Banking and Financial Awareness July 2019: Week II

Banking and Financial Awareness July 2019: Week II

RBI data on Affordable Housing in Four Years

  • The house price-to-income ratio has increased in the last 4 years, as per the RBI’s quarterly Residential Asset Price Monitoring Survey.
  • The survey shows that the house price-to-income ratio has increased from 56.1 in the 2015 March quarter to 61.5 in 2019 March quarter.
  • A wide gap between home prices in the country and real income was found in the survey.
  • Bhubaneswar with a price-to-income ratio of 54.3 was found to be the most affordable city for home buying in the 2019 March quarter.

RBI revised instructions for BSBD accounts

  • As per the revised circular, Banks are advised to offer basic minimum facilities free of charge without any minimum balance requirement.
  • There will be no limit on the number and value of deposits made in a month.
  • 4 minimum withdrawals in a month along with ATM withdrawals are allowed.
  • No minimum balance would be required to avail such additional services.
  • The BSBD account can be converted into a normal saving account only at the written request of the customer.
  • The banks would be penalized under RBI Banking Regulation Act, 1949 if found for non-compliance of any instruction.
  • RBI has mandated all banks to offer BSBD accounts to those looking to open a bank account.
  • In a BSBD account, no minimum balance is required to be maintained.

RBI Imposed a penalty on SBI and UBI

  • RBI imposed a penalty of Rs 7 crore on SBI and Rs 10 lakh on Union Bank of India for violating norms issued by RBI.
  • SBI was found to violate the code of conduct for opening and operating current accounts(CRILC), income recognition and asset classification (IRAC) norms, fraud risk management and its reporting.
  • The Union Bank of India was fined for non-compliance on the cybersecurity framework direction issued by RBI.
  • After bank’s reply, RBI concluded to impose a monetary penalty of Rs 7 crore.
  • RBI has imposed penalty with powers vested under the provision of section 47A(1)(c) of the Banking Regulation Act,1949.

HDFC Bank, CSC Launches Credit Card for VLEs

  • The credit card has been launched for small traders, village-level entrepreneurs (VLEs) and VLE- sourced customers.
  • HDFC Bank and CSC have signed a pact in July 2018 in which the bank offered to provide products and services in remote locations to VLEs that are enrolled with CSCs.
  • CSCs acts as delivery points of various government and public utility services across the country.
  • There are about 3.6 lakh CSCs in the country with transacting the business of about Rs 70,000 crore.
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