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Economy Current Affairs
Economy Current Affairs October 4th Week 2017
Author : Admin
Category : Economy Current Affairs
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Economy Current Affairs October 4th Week 2017

1. Linking Aadhaar number to bank accounts is mandatory, says RBI.

The Reserve Bank of India on Saturday clarified that linkage of Aadhaar number to bank account is mandatory. The RBI`s clarification came a day after it was reported that the Central bank had not issued any instruction regarding mandatory linking of the biometric-based identity number with bank account.

The RBI in its clarification said: "RBI clarifies that linking Aadhaar to bank accounts is mandatory. Some news items have appeared in a section of the media quoting a reply to a Right to Information Act application that Aadhaar number linkage with bank accounts is not mandatory."

"The  Reserve Bank clarifies that, in applicable cases, linkage of Aadhaar number to bank account is mandatory under the Prevention of Money -laundering  (Maintenance of Records) Second Amendment  Rules, 2017 published in the Official  Gazette on June 1, 2017. These Rules have statutory force and, as such, banks have to implement them without awaiting further instructions," the RBI said.

On Friday, it was reported that the central bank had not made the linking of the two documents mandatory. The reports were based on an RTI application  which was filed by a news website.
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According to reports, the RBI in its respose to the RTI application said: "The Government has issued a Gazette Notification GSR 538(E) dated 1 June 2017 regarding Prevention of Money laundering (Maintenance of Records) Second Amendment Rules, 2017, inter-alia, making furnishing of Aadhaar (for those individuals who are eligible to be enrolled for Aadhaar) and permanent number (PAN) mandatory for opening a bank account. It may be noted that Reserve Bank has not yet issued an instruction in this regard." The report also suggested that the central bank has not has not filed any petition with the Supreme Court on seeking permission of linking the Aadhaar with bank accounts.

This year in June, the government had made Aadhaar mandatory for opening bank accounts as well as for any financial transaction of Rs 50,000 and above. The government had issued a notification, saying:

"Existing bank account holders have been asked to furnish the Aadhaar number issued by the Unique Identification Authority of India (UIDAI) by December 31, 2017, failing which the account will cease to be operational."
 
2. SBI launches ‘2nd SBI Digital Hackathon’ Digitize For Bank.
Country’s largest lender State Bank of India recently launched its second edition of its Hackathon – Digitize For Bank (#D4B2017) at the hands of DMD & CIO of SBI, Mrutyunjay Mahapatra.

Digitize for Bank (#D4B2017) presented by SBI Collaborative Innovation Centre (CIC) is a curated Digital Hackathon on 4 use cases across “Cognitive” theme. They are: Facial Recognition, Signature Recognition, Voice based Authentication and Cheque Truncation Value Enhancers.

Today, Banks face several challenges like identity fraud, problems with signature validation, and lack of multi-form authentication.

Sudin Baraokar, Head Innovation, SBI opines on this occasion, “D4B2017 will leverage digital technologies to automate processes, identify patterns, improve efficiency and help the bank in fraud detection, spotting outliers, reduce validation errors and help simplify and ease customer experience.”

In the phase 1, participants can register their idea during October 11-27, 2017 followed by Hackathon which will start from 1st November 2017 and ends on 12th November.

The finalists will be called for final interview and can showcase their product between November 20-29, 2017. The winners will be announced on 30th November 2017 and the winning teams will get an opportunity for incubation and acceleration with SBI.
 
3. IndusInd Bank Launches m-wallet with MobiKwik.
IndusInd Bank Launches m-wallet with MobiKwik
IndusInd Bank, in association with MobiKwik, today announced the launch of a co-branded wallet ‘IndusInd MobiKwik’ that allows its customers to pay at the MobiKwik merchant network using their accounts, with a ’Direct Debit Feature’

The direct debit feature will allow IndusInd Bank account holders to link their accounts just once and pay using the co-branded app as and when required, thereby eliminating the need to load the MobiKwik prepaid wallet separately.

“The transaction is authorised with an additional factor of authentication, in line with mobile banking guidelines,” a release said.

Ritesh Raj Saxena, Head-Savings, Digital and Payments Business, IndusInd Bank, said the partnership with MobiKwik is to leverage the synergies in the payments business between banks and fintechs, to bring the customers the best of both worlds in a seamless fashion.
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“The latest PPI guidelines of RBI reinforce the roadmap for wallet operators and partnerships with banks...,” he said.

As on September 30, private sector lender IndusInd Bank had 1,250 branches and 2,146 ATMs spread across 690 locations in the country.

