credit Guarantee Corporation (Amendment) Bill, 2021, ensuring that account holders get up to Rs 5 lakh within 90 days of the RBI imposing a moratorium on the banks. This was done keeping the 'Depositors First' spirit in mind, Modi said while announcing that over 1 lakh depositors have got about Rs 1,300 crore of their money with stressed banks in the past few days with the enactment of the legislation. He assured that about three lakh more such account holders will get their deposits with the banks that are under the RBI moratorium, soon. [Source website : business-standard.com] Published on : 13-12-2021 Govt unlikely to announce capital infusion for PSU banks in Budget 2022-23 To augment their resources, banks would be encouraged to raise funds from the market and also by selling their non-core assets, they added. Govt unlikely to announce capital infusion for PSU banks in Budget 2022-23 New Delhi, Dec 12 (PTI) The government is unlikely to announce capital infusion for public sector banks (PSBs) in the upcoming Budget, as their financial health has improved on the back of reduction in bad loans, sources said. To augment their resources, banks would be encouraged to raise funds from the market and also by selling their non-core assets, they added. During the current financial year, the government has earmarked Rs 20,000 crore for the recapitalisation of PSBs. Finance Minister Nirmala Sitharaman is expected to present the fourth budget of the Modi 2.0 government on February 1. It is to be noted that the net profit of PSBs surged to Rs 14,012 crore in the first quarter, which further rose to Rs 17,132 crore in the second quarter ended September 2021. The combined profit of the first half of the current fiscal is close to the total profit earned in the entire previous financial year. During the last financial year, PSBs raised capital funds to the tune of Rs 58,697 crore, the highest amount mobilised in a fiscal. [Source website : business-standard.com] Published on : 13-12-2021 Banks write off Rs 2.02 lakh crore NPAs in FY21, Rs 11.68 lakh crore in last 10 years Banks have written off a huge Rs 11,68,095 crore worth of bad loans, or non-performing assets (NPAs), in the last ten years with most of the write-offs coming in the last seven years, the Reserve Bank of India said in an RTI reply. In the last fiscal alone, when the pandemic hit, banks wrote off Rs 2,02,781 crore of bad loans amid the several relief measures, announced by the government and the RBI. The write-off over ten years is 10.5 per cent of the total non-food bank advances of Rs 110.7 crore. About Rs 10.72 lakh crore write-off has happened since the FY15 when the Narendra Modi government assumed power. The bulk of write-offs happened after the RBI under governor Raghuram Rajan ordered an asset quality review that threw up huge non-performing assets. Public sector banks made almost 75 per cent of the write- offs. Banks wrote off Rs 2,34,170 crore in FY20, Rs 2,36,265 crore in FY19, Rs 1,61,328 crore in FY18 and Rs 1,08,373 crore in FY17, according to the RBI. Five banks wrote off Rs 89,686 crore in the fiscal ended March 2021, with SBI writing off Rs 34,402 crore, Union Bank of India Rs 16,983 crore, Punjab National Bank Rs 15,877 crore and Bank of Baroda Rs 14,782 crore. [Source website : bfsi.economictimes.indiatimes.com] Published on : 13-12-2021 21

Centre was sensitive to fiscal deficit: Garg on CAG's bank recap concerns Funds for these investments were raised by the government through the issue of non-transferable special securities to the same PSBs. Subhash Garg, the Department of Economic Affairs (DEA) secretary during the years when the Comptroller and Auditor General (CAG) of India had flagged the issue of the finance ministry not showing bank recapitalisation as fiscally non-neutral, said the government at that time was sensitive to fiscal deficit. The government can now show recapitalisation as affecting deficit. The government is no longer sensitive to fiscal deficit as it was raised to 9.5 per cent of gross domestic product (GDP) in the Revised Estimates (RE), from 3.5 per cent in the Budget Estimates (BE) for the current fiscal year, Garg told Business Standard. [Source website : business-standard.com] Published on : 13-12-2021 As many as 41,177 posts vacant at public sector banks: Govt As many as 41,177 positions or 5 per cent of the total sanctioned posts at public sector banks were vacant as on December 1, Union Finance Minister Nirmala Sitharaman said on Monday. There are more than 8,05,986 sanctioned positions at Public Sector Banks (PSBs). Among the banks, State Bank of India (SBI) had the maximum number of vacant posts at 8,544, according to official data. To a query in the Lok Sabha on whether the government is aware of the fact that there is a huge shortage of staff in the PSBs due to which they are unable to perform their duties properly, the minister replied in the negative. Citing inputs received from the PSBs, the minister said that as on December 1, this year, 95 per cent staff is in position against the sanctioned staff strength, adding that the small proportion of vacancies is substantially attributable to attrition on account of superannuation and other usual factors. \"As on 1.12.2021, there are 8,05,986 sanctioned posts and 41,177 vacant posts in Public Sector Banks,\" Sitharaman said in a written reply. The posts are spread across three categories -- officer, clerk and sub-staff. There are 12 PSBs. While SBI had 8,544 vacant posts, the number for Punjab National Bank was at 6,743. The Central Bank of India had 6,295 vacant positions, followed by Indian Overseas Bank at 5,112 and Bank of India at 4,848. At SBI, there were 3,423 vacant posts for officers and 5,121 vacancies at the clerk level. Sitharaman also said that no post/vacancy has been abolished during the last six years in the PSBs, except one post in Punjab & Sind Bank in 2016. Banks undertake staff recruitment to fill vacancies on an ongoing basis as per their requirement, she added. [Source website : bfsi.economictimes.indiatimes.com] Published on : 13-12-2021 NPAs of Public Sector Banks Doubled to Rs5.40 Lakh Crore in Past Seven Years: Govt The non-performing assets (NPAs) of public sector banks (PSBs) have almost doubled over the past seven years to Rs5.40 lakh crore, the Rajya Sabha was informed on Tuesday. In a written reply, Dr Bhagwan Karad, minister of state for finance, says, between June 2014 to September 2021, gross NPAs of 13 banks, including IDBI Bank Ltd (which has now become a private sector bank), increased to Rs5,40,442 crore from Rs2,24,542 crore. State Bank of India (SBI) tops the list, with its NPAs jumping to Rs1.21 lakh crore as of September 2021 from Rs74,482 crore in June 2014. As of 30 September 2021, SBI has stressed assets, including restructured standard advances worth Rs1,23,386 crore, out of which about Rs1.21 lakh crore are its gross NPAs. SBI is followed by Punjab National Bank (PNB), which saw its NPAs increasing to Rs98,484 crore from Rs32,416 crore during the same period. However, as per the data disclosed by the minister, these 13 lenders witnessed the percentage of gross advances compared with NPAs declining to 10.52% from 12.17% over the past seven years. [Source website : moneylife.in] Published on : 14-12-2021 22

Govt to refund MDR losses to banks on digital payments for FY23 Payment companies like Visa and Mastercard have been seeking a level playing field with RuPay, claiming the government is favouring the latter The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved an incentive scheme worth Rs 1,300 crore for 2022-23 to promote RuPay debit cards and low-value Unified Payments Interface (UPI) transactions up to Rs 2,000 by reimbursing the merchant discount rate (MDR) to banks, which was brought down to zero in December 2019. The scheme is expected to facilitate acquiring banks in building a robust digital payments ecosystem and promoting RuPay debit cards and BHIM-UPI digital transactions across all sectors and segments of the population, further deepening digital payments in the country, said the Cabinet Secretariat in a media briefing. “This is like investment for digital payments, so that more and more people carry out digital transactions. In November, a record 4.23 billion digital transactions valued at Rs 7.56 trillion were carried out,” said Minister for Communications, Electronics and Information Technology Ashwini Vaishnaw, while addressing the media. [Source website : business-standard.com] Published on : 16-12-2021 RBI proposes new norms for capital requirement for banks The Reserve Bank of India (RBI) on Wednesday proposed to replace existing approaches for measuring minimum operational risk capital requirements of banks with a new BaselIII standardised approach. 'Operational risk' refers to the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. The RBI issued the 'Draft Master Direction on Minimum Capital Requirements for Operational Risk' as part of the convergence of its regulations for banks with Basel-III standards. The central bank has sought comments on the draft by January 31, 2022. All existing approaches - Basic Indicator Approach (BIA), The Standardised Approach (TSA)/ Alternative Standardised Approach (ASA) and Advanced Measurement Approach (AMA) for measuring minimum operational risk capital requirements - are proposed to be replaced by the new standardised approach (Basel-III Standardised Approach). The central bank aims to put the modified norms in place from April 1, 2023. Meanwhile, in a circular, the RBI said any payment bank or small finance bank that intends to undertake the government agency business may be appointed as an agent of the RBI upon execution of an agreement with it. The decision, the RBI added, has been taken in consultation with the Ministry of Finance. [Source website : bfsi.economictimes.indiatimes.com] Published on : 16-12-2021 Indian economy recovering well, but Omicron poses a risk: RBI bulletin RBI's recent surveys show for the year ahead, consumers are buoyed by sentiments on income and employment The Indian economy “continues to forge ahead, emerging out of shackles of pandemic,” but the rise of the Omicron variant has emerged as the biggest risk factor, said the state of the economy report released with the December bulletin of the Reserve Bank of India (RBI) on Wednesday. The Indian economy bounced back strongly in the second quarter, as the gross domestic product (GDP) surpassed its pre- pandemic levels, and inflation broadly remained under the 6 per cent range, the upper band of the tolerance range of the RBI. The RBI’s medium-term target is to keep retail inflation at 4 per cent. In November, the retail inflation came at 4.91 per cent, but wholesale price index (WPI), which it no longer targets, came at a 12 year high of 14.23 per cent. “A host of incoming high frequency indicators are looking upbeat and consumer confidence is gradually returning. Aggregate demand conditions point to sustained recovery, albeit, with some signs of sequential moderation,” the report said. [Source website : business-standard.com] Published on : 16-12-2021 23

