Bankers Plus - January 2024 Edition (PDF)

Subscribers Copy- Not for free circulation BANKERS PLUS Volume IV, Issue 10 January 2024 Highlights of COP 28 Summ...

Subscribers Copy- Not for free circulation BANKERS PLUS Volume IV, Issue 10 January 2024 Highlights of COP 28 Summit Bankers Plus-Monthly e magazine by Ramya Education Enterprise  BANKERS PLUS Volume IV, Issue 10 January 2024 US Debt Ceiling Crisis Cover page Article s COP-28 Summit 2023 Key Highlights …Page Page 1-41-4 REGULATORY UPDATES KNOWLEDGE HUB 5 US Debt Ceiling Crisis 46 INDUSTRY UPDATES ….Page 5-20 QUIZ TIME….Page Page21-31 1-4 33 54 BANKERS PLUS- Professional e- Published by, magazine- Monthly Ramya Education Enterprise Annual Subscription Charges: ….Page 32-43 5G-807, Provident Sunworth, Rs. 300 NICE Junction, Mysore Road, Bangalore-60 CLICK HERE TO SUBSCRIBE www.ramyaedu.com Note: The copy of this e -magazine is intended for the use of Subscribers only. Unauthorized sharing is prohibited and liable for appropriate action taken by the publisher.  Bankers Plus Editor’s Desk BANKERS PLUS -June JAN2021 2024 Welcome to January 2024 edition of ‘Bankers Plus‟. Wish you all a very happy & prosperous new year 2024. Let all your dreams, hopes and aspirations come true in the year 2024. In most of the banks internal promotion process has begun for the next financial year. Competition become tough and many bankers who are aged between 35-45 years are facing „mid career crisis‟. Progress upto this level was quite smooth to them but now it is not. Considering this many of them are aggressively adding all possible qualifications to give a boost to their careers. Now banking industry is with huge number of middle management executives those who are mainly in Senior to Chief manager grades (Equivalent grades in Private banks) with very little number of vacancies available at next level. „Internal competition‟ become very high and progressing towards next higher level is really become a challenge. In private sector banks a small portion of this issue is addressed by the „attrition‟. HR departments have taken proactive roles to adding „additional layers‟ in between the existing grades to address this issue over short to medium terms. But, it is also not a long term solutions as it is not adding value addition to their nature of work. In PSBs the situation is alarming as there is no healthy attrition in middle and senior levels. I have only one suggestion to all those who are facing this issue. Update with relevant knowledge and add those qualifications from which the knowledge gained can be used to sharpen skills and can be used for effective performance of duties. Qualifications will not support your career progression unless it is backed by „consistent performance‟ which adds significant measurable business and profit to your organization. All the very best. This e-magazine is not for free circulation. Shivaprasad K Be responsible. Click here to subscribe www.ramyaedu.com Bankers Plus.  Ramya Education Enterprises No. 5G-807, Provident Sunworth, Mysore Road, Bangalore-560060 09819952288/080-48141874 Updated till 31.12.2023 Price: Rs. 715/- (Including speed post charges) Click here to order with Single click COVERAGE: Current trends in Banking and Finance including financial awareness, Latest RBI guidelines, Govt. sponsored schemes Banking products, Legal and regulatory aspects of banking, Credit and all aspects of general banking in Multiple choice Questions format with explanations for key Topics. More than 2250 MCQs including recollected questions from previous exams. (Hard copy) Payment can also be made to Gpay or Phonepe or BHIM no. 9819952288 or Account no. 2101115000010198 Ifsc: KVBL0002101; Karur Vysya bank, Name: Ramya Education Enterprise and provide your address through SMS or Whatsapp to 9819952288 for dispatch. Or order at www.ramyaedu.com  Bankers Plus-March Coverpage Article 2022 BANKERS PLUS - JAN 2024 1 COP-28 Summit 2023 Key Highlights The United Nations Climate Change Conferences are yearly conferences held in the framework of the United Nations Framework Convention on Climate Change (UNFCCC). They serve as the formal meeting of the UNFCCC parties – the Conference of the Parties (COP) – to assess progress in dealing with climate change. The year’s 2023 conference -COP 28 recently concluded at Dubai- UAE. Started in 2005, these conferences have also served as the "Conference of the Parties Serving as the Meeting of Parties to the Kyoto Protocol" (CMP). Kyoto Protocol was an international treaty signed on 11th December 1997, which extended the 1992 United Nations Framework Convention on Climate Change that commits state parties to reduce greenhouse gas emissions. Although the 1997 Kyoto Protocol also technically remains in force, the Paris Agreement has, in effect, superseded the Kyoto Protocol as the principal regulatory instrument governing the global response to climate change. The Paris Agreement was adopted on 12 December 2015 and came into effect on 4 November 2016 which seeks to find a middle ground – a “Goldilocks” solution – between the contrasting models of the Kyoto Protocol and the 2009 Copenhagen Accord. The key aim of Paris Agreement substantially reduce global greenhouse gas emissions to hold global temperature increase to well below 2°C above pre-industrial levels and pursue efforts to limit it to 1.5°C above pre-industrial levels, recognizing that this would significantly reduce the risks and impacts of climate change. 1  Bankers Plus-March Coverpage Article 2022 BANKERS PLUS - JAN 2024 2 The first COP summit was held at Berlin, Germany in the year 1995 and till date 28 such summits have been held and various consensus of climate change have been initiated. Year 2023, COP-28 summit was held at Dubai and the next year’s summit COP29 is expected to be held at Baku, Azerbaijan. India is expected to host COP33 summit in the year 2028. Structure of COP: The COP is the supreme decision-making body of the Convention. To put it simply, the COP is where the world comes together to agree on ways to address the climate crisis, such as limiting global temperature rise to 1.5 degrees Celsius, helping vulnerable communities adapt to the effects of climate change, and achieving net-zero emissions by 2050. The COP meets every year, unless the Parties decide otherwise. The COP meets in Bonn, the seat of the secretariat, unless a Party offers to host the session. This is the world’s only multilateral decision-making forum on climate change with almost complete membership of every country. COP Presidency rotates among the five recognized UN regions - that is, Africa, Asia, Latin America & Caribbean, Central & Eastern Europe and Western Europe & Others – there is a tendency for the venue of the COP to also shift among these groups. Key Highlights of COP-28 summit: Following are the major highlights of Takeaways from COP-28 summit which was held recently at Dubai, UAE. (a) The world is welcoming with caution a landmark decision, referred to as the „Global Stocktake‟-is considered the central outcome of COP28, in which nearly 200 countries pledged to move away from fossil fuels. 2  Bankers Plus-March Coverpage Article 2022 BANKERS PLUS - JAN 2024 3 (b) The „stocktake‟ recognizes the science that indicates global greenhouse gas emissions need to be cut 43% by 2030, compared to 2019 levels, to limit global warming to 1.5°C. But it notes Parties are off track when it comes to meeting their Paris Agreement goals. (c) Parties reached a historic agreement on the operationalization of the loss and damage fund and funding arrangements. Total commitment of USD 700 million funds has come till date. Fund will be serviced by new, dedicated and independent secretariat. (d) Parties agreed on targets for the ‘Global Goal on Adaptation (GGA)‟ and its framework, reflects a global consensus on adaptation targets and the need for finance, technology and capacity-building support to achieve them. (e) The „Green Credit‟ Initiative has been conceptualized as a mechanism to incentivize voluntary pro-planet actions, as an effective response to the challenge of climate change. It envisions the issue of Green Credits for plantations on waste/degraded lands and river catchment areas, to rejuvenate and revive natural eco-systems. (f) The ‘Green Climate Fund (GCF)‟ received a boost to its second replenishment with six countries pledging new funding at COP28 with total pledges now standing at a record USD 12.8 billion from 31 countries, with further contributions expected. (g) Eight donor governments announced new commitments to the least Developed Countries Fund and Special Climate Change Fund totalling more than USD 174 million to date, while new pledges, totaling nearly USD 188 million so far, were made to the Adaptation Fund at COP28. 