Banking and Financial Awareness – 30

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Agnihotri Ravindra

01 Aug, 2013

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1) The Reserve Bank of India (RBI) on 15 July 2013 imposed fines totaling Rs. 49.5 crore on 22 public and private sector banks for violating KYC/anti-money laundering norms. How many banks were given cautionary letters following an expose made by an online portal? – Seven (These seven banks are Citibank, Standard Chartered Bank, Barclays Bank, BNP Paribas, Royal Bank of Scotland, Bank of Tokyo Mitsubishi and State Bank of Patiala. A penalty of Rs. 3 crore each was imposed on 7 banks which were – State Bank of India (SBI), Bank of India, Canara Bank, Bank of Baroda, Central Bank of India, Indian Overseas Bank and Federal Bank. The United Bank of India, Lakshmi Vilas Bank, Punjab National Bank, Jammu & Kashmir Bank and Andhra Bank were slapped a penalty of Rs. 2.5 crore each. A penalty of Rs. 2 crore each was imposed on Yes Bank, Vijaya Bank, Oriental Bank of Commerce and Dhanlaxmi Bank. The other banks which were penalised by the RBI include Deutsche Bank, Development Credit Bank, ING Vysya Bank, Kotak Mahindra Bank and Ratnakar Bank)

  • 2) Which PSU bank became the first to take unusual step of publishing photographs of loan guarantors along with that of borrowers who have failed to repay their loans? – Allahabad Bank (Allahabad Bank on 9 July 2013 published photographs of three guarantors for a bank loan worth Rs. 314 crore which had not been repaid. PSU banks recently decided to apply pressure on loan guarantors along-side the defaulters. The move came on heels of 39 listed banks reporting a 36% rise in NPAs (non-performing assets) to Rs. 1,79,431 crore as on 31 March 2013)

  • 3) Union Govt. on 9 July 2013 hiked the import duty on sugar to 15% in an effort to help the sugar industry clear Rs. 9,000 crore cane arrears to farmers. What was the import duty on sugar before this move? – 10% (The duty of both raw and white (refined) sugar was raised to 15% as sugar imports had been putting pressure on domestic prices and have prevented millers from clearing cane arrears to farmers. The hike in duty was aimed at curbing import of sugar and improving the bearish sentiment in domestic market. This would, however, lead to rise in sugar prices across the country)

  • 4) Reserve Bank of India (RBI) on 8 July 2013 allowed NBFCs (non-banking finance companies) to access the external commercial borrowing (ECB) market. What was the category defined for such NBFCs by the RBI? – Asset Finance Companies or AFCs (This name was given as NBFCs involved in asset financing have been allowed to access the ECB market. The access is subject to certain conditions including availing of ECB under the automatic route with minimum average maturity of five years to finance import of infrastructure equipment for leasing to infrastructure projects)

  • 5) Which country will become 18th member of the Eurozone from 1 January 2014? – Latvia (Economy and finance ministers from the 28 European Union (EU) countries gave the final green light to Latvia on 9 July 2013 to join the eurozone on 1 January. Latvia emerged from a crisis in 2008-09 to become the fastest-growing economy of the EU, having posted GDP growth of more than five percent year-on-year in both 2011 and 2012. It should be noted that 28-member EU is a political entity and represents the interest of all of Europe whereas Eurozone is a currency block of 17 nations that have accepted Euro as a common currency. Not all countries of EU use Euro as currency (Britain still uses Pound as its currency))

  • 6) In the biggest foreign investment pullout from India, world’s largest steel maker ArcelorMittal on 17 July 2013 scrapped its $12 billion (Rs. 50,000 crore) steel plant proposed to be set up in an eastern state. Which state is this? – Odisha (ArcelorMittal blamed inordinate delays in acquiring land and securing iron ore linkages for scrapping this deal. This plant was proposed to be set up in Keonjhar district of the state)

  • 7) The govt. on 17 July 2013 approved a proposal to amend SEBI Law for providing more powers to crack down on ponzi schemes. What specific additional powers would be provided to SEBI after the amendments comes into effect? –

          a) Direct powers to carry out search and seizure operations and attachment of assets

          b) Power to seek information, such as telephone call data records, from any person or entities in respect of any securities transaction

    (Ponzi schemes are schemes which offer very heavy or extraordinary returns to investors and are generally not very transparent about their business operations)

  • 8) What will be the name of India’s first all-women bank, announcement for which was done in the Union Budget of 2013-14? – Bharatiya Mahila Bank – BMB (The present deadline for launch of this bank is 1 November 2013 and the bank is expected to have 39 branches across the country in its first year)

  • 9) Market regulator, the Securities and Exchange Board of India (SEBI), on 16 July 2013 said that PSUs (public sector undertakings) not fulfilling the minimum public holding, would face action. What are the salient features of minimum public holding norms of the SEBI?

    • All listed PSUs are required to fulfill the minimum public shareholding norms, after which the Government will hold a maximum of 90% shares, while the remaining will be owned by the general public, banks, financial institutions or mutual funds. 
    • Due date for this norm to be complied with is 8 August 2013
    • All private sector listed companies were required to achieve at least 25% public shareholding by 3 June 2013 (SEBI had taken action against the promoters and directors of 105 non-compliant companies
  • 10) First major economic reform was announced in China on 19 July 2013 since Xi Jinping became the President in March 2013. What is this major economic reform? – Decontrol of lending rates for banks with which banks in China will be able to set their own lending rates (This move was seen as a step to address the problem of economic slowdown and declining growth. Competitive bank lending rates is expected to result in lowering the cost of acquiring funds for business)

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    1. manoj kabiraj says:

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      thanks & regards
      manoj kabiraj

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    3. jeet says:

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