Capital norms for operational risks of banks to be revised: RBI The revised directions will apply to all commercial banks in India The Reserve Bank of India (RBI) will introduce revised norms for banks for setting aside capital for operational risks from April 01, 2023, to ensure robustness in working of banking entities. The proposed rules termed the new standardised approach, which is Basel III-compliant, will replace existing approaches like basic Indicator Approach (BIA), and Advanced Measurement Approach (AMA) to measure minimum operational risk capital requirements. For the purpose of these revised directions operational risks means the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. This definition includes legal risk, but excludes strategic and reputational risk. The revised directions will apply to all commercial banks in India. However, Local Area Banks, Payments Banks, Regional Rural Banks, and Small Finance Banks have been excluded from its ambit. [Source website : business-standard.com] Published on : 16-12-2021 Scheduled payment banks, SFBs to do government agency business: RBI Bank executives said this is step to broad-base set up and enhance quality of service for government business The Reserve Bank of India (RBI) has thrown open the government agency business like tax collection to scheduled payment banks and scheduled small finance banks (SFBs). This is part of move to provide further scope to private banks to conduct government agency business. It has now been decided in consultation with the government of India, to make scheduled payments banks and scheduled small finance banks eligible to conduct such business, RBI said in a notification. [Source website : business-standard.com] Published on : 16-12-2021 Government to mull changes in law to cut state’s stake in banks The government is considering changes that would make it easier to lower its stake in state-run banks, a key step in Prime Minister Narendra Modi’s plan to unclog credit flow to the economy. The proposals -- if approved -- would allow the government to gradually lower its holding in state-run lenders to 26% from 51% without diluting its grip on management appointments, the people said, asking not to be identified as the deliberations are private. They would also simplify privatisation of certain identified lenders and permit foreign investors to purchase bigger stakes in others without seeking Parliament approval. With the proposed amendments, the government is seeking to reduce state-run banks’ reliance on frequent injections of government capital while still maintaining their quasi-sovereign status that depositors favor. The move would dilute some of the policies India enacted in 1969 when the state swept in to nationalize its lenders, creating a swathe of banks that even today control two-thirds of the sector’s assets and the bulk of its bad debts. [Source website : bfsi.economictimes.indiatimes.com] Published on : 18-12-2021 RBI empanels CSB Bank to undertake banking biz of central, state govts Private sector lender on Tuesday said it has been empanelled as an 'agency bank' by the Reserve Bank ofIndia (RBI) to undertake general banking business of central and state governments. This appointment will allow CSB Bank to undertake general banking business of the central and state governments which may be entrusted by the RBI, the bank said in a statement. \"As an agency bank of the RBI, CSB Bank is now authorised to enter into an agreement with different state governments and central government departments for businesses such as tax collections, pension payment, collection of stamp duty, etc.,\" the bank said. [Source website : economictimes.indiatimes.com] Published on : 21-12-2021 24

MPC Meet: RBI Governor for continued policy support amid headwinds ’emanating from global factors’ The Indian economy is facing several headwinds emanating from global factors – some old ones getting prolonged compared with the initial assessment, coupled with new ones, he noted. Uncertainty is emerging as the only certainty, said RBI Governor Shaktikanta Das as he emphasised on continued policy support at the December MPC meet during which members expressed concerns over spread of the Omicron variant of coronavirus, as per the minutes of the rate-setting panel released on Wednesday. After three days of deliberations, the six members of the Monetary Policy Committee (MPC) on December 8 unanimously voted for status quo on policy rates for the ninth consecutive time. At the meeting, the RBI Governor said risks stalking the global economy have amplified with rapid spread of the virus mutations, including the Omicron variant, leading to countries scrambling for restrictions. These developments, he said, certainly have two major takeaways for central bankers. “First, uncertainty is emerging as the only certainty with which central bankers will have to deal with in the period ahead. Second, since monetary policy is at an inflection point, the journey of monetary policy which is hardly smooth in the best of times is going to get more challenging,” he opined as per the minutes. The Indian economy is facing several headwinds emanating from global factors – some old ones getting prolonged compared with the initial assessment, coupled with new ones, he noted. He further said there is growing uncertainty regarding the evolving global macroeconomic outlook. On the domestic front, even as the prospects for economic activity are improving, there is still a slack with key drivers like private consumption remaining well below their prepandemic levels, Das added. [Source website : financialexpress.com] Published on : 22-12-2021 Profitability of PSBs improved post amalgamation: MoS for Finance Profitability of public sector banks has improved on a consolidated basis after amalgamation, the government said in Parliament on Tuesday. According to RBI's data, profitability of public sector banks (PSBs) that have been amalgamated/merged during the last five years has improved on a consolidated basis, Minister of State for Finance Bhagwat Karad said in a written reply to the Rajya Sabha. The profitability of State Bank of India (SBI), into which five associate banks of SBI and Bhartiya Mahila Bank were merged with effect from April 1, 2017, improved from a loss of Rs 1,378.35 crore in financial year 2016-17 to a profit of Rs 20,410.47 crore in 2020-21, Karad said. Likewise, Bank of Baroda, into which Vijaya Bank and Dena Bank were amalgamated from April 1, 2019, showed improvement from a loss of Rs 8,339.27 crore in 2018-19 to a profit of Rs 828.96 crore in 2020-21, the minister said. In case of Punjab National Bank, into which Oriental Bank of Commerce and United Bank of India were amalgamated from April 2020, the performance improved from a loss of Rs 8,310.93 crore in 2019- 20 to a profit of Rs 2,021.62 crore in 2020-21. Union Bank of India, which merged Andhra Bank and Corporation Bank with itself in April 2020, improved financially from a loss of Rs 6,539.22 crore in 2019-20 to a profit of Rs 2,905.97 crore in 2020-21, Karad said. Similarly, Canara Bank after amalgamation with Syndicate Bank rose from a loss of Rs 5,837.46 crore in FY20 to a profit of Rs 2,557.57 crore in FY21, and Indian Bank on merger with Allahabad Bank improved from a loss of Rs 4,642.73 crore in 2019-20 to a profit of Rs 3,004.68 crore in 2020-21, the minister added. Both these amalgamation took effect from April 2020. [Source website : bfsi.economictimes.indiatimes.com] Published on : 22-12-2021 No Cabinet decision on privatisation of two PSBs: FM Nirmala Sitharaman The Cabinet has not taken any decision on privatisation of two Public Sector Banks (PSBs), which the government had announced in Budget 2021-22, Parliament was informed on Tuesday. In the Union Budget for financial year 2021-22, the government had announced its intent to take up privatisation of two PSBs in the year and approval of a policy of strategic disinvestment of public sector enterprises, Finance Minister Nirmala Sitharaman said in a written reply in the Rajya Sabha on Tuesday. [Source website : bfsi.economictimes.indiatimes.com] Published on : 22-12-2021 25

Rates on hold but RBI MPC gets battle ready for economy as Omicron looms Committee meeting kept policy stance accommodative as Jayanth Varma opposed, but the central bank later worked on raising money market rates through VRRR. Monetary policy committee (MPC) members feared rising inflation but felt that the momentum of growth recovery was not sufficient to merit policy tightening, show the minutes of the meeting released on Wednesday. The six-member MPC, which announced its outcome on December 8, voted unanimously to keep the policy repo rate unchanged. However, external member Jayanth R Varma continued to vote against keeping the stance accommodative. The repo and the reverse repo rates remained unchanged at 4.00 per cent and 3.35 per cent, respectively, after the December 8 policy. Governor Shaktikanta Das worried about the Indian economy facing “several headwinds emanating from global factors” — some old ones were getting prolonged while new ones were emerging. “While the Indian economy is on its way to achieve the projected growth of 9.5 per cent in 2021-22, there are still significant areas of concern,” the RBI governor said. [Source website : business-standard.com] Published on : 23-12-2021 RBI extends card tokenisation rule by 6 months after industry request Tokenisation refers to the technology of substituting sensitive card data with random numbers The Reserve Bank of India (RBI) on Thursday extended the deadline for wiping off card data on merchant sites and applying tokenisation by another six months as merchants and payments companies expressed their inability to meet the December 31 deadline. In a statement on its website, the central bank said “at the request of industry stakeholders”, the timeline is being extended until June 30, 2022. After that, all card data “shall be purged”. In addition to tokenisation, industry stakeholders must devise an alternative mechanism to handle recurring e-mandates, equated monthly instalment (EMI) options, etc. or any post-transaction activity that currently involves the storage of card-on-file data by entities other than card issuers and card networks. On March 17, 2020, the central bank had said from June 30, 2021, merchant websites and payment aggregators should not store customer card data. At the request of merchants and payment aggregators as well as card companies and banks, this timeline was extended until December 31, 2021. In order to avoid inconveniencing customers, the central bank on September 7 this year introduced card-on-file tokenisation (CoFT) services. Ashish Agarwal, vice- president and head of policy, Nasscom, said this extension was valuable and would mitigate business and payments risks for customers. [Source website : business-standard.com] Published on : 24-12-2021 26

Govt asks banks to share details of 'interest on interest' charged An official confirmed the development and said that information has been sought on the methodology used for calculating the amount to be refunded or adjusted for different facilities. The finance ministry has asked banks to share details of their board-approved policy on refund or adjustment of 'interest on interest' charged to borrowers during the moratorium period March to August 2020. An official confirmed the development and said that information has been sought on the methodology used for calculating the amount to be refunded or adjusted for different facilities. \"Banks are expected to provide details before the end of this quarter. ...We have asked if the Indian Banks Association (IBA) has formulated any policy in this regard in consultation with other industry participants,\" the official said. [Source website : bfsi.economictimes.indiatimes.com] Published on : 25-12-2021 Banks need to strengthen corporate governance, says RBI report The Reserve Bank emphasised it will endeavour to ensure a safe, sound and competitive financial system through its regulatory and supervisory initiatives The banking sector needs to strengthen corporate governance and risk management practices to deal with the uncertainties created by the coronavirus pandemic, the Reserve Bank said on Tuesday. With rapid technological advancements in the digital payments landscape and emergence of new entrants across the FinTech ecosystem, banks would also be required to prioritise upgrading their IT infrastructure and improving customer services, together with strengthening their cybersecurity. \"Banks would need to strengthen their corporate governance practices and risk management strategies to build resilience in an increasingly dynamic and uncertain economic environment,\" the RBI said in its report on 'Trend and Progress of Banking in India 2020-21'. It further said although credit offtake by banks remained subdued in an environment of risk aversion and muted demand conditions during 2020-21, a pick up has started in the second quarter of 2021-22, with the economy emerging out of the shadows of the second wave of COVID-19. \"Going forward, revival in bank balance sheets hinges around overall economic growth which is contingent on progress on the pandemic front,\" it said. [Source website : business-standard.com] Published on : 28-12-2021 RBI authorises RBL Bank to collect indirect taxes The Reserve Bank has granted permission to to collect indirect taxes on behalf of the government, the private sector lender said on Friday. It has already been granted permission to collect direct taxes. \"RBL Bank has been authorized by the Reserve Bank ofIndia (RBI), based on recommendation from the Controller General of Accounts, Ministry of Finance and Government ofIndia, to collect indirect taxes on behalf of the Central Board ofIndirect Taxes and Customs (CBIC),\" the bank said in a regulatory filing. The bank had recently been authorised to collect direct taxes on behalf of the Central Board of Direct Taxes (CBDT). \"With this announcement, the bank can now collect direct and indirect taxes,\" it said. [Source website : economictimes.indiatimes.com] Published on : 28-12-2021 27