3  Bankers Plus-March Coverpage Article 2022 BANKERS PLUS - JAN 2024 4 At COP28, discussions continued on setting a „new collective quantified goal on climate finance‟ in 2024, The new goal, which will start from a baseline of USD 100 billion per year. India at COP-28: Government of India has presented India’s national statement at COP28. The key highlights of India‟s national statement are, (a) India has given a call to Global communities to Join „Mission LiFE‟ – Lifestyle for Environment which bears testimony to India’s action-oriented approach. (b) In an endeavour to decouple economic growth from greenhouse gas emissions, India has successfully reduced the emission intensity vis-à-vis its GDP by 33% between 2005 and 2019, thus achieving the initial NDC target for 2030, 11 years ahead of the scheduled time. (c) India has also achieved 40% of electric installed capacity through non fossil fuel sources, nine years ahead of the target for 2030. Between 2017 and 2023, India has added around 100 GW of installed electric capacity, of which around 80% is attributed to non- fossil fuel-based resources. (d) The Global Biofuel Alliance, launched during G20 summit, will play catalytic role fostering global collaboration for advancement & widespread adoption of biofuels. (e) India has reaffirmed commitment to work together for the common objective for greener, cleaner and healthier planet as we have one Earth, we are One family and share One future. (f) During the event, Prime Minister highlighted that LeadIT 2.0 will focus on inclusive & just industry transition, co development and transfer of low-carbon technology, and financial support to emerging economies for industry transition. (g) India's involvement in the „Quad Climate Working Group‟ and the „Mangrove Alliance‟ illustrates a recognition of the pivotal role played by local communities and regional governments in fostering sustainable lifestyles and holistic conservation efforts. 4  BANKERS PLUS 5 JUNE 2023, Volume IV, Issue 3 Volume IV, Issue 10 January 2024 Subscribers Copy- Not for free circulation BANKERS PLUS DEC2023, VOL IV, ISSUE 10 Regulatory Updates Bankers Plus Bankers Plus-Monthly e- magazine Click below to subscribe/Renew Annual Subscription charges: Rs. 300 To subscribe click here Share your Feed backs/ Suggestions to [email protected] Bankers Plusupdates Regulatory BANKERS PLUS REGULATORY - JAN 2024 UPDATES 6 Credit Guarantee Regulatory Updates Scheme for RTGS Co-lending- Modifications Co-lending is an arrangement where in banks will tie-up with NBFCs for jointly disbursing loans to priority sector. In order to make the scheme effective, CGTMSE has introduced Credit guarantee scheme for Co-lending (CGSCL) in Feb 2022. The trust has carried out few of the modifications under CGSCL scheme recently which are as under, (a) Ceiling on Guarantee: P which is a subsidiary on. Existing Clause Modified Clause (a) Rs. 200 lakh for credit (a) Rs. 500 lakh for credit facility secured by primary facility secured by primary security. security. (b) Rs. 100 lakh for (b) Rs. 200 lakh for unsecured facility. unsecured facility. (b) Effective Rate of Interest: Existing Clause Modified Clause Effective Rate of interest Effective Rate of interest charged to MSE borrowers charged to MSE borrowers under this arrangement upto under this arrangement upto a maximum of 18% shall be a maximum of 21% shall be eligible for coverage. eligible for coverage. Bankers Plusupdates Regulatory BANKERS PLUS REGULATORY - JAN 2024 UPDATES 7 (c) Any MLI can avail guarantee coverage for their portion of credit facility: Regulatory Existing Updates Clause Modified Clause RTGS No such clause. Any Member Lending institution can lodge guarantee claim even though other partner does not wish to claim the guarantee cover after account turns NPA. (d) Concession in Annual guarantee Fee: Following categories have been identified for additional concession/relaxation in guarantee fee & extent of guarantee coverage. P which is aGeographic subsidiary on. Category Social MSE Status Target Women/SC/ North Eastern ZED certified Group ST/ Person including Sikkim, with UT of J&K, Ladak disability (Upto Rs. 50 (PWD)/ lakh)/Aspirational Agniveers districts Concession 10% 10% 10% in Fee An MSE falling in all the above three categories shall be eligible for maximum discount of 30% on standard rate. The applicable slabs of guarantee fee payable are, 0-10 lakh- 0.37%, Above 10 lakh upto 50 lakh -0.55%, Above 50 lakh upto 1 crore- 0.60% & Above 1 crore upto 2 crore- 1.20%. Bankers Plusupdates Regulatory BANKERS PLUS REGULATORY - JAN 2024 UPDATES 8 (e) Extent of Guarantee Coverage : Category (Including Maximum extent of guarantee Regulatory Updates Trading activity) coverage (where guaranteed RTGS credit facility is) Upto >Rs. 5 lakh >Rs. 50 Rs. 5 & Upto Rs. lakh and lakh 50 lakh Upto Rs. 500 lakh Micro Enterprises 85% 75% 75% MSEs located in North 80% East Region (including Sikkim, UT of J,K & Ladak) P which is a subsidiary on. Women/SC/ ST/ Person 85% with disability (PWD)/MSEs located in aspirational district/ promoted by Agniveers. All other category of 75% borrower The new/modified guidelines will be effective from January 01, 2024. Under Co-lending model, banks and NBFCs will share the credit exposure in the ratio of 80:20 and NBFC will act as a point for customer interface. Bankers Plusupdates Regulatory BANKERS PLUS REGULATORY - JAN 2024 UPDATES 9 CGTMSE- Modification in RTGS Regulatory Updates Scheme guidelines As per the CGTMSE guidelines, lock-in-period for invocation of guarantee is 18 months. In the recent modification, CGTMSE has decided to reduce the lock-in-period in respect of loans upto 36 months and loan amount upto Rs. 10 lakh from 18 months to 9 months. The revised guidelines is effective from December 15,2023. In order to promote entrepreneurship and boost the number of MSEs in „Identified Credit P which Deficient on. is a subsidiary Districts (ICDDs)‟ (which are identified by RBI), CGTMSE has recently announced special benefits. MSE borrowers situated in ICDDs would get 10% reduction in standard rates of guarantee fees in addition to other special benefits related to social category and Zed certification. Further the extent of guarantee cover is increased by 5% over and above the applicable guarantee coverage (i.e. for guarantee coverage of 75%, the coverage would be 80%, for 85% it would be 90%). Presently there are 184 districts have been identified as credit deficient by RBI. In addition to these, ceiling on guarantee coverage provided for borrowers of Regional Rural Banks and State Financial Corporation has been increased from Rs. 50 lakh to Rs. 200 lakh with effect from January 1, 2024. Bankers Plusupdates Regulatory BANKERS PLUS REGULATORY - JAN 2024 10 UPDATES Foreign Exchange Regulatory Updates Management (Receipt & Payment) RTGS Regulations, 2023 RBI has recently issued Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023 which are being effective from 20/12/2023. The receipt and payment between a person resident in India and a person resident outside India shall, unless provided otherwise, be made through an Authorised Bank or Authorised Person and in the manner as specified below: (1) Trade Transaction: Receipt/payment P which is a subsidiary on. for export to or import from the countries given below of eligible goods and services shall be made as under, (a) Nepal and Bhutan - In Indian Rupees provided that in case of exports from India where the importer in Nepal has been permitted by the Nepal Rashtra Bank to make payment in foreign currency, such receipts towards the amount of the export may be in foreign currency. (b) Member countries of ACU, other than Nepal and Bhutan through ACU mechanism or as per RBI guidelines through ACU banks. In case of imports where the goods are shipped to India from a member country of the ACU (other than Nepal and Bhutan) but the supplier is resident of a country other than a member country of the ACU, the payment may be made In Indian Rupees or in any foreign currency. Bankers Plusupdates Regulatory BANKERS PLUS REGULATORY - JAN 2024 11 UPDATES (2) Transactions other than trade transactions: receipt and payment shall be made as under, Regulatory (a) Nepal Updates and Bhutan - In Indian Rupees provided that in case of overseas investment RTGS in Bhutan, payment may also be made in foreign currency; (b) Other Countries – In Indian Rupees or any foreign currency. (3) Payment and receipt in India for any current account transaction, other than a trade transaction, between any person resident in India and a person resident outside India, who is on a visit to India, may be made only in Indian Rupees. Regulatory updates BANKERS P which is a subsidiary on. PLUS - JAN 2024 Processing of e-mandates for recurring transactions RBI has provided relaxation in Additional Factor of Authentication (AFA) while processing e-mandates or standing instructions on cards, PPIs & UPI, for subsequent recurring transactions with values up to ₹15,000/-. RBI has recently decided to increase this limit from ₹15,000/- to ₹1,00,000/- per transaction for the following categories: (a) subscription to mutual funds, (b) payment of insurance premiums, and (c) credit card bill payments. Bankers Plusupdates Regulatory BANKERS PLUS REGULATORY - JAN 2024 12 UPDATES CIMS Submission of Regulatory Updates Returns through RTGS CIMS RBI has launched next generation data warehouse viz., the Centralized Information Management System (CIMS) in June 2023 which is intended to support data collection and analysis. Recently RBI has decided to discontinue submission of the