Promotion Material Annexure LL

)
62
80
10
A Reference Study Material (Annexure II)
K
.(V
For Promotion Exercise of Officers
2023-24
SH
A
K
A
PR
D
VE
R
A
M
U
K
r.
M
y:
B
Baroda Academy
ed
Bank of Baroda
ad
(For internal circulation only)

o
nl
Do Not Print unless extremely required. Save Paper, Save Trees, Preserve
ow
Environment.
D
Disclaimer: Though all efforts have been made to incorporate
latest and correct information of the related topics but in case of
any doubt please refer Book of instructions, reference books and
circulars of the Bank. This booklet is focusing mainly on the
written promotion exam within the Bank (based on previous
)
62
trends) and should not be considered as an instruction manual.
80
Employees are supposed to update themselves by reading
10
Bank’s latest circulars & Bank guidelines.
K
As regards, Banking, Economy & General Awareness, an attempt
.(V
is made to reflect few of the many ways in which questions can
be put forward. General Awareness may be tested from various
SH
spheres for e.g. Awards, Sports, Economy, etc. Same should not
A
be construed static. Various resources available on internet may
K
be referred for latest trend of questions in these areas. Please
A
update yourself by reading latest banking industry/ other general
PR
awareness related news. The General Awareness chapter is
indicative only.
D
VE
R
A
M
U
K
r.
M
y:
B
ed
oad
nl
ow
D
Contents
Sr. No. Annexure II Topics Page No.
1. Emerging Trends and Awareness about Indian/Global 4

Banking
)
62
2. Awareness about RBI guidelines, RBI Monetary 15
Policy, Regulatory guidelines
80
3. Awareness about Digital Economy & Digital 29
transformation trends, Payments/Fintech
10
Ecosystems/Digital Platform based developments.
4. Awareness about Financial Sector other than Banking 38
K
& linkages with Banking.
.(V
5. Awareness about EASE - PSB Reform agenda 44
6. Awareness about Indian Economy, Emerging 52
SH
markets/segments in India / Inflation/Direct-Indirect
Taxation/Fiscal Matters/Budget etc.
A
7. Capital Markets, Money Markets, Capital Raising 70
K
Avenues, Commodity Markets (Basic Concepts).
A
8. Important Developments in the Economy initiated
PR 76
from the Govt. Side
9. Basic Treasury/ALM/Risk Management practices 102
D
10. Test Your Knowledge 110

VE
R
A
M
U
K
r.
M
y:
B
ed
oad
nl
ow
D
Emerging Trends and
Awareness about
)
62
Indian/Global Banking
80
10
(Banking, Economy & General Awareness)
K
Budget Highlights
.(V
HIGHLIGHTS OF THE UNION BUDGET 2022-23 (Related to Financial Services)
SH
In 2022, 100 per cent of 1.5 lakh post offices will come on the core banking
system enabling financial inclusion and access to accounts through 11 net
A
banking, mobile banking, ATMs, and also provide online transfer of funds
K
between post office accounts and bank accounts. This will be helpful, especially
A
for farmers and senior citizens in rural areas, enabling interoperability and
PR
financial inclusion.
 To mark 75 years of independence, the government proposed to set up 75
Digital Banking Units (DBUs) in 75 districts of the country by Scheduled
D
Commercial Banks to ensure that the benefits of digital banking reach every
VE
nook and corner of the country in a consumer-friendly manner.

 The Government proposed to introduce Digital Rupee, using blockchain and
R
other technologies, to be issued by

A
the Reserve Bank of India starting

M
2022-23 for more efficient and

U
cheaper currency management

K
system.
 It was proposed in the budget that
r.
income of a non-resident from

M
offshore derivative instruments, or

y:
over the counter derivatives issued

B
by an offshore banking unit, income

from royalty and interest on account
ed
of lease of ship and income received

from portfolio management services
ad
in IFSC shall be exempt from tax,

o
subject to specified conditions.

nl
PM GatiShakti
ow
PM GatiShakti is a transformative approach for economic growth and sustainable

D
development. The approach is driven by seven engines, namely, Roads, Railways,

Airports, Ports, Mass Transport, Waterways, and Logistics Infrastructure. These
engines are supported by the complementary roles of Energy Transmission, IT
Communication, Bulk Water & Sewerage, and Social Infrastructure. The approach is
powered by Clean Energy and Sabka Prayas – the efforts of the Central Government,
the state governments, and the private sector together – leading to huge job and
entrepreneurial opportunities for all, especially the youth.
PM GatiShakti National Master Plan:
)
62
The scope of PM GatiShakti National
80
Master Plan will encompass the
seven engines for economic
10
transformation, seamless
K
multimodal connectivity and logistics
.(V
efficiency. It will also include the
infrastructure developed by the state
governments as per the GatiShakti
SH
Master Plan. The focus will be on
planning, financing including through
A
innovative ways, use of technology,
K
and speedier implementation.
A
PR
The projects pertaining to these 7
D
engines in the National Infrastructure

VE
Pipeline will be aligned with PM

GatiShakti framework. The
R
touchstone of the Master Plan will be

A
world-class modern infrastructure

M
and logistics synergy among

U
different modes of movement – both

K
of people and goods – and location of projects. This will help raise productivity, and
r.
accelerate economic growth and development.

M
y:
Road Transport:
B
PM GatiShakti Master Plan for Expressways will be formulated in 2022-23 to facilitate

ed
faster movement of people and goods. The National Highways network will be
ad
expanded by 25,000 km in 2022-23. Rs.20,000 crore will be mobilized through

innovative ways of financing to complement the public resources.
o
nl
Seamless Multimodal Movement of Goods and People:

ow
The data exchange among all mode operators will be brought on Unified Logistics
Interface Platform (ULIP), designed for Application Programming Interface (API). This
D
will provide for efficient movement of goods through different modes, reducing logistics
cost and time, assisting just-in-time inventory management, and in eliminating tedious
documentation. Most importantly, this will provide real time information to all
stakeholders, and improve international competitiveness. Open-source mobility stack,
for organizing seamless travel of passengers will also be facilitated.
Multimodal Logistics Parks:
)
Contracts for implementation of Multimodal Logistics Parks at four locations through
62
PPP mode will be awarded in 2022-23.
80
Railways:
10
Railways will develop new products and efficient logistics services for small farmers
K
and Small and Medium Enterprises, besides taking the lead in integration of Postal
.(V
and Railways networks to provide seamless solutions for movement of parcels.
‘One Station-One Product’ concept will be popularized to help local businesses &
SH
supply chains.
As a part of Atmanirbhar Bharat, 2,000 km of network will be brought under Kavach,
A
the indigenous world-class technology for safety and capacity augmentation in 2022-
K
23. Four hundred new-generation Vande Bharat Trains with better energy efficiency
A
and passenger riding experience will be developed and manufactured during the next
PR
three years. One hundred PM GatiShakti Cargo Terminals for multimodal logistics
facilities will be developed during the next three years.
D
VE
Mass Urban Transport including Connectivity to Railways:

Innovative ways of financing and faster implementation will be encouraged for building
R
metro systems of appropriate type at scale. Multimodal connectivity between mass

A
urban transport and railway stations will be facilitated on priority. Design of metro
M
systems, including civil structures, will be re-oriented and standardized for Indian
U
conditions and needs.

K
Parvatmala: National Ropeways Development Programme:

r.
M
As a preferred ecologically sustainable alternative to conventional roads in difficult hilly

areas, National Ropeways Development Programme will be taken up on PPP mode.
y:
The aim is to improve connectivity and convenience for commuters, besides promoting
B
tourism. This may also cover congested urban areas, where conventional mass transit
ed
system is not feasible. Contracts for 8 ropeway projects for a length of 60 km will be
awarded in 2022-23.
ad
Capacity Building for Infrastructure Projects:

o
nl
With technical support from the Capacity Building Commission, central ministries,
ow
state governments, and their infra-agencies will have their skills upgraded. This will
ramp up capacity in planning, design, financing (including innovative ways), and
D
implementation management of the PM GatiShakti infrastructure projects.

For 2022-23, Finance Minister proposed allocation of Rs. 1 lakh crore to assist the
states in catalysing overall investments in the economy. These fifty-year interest free
loans are over and above the normal borrowings allowed to the states. This allocation
will be used for PM GatiShakti related and other productive capital investment of the
states. It will also include components for:
)
62
 Supplemental funding for priority segments of PM Gram Sadak Yojana, including
support for the states’ share,
80
 Digitisation of the economy, including digital payments and completion of OFC
10
network, and
 Reforms related to building byelaws, town planning schemes, transit-oriented
K
development, and transferable development rights.
.(V
EASE Reforms
SH
EASE Agenda was launched in January 2018 jointly by the government and PSBs. It
was commissioned through Indian Banks’ Association and authored by Boston
A
Consulting Group.
K
A
EASE 1.0 report showed significant improvement in PSB performance in resolution of
PR
Non-Performing Assets (NPAs) transparently. EASE 2.0 introduced new reform Action
Points across six themes – Responsible Banking; Customer Responsiveness; Credit
D
Off-take, PSBs as Udyami Mitra (SIDBI portal for credit management of MSMEs);
VE
Financial Inclusion & Digitalisation; Governance and Human Resource (HR). Ease 3.0
seeks to enhance ease of banking in all customer experiences, using technology –
R
Dial-a-loan and PSBloansin59 minutes.com. Partnerships with FinTechs and E-

A
commerce companies, Tech-enabled agriculture lending. EASE 4.0 commits PSBs to

M
tech-enabled, simplified and collaborative banking to further the agenda of customer-

U
centric digital transformation.

K
Finance and Corporate Affairs Minister launched the fifth edition of Enhanced Access
r.
and Service Excellence (EASE 5.0), which spells out the common reforms agenda for
M
public sector banks under the EASENext program. Under EASE 5.0, PSBs will
y:
continue to invest in new-age capabilities and deepen the ongoing reforms to respond
to evolving customer needs, changing competition and the technology environment.
B
EASE 5.0 will focus on digital customer experience and integrated and inclusive
ed
banking, with emphasis on supporting small businesses and agriculture. All PSBs will
also create a bank-specific three-year strategic roadmap. The initiatives will be across
ad
diverse themes — business growth, profitability, risk, customer service, operations and
o
capability building. EASENext is well-positioned to channel reforms with specific focus

nl
on customer-centric initiatives.
ow
D
)
62
80
10
K
.(V
SH
A
K
Source: file:///C:/Users/Administrator/Downloads/1655884430882%20(1).pdf
A
PR
UPI123Pay
D
UPI 123PAY is an instant payment system for feature phone users who can use
VE
Unified Payments Interface (UPI) payment service in a safe and secure manner.
Through UPI 123PAY, feature phone users will now be able to undertake a host of
R
transactions based on four technology alternatives. They include calling an IVR

A
(interactive voice response) number, app functionality in feature phones, missed

M
call-based approach and also proximity sound-based payments. Under this

payment method, there are 4 solutions going live - UPI payment through pre-
U
K
defined IVR number, Missed Call pay, payment functionality implemented by OEM
(feature phone mobile manufacturers) and Proximity sound based technology and
r.
Voice Based Payments.

M
y:
Business Responsibility and Sustainability Reporting

B
In India, the top 1,000 listed companies were hitherto required to furnish a Business
ed
Responsibility Report (BRR) to the stock exchanges as a part of their annual

ad
reports. The BRR comprises the initiatives taken by the companies from an
Environmental, Social and Governance (ESG) perspective, in the Securities and
o
nl
Exchange Board of India (SEBI) prescribed format. SEBI amended certain

provisions of the SEBI (Listing Obligations and Disclosure Requirements)
ow
Regulations, 2015 (LODR) through a notification dated 5 May 2021 and the
requirement of BRSR has come into picture. The BRSR is intended towards having
D
quantitative and standardized disclosures on ESG parameters to enable

comparability across companies, sectors and time. Such disclosures will be helpful
for investors to make better investment decisions. The BRSR shall also enable
companies to engage more meaningfully with their stakeholders, by encouraging
them to look beyond financials and towards social and environmental impacts.
ESG Disclosure in India – India, at CoP26, has pledged to achieve net zero
emissions by 2070. This is in line with the policies adopted by Indian regulators
)
over the past few years, which indicate that India has made an aggressive move
62
towards decarbonization, by nudging as well as mandating market players to adopt
80
sustainable ways of doing business. One of the indicators of the same is the
introduction of comprehensive sustainability and Environment, Social and
10
Governance (“ESG”) related disclosures to nudge companies to look beyond the
K
traditional finance-centric models. BRSR (Business responsibility and
.(V
sustainability report) is an initiative towards ensuring that investors have access to
standardized disclosures on ESG parameters.
The BRSR framework has been developed after years of evolution, as can be seen
SH
from the table below:
A
2009 - Ministry of Corporate Affairs (“MCA”) issued the National Voluntary
K
Guidelines (“NGVs”) on CSR.
A
PR
2012 - SEBI mandated the top 100 listed companies by market capitalization to file
BRR based on theNGVs along with their annual reports.
2014 - CSR was mandated and CSR Rules came into force.
D
2015 - BRR was extended by SEBI to the top 500 listed companies by market
VE
capitalization.
2017 - SEBI advised that IR may be adopted by companies on a voluntary basis
R
from financial year2017-18 by the top 500 listed companies.

A
2019 - MCA released the NGBRC.

M
2019 - BRR was extended by SEBI to the top 1000 listed companies by market
U
capitalization.
K
2021 - SEBI introduced BRSR in May 2021.

r.
M
Read more at - https://www.sebi.gov.in/sebi_data/commondocs/may-

y:
2021/Business%20responsibility%20and%20sustainability%20reporting%20by%
20listed%20entitiesAnnexure1_p.PDF and
B
https://www.pwc.in/assets/pdfs/consulting/esg/business-responsibility-and-
ed
sustainability-report.pdf
ad
Climate Change Risks

o
nl
Climate change risk is described as an uncertainty caused by severe weather events

ow
such as floods, droughts and typhoons causing disasters that bring physical risks with
negative impact on business and the overall economy. The cost of catastrophic
D
weather events are rising in terms of loss of lives and livelihoods, savings, capital
assets, jobs and incomes. This may lead to transition risks (in terms of change in the
mode of operations, systems and processes, relocation, etc.) which may further raise
operating costs. Climate risk event is defined as “a green swan” that is outside the
normal range of expected events (BCBS 2020). Covid-19 may be considered “a black
swan” (the concept popularised by Nassim Nicholas Taleb) event because it happens
once in 100 years (tail risks, non-normal). There is also limited precedent for how a
global pandemic will impact the financial markets.
)
62
TReDS
80
Trade Receivables e-Discounting System (TReDS) is an initiative of Reserve Bank of
10
India (RBI) to facilitate MSME receivable payments from Corporates. The main
objective of the TREDS platform is to address the critical needs of MSMEs i.e. the twin
K
issues of promptly en-cashing receivables and eliminating credit risk. It is an electronic
.(V
platform for facilitating the financing / discounting of trade receivables of Micro, Small
and Medium Enterprises (MSMEs) through multiple financiers. These receivables can
be due from corporates and other buyers, including Government Departments and
SH
Public Sector Undertakings (PSUs). TReDS was introduced in 2014 by the central
bank and later in 2017, three platforms including M1Xchange promoted by Mynd
A
Solutions, Invoicemart (joint venture of AxisBank and mjunction services), and RXIL
K
(joint venture between SIDBI and NSE) were issued licenses to operate on TReDS
A
mechanism. PR
TReDS is an online platform on which the trade receivables are auctioned, this
process is commonly known as bill or invoice discounting. There are three parties –
D
MSME Supplier, Corporate Buyer and Financier. Here, the MSME Supplier can sell
VE
an invoice to a financer which is due to be paid at a future date. Thus, this helps
MSMEs to obtain funds on credit on the basis of invoice and start working without any
cash flow problems. The invoice is uploaded by either buyer or supplier depending on
R
the method of discounting and is approved by the other party. Once the invoice is
A
approved the financiers on the platform start to bid on the invoice. The supplier accepts
M
the bid and the discounted amount is credited in its account in T+1 day, where T is the
U
day of acceptance.
K
r.
M
y:
B
ed
oad
nl
ow
D
How does the system work?
A seller has to upload the invoice on the platform. It then goes to the buyer for
acceptance. Once the buyer accepts, the invoice becomes a factoring unit. The
factoring unit then goes to auction. The financiers then enter their discounting (finance)
rate. The seller or buyer, whoever is bearing the interest (financing) cost, gets to
accept the final bid. TReDs then settle the trade by debiting the financier and paying
)
the seller. The amount gets credited the next working day into the seller’s designated
62
bank account through an electronic payment mode. The second leg of the settlement
80
is when the financier makes the repayment and the amount is repaid to the financier.
10
E-RUPI
K
e-RUPI, a new digital payment mode under UPI is launched by Hon’ble Prime Minister
.(V
on 02nd August 2021. e-RUPI is a one-time redeemable payment voucher in form of
QR Code or an SMS string which will be delivered to the beneficiary’s mobile phones
SH
and can be redeemed at specific accepting centers without any credit or debit card,
mobile app or internet banking.
A
K
e-RUPI is basically a prepaid voucher which can be issued by Banks (issuing entities)
A
on behalf of Sponsor (any Corporate or Government agency) to a beneficiary (any
PR
citizen) which will be delivered in form of a QR Code or SMS string strictly in digital
mode. The beneficiary will be able to redeem the prepaid voucher at designated
D
location with voucher acceptance infrastructure. e-RUPI should not be confused with
VE
Digital Currency which the Reserve Bank of India is contemplating. Instead e-RUPI is
a person specific, even purpose specific digital voucher.
R
BigTech
A
M
BigTech is a term that refers to the most dominant and largest technology companies
U
in their respective sectors. Their products and services are used globally and have
K
become heavily relied upon by businesses and individuals alike. Unlike Fintech,
r.
BigTech firms have some advantages that banks will find it harder to replicate, and so
M
they present a much stronger challenge to established banks in two main areas:
consumer finance and loans to small firms. BigTech firms also participate in UPI as
y:
third-party application providers and facilitate transactions through their platforms -

B
Google Pay, Amazon Pay, WhatsApp, etc.

ed
SupTech & RegTech

ad
Regtech is already a familiar word in the financial sector. It refers to applications of

o
innovative technologies that support compliance with regulatory and reporting

nl
requirements by regulated financial institutions. Suptech, on the other hand, refers to

ow
technologies used by supervisory agencies themselves. SupTech provides

technological tools to regulatory authorities to improve efficiency through automation.
D
RegTech assists banks in meeting regulatory standards, same as FinTech assists

banks in connecting with customers through technology.
The examples are Import Data Processing and Monitoring System (IDPMS), Export
Data Processing and Monitoring System (EDPMS) and Central Repository of
Information on Large Credits (CRILC), to name a few. Also, the risk-based supervision
of banks is extensively data-driven and is an example of SupTech. The future of
RegTech and SupTech technologies, however, lie in big data analytics, artificial
)
intelligence, machine learning, cloud computing, geographic information system (GIS)
62
mapping, data transfer protocols, biometrics, etc. RBI DAKSH.
80
RBI’s DAKSH is a web-based end-to-end workflow application through which RBI shall
10
monitor compliance requirements in a more focused manner with the objective of
further improving the compliance culture in Supervised Entities (SEs) like Banks,
K
NBFCs, etc. The application will also enable seamless communication, inspection
.(V
planning and execution, cyber incident reporting and analysis, provision of various MIS
reports etc., through a Platform which enables anytime-anywhere secure access. It is
SH
as SupTech (Supervisory Technology) which is expected to make the Supervisory
processes more robust.
A
K
Account Aggregator
A
PR
An Account Aggregator (AA) is a type of RBI-regulated entity (with an NBFC-AA
license) that helps an individual securely and digitally access and share information
from one financial institution they have an account with to any other regulated financial
D
institution in the AA network. Account aggregators are entities that allow individuals to
VE
share and access data from one financial institution to another in the consolidated
networks of account aggregators. These aggregators have received approval to
R
access and share data by the RBI.

A
M
U
K
r.
M
y:
B
ed
oad
nl
ow
D
)
62
80
10
K
.(V
SH
A
K
Neo Bank/Banking
A
PR
A neobank is a digital bank that does not have any branches. Instead of having a
physical presence at a set location, neobanking is entirely online. A broad collection
of financial service providers, who primarily target tech-savvy customers, comes under
D
the umbrella of neobanking. Neobanks provide services via its mobile application. In
VE
India, neobanks don't have a bank license of their own. Instead, they count on bank
partners that are regulated to provide bank-licensed services. The likes of Jupiter, Fi,
R
Niyo, and RazorpayX are currently working in partnerships with traditional banks.
A
M
U
Revised MSME Definition

K
Revised Classification applicable w.e.f 1st July 2020

r.
M
Composite Criteria: Investment in Plant & Machinery/equipment and Annual

y:
Turnover
B
Classification Micro Small Medium

ed
Manufacturing Investment in Plant Investment in Plant Investment in Plant

ad
Enterprises and and Machinery or and Machinery or and Machinery or

Enterprises Equipment: Equipment: Equipment:
o
rendering Services Not more than Rs.1 Not more than Not more than
nl
crore and Annual Rs.10 crore and Rs.50 crore and

ow
Turnover ; not Annual Turnover ; Annual Turnover ;

more than Rs. 5 not more than Rs. not more than Rs.
D
crore 50 crore 250 crore

Ministry of Micro, Small and Medium Enterprises has decided to include Retail and
Wholesale trade as MSMEs for the limited purpose of Priority Sector Lending and they
would be allowed to be registered on Udyam Registration Portal for the following NIC
Codes and activities mentioned against them:
 45, Wholesale and retail trade and repair of motor vehicles and motorcycles
)
62
 46, Wholesale trade except of motor vehicles and motorcycles
 47, Retail trade except of motor vehicles and motorcycles
80
Read more at – https://rbi.org.in/scripts/FAQView.aspx?Id=84
10
K
.(V
SH
A
K
A
PR
D
VE
R
A
M
U
K
r.
M
y:
B
ed
oad
nl
ow
D
Awareness about RBI
guidelines, RBI Monetary
)
62
Policy, Regulatory
80
Initiatives
10
K
.(V
(Banking, Economy & General Awareness)
The Reserve Bank of India issues Notifications, Master Directions, Master Circulars,
SH
Draft Notification/Guidelines and Circulars on its website for all regulated Entities
which are available at https://www.rbi.org.in/Scripts/NotificationUser.aspx
A
K
Summary of RBI Digital Lending Policy Guidelines
A
Here's how the RBI guidelines on digital lending aim to protect borrowers:
PR
 The guidelines explicitly state that digital lending apps cannot access mobile
D
phone resources such as file and media, contact lists, call logs, telephone
VE
functions, etc. One-time access can be taken for camera, microphone, location
or any other facility necessary for the purpose of onboarding/ KYC requirements
R
only, with the explicit consent of the borrower.


A
The borrowers must be informed about the storage of customer data including
M
the type of data that can be stored, the length of time for which data can be
U
stored, restrictions on the use of data, data destruction protocol, standards for
K
handling security breach, etc. The information must be provided on their

website and the apps at all times.
r.
 At the time of disbursing the loans using digital apps, a key Fact Statement
M
(KFS) to the borrower before the execution of the contract in a standardized

y:
format for all digital lending products.

B
 The borrower must be informed about the all-inclusive cost of digital loans and
should also be a part of the Key Fact Statement.
ed
 The penal interest/charges levied, if any, on the borrowers shall be based on

ad
the outstanding amount of the loan. Further, the rate of such penal charges
shall be disclosed upfront on an annualized basis to the borrower in the Key
o
Fact Statement.
nl
 Any fees charges etc. payable to lending service providers must be paid by the
ow
regulated entities and borrowers must not be charged for this.

 The Key fact statement should contain the details of the annual percentage
D
rate, the recovery mechanism, details of grievance redressal officer designated

specifically to deal with digital lending/FinTech-related matters and the cooling-
off/ look-up period. The cooling-off/look-up period is the amount of time given
to the borrower for exiting digital loans, in case a borrower decides not to
continue with the loan.
 Any charges that are not mentioned in the Key Fact Statement are not
chargeable to borrowers at any stage during the loan term.
)
 The information shall be sent to the borrowers on their verified email/SMS on
62
the successful execution of loan contract/transaction. The information must be
80
sent on the letterhead of the regulated entity (bank) and must contain a Key
Fact statement, a summary of loan product, sanction letter, terms and
10
conditions, account statements, privacy policies of the LSPs/DLAs with respect
K
to borrowers data, etc.
.(V
 At the time of the sign-up/onboarding stage, information related to product
features, loan limit and cost, etc., must be informed to the borrowers.
 The banks, and NBFCs must publish the list of their digital lending apps, and
SH
lending service providers, engaged by them on their websites.
 Details of nodal grievance redressal officer must be displayed on the websites
A
K
of banks, NBFCs, lending service providers, digital lending apps and also on
A
the key fact statement.

PR
Digital lending apps and websites must allow a borrower to lodge their
complaint.
 If the complaint lodged by the borrower is not resolved within 30 days, then
D
he/she can lodge a complaint on the Complaint Management System (CMS)

VE
portal under the Reserve Bank-Integrated Ombudsman Scheme (RB-IOS). For

entities currently not covered under RB-IOS, a complaint may be lodged as per
R
the grievance redressal mechanism prescribed by the Reserve Bank.

A
 The banks, NBFCs must capture the economic profile of the borrowers covering
M
(age, occupation, income, etc.), before extending any loan over their own Digital
U
Lending Apps and/or through Lending Service Providers engaged by them, with
K
a view to assessing the borrower’s creditworthiness in an auditable way.

r.
 There shall be no automatic increase in credit limit unless explicit consent of

M
the borrower is taken on record for each such increase.


y:
During the cooling-off/look-up period, the borrower shall be given an explicit

option to exit the digital loan by paying the principal and the proportionate APR
B
without any penalty during this period. The cooling-off period shall be
ed
determined by the Board of the bank, NBFC. The period so determined shall
not be less than three days for loans having tenor of seven days or more and
ad
one day for loans having tenor of less than seven days. For borrowers
o
continuing with the loan even after look-up period, pre-payment shall continue
nl
to be allowed as per extant RBI guidelines.

ow
 The borrower shall be provided with an option to give or deny consent for use
of specific data, restrict disclosure to third parties, data retention, revoke
D
consent already granted to collect personal data and if required, make the app
delete/ forget the data.
 Explicit consent of the borrower shall be taken before sharing personal
information with any third party, except for cases where such sharing is required
as per statutory or regulatory requirements.
 No biometric data is stored/ collected in the systems associated with the Digital
Lending Apps of regulated entities / their Lending Service Providers unless
)
allowed under extant statutory guidelines.
62
 The banks and NBFCs shall ensure that any lending done through their Digital
80
Lending Apps and/or Digital Lending Apps of Lending Service Providers is
reported to Credit Information Companies (such as CIBIL) irrespective of its
10
nature/ tenor.
K
 Any extension of structured digital lending products by banks, NBFC and/or
.(V
Lending Service Providers engaged by them over a merchant platform involving
short-term, unsecured/ secured credits or deferred payments, need to be
reported to Credit Information Companies.
SH
 The regulated entities shall ensure that all loan servicing, repayment, etc., shall
be executed by the borrower directly in the regulated entities’ bank account
A
K
without any pass-through account/ pool account of any third party. The
A
disbursements shall always be made into the bank account of the borrower
PR
except for disbursals covered exclusively under statutory or regulatory mandate
(of RBI or of any other regulator), flow of money between regulated entities for
co-lending transactions and disbursals for specific end use, provided the loan
D
is disbursed directly into the bank account of the end-beneficiary. Regulated

VE
entities shall ensure that in no case, disbursal is made to a third-party account,

including the accounts of Lending Service Providers and their Digital Lending
R
Apps, except as provided for in these guidelines.

A
M
U
RBI Monetary Policy

K
r.
Under the Reserve Bank of India, Act,1934 (RBI Act,1934) (as amended in 2016), RBI
M
is entrusted with the responsibility of conducting monetary policy in India with the
primary objective of maintaining price stability while keeping in mind the objective of
y:
growth. Under Section 45ZA, the Central Government, in consultation with the RBI,
B
determines the inflation target in terms of the Consumer Price Index (CPI), once in five
ed
years and notifies it in the Official Gazette. Accordingly, on August 5, 2016, the Central
Government notified in the Official Gazette 4 per cent Consumer Price Index (CPI)
ad
inflation as the target for the period from August 5, 2016 to March 31, 2021 with the
o
upper tolerance limit of 6 per cent and the lower tolerance limit of 2 per cent. On March
nl
31, 2021, the Central Government retained the inflation target and the tolerance band
ow
for the next 5-year period – April 1, 2021 to March 31, 2026. Section 45ZB of the RBI
Act provides for the constitution of a six-member Monetary Policy Committee (MPC)
D
to determine the policy rate required to achieve the inflation target.

The Central Government has notified the following as the factors that constitute failure
to achieve the inflation target: (a) the average inflation is more than the upper tolerance
level of the inflation target for any three consecutive quarters; or (b) the average
inflation is less than the lower tolerance level for any three consecutive quarters.
Where the Bank fails to meet the inflation target, it shall set out in a report to the Central
)
62
Government:
80
 the reasons for failure to achieve the inflation target;
 remedial actions proposed to be taken by the Bank; and
10
 an estimate of the time-period within which the inflation target shall be achieved
K
pursuant to timely implementation of proposed remedial actions.
.(V
The operating framework of monetary policy aims at aligning the operating target – the
weighted average call rate (WACR) – with the policy repo rate through proactive
SH
liquidity management to facilitate transmission of repo rate changes through the entire
financial system, which, in turn, influences aggregate demand – a key determinant of
A
inflation and growth.
K
A
Read more @ https://www.rbi.org.in/scripts/FS_Overview.aspx?fn=2752
PR
RBI Monetary Policy September, 2022 – Key Highlights
D
 Benchmark interest rate hiked by 50 basis points to 3-year high at 5.90 per cent.
VE
 Economic growth projection for FY23 cut to 7 pc from 7.2 pc estimated in

August.
R
 GDP expected to grow at 6.3 pc in September quarter, 4.6 pc each in December

A
and March quarters.

M
 Inflation projection retained at 6.7 pc for ongoing fiscal year (FY23) Inflation to
U
remain above upper tolerance limit of 6 pc till December.