NBFC sector expected to remain buoyant: RBI report Non-banking financial companies (NBFCs) are expected to remain buoyant going ahead, helped by the revival in the economy and increased pace of vaccinations, the Reserve Bank of India (RBI) said in its Report on Trend and Progress of Banking in India 2020-21.The pandemic has tested the resilience of NBFCs, but so far, the sector has emerged stronger with reasonable balance sheet growth, increased credit intermediation, higher capital, lower delinquency ratio and enlarged liquidity cushions, the report released on Tuesday said. [Source website : financialexpress.com] Published on : 28-12-2021 Banking frauds: 4,071 cases involving ₹36,342 cr reported in H1 FY22: RBI In 2020-21, there was a marked increase in frauds related to PVBs (private sector banks). During H1 22, private banks accounted for more than half of the number of reported fraud cases. The Reserve Bank of India, in its report on Trend and Progress of Banking in India 2020-21, has said that 4,071 banking frauds were reported in from April-September against 3,499 during the same year-ago period. However, the amount involved in these banking frauds declined to ₹36,342 crore during the first half of the fiscal year from ₹64,261 crore in the corresponding period of the previous financial year. \"In terms of area of operations, an overwhelming majority of cases reported during 2020-21 in terms of number and amount involved related to advances, while frauds concerning card or internet transactions made up 34.6 per cent of the number of cases,\" the RBI said. In 2020-21, there was a marked increase in frauds related to PVBs (private sector banks), both in terms of number as well as the amount involved. During H1:2021-22, private sector banks accounted for more than half of the number of reported fraud cases, the RBI said. In value terms, the share of PSBs was higher, indicating predominance of high value frauds. \"While the major share of loans related cases pertained to PSBs, PVBs accounted for a majority of card/ internet and cash-related cases,\" the RBI said. [Source website : livemint.com] Published on : 28-12-2021 Amount recovered through various channels dropped in 2020-21: RBI report The IBC route yielded more than Rs 27,000 crore, while around Rs 27,700 crore was recovered through the SARFAESI Act In 2020-21, the amount recovered as a percentage of the amount involved, or recovery rate, was 14.1 per cent, compared to 22.1 per cent the previous year, owing primarily to pandemic-related challenges. Despite the suspension of new insolvency proceedings under the Insolvency and Bankruptcy Code (IBC) for a year until March 2021, it constituted one of the major channels of recoveries in terms of amount recovered. The IBC route yielded more than Rs 27,000 crore, while around Rs 27,700 crore was recovered through the SARFAESI Act. During 2020-21, all recovery channels, particularly Lok Adalats, witnessed a decline in the of cases referred for resolution. “Allowing pre-pack resolution window for MSMEs is expected to assuage the mounting pressure of pending cases before NCLTs, reduce haircuts and improve declining recovery rates,\" the RBI said. [Source website : business-standard.com] Published on : 29-12-2021 28

Recast scheme to stay afloat, says RBI Trend & Progress report The restructured plan included additional time for repayments, more funding support, and conversion of part of working capital into term credit. Even before the pandemic, the restructuring scheme was in force to help borrowers in micro-small and medium enterprises (MSMEs) category manage the effects of economic slow-down. After the first Covid-19 pandemic, the Reserve Bank of India implemented a much-elaborated debt recast scheme to soften the blow for hard-hit borrowers. The restructured plan included additional time for repayments, more funding support, and conversion of part of working capital into term credit. While these packages help restructured MSME accounts stay afloat during difficult times, the economic recovery and timely payments by customers will have a greater impact on their future. [Source website : business-standard.com] Published on : 29-12-2021 Banks’ gross NPAs decline to 6.9% In absolute terms, the gross bad loans of banks stood at Rs 8.37 lakh crore at the end of March, lower than Rs 8.99 lakh crore a year ago. Despite the pandemic, asset quality in the banking sector has improved. The gross non- performing asset ratio (GNPA) for scheduled commercial banks (SCBs) decreased to 6.9% as at the end of September from 7.3% in March, and 8.2% in FY20, due to lower slippages, according to data released by the Reserve Bank of India (RBI) on Tuesday. In absolute terms, the gross bad loans of banks stood at Rs 8.37 lakh crore at the end of March, lower than Rs 8.99 lakh crore a year ago. With the decline in delinquencies, the provisioning requirements of banks have also dropped and the net NPA ratio of both public and private sector lenders decreased to 3.1% and 1.4%, respectively, as per the RBI’s report on Trend and Progress of Banking in India 2020-21. However, foreign banks reported increasing accretions to NPAs and deteriorating asset quality due to the amalgamation of a troubled private bank with a foreign bank, RBI said. In November 2020, Lakshmi Vilas Bank was amalgamated with DBS Bank India. On an overall basis, the net NPA ratio decreased to 2.4% at the end of March from 2.8% a year ago. The RBI noted that in-line with observations made since 2018, in 2020-21 too lenders predominantly wrote off bad loans to lower their gross bad loans. Public sector banks wrote off the highest amount of bad loans in FY21 at Rs 1.34 lakh crore, while private sector banks wrote off loans amounting to Rs 69,995 crore. The special mention accounts-2 (SMA-2) ratio, which signal impending stress, have risen across bank groups since the outbreak of the pandemic, RBI said. [Source website : financialexpress.com] Published on : 29-12-2021 Bank NPAs ease to nearly six-year low: RBI Trends & Progress report Credit growth showing signs of recovery, says RBI report Proving sceptics wrong, 2020-21 turned out to be the best in recent years for Indian banks in terms of their financial performance. The pandemic-hit financial year was marked by a “discernible increase” in profitability, as banks’ income remained stable but expenditure declined, the Reserve Bank of India (RBI) observed in the annual Trends & Progress Report. During the year, total income of banks remained stable, despite a marginal decline in the largest component — interest income — in an environment characterised by low credit offtake and interest rates, the report said. “The fall (interest income) was cushioned by a sizable increase in income from investments. Income from trading also accelerated, as banks booked profits on falling G-Sec yields,” it said. [Source website : business-standard.com] Published on : 29-12-2021 29

RBI warns of bad loan spike, pencils NPAs at 8.1-9.5% by September The report also said that the rising stress level in the retail loan portfolio of banks was led by home loans. Gross bad loans of banks may rise from 6.9 per cent in September 2021 to 8.1-9.5 per cent by September 2022 if the Omicron variant strikes the economy hard, as per the financial stability report of the Reserve Bank released on Wednesday. The report also said that the rising stress level in the retail loan portfolio of banks — the mainstay of bank credit for many years now — was led by home loans, which grew in double-digits so far this fiscal. While asset quality improved, with gross non-performing assets (GNPA) and net NPA (NNPA) ratios declining to 6.9 and 2.3 per cent, respectively, in September 2021, the slippage ratio inched up during the same period as private sector banks showed a higher rate of deterioration in asset quality, as per the report. But, based on the stress tests, the report warns that the GNPA ratio may rise to 8.1 per cent by September 2022 under the baseline scenario and further to 9.5 per cent under severe stress, if the economy is hit by an Omicron wave. Within the bank groups, public sector banks’ GNPA stood at 8.8 per cent in September 2021 and may deteriorate to 10.5 per cent by September 2022 under the baseline scenario, while for private-sector lenders, the same may rise from 4.6 per cent to 5.2 per cent, and for foreign banks, it may increase from 3.2 per cent to 3.9 per cent over the same period, the report said. Similarly, the overall provisioning coverage ratio moved up from 67.6 per cent in March 2021 to 68.1 per cent in September 2021. [Source website : financialexpress.com] Published on : 29-12-2021 Retail-led credit model facing headwinds as home loan delinquencies rise, RBI says Housing loans and other personal loans constituted as much as 64 per cent of incremental credit during the last two financial years. The Reserve Bank has flagged concerns on the deteriorating credit quality in the retail books of lenders and warned that the retail-led model of selling credit, led by housing loans, is confronting headwinds now. Between April and the first week of December, credit disbursal grew to 7.1 per cent as against 5.4 per cent growth a year ago and 5.2 per cent in March 2021, according to the financial stability report released on Wednesday. The report said that in recent years, growth in wholesale credit has been lagging; retail credit, on the other hand, was generally recording double-digit growth, although the pace of growth remains below the pre-pandemic level. Housing loans and other personal loans constituted as much as 64 per cent of incremental credit during the last two financial years. “The retail-led credit growth model is confronting headwinds: first, delinquencies in the consumer finance portfolio have risen, and second, the new-to-credit segment, a key driver of consumer credit growth in the pre-pandemic period, is showing a decline in originations,” the report said. [Source website : financialexpress.com] Published on : 29-12-2021 Auto-debit bounces above 30% in November In terms of value, the bounce rate on auto-debit requests stood at 25.16%, slightly worse than 24.83% in October. The bounce rate on auto-debit transactions remained above 30% in November, unchanged from 31.2% in the previous month. The failure rate of such transactions, many of which are debit requests for loan repayments, still remained higher than their pre-Covid levels, indicating high levels of stress in the retail segment. According to data released by the National Payments Corporation of India, of 90.73 million debit requests made in November over the National Automated Clearing House (NACH) platform, 28.33 million bounced. In terms of value, the bounce rate on auto-debit requests stood at 25.16%, slightly worse than 24.83% in October. Data from the NACH platform does not include intra- bank transactions, and therefore do not represent all debit requests made in the financial system. EMI payments to smaller non-banking financial companies (NBFCs) and fintechs constitute a chunky share of requests made through the NACH platform. While stress in the retail segment has eased significantly from the levels seen in Q1FY22 in the wake of the second wave of the pandemic, lenders’ asset quality troubles may be far from over. On Tuesday, the Reserve Bank of India (RBI) warned that the increased share of restructured accounts on lenders’ books remains a source of risk. [Source website : financialexpress.com] Published on : 30-12-2021 30