return through the XBRL system and shift to Centralized Information Management System (CIMS), with effect from December 26, 2023. Following reporting is migrated to CIMS system. P which is a subsidiary on. Type of return Reporting code Quarterly statement on issuance of guarantees on R131 behalf of their clients for availing Trade Credits for imports in India Statement E- Total remittances received every R129 quarter under Rupee Drawing Arrangement. Half yearly return on quantity and value of gold R132 imported by the designated agencies and payment details. Monthly report on quantity and value of gold R133 imported by the designated agencies and payment details with cumulative position. Monthly LRS returns-submitted on or before fifth of R089 the succeeding month LRS daily returns R010 Bankers Plusupdates Regulatory BANKERS PLUS REGULATORY - JAN 2024 13 UPDATES Reverse Repo transactions - Regulatory Updates Reporting in Form RTGS „A‟ Return Banks to submit ‘Form A‟ Return for reporting of Reverse Repo transactions undertaken by them. On a review, RBI has been decided to revise the instructions in this regard and banks should report the Reverse Repo transactions carried out with non-banks (other institutions) as under, (a) For original tenors up to and inclusive of 14 days - Not required to be reported in Form A. (b) For original tenors more than 14 days - Item VI(a) of P which is a subsidiary on. Form A [i.e. Loans, cash credits and overdrafts under Bank Credit in India (excluding inter-bank advances)]. The guidelines regarding reporting Reverse repo transactions with banks will remain the same and is as under, i. For original tenors up to and inclusive of 14 days (a) Form A (under item - Money at call and short notice) and; (b) Form A (under item - Inter Bank Assets) ii. For original tenors more than 14 days (a) Form A (under item - Advances to banks) and; (b) Form A (under item- under Inter Bank Assets) Important Notice The copy of this e-magazine is intended for the use of Subscribers only. Unauthorized sharing is prohibited and liable for appropriate action taken by the publisher. Bankers Plusupdates Regulatory BANKERS PLUS REGULATORY - JAN 2024 14 UPDATES Investments in Regulatory Updates Alternative RTGS Investment Funds (AIFs) As per SEBI’s definition, Alternative Investment Fund (AIF) means any fund established or incorporated in India which is a privately pooled investment vehicle which collects funds from sophisticated investors, whether Indian or foreign, for investing it in accordance with a defined investment policy for the benefit of its investors. Banks and Financial Institutions make investments in units of AIFs as part of their regular P which investment is a subsidiary on.operations. Since, these AIFs invest in other companies or business entities there are regulatory concerns on exposure limits. In order to address concerns relating to possible evergreening through this route, RBI has recently provided the following advisory, (a) Banks/FIs shall not make investments in any scheme of AIFs which has downstream investments either directly or indirectly in a debtor company of the Banks/FIs. The debtor company of the Banks/FIs, for this purpose, shall mean any company to which the Bank/FI currently has or previously had a loan or investment exposure anytime during the preceding 12 months. (b) If an AIF scheme, in which Bank/FI is already an investor, makes a downstream investment in any such debtor company, then the Bank/FI shall liquidate its investment in - Bankers Plusupdates Regulatory BANKERS PLUS REGULATORY - JAN 2024 15 UPDATES - the scheme within 30 days from the date of such downstream investment by the AIF. (c) If Regulatory Bank/FI have Updates already invested into such schemes RTGS having downstream investment in their debtor companies as on date, the 30-day period for liquidation shall be counted from 19.12.2023. Bank/FI shall forthwith arrange to advise the AIFs suitably in the matter. (d) In case Bank/FI is not able to liquidate their investments within the above-prescribed time limit, they shall make 100 percent provision on such investments. (e) In addition, investment by REs in the subordinated units of any AIF scheme with a „priority distribution model‟ shall be subject to full deduction from Banks/FIs capital funds. P which is a subsidiary on. Two Best and simplified books to practically learn and understand Balance sheet, financial statements analysis & Credit If both books ordered together price is Rs. 660/- Click here to order with single click Rs. 350/- Rs. 360/- Bankers Plusupdates Regulatory BANKERS PLUS REGULATORY - JAN 2024 16 UPDATES Enhancing UPI transaction limit & Regulatory Updates introduction of RTGS UPI TAP & PAY Unified Payments Interface (UPI) continues to grow in popularity. The transaction limit for UPI is capped at ₹1 lakh, except a few categories like Capital Markets (AMC, Broking, Mutual Funds, etc.), Collections (Credit card payments, Loan re-payments, EMI), Insurance etc, where the transaction limit is ₹2 lakh. In December 2021, the transaction limit for UPI payments for Retail Direct Scheme and for IPO subscriptions was P increased which is a to ₹5 lakh. on. subsidiary To encourage the use of UPI for medical and educational services, RBI has recently enhanced the limit for payments to hospitals and educational institutions from ₹1 lakh to ₹5 lakh per transaction. This enhanced limit shall only be applicable to „Verified merchants‟. In addition to the existing models (Scan & pay, Pay to contact, UPI number etc) of UPI payments, NPCI has recently introduced a new mode ‘UPI Tap & Pay’. On Tap, the transactions amount of Rs. 500 and less will be processed through UPI Lite if enabled by the user, if not the transaction shall be processed with UPI PIN. Means, On Tap the transaction amount of more than Rs. 500 will need UPI PIN and will be processed online. This new system is expected to Go-live by 31st January 2024. Bankers Plusupdates Regulatory BANKERS PLUS REGULATORY - JAN 2024 17 UPDATES e-Rupi voucher- Regulatory Updates RTGS Enhancement in limits e-RUPI voucher was introduced in the year 2021 for cash less digital Direct Benefit Transfer process. Since then the scope of this product has been enhanced. NPCI has recently revised the limits of loading permitted in e-RUPI vouchers. (a) If government is a sponsor- Rs. 1,00,000 per voucher. (b) If corporate is a sponsor- Rs. 50,000 per voucher. (c) If an individual is a sponsor- Rs. 10,000 per voucher. At any point of time the balance P which in the on. is a subsidiary voucher should not exceed these limits. For Government and corporate sponsors UPI apps can issue one time use (non-reloadable) or Multiple time use (reloadable/non-reloadable) e-rupi voucher. For individual sponsors UPI app shall not issue reloadable vouchers. The validity of e-rupi voucher shall be one year. BANKERS PLUS Please click here to give your valuable feed back Bankers Plusupdates Regulatory BANKERS PLUS REGULATORY - JAN 2024 18 UPDATES Card-on-File Tokenisation - Tokenisation throughRTGS Card Issuing Banks Tokenisation is the process of replacing a card’s 16-digit number on the plastic card with a unique alternate card number, or ‘Token’ which shall be unique for a combination of card, token requestor and device. The CoFT services are being currently provided by card issuers and card networks. RBI has recently decided to enable Card-on-File Tokenisation (CoFT) directly through card issuing banks / institutions P which also.on.This will provide is a subsidiary cardholders with an additional choice to tokenise their cards for multiple merchant sites through a single process. CoFT through card issuers – Requirements are, (a) Generation of CoF Tokens for a card, through the card issuer, can be enabled through mobile banking and internet banking channels. (b) CoFT generation shall be done only on explicit customer consent, and with AFA validation. (c) The tokens thus generated shall be made available on the merchant’s payment page, in the cardholder’s account with the merchant. (d) The cardholder may tokenise the card at any time of his convenience, either on receipt of the new card or later. The card token so issued may be either by the card network or the issuer or both. Bankers Plusupdates Regulatory BANKERS PLUS REGULATORY - JAN 2024 19 UPDATES Continuation of Interest Equalisation RTGS Scheme Union Cabinet has recently approved an additional allocation of Rs 2500 Cr over and above current allocation of Rs. 9538 crore for continuation of Interest Equalisation Scheme till 30th June 2024. This would help exporters from identified sectors and all MSME manufacturer exporters to avail pre and post shipment Rupee export credit at competitive rates. Benefit shall be continued tilla30.06.2024 P which is to manufacturer and subsidiary on. merchant exporters of the identified 410 tariff lines and to all manufacturer exporters from MSME sectors at rates as specified below: S.No Category of Exporters Rate of interest Equalisation 1 Manufacturer & Merchant Exporters listed in 2% the 410 tariff lines 2 MSME exporters of all tariff lines 3% The Scheme has now been made fund limited, and benefit to individual exporters