K
Average crude oil price for Indian basket expected at USD 100 per barrel.
 RBI to remain focused on withdrawal of accommodative monetary policy stance
r.
to check prices.
M
 RBI says rupee movement orderly against US dollar; depreciated only 7.4 pc
y:
this year till September 28.

 RBI does not have a fixed exchange rate for rupee; intervenes in market to curb
B
excessive volatility.
ed
 Forex reserve down 67 pc at USD 537.5 billion as of September 23 this year.

 The central bank confident of financing external sector deficit.
ad
 World in midst of third major shock from aggressive monetary tightening by

o
central banks.
nl
 Indian economy resilientMerchandise exports affected due to external factors,

private consumption picking up.
ow
 Recent correction in global crude oil prices if sustained may provide relief from
inflation.
D
 Bank credit has grown at accelerated pace of 16.2 pc.

 Next meeting of the Monetary Policy Committee on December 5-7.
Read more at –
https://rbidocs.rbi.org.in/rdocs/PressRelease/PDFs/PR1043MPCE8CB594A9B71450
3B8A9F6912968DF00.PDF
)
Important Regulatory Initiatives
62
80
1. Reserve Bank of India
10
Date Regulation Rationale
K
January 04, 2022 Retail Direct Scheme – Market Making: The To promote retail participation in
.(V
Reserve Bank notified market-making scheme Government Securities market by
to provide liquidity in the secondary market, providing prices/quotes to Retail
wherein the Primary Dealers shall be present Direct Gilt (RDG) account holders
SH
on the NDS-OM platform (odd-lot and Request enabling them to buy/sell
for Quotes segments) throughout market securities under the RBI Retail
hours and respond to buy/sell requests from Direct Scheme.
A
Retail Direct Gilt Account Holders (RDGAHs).
K
A
January 20, 2022 Amendment to regulations under the To widen the scope of companies
PR
amended Factoring Regulation Act, that can undertake factoring
2011: In addition to NBFC-Factors, all non- business.
deposit taking NBFC-Investment and Credit
D
Companies (NBFC-ICCs) with asset size of

VE
₹1,000 crore & above have been allowed to

undertake factoring business, subject to
satisfaction of certain conditions; and other
R
NBFCs can undertake factoring business by

A
converting themselves as NBFC-Factor.

M
February 10, 2022 Permitting banks to deal in Offshore To aid in removing the
U
Foreign Currency Settled Rupee segmentation between onshore

K
Derivatives market: Banks in India having and offshore markets and

r.
AD category-I license under the Foreign improving the efficiency of price

M
Exchange Management Act (FEMA), 1999, discovery.

were permitted to undertake transactions in
y:
the offshore foreign currency settled overnight

indexed swap (FCS-OIS) market with non-
B
residents and other AD category-I banks.

ed
February 10, 2022 Voluntary Retention Route (VRR) for To facilitate stable investments by
ad
Foreign Portfolio Investors (FPIs) FPIs in debt instruments issued in

investment in debt: The investment limit of the country.
o
₹1,50,000 crore under VRR has been

nl
increased to ₹2,50,000 crore with effect from

April 1, 2022. The minimum retention period
ow
shall be three years, or as decided by RBI for

each allotment by tap or auction.
D
February 10, 2022 Master Direction – Reserve Bank of India To promote the development of
(Credit Derivatives) Directions, the CDS market in India for
2022: These Directions shall apply to credit facilitating development of a liquid
derivatives transactions undertaken in OTC market for corporate bonds,
markets and on recognised stock exchanges especially for the bonds of lower-
in India. Residents and Non-residents, who rated issuers.
are eligible to invest in corporate bonds and
debentures under the Foreign Exchange
)
Management (Debt Instruments) Regulations,
62
2019 can participate in the credit derivatives
market. Eligible market-makers in credit
80
derivatives consist of SCBs (except SFBs,
10
LABs and RRBs), NBFCs (including SPDs and
HFCs) with a minimum NOF of ₹500 crore and
K
subject to specific approval of the Department
.(V
of Regulation, Reserve Bank, and EXIM Bank,
NABARD, NHB and SIDBI. The market-
makers will classify users as retail or non-
SH
retail.
March 08, 2022 Reserve Bank launched: (a) UPI123Pay- It To accelerate the process of
A
provides various options to enable feature digital adoption in India, by
K
phone users make payments through Unified creating a richer and more
A
Payments Interface (UPI); and (b)
PR inclusive ecosystem that can
DigiSaathi- A 24x7 Helpline to address the accommodate larger sections of
queries of digital payment users across the population.
products.
D
VE
March 09, 2022 NaBFID - All India Financial Institution NaBFID has been set up by the
(AIFI): National Bank for Financing Government to support
Infrastructure and Development (NaBFID) has development of long term
R
been set up as a Development Financial infrastructure financing in India

A
Institution. NaBFID shall be regulated and and the press release was issued
M
supervised as an All India Financial Institution to inform public about its position
U
(AIFI) by the Reserve Bank. It shall be the fifth in the regulatory landscape.
AIFI after EXIM Bank, NABARD, NHB and
K
SIDBI.
r.
M
March 14, 2022 Regulatory framework for Microfinance To deleverage the microfinance
Loans Direction: The new regulatory borrowers, enhance the customer
y:
framework for microfinance loans includes protection measures, enable the

common definition of microfinance loan for all competitive forces to bring down
B
REs, limit on loan repayment obligations of a the interest rates, provide

ed
household, detailed guidelines on pricing of flexibility to the REs to meet the

microfinance loans, conduct towards credit needs of the microfinance
ad
microfinance borrowers, and withdrawal of borrower comprehensively and

exemption for ‘not for profit’ companies introduce activity-based
o
engaged in microfinance activities. The REs regulation in the microfinance

nl
are required to put in place board-approved sector.

ow
policies on assessment of household income

and indebtedness, pricing of microfinance
loans, conduct of employees and providing
D
flexibility of repayment periodicity on

microfinance loans as per borrowers’
requirements.
March 25, 2022 Framework for Geo-Tagging of Payment To facilitate the nuanced spread
System Touch Points: Reserve Bank has of acceptance infrastructure and
released a framework for capturing geo- inclusive access to digital
)
tagging information of payment system touch payments.
62
points deployed by banks/non-bank PSOs.
Geo-tagging of payment system touch points
80
will enable proper monitoring of the availability
of payment acceptance infrastructures, inter
10
alia, Points of Sale (PoS) terminals, and Quick
K
Response (QR) codes. In turn, such
monitoring will support policy intervention to
.(V
optimise the distribution of payment
infrastructure.
SH
April 07, 2022 Establishment of Digital Banking Units To improve the availability of
(DBUs): Domestic SCBs (other than RRBs, digital infrastructure for banking
A
PBs and LABs) with past digital banking services and to accelerate and
K
experience are permitted to open Digital widen the reach of digital banking
A
Banking Units (DBUs) in Tier-1 to Tier-6 PR services.
centres, without having the need to take
permission from Reserve Bank of India. The
DBUs of the banks will be treated as Banking
D
Outlets (BOs). In addition to ensuring the

VE
physical security of the infrastructure of the

DBU, adequate safeguards for the cyber
security of the DBUs will have to be ensured
R
by the banks.
A
M
April 21, 2022 Legal Entity Identifier (LEI) for To further harness the benefits of
Borrowers: Extension of guidelines on LEI to LEI viz. identification of financial
U
UCBs and NBFCs. Further, non-individual transactions and improvement in

K
borrowers enjoying aggregate exposure of ₹5 the quality and accuracy of

r.
crore and above from banks and financial financial data systems for better
M
institutions (FIs) shall be required to obtain LEI risk management.

codes. As per the timeline for obtaining LEI,
y:
borrowers with total exposure above ₹25 crore

are required to obtain LEI by April 30, 2023.
B
Borrowers who fail to obtain LEI will not be

ed
sanctioned any new exposure nor shall they

be granted renewal/enhancement of any
ad
existing exposure.
o
April 21, 2022 Master Direction on Credit Card and Debit To set standards for card
nl
(effective from July Card – Issuance and Conduct issuance and conduct business.
01, 2022) Directions: These directions cover the
ow
general and conduct regulations relating to

credit, debit and co-branded cards which shall
D
be read along with prudential, payment and

technology & cybersecurity-related directions
applicable to credit, debit and co-branded
cards, as issued by the Reserve Bank.
June 01, 2022 Master Direction on Variation Margin: The To strengthen the resilience of
Reserve Bank issued Master Directions OTC derivatives markets.
regarding the exchange of variation margin
)
(VM) for non-centrally cleared derivatives
62
(NCCDs). A domestic covered entity shall
exchange variation margin with a counterparty
80
to an NCCD transaction if the counterparty is
a domestic covered entity or a foreign covered
10
entity. VM shall be calculated and exchanged
K
on an aggregate net basis, across all NCCD
contracts that are executed under a single,
.(V
legally enforceable netting agreement.
2. Securities and Exchange Board of India
SH
A
K
November 09, Strengthening of regulatory provisions and To expand the scope of related
2021 enhancing disclosures related to Related parties, RPTs and material RPTs
A
Party Transactions (RPTs). and to address the issue of
PR
siphoning of funds through
unlisted subsidiaries.
D
November 09, Backstop facility for Corporate Debt To facilitate liquidity in the
VE
2021 Securities. corporate bond market and to

respond quickly to stress
R
situations.
A
December 02, Investor Charter for Stock Brokers and To promote transparency, and
M
2021 Depository Participants. enhance awareness, trust and

U
confidence of investors in the

K
Indian securities market.

r.
December 03, SOP for handling technical glitches at the end To prevent disruptions like
M
2021 of stock brokers. inability to login, and failure to

transact faced by clients etc.
y:
December 09, Transaction in Corporate Bonds through To enhance price discovery and
B
2021 Request for Quote (RFQ) platform by Portfolio transparency in transaction of

ed
Management Services. eligible securities and to increase

liquidity on the exchange
ad
platform.
o
January 10, 2022 Framework for operationalising the Gold Government of India vide Gazette
nl
Exchange in India. notification S.O. 5401 (E) dated

December 24, 2021, notified
ow
“Electronic Gold Receipts” as

‘securities’ and vide Gazette
D
notification dated December 31,

2021, SEBI (Vault Managers)
Regulations, 2021, were notified,
paving the way for
operationalisation of Gold
Exchange.
January 25, 2022 Introduction of Special Situation Fund, which To enable AIFs, as a source of
shall invest only in ‘stressed assets’, as a new capital, to supplement the efforts
)
sub-category of Alternative Investment Funds of ARCs in buying stressed loans.
62
(AIFs).
80
February 04, 2022 Stress Testing for open-ended debt mutual To have a common methodology
fund schemes. across the industry for stress
10
testing and dynamic evaluation of
risk parameters (viz. interest rate
K
risk, credit risk and liquidity risk).
.(V
February 14, 2022 Standard Operating Guidelines for the Vault To ensure ease of compliance for
Managers and Depositories - Electronic Gold the market participants in the
SH
Receipts (EGR) segment. EGR ecosystem as well as
effective implementation of the
A
regulations.
K
March 24, 2022 Introduction of Options on Commodity Indices: To further deepen the commodity
A
Product Design and Risk Management derivatives market.
PR
Framework.
March 29, 2022 Operational guidelines for Security and To further strengthen the process
D
Covenant Monitoring using Distributed Ledger of security creation, monitoring of

VE
Technology (DLT). security created, monitoring of

asset cover and covenants of the
R
non-convertible securities by
A
Debenture Trustee using

blockchain technology.
M
U
April 01, 2022 Standardisation of industry classification. To bring uniformity in the industry
K
classification structure in Indian

securities market.
r.
M
April 04, 2022 Execution of ‘Demat Debit and Pledge To make the process of the
Instruction’ (DDPI) for transfer of securities authorisation given by a client to
y:
towards deliveries/settlement obligations and stock brokers and DPs more

B
pledging/re-pledging of securities. transparent and simpler, and

mitigate the possible misuse of
ed
Power of Attorney by stock

brokers.
ad
April 11, 2022 Comprehensive Risk Management To have appropriate provisions

o
Framework for Electronic Gold Receipts for risk management for trading in
nl
(EGR) segment. the EGR segment.

ow
D
3. Insurance Regulatory and Development Authority of India
December 30, IRDAI releases 2021-22 - List of Domestic To identify systemically important
2021 Systemically Important Insurers (D-SIIs): 1. insurers for enhanced regulatory
Life Insurance Corporation of India; 2. General supervision.
)
62
Insurance Corporation of India, and 3. New
India Assurance Co. Ltd.
80
January 03, 2022 IRDAI (Surety Insurance Contracts) To regulate and develop the
10
Guidelines, 2022. Surety Insurance business.
K
April 29, 2022 Exposure of Insurers to Financial and To permit all Insurers to have
.(V
Insurance Activities. exposure to Financial and
Insurance activities up to 30% of
investment assets.
SH
4. Pension Fund Regulatory and Development Authority
A
K
A
December 23, Guidelines for Operational Activities - to be To smoothen the operations for
2021 followed by Point of Presence (PoPs-APY). the Points of Presence under the
PR
NPS, the guidelines were issued
for compliance by all PoPs.
D
January 27, 2022 Change of Pension Fund and Asset Allocation Under the All Citizen Model and
VE
by NPS subscribers. NPS Corporate Sector Model, the

subscriber or the employer has
R
been provided with the option to

A
change the investment choice

M
and the asset allocation four times

in a financial year.
U
K
January 31, 2022 Revision of Services charges for PoP under To incentivize the PoPs to actively
NPS (All Citizen Model and Corporate sector). promote and distribute NPS and
r.
provide better customer service.

M
March 16, 2022 Guidelines for Operational Activities - to be To streamline the processes
y:
followed by Point of Presence (PoPs-NPS- covering, inter alia, service

B
Lite). standards, standard operating

procedures, contribution
ed
management procedures, reports

and disclosures, and redressal of
ad
grievances.
o
5. Insolvency and Bankruptcy Board of India

nl
ow
February 09, 2022 Amendment to CIRP Regulations: The For integrating directions given by
D
Insolvency and Bankruptcy Board of India IBBI’s circulars on the subjects

(IBBI/Board) notified the Insolvency and ‘Clarification - Consideration of
Bankruptcy Board of India (Insolvency matters/issues by the committee
Resolution Process for Corporate Persons) of creditors on request by
(Amendment) Regulations, 2022 (CIRP members of the committee’ and
Regulations). ‘Retention of records relating to
Corporate Insolvency Resolution
Process’ into the CIRP
regulations.
)
62
April 05, 2022 Amendment to Voluntary Liquidation To curtail delay in completion of
Process Regulations: The IBBI amended the the voluntary liquidation process
80
IBBI (Voluntary Liquidation Process) and ensure faster exit for firms.
Regulations, 2017 to modify timelines for
10
some stipulated activities undertaken by the
K
liquidator during the voluntary liquidation
process such as preparation of a list of claims,
.(V
distribution of proceeds from realisation to
stakeholders and completion of the liquidation
SH
process. It is also provided for submission of a
compliance certificate by the liquidator to the
Adjudicating Authority, summarising the
A
actions taken by the liquidator during the
K
process.
A
April 28, 2022 Amendment to Liquidation Process
PR To provide clarity on the
Regulations: The IBBI amended the IBBI application of IBBI (Liquidation
(Liquidation Process) Regulations, 2016 to Process) (Amendment)
D
insert explanations after regulations 2A, 21A Regulations, 2019 on certain

VE
and 31A to clarify that the requirements of aspects of the liquidation process.
these regulations shall apply to the liquidation
processes commencing on or after the date of
R
the commencement of the IBBI (Liquidation

A
Process) (Amendment) Regulations, 2019. It

M
also inserted an explanation after regulation

U
44 to clarify that in relation to the liquidation

processes commenced prior to the
K
commencement of the IBBI (Liquidation

r.
Process) (Amendment) Regulations, 2019,

M
the requirements of this regulation as existing

before such commencement, shall apply.
y:
June 14, 2022 Amendment to CIRP Regulations: The IBBI To improve information sharing
B
amended the CIRP Regulations to inter alia among stakeholders and further
ed
provide for the following: (a) OCs can furnish streamline the CIRP process.
extracts of Form GSTR-1, Form GSTR-3B and
ad
e-way bills, wherever applicable along with the

application filed under section 9 of the Code,
o
as evidence of transaction with the CD; (b)

nl
Place a duty on CD, its promoters or any other

ow
person associated with the management of

the CD to provide the information sought by
the RP; (c) Duty on the creditors to share all
D
relevant financial information of the CD from

their records with RP in preparation of the
information memorandum and avoidance
transactions application; (d) Resolution plan
shall provide for the manner in which
avoidance applications will be pursued after
the approval of the resolution plan and the
manner in which the proceeds, if any, from
such proceedings shall be distributed; and (e)
)
Enables the CoC to make a request to the RP
62
regarding the appointment of a third valuer if
there is significant difference in valuations
80
during CIRP.
10
June 14, 2022 Amendment to IBBI (Grievance and To facilitate expeditious redressal
K
Complaint Handling Procedure) and avoid placing undue burden
Regulations, 2017 and the IBBI (Inspection on the service providers.
.(V
and Investigation) Regulations, 2017: The
Amendment Regulations provides for
SH
following: (a) Revisions in various timelines
related to enforcement process provided in the
said regulations for addressing the issue of
A
delay in present mechanism; (b) Effective
K
participation of IPAs in regulating the IPs
A
through examination of grievances received
PR
against IPs; and (c) Intimation to CoC/AA
about the outcome of Disciplinary Committee
(DC) order.
D
VE
June 14, 2022 Amendment to IBBI (Information Utilities) To strengthen the IU, reduce
Regulations, 2017: The amendment inter alia delay in initiation of insolvency
provides for the following: (a) Expansion of the resolution process and bring
R
list of documents evidencing the debt or information symmetry amongst

A
default information in the Form C under the various stakeholders.

M
Schedule of the Information Utilities (IU)

U
Regulations; (b) The category of record of

default issued by an IU with “deemed to be
K
authenticated status” has been removed in

r.
case of FCs which are banks included in the

M
second schedule of the Reserve Bank of India

Act, 1934; (c) To enhance effectiveness and
y:
admissibility of the Record of Default (ROD), a

B
format of ROD has been specified; and (d)

Before filing an application to initiate CIRP
ed
under section 7 or 9, the creditor shall file the

information of default, with the IU and the IU
ad
shall process the information for the purpose

of issuing ROD in accordance with regulation
o
21.
nl
ow
6. International Financial Service Centres Authority

D
November 12, Version 2.0 of IFSCA Banking Handbook. To improve the regulatory
2021 framework.
November 25, Circular on Global Access to broker To permit registered broker-

2021 Dealers in IFSC: Vide this circular, IFSCA laid dealers incorporated in IFSC to
down the regulatory framework for various access exchanges in jurisdictions
)
categories of capital market intermediaries outside IFSC.
62
operating in IFSC, including broker-dealers.
80
January 19, 2022 Circular on Qualified Jewellers importing To lay down conditions for entities
gold through India International Bullion to be considered as ‘Qualified
10
Exchange: The Directorate General of Jewellers’ for transacting as
Foreign Trade, Ministry of Commerce & trading members/clients of trading
K
Industry specified that the import of gold under members on IIBX for import of
.(V
ITC(HS) Codes 71081200 and 71189000, gold.
shall be permitted by Qualified Jewellers
through India International Bullion Exchange
SH
(IIBX).
A
January 31, 2022 IFSCA (Insurance Web Aggregator) To cater to the insurance
K
Regulations, 2022: The IFSCA notified a requirements of the Indian
A
comprehensive regulatory framework for the diaspora and to promote such
Insurance Web Aggregator (IWA), which inter retail businesses through
PR
alia provides liberalised minimum capital and technology at IFSC.
net-worth requirements and a light-touch
D
regulatory framework for operations of IWAs

VE
from the IFSC.
April 19, 2022 IFSCA (Fund Management) Regulations, To streamline and consolidate all
R
2022: The internationally aligned regulations, existing regulations on Fund

A
inter alia, provide for registration and Management in IFSC.

M
regulations of Fund Management Entity

(FME), single registration for multiple activities
U
such as management of retail schemes

K
(Mutual Funds, ETFs), non-retail schemes

(AIFs), Portfolio Management Services,
r.
InvITs, REITs, Family Offices, Investment

M
Advisors, Fund Administrators and Fund Labs.

y:
April 27, 2022 Framework for FinTech Entity in the The framework is aimed at giving
B
International Financial Services Centres a boost to the establishment of a

(IFSCs): The framework covers FinTech and world-class FinTech Hub at GIFT
ed
TechFin solutions and, inter alia, provides for IFSC comparable with other
ad
Direct Entry Authorisation to eligible FinTechs, International Financial Centers

dedicated Regulatory Sandbox to test FinTech (IFCs).
o
solutions under IFSCA FinTech Regulatory

nl
Sandbox and Innovation Sandbox. It also

incorporates the Inter-Operable Regulatory
ow
Sandbox (IORS) mechanism - a mechanism to

facilitate the testing of innovative hybrid
D
financial products/services falling within the

regulatory ambit of more than one financial
sector regulator.
May 18, 2022 Framework for Aircraft Lease: The revised To grow aircraft financing and
framework consolidates the guidelines relating leasing activities within Indian
to the business of operating and/or financial shores for the development of the
)
lease of aircraft or helicopter and engines of aviation industry.
62
aircraft or helicopter or any part thereof and/or
Aircraft Ground Support Equipment by the
80
aircraft leasing entities registered with the
IFSCA.
10
K
.(V
NEWS & UPDATES
 Banking News (Domestic and International) can be accessed at Baroda
SH
Gurukul at the following path:
A
Baroda Gurukul > Social Learning > Digital Library > News Flash Folder
K
News Flash also covers Knowledge Bite which are Banking (or related) terms
A
helpful to common banker.
PR
D
 Gist of Circulars (HO, BCC and RBI) can be accessed at Baroda Gurukul at
VE
the following path:

R
Baroda Gurukul > Social Learning > Digital Library > Gist of Circulars folder
A
M
U
K
r.
M
y:
B
ed
oad
nl
ow
D
Awareness about Digital
Economy (Emerging
)
62
Market Segment in India)
80
10
 NPCI - National Payments Corporation of India (NPCI), an umbrella
organisation for operating retail payments and settlement systems in India, is
K
an initiative of Reserve Bank of India (RBI) and Indian Banks’ Association (IBA)
.(V
under the provisions of the Payment and Settlement Systems Act, 2007, for
creating a robust Payment & Settlement Infrastructure in India.
SH
Considering the utility nature of the objects of NPCI, it has been incorporated
as a “Not for Profit” Company under the provisions of Section 25 of Companies
A
Act 1956 (now Section 8 of Companies Act 2013), with an intention to provide
K
infrastructure to the entire Banking system in India for physical as well as
A
electronic payment and settlement systems. The Company is focused on
bringing innovations in the retail payment systems through the use of
PR
technology for achieving greater efficiency in operations and widening the reach
of payment systems.
D
VE
The ten core promoter banks are State Bank of India, Punjab National Bank,
Canara Bank, Bank of Baroda, Union Bank of India, Bank of India, ICICI Bank
Limited, HDFC Bank Limited, Citibank N. A. and HSBC. In 2016 the
R
shareholding was broad-based to 56 member banks to include more banks

A
representing all sectors. In 2020, new entities regulated by RBI were inducted,
M
consisting of Payment Service Operators, payment banks, Small Finance

U
Banks, etc. The shares were allotted pursuant to issuance of equity shares on
private placement basis in compliance to the applicable provisions of the
K
Companies Act, 2013.

r.
M
Major initiatives of NPCI are Rupay, Immediate Payments Service (IMPS),

National Automated Clearing House (NACH) , Unified Payment Interface (UPI),
y:
Aadhaar Payment Bridge System (ABPS), Aadhaar Enabled Payment System

B
(AEPS), National Electronic Toll Collection (NETC), Bharat Bill Payment

System (BBPS) etc.
ed
 UPI – Unified Payments Interface (UPI) is a system that powers multiple bank
ad
accounts into a single mobile application (of any participating bank), merging
o
several banking features, seamless fund routing & merchant payments into one
nl
hood. It also caters to the “Peer to Peer” collect request which can be scheduled
ow
and paid as per requirement and convenience.

D
With the above context in mind, NPCI conducted a pilot launch with 21 member
banks. The pilot launch was on 11th April 2016 by Dr. Raghuram G Rajan,
Governor, RBI at Mumbai. Banks have started to upload their UPI enabled Apps
on Google Play store from 25th August, 2016 onwards.
Features of UPI
 Immediate money transfer through mobile device round the clock 24*7
)
and 365 days.
62
 Single mobile application for accessing different bank accounts.
 Single Click 2 Factor Authentication – Aligned with the Regulatory
80
guidelines, yet provides for a very strong feature of seamless single click
10
payment.
 Virtual address of the customer for Pull & Push provides for incremental
K
security with the customer not required to enter the details such as Card
.(V
no, Account number; IFSC etc.
 QR Code
SH
 Best answer to Cash on Delivery hassle, running to an ATM or rendering
exact amount.
A
 Merchant Payment with Single Application or In-App Payments.
K
 Utility Bill Payments, Over the Counter Payments, QR Code (Scan and
A
Pay) based payments. PR
 Donations, Collections, Disbursements Scalable.
 Raising Complaint from Mobile App directly.
D
In 2018 NPCI, launched upgraded version of UPI ie. UPI 2.0. Here are the some
VE
recently added features of UPI 2.0 –
Linking of overdraft account: In addition to current and savings accounts,

R
customers can link their overdraft account to UPI. Customers will be able to
A
transact instantly and all benefits associated with overdraft account shall be
M
made available to the users. UPI 2.0 will serve as an additional digital channel
U
to access the overdraft account.

K
One-time mandate: UPI mandate could be used in a scenario where money is

r.
to be transferred later by providing commitment at present. UPI 2.0 mandates

M
are created with one-time block functionality for transactions. Customers can
pre-authorise a transaction and pay at a later date. It works seamlessly for
y:
merchants as well as for individual users. Mandates can be created and

B
executed instantly. On the date of actual purchase, the amount will be deducted
and received by the merchant/individual user.
ed
ad
Invoice in the inbox: According to NPCI, this feature is designed for customers
to check the invoice sent by merchant prior to making payment. It will help
o
customers to view and verify the credentials and check whether it has come
nl
from the right merchant or not. Customers can pay after verifying the amount
ow
and other important details mentioned in the invoice.
Signed intent and QR: This feature is designed for customers to check the
D
authenticity of merchants while scanning QR or quick response code. It notifies

the user with information to ascertain whether the merchant is a verified UPI
merchant or not. This provides an additional security. Customers will be
informed in case the receiver is not secured by way of notifications, said NPCI.
UPI123PAY – For the feature phone users Reserve Bank of India has launched
At present, efficient access to UPI is available on smart phones. Considering
)
62
that there are more than 40 crore feature phone mobile subscribers in the
country, UPI123pay will materially improve the options for such users to access
80
UPI.
10
UPI123Pay includes four distinct options:
K
(i) App-based Functionality: An app would be installed on the feature phone
.(V
through which several UPI functions, available on smartphones, will also be
available on feature phones.
SH
(ii) Missed Call: This will allow feature phone users to access their bank account
and perform routine transactions such as receiving, transferring funds, regular
A
purchases, bill payments, etc., by giving a missed call on the number displayed
K
at the merchant outlet. The customer will receive an incoming call to
A
authenticate the transaction by entering UPI PIN.
PR
(iii) Interactive Voice Response (IVR): UPI payment through pre-defined IVR
numbers would require users to initiate a secured call from their feature phones
D
to a predetermined number and complete UPI on-boarding formalities to be

VE
able to start making financial transactions without internet connection.

(iv) Proximity Sound-based Payments: This uses sound waves to enable
R
contactless, offline, and proximity data communication on any device.

A
M
 Immediate Payments Service (IMPS) – Prior to 2010, the Indian banking

U
industry faced a challenge in electronic inter-bank fund transfers. Till this time,
inter-bank modes available were NEFT and RTGS, which were accessible for
K
fund transfers only during banking hours. Considering the pressing business
r.
requirement for a seamless 24x7x365 service, NPCI conducted a pilot study on

M
the mobile payment system with banks like SBI, BOI, UBI and ICICI in August
y:
2010. Subsequently, Yes bank, Axis and HDFC bank joined in the month of
September, October and November 2010, respectively.
B
ed
Immediate Payment Service (IMPS) was publicly launched on 22nd November

2010 by Smt. Shyamala Gopinath, Deputy Governor Reserve Bank of India, in
ad
Mumbai. IMPS is now a widely utilised mode of fund transfers across India by
o
customers, businesses, banks and financial institutions.

nl
ow
IMPS is a robust, real-time, instant payment, electronic funds transfer service

that is available 24x7, across the year (including holidays), to facilitate inter-
D
bank (account to-account, account-to-wallet* and wallet- to-account) fund

transfers. It can be accessed on multiple electronically enabled channels such
as mobile, internet, ATM, SMS.
Banks and payment banks that have RBI approved mobile banking licenses are
eligible to avail of and offer IMPS. They can on-board as beneficiary bank only
or remitter and beneficiary bank. Any banking entity mentioned can play a part
in the IMPS ecosystem.
)
62
Fund transfer - There are two methods by which a fund transfers can be
80
initiated through IMPS
1) Using Mobile number + Mobile Money Identifier (MMID): A combination of
10
the mobile number and MMID (7 digit number) is linked to a unique account
K
number. Both Remitter as well as Beneficiary needs to register their mobile
.(V
numbers with their respective bank accounts and get an MMID, in order to send
or receive funds using IMPS.
2) Using Account number + IFSC In cases where the Remitter is enabled on
SH
mobile banking, but Beneficiary mobile number is not registered with any bank
account then fund transfer can be made using beneficiary’s account number
A
K
and IFSC.
A
PR
Transactions through IMPS - In view of the importance of the IMPS system in
processing of domestic payment transactions, RBI has increased the per-
transaction limit from Rs. 2 lakh to Rs. 5 lakh for channels other than SMS and
D
IVRS. This will lead to further increase in digital payments and will provide an
VE
additional facility to customers for making digital payments beyond Rs. 2 lakh.
R
 Digital Banking Unit (DBU) – A specialised fixed point business unit / hub
A
housing certain minimum digital infrastructure for delivering digital banking

M
products & services as well as servicing existing financial products & services
U
digitally, in both self-service and assisted mode, to enable customers to have

K
cost effective/ convenient access and enhanced digital experience to/ of such
r.
products and services in an efficient, paperless, secured and connected

M
environment with most services being available in self-service mode at any

time, all year round.
y:
B
Scheduled Commercial Banks (other than RRBs, PBs and LABs) with past
ed
digital banking experience are permitted to open DBUs in Tier 1 to Tier 6

centres, unless otherwise specifically restricted, without having the need to take
ad
permission from Reserve Bank of India in each case.

o
nl
Each DBU shall be housed distinctly, with the separate entry and exit
provisions. They will be separate from an existing Banking Outlet with formats
ow
and designs most appropriate for digital banking users.

