Banking - General Knowledge Questions

Karnataka Bank has launched online savings bank (SB) account opening facility through ‘Video-based Customer Identification Process (V-CIP)’.

 

The facility enabled in the corporate website of the bank, empowers prospective customers to open an SB account through online process and complete KYC (know your customer) verification through a video call at their place of convenience.

 

The end-to-end paperless digital process leverages the bank’s API (Application Programming Interface) that auto fills the account opening form, validates PAN/Aadhaar number instantly and completes the KYC process through a video call..

Source : The Hindu Businessline

Shanghai-headquartered New Development Bank (NDB) of the BRICS countries has appointed former bureaucrat Dr D J Pandian as the Director-General of its India Regional Office in Gujarat International Finance Tec-City (GIFT City), the bank announced on Tuesday(21st June 2022).

 

Last month, the NDB had announced plans to set up IRO in the Gift city.

 

The NDB has approved 20 projects in India for about USD 7.2. billion. The IRO will support the effective and efficient implementation of these projects and work closely with Project Implementation Agencies on achieving desired project outcomes. IRO will also play an important role in preparing new projects and assisting government institutions in capacity building and in providing technical assistance, the bank quoted Pandian as saying in a press release.

 

The establishment of the IRO is an important milestone for NDB as it marks the fulfilment of a commitment made by the founders of the bank in setting up regional offices, beyond headquarters, in each of the other four founding countries -- South Africa, Brazil, Russia and India (BRICS), he said.

 

Pandian earlier served as the Vice President and Chief Investment Officer of the Beijing-based Asia Infrastructure Investment Bank (AIIB) in which India is the 2nd largest shareholder after China.

 

He was succeeded by former RBI Governor Urjit Patel in January. During his tenure at the AIIB, he was instrumental in securing USD 6.7 billion in funding for 28 projects in India, stated to be the highest project finance extended by the bank..

Source : Business Today

The Reserve Bank of India (RBI) has cancelled the licence of Millath Co-operative Bank Ltd as “the bank does not have adequate capital and earning prospects", among other reasons. The bank has ceased to carry on banking business, with effect from the close of business on Saturday (June 18, 2022). The Registrar of Cooperative Societies, Karnataka, has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank.

 

“The Reserve Bank of India (RBI) has, vide order dated June 17, 2022, cancelled the license of ‘Millath Co-operative Bank Ltd., Davangere, Karnataka’. Consequently, the bank ceases to carry on banking business, with effect from the close of business on June 18, 2022. The Registrar of Cooperative Societies, Karnataka has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank," the central bank said in a statement dated June 18.

 

The RBI said it has cancelled the license as :

a) the bank does not have adequate capital and earning prospects;

b) the bank has failed to comply with the requirements of Sections 22(3) (a), 22 (3) (b), 22(3)(c), 22(3) (d) and 22(3)(e) read with Section 56 of the Banking Regulation Act, 1949;

c) the continuance of the bank is prejudicial to the interests of its depositors;

d) the bank with its present financial position would be unable to pay its present depositors in full;

e) and public interest would be adversely affected if the bank is allowed to carry on its banking business any further..

Source : News18

Singaporean lender DBS Bank's local unit on Monday(20th June 2022) said it has acquired a 9.9 per cent stake in the micro businesses-focused non-bank finance company Svakarma Finance for an undisclosed sum.

 

DBS Bank India said the stake buy in Svakarma will help in delivering relevant financial solutions to the micro-enterprises through a combination of direct lending and co-lending.

 

Earlier, DBS Bank had taken over domestic private sector lender Lakhsmi Vilas Bank (LVB) in 2020 at the request of the Reserve Bank to add heft to its network. LVB was grappling with a high quantum of non-performing assets (NPAs) and was unable to bolster its capital buffers as multiple attempts fell through.

 

Taking over LVB helped DBS Bank India add over 550 branches and 900 automated teller machines (ATMs) to its relatively small presence in the country. DBS continues to be among the small set of global lenders, who have signed up to operate as a wholly-owned subsidiary as desired by the local authorities.

 

A DBS Bank India statement said its strategy envisages significant growth in SME and consumer businesses..

Source : Business Standard

Fitch Ratings on Wednesday(15th June 2022) upgraded nine(9) Indian Banks , including SBI, ICICI Bank, and Axis Bank, from negative to stable. Bank of Baroda (BOB), Bank of Baroda (New Zealand) Ltd, Bank of India, Canara Bank, Punjab National Bank (PNB), and Union Bank of India are among the other institutions to get a upgrade. Fitch Ratings has upgraded 9 India-based banks’ Long-Term Issuer Default Ratings (IDRs) to Stable from Negative, while upholding their IDRs.

 

 

* The IDRs are based on Fitch’s evaluation of the sovereign’s ability and tendency to offer extraordinary support for these institutions, which takes into account Fitch’s assessment of the sovereign’s ability and inclination.

 

* It takes into account the government’s track record of backing systemically important banks, the lenders’ relative systemic importance, and their various ownership structures.

 

* Fitch also changed the outlook on the Export-Import Bank of India’s (EXIM) Long-Term IDR from negative to stable.

 

* These steps come after Fitch changed the outlook on India’s ‘BBB-‘ rating from negative to stable last week, citing reduced downside risks to the country’s medium-term growth, as evidenced by its rapid economic recovery and lessening financial sector problems.