has been capped at Rs 10 Cr per annum per IEC (Import Export Code). In addition, the banks that lend to exporters at an average rate of more than Repo + 4% would be debarred under the Scheme. Bankers Plusupdates Regulatory BANKERS PLUS REGULATORY - JAN 2024 20 UPDATES Global Systemically Regulatory Updates Important Banks RTGS (G-SIBs)-2023 The Financial Stability Board (FSB), in consultation with Basel Committee on Banking Supervision (BCBS) and national authorities, has identified the 2023 list of global systemically important banks (G-SIBs) recently. The list for 2023 includes 29 G-SIBs, one less than the 2022 list. The changes in the allocation of the institutions to buckets largely reflect the effects of changes in underlying activity of banks, P which with the is a subsidiary on. activity category cross-jurisdictional being the largest contributor to score movements. FSB member authorities apply the following requirements to G- SIBs, (a) Higher capital buffer requirement from 1 January 2025. (b) Total Loss-Absorbing Capacity (TLAC) as per Basel 3 norms. (c) Resolvability which include group-wide resolution planning and regular resolvability assessments. (d) Higher supervisory expectations which includes e supervisory expectations for risk management functions, risk data aggregation capabilities, risk governance and internal controls. The list of G-SIBs for the year 2023 are, Bankers Plusupdates Regulatory BANKERS PLUS REGULATORY - JAN 2024 21 UPDATES Bucket (Additional CET 1 G-SIBs in alphabetical order within each bucket requirement) 5 (Empty) Regulatory Updates (3.5%) RTGS 4 JP Morgan Chase (2.5%) 3 Bank of America (2.0%) Citigroup HSBC 2 Agricultural Bank of China (1.5%) Bank of China Barclays BNP Paribas China Construction Bank Deutsche Bank Goldman Sachs Industrial P which is and Commercial a subsidiary on. Bank of China Mitsubishi UFJ FG UBS 1 Bank of Communications (BoCom) (1.0%) Bank of New York Mellon Groupe BPCE Groupe Crédit Agricole ING Mizuho FG Morgan Stanley Royal Bank of Canada Santander Société Générale Standard Chartered State Street Sumitomo Mitsui FG Toronto Dominion Wells Fargo Bankers Plusupdates Regulatory BANKERS PLUS REGULATORY - JAN 2024 22 UPDATES PIDF – Extension of Regulatory Updates Scheme and RTGS Enhancements RBI has established Payments Infrastructure Development Fund (PIDF) in order to increase the number of acceptance devices multi-fold in the country from January 1, 2021. As per the announcement made under latest Monetary policy, the PIDF Scheme is being extended by two years, i.e., upto December 31, 2025. Further following enhancements are being made to the Scheme: (a) The beneficiaries P which identified as on. is a subsidiary part of the PM Vishwakarma Scheme, across the country, shall be included as merchants for deployment under the PIDF Scheme. (b) The PIDF Scheme presently subsidises deployment of acceptance infrastructure based on category of device - physical or digital. RBI has decided to enable other contemporary devices, viz., Soundbox devices and Aadhaar-enabled biometric devices eligible for subsidy under the Scheme, for installations made from October 01, 2023 onwards. (c) The amount of subsidy for devices deployed in special focus areas, viz., North Eastern States, Union Territories of Jammu & Kashmir and Ladakh, is increased from 75% to 90% of the total cost, irrespective of the type of device, for installations made from October 01, 2023 onwards. Bankers Plusupdates Regulatory BANKERS PLUS REGULATORY - JAN 2024 23 UPDATES Review of National Development Regulatory Updates RTGS Banks under Basel III framework The Net Stable Funding Ratio (NSFR) and Liquidity Coverage Ratio (LCR) are significant components of the Basel III reforms. NABARD, NHB and SIDBI are considered as National Development Banks (NDBs) under the NSFR framework. On a review, RBI has been decided that the other All India Financial Institutions (AIFIs) i.e. EXIM Bank and National Bank for Financing Infrastructure and Development (NaBFID) shall also P which be isconsidered a subsidiaryason.NDBs for NSFR computation. Further, unencumbered loans to NDBs with a residual maturity of one year or more that would qualify for a 35 per cent or lower risk weight under the Standardised Approach for credit risk shall be assigned a Required Stable Funding (RSF) factor of 65 per cent (as against 100 per cent currently). The NSFR is defined as the amount of available stable funding relative to the amount of required stable funding. “Available stable funding” (ASF) is defined as the portion of capital and liabilities expected to be reliable over the time horizon considered by the NSFR, which extends to one year. The amount of stable funding required of a specific institution is a function of the liquidity characteristics and residual maturities of the various assets held by it. Bankers Plusupdates Regulatory BANKERS PLUS REGULATORY - JAN 2024 24 UPDATES Penal Charges in Regulatory Updates Loans- Extension of RTGS Implementation Timeline RBI has issued guidelines on Fair Lending Practice - Penal Charges in Loan Accounts in August 2023 and instructed banks to replace Penal interest with Penal charges and not to capitalize penal charges if not paid by the customers. Banks were also instructed to implement these changes in their processes from January 1, 2024. However, considering that certain clarifications and additional P which time has been sought byissome a subsidiary banks on. to reconfigure their internal systems and operationalize the circular, RBI has decided to extend this time line by another 3 months. Accordingly, banks shall ensure that the instructions are implemented in respect of all the fresh loans availed from April 1, 2024 onwards. In the case of existing loans, the switchover to new penal charges regime shall be ensured on the next review/ renewal date falling on or after April 1, 2024, but not later than June 30, 2024. Please click here to give your valuable feed back Bankers Plusupdates Regulatory BANKERS PLUS REGULATORY - JAN 2024 25 UPDATES RBI Internal Regulatory Updates Ombudsman RTGS Directions, 2023 RBI has introduced Internal Ombudsman mechanism in regulated entities with a view to strengthen the Internal Grievance Redress system and speedy resolution of customer complaints by enabling a review before their rejection, by an apex level authority within the Regulated Entity. RBI has recently issued Master Direction on Internal Ombudsman which P which is a subsidiary is applicable on.regulated entities to all it’s with effect from December 29, 2023. The key highlights of these guidelines are, (a) The guidelines are applicable to all banks having 10 or more branches in India, Deposit-taking NBFCs (NBFCs-D) with 10 or more branches and Non-Deposit taking NBFCs (NBFCs-ND) with asset size of Rs.5,000 crore and above and having public customer interface. (b) The Internal Ombudsman shall either be a retired or serving officer, in the rank equivalent to a General Manager of another bank / Financial Sector Regulatory Body, having necessary skills and experience of minimum seven years. (c) The Internal Ombudsman shall previously not have been employed, nor presently be employed, by the regulated entity or the regulated entity’s related parties. Bankers Plusupdates Regulatory BANKERS PLUS REGULATORY - JAN 2024 26 UPDATES (d) Regulated entity may appoint more than one Internal Ombudsman depending on the volume of complaints received Regulatory Updates by them. RTGS (e) The Internal Ombudsman shall not be over 70 years of age before the completion of the tenure. (f) Regulated entity may appoint one or more Deputy Internal Ombudsman depending on the volume of complaints received by them, who would assist the Internal Ombudsman in the quality disposal of the complaints. (g) The Deputy Internal Ombudsman shall either be a retired or serving officer, not below the rank of DGM of another bank/FI having necessary skills and experience of minimum five years and should not be more than 70 years of P which is age before the completion of athe subsidiary tenure. on. (h) Deputy Ombudsman reports to Internal Ombudsman. In the temporary absence of the Internal Ombudsman, not exceeding a period of 15 working days, the Deputy Internal Ombudsman may function as the Internal Ombudsman for the limited purpose of reviewing the rejected complaints. (i) In the absence of Internal Ombudsman banks need to make temporary arrangement with prior intimation to CEPD department of RBI. Alternative arrangement can be made if the period of absence is more than 15 days. However, such temporary absence should not exceed 30 days. (j) The appointment of the Internal Ombudsman / Deputy Internal Ombudsman is of contractual nature and for a minimum & maximum period of 3 and 5 years respectively and not eligible for reappointment. Bankers Plusupdates Regulatory BANKERS PLUS REGULATORY - JAN 2024 27 UPDATES (k) The regulated entity shall conduct an internal audit of the implementation of these Internal Ombudsman directions on a yearly Regulatory basis. Updates RTGS (l) The Internal Ombudsman shall not handle complaints received directly from the complainants or members of the public but deal with the