D
For front-end or distribution layer of digital banking, each bank would choose
suitable smart equipment, such as Interactive Teller Machines, Interactive
Bankers, Service Terminals, Teller and Cash Recyclers, Interactive Digital
Walls, Document uploading, self -service card issuance devices, Video KYC
Apparatus, secured and connected environment for use of own device for digital
banking, Video Call / Conferencing facilities, to set up an DBU. These facilities
can be insourced or outsourced while complying with relevant regulatory
)
guidelines.
62
80
The establishment of DBUs should be part of the digital banking strategy of the
bank. The operational governance and administrative structure of the DBUs will
10
be aligned with that of the Digital Banking Segment of the bank. However, in
K
order to accelerate digital banking initiatives, each DBU will be headed by a
.(V
sufficiently senior and experienced executive of the bank, preferably Scale III
or above for PSBs or equivalent grades for other banks who can be designated
as the Chief Operating Officer (COO) of the DBU.
SH
Banks shall report the Digital Banking Segment as a sub-segment within the
A
K
existing Retail Banking Segment. Digital banking products / services applicable
to segments other than ‘Retail Banking’ need not be reported at this stage.
A
PR
Financial literacy can be promoted through these digital banking units. Financial
inclusion and digital banking go another mile in achieving greater digitising and
D
formalising of Indian economy. Popularising digital banking is important, so the

VE
most important aspect is that it is going to be cost effective for the consumer
and it is going to be absolutely safe and secure for them to use it. These
R
thoughts will have to be promoted by the bank agents, meaning banking agents,
A
banking correspondent bank managers and all officials so that greater

M
formalisation of the Indian economy can be achieved. As part of the Union

U
budget speech for 2022-23, the Finance Minister announced setting up the 75
K
DBUs in 75 districts to commemorate our country's 75 years of independence.

r.
On 16th October 2022, Prime Minister inaugurated 75 digital banking units

M
across the country.

y:
B
 Interoperable Card-less Cash Withdrawal (ICCW) at ATMs - Card-less cash

ed
withdrawal through ATMs is a permitted mode of transaction offered by a few

ad
banks in the country on an on-us basis (for their customers at their own ATMs).
The absence of need for a card to initiate cash withdrawal transactions would
o
help in containing frauds like skimming, card cloning, device tampering, etc. All
nl
banks, ATM networks and WLAOs may provide the option of ICCW at their
ow
ATMs. NPCI has been advised to facilitate Unified Payments Interface (UPI)
integration with all banks and ATM networks. While UPI would be used for
customer authorisation in such transactions, settlement would be through the
D
National Financial Switch (NFS) / ATM networks.

The on-us / off-us ICCW transactions shall be processed without levy of any
charges other than those prescribed by Reserve Bank of India on Interchange
Fee and Customer Charges. Withdrawal limits for ICCW transactions shall be
in-line with the limits for regular on-us / off-us ATM withdrawals. All other
instructions related to Harmonisation of Turn Around Time (TAT) and customer
compensation for failed transactions shall continue to be applicable.
)
62
80
 E-Rupi Voucher – National Payments Corporation of India (NPCI) in association
with Department of Financial Services (DFS), National Health Authority (NHA),
10
Ministry of Health and Family Welfare (MoHFW), and partner banks, has
launched an innovative digital solution – ‘e-RUPI’. The users of this seamless
K
one-time payment mechanism will be able to redeem the voucher without a
.(V
card, digital payments app or internet banking access, at the merchants
accepting e-RUPI. e-RUPI would be shared with the beneficiaries for a specific
SH
purpose or activity by organizations or Government via SMS or QR code. This
contactless e-RUPI is easy, safe and secure as it keeps the details of the
beneficiaries completely confidential. The entire transaction process through
A
this voucher is relatively faster and at the same time reliable, as the required
K
amount is already stored in the voucher.
A
PR
The e-RUPI prepaid digital voucher has a cap of Rs. 10,000/- per voucher and
each voucher can be used / redeemed only once. To facilitate digital delivery
of various government schemes to the beneficiaries, it is proposed to increase
D
the cap on amount for e-RUPI vouchers issued by Governments to Rs.

VE
1,00,000/- per voucher and allow use of the e-RUPI voucher multiple times
(until the amount of the voucher is completely redeemed) but for private usage
R
maximum cap is Rs 10000.

A
M
 ONDC – ONDC, or Open network for digital commerce, a UPI-type protocol, is

a set of standards for voluntary adoption by sellers or logistics providers or
U
payment gateways. It is a market and community-led network that aims to

K
create an open, inclusive and competitive marketplace. Still, at a nascent stage,

r.
it is being pitched as a solution to break the dominance of large e-commerce

M
firms like Flipkart, Amazon, and others in India.

y:
The network aims to democratise e-commerce by putting more kiranas and

B
unorganised retailers online. ONDC is being pitched as a non-profit e-

ed
commerce network that will display products and services from all participating
e-commerce platforms in search results. For example, if both Amazon and
ad
Flipkart integrate their platforms with ONDC, a user searching for a Bluetooth
o
headset on Amazon would also see results from Flipkart on the Amazon app.
nl
Set up as a non-profit company (like the National Payments Corporation of

ow
India), ONDC would let sellers voluntarily display their products and services
across all participating apps and platforms. Since this network uses open
D
specifications and protocols, and isn't tied down to any platform – it doesn't
require buyers and sellers use the same platform to complete a transaction. So
long as the platforms are connected to this open network, buyers and sellers
can transact irrespective of the applications they use.
 Jan Samarth Portal – Jan Samarth is a first-of-its-kind online platform for directly
connecting lenders with beneficiaries. Citizens can avail loans under 13 Central
)
government schemes under 4 loan categories. The one-stop portal allows
62
citizens to check eligibility, apply online and get digital approval. The core
80
objective of Jan Samarth Portal is to promote inclusive growth and development
of various sectors by guiding and providing them the right type of Government
10
benefits through simple and easy digital processes. The portal ensures end-to-
end coverage of all the processes and activities of all the linked schemes.
K
.(V
The Jan Samarth portal enables citizens to explore and avail credit under
various Central Government schemes. The four loan categories currently
SH
available on the portal include: Education, Agri Infrastructure, Business Activity
& Livelihood. The Jan Samarth Portal uses cutting-edge technologies and smart
A
analytics to provide intuitive guidance to citizens for checking subsidy eligibility
K
and auto recommendation system offers best suitable schemes as per citizen's
A
requirements and credentials. Advanced technologies automate the entire
PR
lending processes based on digital verifications making the entire process
simple, speedy and hassle-free.
D
 India International Bullion Exchange (IIBX) - PM launched India’s 1st IIBX at

VE
International Financial Services Centres (IFSC) at GIFT City (Gujarat). It is a

market through which buyers and sellers trade gold and silver as well as
R
associated derivatives. Example - London Bullion Market is known as the

A
primary global market trading platform for gold and silver. IIBX was
M
1 st introduced in budget 2020 for easing gold import by Jewellers in India.

U
Bullion can sometimes be considered legal tender and is often held as

K
reserves by central banks or held by institutional investors. India is the

world’s 2 nd biggest consumer of Gold after China.
r.
M
 Environment, Social and Governance (ESG) - Environmental, Social, and

y:
Governance (ESG) goals are a set of standards for a company’s operations

that force companies to follow better governance, ethical
B
practices, environment-friendly measures and social responsibility.

ed
Environmental is all about an enterprise focus and action leadership around

energy usage, waste management, and natural resources conservation. Social
ad
deals with an enterprise relationship and reputation with its employees,

customers, stakeholders, institutions and the larger community. Governance is
o
all about how an enterprise manages with the proper management structure,
nl
executive compensation and ensuring stakeholder rights, especially

ow
employees, shareholders and customers.

D
ESG as a concept is not new to India. SEBI requires top 1,000 listed
companies to issue Business Responsibility and Sustainability Report that
includes ESG concepts in its disclosures. India also has a green bond market,
proceeds of which are used to fund renewable energy projects. One of the initial
milestones towards identifying ESG disclosure requirements for companies
was the release of the National Voluntary Guidelines on Social, Environmental
and Economic Responsibilities of Business (NVGs) in 2011 by the Ministry of
Corporate Affairs (MCA).
)
In 2012, the SEBI formulated the Business Responsibility Reports (BRR) which
62
mandated top 100 listed entities (which was extended to top 500 listed entities
80
in 2015) by market capitalization to file BRR as part of their annual report. In
2021, SEBI replaced the existing BRR reporting requirement with a more
10
comprehensive integrated mechanism, the Business Responsibility and
Sustainability Report (BRSR). It will be mandatorily applicable to the top 1,000
K
listed entities (by market capitalization) from FY 2022-23 onwards.
.(V
 Renewable Energy - India's energy demand is expected to increase more than
SH
that of any other country in the coming decades due to its sheer size and
enormous potential for growth and development. Therefore, it is imperative that
A
most of this new energy demand is met by low-carbon, renewable sources.
K
India's announcement India that it intends to achieve net zero carbon emissions
A
by 2070 and to meet 50% of its electricity needs from renewable sources by
PR
2030 marks a historic point in the global effort to combat climate change.
The Indian renewable energy sector is the fourth most attractive renewable
D
energy market in the world. India was ranked fourth in wind power, fifth in solar
VE
power and fourth in renewable power installed capacity, as of 2020. Installed

renewable power generation capacity has gained pace over the past few years,
R
posting a CAGR of 15.92% between FY16-22. India is the market with the
A
fastest growth in renewable electricity, and by 2026, new capacity additions are
M
expected to double.
U
With the increased support of the Government and improved economics, the
K
sector has become attractive from an investors perspective. As India looks to

r.
meet its energy demand on its own, which is expected to reach 15,820 TWh by
2040, renewable energy is set to play an important role. As of July 2022, India’s
M
installed renewable energy capacity (including hydro) stood at 161.28 GW,

y:
representing 39.91% of the overall installed power capacity. The country is

B
targeting about 450 Gigawatt (GW) of installed renewable energy capacity by

2030 – about 280 GW (over 60%) is expected from solar.
ed
The non-hydro renewable energy capacity addition stood at 4.2 GW for the first
ad
three months of FY23 against 2.6 GW for the first three months of FY22. Solar
power installed capacity has increased by more than 18 times, from 2.63 GW
o
nl
in March 2014 to 49.3 GW at the end of 2021. In FY22, till December 2021,
India has added 7.4GW of solar power capacity, up 335% from 1.73 GW in the
ow
previous year. Off-grid solar power is growing at a fast pace in India, with sales
of 392,000 off-grid solar products in the first half of 2021. Power generation
D
from renewable energy sources (not including hydro) stood at 18.99 billion units
(BU) in July 2022, up from 16.61 BU in July 2021. With a potential capacity of
363 GW and with policies focused on the renewable energy sector, Northern
India is expected to become the hub for renewable energy in India.
 Electric Vehicles - By 2030, 80% of two and three-wheelers, 40% of buses,

and 30 to 70% of cars in India will be electric vehicles, says the NITI Aayog.
As the nation gears towards its ‘Zero-emission’ 2070 dream, funds and focus
)
are directed towards electric mobility. In March 2022, between 2019-2020 and
62
2020-2021, the two–wheeler EVs rose by 422% ; three–wheelers by 75% and
80
four–wheelers up by 230%. The number of electric buses also increased by
over 1,200%. India’s road to a fully-electric ecosystem still has a few hurdles -
10
High cost, inadequate infrastructure, lack of high performing EVs The electric
variants of the 2 and 4 wheelers are often priced much higher than regular fuel
K
options. This is the most important reason for the slow adoption of electric
.(V
mobility.
Over 60% of consumers believe that an EV is beyond their budget. The
SH
maintenance costs are high mainly due to the lack of necessary amenities.
There are more than 65,000 petrol bunks in India but only 1640 EV charging
A
stations. The EVs in India so far have only been variants of the already
K
available fossil-fuel driven 2 and 4 wheelers. High performing luxury variants
A
or supercars like the Tesla are yet to hit the Indian markets.
PR
Hoping to convert more consumers into Electric Vehicle owners, the
government is offering subsidies for purchasing electric vehicles. A tax
D
exemption of Rs 1.5 lakh is also given for people buying electric cars on loan.
VE
The GST for the purchase of EVs is set at just 5% with zero cess.
R
Under two phases of the FAME or faster adoption and manufacturing of hybrid
A
and electric vehicles scheme, the government has been trying to improve the
M
infrastructure for electric vehicle manufacturing in the country. There is also a

plan for 22,000 EV charging stations to be set up by Oil Marketing Companies
U
across the country. In the 2022 budget, a battery swapping policy was
K
announced as an easier way to charge EVs. Last year, the government also
r.
announced a Production Linked Incentive scheme for automakers, a part of

M
which aims to boost electric vehicles manufacturing.

y:
B
ed
oad
nl
ow
D
Awareness about financial
sector other than banking
)
62
Credit Suisse Crisis-Explained
80
Credit Suisse - Switzerland's largest and Europe's second-largest bank is
10
witnessing severe financial crisis and it’s share prices are falling from last few months.
Addition to this the spreads on credit default swaps (CDS) on Credit Suisse debt
K
have spiked to a 14-year high — the highest since the global financial crisis of
.(V
2008.These scenarios speculate if Credit Suisse is about to collapse, much like
Lehman Brothers, an iconic American investment bank, did in 2008. Credit Suisse is
SH
considered as one of the "global systemically important banks". Which means its
failure could trigger a global financial crisis.
A
K
Credit Suisse Group AG was founded in 1856 to fund the Swiss Railways network.
A
It has been instrumental in shaping the landscape of Switzerland over the years by
PR
giving loans for the development of both Switzerland and Europe's railway systems
and electrical grid. It began personal banking and retail banking operations in the 20th
century, and to this day, it remains one of the largest banks in Europe. In the 1980s
D
and 1990s, Credit Suisse merged with First Boston to create Credit Suisse First
VE
Boston, which was its investment banking division till 2006. Credit Suisse has a
domestic Swiss bank plus wealth management, investment banking, and asset
R
management operations.
A
M
Reportedly, Credit Suisse had just over 50,000 employees and 1.6 trillion Swiss
U
francs ($1.62 trillion) in assets under management at the end of 2021. The reduction
K
in share prices is mainly attributed to several risky bets made by the bank which made
r.
bank to undergone losses. That, in turn, has hurt its profitability, eroded investor
M
confidence, and has made raising fresh capital costlier.

y:
What Has Led to Credit Suisse's Recent Troubles?

B
(a) The Archegos Capital scandal was unearthed in March 2021, when Archegos
ed
Capital, a US-based Hedge Fund defrauded several banks including Credit Suisse,
Nomura,Mitsubishi UFJ Financial Group, and Deutsche Bank.
oad
In short, the fraud, allegedly led by investor Bill Hwang, led to losses to Credit Suisse
nl
to the tune of $4.7 billion as well as the removal of two of the bank's top executives.
An independent audit authorised by the bank's board also found that it had failed to
ow
manage risk efficiently.

D
(b) In March 2021, a month before the Archegos scandal became public, Credit
Suisse also announced that it was closing and liquidating several investor funds,
worth $10 billion, provided to another financial services
Company, Greensill capital. Greensill declared insolvency in March 2021. Investors

reportedly lost close to $3 billion because of this.
)
62
(c) In February 2022, a massive leak of over 30,000 of Credit Suisse's clients revealed
80
over $100 billion in wealth held by people who had profited from "torture, drug
trafficking, money laundering, corruption and other serious crimes. This revelation also
10
hurt the bank's reputability further, amplifying investor concerns.
K
.(V
The way ahead?
The bank recently put forth turnaround strategy for 100 days. Credit Suisse is said
SH
to tap 20 Banks for Capital Increase. It is reported that Goldman, Citi, JPMorgan,
Santander, BNP joining consortium to execute restructuring plan of the bank with a
A
proposed right issue of $4 billion. Raising fresh capital within short possible time,
K
reduction in expenses (Already bank has reportedly sacked 9000 employees) are the
A
key factors for the bank to survive in future.
PR
RBI’s Advanced Supervisory Monitoring System - DAKSH
D
RBI is taking various initiatives in strengthening supervision, which among other

VE
initiatives include adoption of latest data and analytical tools as well as leveraging
technology for implementing more efficient and automated work processes. In
R
continuation of this effort, the central bank has recently launched a new tech initiative
A
named “दक्ष (DAKSH)-Reserve Bank’s Advanced Supervisory Monitoring

M
System”, which is expected to make the Supervisory processes more robust.

U
K
“दक्ष (DAKSH)” means “efficient” & “competent”, reflecting the underlying

r.
capabilities of the application. “दक्ष (DAKSH)” is a web-based end-to-end workflow

M
application through which RBI shall monitor compliance requirements in a more

focused manner with the objective of further improving the compliance culture in
y:
Supervised Entities (SEs) like Banks, NBFCs, etc. The application will also enable
B
seamless communication, inspection planning and execution, cyber incident reporting

ed
and analysis, provision of various MIS reports etc.

ad
Cancellation of the Certificate of Registration of Brickwork Ratings

o
SEBI has recently cancelled the Certificate of Registration (CoR) granted to

nl
Brickwork Ratings India Private Limited as a Credit Rating Agency (CRA). The
ow
CRA has been directed to wind down its operations within a period of six months
from October 6, 2022 and not to take any new clients /fresh mandates from the date
D
of Order ibid.
In view of the above, Regulated Entities/ Market Participants are advised that in
respect of ratings/credit evaluations required in terms of any guidelines issued by the
Reserve Bank, no such fresh ratings/evaluations shall be obtained from Brickwork
Ratings with immediate effect. RBI is going to issue prudential treatment of the existing
ratings issued by the rating agency shortly.
)
62
International Year of Millets (IYOM)-2023
80
During the Budgetary announcement for the year 2022-23,Government of India has
announced the year 2023 as the International Year of Millets. The announcement
10
made with an intention to provide Support for post-harvest value addition, enhancing
K
domestic consumption and for branding millet products nationally and internationally.
.(V
To give a boost to this initiative a MoU was signed between the Department of
Agriculture and Farmers Welfare and the National Agricultural Cooperative
SH
Marketing Federation of India Limited (NAFED).
A
Under this MoU, DA&FW and NAFED will collaborate in key areas like facilitating
K
advisory support to manufacturers or processors of millet-based products to develop
A
value-added millet-based commodities, on-boarding of start-ups, inclusion of start-ups
PR
empanelled with Indian Institute of Millets Research (IIMR), formation of FPOs
specifically for developing a range of millet-based products.
D
VE
In addition to this it is agreed to promote and market, millet-based products through

the network of NAFED Bazaar Stores and other institutions linked with NAFED as
well as installation of Millet based Vending Machines at various locations across
R
Delhi-NCR and dispensing millet-based products that shall assist in establishing the
A
focus on millet-based commodities.

M
U
K
Strategic Disinvestment of IDBI Bank Ltd- Issue of PIM/ EOI

r.
M
Government of India currently holds 45.48% and Life Insurance Corporation of

y:
India holds 49.24% of the total equity share capital of IDBI Bank Ltd. Pursuant to the
strategic disinvestment of IDBI Bank, Government of India now proposes to sell shares
B
representing 30.48% and LIC of India proposes to sell shares representing 30.24%
ed
aggregating to 60.72% of the equity share capital of IDBI Bank, along with transfer of
management control in IDBI Bank.
oad
Government of India acting through Department of Investment and Public Asset

nl
Management (DIPAM), has engaged “KPMG India Private Limited” as the

Transaction Advisor and “Link Legal” as the Legal Advisors for providing advisory
ow
services and managing the transaction. The bank has released Preliminary
D
Information Memorandum (PIM) which has been published on

October 7, 2022 for inviting expression of interest (EOI) from the bidders for the
stake.
Government of India is bidding for Rs. 640 billion value for IDBI bank for stake sale
purpose and expecting to get the financial bids for IDBI Bank by March 2023 and
complete the process of privatization in the first half of next fiscal beginning April 2023.
)
62
Previously in January 2019, Government of India has sold 49.24% stake in IDBI bank
to LIC of India. Henceforth, the bank is categorized as Private Sector Bank.
80
Launch of 5G network services in India
10
K
The next-generation network service “5G” was inaugurated at the sixth edition of
.(V
India Mobile Congress (IMC) on 1stOctober 2022. Airtel, Reliance Jio and
Vodafone Idea – the three major telecom operators of the country demonstrated use
cases of 5G technology to show the potential of 5G technology in India under IMC.
SH
5G or the fifth generation of mobile networks promises faster internet speeds. At
A
its peak, internet speeds on 5G could touch 10 Gbps, compared to the 100 Mbps peak
K
of 4G. In simple words, 5G will offer faster download and upload speeds for the users.
A
PR
Delhi’s IGI Airport is the first to get 5G capabilities in India. The service will be
expanded to four cities – Delhi, Kolkata, Mumbai, Chennai later. List of cities which
D
will receive the 5G service in the initial rollout phase are Ahmedabad, Bengaluru,
VE
Chennai, Varanasi, Chandigarh, Delhi, Jamnagar, Gandhinagar, Mumbai, Pune,

Lucknow, Kolkata, Siliguri, Gurugram and Hyderabad.
R
Payment facility for Indian tourists in Europe

A
M
“Worldline” a global leader in payments services, has recently tied up with NPCI
U
International Payments Ltd. (NIPL), the international arm of NPCI in a move to

K
expand the acceptance of Indian payment means across Europe. This tieup allows
Indian tourists to make payment while shopping in European countries through UPI
r.
and RuPay. India is one of the most important tourist markets for Europe with an
M
estimated 10 million Indians travelling to Europe every year.

y:
Operationalisation of Central Bank Digital Currency-Wholesale (e₹-W) Pilot

B
ed
Pursuant to Budgetary announcement made regarding the released of Central Bank

Digital Currency (CBDC), RBI on October 7, 2022 had announced that the Reserve
ad
Bank will soon commence pilot launches of Digital Rupee (e₹) for specific use cases.
Accordingly, the first pilot project in the Digital Rupee - Wholesale segment (e₹-
o
nl
W) shall commence on November 1, 2022.

ow
The use case for this pilot is settlement of secondary market transactions in
government securities. Use of e₹-W is expected to make the inter-bank market more
D
efficient. Settlement in central bank money would reduce transaction costs by pre-
empting the need for settlement guarantee infrastructure or for collateral to mitigate
settlement risk. Going forward, other wholesale transactions, and cross-border
payments will be the focus of future pilots, based on the learnings from this pilot
project.
Nine banks, viz., State Bank of India, Bank of Baroda, Union Bank of India, HDFC
Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC
)
62
have been identified for participation in the pilot. The first pilot in Digital Rupee - Retail
segment (e₹-R) is planned for launch within a month in select locations in closed user
80
groups comprising customers and merchants.
10
Enabling Bharat Bill Payment System to Process Cross-Border Inbound Bill
K
Payments
.(V
As per RBI guidelines, foreign inward remittances received under Rupee Drawing
Arrangement (RDA) can be transferred to the KYC compliant beneficiary bank
SH
accounts through electronic mode, such as, NEFT, IMPS, etc.
A
To facilitate Non-Resident Indians (NRIs) undertake utility, education and other bill
K
payments on behalf of their families in India, RBI has enabled Bharat Bill Payment
A
System (BBPS) to accept cross-border inward payments. Accordingly foreign inward
PR
remittances received under the Rupee Drawing Arrangement (RDA), can be
transferred by the banks to the KYC compliant bank account of the biller (beneficiary)
D
through Bharat Bill Payment System (BBPS).

VE
Notification regarding FIRP Process

R
MCA in its recent notification has widened the pool of start-ups that can avail Fast
A
track corporate insolvency resolution process (FIRP), thereby enabling faster

M
exits for such businesses within 90 days. Henceforth FIRP would be available to the
U
expanded definition of “Startups” as defined in February 2019 by the Ministry of

K
Commerce and Industry.

r.
As per the year 2019 notification, an entity shall be considered as a Startup upto a
M
period of ten years from the date of incorporation/ registration, if it is:

y:
(a) incorporated as a private limited company or registered as a partnership firm or a

B
limited liability partnership in India.

ed
(b) Turnover of the entity for any of the financial years since incorporation/ registration
ad
has not exceeded Rs. 100 crore.

o
(c) Entity is working towards innovation, development or improvement of products or

nl
processes or services, or if it is a scalable business model with a high potential of

ow
employment generation or wealth creation.

D
Other than start-ups as defined above, application for FIRP can be made by ‘Small
companies’ and unlisted companies with total assets, as reported in the financial
statement of the immediately preceding financial year, not exceeding Rupees one
crore.
Clarification in operation of Senior Citizens’ Savings Scheme
Government of India, through commercial banks, offers the Senior Citizens' Savings
)
Scheme (SCSS) that assists senior citizens in saving for retirement and receiving
62
quarterly interest payments at higher rates compared to normal deposit schemes. The
80
current applicable rate of interest for the scheme with effect from 01.04.2022 is 7.40%
p.a. The deposit can be opened with a minimum amount of Rs. 1,000 and maximum
10
amount of Rs. 15 lakh.
K
.(V
Recently, government has issued few of the clarifications with respect to operations in
SCSS accounts. They are,
SH
(a) In cases where the SCSS account holder/s passes away and the account is being
closed on request of the nominee/legal heir, the rate of interest as applicable on SCSS
A
scheme shall be paid till the date of demise the account holder. Thereafter, the interest
K
rate applicable on Post Office Savings Account shall be paid from the date of demise
A
of the account holder till the date of final closure of the account.
PR
(b) Premature closure clause does not trigger on account of demise of the SCSS
D
account holder. The premature closure of the account is applicable only when the
VE
SCSS account holder requests for closure of own SCSS account before the maturity
period. In such cases of premature closure of the account, stipulated pre closure
penalty shall be applicable.
R
A
M
U
K
r.
M
y:
B
ed
oad
nl
ow
D
EASE Reforms in PSB
EASE (Enhanced Access and Service Excellence)
)
62
80
Journey of PSB Reforms EASE Agenda:
10
EASE (Enhanced Access and Service Excellence) was launched based on the
recommendations made by PSB Whole Time Directors (WTDs) and senior executives
K
in PSB Manthan in November 2017.
.(V
It encapsulates a synergistic approach to ensure prudent and clean lending, better
SH
customer service, simplified and enhanced credit, and robust governance and HR
practices.
A
K
EASE 1
A
PR
The first edition of the EASE program pertaining to FY19 aimed at laying the
foundation for themes such as Customer Responsiveness by enabling banking from
the comfort of home and mobile and grievance redressal, responsible banking through
D
the setup of dedicated Stressed Assets Management Vertical (SAMV) for rigorous
VE
monitoring of large-value stressed loans, improved governance and financial stability

through institutionalizing risk appetite frameworks and riskbased pricing, near-home
R
banking by providing branch equivalent services through Bank Mitras, and enhanced
A
micro-insurance coverage ensuring financial inclusion, and developing personnel for

Brand PSBs through initiatives such as the implementation of Performance
M
Management System (PMS).

U
K
The EASE 1.0 report showed significant improvement in PSB performance in

resolution of Non Performing Assets (NPAs) transparently.
r.
M
EASE 2
y:
The second edition of the EASE program for CLEAN and SMART banking was
B
launched for FY20 to further build on the foundation of EASE 1.0. It has been
instrumental in further systematically addressing root causes of weaknesses in PSBs
ed
effected through hard-wiring of sound IT systems and processes. It has set up

comprehensive Loan Management Systems (LMS) for faster processing and tracking,
ad
introduced Early Warning Signals (EWS) systems and specialized monitoring for
timebound action in respect of stress, put in place focused recovery arrangements,
o
and established outcome-centric HR systems. The reforms have equipped Boards and
nl
leadership for effective governance. Further, it has enabled banking from home and
ow
mobile through an expanded bouquet of services, including enhanced regional

languages availability.
D
EASE 2.0 was built on the foundation of EASE 1.0 and introduced new reform Action
Points across six themes to make reforms journey irreversible, strengthen processes
and systems, and drive outcomes. The six themes of EASE 2.0 are:
 Responsible Banking;
 Customer Responsiveness;

)
Credit Off-take,
62
 PSBs as UdyamiMitra (SIDBI portal for credit management of MSMEs);
80
 Financial Inclusion & Digitalisation;
10
 Governance and Human Resource (HR).
K
.(V
EASE 3.0
SH
Transformation of PSBs into Digital and Data-driven Banks. The Indian financial
services industry has seen unprecedented disruption over the last few years, enabled
by digitalization and effective use of data. There are three fundamental drivers which
A
have all come together to catalyze the changes in the industry. Firstly, consumer
K
behaviors are changing rapidly, driven by experiences offered by technology giants,
A
and accentuated by the COVID-19 pandemic. Secondly, there have been rapid
PR
technological advances led by the increasing penetration of smartphones and data
usage. Thirdly, the regulatory environment is increasingly becoming favorable to
D
provide continued impetus and further the digitalization agenda.

VE
EASE 3 seeks to enhance ease of banking in all customer experiences, using

technology viz.
R
A
 Dial-a-loan and PSBloansin59 minutes.com.