 

* India’s GDP is expected to expand 7.8% in FY23, according to Fitch, compared to a median prediction of 3.4 percent for nations rated BBB..

Source : India Times

* Equitas Small Finance Bank has announced to launch an exclusive savings account for kids named ‘ENJOI’.

* Aim : Encourage the young kids to develop the saving habit early.

* The account will be launched on June 19 to coincide with Father’s Day.

* The ENJOI allow kids of 0-18 years to open savings accounts under the supervision of their parents.

* The bank offers 7% interest for savings balances between ₹5 lakh to ₹2 crore. ..

Source : The Hindu Businessline

* Foreign lender HSBC India on Monday(13th June 2022) announced that it will lend USD 250 million to startups in the country.

 

* The bank did not specify the timeframe for disbursal of the amount

 

* The lending will be done to high-growth, tech-led startups in the third largest startup ecosystem in the world, the lender said in a statement.

 

* The lending, which comes amid increased focus on startups' debt needs by financial intermediaries locally and a 'funding winter' impacting equity funding to the sector, will be managed by the lender's commercial banking vertical.

 

* The commercial banking vertical in India had witnessed a 42 per cent jump in its profit for 2021 at USD 265 million as against USD 187 million in the year ago period.

 

* Loans to small and medium enterprises tripled to USD 1 billion in 2021 as against USD 300 million in 2018, the bank said..

Source : Business Standard

The Reserve Bank of India (RBI) relaxed the limitations placed on Mastercard Asia/Pacific Pte Ltd on onboarding new domestic clients. For non-compliance with RBI standards for data storage in India, Mastercard has been barred from onboarding new domestic users (debit, credit, or prepaid) onto its card network as of July 22, 2021. The RBI had given Mastercard almost three years to comply with the regulatory directives, but it was unable to do so.

 

 

* All system providers were directed to ensure that the entire data (full end-to-end transaction details, information collected, carried, or processed as part of the message or payment instruction) relating to payment systems operated by them is stored in a system only in India by the RBI circular on Storage of Payment System Data dated April 6, 2018.

 

* They were also expected to notify the RBI of their compliance and submit a board-approved system audit report done by a CERT-In empanelled auditor within the prescribed time frames.

 

* However, multinational credit and card companies have resisted the move, citing costs, security concerns, a lack of transparency, a tight schedule, and the prospect of data localization demands from other nations as reasons.

 

* The Reserve Bank of India had mandated that data be stored only in India, with no copies — or mirroring — stored in other countries.

 

* Payment companies that used to store and process Indian transactions outside of India claimed that their systems were centralised and that moving the data storage to India would cost them millions of dollars.

 

* The Reserve Bank of India has decided to allow non-bank entities such as Prepaid Payment Instrument (PPI) issuers, card networks, White Label ATM (WLA) operators, and Trade Receivables Discounting System (TReDS) platforms to join the centralised payment system (CPS) and conduct RTGS and NEFT transactions..

Private sector lender HDFC Bank has announced the signing of a memorandum of understanding with 100X.VC, a notable early-stage venture capital firm, to further its engagement with the start-up ecosystem in the country.

 

The bank announced the provision of its comprehensive package of specialised services and facilities customised for start-ups, branded as ‘Smart-Up’, for all enterprises affiliated with the venture capital firm. It also announced it would issue additional loans to these start-ups and evaluate their investment potential.

 

HDFC Bank and 100X.VC will collaborate in mutually advantageous areas as a result of this MoU. All of the venture capital firm's investee firms will be advised to use HDFC Bank as their primary bank. The bank seeks to improve the ecosystem by fostering innovation and entrepreneurship through such partnerships, the statement from the companies said.

 

The bank will also assess 100X.VC-recommended start-ups for investment and loan extension opportunities. Additionally, HDFC Bank and 100X.VC will also collaborate on initiatives such as Master Classes for start-up enterprises in the country. 

 

The MoU was signed in the presence of Abhishek Deshmukh, Branch Banking Head - Maharashtra, and Yagnesh Sanghrajka, founder & CFO, 100X.VC and Sanjay Mehta, founder & Partner, 100X.VC; Ninad Karpe, Partner,100X.VC, among other senior bank officials..

Source : Business Today

OmniCard has announced that it became the 1st RBI licensed PPI (Prepaid Payment Instrument) to launch cash withdrawal using a RuPay-powered card from any ATMs across the country. The move came in after RBI permitted the non-bank licensed entities to enable cash withdrawals from the digital wallets. 

 

OmniCard users can withdraw cash from any ATM at their convenience with full security from frauds like card theft, card cloning, and PIN skimming as the withdrawal facility comes with high safety & secure features and protects the user from exposing their money and bank account details, an official statement said.

 

Commenting on the announcement, Nalin Bansal, Chief of Corporate, Fintech Relationships and Key Initiatives, NPCI stated, "We are happy to partner with OmniCard in this endeavour of creating a more expanded line of available payments experiences for the RuPay customers. Prepaid RuPay cards act as a boon in augmenting the customer's financial inclusion, security, and convenience.

 

Sanjeev Pandey, Co-Founder & CEO, OmniCard, said, “OmniCard provides a compelling alternative platform for users today to keep their bank account safe where life savings are stored from cyber frauds using digital wallet linked with Rupay Card and UPI where the user can store money as per his spending needs. Cash withdrawal is an attempt further to enable customer needs in case of unforeseen spending requirements. I would like to thank RBI and NPCI for their direction and support.”.

Source : Zeebiz