complaints that have already been examined by the regulated entity but have been partly or wholly rejected by the regulated entity. (m) The Internal Ombudsman shall furnish periodic reports (including the analysis of complaints) on his / her activities to the Committee of the Board handling customer service and protection, preferably at quarterly intervals, but not less than half yearly intervals. P which is a subsidiary Regulatory updates BANKERS on. PLUS - JAN 2024 Classification of MSMEs The revised criteria for classification of enterprises as MSMEs were notified by the Ministry of MSME in June 2020. Based on the clarification received from Ministry, RBI has recently made following amendment in it’s Master Direction. “All the above enterprises are required to register online on the Udyam Registration portal and obtain „Udyam Registration Certificate‟. For PSL purposes banks shall be guided by the classification recorded in the Udyam Registration Certificate (URC)”. Bankers Plusupdates Regulatory BANKERS PLUS REGULATORY - JAN 2024 28 UPDATES Minimum Holding Period exemption Regulatory Updates RTGS for Transfer of Receivables RBI has issued Master Direction on Transfer of Loan Exposures in the year 2021 to facilitate robust secondary market for loan accounts. As per these directions the transferor can transfer loans only after a minimum holding period (MHP) which is 3 months in case of loans with tenor of up to 2 years and 6 months in case of loans with tenor of more than 2 years. In order to develop P which secondary market is a subsidiary on. operations of receivables acquired as part of „factoring business‟ RBI has recently decided that transfer of such receivables by eligible transferors will be exempted from MHP requirement, subject to fulfilment of the following conditions: (a) The residual maturity of such receivables, at the time of transfer, should not be more than 90 days, (b) the transferee conducts proper credit appraisal of the drawee of the bill, before acquiring such receivables. Important Notice The copy of this e magazine is intended for the use to Subscribers only. Please stop Unauthorized sharing. If anyone receive the same from unauthorized sources (Other than from mobile numbers 9819952288/9916049194 or email [email protected], please desist from downloading. Any unauthorized sharing prompts for an appropriate action from the publisher. Bankers Plusupdates Regulatory BANKERS PLUS REGULATORY - JAN 2024 29 UPDATES Financial Benchmark Regulatory Updates RTGS Administrators Directions- 2023 Benchmarks mean prices, rates, indices, values or a combination thereof related to financial instruments that are calculated periodically and used as a reference for pricing, valuation or settlement of financial instruments or any other financial contract. RBI has recently issued Financial bench mark administrators Directions 2023. Key highlights of these directions are, (a) „Financial Benchmark Administrator‟ (FBA) means a P which is a subsidiary on. person who controls the creation, operation and administration of benchmark(s). (b) „Significant benchmark‟ means any benchmark notified by the Reserve Bank as a ‘significant benchmark’ under these Directions. (c) A FBA shall be a company incorporated in India. An FBA administering a ‘significant benchmark‟ shall maintain a minimum net-worth of ₹5 crore at all times. An FBA administering a „non-significant benchmark‟ shall maintain a minimum net-worth of ₹1 crore at all times. (d) FBAs shall develop an appropriate oversight function for regular review of various aspects of the ‘significant benchmark’ determination process through „Oversight Committee‟. No person shall be a member of the Oversight Committee for more than five years irrespective of the number of terms. Bankers Plusupdates Regulatory BANKERS PLUS REGULATORY - JAN 2024 30 UPDATES RBI (Government Securities Lending) RTGS Directions, 2023 Government Securities Lending (GSL) transaction refers to dealing in Government securities involving lending of eligible Government securities, for a fee, by the owner of those securities (the lender) to a borrower, on the collateral of other Government securities, for a specified period of time, with an agreement that the borrower shall return to the lender the security borrowed and the latter shall return the security received as collateral to the P which is aformer at the subsidiary on.end of the agreed period. RBI has recently issued directions in this regard and the key highlights of these guidelines are, (a) Government securities issued by the Central Government excluding Treasury Bills shall be eligible for lending/borrowing under a GSL transaction. (b) Securities obtained under a repo transaction, including through Reserve Bank‟s Liquidity Adjustment Facility, or borrowed under another GSL transaction shall also be eligible to be lent under a GSL transaction. (c) The minimum tenor of a GSL transaction shall be one day and the maximum tenor shall be the maximum period prescribed to cover short sales. (d) All GSL transactions shall settle on a Delivery versus Delivery basis. The first leg of all GSL transactions shall settle either on a T+0 or T+1 basis.  Bankers Bankers Plus-March Plus317 2022 BankersREGULATORY Plusupdates UPDATES Regulatory BANKERS REGULATORY PLUS Bankers - JAN Volume UPDATES 2024 II, Plus Issue REGULATORY UPDATES June 2021 (e) All GSL transactions shall settle through July 2021 Clearing Corporation of India Ltd. (CCIL) or any other central counterparty or clearing arrangement approved by the RTGS Reserve Bank for the purpose. (f) All GSL transactions shall be reported to the CCIL, or any other agency approved by the Reserve Bank for the purpose, within 15 minutes of execution, by both counterparties to the transaction or by the ETP operator concerned, as the case may be. (g) Participants undertaking GSL transactions shall enter into a standard bilateral master GSL agreement, with their counterparty, as per the documentation finalized by FIMMDA. SBICAP which Regulatory is a subsidiary ofBANKERS updates the StatePLUS Bank -of India JAN has 2024 set up a SPV (SLS Trust) to manage this operation. Deposit of contribution to NPS Volume II, Issue 7 through REGULATORY UPI UPDATES PFRDA has recently allowed National Pension System (NPS) subscribers to deposit contributions through Unified Payments Interface (UPI) QR code under D-Remit scheme. This advancement aims to simplify the contributionClick here process, to making it more accessible and efficient for NPS participants. Subscribe Under this, Contributions received by the Trustee Bank (TB) before 9:30 AM will be invested on the same day, optimizing returns to the investors.  Bankers Bankers Plus-March Plus327 2022 BankersREGULATORY Plusupdates UPDATES Regulatory BANKERS REGULATORY PLUS Bankers - JAN Volume UPDATES 2024 II, Plus Issue REGULATORY UPDATES June 2021 July 2021 Key policy rates as on 31.12.2023 RTGS Key Rate-As on 31.10.2023 31.12.2023 Policy Repo Rate 6.50% 6.50% Fixed Reverse Repo Rate 3.35% 3.35% Standing Deposit Facility Rate 6.25% 6.25% MSF Rate 6.75% 6.75% Bank Rate 6.75% 6.75% CRR 4.50% 4.50% SLR SBICAP which is a subsidiary of the18.00% 18.00% State Bank of India has Base Rate 8.95-10.10% 8.95-10.25% set up a SPV (SLS Trust) to manage this operation. MCLR (Overnight) 7.95% - 8.50% 7.95% - 8.50% Savings Deposit Rate 2.70% - 3.00% 2.70% - 3.00% Term Deposit Rate > 1 Year 6.00% - 7.25% Volume 6.00% II,-Issue 7.25%7 REGULATORY UPDATES BANKERS PLUS-MONTHLY E-MAGAZINE Scan the QR code to Subscribe/Renew Annual subscription fee-Rs. 300/- Click here Whatsapp payment to reciept, email id & Subscribe whatsapp number to 9819952288 to enroll/renew.  Volume II, Issue 11 BANKERS PLUS 33 Volume II- Issue 8 JUNE 2023, Volume IV, Issue 3 Volume IV, Volume II, Issue 6 10 Issue January 2024 December 2021 RTGS Subscribers Copy- Not for free circulation Industry Updates REGULATORY UPDATES SBICAP which is a subsidiary of the State Bank of India has set up a SPV (SLS Trust) to manage this operation. Bankers Plus-Monthly e- magazine Click below to subscribe/Renew Annual Subscription charges: Rs. 300 To subscribe click here Share your Feed backs/ Suggestions to [email protected] Industry updates Cover BANKERS PLUS page - JAN Article 2024 34 Expert committee on Transition Finance at IFSCA International Financial Services Centers Authority (IFSCA) has undertaken numerous regulatory initiatives for development of financial instruments at IFSC to facilitate capital flows towards climate action in India and other developing countries. These initiatives have led to listing of $10.1 billion ESG-labelled debt securities, issuance of more than $700 million green/sustainable loans, and set-up of an ESG Engagement Fund at IFSC. email and Subscribe online at Despite the significant global growth in instruments for financing environmentally friendly activities, in the past few years, the mobilization of funds has been more inclined to certain sectors of the economy, whose activities are related to near-zero carbon emissions. The need of the hour is to fund the transition journey of all sectors, especially hard-to-abate sectors, in order to achieve Paris agreement goals and Sustainable