M
 Partnerships with FinTechs and E-commerce companies,

U
K
 Credit@click,
r.
 Tech-enabled agriculture lending,

M
 EASE Banking Outlets etc.

y:
B
ed
oad
nl
ow
D
)
62
80
10
K
.(V
SH
A
EASE 4.0 reforms agenda: PSBs to transform into ‘digital-attacker banks’
K
A
PR
Union Minister of Finance and Corporate Affairs Smt. Nirmala Sitharaman today
unveiled the fourth edition of the Public Sector Bank (PSB) Reforms Agenda ‘EASE
D
4.0’ for 2021-22 - tech-enabled, simplified, and collaborative banking. She

VE
unveiled the annual report for the PSB Reforms Agenda EASE 3.0 for 2020-21 and
participated in the awards ceremony to felicitate best performing banks on EASE 3.0
Banking Reforms Index.
R
A
The fourth edition of the EASE (Enhanced Access and Service Excellence) reforms
M
agenda for PSBs has been unveiled in the backdrop of the amalgamation of 13 PSBs
U
into 5 PSBs being successfully completed over the last two years.
K
EASE 4.0 commits PSBs to tech-enabled, simplified and collaborative banking, the
r.
Indian Banks’ Association (IBA) said in a statement, adding that it aims to further the
M
agenda of customer-centric digital transformation and deeply embed digital and data
into PSBs’ ways of working.
y:
The EASE 4.0 reforms looks at four key initiatives for public sector banks to adopt:
B
ed
 Smart lending backed by analytics;

o Dial-a-loan for doorstep lending
ad
o Credit@Click: End to End digital retail and MSME lending for

o Analytics based credit offers
o
 24×7 banking with resilient technology and cloud based IT systems

nl
o Deeper penetration of Mobile & internet banking

ow
o Cloud-based IT Systems and improved cyber resilience

o Process automation
D
 Data enabled agriculture financing;

o Dial-a-loan for agri loans
o Partnership with AgriTechs for data exchange
o Automated Processing & sanctioning
 Collaborating with the financial ecosystem.

o Digital Payments in semi-urban and rural areas
)
o At scale delivery of doorstep banking services
62
o Co-lending with NBFCs
80
SBI, BoB Union Bank of India win top honors.
10
State Bank of India, Bank of Baroda and Union Bank of India have won the awards for
K
best performing banks for PSB Reforms EASE 3.0 based on the EASE index.
.(V
Indian Bank won the award for the best improvement from the baseline performance.
SBI, BoB, Union Bank of India, Punjab National Bank and Canara Bank won the top
SH
awards in different themes of the PSB Reforms Agenda EASE 3.0.
A
K
A
PR
D
VE
R
A
M
U
K
r.
M
y:
B
ed
oad
nl
ow
D
Bank of Baroda Ranks #1 in EASE 4.0 Reforms Index for FY2021-22 Recognized as
the Overall Top Performing Bank Ranked #1 in Smart Lending and 24X7 Banking;
Ranked 3 in Tech-Enabled Banking, Prudent Banking and Governance & HR Mumbai,
September 19, 2022: Bank of Baroda (Bank), one of India’s leading public sector
banks, has been named the “Overall Top Performing Bank” in the EASE 4.0 Reforms
Index for FY2021-22. Further, the Bank is ranked #1 in Smart Lending for Aspiring
India and New Age 24X7 Banking and #3 in Tech-Enabled Ease of Banking,
Institutionalizing Prudent Banking and Governance & Outcome-centric HR. Smt.
)
Nirmala Sitharaman, Hon. Union Minister of Finance & Corporate Affairs, felicitated
62
the Bank at the awards function organized by the Indian Banks’ Association (IBA) on
80
16th September 2022.
10
Last year, in the EASE 3.0 PSB Banking Reforms Index, Bank of Baroda was ranked
#2 overall.
K
.(V
Impact of EASE on PSBs: Public Sector Banks have reported healthy profits and
have accelerated on technology-driven reforms. These banks have reported a profit
of Rs. 31,817 crore in FY21 as compared to a loss of Rs. 26,016 crore in FY20. This
SH
is the first year when PSBs have reported profit after five years of losses. Total gross
non-performing assets stood at Rs. 6.16 lakh crore as of March 2021 - a reduction of
A
Rs. 62,000 crore from March 2020 levels.
K
PSBs have recorded a phenomenal growth in their performance over four quarters
A
since the launch of EASE 3.0 Reforms Agenda. The overall score of PSBs increased
PR
by 35% between March-2020 and March-2021, with the average EASE index score
improving from 44.2 to 59.7 out of 100. Significant progress is seen across six themes
of the Reforms Agenda, with the highest improvement seen in the themes of ‘Smart
D
Lending’ and ‘Institutionalizing Prudent Banking’.

VE
R
A
M
U
K
r.
M
y:
B
ed
oad
nl
ow
D
Digital lending Initiatives
Credit@click was a flagship
initiative under EASE 3.0.
Nearly 4.4 lakh
customers have been
)
benefitted through such
62
instantaneous and simplified
credit access.
80
PSBs have setup mechanism
10
for customers where they can
K
register loan requests 24X7
.(V
through digital channels such
as Mobile and Internet
banking, SMS, missed call and
SH
call center. In FY21, PSBs
have collectively disbursed Rs.
A
40,819 crore of fresh personal, home and vehicle loans through leads sourced from
K
such digital channels.
A
The top 7 PSBs have built analytics capabilities through the setup of dedicated
PR
analytics teams and IT infrastructure to proactively offer loans to its existing
customers. Such loan offers were generated using the existing customer transactions
D
data within the banks. In FY21, Rs. 49,777 crore of fresh retail loan disbursements
were made by the top 7 PSBs based on these credit offers.
VE
PSBs have also extensively used external partnerships and dedicated marketing
R
salesforce network for the sourcing of retail segment and MSME segment loans.
A
Sourcing from such channels has been 9.1 lakh loans in FY21.
M
U
Mobile/Internet banking and customer service

K
r.
Nearly 72% of financial transactions happening at PSBs is now happening

M
through digital channels. PSBs are now offering services across call centres, Internet
banking, and Mobile banking in 14 regional languages such as Telugu, Marathi,
y:
Kannada, Tamil, Malayalam, Gujarati, Bengali, Odia, Kashmiri, Konkani, Hindi,

B
Punjabi, Assamese for the ease of customers.

ed
For continual improvement in coverage under financial inclusion initiatives, there was
a 13% growth in transactions provided by Bank Mitras in rural areas and 50%
ad
growth in enrolments in Micro personal accident insurance in Q4FY21 compared

to Q4FY20.
o
nl
EASE 4.0 aims to further the agenda of customer-centric digital transformation and
ow
deeply embed digital and data into PSBs' ways of working.

D
EASE 5.0
Finance and Corporate Affairs Minister launched the fifth edition of Enhanced
Access and Service Excellence (EASE 5.0), which spells out the common reforms
agenda for public sector banks under the EASENext program.
)
62
About EASE 5.0
80
10
 Under EASE 5.0, PSBs will continue to invest in new-age capabilities and deepen
the ongoing reforms to respond to evolving customer needs, changing competition
K
and the technology environment.
.(V
 EASE 5.0 will focus on digital customer experience and integrated and inclusive
banking, with emphasis on supporting small businesses and agriculture.
SH
 All PSBs will also create a bank-specific three-year strategic roadmap.
A
 The initiatives will be across diverse themes — business growth, profitability, risk,
K
customer service, operations and capability building.
A
 EASENext is well-positioned to channel reforms with specific focus on customer-
PR
centric initiatives.
D
VE
The Finance and Corporate Affairs Minister launched the fifth edition of Enhanced
Access and Service Excellence-EASE 5.0, which spells out the common reforms
agenda for public sector banks (PSBs) under the EASENext program. The Department
R
of Financial Services Secretary stated that all PSBs are now profitable and have
A
stronger balance sheets. It is imperative that PSBs leverage this position of strength
M
to significantly increase their competitiveness. He also stated about PSB Manthan

U
2022, which was organised in April 2022 that paved the way for the genesis of a
broader and bolder program.
K
r.
Under EASE 5.0, PSBs will continue to invest in new age capabilities and deepen the
M
ongoing reforms to respond to evolving customer needs, changing competition and

the technology environment. EASE 5.0 will focus on digital customer experience and
y:
integrated & inclusive banking, with emphasis on supporting small businesses and
agriculture.  Simultaneously, all PSBs will also create a bank-specific threeyear
B
strategic roadmap. It will entail strategic initiatives beyond EASE 5.0. The initiatives
ed
will be across diverse themes business growth, profitability, risk, customer service,
operations, and capability building.  The FM mentioned that EASENext is well-
ad
positioned to channel reforms with specific focus on customer centric initiatives. She
o
emphasised on the customer first strategy and focussed on employee development.

nl
FM further mentioned that in order to develop customer centric approach, banks

should engage with their customers to understand their needs and expectations. While
ow
upgrading technology initiatives robust security mechanisms should also be

developed. EASENext reforms should bring ease for customers as well as for
D
employees.
EASENext - would comprise 2 major initiatives:
a) EASE 5.0 (common PSB reforms agenda);
b) Bank specific strategic 3-year roadmap (based on individual bank’s business
priorities).
The EASE 5.0 will have Five Themes to be accomplished through 22 action points as
detailed below:
)
62
THEME-1: Digitally-enabled customer offerings:
80
 Comprehensive digital banking for MSMEs - 3 years roadmap.
10
 Banking solutions for agri value chain - 2 years roadmap.
 Digital-only products and services - 1 year roadmap.
K
 Digital marketing for enhanced customer engagement - 2 years roadmap.
.(V
 Service excellence through digitally-driven customer Advocacy and feedback -
1 year roadmap.
SH
THEME-2: Big data and analytics:
 Setting up specialized analytics function. - 2 years roadmap.
A
 Analytics to drive customer retention - 2 years roadmap.
K
 Micro-segment strategy and stress-testing - 1 year roadmap.
A
 Digital and analytics driven collections - 1 year roadmap.
PR
 Early detection and prevention of frauds - 1 year roadmap.
THEME-3: Modern Technology capabilities:
D
VE
 Customizations in mobile banking for different segments - 3 years roadmap.

 Integrated inbound and outbound contact center with other service channels for
seamless interactions - 2 years roadmap.
R
 Building cross-functional teams for faster implementation - 1 year roadmap.

A
 Open API banking for integration with new-age businesses - 3 years roadmap.
M
THEME-4: Collaborative & Development-focused banking:

U
K
 Broadening and deepening co-lending partnerships - 2 years roadmap.

 Collaborating for adoption of cloud technologies - 3 years roadmap.
r.
 Partnering with Account Aggregators, and enhanced data privacy - 2 years

M
roadmap.
y:
 Deepening financial inclusion in rural and semi- urban areas – 1 year roadmap.
B
THEME-5: Employee development and Governance:

ed
 Employee-centricity with a focus on satisfaction and Engagement - 1 year

roadmap.
ad
 Employee development through learning excellence - 1 year roadmap.

 Promote gender diversity - 3 years roadmap.
o
 Leadership Grooming and Development - 2 years roadmap.

nl
ow
D
Awareness about Indian
Economy, Emerging
)
62
markets/segments in
80
India / Inflation/Direct-
10
K
.(V
Indirect Taxation/Fiscal
SH
Matters/Budget etc.
A
K
Economy of India
A
Indian Economy is a mixed, middle income and developing economy. The Economy
PR
of India is the 5th largest in the world by nominal GDP and the 3rd largest by purchasing
Power Parity (PPP). According to the IMF, on a per capita income basis, India ranked
D
142nd by nominal GDP and 125th by GDP (PPP) in 2022. Until 1991, Government
VE
policies restricted international trade to help domestic industries. After adaption of a

broad economic liberalization in 1991, India’s annual average GDP growth has been
6% to 7% and India was one of the world’s fastest growing major economy. Share of
R
Indian economy is 7.5% of world economy by PPP terms.

A
M
The long-term growth perspective of the Indian economy remains positive due to its
U
young population and corresponding low dependency ratio, healthy savings, and
investment rates, increasing globalisation in India and integration into the global
K
economy. Nearly 70% of India's GDP is driven by domestic private consumption. The
r.
country remains the world's sixth-largest consumer market. India has been a member
M
of the World Trade Organization since 1 January 1995.It ranks 63rd on the Ease of
doing business index and 68th on the Global Competitiveness Report. With 50 crore
y:
(500 million) workers, the Indian labour force is the world's second-largest.
B
According to the World Bank, to achieve sustainable economic development, India

ed
must focus on public sector reform, infrastructure, agricultural and rural development,
removal of land and labour regulations, financial inclusion, spur private investment and
ad
exports, education, and public health.

o
The service sector makes up 50% of GDP and remains the fastest growing sector,
nl
while the industrial sector and the agricultural sector employs a majority of the labour
ow
force.
India is the world's sixth-largest manufacturer, representing 2.6% of global
D
manufacturing output. Nearly 66% of India's population is rural, and contributes about
50% of India's GDP. It has the world's fourth-largest foreign-exchange reserves worth
$588,314 billion.
National Income
It is the net result of all economic activities of any country during a period of one year
and is valued in terms of money.
It is the total amount of money earned by a nation’s people and businesses. For
)
calculating National Income (NI) of a country its Gross Domestic product (GDP) is
62
added with net factor income from abroad.
80
This measures the productive power of an economy in a given period to turn out goods
and services for final consumption. The sale and purchase of second hand goods,
10
transactions in stock market and transfer payments are not included in estimates of
K
National Income. In India, National Income estimates are related with the financial year
(1st April to 31st March).
.(V
History of National Income
SH
In 1868, the first attempt for calculation of NI was made by Dadabhai Naoroji in his
book ‘Poverty and Un-British Rule in India’.
A
K
He estimated the per capita annual income to be 20. The first scientific attempt to
A
measure national income in India was made by Prof. VKRV Rao in 1931-32.
PR
He divided the Indian economy into 13 sectors.
In 1949, National Income committee under the chairmanship of Prof.PC Mahalanobis
D
was constituted. The other members of this committee were Prof.VKRV Rao and Prof.
VE
DR Gadgil.
National Statistical Commission (NSC) was setup on 1st June 2005, for promoting
R
statistical network in the country on the recommendation of C. Rangarajan

A
Commission.
M
U
Concepts of National Income:

K
National Income can be measured by GND, GDP, GNI, NNP, NNI and per capita
r.
income.GNP and per capita income, are considered as the most standard measure of
M
economic development.
y:
Concepts of National Income are as follows

B
ed
 Gross Domestic Product (GDP) It is the money value of all the final goods
ad
and services produced in the domestic territory of a country during the given
time (a year). In GDP, income generated by foreigners in a country is included,
o
but income generated by nationals of a country outside the country is not

nl
included.
ow
GDP = Consumption (c) + Investment (I) + Consumption Expenses (G)

D
GDP (Factor Cost) = GDP – Indirect taxes +Subsidies

 Gross value Added (GVA) It is a measure of the value of goods and services
produced in an area, industry or sector of an economy. It is helpful in calculating
the final output of the country by deducting the impact of taxes and subsides.
 Gross National Product (GNP) It is a monetary value of all final goods and
services produced by the residents of a country in a year.
)
GNP = GDP + Income generated by nationals of country outside the
62
Country (X) - Income generated by Foreigners in the country (M).
80
 Net National Product (NNP) It is the value of GNP after deducting depreciation
10
of plant and machinery.
K
NNP = GNP – Depreciation
.(V
 Personal Income (PI) It is the amount of money collectively received by the
inhabitants of a country. Sources of personal income include money earned
SH
from employment, dividends and distributions paid by investments, rents
derived from property ownership and profit sharing from businesses. It is
A
generally subject to taxation and is considered as a part of National Income.

K
Disposable Personal Income (DPI) The persons will have to pay personal tax
A
personal tax on personal income. Any income remaining out of personal income
PR
after the payment of personal tax and some other fines is termed as DPI.
DPI = Personal income – Personal Tax (Income tax) +subsidies.
D
 Real National Income (RNI) It is the actual quantity of goods and services
VE
produced. Real National Income growth refers to National Income growth

adjusted for inflation.
R
NNP = GNP – Consumption of Capital Stock

A
M
U
Methods of Measuring National Income

K
National Income can be calculated by three methods which are as follows

r.
M
1. Production Method: Net value of final goods and services produced in a country
during a year is obtained, which is called total final product. Under this method,
y:
the net contribution at every stage of production/ manufacturing is used to

B
calculate national income. This is referred as a value addition concept.

2. Income Method: In this method, a total of net income earned by working people
ed
in different sectors and commercial enterprises is obtained. Incomes of both

ad
categories of people i.e., paying taxes and not paying taxes are added to obtain
national income.
o
nl
3. Consumption Method: It is also called expenditure method. Income is either

ow
spent on consumption or saved. Hence National Income is the addition of total

consumption and total savings. In India, a combination of production method
and income method is used for estimating National income.
D
Terms related to National income

 Market Price: It refers to the actual transacted price and it includes indirect,
direct taxes such as excise duty, VAT, GST, Service Tax, Custom duty, etc.,
but it excludes government subsidies.
 Factor Cost: It means the total cost of all factors of production consumed or
)
62
used in producing goods or services. It includes government grants and
subsidies but excludes indirect tax.
80
 Purchasing Power Parity (PPP) It refers to the adjustment to be made in the
10
value of money in a country so that identical goods cost identical money in a
particular currency across all countries. Per capita income should be measured
K
in terms of PPP to reflect the actual standard of living in a country.
.(V
Economic Growth
SH
Economic growth is conventionally measured as a percentage increase in GDP or
A
GNP or Per capita NDP during a year. Per capita NDP is the most appropriate
K
measure of economic growth. The base year for calculating key economic growth is
A
2011-12. PR
Economic Development
D
Economic development is the development of economic wealth of countries, regions

or communities for the well-being of their inhabitants.
VE
It is the process whereby simple, low-income national economies are transformed into
R
modern industrial economies. Although it is sometimes used as synonym for economic

growth, but it is employed to describe a change in a country’s economy involving
A
quantitative and qualitative improvements.

M
U
K
Measurement of Economic Development

r.
M
The economic development of the country is also measured by taking health,

education, living standard and other related factors of inhabitant into account. Some
y:
of the significant indexes developed to measure economic development are given

B
below:
ed
Human Development Index (HDI)

ad
The United Nations Development Programme (UNDP) introduced HDI in its first
Human Development Report (HDR) prepared under the stewardship of Mahbub-ul-
o
Haq and Indian economist Amartya Sen in 1990.

nl
It is a standard means of measuring well-being. HDI measures the average

ow
achievements in a country in three basic dimensions of the human developments i.e..,

a long and healthy life, access to knowledge and a decent standard of living. HDI ranks
D
countries in relation to each other on a scale of 0 to 1.

The three key dimensions used to measure Human Development Index (HDI) of any
country is given below
i. Life Expectancy: It measures the life expectancy of all the inhabitants of the
country at birth. A long and healthy life is considered as most the important
component of HDI.
)
ii. Educational Attainment: It is measured on two levels, the mean years of
62
schooling for residents of a country and the expected year of schooling that
a child has at the average age for starting school.
80
iii. Standard of Living: It is calculated by Gross National Income (GNI) per
10
capita based on Purchasing Power Parity (PPP).
K
.(V
SH
Other Indices of HDR
A
Other three indices of Human development Reports are as follows
K
A
1. Inequality-adjusted Human Development Index (IHDI): It combines a
PR
country’s average achievements in health, education income with how those
achievements are distributed among country’s population. IHDI equals HDI,
when there is no inequality across people, but is less than HDI as inequality
D
rises and can be expressed in percentage.

VE
2. Gender Inequality Index (GII): It is built on the same framework as the IHDI.
The GII measures gender inequalities in three important aspects of human
R
development. i.e., reproductive health measured by maternal mortality ratio and

A
adolescent birth rates, empowerment and economic status expressed as labour

market participation. It ranges from 0, which indicates that women and men fare
M
equally to 1 which indicates that women fare as poorly as possible in all

U
measured dimensions.
K
3. Multidimensional Poverty index (MPI): It was developed in 2010, by Oxford

r.
Poverty and Human Development Initiative and the UNDP to determine poverty
M
beyond income based list. The index uses the same three dimensions as the
y:
Human Development Index such as health, education and standard of living.

These are measured using 10 indicators.
B
ed
Indicators of MPI
ad
Dimensions Indicators
o
Health Child Mortality, Nutrition

nl
ow
Education Years of schooling, Children enrolled

D
Living Standards Cooking Fuel, Toilet, water,

Electricity, Floor and assets
4. Physical Quality of Life Index (PQLI): These indicators reflected that
economically less developed countries are simply underdeveloped versions of
industrialized Countries.
Three component indicators of PQLI are as follows
)
62
 Life Expectancy
80
 Infant mortality rate
 Basic literacy
10
5. Gross National Happiness (GNH) It attempts to measure quality of life in a
K
more holistic manner than just an economic indicator like GDP. The four pillars
.(V
of GNH are promotion of sustainable development, preservation and promotion
of cultural values, conservation of natural environment and establishment of
SH
good governance.
6. The term GNH was coined in 1972 by Bhutan’s King Jigme Singye Wangchuck.
GNH Value is proposed to be an index function of the total average per capita
A
of the following measures
K
A
 Economic Wellness
PR
 Environmental Wellness
 Physical Wellness

D
Mental Wellness

VE
Workplace wellness
 Social Wellness
 Political Wellness
R
A
7. Global Hunger Index (GHI) It is a multi-dimensional statistical tool used to

M
describe the state of country’s hunger situation.

U
K
The index was adopted and further developed by International Food Policy
Research Institute (IFPRI) and was first published in 2006. The GHI combines
r.
four equally weighted indicators.

M
i. The proportion of undernourished as a percentage of the population.

y:
ii. The proportion of children under the age of 5 suffering from wasting.
B
iii. The Proportion of children under the age of 5 suffering from stunting.
ed
iv. The mortality rate of children under the age of 5

ad
8. Human Poverty index (HPI) The UNDP introduced the Human poverty index.
o
It is prepared on the basis of dimensions used by HDI, which are life expectancy
nl
knowledge and a decent living standard.

ow
The index is calculated annually by the UNDP for all countries according to the
D
availability of statistical data. It is prepared in two forms, depending on whether

it is a developing (HPI-1) or an industrialized economy (HPI-2).
9. Gender Development Index (GDI) It was introduced in 1995 in the Human
Development Report written by the United Nations Development Programme
(UNDP).
It highlights inequalities in areas of long and healthy life, Knowledge and a
decent standard of living between men and women.
)
National Prosperity Index (NPI) The prosperity Index goes beyond GDP to
62
measure countries success against a broad set of metrics covering areas such
80
as health, education, opportunity, social capital, personal freedom and more.
10
The prosperity of a Nation is assessed by three important factors. They are
discussed below
K
.(V
 Annual growth rate of GDP
 Improvement in Quality of life of the people, particularly those living
below the poverty line.
SH
 The adoption of a value system derived from civilizational heritage in
every walk of life that is unique to India.
A
K
A
PR
Emerging Markets/Segments in India
India ranks among the well-known emerging markets in the global economic scenario.
D
Since the economic liberalization policies were undertaken in the 1990s, India has
VE
really prospered which has helped to boost the Indian economy to a great extent.
There has been a significant development in the service sector, Agriculture and
R
industrial sector in the country. Following segments have established their presence,
A
M
and is currently growing fast and holds the promise to become an important sector of
the economy and hence are considered as emerging markets.
U
K
Healthcare and Insurance Sector

r.
M
In respect of revenue and employment, Healthcare is emerging as one of the most

important sectors in India. An ageing population, a rising middle class, a soaring
y:
percentage of lifestyle diseases, enhanced concern for public and private

B
partnerships, ramped up adoption and implementation of digital developments in

technology, along with telemedicine, as well as growing investor interest and FDI
ed
inflows considerably over the past two decades, are all cruising the growth and
flourishment of the Indian Healthcare Sector.
oad
Hospitals, Pharmaceuticals, Diagnostics, Medical Equipment and Supplies, and

nl
Medical Insurance are the five components of the healthcare and insurance sector,
according to the government.
ow
Since 2016, India’s healthcare industry has been enlarging at a Compound Annual
Growth Rate (CAGR) of around 22%, and it is expected to grow at a 39% CAGR to
D
$372 billion by the end of 2022. According to the government’s FY 2021-22 budget,
the government intends to amend the previous Insurance Act of 1938 to raise the
permissible FDI limit from 47% to 74% as well.
Renewable Energy Sector
Due to deteriorating environmental conditions, and as a result, under the Paris
)
62
Agreement, every country is under enormous international pressure to reduce carbon
emissions. Renewable energy has emerged as a very promising sector as renewable
80
electricity is becoming increasingly affordable. By the end of 2022, India wants to have
175 gigawatts of renewable energy installed.
10
K
The Ministry of Power has created the Renewable Energy Investment Promotion and
.(V
Felicitation Board (REIPFB) to provide one-stop assistance to industry and investors
for project development and new investment in India’s renewable energy sector. In
SH
addition, over $79 billion has been invested in renewable energy in India over the last
seven years, and India’s installed renewable energy capacity has increased by over
A
two-and-a-half times in that time, to over 141 gigawatts.
K
A
IT Sector PR
The IT Tech industry has exploded in the last two years, whether it’s in the fields of
Artificial Intelligence, Data Analytics, Data Science, or Big Data. The IT industry has
D
grown at such a breakneck pace and scale that it almost seems unreal. Around 33
VE
Indian IT start-ups have achieved the “Unicorn” status, meaning their valuation has
surpassed $1 billion. With approximately 560 million internet users, India is now the
R
second-largest online market after China which makes it clear that India is absolutely
A
booming in this sector.

M
U
Real Estate Sector.

K
The Indian property market is trending in the right direction, and it is expected to pick
r.
up steam in the upcoming months. With strong end-user consumption and calm
M
market conditions, the average quarterly sales volume is expected to exceed the pre-
y:
COVID year’s average quarterly sales.

B
Fast Moving Consumer-Goods Sector (FMCG)

ed
Contrary to many other industries that go through a contraction and expansion cycle,
ad
the FMCG industry’s products are always in demand. People may not buy a new car,
make new loans, or avoid investing in real estate/infrastructure during a recession or
o
economic crisis, but because FMCG products are basic necessities, their demand will
nl
not decrease as much as in other industries. Companies based on FMCG have a lot
ow
of room to grow in every area.

D
Automobile Sector
While leading global automobile players are entering India and setting up production
facilities to tap one of the fastest growing economies of the world, Indian players such
as Eicher Motors, Maruti Suzuki India Ltd, Tata Motors Ltd, etc. are unveiling new
models, facelift versions, etc. to tap the demand from the consumers.
Rising disposable income in the hands of individuals has resulted in shifting preference
towards the four-wheeler segment
)
62
Apart from the above six sectors, there are many other sectors such as food
80
processing, Entertainment, Education etc, which may be considered as emerging
sectors from time to time. But as of now, emerging sectors in an economy are types
10
of markets that seem to be getting more important in the economy and should have
K
the potential to grow.
.(V
Inflation
SH
Inflation is a consistent and appreciable rise in the general price level. In other words,
inflation is the rate at which the general level of prices for goods and services is rising
A
and consequently the purchasing power of currency is falling.
K
Types of Inflation
A
PR
i. Creeping Inflation: Creeping inflation is slow-moving and very mild. The
rise in prices will not be perceptible but spread over a long period. This type
of inflation is in no way dangerous to the economy. This is also known as
D
mild inflation or moderate inflation.

VE
ii. Walking Inflation: When prices rise moderately and the annual inflation
rate is a single digit (3%-9%), it is called walking or trolling inflation.
R
iii. Running Inflation: When prices rise rapidly like the running of a horse at a
A
rate of speed of 10%-20% per annum, it is called running inflation.

iv. Galloping Inflation: Galloping inflation or hyperinflation points out to
M
unmanageably high inflation rates that run into two or three digits. By High
U
inflation the percentage of the same is almost 20% to 100% from an overall
K
perspective.
r.
Note: The first hyperinflation of the 21st century Zimbabwe’s annual inflation rate
M
surged to an unprecedented 3714 percent at the end of April 2007.

y:
Demand-Pull Vs Cost-Push inflation

B
i. Demand-Pull Inflation: Demand and supply play a crucial role in deciding

ed
the inflation levels in the society at all points of time. For instance, if the
demand is high for a product and supply is low, the price of the products
ad
increases.
o
ii. Cost-Push Inflation: When the cost of raw materials and other inputs rises
nl
inflation results. Increase in wages paid to labour also leads to inflation.

ow
Wage-Price Spiral
D
Wage-Price spiral is used to explain the cause and effect relationship

between rising wages and rising prices or inflation.
Other Types of Inflation (on the basis of inducement)
i. Currency Inflation: The excess supply of money in circulation causes rise
in price level.
ii. Credit inflation: When banks are liberal in lending credit, the money supply
increases and thereby rising prices.
iii. Deficit induced inflation: The deficit budget is generally financed through
printing of currency by the central Bank. As a result, prices rise.
)
iv. Profit induced inflation: When the firms aim at higher profit, they fix the
62
price with higher margin.so prices go up.
80
v. Scarcity induced inflation: Scarcity of goods happened either due to fall
in production (e.g. Farm goods) or due to hoarding and black marketing.
10
This also pushes up the price. (This has happened in Venezuela in the
year 2018).
K
vi. Tax induced inflation: Increase in indirect taxes like excise duty, custom
.(V
duty and sales tax may lead to rise in price (e.g. Petrol and Diesel). This is
also called tax inflation.
SH
Measures to control inflation
A
Keynes and Milton Friedman together suggested three measures to prevent
K
and control of inflation.
A
i. Monetary Measure: These measures are adopted by the Central bank of
PR
the Country. They are i) increase in Bank rate ii) Sale of Government
Securities in the open market iii) Higher Cash Reserve ratio (CRR) and
D
Statutory Liquidity Ratio (SLR) iv) Consumer Credit Control and v) Higher
margin requirements vi)Higher Repo rate and Reverse Repo Rate.
VE
ii. Fiscal Measures: Fiscal Policy is now recognized as an important

instrument to tackle an inflationary situation. The major anti-inflationary
R
fiscal measures are the following: Reduction of Government Expenditure,

A
Public Borrowing and Enhancing taxation.

