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Banking and Financial Awareness Digest: January 2022

Published on Friday, January 28, 2022

Banking and Financial Awareness Digest: January 2022

LIC, GIC, and New India Assurance Systematically Important Insurers

  • As per the Insurance Regulatory and Development Authority of India (IRDAI), the Life Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC), and New India Assurance continue to be Domestically Systematically Important Insurers (D-SIIs) for FY2021-22.
  • The D-SIIs tag is given to those insurers which are ‘too big or too important to fail (TBTF)’.
  • The failure of these insurers will cause a dislocation of the financial system and will affect majorly on the country’s economy as well.

‘Digi Zone’—By LIC

  • The Life Insurance Corporation (LIC) of India has inaugurated ‘Digi Zone’ at Bandra Kurla Complex, Mumbai.
  • The ‘Digi Zone’ aims to enhance the digital footprint of LIC.
  • Through the ‘Digi Zone’, people will also be able to pay their policy premiums and get benefits from other services.
  • The ‘Digi Zone’ will make LIC a tech-driven life insurer.
  • The information related to LIC’s products and services will be provided through kiosks installed on the Digi Zone premises.

Pre-qualified Program for Unsecured Loans

  • Paisabazaar.com in partnership with Axis Bank launched a pre-qualified program for unsecured loans on its platform.
  • The pre-qualified program is based on deep technology and performs deep analytics in partnership with banks and non-bank financiers.
  • This will further allow selected customers to view customized and pre-qualified lending offers on the platform Paisabazaar.com.
  • The bank’s customers who are eligible for pre-qualified personal loans from the bank will be able to view and apply for desired offers and get instant access to credit.
  • The process for the same will be entirely digital and will offer a great customer experience.

Nippon India MF launched auto ETF

  • The Nippon Life India Asset Management Limited (NAM India) which is the asset manager of Nippon India Mutual Fund (NIMF) launched Nippon India Nifty Auto ETF.
  • The minimum amount of investment is Rs 1000 and investors can add Re 1 thereafter.
  • The auto ETF will showcase the behavior and performance of the Automobiles sector and will be a benchmark against Nifty Auto TRI.
  • Its aim is to offer investment returns close to the total returns of the securities which are represented by the Nifty Auto Index before expenses and subject to tracking error.

Fino Payment Bank Received Approval for Cross Border Remittances

  • The Reserve Bank of India has approved Fino Payments Bank to commence international remittance business.
  • This was granted under Money Transfer Service Scheme (MTSS).
  • Henceforth, the Fino Payments Bank will be able to perform inward cross-border money transfer activities.
  • The funds remitted by family members or friends from abroad will be directly withdrawn at the ATM or AEPS which are managed by Fino Payment Banks.
  • This will help to enhance the robust distribution network of Fino Payment Bank as its customers will be able to receive funds from foreign countries.

Interest Rates on the Small Savings Schemes Unchanged

  • The GOI’s Ministry of Finance, Department of Economic Affairs has retained the interest rate of small saving schemes unchanged for Q4 of FY22 in order to maintain the status quo.
  • The reason behind this is the rising cases of COVID-19 in the country.
  • The GOI interest rates on the small savings schemes.
  • Following are the interest rates for the fourth quarter of 2021-2022 (January – February – March 2022):
    • Post Office Saving Account: 4%
    • 5 Year Post Office Recurring Deposit (RD) Account: 5.8%
    • Post Office Time Deposit (TD) Account – One Year: 5.5%
    • Post Office Time Deposit Account (TD) – Two Years: 5.5%
    • Post Office Time Deposit Account (TD) – Three Years: 5.5%
    • Post Office Time Deposit Account (TD) – Five Years: 6.7%
    • Post Office Monthly Income Scheme Account (MIS): 6.6%
    • Senior Citizen Savings Scheme (SCSS): 7.4%
    • 15-Year Public Provident Fund Account (PPF): 7.1%
    • National Savings Certificates (NSC): 6.8%
    • Kisan Vikas Patra: 6.9%
    • Sukanya Samriddhi Account: 7.6%

NBBL launched UPMS

  • The NPCI Bharat BillPay Ltd. (NBBL) has launched the ‘Unified Presentment Management System’ (UPMS).
  • The NBBL is the wholly-owned subsidiary of the National Payments Corporation of India (NPCI).
  • The UPMS aims to boost, enrich and simplify bill payment procedures in India.
  • Through UPMS, NBBL will be able to set up standing instructions for its customers. This will happen from any channel and for any mode on their recurring bill payments.
  • The bills will be automatically fetched from the biller's end and will be delivered to the customer's end to perform the action. It will be in terms of auto-debit and bill payment management.

SBI, ICICI Bank, and HDFC Bank retained as D-SIBs

  • The State Bank of India, ICICI Bank, and HDFC Bank were retained as Domestic Systemically Important Banks (D-SIBs) by the Reserve Bank of India.
  • These three major banks are on the list of D-SIBs since 4th Sep 2017.
  • The D-SIBs are those banks that if fail will impact negatively the economy of the country. Hence these banks are ‘too big to fail’.
  • The D-SIBs banks are classified into 5 buckets namely Bucket 1, Bucket 2, Bucket 3, Bucket 4, and Bucket 5. Bucket 5 is termed to be most important and then followed in decreasing order.
  • The ICICI Bank and HDFC Bank are in Bucket 1 and SBI is in Bucket 3.

RBI released the Framework for Small Value Offline Digital Payments

  • The Reserve Bank of India (RBI) has released a framework for small-value offline payment transactions which take place in digital mode.
  • Offline payments can be performed using any channel or devices like cards, wallets, or mobile phones, but must be made in proximity or in face-to-face mode.
  • Offline digital payments are those payments that do not require internet or telecom connectivity.
  • The upper limit for offline payment transactions was fixed at Rs 200 and the total limit on a payment instrument is at Rs 2000.
  • There will not be a requirement for additional factors of authentication.

Airtel Payments Bank received Scheduled Bank Status

  • The Reserve Bank of India (RBI) has granted scheduled banks to Airtel Payments Bank.
  • The status is given in the second schedule of the Reserve Bank of India Act, 1934.
  • Now onwards, the Airtel Payments Bank can pitch for the government.
  • It has become 4th payment bank to receive the status.
  • It will be able to perform business opportunities with central and state governments.
  • It can also participate in primary auctions and in government welfare schemes.
This digest is not complete. Read the complete digest on the Financial Awareness Course. 
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