Development Goals. Taking into consideration the critical need for transition finance, IFSCA has formed an expert committee on Transition Finance consisting of representation from industry, to recommend a regulatory framework for transition finance instruments and measures to promote transition finance through GIFT IFSC under chairmanship of Mr. Dhruba Purkayastha. Industry updates INDUSTRY BANKERS Cover UPDATES PLUS page - JAN Article 2024 35 India-Korea Electronic Origin Data Exchange System (EODES) Central Board of Indirect Taxes & Customs (CBIC), has launched the India-Korea Electronic Origin Data Exchange System (EODES) recently. The Electronic Origin Data Exchange System is aimed at facilitating the smooth implementation of the India-Korea Comprehensive Economic Partnership Agreement (CEPA) by way of electronic exchange of origin information between the two customs administrations email and Subscribein online respect at of the goods traded under the CEPA. The data fields in a Certificate of Origin (CoO) shall be electronically shared by the exporting customs administration with the importing customs, as soon as the certificate is issued. This would facilitate faster clearance of imported goods. BANKERS PLUS (Monthly e-magazine) Click below to subscribe/Renew Annual Subscription charges: Rs. 300 To subscribe click here Industry updates Cover BANKERS PLUS page - JAN Article 2024 36 Highlights of Financial Stability Report, Dec - 2023 RBI has recently released 28th issue of the Financial Stability Report (FSR), which reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC) on risks to financial stability and the resilience of the Indian financial system. FSR is released once in half year. The key highlights of the report are, (a) The capital email to risk-weighted and Subscribeassets onlineratio at (CRAR) and the common equity tier 1 (CET1) ratio of scheduled commercial banks (SCBs) stood at 16.8 per cent and 13.7 per cent, respectively, in September 2023. (b) SCBs’ gross non-performing assets (GNPA) ratio continued to decline to a multi-year low of 3.2 per cent and the net non-performing assets (NNPA) ratio to 0.8 per cent in September 2023. (c) Macro stress tests for credit risk reveal that SCBs would be able to comply with minimum capital requirements, with the system-level CRAR in September 2024 projected at 14.8 per cent, 13.5 per cent and 12.2 per cent, respectively, under baseline, medium and severe stress scenarios. (d) The resilience of the NBFCs sector improved with CRAR at 27.6 per cent, GNPA ratio at 4.6 per cent and return on assets (RoA) at 2.9 per cent, respectively, in September 2023. Industry updates INDUSTRY BANKERS Cover UPDATES PLUS page - JAN Article 2024 37 Memorandum with RBI & Bank of England The Reserve Bank of India (RBI) and the Bank of England (BoE) have recently signed a Memorandum of Understanding (MoU) concerning cooperation and exchange of information in relation to the Clearing Corporation of India Limited (CCIL). The MoU establishes a framework for the BoE to place reliance on RBI’s regulatory and supervisory activities while safeguarding UK emailfinancial stability. and Subscribe onlineThe at MoU also demonstrates the importance of cross-border cooperation to facilitate international clearing activities and the BoE’s commitment to deference to other regulators’ regimes. This MoU confirms the interests of both the authorities in enhancing cooperation in line with their respective laws and regulations. It will also enable the BoE to assess the application of CCIL for recognition as a third country Central Counterparty (CCP) which is a pre-requisite for UK based banks to clear transactions through CCIL. The Clearing Corporation of India Ltd. (CCIL) was set up in April, 2001 to provide guaranteed clearing and settlement functions for transactions in Money, G-Secs, Foreign Exchange and Derivative markets. CCIL is also the Trade Repository for all OTC transactions in the Forex, Interest Rate and Credit derivative transactions. Industry updates Cover BANKERS PLUS page - JAN Article 2024 38 Setting up of Fintech Repository and Cloud Facility To ensure a resilient FinTech sector and promote best practices, regulators and stakeholders need to have relevant and timely information on FinTech entities, including the nature of their activities. FinTechs are using emerging technologies like Distributed Ledger Technology (DLT), Artificial Intelligence / Machine Learning (AI / ML) etc. For better understanding of the developments in the FinTech ecosystem with an objective to appropriately support the email and Subscribe online at sector, RBI has proposed to set-up a Repository for capturing essential information about FinTechs, encompassing their activities, products, technology stack, financial information etc. The Repository will be operationalised by the Reserve Bank Innovation Hub (RBIH) in April 2024 or earlier. Banks and financial entities are maintaining an ever- increasing volume of data. Many of them are utilising various public and private cloud facilities for storage. Considering the issues with safety of data, Reserve Bank is working on establishing a cloud facility for the financial sector in India. The cloud facility will be set up and initially operated by Indian Financial Technology & Allied Services (IFTAS), a wholly- owned subsidiary of RBI. This cloud facility is intended to be rolled out in a calibrated fashion in the medium term. 28 Industry updates Cover BANKERS PLUS page - JAN Article 2024 39 Launch of “Paat-Mitro” app to facilitate jute farmers To provide important information about Minimum Support Price (MSP) and agronomy to jute farmers, the Ministry of Textiles launched “Paat-Mitro” - a mobile application, developed by The Jute Corporation of India Limited (JCI) recently. The application is available in 6 languages. In addition to, the latest agronomic practices and Minimum Support Prices (MSP); Jute Gradation Parameters, Farmer- centric schemesemail like „Jute-ICARE‟, and Subscribeweather online atforecasts, JCI’s Purchase Centers’ locations, Procurement Policies are also made available in the app. Farmers will also be able to track status of their payments for the raw jute sold to JCI under MSP Operation. Latest technology feature like Chatbot is included for their queries through this mobile application “Paat-Mitro”. BANKERS PLUS (Monthly e-magazine) Click below to subscribe/Renew Annual Subscription charges: Rs. 300 To subscribe click here Industry updates INDUSTRY BANKERS Cover UPDATES PLUS page - JAN Article 2024 40 Revision of Interest Rates for Small Savings Schemes Ministry of Finance has revised the rates of interest on various Small Savings Schemes for the fourth quarter of financial year 2023-24 starting from 1st January, 2024 and ending on 31st March. The rate of interest applicable to various small saving schemes is listed below, Instrument ROI from ROI from 01.10.2023 to 01.01.2024 to 31.12.2023 31.03.2024 email and Subscribe online at Savings Deposit 4.0 4.0 1 Year Time Deposit 6.9 6.9 2 Year Time Deposit 7.0 7.0 3 Year Time Deposit 7.0 7.1 5 Year Time Deposit 7.5 7.5 5 Year Recurring Deposit 6.7 6.7 Senior Citizen Savings Scheme 8.2 8.2 Monthly Income Account Scheme 7.4 7.4 National Savings Certificate 7.7 7.7 Public Provident Fund Scheme 7.1 7.1 Kisan Vikas Patra 7.5 (will mature 7.5 (will in 115 mature in 115 months) months) Sukanya Samriddhi Account 8.0 8.2 Scheme 30 Industry updates INDUSTRY BANKERS Cover UPDATES PLUS page - JAN Article 2024 41 Climate Resilience in Indian Agriculture NABARD and Asian Development Bank have launched an initiative to facilitate climate action in India’s agriculture, natural resources, and rural development (ANR) sector. Under this initiative, a Technical Support Unit (TSU) has been set up in NABARD with the partnership of Bill and Melinda Gates Foundation (BMGF) to enable NABARD to address the challenges posed by climate change. As per an estimate, Close to 55% of assets in the Indian Banking sector is prone to climate risks. Intellecap Advisory email and Subscribe online at Services Private Limited has been appointed to manage this Technical Support Unit. Two Best and simplified books to practically learn and understand Balance sheet, financial statements analysis & Credit If both books ordered together price is Rs. 660/- Click here to order with single click Rs. 350/- Rs. 360/- Industry updates INDUSTRY BANKERS Cover UPDATES PLUS page - JAN Article 2024 42 Digital Innovations/ developments in Banking Sector Reserve Bank of India has recently approved an 'Offline Retail Payments' product developed by HDFC Bank, in partnership with Crunchfish AB, for adoption by banks and other financial institutions. Under the 'On Tap' application facility for the theme 'Retail Payments' of the Regulatory Sandbox (RS), this product was developed. The RBI, in the statement, said the product may be considered for adoption by regulated entities, subject to compliance with applicable regulatory requirements. email and Subscribe online at Indian Banks’ Association (IBA) has recently informed that the Indian Banks‟ Digital Infrastructure Company (IBDIC) is currently working on scoping the implementation