M
iii. Other Measures: These measures can be divided broadly into short-term
and long-term measures.
U
i) Short-term measures can be in regard to public distribution of scarce

K
essential commodities through fair price shops (Rationing). In India

r.
whenever shortage of basic goods has been felt, the government has
M
resorted to import so that inflation may not get triggered.

ii) Long Term measures will require accelerating economic growth
y:
especially of the wage goods which have a direct bearing on the

B
general price and the cost of living. Some restrictions on present

consumption may help in improving saving and investment which
ed
may be necessary for accelerating the rate of economic growth in the

o ad
nl
ow
UNION BUDGET 2022-23

D
 India’s economic growth was estimated at 9.20% (to be the highest among all large
economies.)
 60 lakh new jobs envisaged to be created under the Productivity Linked Incentive (PLI)
Schemes in 14 sectors.
 PLI Schemes are assumed to have the potential to create an additional production of
Rs 30 lakh crore.
 Entering Amrit Kaal, the 25 year long lead up to India @100.
)
PM GatiShakti
62
80
 The seven engines that drive PM GatiShakti are:-
a) Roads,
10
b) Railways,
c) Airports,
K
d) Ports,
.(V
e) Mass Transport,
f) Waterways and
g) Logistics Infrastructure.
SH
PM GatiShkati National Master Plan
A
K
 The scope of PM GatiShakti National Master Plan will encompass the seven engines
A
for economic transformation, seamless multimodal connectivity and logistics
PR
efficiency.
 The projects pertaining to these 7 engines in the National Infrastructure Pipeline will
be aligned with PM GatiShakti framework.
D
VE
Roads
R
 National Highways Network to be expanded by 25000 Km in 2022-23.

A
 Rs 20000 Crore to be mobilized for National Highways Network expansion.

M
Multimodal Logistics Parks

U
K
 Contracts to be awarded through PPP mode in 2022-23 for implementation of

r.
Multimodal Logistics Parks at four locations.

M
y:
Railways
B
 One Station One Product concept to help local businesses & supply chains.
ed
 2000 Km of railway network to be brought under Kavach, the indigenous world class
technology and capacity augmentation in 2022-23.
ad
 400 new generation Vande Bharat Trains to be manufactured during the next three
years.
o
 100 PM GatiShakti Cargo terminals for multimodal logistics to be developed during the
nl
next three years.

ow
Parvatmala
D
 National Ropeways Development Program, Parvatmala to be taken up on PPP mode.

 Contracts to be awarded in 2022-23 for 8 ropeway projects of 60 Km length.
Inclusive Development
Agriculture
 Rs. 2.37 lakh crore direct payment to 1.63 crore farmers for procurement of wheat and
paddy.
)
 Chemical free Natural farming to be promoted throughout the county. Initial focus is
62
on farmer’s lands in 5 Km wide corridors along river Ganga.
80
 NABARD to facilitate fund with blended capital to finance startups for agriculture &
rural enterprise.
10
 ‘Kisan Drones’ for crop assessment, digitization of land records, spraying of
insecticides and nutrients.
K
.(V
Ken Betwa project
 1400 crore outlay for implementation of the Ken – Betwa link project.
 9.08 lakh hectares of farmers’ lands to receive irrigation benefits by Ken-Betwa link
SH
project.
A
MSME
K
 Udyam, e-shram, NCS and ASEEM portals to be interlinked.
A
 130 lakh MSMEs provided additional credit under Emergency Credit Linked Guarantee
PR
Scheme (ECLGS)
 ECLGS to be extended up to March 2023.
 Guarantee cover under ECLGS to be expanded by Rs 50000 Crore to total cover of
D
Rs 5 Lakh Crore.
VE
 Rs 2 lakh Crore additional credit for Micro and Small Enterprises to be facilitated under
the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE).
R
 Raising and Accelerating MSME performance (RAMP) programme with outlay of Rs

A
6000 Crore to be rolled out.

M
Skill Development
U
 Digital Ecosystem for Skilling and Livelihood (DESH-Stack e-portal) will be launched
K
to empower citizens to skill, reskill or upskill through on-line training.

· Startups will be promoted to facilitate ‘Drone Shakti’ and for Drone-As-A-
r.
M
Service (DrAAS).
y:
Education
 ‘One class-One TV channel’ programme of PM eVIDYA to be expanded to 200 TV
B
channels.
ed
· Virtual labs and skilling e-labs to be set up to promote critical thinking skills and
simulated learning environment.
ad
· High-quality e-content will be developed for delivery through Digital Teachers.

· Digital University for world-class quality universal education with personalised
o
learning experience to be established.

nl
ow
Health
 An open platform for National Digital Health Ecosystem to be rolled out.
D
· ‘National Tele Mental Health Programme’ for quality mental health counselling and
care services to be launched.
 A network of 23 tele-mental health centres of excellence will be set up, with NIMHANS
being the nodal centre and International Institute of Information Technology-Bangalore
(IIITB) providing technology support.
Saksham Anganwadi
 Integrated benefits to women and children through Mission Shakti, Mission Vatsalya,
)
Saksham Anganwadi and Poshan 2.0.
62
 Two lakh anganwadis to be upgraded to Saksham Anganwadis.
80
Har Ghar, Nal Se Jal
10
 Rs. 60,000 crore allocated to cover 3.8 crore households in 2022-23 under Har Ghar,
Nal se Jal.
K
.(V
Housing for All
 Rs. 48,000 crore allocated for completion of 80 lakh houses in 2022-23 under PM
Awas Yojana.
SH
Prime Minister’s Development Initiative for North-East Region (PM-DevINE)
A
 New scheme PM-DevINE launched to fund infrastructure and social development
K
projects in the North-East.
A
 An initial allocation of Rs. 1,500 crore made to enable livelihood activities for youth
PR
and women under the scheme.
Vibrant Villages Programme

D
 Vibrant Villages Programme for development of Border villages with sparse

VE
population, limited connectivity and infrastructure on the northern border.

R
Banking
A
 100 per cent of 1.5 lakh post offices to come on the core banking system.

M
Scheduled Commercial Banks to set up 75 Digital Banking Units (DBUs) in 75 districts.

U
e-Passport
K
 e-Passports with embedded chip and futuristic technology to be rolled out.

r.
M
Urban Planning
 Modernization of building byelaws, Town Planning Schemes (TPS), and Transit
y:
Oriented Development (TOD) will be implemented.

 Battery swapping policy to be brought out for setting up charging stations at scale in
B
urban areas.
ed
Land Records Management

ad
 Unique Land Parcel Identification Number for IT-based management of land records.
Accelerated Corporate Exit
o
 Centre for Processing Accelerated Corporate Exit (C-PACE) to be established for

nl
speedy winding-up of companies.

ow
AVGC Promotion Task Force

 An animation, visual effects, gaming, and comic (AVGC) promotion task force to be
D
set-up to realize the potential of this sector.
Telecom Sector
 Scheme for design-led manufacturing to be launched to build a strong ecosystem for
5G as part of the Production Linked Incentive Scheme.
Export Promotion
 Special Economic Zones Act to be replaced with a new legislation to enable States to
become partners in ‘Development of Enterprise and Service Hubs’.
)
62
AtmaNirbharta in Defence:
80
 68% of capital procurement budget earmarked for domestic industry in 2022-23, up
from 58% in 2021-22.
10
· Defence R&D to be opened up for industry, startups and academia with 25% of
defence R&D budget earmarked.
K
· Independent nodal umbrella body to be set up for meeting testing and certification
.(V
requirements.
Sunrise Opportunities
SH
 Government contribution to be provided for R&D in Sunrise Opportunities like Artificial
Intelligence, Geospatial Systems and Drones, Semiconductor and its eco-system,
A
Space Economy, Genomics and Pharmaceuticals, Green Energy, and Clean Mobility
K
Systems.
A
PR
Energy Transition and Climate Action:
 Additional allocation of Rs. 19,500 crore for Production Linked Incentive for
manufacture of high efficiency solar modules to meet the goal of 280 GW of installed
D
solar power by 2030.

VE
 Five to seven per cent biomass pellets to be co-fired in thermal power plants:
o CO2 savings of 38 MMT annually,
R
o Extra income to farmers and job opportunities to locals,

A
o Help avoid stubble burning in agriculture fields.

M
 Four pilot projects to be set up for coal gasification and conversion of coal into
U
chemicals for the industry

K
· Financial support to farmers belonging to Scheduled Castes and Scheduled Tribes,

r.
who want to take up agro-forestry.

M
Public Capital Investment:

y:
 Public investment to continue to pump-prime private investment and demand in 2022-

B
23.
· Outlay for capital expenditure stepped up sharply by 35.4% to Rs. 7.50 lakh crore in
ed
2022-23 from Rs. 5.54 lakh crore in the current year.

· Outlay in 2022-23 to be 2.9% of GDP.
ad
 ‘Effective Capital Expenditure’ of Central Government estimated at Rs. 10.68 lakh

crore in 2022-23, which is about 4.1% of GDP.
o
nl
ow
GIFT-IFSC
 World-class foreign universities and institutions to be allowed in the GIFT City.
D
 An International Arbitration Centre to be set up for timely settlement of disputes under

international jurisprudence.
Mobilising Resources
 Data Centres and Energy Storage Systems to be given infrastructure status.
· Venture Capital and Private Equity invested more than Rs. 5.5 lakh crore last year
facilitating one of the largest start-up and growth ecosystem. Measures to be taken to
help scale up this investment.
· Blended funds to be promoted for sunrise sectors.
)
· Sovereign Green Bonds to be issued for mobilizing resources for green
62
infrastructure.
80
Digital Rupee
10
 Introduction of Digital Rupee by the Reserve Bank of India starting 2022-23.
K
Providing Greater Fiscal Space to States
.(V
 Enhanced outlay for ‘Scheme for Financial Assistance to States for Capital
Investment’:
o From Rs. 10,000 crore in Budget Estimates to Rs. 15,000 crore in Revised Estimates
SH
for current year
· Allocation of Rs. 1 lakh crore in 2022-23 to assist the states in catalysing overall
A
investments in the economy: fifty-year interest free loans, over and above normal
K
borrowings
A
 In 2022-23, States will be allowed a fiscal deficit of 4% of GSDP, of which 0.5% will be
PR
tied to power sector reforms
Fiscal Management
D
 Budget Estimates 2021-22: Rs. 34.83 lakh crore

VE
· Revised Estimates 2021-22: Rs. 37.70 lakh crore

· Total expenditure in 2022-23 estimated at Rs. 39.45 lakh crore
R
· Total receipts other than borrowings in 2022-23 estimated at Rs. 22.84 lakh crore
A
· Fiscal deficit in current year: 6.9% of GDP (against 6.8% in Budget Estimates)

M
Fiscal deficit in 2022-23 estimated at 6.4% of GDP

U
K
DIRECT TAXES
r.

M
Vision to establish a trustworthy tax regime.

 To further simplify tax system and reduce litigation.
y:
Introduction of new ‘Updated return’

 Provision to file an Updated Return on payment of additional tax.
B
 Will enable the assessee to declare income missed out earlier.

ed
 Can be filed within two years from the end of the relevant assessment year.
ad
Cooperative societies
 Alternate Minimum Tax (AMT) paid by cooperatives brought down from 18.5 per cent
o
to 15 per cent.
nl
 To provide a level playing field between cooperative societies and companies.

ow
 Surcharge on cooperative societies reduced from 12 per cent to 7 per cent for those
having total income of more than Rs 1 crore and up to Rs 10 crores.
D
Tax relief to persons with disability

 Payment of annuity and lump sum amount from insurance scheme to be allowed to
differently abled dependent during the lifetime of parents/guardians, i.e., on parents/
guardian attaining the age of 60 years.
Parity in National Pension Scheme Contribution

 Tax deduction limit increased from 10 per cent to 14 per cent on employer’s
)
contribution to the NPS account of State Government employees.
62
 Brings them at par with central government employees.
80
 Would help in enhancing social security benefits.
10
Incentives for Start-ups
 Period of incorporation extended by one year, up to 31.03.2023 for eligible start-ups
K
to avail tax benefit.
.(V
 Previously the period of incorporation valid up to 31.03.2022.
Incentives under concessional tax regime
SH
 Last date for commencement of manufacturing or production under section 115BAB
extended by one year i.e. from 31st March, 2023 to 31st March, 2024.
A
K
Scheme for taxation of virtual digital assets
A
 Specific tax regime for virtual digital assets introduced.
PR
 Any income from transfer of any virtual digital asset to be taxed at the rate of 30 per
cent.
 No deduction in respect of any expenditure or allowance to be allowed while
D
computing such income except cost of acquisition.

VE
 Loss from transfer of virtual digital asset cannot be set off against any other income.
 To capture the transaction details, TDS to be provided on payment made in relation to
R
transfer of virtual digital asset at the rate of 1 per cent of such consideration above a
A
monetary threshold.

M
Gift of virtual digital asset also to be taxed in the hands of the recipient.
U
K
Litigation Management

r.
In cases where question of law is identical to the one pending in High Court or
M
Supreme Court, the filing of appeal by the department shall be deferred till such
question of law is decided by the court.
y:
 To greatly help in reducing repeated litigation between taxpayers and the department.
B
Tax incentives to IFSC

ed
 Subject to specified conditions, the following to be exempt from tax

o Income of a non-resident from offshore derivative instruments.
ad
o Income from over the counter derivatives issued by an offshore banking unit.
o Income from royalty and interest on account of lease of ship.
o
o Income received from portfolio management services in IFSC.

nl
ow
Rationalization of Surcharge
 Surcharge on AOPs (consortium formed to execute a contract) capped at 15 per cent.
D
 Done to reduce the disparity in surcharge between individual companies and AOPs.
 Surcharge on long term capital gains arising on transfer of any type of assets capped
at 15 per cent.
 To give a boost to the start up community.
Health and Education Cess

 Any surcharge or cess on income and profits not allowable as business expenditure.
Deterrence against tax-evasion
)
 No set off, of any loss to be allowed against undisclosed income detected during
62
search and survey operations.
80
Rationalizing TDS Provisions
10
 Benefits passed on to agents as business promotion strategy taxable in hands of
agents.
K
 Tax deduction provided to person giving benefits, if the aggregate value of such
.(V
benefits exceeds Rs 20,000 during the financial year.
SH
INDIRECT TAXES
A
 GST revenues are buoyant despite the pandemic – Taxpayers deserve applause for
K
this growth.
A
PR
Special Economic Zones (SEZs)
 Customs Administration of SEZs to be fully IT driven and function on the Customs
National Portal – shall be implemented by 30th September 2022.
D
VE
Customs Reforms and duty rate changes

 Faceless Customs has been fully established. During Covid-19 pandemic, Customs
R
formations have done exceptional frontline work against all odds displaying agility and
A
purpose.
M
Project imports and capital goods

U
 Gradually phasing out of the concessional rates in capital goods and project imports;
K
and applying a moderate tariff of 7.5 percent – conducive to the growth of domestic
sector and ‘Make in India’.
r.

M
Certain exemptions for advanced machineries that are not manufactured within the
country shall continue.
y:
 A few exemptions introduced on inputs, like specialised castings, ball screw and linear
motion guide - to encourage domestic manufacturing of capital goods.
B
ed
Review of customs exemptions and tariff simplification

ad
 More than 350 exemption entries proposed to be gradually phased out, like exemption
on certain agricultural produce, chemicals, fabrics, medical devices, & drugs and
o
medicines for which sufficient domestic capacity exists.

nl
 Simplifying the Customs rate and tariff structure particularly for sectors like chemicals,
ow
textiles and metals and minimise disputes; Removal of exemption on items which are
or can be manufactured in India and providing concessional duties on raw material
D
that go into manufacturing of intermediate products – in line with the objective of ‘Make
in India’ and ‘Atmanirbhar Bharat’.
Sector specific proposals
Electronics
 Customs duty rates to be calibrated to provide a graded rate structure - to facilitate
)
domestic manufacturing of wearable devices, hearable devices and electronic smart
62
meters.
80
 Duty concessions to parts of transformer of mobile phone chargers and camera lens
of mobile camera module and certain other items – To enable domestic manufacturing
10
of high growth electronic items.
K
Gems and Jewellery
.(V
 Customs duty on cut and polished diamonds and gemstones being reduced to 5 per
cent; Nil customs duty to simply sawn diamond - To give a boost to the Gems and
Jewellery sector
SH
.
 A simplified regulatory framework to be implemented by June this year - To facilitate
A
export of jewellery through e-commerce.
K
A
 Customs duty of at least Rs 400 per Kg to be paid on imitation jewellery import - To
PR
disincentivise import of undervalued imitation jewellery.
Chemicals
D
 Customs duty on certain critical chemicals namely methanol, acetic acid and heavy
VE
feed stocks for petroleum refining being reduced; Duty is being raised on sodium
cyanide for which adequate domestic capacity exists – This will help in enhancing
R
domestic value addition.

A
M
MSME
 Customs duty on umbrellas being raised to 20 per cent. Exemption to parts of
U
umbrellas being withdrawn.

K
 Exemption being rationalised on implements and tools for agri-sector which are
r.
manufactured in India

M
Customs duty exemption given to steel scrap last year extended for another year to
provide relief to MSME secondary steel producers
y:
 Certain Anti- dumping and CVD on stainless steel and coated steel flat products, bars
of alloy steel and high-speed steel are being revoked – to tackle prevailing high prices
B
of metal in larger public interest.

ed
Exports
 To incentivise exports, exemptions being provided on items such as embellishment,
ad
trimming, fasteners, buttons, zipper, lining material, specified leather, furniture fittings
and packaging boxes.
o
 Duty being reduced on certain inputs required for shrimp aquaculture - to promote its
nl
exports.
ow
Tariff measure to encourage blending of fuel

D
 Unblended fuel to attract an additional differential excise duty of Rs 2/ litre from the
1st of October 2022 - to encourage blending of fuel.
Capital Markets, Money
Markets, Capital Raising
)
62
Avenues, Commodity
80
10
Markets (Basic Concepts)
K
.(V
Capital Market is basically a venue where funds are exchanged between buyers and
sellers in the form of equity, bonds, securities or other form of financial assets. Sellers
SH
would mean owners of capital who are willing to invest or lend typically institutions like
banks, insurance companies, NBFCs etc. Buyers would mean investors both retail and
A
institutional.
K
A
Capital Market is further divided into primary and secondary. The best known markets
PR
are bonds and stock market. Primary market is the place where corporations or
organizations issue offerings in the market for investors like IPOs. In secondary
D
market, there is exchange of financial instruments between two buyers. For example
VE
someone selling shares of company X from his /her portfolio and someone buying the
same for some consideration. The buyer and seller are unknown to each other and
engage in the trade having contrasting views. So to further simplify the example let’s
R
A
say purchasing a car from the showroom is primary market and then selling it in the
M
second hand market, would be secondary market.

U
There is a thin line that separates capital market from financial market in terms of its
K
literary usage. In market parlance capital market generally means capital raising and
r.
financial markets are probably a sub set of capital market where various instruments
M
are traded not necessarily for capital raising alone. The instruments thus traded in the
financial market are called financial instruments.
y:
B
The financial instruments that prevail in the financial market are as under:
ed
Money market
ad
A money market is an organized exchange that enables individuals and companies to

lend and borrow money. These securities are generally short-term and are of high
o
quality. These securities can range from Treasury bills to certificates of deposit.
nl
Depending on their maturity, money market transactions are carried out in various
ow
ways. Many participants in the money market lend and borrow money, and many
companies use this market to raise capital or park surplus funds.
D
Treasury Bills (T-Bills)
The Treasury bills are issued by the Central Government and known to be one of the
safest money market instruments available. Besides, they carry zero risk, so the
returns are not attractive. Also, they come with different maturity periods like 1 year,
6 months or 3 months and are also circulated by primary and secondary markets.
)
62
The central government issues them at a lesser price than their face-value.
80
Call and Notice Money
10
Call and Notice Money exist in the market. With respect to Call Money, the funds are
borrowed and lent for one day, whereas in the Notice Market, they are borrowed and
K
lent up to 14 days, without any collateral security. The commercial banks and
.(V
cooperative banks borrow and lend funds in this market. However, the all-India
financial institutions and mutual funds only participate as lenders of funds.
SH
Inter-bank Term Market
A
The inter-bank term market is for the cooperative and commercial banks in India who
K
borrow and lend funds for a period of over 14 days and up to 90 days. This is done
without any collateral security at the rates determined by markets.
A
PR
Commercial Papers (CPs)
Commercial papers can be compared to an unsecured short-term promissory note
D
which is issued by top rated companies with a purpose of raising capital to meet
VE
requirements directly from the market.

They usually have a fixed maturity period which can range anywhere from 1 day up to
R
270 days.
A
They offer higher returns as compared to treasury bills. They are automatically not as
M
secure in comparison. Also, Commercial papers are traded actively in secondary

U
market.
K
Certificate of Deposits (CD’s)

r.
M
This functions as a deposit receipt for money which is deposited with a financial
organization or bank. The Certificate of Deposit is different from a Fixed Deposit
y:
receipt in two ways. i. Certificate of deposits are issued only of the sum of money is
B
huge. ii. Certificate of deposit is freely negotiable.

ed
CD’s are also issued at discounted price like the Treasury bills and they range between
a span of 7 days up to 1 year. The Certificate of Deposit issued by banks range from
ad
3 months, 6 months and 12 months.

o
Banker’s Acceptance (BA): A Banker’s Acceptance is a document that promises

nl
future payment which is guaranteed by a commercial bank. Also, it is used in money

ow
market funds and will specify the details of repayment like the date of repayment,
amount to be paid, and details of the individual to which the repayment is due.
D
BA’s features maturity periods that range between 30 days up to 180 days.
Repurchase Agreements (Repo): Repos are also known as Reverse Repo or as
Repo. They are loans of short duration which are agreed by buyers and sellers for the
purpose of selling and repurchasing.
Equity market
)
The equity market is a system in which investors bid for or sell stock at a specified
62
price. Many traders compete for a share of a stock, and the first to place a bid on a
80
particular stock wins it. This process is known as an open outcry, and it works by
traders shouting their prices out in front of others. Electronic trading methods are also
10
used for trading stocks on the equity market.To measure the general performance of
equities, stock market indices are used. There are different indices for stocks in
K
different countries, regions, and industries.
.(V
Derivative market
SH
Most derivatives have no intrinsic value but rather derive their value from the
underlying asset. They are thus susceptible to market risk and sentiment. In addition
A
to this, derivatives are usually leveraged instruments. Common derivatives include
K
credit default swaps, futures contracts, options, and options. They can be traded over-
the-counter, and many are infinitely customizable. Traders use derivatives in their daily
A
activities for hedging and speculation. In addition to risk management and leveraging
PR
positions, these instruments offer several advantages over their traditional
counterparts.
D
VE
Forwards
This is the simplest type of derivatives. A forward contract is a private agreement
between a buyer and a seller where the buyer commits to buy and the seller commits
R
to sell an asset on a specified date in the future at a presently agreed price. The parties
A
involved can customize the terms of their agreement and settlement process as they
M
want.
U
Futures
K
A futures contract is similar to a forward contract because it is also an agreement for

r.
the exchange of an asset (commodity, stock, index, bond, and others) on a future date
M
at a presently agreed price. However, futures are traded in the secondary market the
exchanges and are highly standardized, with rules and regulations backed by the
y:
clearinghouse.
B
ed
Options
This is a contract which gives the investor the right to buy or sell a set amount of the
ad
underlying financial security at a pre-agreed price on or before the expiration of the

contract. Options are mostly traded on the exchanges, although they can be traded
o
over the counter.

nl
An investor can buy a call or put option. A call option gives the holder the right to buy
ow
an asset from the issuer at a specified price on a later date (prior to expiry) while a put
option allows the holder to sell an asset to the issuer at a specified price on a later
D
date (prior to expiry).

Based on when the investor can exercise the option, there four types of options:
American options: Can be exercised at any time until expiry
European options: The buyer can exercise them on the day of expiry
Bermuda options: Can be exercised only on a specified day
Exotic options: Specialized options with unique payoff rules.
)
62
Swaps
This is a type of derivative contract through which two parties can exchange their
80
streams of cash flows within a specified period in the future.
10
K
.(V
There are four types of swap contracts:
SH
Interest Rate Swaps
A
This involves the exchange of one form of an interest rate for another, to reduce
K
fluctuations in the rate or obtain a lower interest rate. It is used where an entity has
A
access to a loan but doesn’t like the type of interest rate (floating or fixed). This entity
PR
can swap the interest rate payment with a willing party that has the preferred type of
interest rate.
Cross-Currency Swap
D
In this type of derivative contract, both the principal and interest payment in one
VE
currency are exchanged for the same in a different currency. This type of swap can be
used to secure cheaper loans, as well as protect against fluctuations in the foreign
R
exchange rate.
A
M
Credit Default Swap

U
Investors use this type to manage credit risks. A lender who is worried about getting
K
back his money may sell the loan to an investor who is willing to assume the risk.
r.
M
Total Return Swap

Here, one party pays the other (owner of the reference asset) an agreed rate over the
y:
life of the swap while receiving the income generated by a reference asset
B
Forex Market simply involves various foreign currency that are aided by other
ed
financial instruments like swaps, options etc.

ad
Commodity market
o
In commodity market historically, reliance was on direct negotiations between

nl
producers and consumers, as well as public sales at a fixed location. The price is
ow
determined by a physical auction, where a human auctioneer invites prospective

buyers to bid on the commodity.
D
Today, there are exchanges to facilitate commodity trading.

Not all the commodities are fit for trading on the commodity exchange. There are a
few characteristics that a commodity should possess to qualify for trade on the
exchange. These characteristics are.
Durability
Homogeneity
)
Price Fluctuation
62
Gradability – Categorize the product into well-defined grades
80
Open Supply – There should not be a monopolized market for the commodity.
10
K
.(V
Capital Raising
Organizations normally raise capital from financial backers for 3 main roles: securing,
SH
re-adjusting the capital blend, and development.
 Raising capital for securing is a typical methodology for organizations to
A
upgrade an incentive for investors. This methodology either permits
K
organizations to apply assets to improve the worth of a current resource.
 Re-balancing the capital mix is a measure organizations take to raise cash flow
A
and rebalance their capital blend. This is normal for organizations with
PR
extraordinary liabilities.
 Organizations may likewise require extra funding to develop activities or
D
potentially for working capital. This is normal for organizations undertaking

VE
projects with enormous forthright expenses and long execution courses of

events.
R
When a company starts its business, it issues shares in proportion to the initial capital
A
brought in by the promoters (i.e. those who start the business as a company). As the
M
business of the company grows, the promoters often require more capital to meet the
U
company’s growth objectives like capacity expansion, new product development,

K
increase in marketing budgets etc. They have 2 ways of raising this capital:
 Getting a loan from a bank (Debt Capital); or,
r.
 Raising Equity capital – selling equity shares of the company (Equity Capital)
M
Both means of financing have their pros and cons. Debt capital would burden the
y:
company and require it to make regular interest payments on the borrowed sum. On
the other hand, raising equity capital would increase the number of owners in the
B
business thereby reducing the stake of each owner. However, the advantage in the
latter case is that the promoters by selling a portion of the company’s ownership (i.e.
ed
equity) in return for capital will be able to avoid interest obligations which they would
ad
have incurred on debt financing.

When you buy a share, you become part owner of the company. For example, if a
o
company issued 100 shares and you bought 10 of them, you own 10 % of the
nl
Company. This gives you the right to share in the future growth and profits of the
ow
company, as also the right to receive the company’s reports and accounts and a right
to vote on corporate affairs. The more shares you own, the bigger your stake.
D
Now there are newer methods of raising funds

a) Private Equity: This is private placement of fund by individuals or institutions
into a company with an intent to buy controlling stake in the equity portion.
Normally such placement happens in non -listed companies.
b) Venture Funding/Hedge Funds: Venture capital (VC) is a form of private equity
and a type of financing that investors provide to start-up companies and small
businesses that are believed to have long-term growth potential. Venture
)
62
capital generally comes from well-off investors, investment banks, and any
other financial institutions. Many unicorns today are examples of VC funding.
80
c) Crowd Funding: Crowd-funding is the use of small amounts of capital from a
10
large number of individuals to finance a new business venture. Crowd-funding
makes use of the easy accessibility of vast networks of people through social
K
media and crowd-funding websites to bring investors and entrepreneurs
.(V
together, with the potential to increase entrepreneurship by expanding the pool
of investors beyond the traditional circle of owners, relatives, and venture
capitalists.
SH
A
K
A
PR
D
VE
R
A
M
U
K
r.
M
y:
B
ed
oad
nl
ow
D
Important developments
in the Economy
)
62
80
INITIATIVES UNDER FOREIGN DIRECT INVESTMENT:
10
The Government has put in place a liberal and transparent policy for attracting Foreign
Direct Investment (FDI), wherein most sectors, except certain strategically important
K
sectors, are open for 100% FDI under the automatic route. Subject to the provisions
.(V
of the FDI Policy, foreign investment in 'manufacturing' sector is under automatic route.
Measures taken by the Government on FDI policy reforms have resulted in increased
SH
FDI inflows in the country. India has received its highest ever FDI inflow of INR
6,31,050 crores in Financial Year 2021-22. Further, FDI Equity inflow in Manufacturing
A
sectors has increased to INR 1,58,332 crore in Financial Year 2021-22 from INR
K
89,766 crore (FY 2020-21), which is an increase of 76%.
A
Further, Reserve Bank of India has undertaken several measures to enhance forex
PR
inflows. These measures include:
 Exemption of incremental Foreign Currency Non-Resident (Bank) [FCNR(B)]
D
and Non-Resident (External) Rupee (NRE) deposits from Cash Reserve Ratio
VE
(CRR) and Statutory Liquidity Ratio (SLR),

 Permission to banks to raise fresh FCNR(B) and NRE deposits without
R
reference to the extant regulations on interest rates until end-October 2022,

A

M
Inclusion of all new issuances of G-Secs of 7-year and 14-year tenors under
the Fully Accessible Route (FAR) for FPls,
U
K
 Exemption of investments by FPls in G-Secs and corporate debt made till

October 31, 2022 from short term limit,
r.
M
 Allowing FPI in commercial paper and non-convertible debentures with an

original maturity of up to one year,
y:
 Temporary increase in the limit for external commercial borrowings (ECBs)

B
under the automatic route from US$ 750 million or its equivalent per financial
ed
year to US$ 1.5 billion,


ad
Increase in the all-in cost ceiling under the ECB framework by 100 basis points,
subject to the borrower being of investment grade rating, and
o
 Permission to AD Cat-I banks to utilise overseas foreign currency borrowings

nl
for lending in foreign currency to entities for a wider set of end-use purposes,
ow
besides exports.
D
Recent Trend
 Total FDI Inflows:

o India received the highest annual FDI inflows of USD 84.835 billion in
FY 21-22 overtaking last year’s FDI by USD 2.87 billion.
 Top 5 sourcing nations for FDI equity flows into India in FY 2021-22 are:-
)
o Singapore (27.01%);
62
o USA (17.94%)
80
o Mauritius (15.98%),
o Netherland (7.86%) and
10
o Switzerland (7.31%).
K
 Top 5 sectors receiving highest FDI Equity Inflow during FY 2021-22 are-
.(V
o Computer Software & Hardware (24.60%),
o Services Sector (Fin., Banking, Insurance, Non Fin/Business,
Outsourcing, R&D, Courier, Tech. Testing and Analysis, Other)
SH
(12.13%),
o Automobile Industry (11.89%),
A
o Trading 7.72% and
K
o Construction (Infrastructure) Activities (5.52%).
A
 Top 5 States receiving highest FDI Equity Inflow during FY 2021-22 are:-
PR
o Karnataka (37.55%),
o Maharashtra (26.26%),
o Delhi (13.93%),
D
o Tamil Nadu (5.10%) and

VE
o Haryana (4.76%)
 Increasing FDI Inflow in Manufacturing Sectors:
R
o India is rapidly emerging as a preferred country for foreign investments

A
in the manufacturing sector.