Asset quality set to worsen, but banks resilient enough: RBI report The GNPA ratio of PSBs, which was 8.8 per cent in September this year, may deteriorate to 10.5 per cent by September 2022 under the baseline scenario Indian banks’ asset quality may deteriorate but lenders have enough capital to withstand a severe shock, said the bi-annual Financial Stability Report, prepared taking inputs from all the financial regulators and released by the Reserve Bank of India (RBI), on Wednesday. A similar sentiment was expressed by the RBI’s trend and progress report released on Tuesday. It had said the asset quality of banks and non-banking financial companies (NBFCs) will witness pressure as regulatory forbearance and standstill on asset classification come to an end in a few months. Global policy environment, repeated supply shocks, and inflation are risks but “Omicron haunts near-term prospects,” the Financial Stability Report said. In his foreword to the report, RBI Governor Shaktikanta Das said the Indian economy is “regaining strength and resilience”, after a destructive second wave of the pandemic in April-May. “Consumer confidence and business optimism are on the rise as the spread and scale of vaccination expands. The outlook is progressively improving, though there are headwinds …,” the RBI governor said. [Source website : business-standard.com] Published on : 30-12-2021 Sarfaesi outperforms IBC in FY21 loan recovery: RBI data While fresh referrals under the insolvency law were suspended for a year up to March 2021, that had no bearing on these figures as they reflect recoveries from cases already admitted by the National Company Law Tribunal (NCLT). Banks managed to recover more of their bad loans through the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act, compared with the Insolvency and Bankruptcy Code (IBC) during FY21, according to the Reserve Bank of India (RBI)’s latest report on trend and progress of banking in India. Through the Sarfaesi route, banks recovered 41% of the amount involved, while the extent of recovery stood at just 20.2% via the IBC. The other modes of recovery, Lok Adalats and debt recovery tribunals (DRTs), yielded even less – 4% and 3.6% respectively – during FY21. Overall, banks were able to recover only 14% of their dues through the four modes. While fresh referrals under the insolvency law were suspended for a year up to March 2021, that had no bearing on these figures as they reflect recoveries from cases already admitted by the National Company Law Tribunal (NCLT). In FY20, the IBC had been the leader among the four modes of recovery, returning to banks 46.3% of their dues. The Sarfaesi Act was a distant second, with 17.4% of the amount involved being recovered. Overall, recoveries were better at 22%. In the report, the RBI said during FY21, all the recovery channels, most notably Lok Adalats, witnessed a sizable decline in the cases referred for resolution. “Even though initiation of fresh insolvency proceedings under the IBC was suspended for a year till March 2021 and Covid-19-related debt was excluded from the definition of default, it constituted one of the major modes of recoveries in terms of amount recovered,” the report said. [Source website : financialexpress.com] Published on : 30-12-2021 31

RBI extends deadline for periodic KYC update to March 31, 2022 The central bank had relaxed the rules first in May last year due to the pandemic The Reserve Bank of India (RBI) on Thursday extended the last date for KYC updation for bank accounts by three months to March 31 next year. In a notification on its website, the central bank said it was extending the deadline in view of the “prevalent uncertainty due to new variant of Covid-19”. The central bank had relaxed the rules first in May last year due to the pandemic and had said banking services should not be restricted just because the KYC documents have not been updated by the customer. [Source website : business-standard.com] Published on : 30-12-2021 32

National and International Importance 33

GDP grows 8.4% in Q2; demand, services drag down economic activities GDP remained almost flat, barely managing to expand 0.3% over the pre-Covid period of Q2 FY20 The economy grew 8.4 per cent during the second quarter of 2021-22 as the pace of vaccination rose and Covid-induced restrictions were eased. However, growth was largely on account of the low base of a 7.4 per cent contraction during the corresponding period of the previous year. Thus, gross domestic product (GDP) remained almost flat, barely managing to expand 0.3 per cent over the pre-Covid period of Q2 FY20. This implies that though the economy is in recovery mode, the pace is yet to accelerate. The economy, while growing 20.1 per cent year-on-year in Q1, had contracted 9.2 per cent against the corresponding pre- Covid period of FY20. With this, the economy expanded 13.7 per cent during the first half this fiscal year. But it contracted 4.4 per cent compared to the pre-Covid period. Chief Economic Advisor Krishamurthy Subramanian said India was likely to have double-digit growth this fiscal year. [Source website : business-standard.com] Published on : 01-12-2021 Bank credit to industry revives, but real estate, education loans lag According to RBI’s data, credit to industry sector increased 4.1% on year to Rs 28,54,571 crore as on October 22. On the other hand, loans to commercial real estate fell 0.5% on year to Rs 2,53,582 crore while education loans credit deployment by banks by 8.7% to Rs 47,260 crore. Even as bank credit to industry, which comprises 29.3% of total non-food industry credit, showed some signs of an uptick with 4.1% year-on-year rise in October, data from the Reserve Bank of India’s sectoral credit deployment shows that credit towards commercial real estate and education loans has shrunk by 0.5% and 8.7% on year, respectively. “Banks have been following a cautious stance in underwriting over past one year owing to Covid impact and focus has been more on secured retail and working capital loans to highly rated borrowers. While banks have actively pursued stronger growth in mortgage and even in LAP (long against property) segments, they have maintained a strong control on their commercial real estate exposure in order to reduce asset quality risks given uncertain economic environment,” said Nitin Aggarwal, vice president, research-banking sector at Motilal Oswal Financial Services. According to RBI’s data, credit to industry sector increased 4.1% on year to Rs 28,54,571 crore as on October 22. On the other hand, loans to commercial real estate fell 0.5% on year to Rs 2,53,582 crore while education loans credit deployment by banks by 8.7% to Rs 47,260 crore. [Source website : financialexpress.com] Published on : 02-12-2021 S&P keeps India GDP growth forecast unchanged at 9.5% in FY22 The Indian economy had shrunk by 7.3 per cent in 2020-21 fiscal (April 2020 to March 2021) as pandemic induced restrictions battered business activity S&P Global Ratings on Tuesday kept India's economic growth forecast in the fiscal year to March 2022 unchanged at 9.5 per cent but raised its predictions for the subsequent year on broadening out of the recovery. The Indian economy had shrunk by 7.3 per cent in 2020-21 fiscal (April 2020 to March 2021) as pandemic induced restrictions battered business activity. The gradual lifting of the restrictions has helped the economy to rebound from pandemic lows. \"India is learning to live with the virus. Following the peak in COVID-19 cases around mid-year, the stringency index has declined, mobility has recovered, and consumer and business confidence has improved,\" S&P Global Ratings said in a report. [Source website : business-standard.com] Published on : 01-12-2021 34

India's fiscal deficit for April-October at 36.3% of FY22 target The windfall gains from oil revenues have contributed to the government's tax collection The Union government’s fiscal deficit for the April-October period came in at Rs 5.47 trillion or 36.3 per cent of the Budget estimates. In the corresponding period last year, the country’s fiscal deficit was a high 119.7 per cent. In the pre-pandemic period (April-October 2019-20), the fiscal deficit was 102.4 per cent of the Budget numbers. The deficit stood at 6.4 per cent of GDP during the first half of the current fiscal year, a bit lower than the full year target of 6.8 per cent. The data released by the Controller General Accounts for the April-October period showed that the reduced fiscal deficit had come on the back of a phenomenal rise in revenue receipts and a fall in both capital and revenue expenditures. [Source website : business-standard.com] Published on : 01-12-2021 GDP report card: Agriculture sees 4.5% growth in second quarter In 2020-21, pulses production went down by 6.65 per cent between the first and fourth advance estimates Gross value added in agriculture and allied activities clocked a healthy growth rate of 4.5 per cent at constant prices in the second quarter of FY22, up from 3 per cent during the same period last fiscal year and 3.5 per cent in Q2 of 2019-20. In the first quarter of FY22, gross value added in the sector was also 4.5 per cent. Growth in current prices was also a healthy 7.9 per cent in July-September 2021-22, up from 7.3 per cent in the same quarter last fiscal year. It was slightly less than the 8.7 per cent of the second quarter of 2019-20. The inflation impact thus translated into 3.4 per cent in the second quarter of FY22, lower than the 4.3 per cent of the same quarter last fiscal year, and also lower than the 6.6 per cent of the first quarter of 2021-22. “Agriculture growth is slightly better than the long-term average of 3.5-4.0 per cent in this quarter and that is purely because of statistical reasons as very little crop output comes into the market in July-September. It is mostly residual rabi and allied sector output that dominates,” said Madan Sabnavis, chief economist, CARE Ratings. [Source website : business-standard.com] Published on : 01-12-2021 35

Festive season retail demand, MSME drive bank loan growth in October Credit offtake in services remains weak Reflecting uptick in festive season demand, the bank retail credit covering housing, vehicle and credit cards etc grew by 11.7 per cent on year-on-year (YoY) basis in October 2021 up from 8.7 per cent in October 2021. Reserve Bank of India data showed the YoY growth in housing loans was steady at 8.4 per cent in October 2021 as against 8.1 per cent a year ago. Vehicle loans rose by 8.4 per cent from 5.7 per cent during this period. The credit cards segment showed a sharp rise to 11.9 per cent in October 2021 from 5.9 per cent a year ago. C S Setty, Managing Director (Retail & Digital Banking, State Bank of India said The credit disbursal in retail category has been good in run-up and during festival season (Dussehra and Diwali). Also, the feedback from the field indicates demand for credit has not declined sharply in the post festival period in November. The economic momentum is higher in the third quarter of current financial year (Q3FY22) than in the same quarter a year ago, when the economy was gradually coming out of shock from the first wave of the Covid-19 pandemic. Ahead of the busy season that starts in October, the economy grew by 8.4 per cent in the second quarter ended September 2021 (Q2FY22) as against a sharp 7.4 per cent contraction in Q2FY21. The credit offtake in the industrial segment also showed traction in tandem with upturn in economic activity. Credit growth to industry picked up to 4.1 per cent in October 2021 from a contraction of 0.7 per cent in October 2020, RBI said. [Source website : business-standard.com] Published on : 01-12-2021 UPI breaks 5-month growth streak; transactions decline 0.71% in November In November, UPI recorded 4.18 billion transactions worth Rs 7.68 trillion After a stellar showing by India’s flagship payments platform, Unified Payments Interface (UPI), in October, wherein the volume of transactions crossed 4.2 billion and value of those transactions surpassed the $100-billion (Rs 7.49-trillion) mark, it has continued this momentum in November, with the platform recording 4.18 billion transactions in November, amounting to Rs 7.68 trillion. But on a month-on-month basis, both the volume and value of transactions dipped somewhat — 0.71 per cent in volume terms and 0.4 per cent in value terms, given the high base. In October, the UPI platform touched record highs — both in terms of value and volume of transactions, aided by the festival season spending. On a year-on-year basis, in November, the volume of transactions was up 89 per cent, while value of transactions was up 96 per cent. [Source website : business-standard.com] Published on : 02-12-2021 36

