Current Affairs July 2016 - Banking

News 1 - State Bank to offer Banking Services on Facebook, Twitter

State Bank of India (SBI) has launched "SBI Mingle", allowing its customers to access various banking services via Facebook and Twitter. The customers have to register for this service through a simple one-time registration process using either their account number or their ATM/Debit Card details.

Currently balance enquiry, mini statement, funds transfer within SBI as well as interbank and beneficiary management services are available for Facebook. On Twitter, using hashtags the customers can find out their account balance and view mini statements.

News 2 - SBI inks pact with Flipkart for EMI facility

State Bank of India (SBI) partnered with Flipkart to offer pre-approved equated monthly instalment (EMI) facility to the bank's customers. Under this partnership, SBI will provide an overdraft facility to pre-qualified set of customers for transacting on Flipkart for a minimum purchase of Rs. 5,000.

The EMI facility will be available in three tenures - 6, 9 and 12 months - and the bank will not charge any fees to process the facility.

News 3 - SBI launches SBI Digital Villages

SBI has launched its new initiative, SBI Digital Villages, aimed at transforming villages into cash less eco-system by adopting them. In its first leg, the bank has adopted 21 villages to be moved on to the digital platform and plans to bring 100 villages under this initiative across the country by the end of FY 17.

Balal village in Kasargode district is one of the 21 villages selected across the country by the State Bank of India. The bank has already installed an ATM, provided free Wi-Fi connection and conducted technology training sessions at Balal village.

News 4 - SBI secures $625 million from the World Bank for their solar program

The State Bank of India has signed an agreement worth 4,200 crore rupees with the World Bank to support its solar program. Under this initiative at least 400 MW solar capacity will be created across the country.

This agreement will help the bank to finance grid connected rooftop solar photovoltaic projects at very competitive rates. The eligible beneficiaries under the facility would be developers, aggregators and end-users, who wish to set up solar projects mainly on commercial, industrial and institutional rooftops.

News 5 - CCEA allows Axis Bank to raise foreign shareholding to 74%

The Cabinet Committee on Economic Affairs approved increase in foreign investment from the current approved level of 62% to 74% of the total paid up share capital of the Axis Bank on a fully fundable basis.

The foreign investment will be by way of Foreign Institutional Investors, Foreign Portfolio Investors, Non-Resident Indians, Foreign Director Investment covering ADRs and GDRs and Indirect Foreign Investment. With the approval, foreign direct investment to the tune of Rs. 12,973 crores will be received in the country with an estimated creation of 6000 to 7000 jobs over the next three years.

News 6 - Cabinet approves interest subsidy of 5% for farmers for the year 2016-17

The Union Cabinet has approved the interest subsidy of 5% for farmers for the year 2016-17. It will help farmers to get a short term crop loan of up to Rs. 3 lakhs payable at 4% of interest rate within one year. In case farmers do not repay the short term crop loan on time they would be eligible for interest subvention of 2% as against 5%.

The government has earmarked Rs. 18,276 crores for the Interest Subvention Scheme. An interest subsidy of 2% has also been cleared for loans of up to six months for small and marginal farmers. For farmers affected by Natural Calamities, the interest subvention of 2% will be provided to Banks for the first year on the restructured amount.

News 7 - SBI Card introduces credit card 'Elite' for their high net-worth clients

In order to target the high net-worth clients, SBI Card, a subsidiary of State Bank of India, has launched a premium credit card called ‘Elite’ with host of facilities on the Master Card World platform and is powered with NFC (Near Field Communication) technology. There are a number of facilities which come with this Elite card that includes a contactless payment experience, adding more speed, airport lounge access and welcome gift worth Rs. 5,000 in the form of vouchers.

This card has been introduced with aim to raise penetration from 15% to 20% in card usage. The joining fees which is decided by SBI is Rs. 4,999.

News 8 - IDFC Bank signs purchase agreement for a micro finance company called Grama Vidiyal

The IDFC Bank inked a share purchase agreement to buy micro lender Grama Vidiyal Micro Finance Ltd for its business expansion and banking services. Grama Vidiyal will help the bank access to 1.2 million households apart from adding 319 points of presence in seven states namely – Tamil Nadu, Kerala, Karnataka, Puducherry, Maharashtra, Gujarat and Madhya Pradesh.