of domestic Letter of Credit (LC) issuance on blockchain as one of its use cases. Indian Banks’ Digital Infrastructure Company (IBDIC) Private Limited, with investments from 18 banks incorporated with the objective of providing a platform for exploring, building, and implementing digital solutions for the Indian financial services sector. IndusInd Bank has recently announced the launch of „IndusInd Bank eSvarna’, India’s first Corporate Credit Card on RuPay network. This launch positions IndusInd Bank as the first in the country to integrate UPI functionality with a Corporate Credit Card. Industry updates Cover BANKERS PLUS page - JAN Article 2024 43 India re-elected to International Maritime Organization In elections recently held for the 2024–25 biennium, India was re-elected to the International Maritime Organisation (IMO) Council with the highest tally. India's re-election falls under the Category of 10 states with "the largest interest in international seaborne trade", alongside Australia, Brazil, Canada, France, Germany, the Netherlands, Spain, Sweden, and the United Arab Emirates (UAE). India secured theemail and Subscribe large-scale online support of at the international community at the International Maritime Organisation for India to continue to serve the global maritime domain. The International Maritime Organisation (IMO) is the leading authority that regulates the maritime industry, which supports global trade, transportation, and all marine operations. India proposes to have dedicated IMO cell in India and appointment of a permanent representative at IMO headquarters, London. The International Maritime Organization is a specialized agency of the United Nations responsible for regulating shipping. The IMO was established following agreement at a UN conference held in Geneva in 1948 and the IMO came into existence ten years later, meeting for the first time on 17 March 1958 and head quartered at London. Industry updates Cover BANKERS PLUS page - JAN Article 2024 44 Report on Trend and Progress of Banking in India 2022-23 RBI has recently released the Report on „Trend and Progress of Banking in India 2022-23‟, a statutory publication in compliance with Section 36 (2) of the Banking Regulation Act, 1949. This Report presents the performance of the banking sector, including co-operative banks and non- banking financial institutions, during 2022-23 and 2023-24 so far. The major highlights of the report are, (a) The consolidated balance sheet of scheduled commercial banks (SCBs) inemail and expanded 2022-23 Subscribeby online 12.2atper cent, driven by credit to retail and services sectors; deposit growth also picked up, although it trailed credit growth. (b) The capital to risk weighted assets ratio (CRAR) of SCBs was 16.8 per cent at end-September 2023, with all bank groups meeting the regulatory minimum requirement and the common equity tier 1 (CET1) ratio requirement. (c) The improvement in asset quality of banks that began in 2018-19 continued during 2022-23 and H1:2023-24, with gross non-performing assets (GNPA) ratio at 3.2 per cent at end-September 2023. (d) The combined balance sheet of urban co-operative banks (UCBs) expanded by 2.3 per cent in 2022-23, driven by loans and advances. Their capital buffers and profitability improved through 2022-23 and Q1:2023-24. Industry updates INDUSTRY BANKERS Cover UPDATES PLUS page - JAN Article 2024 45 (e) Higher net interest income and lower provisioning boosted Net Interest Margin (NIM) and profitability in the year 2022-23. (f) The consolidated balance sheet of non-banking financial companies (NBFCs) expanded by 14.8 per cent in 2022-23, led by double digit credit growth. Profitability and asset quality of the sector also improved in 2022-23 and in H1:2023-24, even as the sector remained well-capitalised with CRAR higher than the regulatory requirement. (g) Fraud cases in the banking sector rose during the first half of the ongoing financial year even as the amount involved in frauds dropped significantly. The number of frauds in banks jumped to 14,483 during the April-September period of the email current fiscal from andin Subscribe 5,396 online at period last year. the corresponding However, the amount involved in the frauds was only 14.9% of the previous year's amount. The total amount involved dropped significantly from ₹17,685 crore during April- September last year to ₹2,642 crore in the same period this fiscal. BANKERS PLUS Monthly e-magazine Click below to subscribe/Renew Annual Subscription charges: Rs. 300 To subscribe click here  Cover page Volume II, Article Issue 7 BANKERS PLUS 46 JUNE 2023, Volume IV, Issue 3 Volume IV, Issue 10 January 2024 Subscribers Copy- Not for free circulation Knowledge Hub ANNUAL SUBSCRIPTION CHARGES-RS. 300/- Published in e-version only and shared through email and Subscribe online at LIST OF ARTICLES Sl.No Name of the Article Author Page no. 1 Fintechs to Surpass Shri. Hargovind 47-49 Traditional Bank Sachdev Lendings in India 2 Twin balance sheet Dr. Deepak Kumar 50-53 problem to the twin & Shri. Arun balance sheet advantage Kumar Mishra  Cover Bankers Bankers page Plus47 Article Plus-March Knowledge Hub INDUSTRY UPDATES BANKERS PLUS Bankers2022 - JAN Plus 2024 Bankers Volume II,Plus Issue June 2021 7 Fintechs to Surpass Volume II, Issue 6 Traditional Bank Lendings in India - Shri. Hargovind Sachdev “Financial institutions must be able to deliver an easy-to- navigate, seamless digital platform that goes far beyond a miniaturised online banking offering.” The Reserve Bank of India's latest order on unsecured loans has hit the banking sector's growth due to banks slowing down on aggressive retail lending. The fallout of the Regulator’s action will discourage the rising dependence on unsecured retail loans for subsistence and growth ANNUAL by the Indian middle class. ACHARGES-RS. SUBSCRIPTION 100bps cut in growth 300/- would impact Publishedreturn in on asset (RoA)/ return on equity (RoE) by 3- 10bps/20-100bps. Banks will also lose profits by distancing from the lucrative retail loans. The shares of retail lenders and credit card companies are falling, reflecting investors' concerns about their profitability without retail loans. The biggest beneficiary of this downscaling shall be Fintech companies. Having established themselves as a destination point, the Fintech companies shall take over as leaders in India's lending space within this decade. They shall outpace traditional banks in a significant shift by 2030. A report by an RBI-supported independent body, CAFRAL (Centre for Advanced Financial Research and Learning), highlights the unique and multifaceted needs of the small and middle- income segment. The report finds the enhanced disbursal of retail loans through Fintech. The advantages & convenience of Fintech's digital platforms are a big attraction over orthodox and traditional banking platforms. CAFRAL highlights the Fintech industry's remarkable growth, weaving around-  Cover Bankers Bankers page Plus48 Article Plus-March Knowledge Hub INDUSTRY UPDATES BANKERS PLUS Bankers2022 - JAN Plus 2024 Bankers Volume Plus II, Issue June 2021 -15000 start-ups established between 2006 and 2021. Easy online accessibility and 7 quick processing models based on digital lending Volume have II, Issue become 6 favourites of borrowers. the Data analytics for prompt credit assessment and seamless loan processing, followed by quick loan disbursal, enable fintechs to overtake banks. The friendly, innovative service also creates an edge over the brick-and-mortar banks, carving a paradigm shift. Fintech lenders excel in speed, last-mile reach, and comfort of bedroom banking. Internet-based loan processing and assessment and funding within hours of the application contrasts with the red tape and bureaucratic style of bank functioning. ANNUAL SUBSCRIPTION CHARGES-RS. 300/- Published in Fintech's 24x7 availability has a vast reach across geographies, attracting a broader spectrum of borrowers. Discreet data analysis of Credit reports through advanced algorithms conducted by Fintech companies automatically discovers and identifies credit-worthy borrowers and funds them without the need to walk into any bank. The cost savings in real estate rentals and thin overheads enable fintechs to invest in efficient operations and advanced risk measurement techniques, shunning risky exposures. Effective cost control further makes fintechs competitive in offering low-interest rates. Harnessing artificial intelligence (AI), Fintech lenders create personalised financing solutions, delighting customers. Their customised loan products cater to diverse financial needs in fast- changing financial supermarkets due to the extensive use of data. 38  Cover Bankers Bankers page Plus49 Article Plus-March Knowledge Hub INDUSTRY UPDATES BANKERS PLUS Bankers2022 - JAN Plus 2024 Bankers Volume Plus II, Issue June 2021 The book size of the Indian digital lending companies stood at $ 38.2 billion in 2021,7jumped to $ 53.10 billion in 2022 and crossed $ 74.0 Volume billion in II,2023. Issue 6The amount is likely to cross $ 515 billion by 2030, as per CAFRAL, recording a 33.5% CAGR growth, taking Fintech lending beyond the loan portfolio of traditional banks. Fintechs stole a march by adopting innovative lending models like P2P lending, microfinancing, short-term credit, LC Bill discounting and invoice financing. The emergence of e-commerce companies and accessible EMI credit card offerings also increased their growth. The fintech landscape has the eyes of multiple regulators like the Government of India, the Reserve Bank of India, the Insurance Regulatory and Development Authority of India, the Telecom Regulatory Authority ANNUALof IndiaSUBSCRIPTION and the Securities and CHARGES-RS. 300/- Exchange Board of India, instilling confidence Published in in the clients leading to spectacular growth. RBI has been constantly encouraging Fintechs as an alternate funding source for the masses. As an evolving superior choice, the fintech ecosystem is on a grand growth trajectory to transform the traditional lending firmament to take India to a $ 5.0 trillion GDP. Rightly said, "The secret of change is to focus on all of your energy, not on fighting the old, but building the new." About the Author Shri. Hargovind Sachdev is Ex-General Manager, with State Bank of India, Former CVO UCO Bank and United Bank of India and currently an independent director at HPL Electric & Energy Limited.  