Paytm Payments Bank gets RBI approval to operate as scheduled bank After the announcement, Paytm's share price rose 2.62 per cent to close at Rs 1,594.55 apiece. Paytm Payments Bank, an associate entity of Paytm, on Thursday said it has received the banking regulator’s approval to operate as a scheduled payments bank, helping it to expand its financial services operations. In a statement, the bank said it has been included in the second schedule to the Reserve Bank of India (RBI) Act, 1934. After the announcement, Paytm’s share price rose 2.62 per cent to close at Rs 1,594.55 apiece. Since listing, Paytm’s share price has come under immense pressure. Interestingly, the RBI issued a notification on October 7, saying Paytm Payments Bank has been included in the second schedule. The same has been published in the Gazette of India, dated October 2–8. With the scheduled bank status, the payments bank can now participate in government- and other large corporations-issued requests for proposal, primary auctions, fixed- rate and variable rate repos, and reverse repos, along with participation in marginal standing facility. Also, the bank will now be eligible to partner in the government’s financial inclusion scheme. [Source website : business-standard.com] Published on : 02-12-2021 Credit card spends jump 12% to cross Rs 1 lakh crore mark for first time Monthly card spendings crossed the Rs 1-lakh-crore-mark for the first time at Rs 1,01,200 crore in the reporting month. Credit card spends grew 12 per cent in October to cross for the first time the Rs 1 lakh-crore-mark, driven by a steep 26 per cent growth in the previous month led by ICICI Bank and HDFC Bank, says a report. The banking system saw a net addition of 13,36,000 new credit cards in October, which is a monthly addition of 22 per cent, led by healthy traction by ICICI Bank and HDFC Bank. This takes the total credit card base to 6.64 crore, a growth of 11.7 per cent annualised growth, which is the highest in the past 14 months, according to an analysis of the latest RBI data by brokerage Motilal Oswal. More significantly, monthly card spendings crossed the Rs 1-lakh-crore-mark for the first time at Rs 1,01,200 crore in the reporting month, aided by the festive season according to the report which also attributed the overall economic recovery and rising share of e-commerce transactions for the strong growth, and would keep spends buoyant as robust performance by SBI and ICICI is likely to continue, along with the strong HDFC recovery. While ICICI Bank was the largest issuer in the month, adding 26 per cent more or 2.78 lakh new customers in the month, followed by RBL Bank (16.7 per cent), Indusind Bank (15.5 per cent), and SBI Card (14.5per cent) in October in percentage terms. [Source website : financialexpress.com] Published on : 03-12-2021 37

International Day Of Banks 2021: Why Do UN Observe the Day Since 2020? The United Nations General Assembly decided to keep December 4 as International Day of Banks and it was celebrated for the first time in 2020. It was celebrated to recognise the importance of multilateral and international development banks in financing sustainable developments. It is also observed in recognition of the vital role of banking systems in Member State in contributing to the improvement of the standard of living. In September 2015, the General Assembly adopted a comprehensive, far-reaching and peoplecentred set of Universal Sustainable Development Goals and reaffirmed the commitment to work tirelessly for full implementation of goals by 2030. They recognised that the indispensable requirement for Sustainable Development was to eradicate poverty in all forms and dimensions, including extreme poverty which is the greatest global challenge. The resolution includes the relevance of inclusion in the international financial system at all levels and the importance of financial inclusion as a policy objective in financial regulation by National priorities and legislation. The resolution also invites the international community to observe an International day of Banks to highlight the role of banks in contributing and achieving Sustainable Development. Well-running National Development Banks can help countries in developing financing options for Sustainable Development goal-related investments. Such banks are aligned with Goals in holistic ways and are considered integrated National Financing frameworks. [Source website : news18.com] Published on : 04-12-2021 NCLT allows RBI's plea for bankruptcy proceedings against Reliance Capital The bankruptcy tribunal has also confirmed the appointment of Y Nageswar Rao as the administrator of the company The Mumbai bench of National Company Law Tribunal (NLCT) on Monday admitted the petition moved by the Reserve Bank of India (RBI) to initiate insolvency proceedings against Reliance Capital under Section 227 of the Insolvency and Bankruptcy Code (IBC). The bankruptcy tribunal has also confirmed the appointment of Y Nageswar Rao as the administrator of the company. Earlier in the day, the bench presided over by Pradeep Narhari Deshmukh and Kapal Kumar Vohra had reserved their order in the matter after hearing the case. The RBI had moved the Mumbai bench of NCLT last week to initiate insolvency proceedings against Reliance Capital, after it superseded the company’s board last month, citing defaults and governance issues. [Source website : business-standard.com] Published on : 07-12-2021 Fitch Ratings cut India's FY22 economic growth forecast to 8.4% It raised GDP growth projections to 10.3 per cent, from the earlier expected 10 per cent for the next fiscal year (2022-23) Fitch Ratings cut India’s economic growth forecast to 8.4 per cent, from the previous 8.7 per cent for the current fiscal year (2021-22, or FY22) on Wednesday. The rating agency said risks to recovery remain, especially in the near term, given that less than one-third of the population is fully vaccinated. The newly discovered Omicron variant has added to the risk, it said. However, the rating agency said the economy staged a strong rebound in the second quarter of FY22 from the Delta variant-induced sharp contraction. According to its estimates, gross domestic product (GDP) rose a sharp 11.4 per cent quarter- on-quarter in seasonally adjusted terms after slumping by 12.4 per cent in the first quarter. “However, the bounce was more subdued than we expected in our September outlook. The rebound in the services sector was weaker than hoped for,” it said. [Source website : business-standard.com] Published on : 08-12-2021 38

Life insurers' new business premium spikes 42% at Rs 27,177 cr in Nov Profitability a worry with excess reserves on balance sheet for Covid claims Life insurers’ new business premium (NBP) reported stellar performance in November after a poor showing in October, on the back of strong growth in group single premiums for both private insurers and Life Insurance Corporation (LIC) of India. In November, 24 life insurers, including LIC, reported NBP to the tune of Rs 27,177 crore, up 42 per cent year-on-year (YoY) from the year-ago period. Private insurers’ NBP rose 58.63 per cent YoY to Rs 11,209.75 crore as group single premiums more than doubled during this period. Private players saw their individual single premiums rise 32.5 per cent, while individual single premiums, as well as renewable premiums, posted decent growth in the same period. NBP is the premium acquired from new policies in a particular year. State-owned insurance behemoth LIC also posted impressive growth of 32 per cent in NBP during the same period after a muted performance in the last few months. LIC reported NBP of Rs 15,967.51 crore. Among large private players, SBI Life witnessed exceptional growth of 150 per cent YoY in NBP, while other large entities like HDFC Life, ICICI Prudential Life, and Max Life Insurance posted NBP growth of over 25 per cent. [Source website : business-standard.com] Published on : 08-12-2021 Asset quality pressures on micro-lending ease in Q2Fy22: CRIF High Mark The gross loan portfolio in microfinance rose by 2.1 per cent growth at Rs 2.49 trillion at end of September 21. Reflecting a turnaround in the microfinance space, asset quality pressure eased sequentially with loans in the 30-plus day passed dues (DPD) bucket, declining to 10.4 per cent in the quarter ended September from 15 per cent in April-June. However, the 90-plus DPD remained stable at 3.3 per cent in the July-September period, similar to April-June, according to credit information bureau CRIF High Mark. While the 30-plus DPD was 9.5 per cent in March 2021, it was 4.4 per cent for the 90-plus DPD bucket in the same month. This cannot be compared with the September 2020 numbers because of the moratorium granted on repayments for March-August 2020 due to the adverse effects on the first Covid wave. It is also because the Supreme Court had granted interim stay on labelling accounts as non-performing loans. Gross loan portfolio (GLP) in the microfinance sector in India rose by 2.1 per cent to Rs 2.49 trillion at the end of September 2021 from Rs 2.43 trillion at end of June 2021. This came after nearly seven per cent quarter-on-quarter decline in the previous quarter (Q1 of FY22), which was marked by adverse impact of the second wave. The GLP was Rs 2.61 trillion in March 2021. [Source website : business-standard.com] Published on : 08-12-2021 Treat crypto/digital tokens as securities of a special class: CII Statement has come at a time when the government is planning to bring legislation to Parliament Industry body, Confederation of Indian Industries (CII) on Thursday urged the government to treat the crypto/digital tokens as ‘securities’ of a special class. This statement has come at a time when the government is planning to bring legislation to Parliament. Pitching for special status, CII recommended that these should not be subjected to provisions of existing securities regulations. “Instead, a new set of regulations appropriate to the context of crypto/digital currencies and their jurisdiction-less, decentralised character, should be evolved and applied. This would mean regulatory focus principally on dealings and custody, rather than on issuance (except where issuance entails an Initial Coin Offering (ICO) to the public by an issuer established in India),” it said. The government has listed a Bill for the winter session of the Parliament to ban all the private cryptocurrencies and facilitate the introduction of Central Bank Digital Currency (CBDC) to be introduced during the session. The Bill is titled ‘The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’. [Source website : thehindubusinessline.com] Published on : 09-12-2021 39