M
o FDI Equity inflow in Manufacturing Sectors have increased by 76% in FY

2021-22 (USD 21.34 billion) compared to previous FY 2020-21 (USD
U
12.09 billion).
K
 As per the UNCTAD World Investment Report (WIR) 2022, in its analysis of the
r.
global trends in FDI inflows, India has improved one position to 7th rank among
M
the top 20 host economies for 2021.

y:
INITIATIVES UNDER MSME SEGMENT

B
The Micro Small and Medium Enterprises (MSMEs) sector is a major contributor to the
ed
socio-economic development of the country. In India, the sector has gained significant
importance due to its contribution to Gross Domestic Product (GDP) of the country
ad
and exports. The sector has also contributed immensely with respect to
entrepreneurship development especially in semi-urban and rural areas of India.
o
nl
According to the provisions of Micro, Small & Medium Enterprises Development

ow
(MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified
in two classes i.e., Manufacturing Enterprises and Service Enterprises.
D
The enterprises are further categorized based on investment in equipment and annual
turnover.
Criteria Manufacturing Service

Turnover Investment Turnover Investment
)
Rs. 5 Less than
62
Rs. 5 crore crore
Less than Rs. 25 lakh (US$ 0.03
Micro Rs. 10 lakh
80
million)
(US$ 0.6 million) (US$ 0.6
10
million) (US$ 0.01 million)
Rs. 50 More than Rs. 10
K
Rs. 50 crore More than Rs. 25 lakh (US$ 0.03 crore lakh (US$ 0.01
.(V
Small million) but less than Rs. 5 crore million) but less
(US$ 6.8 million) (US$ 0.6 million) (US$ 6.8 than Rs. 2 crore
million) (US$ 0.3 million)
SH
More than Rs. 2
crore
A
Rs. 250
More than Rs. 5 crore (US$ 0.6
K
Rs. 250 crore crore (US$ 0.3 million)
Medium million), but less than Rs. 10 crore
A
(US$ 34 million) (US$ 34 but does not
(US$ 1.4 million)
PR
million) exceed Rs. 5 crore
(US$ 0.6 million)

D
VE
R
MARKET SIZE:
A
M
The BSE SME (small and medium enterprises) platform is expected to witness >60
U
SMEs to enter the market in one year (2021-22) to bring up equity funds for meeting
K
their business requirements. The initial public offering (IPO) route witnessed 16 SMEs
enter the market; they raised Rs. 100 crore (US$ 13.74 million) in 2020. In June 2021,
r.
Bombay Stock Exchange (BSE) announced that it has collaborated with Electronics
M
and Computer Software Export Promotion Council (ESC) to build awareness among
y:
small businesses and start-ups about advantages of listing.

B
MSMEs are being encouraged to market their products on the e-commerce site,
ed
especially through Government e-Marketplace (GeM), owned and run by the

government, wherefrom Ministries and PSUs (public sector undertakings) source their
ad
procurement. As of September 4 2022, the GeM portal has served 11.26 million orders
worth Rs. 299,059 crores (US$ 37.54 billion) from 5.06 million registered sellers and
o
service providers for 62,354 buyer organizations.

nl
ow
D
)
62
80
10
K
.(V
Domestic business requires a strong financial stimulus with concessional working
SH
capital loans to ensure adequate liquidity is maintained in business operations from
the government and financial institutes.
A
K
Indian Micro, Small and Medium Enterprises (MSMEs) are rapidly adopting digital
payments over cash, with 72% payments done through the digital mode compared
A
with 28% cash transactions. Rise in digital adoption presents prospects for further
PR
growth in the sector.
D
STATUTORY BODIES:
VE
MSME Ministry has four statutory bodies namely, Khadi and Village Industries
Commission (KVIC) who is responsible for promoting and developing khadi and village
R
industries for providing employment opportunities in rural areas, thereby strengthening

A
the rural economy, Coir Board in charge of promoting overall development of the coir
M
industry and improving living conditions of workers in this industry, National Small
U
Industries Corporation Limited (NSIC) responsible for promoting, aiding and fostering
K
growth of micro and small enterprises in the country, generally on commercial basis,
National Institute for Micro, Small and Medium Enterprises, (NI-MSME) in-charge of
r.
enterprise promotion and entrepreneurship development, enabling enterprise

M
creation, performing diagnostic development studies for policy formulation, etc. and
lastly, Mahatma Gandhi Institute for Rural Industrialisation (MGIRI) responsible for
y:
accelerating rural industrialisation for sustainable village economy, attract

B
professionals and experts to Gram Swaraj, empower traditional artisans, encourage

innovation through pilot study/field trials and R&D for alternative technology using local
ed
resources.
ad
New online system of MSME/Udyam Registration launched by the Union MSME

o
Ministry, w.e.f. July 01, 2020, successfully registered >1.1 million MSMEs until
nl
November 2020. In June 2021, the Ministry of Micro, Small and Medium Enterprises
ow
extended the validity of Udyog Aadhaar Memorandum from March 31, 2021, to
December 31, 2021.
D
GOVERNMENT POLICIES
The Government of India has designed various policies for the growth of MSMEs in
the country.
 As on July 8, 2022 the number of loans sanctioned under the Pradhan Mantri
)
MUDRA Yojana (PMMY) scheme was 10.03 million and the amount disbursed
62
was Rs. 73,199.89 crore (US$ 9.15 billion).
80
 In the Union Budget of 2022-23 MSMEs sector was allocated an Emergency
10
Credit Line Guarantee Scheme (ECLGS) of Rs. 50,000 crore (US$ 6.55 billion).
K
 On March 30 2022, the Indian government allocated Rs. 6,062.45 crore (US$
.(V
808 million) for the scheme Raising and Accelerating MSME Performance
(RAMP). The programme aims to improve market and credit access, strengthen
institutions and governance at the centre and state levels, improve centre-state
SH
connections and partnerships, resolve late payment difficulties, and green
MSMEs.
A

K
In November 2021, the Indian government launched the Special Credit Linked
Capital Subsidy Scheme (SCLCSS) for the services sector. This scheme will
A
help enterprises in the services sector meet various technology requirements.
PR
 In November 2021, the Ministry of Micro, Small and Medium Enterprises
D
launched SAMBHAV, a national-level awareness programme to push economic

VE
growth by promoting entrepreneurship and domestic manufacturing.
RECENT DEVELOPMENTS
R
A
Major Recent Developments in the MSMEs include:

M

U
In June 2022, the central government announced a new initiative called

"Promotion of MSMEs in North Eastern Region and Sikkim." The main purpose
K
of this project was to stimulate MSMEs in the North East by establishing mini-
r.
technological centres, developing new and existing industrial estates, and

M
promoting tourism.
y:
 In November 2021, the Small Industries Development Bank of India (SIDBI)

B
inked a pact with Google to pilot social impact lending with financial assistance
up to Rs. 1 crore (US$ 133,939.60) at subsidised interest rates to micro
ed
enterprises. To reinvigorate the Indian MSME sector, Google India Pvt. Ltd.
GIPL, will bring a corpus of US$ 15 million (~Rs. 110 crore) for micro
ad
enterprises as a crisis response related to COVID-19.

o
 In November 2021, digital freight forwarder Freightwalla, launched a shipment

nl
tracking service for MSME exporters and importers based on predictive

ow
analytics to help businesses tackle risks associated with shipment delays and
improve supply chain efficiency.
D
 In November 2021, Cashinvoice, a supply chain financing (SCF) platform,

announced that it will aid MSMEs with over Rs. 10,000 crore (US$ 1.33 billion)
worth of financing in the year ahead, as it has raised Pre-Series A funding of
US$ 1 million from Accion Venture Lab.
 In October 2021, Sundaram Finance and the MSME Development Institute

(Chennai), provided marketing assistance to MSMEs. Entrepreneurial and
managerial development of MSMEs will be done through an incubator scheme,
)
that will give innovators opportunities to develop and nurture ideas for the
62
production of new products.
80
 In September 2021, Aerospace Engineers Private Limited, a Tamil Nadu-based
10
MSME, secured a contract from Boeing to produce and supply critical aviation
components.
K
.(V
PRODUCTION-LINKED INCENTIVE SCHEME (PLI):
 Announced in 2020, the PLI scheme provides eligible companies with
SH
incentives ranging from 4-6 percent on incremental sales of mobile phones
manufactured in India over a five-year period beginning with the base year
A
(2019-20). To qualify for the subsidy in 2020-21, high-end manufacturers or
K
companies producing handsets worth more than Rs. 15,000 (US$ 200) must
A
sell goods worth Rs. 4,000 crore (US$ 550 million) or more.
PR
 In April 2021, the government extended the scheme until 2025-26 (a year
longer than the initial 2024-25) and allowed companies to choose between
2019-20 and 2020-21 as base years. The government has approved
D
approximately 16 applications from both domestic and multinational

VE
corporations. The total investment is expected to be more than Rs. 40,000

crores (US$ 5.5 billion).
R
 To reduce import dependency and boost domestic production and exports, the
A
government implemented a PLI scheme for telecom and networking products

M
in February 2021. The scheme’s goal is to turn India into a global manufacturing
U
hub for telecom equipment by encouraging telecom players (including

K
networking product manufacturers) to invest in India and incentivizing both

foreign and domestic investments.
r.
 The production-linked incentive (PLI) scheme for telecom and networking

M
products was announced, with a Rs. 12,195 crore (US$ 1.65 billion) outlay for
y:
a five-year period ending in FY26. It aims to create global champions in the

Indian telecom sector that can potentially scale up and penetrate the global
B
value chain by leveraging cutting-edge technologies.

ed
 The Union Cabinet approved major telecom sector reforms in September 2021,
which are expected to boost employment, growth, competition, and consumer
ad
interests. The rationalisation of adjusted gross revenue, the rationalisation of

o
bank guarantees (BGs), and the encouragement of spectrum sharing are

nl
among the key reforms.

ow
 India is a large and emerging market for IT hardware products, with more than
US$ 120 billion in IT hardware expected to be consumed over the next decade.
Currently, imports meet India’s demand for IT hardware products. Following
D
this, the Indian government announced production linked incentive (PLI)

schemes worth Rs. 1.97 trillion (US$ 26.4 billion) in 13 sectors in April 2020, in
response to rising strategic security concerns and China’s Plus One business
strategy, which entails avoiding sole investment in China and diversifying
businesses into other countries. The government intends to use this PLI
scheme to entice multinational firms to relocate their manufacturing capacity to
India, as well as to encourage MSMEs to take advantage of the opportunities
provided by a PLI scheme.
)
62
 The appliances and consumer electronics industry in India was worth Rs.
76,400 crore (US$ 10.93 billion) in 2019 and is expected to more than double
80
to Rs. 1.48 lakh crore (US$ 200 billion) by 2025. The Indian market offers a
10
plethora of opportunities for electronics manufacturers due to its significant
growth potential.
K
 According to experts, the government’s approval of the Rs 76,000 crore
.(V
production linked incentive (PLI) scheme for the development of India’s
semiconductor and display manufacturing ecosystem will have a horizontal
impact. That is, rather than focusing solely on the semiconductor industry, it
SH
would spread to other segments of electronic manufacturing where MSMEs are
A
prevalent, such as automotive, smartphones, television, refrigerators, laptops,
air conditioners, medical equipment, and so on. Essentially, it would aid in the
K
further penetration of electronic or smart devices in the country.
A
 “The programme will promote higher domestic value addition in electronics
PR
manufacturing and will significantly contribute to achieving a $1 trillion digital
economy and a $5 trillion GDP by 2025,” the Cabinet said in announcing the
D
programme.
VE
 The massive investments in India demonstrate the country’s growing

importance as a prime market for Western consumer electronics as well as a
R
manufacturing centre capable of competing with China and other fast-growing

A
production hubs. The country is attempting to increase its share of the global
M
electronics manufacturing market by capitalising on opportunities created by

global supply chain reconfiguration and rising local demand.
U
 Mr. Narendra Modi, Prime Minister of India, approved the production-linked

K
incentive (PLI) scheme in the textiles sector in September 2021, with an

r.
estimated outlay of Rs. 10,683 crore (US$ 1.45 billion) for MMF apparel, MMF
M
fabrics, and 10 segments/products of technical textiles.

 The government approved a production-linked incentive (PLI) scheme for the
y:
automobile and drone industries in September 2021, with a budget of Rs.

B
26,058 crore (US$ 3.54 billion) to boost the country’s manufacturing

ed
capabilities.
 To boost exports, the government announced plans in September 2021 to
ad
release Rs. 56,027 crore (US$ 7.62 billion) through various export promotion
schemes.
o
nl
 The Indian government approved the Deep Ocean Mission (DOM) in August
2021, with a budget outlay of Rs. 4,077 crore (US$ 553.82 million) over the next
ow
five years.
 The government approved the production linked incentive (PLI) scheme for
D
manufacturing advanced chemistry cell (ACC) batteries in May 2021, with an

estimated outlay of Rs. 18,100 crore (US$ 2.44 billion); this move is expected
to attract Rs. 45,000 crore (US$ 6.07 billion) in domestic and foreign
investment.
 The Union Cabinet approved the PLI scheme for white goods (air conditioners
and LED lights) with a budgetary outlay of Rs. 6,238 crore (US$ 848.96 million)
and the ‘National Programme on High Efficiency Solar PV (Photo Voltic)
Modules’ with a budgetary outlay of Rs. 4,500 crore (US$ 612.43 million).
)
62
STAND UP INDIA SCHEME:
80
The Prime Minister of India, Mr Narendra Modi launched the Stand Up India Scheme
10
in April 2016, encouraging people from the scheduled caste and scheduled tribes and
women across the country to become entrepreneurs by loaning them a sum of money
K
to start a business.
.(V
Given below are the key features of the Stand Up India scheme:
SH
 The scheme is part of an initiative by the Department of Financial Services
(DFS),Ministry of Finance to promote entrepreneurial projects.
A
 An amount ranging from Rs 10 lakhs to Rs.1 crore to be provided as a loan,
K
inclusive of working capital for setting up a new enterprise.
A
 The scheme states that each bank branch needs to facilitate two
PR
entrepreneurial projects on an average. One for SC/ST and one for a woman
entrepreneur.
D
 A RuPay debit card would be provided for the withdrawal of credit.

VE
 Credit history of the borrower would be maintained by the bank so that the
money is not used for any personal use.
R
 Refinance window through Small Industries Development Bank of India (SIDBI)

A
with an initial amount of Rs.10,000 crore.

M
 Under this scheme, through NCGTC, creation of a corpus of Rs.5000 crore for
U
credit guarantee.
K
 Supporting the borrowers by providing comprehensive support for pre-loan

training like facilitating the loan, factoring, marketing, etc.
r.
 A web portal has been created to assist people for online registration and
M
support services.
y:
 The main purpose of this scheme is to benefit the institutional credit structure
B
by reaching out to the minority sections of the population by initiating bank loans
in the non-farm sector.
ed
 The scheme will also be an advantage for the ongoing schemes of other
ad
Departments.
 The Stand Up India scheme will be led by Small Industries Development Bank
o
of India (SIDBI) along with the involvement of the Dalit Indian Chamber of
nl
Commerce and Industry (DICCI). Along with DICCI, there will also be
ow
involvement of other sector-specific institutions.

 The designation of Stand Up Connect Centres (SUCC) will be provided to SIDBI
D
and National Bank of Agriculture and Rural Development (NABARD)

 An initial amount of Rs.10,000 crore will be allotted to the Small Industries
Development Bank of India (SIDBI) to provide financial aid.
 There will be a pre-loan and an operational phase for this scheme and the
system and Officials tend to help people throughout these phases.
 To help the credit system reach out to the entrepreneurs, the margin money for
the composite loan will be up to 25 per cent.
 The people who apply for this scheme will be familiarised with the online
platforms and other resources of e-marketing, web-entrepreneurship, factoring
)
62
services and registration.
80
Eligibility Criteria: Stand Up India Scheme
10
There are certain eligibility criteria that need to be fulfilled by the people applying for
K
the loan:
.(V
1. The individual must be 18 years or above
2. The company must be a private limited/LLP or a partnership firm.
SH
3. The turnover of the firm must not be more than 25 crores
4. The entrepreneur should either be a woman for a person belonging to
A
scheduled caste or scheduled tribe category.
K
5. The loan will only be provided to fund greenfield projects i.e., the project must
A
be a very first one being undertaken under the manufacturing or service sector.
6. The applicant must not a bank or any other Organisation’s defaulter.
PR
7. The company should be dealing with any commercial or innovative consumer
goods. An approval of DIPP is also required for the same.
D
VE
Tax Benefits/Incentives in Stand Up India
 The applicants will get 80% rebate after filing the patent application form. This
R
can only be filled by startups and the benefits are also more for them as
A
compared to other companies.

M
 There is also an inclusion of Credit Guarantee Fund and the entrepreneurs

U
enjoy relaxation in Income tax at least for the first three years.
K
 There will be complete relaxation for the entrepreneurs for the Capital Gain Tax.
r.
 Moreover, for the entities who qualify the program will further enjoy benefits like
M
the redemption of tax on the profits earned.


y:
This is to ease the entities during the initial startup phase and that there is no
burden of paying heavy costs for taxes.
B
ed
STARTUP INDIA SCHEME:

ad
This is an important government scheme that was launched on 16th January 2016
o
with an aim to promote and support the start-ups in India by providing bank finances.
nl
It was inaugurated by the former finance minister, Arun Jaitley.

ow
The Startup India scheme is based majorly on three pillars which are mentioned below:
D
1. Providing funding support and incentives to the various start-ups of the country.
2. To provide Industry-Academia Partnership and Incubation.
3. Simplification and Handholding.
Registration for Startup India

A person must follow the below-mentioned steps that are important for the successful
registration of their business under the Startup India scheme:
)
62
1. A person should incorporate their business first either as a Private Limited
Company or as a Limited Liability Partnership or as a Partnership Firm along
80
with obtaining the certificate of Incorporation, PAN, and other required
10
compliances.
2. A person needs to log in to the official website of Startup India where he/she
K
has to fill all the essential details of the business in the registration form and
.(V
upload the required documents.
3. A letter of recommendation, Incorporation/Registration Certificate, and a brief
description of the business are some of the essential documents required for
SH
the registration purpose.
4. Since the start-ups are exempted from income tax benefits, therefore, they must
A
be recognized by the Department of Industrial Policy and Promotion (DIPP)
K
before availing these benefits. Also, they should be certified by the Inter-
A
Ministerial Board (IMB) to be eligible for IPR related benefits.
PR
5. After successful registration and verification of the documents, you will be
immediately provided with a recognition number for your startup along with a
certificate of recognition.
D
VE
Who is eligible to apply under the Startup India scheme?

An entity is eligible to apply when:
R
A
 It is incorporated as a private limited company or partnership firm or a limited

M
liability partnership in India

U
 It has less than 10 years of history i.e. less than 10 years have elapsed from
K
the date of its incorporation/registration

 The turnover for all of the financial years, since the incorporation/ registration
r.
has been less than INR 100 crores

M
Government Measures to Promote Startup Culture in the Country

y:
B
1. As part of the “Make in India” initiative, the government proposes to hold

one Start-Up fest at the national level annually to enable all the stakeholders
ed
of the Start-up ecosystem to come together on one platform. You can know in
ad
detail about the Make In India program on the linked page.

2. Launch of Atal Innovation Mission AIM – to promote Entrepreneurship through
o
Self-Employment and Talent Utilization (SETU), wherein innovators would be

nl
supported and mentored to become successful entrepreneurs. It also provides

ow
a platform where innovative ideas are generated. Relevant details on Atal

Innovation Mission AIM are available on the linked page.
3. Incubator set up by PPP – To ensure professional management of
D
Government-sponsored or funded incubators, the government will create a

policy and framework for setting-up of incubators across the country in public-
private partnerships. The incubator shall be managed and operated by the
private sector. Read more on Public-Private Partnership on the link provided
here.
o 35 new incubators in existing institutions. Funding support of 40% shall
be provided by the Central Government, 40% funding by the respective
State Government and 20% funding by the private sector for
establishment of new incubators.
)
62
o 35 new private sector incubators. A grant of 50% (subject to a maximum
of INR 10 crore) shall be provided by Central Government for incubators
80
established by the private sector in existing institutions.
10
4. A Startup India Seed Fund Scheme has been implemented with effect from
April 1, 2021. The scheme aims to provide financial assistance to startups for
K
proof of concept, prototype development, product trials, market entry and
.(V
commercialization.
SH
PM GATI SHAKTI:
Gati shakti is a digital platform that will bring 16 ministries including railways and
A
roadways together for integrated planning and coordinated implementation of
K
infrastructure connectivity projects. This will help in removing long-standing issues
A
such as disjointed planning, lack of standardization, problems with clearances, and
PR
timely creation and utilization of infrastructure capacities.
D
The Gati Shakti scheme will subsume the Rs 110 lakh crore National Infrastructure
Pipeline that was launched in 2019. The portal will offer 200+ layers of geospatial data,
VE
including that on existing infrastructure. It will also allow various government

departments to track, in real-time and at one centralized place, the progress of various
R
projects. It will help different departments to prioritize their projects through cross-
A
sectoral interactions. By incorporating infrastructure schemes under various ministries

M
and states, the platform aims at boosting last-mile connectivity bringing down logistics
costs with integrated planning and reducing implementation overlaps. A project
U
monitoring group under the Department of Promotion of industry and Internal

K
trade (DPIIT) will monitor the progress of key projects in real-time.

r.
M
PM Gati Shakti will incorporate the infrastructure schemes of various Ministries and
y:
State Governments like Bharatmala, Sagarmala, inland waterways, dry/land

ports, UDAN, etc. Economic Zones like textile clusters, pharmaceutical clusters,
B
defence corridors, electronic parks, industrial corridors, fishing clusters, Agri zones will
ed
be covered to improve connectivity & make Indian businesses more competitive.

ad
Targets under the PM Gati shakti Scheme:

o
Gati shakti has set targets for all infrastructure ministries and the targets to be
nl
achieved by 2024-25:
ow
1. 11 industrial corridors and 2 new defence corridors (Tamil Nadu and Uttar
D
Pradesh), achieving a 1.7 lakh crore turnover in defence production.

2. Around 38 electronics manufacturing clusters
3. 109 pharma clusters
4. Increase in the total cargo handled at Indian ports to 1759 MTPA
5. Adding over 200 airports, helipads, and water aerodromes.
6. Extending 4G connectivity to all villages
7. Adding 17,000 km to the gas pipeline network is being planned.
)
Six pillars of PM Gati Shakti:
62
1. Comprehensiveness: It will include all the existing and planned
80
initiatives of various Ministries and Departments with one centralized
portal. Every Department will now have visibility of each other’s activities
10
providing critical data while planning & comprehensively executing
K
projects.
.(V
2. Prioritization: Through this, different Departments will be able to
prioritize their projects through cross-sectoral interactions.
3. Optimization: The National Master Plan will assist different ministries in
SH
planning for projects after the identification of critical gaps. For the
transportation of the goods from one place to another, the plan will help
A
in selecting the most optimum route in terms of time and cost.
K
4. Synchronization: Individual Ministries and Departments often work in
A
silos. There is a lack of coordination in the planning and implementation
PR
of the project resulting in delays. It will help in synchronizing the activities
of each department, as well as of different layers of governance,
holistically by ensuring coordination of work between them.
D
5. Analytical: The plan will provide the entire data at one place with GIS-
VE
based spatial planning and analytical tools having 200+ layers, enabling
better visibility to the executing agency.
6. Dynamic: All Ministries and Departments will now be able to visualize,
R
review and monitor the progress of cross-sectoral projects, through the

A
GIS platform, as the satellite imagery will give on-ground progress

M
periodically and the progress of the projects will be updated regularly on

U
the portal. It will help in identifying the vital interventions for enhancing
K
and updating the master plan.

r.
M
What is the need for the scheme?

y:
 To address the wide gap between macro planning and micro

B
implementation due to the lack of coordination and advanced information

sharing as departments think and work in silos.
ed
 As per reports, studies estimate the logistics costs in India at about 13-
14% of GDP as against about 7-8% in developed economies. With this
ad
high logistical cost, the competitiveness of India’s exports is greatly

o
reduced.
nl
 It will increase economic activities and create employment on a large

scale due to the creation of quality infrastructure for sustainable
ow
development.
 The scheme is in synergy with the National Monetisation Pipeline
D
(NMP) which was announced to provide a clear framework for

monetization and give potential investors a ready list of assets to generate
investor interest.
 A holistic and integrated transport connectivity strategy will greatly
support ‘Make in India’ and integrate different modes of transport.
 Another push for such a scheme was the lack of demand in the post-
Covid-19 scenario, which in turn led to a lack of private demand and
investment demand.
 Due to land acquisition delays and litigation issues, the rate of
)
62
implementation of projects is very slow on global standards- issues that
the scheme will address.
80
10
INDUSTRIAL LAND BANKS:
K
The India Industrial Land Bank (IILB) is a Geographic Information System (GIS)
.(V
database of industrial areas/clusters developed by the Department for Promotion of
Industry & Internal Trade (DPIIT).
SH
It enables a committed application of resource optimization, industrial upgradation and
sustainability.
A
Overview of India Industrial Land Bank
K
A
The India Industrial Land Bank acts as a repository of all information related to
PR
industrial infrastructure-related information, including connectivity, infrastructure,
natural resources and terrain, plot-level information on vacant plots and contact
details.
D
VE
As of July 2021, about 4000 industrial parks have been mapped across an area of 5.5
lakh hectare. It will serve a crucial decision support for investors and industrialists
seeking land to set up their businesses. It is expected that by December 2021 pan-
R
India integration will be achieved with information of industry-bases in 17 states being

A
updated on a real time basis.

M
U
Why is the Indian Industrial Land Bank needed?

K
Setting up an industrial base or a business park is an uphill task in India, as the

r.
database regarding where one can find land as well as other relevant information is
M
lacking.
y:
The IILB can make such data easily available for stakeholders to come to an informed
decision on where and how they can set up their industrial bases. The GIS-based
B
system will also enable a cost-analysis on what will be the profit and loss scenario for
ed
a prospective entrepreneur when he/she sets up their business.

ad
NATIONAL INFRASTRUCTURE PIPELINE:

o
nl
The National Infrastructure Pipeline (NIP) for FY 2019-25 is a first-of-its-kind, whole-

ow
of-government exercise to provide world-class infrastructure to citizens and improving

their quality of life. It aims to improve project preparation and attract investments into
D
infrastructure. To draw up the NIP, a High-Level Task Force was constituted under the
chairmanship of the Secretary, Department of Economic Affairs (DEA), Ministry of
Finance. The Final Report on National Infrastructure Pipeline for FY 20-25 of the Task
Force was released by the Union Minister for Finance & Corporate Affairs, Smt.
Nirmala Sitharaman on 29th April, 2020.
The NIP has been made on a best effort basis by aggregating the information provided
by various stakeholders including line ministries, departments, state governments and
private sector across infrastructure sub-sectors, as identified in the Harmonised
)
Master List of Infrastructure. All projects (Greenfield or Brownfield, under
62
conceptualization or under implementation or under Development) of project cost
80
greater than Rs. 100 crore per project were sought to be captured.
10
NATIONAL MONETISATION PIPELINE (NMP):
K
Union Minister for Finance and Corporate Affairs, Smt Nirmala Sitharaman, launched
.(V
the asset monetisation pipeline of Central ministries and public sector entities:
'National Monetisation Pipeline (NMP Volumes 1 & 2)'. NITI Aayog has developed
SH
the pipeline, in consultation with infrastructure line ministries, based on the mandate
for 'Asset Monetisation' under Union Budget 2021-22. NMP estimates aggregate
A
monetisation potential of Rs 6.0 lakh crores through core assets of the Central
K
Government, over a four-year period, from FY 2022 to FY 2025.
A
Asset monetisation, based on the philosophy of Creation through Monetisation, is
PR
aimed at tapping private sector investment for new infrastructure creation. This is
necessary for creating employment opportunities, thereby enabling high economic
growth and seamlessly integrating the rural and semi-urban areas for overall public
D
welfare.
VE
The plan is in line with Prime Minister’s strategic divestment policy, under which the
R
A
government will retain a presence in only a few identified areas with the rest tapping
the private sector. The National Monetisation Pipeline is announced to provide a clear
M
framework for monetisation and give potential investors a ready list of assets to
U
generate investor interest. Union Budget 2021-22 has identified the monetisation of
K
operating public infrastructure assets as a key means for sustainable infrastructure

financing. As of now, only assets of central government ministries and Central Public
r.
sector enterprises (CPSEs) in infrastructure sectors have been included. Roads,

M
railways, and power sector assets will comprise over 66% of the total estimated value
y:
of the assets to be monetized. The sectors including telecom, mining, aviation, ports,
natural gas, and petroleum product pipelines, warehouses, and stadiums will cover
B
the remaining 44% estimated value.

ed
ad
The success of the infrastructure expansion plan would depend on other stakeholders
playing their due role; hence all the strata should be duly considered and be given
o
opportunities.
nl
ow
The State governments and their public sector enterprises and the private sectors
should be able to work together through healthy competition.
D
A high-Powered Intergovernmental Group can be set up as recommended in
the 15th finance commission to re-examine the fiscal responsibility legislation of the
Centre and States.
DIGITAL PLATFORM BASED DEVELOPMENTS
)
62
Fintech Innovations: P2P Lending and Robo-Advising
80
P2P lending platforms, in which individuals and companies invest in small businesses,
enable the provision of credit without bank intermediation. They match borrowers and
10
lenders directly: Some allow the lenders to choose the borrowers, while others form
packages of loans, and online auctions are often used for this purpose.
K
.(V
These platforms frequently provide business risk rankings to borrowers, obtained by
algorithms using big data. P2P lending is prominent in China and is growing fast in the
United States (leaders include LendingClub and Prosper, which target both retail and
SH
institutional investors) and the United Kingdom (with Funding Circle as leader). Other
European countries where P2P consumer lending is growing are Germany, France,
A
and Finland.
K
A
The number of crowdfunding platforms (a version of P2P lending that allows projects
to raise capital from a large pool of investors through an online platform) has increased
PR
significantly in EU countries, with France, the Netherlands, Italy, and Germany taking
the lead, although in general the role of P2P lending is limited in the EU.
D
VE
Another example of FinTech innovation is provided by so-called robo-advisors, which

are computer programs that generate investment advice according to customer data.
Through the use of ML tools, robo-advisors represent a cheap alternative to human
R
wealth advisors. If programmed properly, they may help alleviate the usual conflicts of
A
interest that are widespread in the banking sector. Nevertheless, robo-advising is still
M
a young technology and represents only a fraction of overall financial advising; this is
U
particularly true in Europe, where assets under robo-management amount to much

less than those in the United States.
K
r.
End-to-end digitization
M
As pandemic-driven digital adaptation by customers and employees accelerated, it

y:
exposed operational and technical gaps in many financial institutions. To win the race
to all things digital, financial institutions are taking two important steps.
B
First, they exploit exponential technologies such as automation, hybrid cloud, and AI.
ed
Second, they apply them at scale— enabling collaboration across internal business
ad
units and an ecosystem of external partners through more secure platform

interactions.
o
nl
Adopting extreme digitization requires financial institutions to build a modern compute

environment and infrastructure that supports the flexibility to innovate while improving
ow
the cost efficiency of resilient operations.