Cover Bankers Bankers page Plus50 Article Plus-March Knowledge Hub INDUSTRY UPDATES BANKERS PLUS Bankers2022 - JAN Plus 2024 Bankers Volume II,Plus Twin balance Issue sheet June 2021 7 problem Volume II, Issue 6to the twin balance sheet advantage -Dr. Deepak Kumar & Arun Kumar Mishra A balance sheet is a statement of assets and liabilities. This applies to both businesses and financial organisations. Even the RBI releases its balance sheet. The twin balance sheet problem in India refers to a problematic balance sheet of Indian enterprises and banks, implying that both lenders and borrowers are stressed. The twin balance sheet problem refers to the deteriorating balance sheets of corporates and banks at the same time. The issue occurs when poor ANNUAL corporates’ SUBSCRIPTION balance CHARGES-RS. sheets force them to default on 300/- their loans, Published in non-performing assets (NPAs) for banks. resulting in high Before the Sub Prime Crisis in United State in 2008-09, India was going through a massive boom. The GDP growth was remarkable, companies were making money, and no one thought that it would stop. So businesses kept expanding. They kept borrowing from banks to realise their ambitions. Banks were happy to lend massive amounts as the bigger the loans, the higher the income Bank make through interest. The credit boom in India in this period was larger than ever. In just about 5 years leading up to FY09, the non-food bank credit doubled. The economic situation looked promising and no one was hesitating from taking risks. The Sub Prime crisis in United States, changed everything. The global economy crashed and the promised economic growth vanished. Indian companies were dragged into the chaos. The first balance sheet was in turmoil. This flowed to the Indian banks which had also lent money with reckless. Companies began defaulting and bad loans ballooned.  Cover Bankers Bankers page Plus51 Article Plus-March Knowledge Hub INDUSTRY UPDATES BANKERS PLUS Bankers2022 - JAN Plus 2024 Bankers Volume Plus II, Issue June 2021 To put things in perspective, NPAs (bad loans) had reached about 12% of the gross 7 loans that banks lent. And nearly 80% of these NPAsVolume II, Issue were on 6the shoulders of public sector banks (PSBs). The second balance sheet was in turmoil. This was a twin Balance Sheet problem in India. Government of India has recognised the seriousness of the problem and adopted the 4R strategy. The 4R strategy is recognition, recapitalisation, resolution and reform. It called on banks to value assets as close to their true value as possible (recognition). They were strengthened through equity infusion (recapitalisation). Their NPAs were sold or rehabilitated (resolution) and the sector went through reforms to avoid repetition. Public sector banks reported a cumulative Rs. 1.04 lakh crore net profit in FY23, tripling from Rs. 36,270 crore in FY14. Gross non-performing assets (GNPA) ratio of scheduled commercial banks dropped to 3.96% at the end of FY23, ANNUAL from 6.04% a year SUBSCRIPTION CHARGES-RS. earlier. Rating agency 300/- Crisil projects this to drop to Published a decadal low in of 3.8% by the end of FY24. Year wise Total Assets of PSB Sr. No. Banks Total Assets (Rs. In crore) I NATIONALISED BANKS 2021 2022 2023 1 Bank of Baroda 1,155,365 1,278,000 1,458,562 2 Bank of India 725,856 734,614 815,556 3 Bank of Maharashtra 196,665 230,611 267,651 4 Canara Bank 1,153,675 1,228,105 1,345,732 5 Central Bank of India 369,215 386,423 406,165 6 Indian Bank 623,427 671,668 710,501 7 Indian Overseas Bank 274,010 299,377 313,746 8 Punjab & Sind Bank 110,482 121,068 136,455 9 Punjab National Bank 1,260,633 1,314,805 1,461,831 10 UCO Bank 253,336 267,784 300,863 11 Union Bank of India 1,071,706 1,187,591 1,280,752 TOTAL OF NATIONALISED BANKS [I] 7,194,370 7,720,045 8,497,815 II State Bank of India (SBI) 4,534,430 4,987,597 5,516,979 TOTAL OF PUBLIC SECTOR BANKS 11,728,800 12,707,642 14,014,794 [I+II] 40  Cover Bankers Bankers page Plus52 Article Plus-March Knowledge Hub INDUSTRY UPDATES BANKERS PLUS Bankers2022 - JAN Plus 2024 Bankers Plus This data Volume shows that the assets of the Public Sector June II, Issue 2021are Banks increasing on year 7 on year basis. Total assets of the PSB in FY 2021 wasVolume Rs. 117.28 II, Issue 6lakhs crores which has increase to Rs. 127.07 lakhs crores in FY 2022. Assets of PSBs have further increased to Rs. 140.14 Lakhs crores in FY 2023. Year Wise Gross NPA & Net NPA of PSB: Sr. No. Banks Gross NPA (Rs. In crore) Net NPA (Rs. In crore) I NATIONALISED 2021 2022 2023 2021 2022 2023 BANKS 1 BOB 66,671 54,059 36,764 21,800 13,365 8,384 2 BOI 56,535 45,605 37,686 12,262 9,852 8,054 3 BOM 7,780 5,327 4,334 2,544 1,277 435 4 Canara Bank 60,288 55,652 46,160 24,442 18,668 14,349 5 CBI 29,277 28,156 18,386 9,036 6,675 3,592 6 Indian Bank 38,455 35,214 28,180 12,271 8,849 4,043 7 IOB 16,323 15,299 14,072 4,578 3,825 3,266 8 P& S Bank 9,334 8,565 5,648 2,462 1,742 1,412 9 ANNUAL SUBSCRIPTION PNB 104,423 92,448 CHARGES-RS. 77,328 300/- 22,585 38,576 34,909 10 UCO Bank 11,352 10,237 7,726 4,390 3,316 2,018 Published 11 UBI in 89,788 79,587 60,987 27,281 24,303 12,927 Tot. Nationalised 490,226 430,150 337,270 159,642 126,780 81,065 Banks [I] II SBI 126,389 112,023 90,928 36,810 27,966 21,467 TOTAL OF PSBs 616,615 542,173 428,198 196,452 154,746 102,532 [I+II] The above data shows that, despite that total assets of the PSBs are increasing, the Gross NPA is decreasing on year on year basis. Gross NPA of PSBs in FY 2021 was Rs. 6.17 lakhs crores which has decreased to Rs. 5.42 lakhs crores in FY 2022. Further the same has decreased to Rs. 4.28 lakhs crores in FY 2023. The Net NPA data shows that the year wise Net NPA of the PSBs are decreasing on year on year basis. In FY 2021 the net NPA of the PSBs were Rs.1.96 lakhs crores which has decreased to Rs. 1.55 Lakhs crores in FY 2022. The net NPA of PSBs has further decreased to Rs. 1.02 Lakhs crores in FY 2023.  Cover Bankers Bankers Plus53 page2024 Plus-MarchArticle Knowledge Hub INDUSTRY UPDATES BANKERS PLUS Bankers2022 - JAN Plus Bankers Volume Plus II, Issue June 2021 Net NPA as % to Net Advances & Capital Adequacy Ratio-Basel: Sr. 7 Banks Net NPA as % to Net Capital Adequacy Ratio- :No. Volume II, Issue 6 Advances Basel III [%] I NATIONALISED BANKS 2021 2022 2023 2021 2022 2023 1 Bank of Baroda 3.09 1.72 0.89 14.99 15.68 16.24 2 Bank of India 3.35 2.34 1.66 14.93 16.51 16.28 3 Bank of Maharashtra 2.48 0.97 0.25 14.49 16.48 18.14 4 Canara Bank 3.82 2.65 1.73 13.18 14.90 16.68 5 Central Bank of India 5.77 3.97 1.77 12.78 13.84 14.12 6 Indian Bank 3.37 2.27 0.90 15.71 16.53 16.49 7 Indian Overseas Bank 3.58 2.65 1.83 15.32 13.83 16.10 8 Punjab & Sind Bank 4.04 2.74 1.84 17.06 18.54 17.10 9 Punjab National Bank 5.73 4.80 2.72 14.32 14.50 15.50 10 UCO Bank 3.94 2.70 1.29 13.74 13.74 16.51 11 Union Bank of India 4.62 3.68 1.70 12.56 14.52 16.04 TOTAL OF NATIONALISED 4.10 2.94 1.59 - BANKS [I] II State Bank of India (SBI) 1.50 1.02 0.67 13.74 13.83 14.68 ANNUAL SUBSCRIPTION Total of PSBs [I+II] 3.09 2.20 CHARGES-RS. 1.24 - 300/- Published in Net NPA to the percentage of total advance is also decreasing on year on year basis. IN FY 2021 the net NPA percentage to total advance was 3.09% which has reduced to 2.20% in FY 2022 and further reduced to 1.24% in FY 2023. This shows that the net NPA of the PSBs in the percentage of total advance is decreasing which is a healthy sign for the PSBs of India. The minimum capital adequacy required as per RBI guidelines is 11.50%. The above data shows that all the PSBs are adequately and sufficiently capitalized. By analysing the above data we may conclude that, PSBs performance has significantly improved and India is out of the cycle of twin Balance sheet problem. About the Authors The authors of the article, Dr. Deepak kumar (Senior manager) & Shri. Arun Kumar Mishra (Head,Learning academy) working at UBI, Lucknow. 41  BANKERS PLUS