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Equitas SFB launches fintech accelerator programme ‘Equitech’
- The programme, designed to scale-up, will help fintechs to curate their products and define a go-to-market strategy.
- Chennai-based lender said, Equitech will help fintechs to reach the next level and take its product to the market in a more targeted manner.
GIFT City, India Insurtech Association ink pact to promote fintech in insurance space
- India Insurtech Association (IIA), a not-for-profit body promoting tech-driven insurance ecosystems in India inked a memorandum of understanding (MoU) with International Financial Services Centre at GIFT City, (GIFT-IFSC) to collaborate on building thought leadership in the field of insurance and promoting GIFT City for Indian and foreign insurance companies.
- To raise awareness about GIFT IFSC, the collaboration will organise events, information series, seminars, and conferences.
RBL Bank selects AWS to accelerate AI efforts
- It will leverage Amazon Textract across the bank’s risk and operations to analyse documents
- RBL Bank has selected Amazon Web Services (AWS), an Amazon.com company, as its cloud provider.
Now, depositors can withdraw up to ₹5 lakh if bank placed under moratorium
- Parliament has given its approval to a Bill to amend the Deposit Insurance and Credit Guarantee Corporation Act, 1961.
- The amendment to the Act will enable depositors to access their deposit up to sum prescribed under deposit insurance, which is ₹5 lakh, in case the bank is placed under moratorium, and that too within 90 days.
- As of now, depositors have to wait for liquidation or passage of resolution to get the benefit of deposit insurance
Central Bank of India enters into strategic co-lending partnership with Dhanvarsha Finvest
- Central Bank of India (CBoI) has entered into a strategic co-lending partnership with Dhanvarsha Finvest Ltd (DFL) to offer loans against gold ornaments under priority sector to Micro, Small and Medium Enterprise (MSME) borrowers at competitive rates.
Under this partnership, DFL will originate and process loans against gold ornaments as per jointly formulated credit parameters and eligibility criteria and CBoI will take into its book 80 per cent of the gold loans under mutually agreed terms, as per the public sector bank’s stock exchange filing.
Dhanvarsha Finvest is a BSE-listed non-banking finance company providing credit to the MSME sector. It has branches in Maharashtra, Delhi NCR and Madhya Pradesh.
Karnataka Bank empaneled as ‘Agency Bank’ for government business
- Karnataka Bank is empaneled by the Reserve Bank of India (RBI) to act as an ‘Agency Bank’ to facilitate transactions related to the government businesses.
- Bank can now undertake revenue receipts and payments on behalf of the Central/State governments, pension payments and collection of stamp duty charges
UCBs: RBI may nix norm to constitute Board of Management
The Reserve Bank of India (RBI) may do away with the stipulation that requires Urban Co-operative Banks (UCBs) to constitute a Board of Management (BoM) as the September 2020 amendment to the Banking Regulation Act, 1949, gives the central bank full control over their functioning.
Background:
- Before this amendment, UCBs were under the dual control of the RBI and respective State governments or Central government (in the case of multi-state cooperative banks), constraining timely regulatory action against weak banks.
- To address the vexed issue of dual control, the central bank had, in December 2019, issued a circular, directing UCBs to constitute BoM, in addition to the Board of Directors.
- As per this circular, the RBI has powers to remove any member of BoM and/ or the CEO if the person is found to be not meeting the criteria prescribed by it, or acting in a manner detrimental to the interests of the bank or its depositors or both. Further, it can also supersede the BoM if its functioning is found unsatisfactory.
December 2019 Circular:
The central bank’s December 2019 notification directs every UCB with deposit size of ₹100 crore and above to put in place a BoM. As of March-end 2020, of the 1,539 UCBs in the country, 663 fell under this category.
The BoM (excluding CEO) should have a minimum of five members, and the maximum number of members should not exceed 12.
RBI extends on-tap TLTRO scheme till December 31
The Reserve Bank of India (RBI) has extended the on-tap targeted Long Term Repo Operations (TLTROs) scheme by three months till December 31.
- The RBI had, on October 9, 2020, first announced that it would conduct on tap TLTRO with tenors of up to three years for a total amount of up to ₹1-lakh crore at a floating rate linked to the policy repo rate. The scheme was available up to March 31, 2021.
Liquidity availed by banks under the scheme has to be deployed in corporate bonds, commercial papers, and non-convertible debentures issued by the entities in five specific sectors.
- This scheme was further extended to stressed sectors identified by the Kamath Committee in December 2020 and bank lending to NBFCs in February 2021.
- The liquidity availed under the scheme can also be used to extend bank loans and advances to these sectors.
Investments made by banks under this facility is classified as held to maturity (HTM), even in excess of 25 per cent of total investment permitted to be included in the HTM portfolio.
All exposures under this facility will also be exempted from reckoning under the large exposure framework (LEF).
RBI gives banks 3 more months to comply with new rules on opening current accounts
The Reserve Bank of India has given banks three more months, till October 31, to implement the new rules on opening current accounts.
- This comes after thousands of small businesses across the country raised a cry after their current accounts were frozen on Monday, as banks rushed to comply with the RBI directive.
Background:
In August 2020 an RBI directive had said that banks cannot open current accounts for customers who have availed themselves of cash credit (CC) or overdraft (OD) from the banking system
Cash Credit : A cash credit loan is a cash loan given to a company to meet its working capital requirements. It is a short-term source of finance with a tenure of up to 12 months.