It is said to be first of such acquisition where a bank has acquired a micro-finance institution. Grama Vidiyal's had an AUM of Rs. 1,502 crores of micro finance assets as of March 2016.

News 9 - SBI in agreement with IIT Bombay to promote the idea of StartUps

The State Bank of India inked a Memorandum of Understanding with the Indian Institute of Technology Society for Innovation and Entrepreneurship (SINE), to promote the idea of start-ups in the financial sector. The Bank will provide funding at bank’s norms to startups operating out of SINE and to those projects being promoted by SINE.

As per the agreement, both the parties will look for FinTech start-ups that have products or applications that aid to the financial sector and can help SBI to explore the synergy for their banking services. In turn, SBI will provide a platform for testing/ piloting projects and by funding such product/application projects.

News 10 - HDFC becomes the first Indian Firm to issue masala bonds

The Housing Development Finance Corporation (HDFC) became the first Indian firm to issue rupee-denominated “Masala Bonds” on London Stock Exchange (LSE). It has raised Rs. 3,000 crores through these bonds that got over-subscribed by 4.3 times. These bond bears a fixed semi-annual coupon of 7.875% per annum and has a tenor of 3 years and 1 month. The all-in annualized yield to the investors is about 8.33% per annum.

The rupee-denominated bonds or masala bonds are instruments through which Indian entities can raise funds by accessing overseas capital markets, while the bond investors hold the currency risk.

News 11 - Govt injects Rs. 22,915 crores capital to 13 PSU banks for the FY–17

The Union Government has announced a sum of Rs. 22,915 crores for recapitalization of 13 public sector banks with an aim to boost credit growth in the economy. The State Bank of India (SBI) received the largest allocation of Rs. 7,575 crores. The Indian Overseas Bank and the Punjab National Bank are to get Rs. 3,191 crores and Rs. 2,816 crores respectively. The least, which is Rs. 44 crores were allocated to the Allahabad Bank.

The remaining amount, to be released later, will be linked to performance. The Centre had allocated a total of Rs. 25,000 crores for the capitalization of the public sector banks in the FY 2016-17, in line with the infusion plans announced under the umbrella scheme “Indradhanush” introduced in 2015. The plan proposes infusions adding up to Rs. 25,000 crores in 2015-16 as well as in 2016-17, followed by Rs. 10,000 crores each in 2017-18 and 2018-19.

News 12 - SBI launches Rs. 7,350 crores stressed assets fund with the US Firm Brookfield

The State Bank of India has roped in American fund house Brookfield Asset Management to set up an over Rs. 7,350 crores stressed assets fund as a part of its bad loans resolution process. Out of the total investible fund of Rs. 7,350 crores, Brookfield will contribute Rs. 7,000 crores and the remaining 5% or Rs. 350 crores will come from SBI.

The JV will evaluate and invest in various stressed assets, relying upon Brookfield's operational expertise to manage recapitalized businesses. This is the second such fund after Kotak Bank roped in Canadian Pension Plan Investment Board (CPPIB) to launch a a USD 525 million fund to invest in the stressed assets in March.

News 13 - SBI signs a pact with IIT Bombay hosted Business Incubator

The State Bank of India has signed a Memorandum of Understanding (MoU) with the IIT Bombay hosted ‘Society for Innovation and Entrepreneurship’ (SINE) to promote innovation by start-ups in the financial sector.

The bank has commenced a strategic initiative to promote innovation by engaging with startups in the FinTech segment, through funding, procurement and co-innovation under a special window. SINE is the Technology Business Incubator hosted by IIT Bombay. It is a non-profit arrangement with the Board, faculty and industry experts.

News 14 - SbiINTOUCH offers convenient shopping experience

The sbiINTOUCH and Visa Paywave enabled contactless debit cardholders to pay by presenting their cards at the PoS (Point of Sales) terminals of Big Bazaar and Food Bazaar outlets by just waving their sbiINTOUCH Contactless Debit Cards on NFC enabled PoS terminals up to Rs. 2,000. In the first phase, sbiINTOUCH Contactless Debit Cards will be accepted at Big Bazaar and Food Bazaar outlets in nine cities namely Ahmedabad, Bengaluru, Chandigarh, Chennai, Delhi NCR, Hyderabad, Kolkata, Mumbai and Pune.