Fitch raises outlook for India auto loans to 'neutral' from 'deteriorating' Economic recovery supports stable asset performance Rating agency Fitch Ratings has revised outlook on Indian auto loans to from 'deteriorating' to 'neutral' due to stable asset performance that is supported by economic recovery. The average arrears in the 90-plus days past dues (DPD) bucket for rated asset backed securities (ABS) fell from a peak of 1.9 per cent in June to just one per cent in September. While risks from the new wave of Covid-19 infections remain, any stress is expected to be temporary and less severe than seen in FY21. The operating environment for the commercial vehicle (CV) sector, which comprises a major part of the Fitch rated portfolio, has improved in line with economic activity. The second shock proved to be a short-lived disruption and has not derailed the overall recovery of the CV sector from the pandemic’s lowest point. Fitch expects the economic recovery in 2022 to remain supportive of the sector. [Source website : business-standard.com] Published on : 10-12-2021 India's economy likely to grow 10.5% in FY22, 9% in FY23: Credit Suisse For the current financial year too, the brokerage anticipates growth to be higher than the consensus forecast of 8.4-9.5 per cent Swiss brokerage Credit Suisse expects the economy to continue to show positive surprises and record up to 9 per cent growth in the next fiscal. For the current financial year too, the brokerage anticipates growth to be higher than the consensus forecast of 8.4-9.5 per cent, and printing in at around 10.5 per cent. As a policy, Credit Suisse does not provide absolute growth numbers in its forecast. However, an extrapolation of data available and projections indicate that economic growth could clip 9 per cent in 2022-23 period, which according to the brokerage is up to 400 basis points (bps) over the consensus numbers. Neelkanth Mishra, the co-head of equity strategy for Asia Pacific and India equity strategist at Credit Suisse, told PTI that he expects meaningful upgrades to the GDP forecast as the economic recovery has surprised positively. \"We expect GDP getting an upgrade of 4 percentage points over the consensus for FY23 as output should get closer to the pre-pandemic trend than what is currently forecast. \"The economy is expected to continue to show positive surprises even though the recovery has so far been lop-sided but in the next three-six months most of low-income jobs should recover too,\" Mishra said on Thursday. [Source website : business-standard.com] Published on : 10-12-2021 How PSBs played a key role in relieving small biz stress during COVID-19 Public sector banks played a lead role in helping the scheme reach out to a wider set of MSME borrowers, with very small and micro enterprises having a turnover of up to Rs 1 crore being the biggest beneficiaries. Nearly two-thirds of small businesses believe that the government's Emergency Credit Line Guarantee Scheme (ECLGS) has helped them pass through financial troubles, according to a TransUnion CIBIL report. Private sector banks and public sector banks accounted for 44.5 per cent and 43.6 per cent, respectively, of the loans disbursed under the However, the number of applications processed by PSBs was 1.6 times that of the private sector banks. [Source website : bfsi.economictimes.indiatimes.com] Published on : 10-12-2021 40

Reserve Bank may rationalise some payment charges, says industry Others say central bank may relook zero merchant discount rate on RuPay, UPI The Reserve Bank of India’s (RBI) decision to float a discussion paper on charges in payment systems has evoked mixed reactions from the industry with many saying that the regulator should look at rationalising certain charges that are on the higher side. The RBI may, in fact, also look at introducing charges on certain instruments and players, who are currently exempted from any fees. The apex bank had earlier said the discussion paper will cover all aspects of charges in digital payments such as credit cards, debit cards, prepaid payment instruments (cards and wallets) and Unified Payment Interface (UPI), among others. The main objective of the regulator is to make digital transactions affordable to users and economically remunerative to providers. [Source website : business-standard.com] Published on : 11-12-2021 Banks pull out innovative products to woo back corporate customers Indian banks are increasingly packaging loans with other instruments to prevent erosion of business at a time corporate customers are increasingly seeking finance outside the traditional banking system through equity and bonds. Alongside traditional working capital and term lending, lenders are offering to invest in corporate bonds, helping customers raise external commercial borrowings (ECBs) and even buying their equity shares, two bankers said on condition of anonymity. State Bank of India (SBI) recently invested ₹100 crore in JSW Cement Ltd, part of the $13 billion JSW Group, through compulsorily convertible preference shares (CCPS), which would be converted to common shares at a later date. [Source website : livemint.com] Published on : 12-12-2021 41

Banks Lost Rs 2.85 Trillion Due To Loan Default Of 13 Firms: UBFU According to the statistics given by the UFBU, the 13 corporates' outstanding dues were at Rs 4,86,800 crore and it was resolved at Rs 1,61,820 crore resulting in a loss of Rs 2,84,980 crore. Public sector banks have lost nearly Rs 2.85 lakh crore on account of loan dues of 13 corporates even as the banks are used to bail out ailing financial institutions such as Yes Bank and IL&FS, United Forum of Bank Unions alleged on Monday. In press release, UFBU's Convener B Rambabu said the organisation calls for a two-day all India bank strike on December 16 and 17 protesting against Banking Laws (Amendment) Bill 2021 and opposing the centre's alleged move to privatise PSBs. According to the statistics given by the UFBU, the 13 corporates' outstanding dues were at Rs 4,86,800 crore and it was resolved at Rs 1,61,820 crore resulting in a loss of Rs 2,84,980 crore. \"It is also a matter of reality that time and again public sector banks have been used to bail out ailing private sector banks such as Global Trust Bank, United Western Bank, Bank of Karad, etc. In the recent past, it was Yes Bank, which was bailed out by public sector SBI. Private sector's largest NBFC, IL&FS, was bailed out again by public sector SBI and LIC,\" he said. He said the PSBs participate in majority of the government programmes and schemes such as Jan Dhan, MUDRA for unemployed youth, Swadhan for street vendors, Pradhan Mantri Awas Yojana and Pradhan Mantri Jivan Jyoti Yojana, among others. The UFBU, therefore, is of the view that privatisation of public sector banks will jeopardise the interests of the common people and backward regions of the country, he said. In the event of the government moving forward with the Bill in the Parliament to privatise the banks, bank employees and officers are prepared to go to any extent including indefinite strike against privatisation of banks, as it is detrimental to the interests of the nation and its people, the UFBU said. The organisation said though the operating profits of the PSBs are in health condition the only issue being confronted with the banks was that of huge Non- Performing Assets (NPAs) in which the major share was that of big corporate. [Source website : businessworld.in] Published on : 13-12-2021 Micro-loan disbursement up 154.5% QoQ to to Rs 64,899 cr in Sept: MFIN The number of loans disbursed also rose sharply to 18.5 million in Q2FY22 from 7.1 million in Q1FY22 Keeping pace with the upturn in the economy, micro loans disbursed by lenders rose by 154.5 per cent sequentially to Rs 64,899 crore in quarter ended September 2021 (Q2FY22) from Rs 25,503 crore in June 2021 quarter (Q1FY22). The disbursements rose by 107.6 per cent on year- on-year (YoY) basis from Rs 31,261 crore in quarter ended September 2020 (Q2FY21), according to MFIN data. The number of loans disbursed also rose sharply to 18.5 million in Q2FY22 from 7.1 million in Q1FY22 and 8.8 million in Q2FY21. However, the average size of loan declined to 35,053 in the September 2021 quarter from Rs 36,085 in June 2021 and Rs 35,652 in September 2020. Alok Misra, chief executive & director, Microfinance Institutions Network (MFIN), said the microfinance operations seem to be returning towards normalcy after the difficult phase of the second wave of the pandemic. The second quarter of FY 21-22 saw growth of portfolio as well as an improvement in portfolio quality. [Source website : business-standard.com] Published on : 16-12-2021 42

CD issuances sharply jump in November On the other hand, credit offtake in November increased due to festival-time demand for retail loans. The credit growth was also supported by easing of lockdown restrictions. Issuances of certificates of deposit (CDs) rose sharply in November due to demand from private banks for the festival season. Issuances also surged in anticipation of short-term rates inching up after the monetary policy review. According to data compiled from NSDL, banks raised Rs 14,020 crore in November, sharply higher than Rs 425 crore in October. In September, banks had raised Rs 12,735 crore. Axis Bank was the largest issuer in November at Rs 9,630 crore. This was followed by HDFC Bank which raised Rs 3,550 crore. However, state-owned banks remained on the sidelines with no issuances from their end. “We believe that some banks have issued CDs in anticipation of short- term rates going up even though liquidity continues to be in surplus. It is a function of future expectations in our view. Also the spreads between 1-year T-bill and CDs are close to historically low levels, which may not sustain going forward. Hence, banks are taking advantage of the same,” said Puneet Pal, head – fixed income, PGIM India Mutual Fund. [Source website : financialexpress.com] Published on : 16-12-2021 HC can't pass order under Art 226 directing bank to grant OTS to borrower: SC The Supreme Court on Wednesday said that a high court cannot pass an order under Article 226 of the Constitution directing a financial institution/bank to positively grant the benefit of One Time Settlement (OTS) to a borrower. A bench of justices M R Shah and B V Nagarathna said a borrower cannot seek such benefit as a matter of right, and the grant of one time settlement is always subject to the eligibility criteria mentioned under the OTS Scheme and the guidelines issued from time to time. The top court's judgement came on an appeal filed by The Bijnor Urban Cooperative Bank Limited, Bijnor against an order of Allahabad High Court in exercise of powers under Article 226 issued a writ of mandamus directing the Bank to positively consider the borrower's application for One Time Settlement (OTS). The apex court set aside the high court order saying it has materially erred and has exceeded in its jurisdiction. \"No writ of mandamus can be issued by the High Court in exercise of powers under Article 226 of the Constitution of India, directing a financial institution/bank to positively grant the benefit of OTS to a borrower,\" the bench said. [Source website : bfsi.economictimes.indiatimes.com] Published on : 16-12-2021 43

