Current Affairs May 2017 - Finance

News 1 - RBI asked ARCs to have a minimum net corpus of Rs100 crore by 2019

The Reserve Bank of India has asked all the existing Asset Reconstruction Companies (ARCs) to have a minimum net-owned corpus of Rs 100 crore by March 2019 in view of their enhanced role and greater cash based transactions.

ARCs are in the business of buying bad loans from banks to turn them around. As per amended SARFAESI Act, 2016, ARCs cannot carry on the business of securitisation or asset reconstruction without having NOF of not less than Rs 2 crore or any other amount stipulated by the RBI.

News 2 - Cabinet approved issuing ordinance to resolve NPAs of banks

The Union Cabinet approved a new framework for dealing non-performing assets (NPAs) in the banking system and details will be announced after President Pranab Mukherjee gives his assent to an ordinance to amend the Banking Regulation Act to resolve the Non Performing Assets crisis.

The set of measures includes the promulgation of an Ordinance to amend the Banking Regulation Act to give more powers to Reserve Bank of India and its committees to act on behalf of banks while deciding on NPAs.

News 3 - RBI made changes in norms for dealing with stressed loans

RBI made substantial changes in the norms for dealing with stressed loans and warned banks they will be penalised for missing Non-Performing Assets (NPA) resolution timelines.

RBI, through a notification, eased the decision making process in the Joint Lenders' Forum and Corrective Action Plan under the 'Framework for Revitalising Distressed Assets in the Economy'. The government notified an ordinance empowering the Reserve Bank to issue directions to banks to initiate insolvency resolution process in case of a default under the Insolvency and Bankruptcy Code, 2016.

News 4 - Cabinet committee approved appointments of heads of 7 PSU banks

The Appointments Committee of the Cabinet appointed heads of 7 PSU banks. The appointments are as below −

News 5 - India's first life insurance product that can be bought via PoS launched

India’s simplest life insurance product that can be bought at a point of sale (PoS) was launched by Edelweiss Tokio Life Insurance, termed as ‘PoS Saral Nivesh’.

With this ‘PoS Saral Nivesh’ becomes the first product to be approved by the Insurance Regulatory and Development Authority of India's guidelines on point of sale-life insurance products.

Various attractive features of product include its easiest way of buying, guaranteed benefits payable at time of maturity or death, guaranteed return etc. The best feature of product is that the product is simple, easy to understand, and easy to buy.

News 6 - YES Bank in union with Cashkaro.com to bring card-linked offers

Cashkaro.com in union with Yes bank to bring unique Card Linked Offers such as cash-back proposition. It provides online and offline shoppers with personalized merchant deals on which shoppers can avail cash-back offers.

YES BANK debit cardholders can avail cash-back offers from a wide range of participating online merchants such as Forever 21, Chaayos, Junkyard Cafe, UrbanClap, Zivame, Nearbuy, Limeroad, etc.

This launch by Yes bank is India's first Card Linked Offers (CLO) cash-back proposition to earn cash-back which reflects into their bank accounts instantly and encourage cashless economy.

News 7 - SEBI permits investors to buy mutual funds via digital wallet

Market regulator Securities and Exchange Board of India (SEBI) has allowed investors to invest in mutual funds through digital wallets in order to channelize household savings into capital markets and promote digitisation in investment instruments.

SEBI said mutual fund houses can now allow retail individual investors to invest up to Rs 50,000 or 90% of the folio value, whichever is lower, per financial year through the digital wallet route. Investors can redeem such purchases only into their bank account.

News 8 - NHAI Masala Bond Launched at London Stock Exchange

The Union Minister of Road Transport & Highways and Shipping Shri. Nitin Gadkari launched the NHAI Masala Bond issue at the London Stock Exchange. The NHAI issue witnessed an overwhelming response from a wide range of investors, some of them being first timers to participate in the Masala Bond market.

The spectrum of investors shows bright prospects of the Masala Bond as an instrument of raising rupee denominated resources internationally. On this occasion London Stock Exchange presented a Memento to Shri Nitin Gadkari.

News 9 - HDFC Life entered into bancassurrance tie-up with Catholic Syrian Bank

HDFC Life entered into a bancassurance distribution tie-up with Catholic Syrian Bank to distribute its individual life insurance products to the private lender’s customers.

HDFC life products such as individual life insurance, health and pension products will be offered to million customers of bank.

HDFC Life is a long-term life insurance provider, offering individual and group insurance.

Its products will be offered to customer base of 430 branches of Catholic Syrian Bank. HDFC Life has entered into tie up with Kerala based bank for the first time.

News 10 - RBI restricted UCO Bank's business and expansion

Reserve bank of India has restricted UCO bank from business expansion due to loss reported from NPAs. The restrictions will be on lending and branch expansion plans.

RBI has also asked for "prompt corrective action" from bank due to its high bad loans and negative return on assets. It is second bank facing restrictions after IDBI bank ltd.

UCO Bank reported Rs 22,541 crore gross NPA at the end of FY17, which was 17.1% of total advances. However, the bank managed to curtail down losses to Rs 588 crore in the fourth quarter of 2016-17.

News 11 - RBI gives authorization to Paytm to start operations as Payment Bank

Reserve Bank of India gave final approval to Paytm payments bank under its Authorised Entity One97 Communications Ltd to start operations as Payments bank.

It has been decided that Renu Satti, vice-president of business at Paytm, will take on duties as the chief executive officer of Paytm Payments Bank.

As per the guidelines of RBI, the company will be transferring its wallet business to the newly incorporated payments bank entity, Paytm Payments Bank Ltd. At present, Paytm has close to 218 million wallet accounts and it aims to open 200 million accounts within 12 months of the launch.

News 12 - RBI to reconstitute oversight committee to deal with bad loans

The RBI decided to reconstitute the oversight committee, OC, with more members after the government armed it with additional powers to resolve bad loans with banks that have crossed Rs 8 lakh crore.

RBI stated that while the current members will continue in the reconstituted OC, names of a few more will be announced soon.

The apex bank would be constituting a Committee comprised majority of its independent Board Members to advise it in the Non-Performing Asset matter and it has also envisaged an important role for the credit rating agencies in resolving the issue.

News 13 - Bank of Baroda and IFFCO to issue debit card for farmers

In order to motivate digitalisation and cashless economy, Bank of Baroda (BOB) and IFFCO will unanimously issue co-branded debit cards for farmers with inbuilt overdraft facility of Rs 2,500 in special savings bank account, meant for purchase of various agri products at IFFCO sale counters.

As a part of initiative, 200000 co-branded debit cards will be issued initially to the farmers, starting in the states like Uttar Pradesh, Bihar, Rajasthan and Madhya Pradesh. These co-branded debit cards will be compulsorily used for the purchase of IFFCO products only.

News 14 - Karnataka Bank signed MoU with HDFC Asset Management

HDFC Capital Asset Management Ltd entered into MoU with Karnataka Bank Ltd to cross-sell mutual fund products. It is a kind of a distribution agreement.

Karnataka Bank is a time-tested customer-centric Bank and its 769 branches will provide an opportunity to the customers to invest in a strong brand like HDFC Mutual Fund.

This tie-up is a big opportunity for both the Bank as well as HDFC AMC, as there is a gradual shift from physical assets to financial assets.