Upasana Taku, co-founder, MobiKwik said this special wallet created by MobiKwik will enable 10 million IndusInd Bank customers to “easily perform digital payments by seamlessly transferring money from their bank accounts to the merchant, at the press of a button without loading money in their wallet“.

MobiKwik app is a leading mobile payment platform with a network of over 20,00,000 direct merchants and 65 million plus users.
 
4. India and Asian Development Bank Sign $300 Million Loan.
India and Asian Development Bank Sign $300 Million Loan
The Asian Development Bank and the Government of India signed a $300 million loan today to continue a series of fiscal reforms in the State of West Bengal to improve the quality of public service delivery. 

The Second West Bengal Development Finance Program targets a further increase in public investment through reduction of unproductive expenditure, and savings from efficiencies in revenue collections. The Program will build on earlier intervention under Phase I of the project through the $400 million Program that targeted a comprehensive fiscal consolidation program in the state. 

“The Program aims to further deepen the reforms with focus on expenditure rationalization, improvement in revenue administration, and facilitation of more private investment in the state” said Mr. Sameer Kumar Khare, Joint Secretary, Department of Economic Affairs, Ministry of Finance who signed the loan on behalf of the Government of India. 

“The new Program will create the fiscal space necessary to sustain higher public investment in the State which could put the state’s finances on a balanced and sustainable path,” said Mr. Kenichi Yokoyama, ADB Country Director for India, who signed for ADB. The program agreement was signed by Mr. Parwez Ahmad Siddiqui, Secretary, Finance Department, Government of West Bengal. 

ADB’s first Program focused on augmenting public investments that reached almost 1.3%, as a percentage of gross state domestic product, in FY2016 from 0.5% in FY2012 while the fiscal deficit reduced to 2.2% from 3.4% in the same period. The new Program will not only target public investment but would also support private investments more directly by creating an infrastructure facility to support project preparation, development, and appraisal, with emphasis on public-private partnerships in health and education. It also seeks to simplify the registration and licensing procedure for micro, small and medium enterprises. 
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Spread over two years, the Program will also carry forward reforms such as linking medium term expenditure plans to actual budgets, supported by strengthening internal audit system, and enhancements in the integrated financial management system (IFMS). Other activities under the program include improved tax monitoring and continued support for information technology systems in strengthening tax and land administration. 

Capital outlay as a percentage of gross state domestic product is expected to rise to 2.2% by FY2022 under the second program, with improved budget allocations geared toward development expenditure. 

Accompanying the loan is a technical assistance grant of $500,000 to strengthen key institutions responsible for carrying out fiscal management reforms in the state.
 
5. Reserve Bank of India Slaps Rs2-crores Penalty on IDFC Bank.
The Reserve Bank of India (RBI) on Tuesday slapped a Rs6 crore penalty on Yes Bank Ltd for breaching its rules on classifying non-performing assets and failing to report a security incident involving its ATMs on time. Separately, RBI also imposed a Rs2 crore penalty on IDFC Bank Ltd for breaching regulations on giving loans.

In a notification, RBI said Yes Bank violated the Income Recognition Asset Classification (IRAC) norms on dealing with assessment of bad loans as of March-end 2016. Yes Bank was one of three private sector lenders which had reported a sharp divergence between their asset quality classification and provisioning for 2015-16, and what the RBI deemed necessary.

In its annual report for 2016-17, the bank said its bad loan classification of Rs748.9 crore at the end of March 2016 varied from that of RBI to the tune of Rs4,176 crore.

RBI’s bad loan assessment was 558% more than what Yes Bank had reported.

RBI also said Yes Bank failed to report a cyber-security attack on its ATM network within the prescribed timeframe.

Card data of 3.2 million users was stolen between 25 May and 10 July 2016 from a network of Yes Bank ATMs managed by Hitachi Payment Services Pvt. Ltd, but it was only in September that year that banks and payments services providers became aware of the extent of the breach, Mint reported on 20 October 2016.
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“The statutory inspection of the bank with reference to its financial position as on March 31, 2016 revealed, inter alia, violations of various regulations issued by RBI in the assessment of Non-performing Assets (NPAs). A cyber-security incident involving ATMs of the bank was also not reported by the bank within the prescribed timeframe,” said RBI in its notification. 

Phone calls to a Yes Bank spokesperson had not elicited a response at the time of going to press.

In the case of IDFC Bank, RBI said the bank failed to comply with the regulations pertainting to sanction/renewal of loans and advances.

“The status report of the bank based on its financial position as on December 31, 2016, revealed, inter alia, non-adherence with certain directions pertaining to sanction/renewal of loans and advances,” the notification said.

“This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers,” it added.


 

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