D
Emerging digital assets
The financial services ecosystem faces an interesting opportunity: to reorganize itself
using digital connectivity for efficiency, lower costs, and better customer experiences.
This opportunity, in turn, is driving the inevitable: new digital assets—central bank
digital currencies (CBDC), non-fungible tokens (NFT), stable coins, and
)
cryptocurrencies—as solutions to eliminate even more friction in financial interactions.
62
But changing the status quo this radically comes with a host of challenges. Traditional
institutions, their policies and processes, as well as current regulations aren’t ready
80
for the growing demand in Decentralized Finance (DeFi) lending, crypto investments,
10
and tokenized exchanges of value and ownership. Regulators are hurrying to define
the ground rules that embrace wholesale activities as well as retail interests.
K
.(V
More than 80 central banks worldwide are testing the logic and reliability of alternative
money pipelines—a few of which have already gone live. This requires trusted
financial intermediaries to deploy a new digital infrastructure that also addresses
SH
growing demand for trusteeship, capital management solutions, and custody for
secured storage.
A
Digital Currencies
K
A
Different means of payment can be classified as objects, such as cash, central bank
PR
digital currency, cryptocurrencies including bitcoin or other digital coins, or claims such
as money issued by banks or other intermediaries (Alipay, WeChat Pay, M-Pesa, or
blockchain-based monies such as Paxos or USD Coin).
D
VE
Claim-based monies can in turn be categorised according to whether their redemption

is at fixed value (e.g. bank money or e-money) or at variable value (e.g. Libra, which
may have exchange-rate risk when converted into domestic currency).
R
A
Other important distinctions are whether the redemption is guaranteed by the

M
government (e.g., bank money) or, in principle, not (e.g., e-money) and whether
U
settlement is centralised (e.g., cash, bank money, e-money) or decentralised (e.g.,

cryptocurrencies). A key issue for digital currencies is stability. For example, bitcoin’s
K
value has fluctuated wildly. Central bank digital money, by contrast, would be perfectly
r.
stable (in nominal terms).

M
E-money is exposed to liquidity, default, and market risk (including foreign exchange
y:
risk), which can be minimised by the issuers with prudential measures. E-money
B
issuers typically hold bank deposits that are not protected by deposit insurance
because those deposits are wholesale. Despite these limitations, e-money may gain
ed
ground, as it has done in China and Kenya, because of its convenience, low
transaction costs (in particular for cross-border payments), complementarity with
ad
blockchain technology, and the power of network effects.

o
Digital currencies may threaten the banking sector with disintermediation if substantial
nl
retail deposits were to move to e-money providers. In that case, a crucial issue will be
ow
whether e-money providers will have access to central bank reserves, deposit
insurance, and/or the lender of last resort. Some central banks, such as those in India,
D
Hong Kong, China, and Switzerland, allow e-money providers to hold central bank
reserves under some conditions, and in China Alipay and WeChat must hold clients’
funds as reserves in the central bank.
India and Singapore to Link their Fast Payment Systems - UPI and PayNow
The Reserve Bank of India and the Monetary Authority of Singapore (MAS) have
announced a project to link their fast payment systems, UPI and PayNow. The linkage
will enable users of the two systems to make instant fund transfers (remittances)
without the need to get onboarded onto the other system. In other words, a user of
)
UPI does not require to be a part of PayNow system to be able to transfer funds to a
62
PayNow user in Singapore and vice versa. The linkage builds upon the earlier efforts
of NPCI International Payments Limited (NIPL, a subsidiary of NPCI) and Network for
80
Electronic Transfers (NETS of Singapore) to facilitate QR code-based payments
10
through UPI in Singapore.
K
The UPI-PayNow linkage can foster cross-border interoperability of payments and
.(V
further anchor trade, travel and remittance flows between the two countries. Singapore
has a large number of Indian workers and students, resulting in substantial (more than
USD 1 billion) in-bound and outbound remittances every year.
SH
The UPI-PayNow linkage is expected to be a significant milestone in the development
of infrastructure for cross-border payments between India and Singapore, and aligns
A
with the G20’s financial inclusion priority of enabling faster, cheaper and more
K
transparent cross-border payments. It can also contribute towards fulfilling United
A
Nation’s (UN) Sustainable Development Goals by reducing cost of remittances.
PR
RBI, Bank Indonesia enter agreement to deepen relations
D
RBI Deputy Governor Michael Debabrata Patra and Bank Indonesia’s Deputy
VE
Governor Dody Budi Waluyo recently signed a MoU to enhance exchange of

information, and expand cooperation in payment systems, digital financial innovation,
anti-money laundering, and combating the financing of terrorism (AML-CFT) between
R
both countries’ central banks.

A
M
The MoU was signed in the presence of RBI Governor Shaktikanta Das and BI
U
Governor Perry Warjiyo. RBI avers that the MoU will help to promote mutual
K
understanding, develop efficient payment systems and achieve cross-border payment

connectivity. The initiatives, towards these ends, will be executed through regular
r.
interaction on economic and financial developments and issues; technical cooperation

M
through training and joint seminars; and joint work to explore the establishment of
cross-border retail payment linkages.
y:
B
ed
oad
nl
ow
D
)
62
80
10
K
.(V
SH
A
Current Digital Banking Trends in India
K
Keeping in view the global focus on enhancing cross-border payment arrangements,
A
the Reserve Bank explored the possibility of linking India’s fast payment system -
PR
Unified Payments Interface (UPI) with similar systems in other jurisdictions, and
actively participated in the discussions of the Committee on Payments & Market
Infrastructures (CPMI) and Financial Stability Board (FSB) on implementation of the
D
G20 endorsed cross-border payments roadmap.

VE
The Reserve Bank expanded access to centralised payment systems to include non-
R
bank payment system providers. Leveraging on the 24x7x365 availability of RTGS,

additional settlements were introduced in UPI, Immediate Payment Service (IMPS),
A
Aadhaar enabled Payment System (AePS), National Electronic Toll Collection

M
(NeTC), and National Financial Switch (NFS), and National Automated Clearing
U
House (NACH) was operationalised on all days of the week.

K
India’s digital payment volume has climbed at an average annual rate of about 50
r.
percent over the past five years. That itself is one of the world’s fastest growth rates,
M
but its expansion has been even more rapid—about 160 percent annually—in India’s
unique, real-time, mobile-enabled system, the Unified Payments Interface (UPI).
y:
B
Transactions more than doubled, to 5.86 billion, in June from a year earlier as the
number of participating banks jumped 44 percent, to 330. Values nearly doubled in the
ed
same period. In addition, the RBI in March introduced a UPI for feature phones (older
devices with buttons instead of touchscreens) that can potentially connect 400 million
ad
users in distant rural areas.

o
Encouraging Healthy Competition

nl
ow
The Reserve Bank expanded access to Centralised Payment Systems (CPS) (RTGS
and NEFT) and permitted authorised non-bank PSOs, viz., PPI issuers, card networks
D
and WLA operators, to participate in CPS as direct members. The non-bank PSOs
were also allowed to open current accounts with the central bank. Direct access is
expected to minimise the overall risk in the payments ecosystem and also benefit non-
banks by lowering cost and time for effecting/ receiving payments, reducing
dependence on banks and eliminating uncertainty in finality of payments as settlement
will be carried out in central bank money.
Payment System Operators (PSOs) comprise PPI issuers, cross-border Money
Transfer Service Schemes (MTSS), White Label ATM (WLA) operators, Trade
)
Receivables Discounting Systems (TReDS), ATM networks, Instant Money Transfer
62
Service Providers, Card Payment Networks and Bharat Bill Payment Operating Units
(BBPOUs), besides Clearing Corporation of India Ltd. (CCIL) and National Payments
80
Corporation of India (NPCI).
10
Offline Payment Solutions: - To encourage technological innovations that enable
K
offline digital transactions, authorised PSOs were permitted in August 2020 to conduct
.(V
pilots for proximity payments using cards, wallets or mobile devices. Based on the
experience gained, the framework for facilitating small value digital payments in offline
mode was issued on January 3, 2022. Accordingly, the authorised PSOs and Payment
SH
System Participants (both acquirer and issuers – banks and non-banks) were
permitted to enable small value digital payments in offline mode using any channel or
A
instrument like cards, wallets, mobile devices, etc., subject to specified conditions. The
K
initiative is expected to give a push to digital transactions in areas with poor or weak
internet or telecom connectivity, particularly in semi-urban and rural areas.
A
PR
In order to make offline payments more secure for users, the Reserve Bank of India
(RBI) has issued a framework that has capped the upper limit of an offline payment
D
transaction at `200/-, with the overall limit kept at `2000/- on a payment instrument at
any point in time. Offline payments can only be made in face-to-face mode, without
VE
additional factor authentication (AFA). However, AFA will be mandatory for

replenishing the usage limit of `2,000/-, which will be allowed only in online mode.
R
Offline payment modes can be enabled only with specific consent of the customer. For
A
cards, such transactions can be allowed without switching on the contactless

M
transaction channel
U
Enhancements in PPIs:- Mandating interoperability, permitting cash withdrawal from

K
full-KYC PPIs and increasing maximum balance in full-KYC PPIs to `2 lakh were
r.
enhancements permitted to PPIs in May 2021.

M
Bharat Bill Payment System (BBPS) - Addition of Biller Category: - In July 2021,
mobile prepaid recharges were permitted as a biller category in BBPS. As part of
y:
BBPS, the mobile prepaid customers will benefit from standardised bill payment
B
experience, centralised customer grievance redressal mechanism, transparent

ed
customer convenience fee and availability of a bouquet of anytime, anywhere digital

payment options.
ad
Enhancements to Indo-Nepal Remittance Facility Scheme: - Enhancements were

o
made to the Indo Nepal Remittance Facility Scheme in October 2021 by way of
nl
increasing the ceiling per transaction to `2 lakh and removing the annual cap of 12
remittances. These enhancements are expected to boost trade payments between the
ow
two countries and also ease pension payments to the ex-servicemen settled/relocated
in Nepal.
D
Availability of NACH on All Days: - Leveraging on the availability of RTGS

24x7x365, NACH system was made operational on all days of the week, including
weekends, effective August 1, 2021. NACH has emerged as a popular and prominent
digital mode of direct benefit transfer (DBT) to large number of beneficiaries and has
helped transfer of government subsidies during the COVID-19 pandemic in a timely
and transparent manner.
24x7 Helpline for Digital Payments – DigiSaathi:- Under the guidance of the
)
Reserve Bank, NPCI in association with the payments industry set-up a centralised
62
industry-wide 24x7 helpline for digital payments christened – DigiSaathi. The 24x7
helpline provides a channel to obtain help on the entire gamut of digital payments.
80
Automated responses on information related to digital payment products and services
10
are available in Hindi and English through multiple options like – (a) toll-free number
(1800-891-3333), (b) a short code (14431), (c) website – www.digisaathi.info, and
K
chatbots. DigiSaathi will assist users with their queries on digital payments via website
.(V
and chatbot facility and through toll-free calls where user can dial or call out the
options/products for which the information is required.
SH
UPI for Feature Phones – UPI123Pay:- UPI123Pay was launched by the Reserve
Bank to empower 40+ crore feature phone subscribers to get on boarded to the
A
domain of digital payments by enabling them to transact digitally and avail UPI
K
features. UPI123Pay provides four distinct options to feature phone users to effect
digital payments, viz., (a) Interactive Voice Response (IVR), (b) missed call, (c) app
A
based functionality, and (d) proximity sound-based payments.
PR
Enhancing Transaction Limit for IMPS: - IMPS is an important payment system
D
providing 24x7 instant domestic funds transfer facility and is accessible through
various channels like internet banking, mobile banking apps, bank branches, ATMs,
VE
SMS and Interactive Voice Response System (IVRS). Keeping in view the importance
of IMPS in processing of domestic payment transactions, the per-transaction limit was
R
enhanced from `2 lakh to `5 lakh for all channels other than SMS and IVRS (`5
A
thousand). This will lead to further increase in digital payments and will provide an
M
additional facility to customers for making digital payments beyond `2 lakh.

U
Increase in UPI Transaction Limit for Specified Categories:- To facilitate greater

K
participation of retail customers in financial markets, e.g., investment in the G-secs

segment through the Retail Direct Scheme, and for payment towards subscription of
r.
Initial Public Offerings (IPOs); the transaction limit in UPI system was enhanced from
M
`2 lakh to `5 lakh for these categories.

y:
Tokenisation - Card Transactions: - The framework on device-based card

B
tokenisation was extended in August 2021 to include laptops, desktops, wearables

ed
(wrist watches and bands) and Internet of Things (IoT) devices. Further, in September
2021, card networks and card issuers were permitted to offer Card-on-File
ad
Tokenisation (CoFT) services. It was also advised that from July 1, 2022 no entity in
the card transaction/payment chain, other than the card issuers and/or card networks,
o
shall store the actual card data, and any such data stored previously shall be purged.
nl
Geo-tagging of Payment System Touch Points:- As announced in the Statement

ow
on Developmental and Regulatory Policies of October 8, 2021, the Reserve Bank

prescribed a framework for geo-tagging of payment acceptance infrastructure
D
deployed by banks and non-bank PSOs. Geo-tagging means capturing the

geographical coordinates (latitude and longitude) of payment touch points deployed
by merchants to receive payments from their customers. Geo-tagging is expected to
provide insights on regional penetration of digital payments by monitoring
infrastructure density across different locations. This will help initiate policy
interventions to deploy additional payment touch points and facilitate undertaking
focused digital literacy programmes. It can provide insights on regional penetration of
digital payments; monitor infrastructure density across different locations; identify
scope for deploying additional payment touch points; and facilitate focused digital
)
literacy programmes.
62
e-BAAT Programmes:- The Reserve Bank has been conducting electronic Banking
80
Awareness and Training (e-BAAT) programmes regularly for the benefit of
10
customers/bankers/students/public. The aim is to create awareness and clear doubts
on use of various payment systems and products. During the year, 367 e-BAAT
K
programmes were conducted by the regional offices of Reserve Bank.
.(V
REs involved in digital lending to comply with new guidelines by RBI
SH
Credit delivery through digital lending methods is bringing several problems in its
wake. In order to mitigate these problems, the RBI has divided digital lenders into three
groups and has strengthened guidelines pertaining to regulatory framework for their
A
lending activities. The three groups of digital lenders include entities regulated by
K
the RBI and permitted to carry out lending business; entities authorised to carry out
A
lending according to other statutory/ regulatory provisions but not regulated by the
PR
RBI; and, entities lending outside the purview of any statutory/ regulatory provision.
RBI has already issued guidelines for the first category of lenders. As for lenders in
D
the second and the third categories, the RBI has asked respective regulator/
controlling authority/ the central government to formulate guidelines based on the
VE
recommendations of its working group formed in January 2021. RBI opines that some
of these recommendations need wider consultation with the government, to ensure
R
that unregulated Digital Lending Apps (DLAs) do not conduct illegal digital lending
A
business. The banking regulator is firm that lending business should be undertaken
M
only by entities regulated by it, or other authorised regulatory bodies.

U
Regulated Entities (REs) engaged in credit delivery through digital lending will have to
K
comply with detailed guidelines regarding lending norms issued by the Reserve Bank
of India (RBI). While REs have been given time till November 30, 2022 to comply with
r.
the guidelines for existing loans, the norms will be applicable immediately for new and
M
existing customers availing fresh loans. The REs will be equally obligated even if they
y:
have outsourcing arrangements with lending service providers (LSPs)/digital lending

apps (DLAs). They will be accountable to ensure that the LSPs/DLAs follow the
B
guidelines.
ed
BBPS can now be used to pay bills by NRIs

ad
Bharat Bill Payment System (BBPS) has now been opened up by the RBI for rupee
o
drawing arrangement for cross-border remittances. This will help NRIs to make bill
nl
payments through BBPs easily. Widening the scope of Bharat Bill Payment System
(BBPS) to facilitate non-resident Indians (NRIs), the RBI has enabled it to accept
ow
cross-border in-bound bill payments. As a result, NRIs can make payments to any of
the 20,000 billers on-boarded on the BBPS, in an interoperable manner. The move will
D
allow NRIs to pay for education, utility, and many other kinds of bills on behalf of their
India-based relatives; that too, without an NRE account
RBI issues guidelines about transition to CoF, licensing of payment aggregator
In an attempt to ease the transition to new norms on card-on-file (CoF) tokenisation
and licensing of payment aggregators (PAs), the RBI has released a new set of
guidelines. As already stipulated, from October 1, 2022, no entity in the card
transaction chain (except for card issuers and card networks) shall store CoF data.
)
The RBI has notified two interim measures in this regard. Other than the
62
aforementioned entities, the merchant or its PA involved in settlement can save the
CoF data for a maximum period of four days after the transaction date or till the
80
settlement date, whichever is earlier. This data shall be used only for settlement of
10
such transactions, and has to be compulsorily purged thereafter. Further, acquiring
banks can continue to store CoF data until January 31, 2023, for handling other post-
K
transaction activities. All PAs existing as on March 17, 2020 and having a net worth of
.(V
Rs 15 crore as on March 31, 2022 have been allowed to apply for authorisation by
September 30, 2022. They will still have to adhere to the timeline of March 31, 2023
for achieving a net worth of Rs 25 crore.
SH
RBI Payments Vision 2025 heralds 4Es to triple the number of digital payments
A
The RBI has issued its ‘Payments Vision 2025’ document, with the core theme of ‘E-
K
Payments for Everyone, Everywhere, Every time’ (4Es). The main aim is to equip
A
every user with affordable, easily accessible, safe, secure, fast, and convenient, e-
PR
payment options. The document aims for a three-fold jump in the number of digital
payments, with simultaneous increase in usage of debit cards, and less cash in
D
circulation. It also sheds light on ring-fencing of domestic payment systems, in view of

the emerging geopolitical risks.
VE
E-mandates for recurring payments by cards increased to Rs 15,000

R
The limit of e-mandates for recurring payments (such as subscriptions, insurance

A
premiums etc.) made by credit/debit cards, has been increased by the RBI from Rs.
M
5000, to Rs 15,000. More than 62.5 million mandates had been registered in favour of
U
domestic and more than 3,400 international merchants for facilitating recurring
K
payments of larger value.

r.
RBI wants ATMs to provide interoperable card-less cash withdrawal

M
Banks, ATM networks, white label ATM operators, and the National Payments
y:
Corporation of India (NPCI) have been asked by RBI to provide interoperable card-
B
less cash withdrawal at all ATMs. The NPCI has been asked to facilitate Unified
Payments Interface (UPI) integration with all banks and ATM networks. UPI will aid in
ed
customer authorisation in such transactions, whereas the National Financial Switch

(NFS) / ATM networks would aid in settlements. The on-us / off-us interoperable card-
ad
less cash withdrawal transactions shall be processed without any extra charges,
except for the ones prescribed on interchange fee and customer charges. Withdrawal
o
nl
limits will be the same as those for regular on-us / off-us ATM withdrawals.
RBI Governor Shaktikanta Das avers that this facility will not just enhance the ease of
ow
transactions, but would also help prevent frauds like card skimming and card cloning,
which become rampant while using cards. While financial experts laud the comfort and
D
convenience of this facility, they have also pointed to the adverse impact it will have
on debit cards.
RBI amps up customer convenience by permitting 24X7 DBUs
Banks have now been permitted by the Reserve Bank of India (RBI) to open digital
banking units (DBUs) to offer products and services 24X7 in self-served and assisted
modes. The products and services that DBUs can provide include account opening,
cash withdrawal and deposit, KYC updation, loans and complaint registrations.
)
Scheduled commercial banks (SCBs) with prior experience in digital banking have
62
been permitted to open DBUs in Tier 1 to Tier 6 centres without requiring RBI’s express
permission.
80
RBI launches innovation hub in Bengaluru
10
The Reserve Bank Innovation Hub (RBIH) has been launched in Bengaluru under the
K
Chairmanship of former Infosys Chief Kris, Gopalakrishnan. Established as a Section
.(V
8 company under the Companies Act with an initial capital contribution of Rs 100 crore,
the RBIH’s main aim is to encourage financial innovation via an institutional set-up.
SH
Banks to implement new cash replenishment system at ATMs by March 2023
A
Obliterating the current system of cash replenishment at ATMs, the RBI has asked all
K
banks to start using only lockable cassettes for the purpose, by March 2023. This is
A
an extended deadline given to banks. RBI has asked banks to fix a board-approved
PR
internal timeline to adhere to the extended deadline and submit quarterly status
reports. Bank boards have been asked to monitor the progress to ensure due
compliance.
D
VE
NPCI launches UPI Lite for small transactions

In order to reduce the stress on the banking system and make small transactions
R
simpler, the National Payments Corporation of India (NPCI) has launched the ‘on-
A
device’ wallet feature for Unified Payments Interface (UPI) users. Named as UPI Lite,
M
in its first phase the feature will process small-ticket transactions in near offline mode
i.e., debit offline and credit online. At a later stage, it will process transactions in
U
complete offline mode i.e., debit and credit both offline. UPI Lite comes with an upper
K
limit of Rs. 200 for any transaction, with the total limit of UPI Lite e-balance for an ‘on-
r.
device’ wallet capped at Rs 2,000 at any point of time.

M
e-RUPI
y:
e-RUPI is a digital voucher a beneficiary gets on his phone in the form of an SMS or
B
QR code. It is a pre-paid voucher, which he/she can go and redeem it at any centre
ed
that accepts its. e-RUPI is a one-time contactless, cashless voucher-based mode of

payment that helps users redeem the voucher without a card, digital payments app,
ad
or internet banking access. As this particular digital token does not require someone
to have a bank account or any particular mobile app, it works even for the non-
o
smartphone using population. With nearly 80 per cent of the population in India having
nl
mobile connection, e-RUPI may revolutionise the digital payment system in the
ow
country. PM Narendra Modi on August 2nd, 2021 launched digital payment solution e-
RUPI. NPCI developed e-RUPI in collaboration with the Department of Financial
Services, Ministry of Health & Family Welfare and National Health Authority.
D
RBI in February 2022, has enhanced the limit and allowed the use of the voucher
multiple times. Recently, NPCI has issued detailed operational guidelines for member
banks in this regard. Important operational instructions are captured below,
(a) Issuer banks can issue both one-time-use and multiple-use e-RUPI vouchers.
(b) Issuer banks can issue e-RUPI vouchers for government schemes up to Rs.
)
62
1,00,000/- and for private entities up to Rs. 10,000/- per voucher.
80
(c) Issuer banks can decide the number of e-RUPI vouchers which can be issued to a
single beneficiary based on its internally laid down risk-based approach.
10
(d) Issuer bank can decide the validity of the e-RUPI voucher issued by it within the
K
maximum validity period of 12 months.
.(V
(e) For multiple-time use of e-vouchers, once the voucher is expired, issuer banks
shall refund the remaining balance to the sponsor’s source account. In the case of a
SH
single time use voucher, the balance is to be refunded after the 1st
redemption/revoke/expiry whichever is earlier.
A
(f) e-RUPI voucher operates under the UPI framework and the issuer bank shall
K
mandatorily send an SMS to the beneficiary with a downloadable QR link once the
A
voucher is created.
PR
Metaverse Banking
D
The Metaverse is all about converging our real and virtual worlds to improve our digital
VE
experiences related to social media, gaming, clubbing, work or any Internet-led

experiences. Metaverse can be defined as collective virtual shared space, created by
R
physically persistent virtual space and the convergence of virtually enhanced physical
reality. It is a sum of Virtual Reality (VR), Augmented Reality (AR) and the Internet.
A
Metaverse Banking is management of financial transactions in virtual environments.

M
That means you can do business with any Bank without stepping out of your home.
U
JPMorgan has become the world‟s first bank to set up shop in the Metaverse.
K
Union Bank of India (UBI), in partnership with Tech Mahindra, recently jumped into the
r.
metaverse world after JP Morgan and HSBC. Initially, “Uni-verse”, the bank‟s
M
Metaverse Virtual Lounge, will host product information and videos. Benefits,
customers can expect from the new technology are:
y:
B
A) Metaverse technology can help encourage the sense of community and cooperative
involvement among customers since it connects entities from both virtual and physical
ed
worlds.
ad
B) The new technology can help simplify activities such as taking loans, making
payments and buying investment products and insurance.
o
nl
C) Metaverse lounge will be accessible from virtual reality (VR) headsets also. Banks
ow
will have their virtual branches setup in metaverse along with interactions being
facilitated by AI driven customer agents.
D
Buy now, pay later (BNPL)
'Buy now, pay later' arrangements are point-of-sale instalment loans that allow
consumers to make purchases and pay for them later within a stipulated interest-free
period in three or more instalments. The BNPL provider settles the bill outright with the
merchant on the buyer's behalf. This option is targeted at young, new-to-credit, cash-
)
strapped millennials, many of whom don't have credit cards. It offers them easy access
62
to credit for small-ticket purchases. A first-time buyer will have to complete KYC
formalities on the provider's platform. BNPL providers use analytics to get insights on
80
buyers' purchase behaviour and determine their credit-worthiness. The business
10
model: Similar to credit cards, BNPL charges fee from the merchant when consumer
makes a purchase. The fee is typically 4–6%. Since most BNPL is using the debit card
K
infrastructure, BNPL will have to pay part of the fee to financing provider, cards
.(V
network (for moving money from customer to BNPL finance provider), issuing and
acquiring processor /POS. Medium to long term growth story of BNPL industry in India
remains strong. BNPL payment adoption is expected to grow steadily over the forecast
SH
period, recording a CAGR of 41.2% during 2022-2028.
A
K
A
PR
D
VE
R
A
M
U
K
r.
M
y:
B
ed
oad
nl
ow
D
D
ow
nl
oad
ed
B
y:
M
r.
K
U
M
A
R
VE
D
PR
A
K
A
GLOBAL TRENDS IN BANKING FY22 (Mindtree)
SH
.(V
K
10
80
62
)
Basic Treasury/ALM/Risk
Management practices
)
62
80
Introduction
10
Treasury management is a business process that focuses on the maximum utilisation
K
of cash in a manner that is consistent with the overall strategic objectives of the
.(V
company. The treasury in a bank is also responsible for meeting the reserve
requirements of the central bank (RBI).
SH
Treasury and its Functions
A
Over the years, the role of the treasury has evolved as a profit centre instead of merely
K
being in charge of liquidity management. Today, the treasury also plays an important
role in the asset liability management (ALM) of the banks. Its functions are said to
A
have become more integrated as it looks after market operations, foreign exchange
PR
trading, use of derivative products and also large corporate clients who demand risk
management services. Thus, it is often referred to as the 'integrated treasury'.
D
VE
Functions of the Integrated Treasury
The main functions of the integrated treasury are as follows:

R
A
• Optimisation of cash resources and liquidity management

M
• Assisting the bank in ALM

U
• Risk management
•Use of derivative products for profit making
K
• Meeting corporate demands for high-end services

r.
• Coordination of financial functions

M
Globalisation - The Indian Banking Perspective

y:
B
The globalisation process in India (which started in 1991) has increased the exposure
of the Indian investor to the global markets as well as the risks associated with it. The
ed
rapid economic growth shown by emerging countries like India has attracted a lot of
ad
foreign investors, and the partially convertible rupee has increased the capital flows,
to and from India. These capital flows affect the money supply, interest rates,
o
exchange rates, inflation and balance of payments in India, thereby increasing the
nl
risks. As a result, risk management has become an important function of the bank.
ow
Globalisation has turned the treasury into a profit making centre for banks.
The immediate impact of globalisation on the treasury and the

D
financial services sector in India is three-fold.
-Global Interest Rate

-Trends Setting Up of Institutions
-Derivative Products
Global Interest Rate Trends
The interest rates, which are central to the treasury, are influenced by global interest
)
rate trends. To capitalise on the market inefficiencies, the bank's treasury allows
62
interest rate arbitrage to make risk less profits. Also, the bank provides its clients with
80
derivative products related to interest rate swaps. These activities promote the role of
the treasury as a profit-making centre.
10
Setting Up of Institutions
K
.(V
A new institutional structure has evolved with the setting up of institutions like
Securities and Exchange Board of India (SEBI), Insurance Regulatory and
Development Authority (IRDA), Clearing Corporation of India (CCIL), National
SH
Securities Depository Corporation Limited (NSDL) and Credit Information Bureau
(India) Limited (CIBIL). This has largely supported the growth of the financial services
A
sector and in turn the bank treasuries in India.
K
A
Derivative Products PR
With the RBI allowing the use of derivative products in India, bank treasuries have
widened the innovative product structures offered to their clients.
D
VE
Treasury as a Profit Centre:

R
The wider scope of the integrated treasury has given banks an opportunity to generate
A
surpluses, which will supplement the profits from the bank's core banking activity. The
M
treasury's activities have become very attractive due to the high return on capital
employed by the banks. This is possible because of the highly leveraged nature of the
U
treasury's transactions, where risk capital is only 2% to 5% of the size of the

K
transaction. Also, the operational costs of the treasury are low as compared to the
r.
conventional branch banking.

