Current Affairs May 2020 - Finance

1 - HDFC Bank released song #HumHaarNahiMaanenge

HDFC Bank released a new song #HumHaarNahiMaanenge to celebrate the firm spirit of citizens around the country amid the nationwide lockdown. Through the campaign, the bank also aims to draw attention to the importance of standing together for a cause and supporting more people during these tough times through the PM-Cares Fund.

The song has been composed by Oscar and Grammy Award-winning musician A.R. Rahman and the lyrics by Prasoon Joshi.

2 - NBFCs asked RBI for one-time restructuring of all loans till March 2021

Non-Banking Financial Companies (NBFCs) have asked the Reserve Bank of India to allow them one-time restructuring of all loans till March 2021, as their borrowers are facing funding issues amid the Corona virus pandemic and the subsequent lockdown.

Currently, RBI has allowed banks and NBFCs for a one-time restructuring of existing loans to MSMEs till December 2020. NBFCs want the one-time restructuring to be allowed to all other borrowers too.

3 - RBI cancelled licence of The CKP Co-operative Bank Ltd, Mumbai

The Reserve Bank of India (RBI) cancelled the licence of Mumbai-based CKP Co-operative Bank Ltd. The bank's financial position had become unsustainable and also not in a position to pay its depositors. The bank, as per RBI's observation, also did not have any concrete revival plan or proposal for merger with another bank.

On liquidation, every depositor is entitled to repayment of his/her deposits up to a monetary ceiling of Rupees Five Lakh only from the Deposit Insurance and Credit Guarantee Corporation (DICGC).

4 - Ameyo launched video KYC platform for banking and finance sector

Gurgaon based Ameyo has launched video-based KYC (Know Your Customer) that eliminates the need for physical KYC following the latest RBI guideline. The platform could be useful to banking and finance sector. It will enable enterprises to reduce video KYC completion drop-offs by 20% and reduce the cost of operations by up to 90%.

Ameyo's video KYC is an end-to-end solution with omnichannel capabilities of scheduling and reminding customers to complete the KYC process. Ameyo is an all-in-one software based communication solution that manages end-to-end customer journeys.

5 - Finance Ministry launched F and O contracts on BSE’s India INX & NSE’s NSE-IFSC

Finance Minister Nirmala Sitaraman launched INR-USD (Rupee-Dollar) Futures and Options contracts on the two International Exchanges, BSE’s India INX and NSE’s NSE-IFSC, at GIFT International Financial Services Centre in Gandhinagar. This will be available for 22 hours across all time zones for all global participants from GIFT IFSC.

The launch of INR-USD contracts at the exchanges in GIFT-IFSC is a step of economic activity and employment gains for India. The trading will bring larger global participation in India through IFSC and connect India’s IFSC globally and bring volumes to India.

6 - SC placed Cooperative banks under SARFAESI Act

A five-judge constitution bench of the Supreme Court of India ruled that the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 will be applicable to state and multi-state cooperative banks. The bench was headed by Justice Arun Mishra.

The reference to the question of law on the applicability of the 2002 Act in the co-operative banking sector was made to the Constitution Bench in 2016. Co-operative banks come within the definition of “Banking Company” under the Banking Regulation Act, 1949.

7 - SBI General Insurance rolled out health insurance policy “Arogya Sanjeevani”

State Bank of India General Insurance launched a standard health insurance policy named “Aarogya Sanjeevani”. Arogya Sanjeevani Policy will cover the hospitalisation treatment cost of COVID–19. Coronavirus disease (COVID-19) is an infectious disease caused by a newly discovered coronavirus.

IRDAI has mandated all general and health insurance companies to offer a Standard Health Insurance Product- Arogya Sanjeevani Policy. Sum insured involved in this policy ranges from Rs. 1 lakh to Rs. 5 lakhs, thus making it affordable health care. The policyholder will have to pay 5% of the bill amount compulsorily.

8 - Kotak Mahindra Bank became first bank in India to allow video KYC

Kotak Mahindra Bank became 1st bank in India to allow video Know your customer (KYC) facility for customers opening savings accounts on Kotak 811 – the banks digital banking platform. In January 2020, the Reserve Bank of India amended the Know Your Customer (KYC) norms and introduced the video-based KYC option to onboard customers.

With Video KYC, verification of KYC documents and recording of the customer’s signature are completed via a video call with the bank. After the Video KYC is completed, the customer gets a full-fledged bank account with no restrictions on deposits or account balances.

9 - NABARD released Rs 20,500 crores of funds for Kharif and pre-monsoon operations

With a view to augment the resources of Cooperative banks and RRBs to enable them to extend credit to farmers for taking up pre-monsoon and kharif 2020 operations, NABARD has extended Rs 20,500 crore with Rs 15,200 crore to Cooperative Banks and the balance of Rs 5,300 crore to RRBs as special liquidity facility in various states.

The Fund is given as a means of front loading the resources of these banks so as to ensure adequate liquidity with them for financing farmers. The banks issued about 12 lakh new KCC cards.

10 - RBI slashed lending rates and extended moratorium on loan repayment by 3 months

The Reserve Bank of India slashed the repo rate by 40 basis points from 4.4% to 4%, reducing the reverse repo rate at 3.35% to maintain accommodative stance. The measures were divided into four categories ― to improve functioning of markets, to support exports and imports, to ease financial stress by giving relief on debt servicing and better access to working capital and to ease financial constraints faced by State Governments.

The RBI extended Rs 15,000 crore line of credit to EXIM Bank. It enabled states to meet about 45% of redemption of their market borrowings which are due in 2020-21.

11 - NPCI launched AI virtual assistant PAi

National Payment Corporation of India (NPCI) launched an artificial intelligence (AI) based chatbot, PAi, to create awareness around its products like FASTag, RuPay, UPI, AePS on a real time basis. PAi is developed by Bengaluru based startup CoRover Private Limited.

NPCI was incorporated in 2008 as an umbrella organization for operating retail payments and settlement systems in India. NPCI has created bouquet of retail payment products such as RuPay card, IMPS, UPI, BHIM, NETC Fastag and Bharat BillPay.

12 - Airtel Payments Bank tied up with Mastercard

Airtel Payments Bank has teamed up with Mastercard to develop customised financial products for Indian farmers and Small and Medium Enterprises (SMEs). The aim is to build a digital platform which provides farmers with knowledge about advanced farming techniques and connection to marketplaces, while simultaneously enabling them to receive payments directly in their Airtel Payments Bank account.

Airtel Payments Bank and Mastercard will work together to create differentiated card solutions, including solutions for contactless payments via NFC (Near Field Communication) for customers and merchants.