Banking and Financial Awareness February 2019: Week III

Banking and Financial Awareness February 2019: Week III

1. Asian Development Bank raised $100 million in international market

  • ADB has raised $100 million from peso-linked bonds in the international market.
  • It was there maiden issue of Philippine Peso.
  • The move will help to reduce foreign exchange risk for ADB’s borrowers and support its growing local currency lending operations in Philippines.

2. Reserve Bank of India doubled the limit of bulk deposits from Rs 1 crore to Rs 2 crore

  • RBI decided to treat deposits to over Rs.2 crore as ‘bulk’ as they doubled the limit for the same from the earlier Rs.1crore.
  • The move will enhance operational freedom of Banks.
  • RBI also proposed banks would maintain their bulk deposits interest rate cards in the core banking system for supervisory review.

3. Reserve slapped Rs 1.5 crore fine on Allahabad Bank

  • The penalty has been imposed for not monitoring end use of funds, delay in classification and reporting of fraud and non-adherence with RBI guidelines.

4. Insurance Regulatory and Development Authority has imposed a fine of Rs 9 lakh on state-owned United India Insurance.

  • IRDAI imposed a sum of 5 lakh for violation of regulations such as assigning of surveyors and submitting reports, insurer offering a settlement to the insured as well as paying the claim to the insured.
  • The balance 4 lakh – 1 lakh each was for violations of circular and guidelines on rates and discounts an insurer can offer.

5. Reserve Bank of India MSME package to help recast 1 lakh crore loan for 700k accounts

  • It must be implemented by every bank before March 2020.
  • MSME package would enhance job opportunities in the industry.
  • It is a one-time scheme wherein a loan tenor and interest rate can be revised without classifying the asset as an NPA.
  • This facility is available for standard advances of up to Rs 25 crore.

6. NTPC has signed a pact with SBI for Rs. 5,000 Crore Term Loan

  • The agreement was signed by NTPC’s General Manager (Finance), Masood A. Ansari, and Deputy General Manager of SBI, Neelabh Sinha.
  • The loan facility is extended at an interest rate linked to 3-month MCLR of the bank and has a door to door tenure on 15 years, which will be utilised to part finance the capital expenditure of NTPC.

7. Yes Bank has been cleared of Divergence charges imposed by RBI

  • Divergence charges mean disparity in reporting bad loans and provisioning numbers for the year ended March 2018.
  • The final report observed nil divergence in the bank’s asset classification and provisioning from the norms of the RBI.
  • In FY16, in its first assessment, Yes Bank was found divergence of Bad loans by RBI at Rs. 4,176 crores higher than the reported gross NPA of Rs. 748.9 crore.
  • In FY17, the bank was found to be divergence again at Rs. 6,355 crores and reported gross NPA of Rs. 2,018 crore lower than RBI’s estimation of Rs. 8,373 crore.

8. $40 million loan agreement signed between Centre, Himachal Pradesh and World Bank for Shimla water supply

  • The loan has been signed for bringing clean and reliable drinking water to citizens of Greater Shimla, who have been facing severe water shortage and water-borne epidemics in the last few years.
  • Shimla Water Supply and Sewerage Service Delivery Reform Programmatic Development Policy Loan 1 is expected to improve Water Supply & Sanitation (WSS) services in and around Shimla.
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