M
The significance of the treasury as a profit centre may be appreciated from the fact
y:
that approximately 25% of the total profits of a bank was shown to be generated by its
treasury department.
B
ed
The treasury has various sources of profits.

ad
-Sources of Profits for Treasury

-Arbitrage
o
nl
Sources of Profits for Treasury

ow
Buying and selling foreign exchange and interest on investments and money market
D
lending continue to be the primary source of profits. However, the buying and selling
of tradable assets and taking proprietary positions in such assets for generating profits
has increasing by the day Interest rate arbitrage across currencies and securities is
also taken up so as to generate risk less profits for the banks. Treasuries have also
started investing in equity markets, which is highly profitable but riskier as compared
to fixed income securities that are still the preferred investment tools for the banks.
Arbitrage
)
The concept of arbitrage is central to the working of markets and therefore it is
62
important to the working of any treasury department. Arbitrage is the concept of
80
making money without taking risks. Such opportunities are very rare.
Example:
10
A simple arbitrage could be arbitrage between two different exchanges. For example,
K
for someone following markets very closely it would be possible to notice minor
.(V
differences in prices of an asset in National Stock Exchange (NSE) versus Bombay
Stock Exchange (BSE). If the price in one exchange is higher than in the other, the
trader can buy it from the exchange that has cheaper prices and sell in the exchange
SH
that has higher prices. This way the trader can gain a risk free profit.
A
For example, if stock XYZ is trading at Rs.103 in Exchange A and at Rs.103.5 in
K
Exchange B. A trader can buy the stock from Exchange A at Rs. 103 and at the same
A
time sell it in Exchange B at Rs. 103.5, thus locking in Rs.0.5. Although this amount is
PR
small, if the trader can do huge quantities of this and keep doing this over several
stock, the potential profits could be huge.
D
Organisational Hierarchy of the Treasury:

VE
In the conventional structure of a bank, the treasury is organised as a special

R
department under the direct control of the bank's head office.

A
M
The treasury has a hierarchy headed by the Chief Treasury Officer (CTO) who reports
directly to the CEO or CFO of the bank.
U
K
The workforce under the treasury has been divided into three divisions (front, back
r.
and mid office) as well as other small but relevant departments.

M
Front Office (Dealing Room)

y:
The front office is headed by the chief dealer. The dealers working under him take
B
decisions on buying and selling the products in the market, occasionally relying upon
ed
the market research reports provided by the bank's in-house research department.
The dealers maybe divided according to the size of operations in different areas
ad
including currencies, forwards, ALM and equities (primary and secondary).

o
Back Office (Treasury Administration)

nl
ow
The treasury administration is the back office of the treasury department. Its daily
routine include verifying the deals done by the dealers, confirming the deals with the
D
counterparties, routine settlement of the deals done by the dealers along with book-
keeping and submission of periodical returns to the RBI.
Mid Office (Risk Management)
The mid office for the treasury serves as a link between the treasury administration
and the dealing room. It is responsible for advising the dealers on the risks on various
investments, defining the limits for stop loss and balance sheet risk management. It
reports to the Chief Risk Officer (CRO) or the Head of the Treasury. It has to
)
implement the policy recommendations of the risk management committee.
62
80
Other Departments
Other small but relevant departments of the treasury may include the investment
10
department (which takes care of the proposals regarding investments above Rs. 5
Crore) and some administrative departments like remittances, systems administration
K
and accounts.
.(V
TREASURY RISK MANAGEMENT
SH
What is treasury risk management? It is Supervision and Control of Treasury.
A
Treasury risk management assumes importance for two reasons:
K
A
The nature of treasury activity is such that profits are generated out of
PR
market opportunities and market risk is present at every step.
a) Treasury is also responsible for balance sheet management, i.e. market
risk generated by other operational departments.
D
VE
Concern for Treasury Risks:

R
The First concern:

A
M
Bank management is highly sensitive to treasury risk, as the risk arises out of high
U
leverage the treasury business enjoys.

K
The risk of losing capital (by treasury) is much higher than, say, in the credit business.
r.
M
Bank's capacity to extend loans is limited by the resources at its command, that is,
deposits and other borrowings.
y:
In case of a loan, the risk is limited to the principal and interest, which may be lost, fully or
B
partly, over a period of time.

ed
Most of the loans are also secured by tangible assets.

ad
The risk is 'capped' by the amount invested in the loan asset.

o
nl
Potential loss in loan assets is known as credit risk.

Treasury on the other hand, has a very low funding requirement, which we call as high
ow
leverage.
D
For instance, treasury can buy and sell foreign exchange of value Rs. 100 crore without any
direct investment of funds, except for allocation of risk capital as per capital adequacy
requirement of RBI.
At the same time, an adverse movement of the exchange rate by Rs. 1 may result in a
loss of over Rs. 1 crore to the bank - which is a straight loss of capital.
A second concern : For management concern is the large size of transactions done
at the sole discretion of the Treasurer.
As we have learnt earlier, whether it is foreign exchange or money market or investment
)
62
business, the value of a single transaction may range from Rs. 5 crore to Rs. 50 crore or even
more in larger banks.
80
The limits are delegated to the Treasurer in advance, and individual market deals rarely
10
need specific approval from the management.
K
If the Treasurer commits an error of judgment, consequent losses to the bank would be
.(V
enormous.
A third factor closely connected to the above is that the losses in treasury business
materialize in very short-term, and the transactions, once confirmed, are irrevocable –
SH
hence no corrective action is possible.
A
Particularly in foreign exchange, markets react so fast that profits or losses on trade deals are
K
almost instantaneous.
A
Traders are generally not allowed to hold open positions for long, as the risk of loss
PR
increases with time.
D
The source of risk in treasury activity is variation in the market price of currency or security,
VE
when there is a gap between the buy leg and sell leg of the transaction.
The risk is hence termed as market risk, as opposed to credit risk of loan assets of the
R
bank.
A
The variability of the price, upward or downward, is known as volatility.

M
In case of currency, it is known as volatility of exchange rate and in case of bonds, it is volatility
U
of interest rates
K
Asset liability management (ALM) of the bank is also closely connected to market risk.
r.
M
Treasury risks are primarily managed by conventional control and supervisory

y:
measures, mostly in the nature of preventive steps, which may be divided into three
B
parts:
ed
1. Organisational Controls
ad
2. Exposure Ceiling
3. Limits on trading positions and stop-loss limits.
o
nl
ow
Treasury risks are primarily managed by conventional control and supervisory

measures, mostly in the nature of preventive steps, which may be divided into three
D
parts:
1. Organisational Controls
2. Exposure Ceiling
3. Limits on trading positions and stop-loss limits
1-Organisational Controls:
)
62
The organisational controls refer to the checks and balances within the system.
80
Treasury is basically divided into three parts:
10
The front office, Back office and The Mid office.
K
.(V
Internal Controls:
The most important of the internal controls are position limits and stop loss limits.
SH
The limits are imposed on the dealers who trade in foreign exchange and securities.
A
K
Trading is a high risk area, vulnerable to sudden market fluctuations and the limits
A
imposed by management are preventive measures to avoid or contain losses in
PR
adverse market conditions.
The trading limits in the context of foreign exchange are of three kinds:
D
VE
(i) limits on deal size
(ii) limits on open positions and

R
A
(iii) stop-loss limits.

M
U
K
1-Limits on deal size:

r.
M
Limits on deal size prescribe the maximum value for a buy/sell transaction. The
limit is a protection against potential losses on the deal.
y:
B
2-Limits on open positions:

ed
Open positions refer to the trading positions, where the buy/sell positions are not
ad
matched.
o
The Treasury may buy USD 1 million, and hold on to the position with an intention to
nl
sell when the USD appreciates against the Rupee.

Not only there is a potential loss if the US dollar does not appreciate, but there is
ow
also a 'carry' cost, as the Treasury loses interest on the USD funds or carry a very
minimal interest during the holding period.
D
Treasury may also take forward positions expecting a rise or fall in the exchange
rate.
The management, therefore, limits the size of open or unmatched positions.
The limits in foreign exchange trade are defined as daylight and overnight.
2-A)The Daylight limits:
Pertain to the intra-day positions, say if the dealer purchases currency in the morning
)
62
and sells it in the afternoon.
80
2-B) Overnight Limits:
10
The overnight limits are smaller when compared to the daylight limits as the dealers
K
may continue to hold the position for next day and during the night the forex market
.(V
would be active but no one would be tracking the position.
SH
Position limits:
A
Position limits are prescribed currency-wise as also for aggregate position
K
expressed in Rupees.
A
PR
For the purpose of aggregation, currency-wise net position is first translated into
USD at the day-end rate and then converted into Rupees.
D
Even when there are matching positions, there is scope for loss if the delivery is at
VE
different points of time.
In a swap deal, the dealer may purchase USD at spot and sell it forward, say, after
R
three months.
A
M
It is a matched deal as the purchase and sale prices are prefixed and hence there
U
is no exchange risk.
K
Stop-loss limits:
r.
M
Stop-loss limits represent the final stage of controlling trading operations.

y:
When the market moves adversely, the open positions will result in loss.
B
ed
A dealer typically would like to wait till the market turns around, so that he can
close the position with a profit.
ad
There is an added risk in that the market correction may not take place as
o
anticipated, and the losses may continue to accumulate in the meantime.

nl
ow
The stop-loss limits prevent the dealer from waiting indefinitely and limit the losses
to a level which is acceptable to the management (which the bank is in a position
to absorb).
D
Any violation of stop-loss limit is viewed seriously by the management.

The stop-loss limits are prescribed per deal, per day, per month as also an
aggregate loss limit per year.Back office need to monitor all the limits
meticulously.
2- Exposure Ceiling Limits:
)
62
Exposure limits are kept in place to protect the bank from credit risk/counter-party
risk.
80
Credit risk:
10
Credit risk in Treasury may be split into default risk and settlement risk.
K
.(V
Default risk:
Default risk is typically when the bank lends in the money market (mainly to other
SH
banks), the borrowing bank may fail to repay the amount on due date.
A
Similar risk is there in repo transactions also.
K
A
Even though inter-bank market is considered to be relatively risk free, it is not
uncommon that a weak bank may suddenly become bankrupt, or, there is a run on
PR
the bank squeezing its liquidity.
D
Even assuming that there is no credit risk in short- term lending, it is not prudent
that Treasury lends its entire surpluses to a single bank or to a handful of banks
VE
and such a procedure would overcome the risk of concentration.

R
Settlement risk:
A
M
The settlement risk refers to the possible failure of the counterparty to the
transaction (which is generally a bank or a financial institution) to deliver/settle their
U
part of the transaction.

K
r.
While ideally all deals should take place in DvP (Delivery vs. Payment) mode, it is
M
not always possible to achieve the standard, either for want of institutional
mechanism, or due to physical barriers (such as different time zones).
y:
B
Delivery of government securities is already taking place against payment, as the

banks have both the securities account (SGL) and funding account with RBI, so
ed
that debit and credit can take place simultaneously.

Similar sophistication is also present in exchange of non-SLR or corporate
ad
securities with depository participants in CCIL mechanism.

o
nl
ow
D
Test Your Knowlegde
1. KYC of Medium Risk Customers have to be obtained once in how many years?
a. 2
b. 3
)
62
c. 5
d. 8
80
2. Two pieces from same note pasted together is called______
10
a. Mutilated Note
b. Soiled Note
K
c. Mismatch Note
.(V
d. Stuck up notes
3. What is the rate(With PAN) for new Section 194N- TDS on cash withdrawals above
SH
Rs. 1 CRORE during any FY?
a. 1%
A
b. 2%
c. 5%
K
d. 8%
A
PR
4. From which date CPPS has been mandatory for of Rs.5 lakh and Above ?
a. 01.06.22
b. 01.08.22
D
c. 31.08.22
VE
d. 01.09.22
5. When branches need NOT to do EDD for all High Risk Customer?
R
a. While allowing High value Transactions

A
b. At the time of Re-KYC

M
c. upon degradation of risk category from Medium to High Risk

U
d. Not for the above cases

K
6. Which gender code is used for opening the accounts of Transgender persons?
r.
a. Male
M
b. Female
c. Third Gender
y:
d. Others
B
7. GOI has, in 2019, issued a new series of Visually Impaired Friendly Series (VIFS)
ed
Coins. Which denomination was not issued?

a. Rs.0.50
ad
b. Rs.1
c. Rs.10
o
d. Rs.20
nl
8. For Counterfeit notes of ____ or more in a single transaction to be reported to local

ow
police authority immediately.

a. 4
D
b. 5
c. 6
d. 7
9. Attachment order is applicable, where the relationship between the customer and the
bank is that of:
a. Lessor and lessee
b. Trustee and beneficiary
c. Debtor and creditor
d. Creditor and debtor
)
62
10. Under Banking Regulation Act,1949 a banking company is prohibited to grant a loan
or an advance against security of its own shares, u/s:
80
a. 19(2)
b. 20(1)
10
c. 17(2)
d. 24 (3)
K
.(V
11. As per extant instructions of Bank of Baroda, what is the maximum amount limit that
the bank can fix up to which minors may be allowed to operate their deposit accounts
independently.
SH
a. Max Rs.2 lac
b. Max Rs.1 lac
A
c. Max Rs. 50000
d. Max Rs.10000
K
A
12. What is amount deposit upto which bank must allow premature closure faculty to the
PR
customers?
a. Rs.10 lakhs
b. Rs.15 lakhs
D
c. Rs.50 Lakhs
VE
d. Rs.200 lakhs
13. Interest rate payable on saving bank account is

R
a. Regulated by RBI
A
b. Regulated by State Govt.

M
c. Regulated by Finance Ministry

d. Deregulated
U
K
14. What is the minimum and maximum period for which a fixed deposit receipt is
r.
generally issued by banks?

a. 15 days and 10 years
M
b. 7 days and 10 years

y:
c. 10 days and 10 years

d. Discretion of the bank
B
15. According to RBI definition under RBI (Interest Rate on Deposits) Directions 2016,
ed
bulk deposit means:

a. single rupee term deposit of Rs.15 lac and above
ad
b. single rupee deposit balance of Rs.15 lac and above

o
c. single rupee term deposit of Rs.2 cr and above

nl
d. single rupee deposit balance of Rs.2 cr and above

ow
16. What is withdrawal limit in Baroda Basic Savings bank Account?

e. 7 Withdrawals Per Month
D
a. 2 Withdrawals Per Month

b. 8 Withdrawals Per Month
c. 4 Withdrawals Per Month
17. What are the account closure charges for Baroda savings Account if it closed on 12th
day of opening the account?
a. Rs.300 Plus GST
b. Rs.200 Plus GST
c. Rs.100 Plus GST
d. Nil
)
62
18. How many transactions are allowed free half yearly in Savings Account?
a. 100
80
b. 80
10
c. 60
d. 50
K
.(V
19. What is the SMS charges for General Current Account customers?
a. Rs.15 monthly
b. Rs.15 Quarterly
SH
c. Rs.25 monthly
d. Rs.25 Quarterly
A
20. Can an illiterate open a joint SB account?
K
a. No
A
b. Yes with another illiterate Person
PR
c. Yes With close relative
d. Other than given option
D
21. Which of the followings is not the key obligations imposed on the institutions as per
VE
the Sexual Harassment of Women at Workplace Act, 2013.

a. Prevention
b. Safety
R
c. Prohibition
A
d. Redressal
M
U
22. Which among the following is a “sexual harassment” as defined under Sexual
Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act
K
2013?
r.
a. physical contact and advances

M
b. a demand or request for sexual favours

c. showing pornography
y:
d. All the above

23. Which among the following does not come under the meaning “workplace” under
B
Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal)

ed
Act 2013?
a. any private sector organisation
ad
b. hospitals or nursing homes

c. any sports institute, stadium, sports complex
o
d. None of these
nl
24. Employee” under Sexual Harassment of Women at Workplace (Prevention,

ow
Prohibition, and Redressal) Act 2013 means?

a. regular employee
D
b. temporary employee
c. adhoc/daily wage employee
d. All the above
25. Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)
Act, 2013 came into force on?
a. 22 April 2013
b. 9 December 2013
c. 21 August 2014
d. 22 January 2015
)
62
26. Expand the phase CSR
80
a. Corporate Social responsibility
b. Company Social responsibility
10
c. Corporate Society responsibility
d. Company Society responsibility
K
.(V
27. What does ethics to do with :
a. The Wider community
b. Business
SH
c. Right or Wrong
d. Nothing
A
28. Which of the following does the term Corporate Social Responsibility relate to?
K
a. Ethical Conduct
A
b. Environmental Practices
PR
c. Community Investment
d. All of the above
D
29. What is Full form of EAP

VE
a. Emotional Assistance program

b. Employee Assistance program
c. Employee authorisation program
R
d. Employee awaremenss program

A
M
30. Which of the following is not a grade of Baroda Gems

U
a. BBB
K
b. BB
c. B
r.
d. B+
M
31. For obtaining DIN (Director Identification Number), an individual has to apply to -------
y:
-
B
a) ICAI
b) Central Government
ed
c) ICSI
d) Respective state government, where the company in which he wants to apply for
ad
directorship, is incorporated.
o
32. As per cashflow statement analysis, cashflow from purchase of fixed assets is -------
nl
type of cashflow.
ow
a) Operating
b) Financing
c) Investing
D
d) Opening
33. Entry of CIN /Registration No. of companies/Corporates in Finacle is done through ---
------- menu.
a) MCEC
b) CUSTMOB
c) UNCHQ
d) CORPCIN
)
62
34. “DSRA” stands for :-
a) Debt Service Reversal Account
80
b) Debtors Service Representative Account
c) Debt Service Reserve Account
10
d) Debt Service Reserves Acknowledgement
K
35. Unsecured credit facilities (excluding schematic lending) should be granted only to
.(V
customers whose financials are beyond question and who have a risk rating of not
lower than --------------.
a) BOB 2
SH
b) BOB 3
c) BOB 4
A
d) BOB 5
K
A
36. As per the latest guidelines of CGTMSE, CGTMSE will have notional -------- charge
on the collateral securities provided by the borrower for the credit facility.
PR
a) Pari Passu
b) First
D
c) Second
d) No
VE
37. Company 'A' enjoying a limit of Rs.2.00 Cr with bank ‘B’, under CGTMSE guarantee
cover, has now been taken over by bank ‘C'. Will the exposure with ‘C’ be now
R
eligible for CGTMSE cover?

A
a) Yes
M
b) No
U
c) Yes, but subject to certain conditions.

K
d) No such clear guideline.

r.
38. If the probability of default (PD) of an obligor increases, the Capital requirement of
M
bank will---------
a) Decrease
y:
b) Increase
B
c) Remain unaltered
d) No direct relation between PD & Capital Requirement
ed
39. Which of the following is not a product under our Bank’s supply chain finance :-
ad
a) Payable Finance
b) Commission Finance
o
c) Dealer Finance
nl
d) Vendor Finance
ow
40. Proposals falling within the delegated lending powers of Corporate Office level
committees are to be submitted to the Chief Risk Officer, at least ---------- days prior
D
to submitting to the respective sanctioning committees.

a) 2
b) 3
c) 7
d) 15
41. What is the maximum per transaction limit using Contactless mode using Baroda
BPCL Debit card:
a) 10000/-
)
b) 5000/-
62
c) 2000/-
80
d) 15000/-
BCC:BR:113:553, 18th Sept 2021
10
42. How many total numbers of daily Contactless transactions can be done on
K
Contactless mode using Baroda BPCL Debit Card:
.(V
a) 10
b) 5
c) 4
SH
d) 15
BCC:BR:113:553, 18th Sept 2021
A
43. What is the Maximum daily limit to add money using Baroda BPCL Debit Card in
K
prepaid wallet Contactless transaction:
A
a) 1000/- PR
b) 5000/-
c) 2000/-
d) 10000/-
D
BCC:BR:113:553, 18th Sept 2021

VE
44. What is the Maximum cash withdrawals per transaction limit on our ATMs by Baroda
VISA Vyapaar Debit Card:
R
a) 15000/-
A
b) 10000/-
M
c) 25000/-
d) 10000/-
U
BCC:BR:113:703, 16th Nov 2021

K
45. What is the Maximum cash withdrawals per transaction limit on other Bank’s ATMs
r.
using Baroda VISA Vyapaar Debit Card:

M
a) 15000/-
b) 10000/-
y:
c) 25000/-
B
d) 5000/-
BCC:BR:113:703, 16th Nov 2021
ed
46. What is the maximum per day limit at POS/Ecom using Baroda VISA Vyapaar Debit
ad
Card:
a) 150000/-
o
b) 200000/-
nl
c) 100000/-
ow
d) 500000/-
BCC:BR:113:703, 16th Nov 2021
D
47. How much number of transactions of cash withdrawals allowed per day using Baroda
VISA Vyapaar Debit Card:
a) 20
b) 15
c) 10
d) 5
BCC:BR:113:703, 16th Nov 2021
48. What is the Card Re-issuance / Replacement Charges of Baroda VISA Vyapaar
Debit Card:
)
62
a) Rs. 200 + taxes
a) Rs. 100 + taxes
80
b) Rs. 150 + taxes
c) Rs. 50 + taxes
10
BCC:BR:113:703, 16th Nov 2021
K
.(V
49. What is the finacle command for Re-issuance of Baroda VISA Vyapaar Debit card:
a) HDCR
b) HOPNACCT
SH
c) DCISS
d) HMCEC
A
BCC:BR:113:703, 16th Nov 2021
K
50. What is the menu to block the undelivered Debit Cards beyond three months from
A
the date of receipt:
PR
a) DCISS
b) HDCR
c) HOPNACCT
D
d) DCARDBLK
VE
BCC:BR:114:52, 28th January 2022
51. The Debit cards which are undelivered and in blocked status for more than
R
_____________ period, all such debit cards to be destroyed into several pieces in
A
presence of two officers of the branch and proper records to be maintained for future
M
reference.
a) 90 days
U
b) 120 days
K
c) 1 year
r.
d) 180 days
BCC:BR:114:52, 28th January 2022
M
y:
52. What are the facility not available in our WhatsApp Banking:
a) Account Statement
B
b) Disabling of UPI
c) Account Blocking (Debit Freeze)
ed
d) Credit Card bill payment

(BCC:BR:114:126, 25th Feb 2022)
oad
53. What are the new features which is not available in bob World:
nl
a) Apply for IPO - ASBA

b) Feedback & Support
ow
c) Wealth Management Services

d) Health Meter
D
(BCC:BR:114:197, 21th Mar 2022)
54. Bank of Baroda was founded by ______

a. Maharaja Sayajirao Gaekwad II
b. Maharaja Sayajirao Gaekwad I
c. Maharaja Sayajirao Gaekwad III
d. Maharaja Sayajirao Gaekwad V
55. Which of the following is the mobile based learning app of BoB?
)
a. Bob World
62
b. Bob etrade
c. Baroda Connect
80
d. Baroda Gurukul
10
K
56. Baroda GEMS stands for________
.(V
a. Baroda Growth & Empowerment Management System
b. Baroda Growth & Efficiency Management System
c. Baroda Goal & Empowerment Management System
SH
d. Baroda Goal & Efficiency Management System
A
K
57. Which of the following is not a subsidiary of Bank of Baroda?
a. Baroda Asset Management India Limited
A
b. Baroda Global Shared Services Ltd
PR
c. India First Life Insurance Company Limited
d. BOB Financial Solutions Limited
D
VE
58. Bank of Baroda has started FINTECH innovation centre in collaboration with which of
the following institute?
R
a. BOB Financial Solutions Limited

A
b. IIM- Ahmedabad
M
c. ISB Hyderabad
d. IIT- Bombay
U
K
r.
59. Which of the following is NOT one of our core values?

M
a. Integrity
b. Customer Centricity
y:
c. Courage
d. Empathy
B
ed
60. What is BOBNOW?

ad
a. Bank of Baroda New Opportunity Window

b. Bank of Baroda The New Operating Model & Ways of Working
o
c. Bank of Baroda The New Operation Model & Ways of Work

nl
d. Bank of Baroda New Opportunity Model & Ways to Work

ow
D
61. Our Bank has put in place a platform for Workplace Counselling facility through
professional Counsellors for employee, spouse and children, what is the name of
platform?
a. Baroda Samadhan
b. Margdarshak Program
c. Baroda Sujhav
d. Employee Assistance Program
62. How many rays are depicted in ‘Baroda Sun’ Logo?
)
a. Three
62
b. Four
c. Five
80
d. Six
10
K
63. Bank of Baroda opened its first overseas branch at?
.(V
a. Dubai, UAE
b. London, UK
c. Mombasa, Kenya
SH
d. Kampala, Uganda
A
K
64. When was the RBI Act amended to establish the Monetary Policy Committee?
a. 2014
A
b. 2015
PR
c. 2016
d. 2017
D
VE
65. Who is the current Governor of RBI (2021)?

a. Dr Shashanka Bhide
R
b. Shashikanta Das
A
c. Ashima Goyal
M
d. Dr. Urjit Patel

U
K
66. What is meant by monetary policy?

r.
a. The process by which the Parliament controls the money supply

M
b. The process by which the central bank or monetary authority of a country

controls the supply of money
y:
c. The process by which International Market controls the money supply

d. Board approved Policy of every Bank to monitor liquidity coverage and stable funding
B
ratio.
ed
ad
67. An increase in Repo Rate can

i) Increase the cost of borrowing and lending of the banks
o
ii) Decrease the cost of lending to the banks

nl
ow
a. Only i
b. Only ii
c. Both i and ii
D
d. None of the above

68. Bank of Baroda was nationalized along with 13 other major commercial banks of
India on:
a. 20 July, 1969
b. 19 July, 1969
c. 20 July, 1980
d. 16 April, 1980
)
62
69. Slogan of Bank of Baroda is:
80
a. India's International Bank
b. One Family, One Bank
10
c. Where service is a way of Life
d. A Tradition of Trust
K
.(V
70. Digitization Index for focused products (Bank of Baroda) has weightage of ____ out
of 100 for Retail?
SH
a. 40
b. 50
A
c. 60
K
d. 70
A
PR
71. The FI Index of our bank comprises of three broad viz., Access, Usage, and Quality
with each of these consisting of various dimensions, which are computed based on a
D
number of indicators. What is the weightage given to Quality?

VE
a. 35 %
b. 20 %
c. 45 %
R
d. 60 %
A
M
U
72. e-RUPI is developed by which of the following organization?

K
a. Reserve Bank of india

b. National Payments Corporation of India
r.
c. Council of Scientific & Industrial Research

M
d. Insurance Regulatory and Development Authority of India

y:
B
73. Which institution launched a new ‘SupTech initiative’ named ‘DAKSH’?

a. SEBI
ed
b. NPCI
c. RBI
ad
d. BOB
o
nl
ow
D

Promotion Material Annexure LL

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Promotion Material Annexure LL

Uploaded by

Copyright:

Available Formats

)

(For internal circulation only)

1. Emerging Trends and Awareness about Indian/Global 4

6. Awareness about Indian Economy, Emerging 52

10. Test Your Knowledge 110

nook and corner of the country in a consumer-friendly manner.

other technologies, to be issued by

the Reserve Bank of India starting

2022-23 for more efficient and

cheaper currency management

income of a non-resident from

offshore derivative instruments, or

over the counter derivatives issued

by an offshore banking unit, income

of lease of ship and income received

in IFSC shall be exempt from tax,

subject to specified conditions.

PM GatiShakti is a transformative approach for economic growth and sustainable

development. The approach is driven by seven engines, namely, Roads, Railways,

engines in the National Infrastructure

Pipeline will be aligned with PM

touchstone of the Master Plan will be

world-class modern infrastructure

and logistics synergy among

different modes of movement – both

accelerate economic growth and development.

PM GatiShakti Master Plan for Expressways will be formulated in 2022-23 to facilitate

expanded by 25,000 km in 2022-23. Rs.20,000 crore will be mobilized through

Seamless Multimodal Movement of Goods and People:

Mass Urban Transport including Connectivity to Railways:

metro systems of appropriate type at scale. Multimodal connectivity between mass

conditions and needs.

Parvatmala: National Ropeways Development Programme:

As a preferred ecologically sustainable alternative to conventional roads in difficult hilly

Capacity Building for Infrastructure Projects:

implementation management of the PM GatiShakti infrastructure projects.

Dial-a-loan and PSBloansin59 minutes.com. Partnerships with FinTechs and E-

commerce companies, Tech-enabled agriculture lending. EASE 4.0 commits PSBs to

tech-enabled, simplified and collaborative banking to further the agenda of customer-

centric digital transformation.

capability building. EASENext is well-positioned to channel reforms with specific focus

transactions based on four technology alternatives. They include calling an IVR

(interactive voice response) number, app functionality in feature phones, missed

call-based approach and also proximity sound-based payments. Under this

Voice Based Payments.

Business Responsibility and Sustainability Reporting

Responsibility Report (BRR) to the stock exchanges as a part of their annual

Exchange Board of India (SEBI) prescribed format. SEBI amended certain

quantitative and standardized disclosures on ESG parameters to enable

from financial year2017-18 by the top 500 listed companies.

2019 - MCA released the NGBRC.

2021 - SEBI introduced BRSR in May 2021.

Read more at - https://www.sebi.gov.in/sebi_data/commondocs/may-

Climate Change Risks

Climate change risk is described as an uncertainty caused by severe weather events

third-party application providers and facilitate transactions through their platforms -

Google Pay, Amazon Pay, WhatsApp, etc.

SupTech & RegTech

Regtech is already a familiar word in the financial sector. It refers to applications of

innovative technologies that support compliance with regulatory and reporting

requirements by regulated financial institutions. Suptech, on the other hand, refers to

technologies used by supervisory agencies themselves. SupTech provides