- A cash credit loan allows a company to withdraw money from a bank account. You can withdraw as many times, but up to its withdrawal limit.
Overdraft account is a type of account in which you can withdraw amount even if there is no fund in your account.
- The bank sanctions a specific limit and your account can go in negative up to that limit. You have to pay interest only on the amount taken as loan. Since it is a current account, you can make as many transaction as you want. You have to pay interest on the amount which is due by the end of the day.
Besides maintaining cash credit/overdraft account with the lead bank in the consortium, businesses with pan-India operations also used to have relationships with other banks with either a strong presence in a specific geographical area or offering superior product/services.
But concerns over diversion of funds by borrowers via accounts outside the consortium prompted the RBI to clampdown on opening of CC/OD accounts. This was aimed at enforcing credit discipline amongst the borrowers as well as facilitating better monitoring by the lenders
RBI approves re-appointment of Prakash Chandra as Non-Executive Chairman of RBL Bank
- The Reserve Bank of India has approved the re-appointment of Prakash Chandra as Non-Executive (Part Time) Chairman of RBL Bank with effect from August three for a three-year period.
Limited Liability Partnership (Amendment) Bill 2021
The Limited Liability Partnership (Amendment) Bill cleared by the Lower House seeks to decriminalize certain provisions and improve ease of doing business. LLP is a preferred legal form among start-ups. There are over 200,000 LLPs in the country.
- The idea is to reduce penal provisions in LLP Act from 24 to 22 and to decriminalize 12 provisions.
Union government paid Rs. 7.03 trillion in fuel subsidies since 2011-12
The Union government has paid Rs. 7.03 trillion in fuel subsidies since 2011-12, minister of state for petroleum and natural gas, Rameswar Teli said in a reply in Lok Sabha.
- The Budget Estimates for F.Y. 2021-22 for LPG & Natural Gas (NG) subsidy is Rs. 12,995 crores
India had 28.74 crore LPG consumers as on 1 January 2021, with the Pradhan Mantri Ujjwala Yojana, a government programme that aims to provide free cooking gas connections to poor families, increasing India’s LPG coverage to 99.5% on 1 January this year from 61.9 % as on 1 April 2016.
UNICEF and Facebook partner for online safety for adolescents and children
UNICEF India and Facebook on Monday launched a one-year joint initiative on ending violence against children, with a special focus on online safety.
- The partnership seeks to create a safe environment for children, online and offline.
- This partnership will include a nationwide social media campaign, and capacity building for 100,000 school children on online safety, digital literacy, and psychosocial support.
Ease of doing business: Maadhyam portal in works for swift nod to proposals
In what may further the ease of doing business in India, the government is working towards the launch of a digital platform 'Maadhyam'--a National Single Window System--to allow investors to identify and apply for various pre-operation clearances required for starting business in the country.
- The Department for Promotion of Industry and Internal Trade’s (DPIIT’s) had planned to launch the portal on 15 August, but it is currently in a testing phase, with the one of the biggest challenges being coordination with multiple stakeholders involved.
- The Maadhyam platform will do away with the need for multiple applications across various portals.
Govt mobilizes Rs 31,290 crore from Sovereign Gold Bond Scheme: FM
The government has collected Rs 31,290 crore from Sovereign Gold Bond (SGB) Scheme since its launch in 2015, Finance Minister Nirmala Sitharaman informed Parliament on Monday.
- With the main objective to develop an alternate financial asset and as an alternative to purchasing/holding of physical gold, the SGB Scheme was notified by the Government of India on November 5, 2015
Finance Minister said these bonds are issued on payment of Indian rupees and is denominated in grams of gold.
- Bonds are issued on behalf of the Government of India by RBI, and have a sovereign guarantee.
- The bonds are restricted for sale to resident Indian entities. The investment limits are presently 4 kgs per fiscal year, for individuals and Hindu Undivided Family (HUF) and 20 kgs per fiscal year for trusts and similar entities.
- Interest payable on these bonds are half-yearly and are at the rate of 2.5 per cent per annum.
- Interest on the bonds is taxable as per the provisions of the Income Tax Act. The capital gains tax arising on redemption of SGB to an individual has been exempted.
Meanwhile, the Sovereign Gold Bond Scheme 2021-22 Series V or the fifth tranche opened for subscription from Monday till August 13 with a settlement date of August 17, 2021.
- The issue price of the bond during the subscription period has been fixed at Rs 4,790 per gram.
Digital transactions grew 80% in last 250 days: Razorpay report
The financial solutions company on Monday released the ninth edition of ‘The (Covid) Era of Rising Fintech’ report with insights about digital payments in the last 500 days up till August 6, 2021.
August 6 marked 500 days of the pandemic since the national lockdown was first announced, starting March 25, 2020. The report based on transactions held on Razorpay platform between the first 250 days (March 25, 2020 to November 29, 2020) and the next 250 days (November 30, 2020 to August 6, 2021).
The report provides a detailed view of the evolving FinTech ecosystem, the digital spending patterns of consumers and an analysis of how different sectors and payment modes performed during this time, when businesses and life were hit by Covid, the company said.
Businesses, especially from tier-2 and tier-3 cities have been a major boost for digital payments exhibiting a growth of 40 per cent from the first 250 days to the next 250 days.
Affordable payment options such as Buy Now Pay Later (BNPL) have seen an increased preference which is expected to rise and increase transactions for SMBs, the report said.