2022 may not be a boom time for banks worldwide, set to face regulatory tightening After the efforts for pandemic relief and huge stimulus by governments, banks across the globe are likely to grapple with excess liquidity and squeezed margins in 2022. The government's efforts to flood the markets with cash in the aftermath of the COVID-19 pandemic propped up borrowers but also left institutions flooded with excess liquidity, according to S&P Global. \"Emergency relief efforts during the pandemic moved credit risk off the table but have directly contributed to margin pressure at US banks,\" it said. Excess cash : The excess cash, created by government relief efforts and forbearance provided by US banks, will remain on their balance sheets for the foreseeable future, leaving bank margins below prepandemic levels for the next few years, it said. The excess funds are expected to remain above $2.9 trillion through 2023 even as the economic recovery continues, it said. The pace of bank branch closures accelerated in 2021, with net closures totalling 3,609 over the 12-month period ending August 31. Both trends should continue as increased M&A activity allows for future technological investments and more branch consolidation, it said. Gradual tightening : Reflecting expectations of a continued return to pre-pandemic norms, banking regulations in the world overall are likely to tighten in 2022 as watchdogs cease cutting financial firms as much slack as they did during the pandemic, Fitch Ratings said. In Asia and North America, the agency predicts that the regulatory climate will hold steady. [Source website : bfsi.economictimes.indiatimes.com] Published on : 17-12-2021 CBI files charge sheet against Corporation Bank ex-chairman, others in Rs 79 crore fraud case The CBI has filed a charge sheet against former chairman cum managing director Ramnath Pradeep of Corporation Bank and other executives in connection with alleged loss of Rs 79 crore incurred by the bank due to loan default by a company, officials said on Friday. In its charge sheet filed before the court of ACMM, Esplanade, Mumbai, the probe agency named S N Murthy Shankar, the then chief manager, and A P Shiva Kumar, the then senior manager, Corporation Bank, LCB, Mumbai, they said. The agency had taken over the investigation on the complaint of the bank on June 16, 2017 against Parekh Aluminex Limited, its directors and chartered accountant (CA). The company and the CA were charge sheeted on December 28, 2020. \"It was alleged that the directors, chartered accountant and others had conspired and availed various credit facilities to the tune of Rs 60 crore (approximately) from e-Corporation Bank (now UBI). They had further allegedly diverted the funds and deployed it in real estate and other non-related business activities by way of loans/advances in different real estate projects,\" CBI spokesperson R C Joshi said [Source website : bfsi.economictimes.indiatimes.com] Published on : 17-12-2021 World Bank unveils replenishment package of IDA to back poorest nations The World Bank has announced a $93 billion replenishment package of the International Development Association (IDA) to help the poorest countries respond to the raging Coronavirus (Covid-19) crisis and boost economic growth. The World Bank's IDA, established in 1960, helps the world's poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people's lives, reports Xinhua news agency. [Source website : business-standard.com] Published on : 17-12-2021 44

ICICI Bank raises Rs 5,000 crore through 10-year bonds Compared to private sector entities, public sector-owned firms are able to get 5-10 basis points finer rates ICICI Bank has raised Rs 5,000 crore through 10-year bonds at a coupon (interest rate) of 6.96 per cent to fund regular business operations. The bonds would be listed in the relevant segment of the NSE. The bonds are rated “AAA” with stable outlook, the bank informed the stock exchange. The money was raised through private placement of bonds. The coupon is about 45-basis points above the yield on 10-year Government of India bonds. Compared to private sector entities, public sector-owned firms are able to get 5-10 basis points finer rates, bond dealers said. [Source website : business-standard.com] Published on : 18-12-2021 IFSCA sets up panel for creating framework for transfer of stressed loans The International Financial Services Centres Authority (IFSCA) on Friday sets up a committee for creating a framework for transfer of stressed loans from domestic lenders to financial institutions in IFSC. Former executive director of RBI G Padmanabhan would be chairing the committee which will also include representative from law firm and other market participants possessing expertise in banking and legal issues, IFSCA said in a statement. \"The committee has been mandated to examine the provisions of the RBI directions pertaining to transfer of stressed loans by lending institutions to entities in IFSCA, identify areas/issues of the directions which require further clarification from RBI, suggest both the contents of the framework to be put in place by IFSCA to enable such transfers and amendments to the RBI directions to make it easier to effect such transfers,\" it said. The committee would submit its report to the chairperson, IFSCA, within one month from the date of its first meeting, it said. IFSCA has been established as a unified regulator to develop and regulate financial products, financial services, and financial institutions in the International Financial Services Centres (IFSCs) in India. Currently, GIFT IFSC is the only international financial services centre in the country. Prior to the establishment of IFSCA, domestic financial regulators - RBI, Sebi, PFRDA and IRDAI - regulated business in IFSC. The main objective of IFSCA is to develop a strong global connect and focus on the needs of the Indian economy as well as to serve as an international financial platform for the entire region and the global economy as a whole. [Source website : bfsi.economictimes.indiatimes.com] Published on : 18-12-2021 Banks recover 60% of over Rs 22,500 crore dues from asset sales of Mallya, Nirav, Choksi Banks have recovered Rs 13,109.17 crore from the asset sale of fugitives Vijay Mallya, Nirav Modi and Mehul Choksi or about 60 per cent of the amount owed by them. A total of Rs 13,109.17 crore has been recovered from the asset sales of Vijay Mallya, Nirav Modi and Mehul Choksi as of July 2021, the Parliament was told. The latest recovery was Rs 792 crore from the sale of assets belonging to Mallya and others on July 16, 2021. In June Enforcement Directorate had said the three “defrauded” public sector banks by siphoning off the funds through their companies which resulted in total loss of over Rs 22,000 crore (Rs 22,585.83 crore in definite numbers) to a clutch of banks. The ED, empowered to probe such cases under criminal sections of the Prevention of Money Laundering Act (PMLA), attached and seized total assets worth Rs 18,170.02 crore in these two cases that included Rs 969 crore worth of properties located abroad. The quantum of the attached and seized assets represented 80.45 per cent of the total bank loss of Rs 22,585.83 crore, the ED said. In June, the Debts Recovery Tribunal (DRT) on behalf of an SBI-led consortium that lent money to Mallya sold fresh shares worth Rs 5,824.50 crore of United Breweries Limited (UBL), After the sale of attached assets by banks in June, the ED had said 40 per cent of the money lost by banks in alleged frauds perpetrated by fugitive businessmen Nirav Modi, Mehul Choksi and Vijay Mallya was recovered. [Source website : bfsi.economictimes.indiatimes.com] Published on : 21-12-2021 45

Axis Bank announces will raise up to Rs 5,000 crore by issuing bonds Axis Bank on Monday said it will raise up to Rs 5,000 crore by issuing bonds. In April this, the board of directors of Axis Bank had authorised it to borrow/raise funds in Indian currency/foreign currency by issue of debt instruments, perpetual debt instruments, AT 1 bonds, infrastructure bonds and Tier II capital bonds among others up to an amount of Rs 35,000 crore. \"We now wish to inform you that the bank proposes to raise funds by issuing senior unsecured taxable redeemable non- convertible debentures of Rs 10 lakh each for cash at par with base issue size of Rs 2,000 crore and green-shoe option to retain over-subscription of Rs 3,000 crore thereby aggregating up to Rs 5,000 crore,\" Axis Bank said in a regulatory filing. [Source website : business-standard.com] Published on : 21-12-2021 Bankers fear opening up of old NPA sale cases after IT raids In recent findings by the IT Department, ARCs acquired the NPAs at far less than the real value of the collateral securities covering the said asset, while also masking their profits. According to some officials, banks may forgo ARCs and take other routes instead. Bankers are afraid that old cases of their non-performing assets sale to asset reconstruction companies will resurface after the recent raid by the Income Tax Department, reports said. “Now, the fear is that old cases of banks’ non-performing asset (NPA) sale to ARCs may be opened up. So, this development will definitely be a dampener when it comes to banks assigning bad loans/NPAs to ARCs. Banks will become wary about selling assets to ARCs,\" a top public sector bank official told The Hindu. According to another PSB official, it is unlikely that bankers were party to/aware of the corrupt nexus between some of the ARCs and borrowers. However, investigating agencies may probe deeper. The IT Department recently raided four ARCs, which revealed unfair and fraudulent trade practices in acquiring these loans. According to a statement by the Central Board of Direct Taxes (CBDT) , the amount at which NPAs have been acquired by the ARCs has been found to be far less than the real value of the collateral securities covering the said asset/NPA. The IT Department’s search disclosed that the minimum cash payout made out by the ARCs to banks for acquiring the stressed assets has usually been using the funds of the borrower group. Such funds have been routed through several layers of dummy companies, controlled by the borrower group or via hawala channels, the statement said. [Source website : bfsi.economictimes.indiatimes.com] Published on : 22-12-2021 Cash in circulation touches Rs 29 lakh crore despite surge in digital payments Data from the Reserve Bank of India shows cash in circulation has touched Rs 28,26,863 crore, a value increase of16.7 per cent compared to Rs 24,20,975 crore in 2020. Despite UPI transactions jumping 70 times in last 4 years, cash is still king in India as people began hoarding cash for emergency purposes due to pandemic-induced uncertainties in the last two years. The value of total cash in circulation has nearly touched Rs 29 lakh crore this year. Data from the Reserve Bank of India shows cash in circulation has touched Rs 28,26,863 crore, a value increase of16.7 per cent compared to Rs 24,20,975 crore in 2020. Combination of greater public demand for cash and a contraction in GDP has led to an increase in Currency in Circulation (CiC) as a percentage of GDP to 14.5% in FY 2020-21. However, year-on year-growth in currency in circulation has decelerated sharply to 7.9% as of November, 2021 from pandemic influenced surge of 22.2% a year ago, Minister of State for Finance Pankaj Chadhary informed Parliament on Tuesday. “Demand for currency depends upon several macroeconomic factors including economic growth and level of interest rate. Precautionary demand generated by the public during fiscal 2020-21 due to the Covid-19 pandemic induced uncertainties is also an important factor in currency demand,” said Chaudhary. However, a recent report by SBI Ecowrap, shows that currency in circulation is expected to be lower at about 13.1 per cent of GDP in 2021-22. “Our estimate also shows that because of the pandemic people may have been holding as much as Rs 3.3 lakh crore in cash for precautionary motive beginning FY21. If we adjust for such currency transactions, the currency to GDP ratio for pure payment purposes may have actually declined in FY21 compared to earlier years,” said SBI Research team's report titled \"A Guide to Formalisation of Economy since FY18\". The formalization efforts are bearing major fruit in terms of currency /GDP ratio. The research report by the country's largest lender estimates that without pandemic GDP collapse, CIC/GDP ratio would have been 12.7% in FY21, as against 12.4% in FY11. [Source website : bfsi.economictimes.indiatimes.com] Published on : 23-12-2021 46

