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Banking & Financial Awareness GK Digest : May 2024

Published on Tuesday, June 11, 2024
Banking & Financial Awareness GK Digest : May 2024

RBI Announces Interest Rate of 8% on Floating Rate Savings Bond (FRSB) 2034

Current Context: The Reserve Bank of India (RBI) announced an 8% interest rate on the Floating Rate Savings Bond (FRSB) 2034 on 29th April 2024.

Details

  • The interest rate is variable and will be reset every six months.
  • The current rate, for the next six months (from April 30, 2024 to October 29, 2024), on this FRB bond will be 8%.
  • The rate is calculated by taking an average of the interest rates from the previous three auctions of short-term government debt, plus a small additional fixed amount (0.98%).
  • These bonds can be a good option for investors who want an interest rate that reflects current market conditions.
  • FRBs have a maturity period of seven years.
  • The minimum investment amount for FRBs is Rs 1,000, while there is no maximum limit.
  • Interest on these bonds is paid semi-annually on January 1 and July 1 each year, with no provision for cumulative interest payments.

NRIs can own up to 100% of a global fund set up at GIFT City

Current Context: The Reserve Bank of India (RBI) has indeed cancelled the licence of Acemoney India Limited, a non-banking financial company (NBFC).

About

  • The cancellation was due to irregular lending practices and violation of RBI guidelines.
  • The company, which had received the certificate of registration in February 2017, was found to be not complying with the extant regulations pertaining to charging excessive interest and ensuring confidentiality of customer information.

RBI Releases Updated Guidance on Operational Risk Management and Resilience for Lenders

Current Context: The Reserve Bank of India (RBI) released an updated Guidance Note on Operational Risk Management and Operational Resilience for lenders on May 1, 2024.

Key Points

  • Updates RBI's Guidance: This replaces the previous Guidance Note on Management of Operational Risk from 2005.
  • Focuses on Operational Resilience: It emphasizes the importance of lenders being able to withstand and recover from disruptions.
  • Aligns with BCBS Principles: The update incorporates best practices outlined in the BCBS's "Revisions to the Principles for the Sound Management of Operational Risk" and "Principles for Operational Resilience" documents, both released in March 2021.

This digest is not complete. Read the complete digest on the Financial Awareness Course.
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