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CBM Assignment 2

The document summarizes 20 major happenings in the Indian banking sector in recent years as reported by the Reserve Bank of India (RBI). Some key events include the RBI establishing digital payment security controls, purchasing government securities to support markets, including retail and wholesale trade as MSMEs for lending purposes, and introducing a framework for resolving stressed assets in banks. The RBI also penalized several banks for violations of compliance norms.

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Abhishek Chopra
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43 views

CBM Assignment 2

The document summarizes 20 major happenings in the Indian banking sector in recent years as reported by the Reserve Bank of India (RBI). Some key events include the RBI establishing digital payment security controls, purchasing government securities to support markets, including retail and wholesale trade as MSMEs for lending purposes, and introducing a framework for resolving stressed assets in banks. The RBI also penalized several banks for violations of compliance norms.

Uploaded by

Abhishek Chopra
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Commercial Bank Management - Assignment 2

Abhishek Chopra - PGP/24/063


Ishika Arya - PGP/24/149
Introduction
The RBI’s homepage has a number of important tabs in the main menu which switch to the
different pages that show important happenings around the country related to the world of banking.
Apart from these the landing page is also home to a slew of other link s related to Financial
Education and all news pertaining to banking systems in India.

Some of the major happenings in the past few years related to the banking sector are:

1. Digital Payment Security Controls


RBI has provided necessary guidelines for the regulated entities to set up a robust governance
structure and implement common minimum standards of security controls for digital payment
products and services. Given the scale at which it is growing it seems important that the foundation
of these rules will have a major impact on digital players.

2. Open Market Purchase of Government of India Securities under G-sec Acquisition


Programme (G-SAP 2.0)
As announced in the Governor's statement of June 04, 2021, the Reserve Bank will conduct open
market purchase of government securities of ₹1.2 lakh crore under the G-sec Acquisition
Programme (G-SAP 2.0) in Q2:2021-22 to support the market. The first purchase of Government
securities for an aggregate amount of ₹20,000 crore under G-SAP 2.0 will be conducted on July
08, 2021.

3. New Definition of MSMEs - Addition of Retail and Wholesale Trade


Ministry of Micro, Small and Medium Enterprises dated July 2, 2021, has decided to include Retail
and Wholesale trade as MSMEs for the limited purpose of Priority Sector Lending and they would
be allowed to be registered on Udyam Registration Portal

4. NHB-NABARD divestment
RBI sold its entire share in both the National Housing Board and the National Bank for Agriculture
and Rural Development to the Government of India for a total of 1,470 crores, allowing it to
terminate cross ownership in both of these organizations.

5. RBI Governor Elected


In December 2018, Shri Shaktikanta Das was elected as the Reserve Bank of India's (RBI) 25th
Governor. He is an acting member of the Finance Summit and a post graduate of St. Stephens
College.
6. E-Wallet Debit card
The RBI has given e-wallet companies like Paytm and FreeCharge special authority to issue debit
cards to its consumers, which is a significant step forward for digital wallet players and their
offerings.

7. Public Credit Registry


TCS and D&B were chosen by the RBI to manage its public credit register, which would house
all information on existing and new borrowers, enhancing transparency and information sharing
in the credit and lending sector.

8. Yes Bank restructuring


Following their inability to raise cash, the RBI imposed a moratorium on Yes Bank, and came up
with a plan to have SBI revive them with a 49 percent investment in the debt-ridden bank.

9. PNB Penalty
Following the INR 13,000 crore PNB scandal, the RBI issued circulars emphasizing the
importance of the necessity for competent audits as it transitioned from periodic to risk -based
auditing, as well as general guidelines when dealing with foreign currencies.

10. ILFS Disclosures


Following the ILFS crisis, the RBI issued a circular in April 2019 requiring all banks and AIFIs to
disclose their actual ILFS and ILFS entity holdings in their notes to accounts. This circular was
withdrawn a month later, in May.

11. Laxmi Vilas DBS Merger


RBI announces the draft of the amalgamation of Laxmi Vilas Bank along with DBS Bank. This is
the first time a forced merger is done of a Indian private bank with a bank with a foreign parent.

12. Axis Bank / Max Life Deal


The Axis Bank/Max Life deal, in which Axis will buy up to a 17 percent stake in the latter, was
rejected by the RBI. The RBI has requested that both parties review the deal, indicating that it is
involved in private party deals to ensure fairness.

13. ICICI Bank


Following allegations of a quid pro quo transaction while in a position of authority at ICICI Bank,
the Reserve Bank of India approved the termination of Chandra Kochhar's contract in December
2019.
14.Cryptocurrency
The Reserve Bank of India (RBI) issued a circular in April 2018 barring firms regulated by it from
providing services or engaging in any transactions involving cryptocurrencies and other
comparable currencies. This was a significant judgement in terms of bitcoin legislation and its
acceptance in India.

15. Voluntary Retention Route


The Reserve Bank of India (RBI) announced the voluntary Retention Route for foreign portfolio
investors investing in debt, which provided explicit and specific guidelines on the structure of the
investments as well as the minimum holding term.

16. Special OMO operations of GoI securities


To tackle a potential liquidity crisis in 2020, the RBI has scheduled special Open Market
Operations for the acquisition and selling of Government of India-backed securities worth INR
10,000 crore. This will ensure that the market remains stable. To avoid a cash crisis, the company
has a sufficient liquidity structure.

17. RBI E-Payment Index


The Reserve Bank of India is working on an e-payment index to assess the extent of digitization
and innovation in the country. This would allow for an assessment of current digital payment
adoption as well as the creation of future laws and initiatives.

18. NPA Resolution


The Reserve Bank of India (RBI) introduced a framework for the resolution of stressed assets in
2018, requiring banks to notify defaults within one day and come up with a resolution plan within
180 days. As a result, tighter restrictions have been enacted, as well as increased disclosure and
transparency.

19. RBI penalized HDFC


HDFC was henceforth penalized for INR 1Cr in 2020, as they failed to comply with the KYC
norms for around 39 customers. This would be the first time that RBI has penalized a private bank
and cracked down on infringements of the law.

20. Demonetization in 2016


The RBI issued a release stating the withdrawal of legal tender status of INR 500 and INR 1,000
bank notes. They further issued fresh INR 500 and INR 2,000 banknotes, known to be the
Demonetization initiative.

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