Shoppers at Big Bazaar and Food Bazaar can also get a 10% cashback on minimum transaction value of INR 500, up to a maximum cashback of INR 500 per calendar month.

News 15 - Federal Bank signs an agreement with Reliance Jio Money

The Federal Bank has signed an agreement with Reliance Jio Money for a one-click payment service. The bank's customers will get a facility to directly pay from their account for the services offered through the wallet (without pre-loading their wallet). Customers will be able to perform a variety of transactions across numerous merchants in just a click.

Reliance Jio Money is a wallet application that will be launched soon for mobile devices. On the occasion, Ms. Shalini Warrier, Chief Operating Officer, Federal Bank said "This arrangement would empower customers to retain the funds with their accounts while enjoying the host of services available in the App".

News 16 - IRCTC joins hands with SBI to promote Rail Ticketing

IRCTC along with the State Bank of India has drawn out a detailed plan for promotion of rail ticketing activities, including internet ticketing and unreserved ticketing system. The MoU will also undertake development of Unreserved Ticketing System.

This MoU was signed by IRCTC CMD A K Manocha and Arundhati Bhattacharya, CMD, SBI. It also envisages for undertaking activities which can provide value to customers and bring about synergy in working of both the organizations.

News 17 - Fourteen PSU banks post losses in the last financial year

Fourteen public sector banks out of 27 posted losses in the last financial year. The main reason for their losses was Asset Quality Review initiated by the Reserve Bank of India. As a result, the banks had to suddenly make provisions for accounts categorized as non-performing assets under the exercise.

The government has allocated 25,000 crore rupees to these banks to strengthen their financial positions.

News 18 - Corp Bank launches ‘Green PIN’ facility

Corporation Bank has launched a new facility called "Green PIN". This facility enables credit card users to generate the Personal Identification Number (PIN) online instantly. The customers who receive the Credit Card but not PIN can also generate a fresh PIN for their credit card.

The module was developed by M/s Worldline Pvt. Ltd., Mumbai. The cardholders can generate the PIN online by logging on to www.liccards.com portal. Corporation Bank has arrangements with LIC for issue of co-branded credit cards.

News 19 - RBI imposes penalties on Bank of Baroda, HDFC and PNB

The Reserve Bank of India slapped penalties of Rs. 5 crores, Rs. 2 crores and Rs. 3 crores on Bank of Baroda, HDFC Bank and Punjab National Bank respectively over the issue of advance import remittances.

These penalties were slapped on Bank of Baroda by RBI after it witnessed weaknesses and failures in internal control mechanisms in respect of certain anti-money laundering provisions. HDFC was slapped on account of pendency in receipt of bills of entry relating to advance import remittances made.

News 20 - ICICI and AXIS banks join SWIFT’s Global Payments innovation initiative

In its first phase, this initiative will focus on business-to-business payments. Designed to help corporates grow their international business, improve supplier relationships, and achieve greater treasury efficiencies; this new service will enable corporates to receive an enhanced payments service directly from their banks, with the following key features −

• Same day use of funds
• Transparency and predictability of fees
• End-to-end payments tracking
• Transfer of rich payment information

News 21 - RBI imposes a fine of Rs. 27 Crores on 13 banks in forex based cases

The Reserve Bank of India (RBI) has imposed a penalty of Rs. 27 crores on 13 banks for violating Know Your Customer (KYC) and antimoney laundering (AML) norms. Bank of Baroda faced a penalty of Rs.5 crores after RBI found irregularities related to a Rs. 6,100crore scam.

Punjab National Bank and Syndicate Bank were slapped Rs. 3 crores each. HDFC Bank, UCO Bank, Allahabad Bank, Canara Bank, Indusind Bank and SBBJ were fined Rs. 2 crores each. Bank of India, Corporation Bank, RBL Bank and SBM Bank were fined Rs. 1 crore each.

