Financial Awareness for RBI Grade B-14 July 2017

Financial Awareness for RBI Grade B-14 July 2017

  1. Order to banks to speed up loan recovery within our powers: RBI (Source: MINT)

  • The Reserve Bank of India (RBI) said its 13 June directive to banks to speed up their bad-loan recovery was well within its powers, and that its classification of sticky assets could not be challenged.
  • RBI directed banks to refer a dozen defaulters including Essar Steel to the National Company Law Tribunal (NCLT) for speedy resolution under the Insolvency and Bankruptcy Code (IBC). The debtors made up a quarter of the Rs 10 trillion of stressed assets clogging up the Indian banking system.

2. SBI moves NCLT against Bhushan Steel (Source: MINT)

  • The State Bank of India (SBI) moved the National Company Law Tribunal (NCLT) against Bhushan Steel Ltd, claiming the company had defaulted on loans of over Rs 43,000 crore.
  • Separately, Bhushan Steel’s sister concern, Bhushan Power and Steel Ltd, was also dragged to the NCLT by Punjab National Bank (PNB) over a default of about Rs 37,000 crore.
  • The two firms together are among the 12 loan defaulters identified by the Reserve Bank of India (RBI) to the NCLT for initiation of insolvency proceedings.

3. RBI’s oversight committee clears SBI’s debt resolution plan for Supreme Infrastructure (Source: MINT)

  • The Reserve Bank of India’s oversight committee has approved a debt restructuring package for Supreme Infrastructure India Ltd under the central bank’s scheme for sustainable structuring of stressed assets (S4A).
  • Under S4A, a defaulter’s debt is classified into sustainable and unsustainable parts. The former is left alone to perform or be restructured if necessary, while the unsustainable debt would be converted into equity or equity-like, long-dated securities and redeemed at a later date.

4. Monthly card payments hit record Rs 70,000 crore on the back of note ban: SBI (Source: MINT)

  • Card payments on point-of-sale (POS) terminals have hit a record monthly amount of Rs 70,000 crore, a level that would have taken three years to reach had demonetization not taken place, State Bank of India (SBI) said in a research report.
  • The report states that a similar trend has been observed in the usage of pre-paid instruments and mobile banking.

5. SBI reduces NEFT, RTGS charges up to 75% (Source: MINT)

  • The State Bank of India (SBI) reduced the National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement (RTGS) charges up to 75%, effective from 15 July. The reduced charges will be applicable on the transactions done through internet banking and mobile banking services offered by the bank.

6. Non-executive chairman can be part of bank’s audit committee: RBI (Source: ET)

  • Reserve Bank said the non-executive chairman of a bank can also be nominated to the audit committee of board of directors.
  • Earlier, any one of the non-executive/non-official directors was supposed to chair the audit committee of the board of the directors of a public sector bank.

7. 2017 sustainable development goals index: India ranked 116 of 157 countries (Source: BS)

  • India is ranked 116 out of 157 nations on a global index that assesses the performance of countries towards achieving the ambitious sustainable development goals (SDGs). The report said that the countries which are closest to fulfilling the goals are not the biggest economies but comparably small, developed countries.

8. Food price-led benign inflation set to reverse (Source: BL)

  • The continued slide of the new series of the consumer price index to its new historic low of 1.54% in June was mostly driven by benign food prices, principally tomatoes, potato and pulses, all of which fell between 20% and 40% compared to the same period last year. However, indications are that the slide driven by food prices will end in July.
  • There are two reasons for this. One, prices of items such as tomatoes have been climbing sharply in July and may remain somewhat elevated during the monsoon months though not necessarily at the prevailing rates. Disaggregated data of the CPI show the price index for tomatoes declined a sharp 31.6 per cent in May and 40.8 per cent in June. However, retail prices of tomatoes started rising in late June.
  • Two, the base effect seen in the inflation of pulses will begin to wear off after July.

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