Net Interest Margin (NIM)
Context: Banks are likely to see a reduction in their net interest margins (NIM) in the second quarter of the current fiscal due to higher cost of deposits. Important Terms
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Tag: Banking & Monetary Policy
Monetary Policy Committee (MPC) Meeting of October 2023
Context: The RBI’s Monetary Policy Committee (MPC) has kept the policy rates unchanged at 6.5% in its recent meeting. Decision of MPC No change in Policy Rate (Repo Rate) Policy Stance: Withdrawal of Accommodation Reasons for Status Quo Other Developmental and Regulatory Decisions
RBI’s Pilot for Frictionless Credit
Context: The RBI has recently commenced a pilot programme endeavouring to evaluate the feasibility and functionality of the ‘Public Tech Platform for Frictionless Credit’. The suggested platform aims to enable delivery of frictionless credit by facilitating seamless flow of required digital information to lenders. […]
T+1 Settlement System
Context: The Securities and Exchange Board of India (SEBI) is working to implement instantaneous settlements in secondary market trades, and is likely to complete the process next fiscal year. What is a Settlement Process? Recent Developments Significance
Internationalisation of Rupee
What is an International Currency? Benefits Associated with Internationalisation of Rupee Past and Current Initiatives Towards the Internationalisation of Rupee Challenges Associated with Internationalisation of a Currency Way Forward Internationalisation of Rupee has significant benefits but to achieve it successfully, would require some prerequisites: […]
Bad Loans at Record Low
Context: In the second quarter of 2019, the NPA ratio of Indian banks was 9.2% which was the worst among most emerging economies. However in the span of just four years, the GNPAs and Net NPAs have now reached their lowest levels since 2015 […]
National Bank for Financing Infrastructure and Development (NaBFID)
Context: The National Bank for Financing Infrastructure and Development (NaBFID) plans to introduce takeout financing products to help finance projects and allow timely exits for commercial lenders. What is Takeout Financing About NaBFID Assistance Provided By Development Banks The Development Banks may offer the […]
RBI Allows Compromise Settlement with Wilful Defaulters, Fraud Accounts
Context: Banks can take on compromise settlements on accounts categorised as wilful defaulters or fraud without prejudice to the criminal proceeding underway against such debtors. What is a Compromise Settlement? About RBI Circular Analysis
MPC’s Unwavering Focus on Price Stability
Context: The Monetary Policy Committee (MPC) has kept inflation front and centre of its approach to policy. The MPC’s recent unwavering focus on price stability is informed largely by its mandate to achieve the Consumer Price Index (CPI) inflation target of 4%, a goal […]
First Loan Default Guarantee (FLDG)
What is FLDG? RBI Framework Benefits
UPI transaction limit set by Indian banks
Context: Unified Payments Interface (UPI) related frauds have been on the rise. To check the number of transactions and reduce the risk of big financial frauds, leading banks including HDFC Bank, State Bank of India (SBI), Axis Bank, and ICICI Bank have implemented some […]
RBI dividend payments to Government
Context: The Central Board of Directors of the Reserve Bank of India (RBI) recently approved the transfer of ₹87,416 crore as surplus to the Union government for the accounting year 2022-23, almost thrice the ₹30,307 crore transferred for the previous fiscal year. The RBI’s […]
Merchant Discount Rate
Context: The Payments Council of India (PCI), an industry body representing payment fintechs in the country, has requested finance minister to restore Merchant Discount Rate (MDR) for RuPay debit cards, as payment aggregator fintechs continue to lose on revenue lines for processing payments through […]
What is LIBOR and why RBI has asked the banks to Move away from it
Context: The Reserve Bank of India has directed the banks and other financial institutions to move away from the LIBOR (London Interbank Offered Rate) and move to any Alternative Reference Rates (ARR). What is LIBOR? LIBOR stands for the London Interbank Offered Rate. It […]
ONDC Project
Context: Despite best efforts, the Government’s Open Network for Digital Commerce could go in vain if proper supply chain management is not being developed. What is Open Network for Digital Commerce? Benefits: Challenge to ONDC:
Expected Loss Approach for Provisioning
Context: Lenders have sought a one-year extension from the Reserve Bank of India (RBI) for implementation of the Expected Credit Loss (ECL)-based loan loss provisioning framework. Provisions A loan loss provision is an expense that is set aside for defaulted loans. Banks set aside […]
Insolvency and Bankruptcy Code
Exit from business is as integral to ease of doing business as is an entry. Earlier frameworks for resolution, such as the Debt Recovery Tribunals, the Lok Adalats and even the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act (SARFAESI […]
Aadhaar enabled Payment System (AePS)
Context: Incidents of bank frauds, without two factor authentication, have been reported across India, with cybercriminals using silicone thumbs to operate biometric ATMs and POS devices. What is AePS? Benefits of AePS:
RBI’s switch auction of G-secs stays undersubscribed on tight liquidity
Context: The Reserve Bank of India’s switch/conversion auction of government securities (G-secs) of Rs 20,000 crore remained undersubscribed. as liquidity remained tight and banks demanded higher yields. Why this trend? About Government Securities A Government Security (G-Sec) is a tradable instrument issued by Central […]
International trade in Indian Rupee
Context: RBI Governor Shaktikanta Das said the government and the central bank are in discussion with South Asian countries to have cross-border trade in rupee. India had already made similar agreements with Sri Lanka, Russia and Mauritius and in early discussions with UAE to […]