Banks raise over Rs 37,000 cr via AT1 bonds amid capital ratio concern Call options for instruments raised last year and worth Rs 28,430 crore are due in the next financial year. Indian banks have raised more than Rs 37,000 crore by issuing new Additional Tier 1 bonds (AT1) this financial year (FY22). The amount is higher than Rs 28,430 crore worth AT1 bonds for which call options are due in the FY22, addressing concerns on rollovers and capital ratios. According to rating agency ICRA, Rs 20,505 crore of AT-I bonds of public sector banks (PSBs) and Rs 7,925-crore bonds of private sector banks (PVBs) are due for exercise of call option. Most bonds (worth Rs 19,750 crore) are due in the second half (H2 FY2022). All PSBs have largely raised AT-I bonds nearly equivalent to the call options due in FY2022, likely preserving their capital ratios, ICRA said. The demand from mutual fund investors remained muted and the AT-I bonds of PSBs were subscribed by other PVBs, pension funds and corporate treasuries. The coupon for the bonds issued by the banks largely remains similar or lower than the bonds for which the call option is scheduled to be exercised this year, ICRA said. [Source website : business-standard.com] Published on : 23-12-2021 Axis Bank emerges as highest bidder for Citi consumer business Private sector Axis Bank has emerged as the highest bidder to buy Citi's consumer banking business, according to sources. American banking major Citibank in April announced its plan to exit from the consumer banking business in India as part of a global strategy. The business comprises credit cards, retail banking, home loans and wealth management. The bank has 35 branches in the country and employs about 4,000 people in the consumer banking business. According to the sources, the valuation could be around $2 billion (about Rs 13,000 crore). The final valuation will be linked to the number of variables including the quantum of deposits, customers, the quantum of assets and liabilities moving from one franchise to another once all regulatory clearances come through, the sources added. [Source website : bfsi.economictimes.indiatimes.com] Published on : 23-12-2021 Bank deposits in Gujarat rise by 12.4% Even as the post pandemic economic recovery began from the second quarter, stalled capital expenditures led to steady growth in the bank deposits. According to the latest report by State Level Bankers’ Committee (SLBC) Gujarat, bank deposits in the state grew by almost Rs 1.01 lakh crore — from Rs 8.15 crore to Rs 9.17 crore, a rise of 12.4% — in the second quarter of 2021-22 in comparison to the same period of last year. Bank deposits in Gujarat stood at Rs 8.84 lakh crore in the first quarter of 2021-22. Banking sector experts attribute the surge in deposits to stalled capital expenditures and expansion plans. “Even as the economy began its recovery path after the second wave of Covid-19, capital expenditures on part of the industries as well as MSMEs were stalled. Industries did not widely execute expansion plans in the wake of uncertainty and concerns over the projected third wave. Moreover, people who faced unforeseen medical emergencies during the second wave began saving money in a big way. This primarily fuelled bank deposit growth even in the second quarter,” said a well-placed source in SLBC Gujarat. [Source website : bfsi.economictimes.indiatimes.com] Published on : 26-12-2021 47

Banks' improved NPA recovery, declined loan provisioning to continue in 2022: ICRA The recent improvement in recovery of the non-performing assets and decline in provisioning of loans in the banking sector are expected to improve further in the coming year, rating agency ICRA said. Accordingly, the improvement in such parameters has helped realise better profitability for the banks, the rating agency said. However, subdued credit growth and surplus liquidity continue to be a drag on the profit margins for the sector. \"The banking sector navigated well during 2022, despite the challenges posed by the second wave of Covid-19... Even in the absence of relief measures such as moratorium on loan repayments or standstill on NPA classification, which were allowed during the first wave, banks were able to reduce their NPAs,\" said Anil Gupta, Vice-President and Sector Head at ICRA. For small finance banks, the Covid-19 pandemic significantly impacted the performance during FY21 and H1FY22 in terms of growth, asset quality and profitability. \"The asset quality was impacted adversely as the product segment for SFBs is largely unsecured with a focus on the self-employed segment, which is more vulnerable to income shocks,\" said Sachin Sachdeva, Vice-President and Sector Head at ICRA. [Source website : bfsi.economictimes.indiatimes.com] Published on : 26-12-2021 Banking sector to see significant reforms in the new year The banking sector is set to witness significant reforms in the coming year with privatisation of public sector banks and strategic disinvestment of IDBI Bank on the agenda of the government for 2022. All said, the emerging coronavirus situation, especially in the wake of the Omicron variant, might pose headwinds in the pace of reforms. Going by the numbers, the banking sector has done reasonably well in 2021, notwithstanding the impact of the second wave of the pandemic. Pursuant to the government's 4Rs strategy of Recognition, Resolution, Recapitalisation and Reforms, Non- Performing Assets (NPAs) of the banking sector have declined to ₹8,35,051 crore as on March 31, 2021. As per the Financial Stability Report (FSR) released by Reserve Bank of India (RBI) in July 2021, macro-stress tests, on the basis of regression modelling, indicate that the Gross NonPerforming Asset (GNPA) ratio of Scheduled Commercial Banks, under the baseline scenario, may increase from 7.48 per cent in March 2021 to 9.80 per cent by March 2022. The net profit of Public Sector Banks (PSBs) surged to ₹14,012 crore in the first quarter and further rose to ₹17,132 crore in the second quarter ended September 2021. The combined profit ( ₹31,114 crore) of the first half of the current fiscal is close to the total profit earned ( ₹31,820 crore) in the entire previous financial year (2020-21). Similarly, private sector banks including HDFC Bank, ICICI Bank and Kotak Mahindra Bank also posted healthy profit with reduction in bad loans. Improved financial health coupled with new Public Sector Enterprise (PSE) policy have prepared a strong ground for the privatisation of public sector banks, a long pending financial sector reform. Many government functionaries have compared the new PSE policy akin to the landmark reforms carried out since 1991. [Source website : livemint.com] Published on : 26-12-2021 Airtel Payments Bank surpasses 1 bn transactions mark in Q2 Airtel Payments Bank crossed one billion transactions volume milestone on its platform during September quarter 2021- 22, according to sources. This represents about 61 per cent year-on-year growth in transaction volume per quarter, underlining the bank's digital-first model and distribution of over 5,00,000 banking points that give it the ability to scale up rapidly. For Airtel Payments Bank, the growth in transactions volume has been sustained following the big pivot amid the pandemic as customer preference for digital payments surged, the source said adding that the company recently crossed one billion transactions per quarter mark. The growth has been driven by uptake for its diversified digital product offerings - UPI based payments, FASTag, bill and utility payments, and mobile and DTH recharges as well as its set of retail solutions, the source added. [Source website : economictimes.indiatimes.com] Published on : 26-12-2021 48

State-backed Bad Bank set to begin operations in January second week The long-awaited state-sponsored bad bank is set to kick off its business from the second week of January just in time for the banking industry to dress up its balance sheet as the fiscal year comes to an end in a quarter. Banks may generate one- off gains as they have already fully provided for those sticky loans estimated at about 82,000 crore in 22 accounts. The bad bank plans to recruit as many as 50 professional executives for the asset management company (AMC) — India Debt Resolution Company Ltd (IDRCL) — to begin with, said people familiar with the matter. The bad bank’s regulatory framework is being worked out. “We are currently busy setting up the infrastructure as we aim to generate write-backs for lenders by the end of this financial year,” one of the senior executives involved in the matter told ET. The assets spread across industries such as power, road construction, infrastructure and manufacturing include Castex Technologies, Lavasa Corporation, Jaypee Infratech, GTL and Reliance Naval. “The bad bank will bring more efficiency and expertise under one roof as the whole objective is to resolve distressed assets,” said Ashutosh Khajuria, executive director and CFO at Federal Bank. “Realistic valuation will likely ensure lower haircuts increasing chances of higher recovery.” More than three months ago, the government set up the IDRCL and the National Asset Reconstruction Company (NARCL), both of which will work in tandem. The ARC is likely to be regulated by the Reserve Bank of India and could be run by bankers/executives on deputation. [Source website : bfsi.economictimes.indiatimes.com] Published on : 27-12-2021 HDFC Bank ties up with IPPB to deliver banking services in semi-urban, rural areas HDFC Bank has tied up with India Post Payments Bank (IPPB) to offer its banking services to the unbanked and underserved segments in semi-urban and rural areas. A memorandum of understanding was signed between HDFC Bank and IPPB to cater to the majority of over 4.7 crore customer base of IPPB. About 90 per cent of IPPB customers reside in rural areas, which may benefit from this tie-up. HDFC Bank said the strategic alliance will enable IPPB to provide affordable and diversified offerings, including access to finance, to its customers through its innovative Doorstep Banking Service. With nearly 2,00,000 postal service providers (Postmen and Gramin Dak Sevaks) equipped with micro ATMs and biometric devices, IPPB caters to the needs and requirements of various customer segments. With this partnership, HDFC Bank aims to further strengthen its financial inclusion drive by leveraging the robust and extensive distribution network of IPPB's 650 branches and over 136,000 banking access points across India, the bank said on Monday. [Source website : economictimes.indiatimes.com] Published on : 27-12-2021 World economy to top $100 trillion in 2022 for first time: Report India will regain sixth position from France next year and become third largest economy in 2031, says study British consultancy CEBR predicted China will become the world's top economy in dollar terms in 2030. The world's economic output will exceed $100 trillion for the first time next year and it will take China a little longer than previously thought to overtake the United States as the No. 1 economy, a report showed on Sunday. British consultancy CEBR predicted China will become the world’s top economy in dollar terms in 2030, two years later than forecast in last year’s World Economic League Table report. India looks to overtake France next year and then Britain in 2023 to regain its place as the world's sixth biggest economy, CEBR said. “The important issue for the 2020s is how the world economies cope with inflation, which has now reached 6.8 per cent in the US,” said CEBR deputy chairman Douglas McWilliams. “We hope that a relatively modest adjustment to the tiller will bring the non- transitory elements under control. If not, then the world will need to brace itself for a recession in 2023 or 2024.” CEBR had said China’s “skilful” management of Covid-19 would boost its relative growth compared to the US and Europe in coming years. [Source website : business-standard.com] Published on : 27-12-2021 49