News 22 - SBI enables instant money transfer facility on ATMs

State Bank of India has launched an Instant Money Transfer (IMT) payment system on its ATMs in India. IMT enables a payment up to Rs. 10,000 to be made from any SBI bank account to a person using just his/her mobile number as the identifier. The recipient of this payment can withdraw funds instantly from an IMT-enabled ATM of SBI without using a debit card. There is no requirement for the beneficiary to have a bank account.

The IMT system has been launched in India by Empays Payment Systems, which is authorized by the Reserve Bank to enable a payment to be made to a mobile phone from a bank account.

News 23 - SBIs Buddy Pay to take mobile payments to the next level with IRCTC & Madura F&L

State Bank of India unveiled its ‘Payment Vision through State Bank Buddy’. The Bank also announced key strategic partnerships with IRCTC and Aditya Birla Group. Students and Payers of 2500 Educational Institutions and Government entities will find Buddy as an additional option for small amount payments through the Bank’s Multi Option Payment System.

IRCTC being the largest e-commerce portal in India with 180mn+ tickets booked annually was a natural partner in this endeavor. The Bank is looking to expand the reach of Buddy to state run transport corporations and cab / auto operators in India as well.

News 24 - OKI installs more than 600 recycling ATMs for State Bank of India

Japanese payments company OKI has installed 600 sets of cash recycling ATMs, ATM-Recycler G7, for State Bank of India. A single ATM-Recycler G7 can handle Rs.50, Rs.100, Rs.500 and Rs.1000 denominations and uses the deposited banknotes for withdrawals, leveraging its cash-recycling function to reduce banknote management and operational costs compared to cash dispensers and non-cash-recycling ATMs.

The OKI Electric Industry is Japan's leading telecommunications manufacturer in the Info-telecom field headquartered in Tokyo, Japan.

News 25 - Coin Exchange Mela organized by ICICI Bank in Puri’s 'Ratha Yatra' festival

A Financial Literacy Camp was organized by the Reserve Bank of India in Puri’s Rath Yatra festival, where ICICI Bank Ltd. arranged a Coin Exchange Mela for the general public to exchange coins and fresh currency notes. This helps exchange of acceptable soiled and mutilated currency notes with fresh currency and coins.

Bank witnessed participation of over 52000 people during the mela, where they exchanged coins worth Rs. 6.34 lakhs in the denomination of Rs. 10, Rs. 5, Rs. 2 and Rs. 1 and fresh currency worth Rs 6.25 lakh in denominations of Rs. 100, Rs. 50, Rs. 20 and Rs. 10.

News 26 - Solar Light Scholarship initiative launched by Karnataka Bank for Rural Students

Mangalore based Karnataka Bank and Manipal based non–governmental organization Bharatiya Vikas Trust (BVT), jointly launched ‘Solar Light Scholarship’ initiative by providing solar lights to the students of rural areas non-electrified households.

It is an initiative where school authorities will identify the beneficiaries and BVT will check for the authenticity. Further, the bank will provide solar lights of unit costing Rs. 9500, where Rs. 4500 will be paid by the beneficiary and the rest by the bank. Under the scheme, 100 rural houses of Udupi district have been provided solar lights.

News 27 - HDFC ERGO entered into Bancassurance Partnership with SVC Bank

HDFC ERGO General Insurance Company entered into the partnership with Shamrao Vithal Co-operative Bank for cross selling of non-life insurance products of HDFC Ergo to the customers of the bank.

SVC Bank has business expansion of 194 branches across 10 states including Maharashtra, Karnataka, Tamil Nadu, Andhra Pradesh, Gujarat, Goa, Delhi, Madhya Pradesh, Rajasthan, and Haryana, which will help HDFC Ergo to promote cross selling of its non-life insurance products.

News 28 - NDB announces loans worth 900 million dollars

The New Development Bank launched by BRICS announced its first round of loans worth about 900 million dollars. The Bank held its first general meeting in Shanghai.

Brazil, Russia, India, China and South Africa established this institution in 2015. The first set of loans will fund five renewable-energy development projects, including those related to the solar and wind power generation.

The New Development Bank starts with an objective of funding infrastructure projects in the developing countries and meet the aspirations of millions through sustainable development.