RBI :- January 2019 Current Affairs ( india)

            Important Banking News  RBI

RBI Allowed one-time restructuring of loans to MSME sector
>>Reserve Bank of India allowed a one-time restructuring of existing debt up to Rs. 25 crore for the companies which
have defaulted on payment but the loans given to them have continued to be classified as standard assets, The
decision will help the micro, small and medium enterprises (MSMEs) which are facing cash crunch in the wake of
demonetisation and GST implementation.

RBI issued fresh guidelines on limiting the customer liability in fraudulent PPI transactions
>>Reserve Bank of India has issued fresh guidelines on limiting the customer liability for unauthorised electronic
payments involving Prepaid Payment Instruments (PPIs). RBI stated that, the rules are applicable to all authorised
non-bank PPI issuers such as Paytm, Mobikwik, PhonePe and Oxigen, among others. In case of third-party breach,
the customer will not lose any money if reported within three days. Fraud is reported within 4-7 days, then the
customer liablity is same as the transaction value, or Rs. 10,000 per transaction, whichever is lower. PPI issuer shall
credit the amount within 10 days.

Nepal’s central bank asked RBI to Make Rs. 200, Rs. 500, Rs. 2000 currency notes legal in country

>>The Nepal Rastra Bank asked the RBI to declare newly circulated Indian currency notes of denominations higher  

than Rs 100 legal tender in the country. As of now, the RBI has only allowed the circulation of Indian currency notes

of Rs 100 and less in Nepal and provides exchange facilities for bills of these denominations. The NRB stated that

country’s banking system, including banks, financial institutions and NRB, hold Indian currency denominations of Rs

500 and Rs 1,000 worth Rs 48 million.

Sri Lanka's Central Bank gets $400 million swap from RBI

>>Sri Lanka's Central Bank stated that the Reserve Bank of India has agreed to provide USD 400 million under a swap

arrangement to boost the island nation's reserves.

>>The RBI has agreed to provide the funds under its SAARC (South Asian Association for Regional Cooperation) Swap

Facility.

RBI makes changes in Gold Monetisation Scheme

>>The Reserve Bank of India has changed its Gold Monetisation Scheme (GMS), 2015 to make charitable institutions, 

Central Government, State Government or any other entity owned by Central Government or State Government 

eligible to deposit under the scheme.

>>The government had launched the GMS in 2015 to mobilise the gold held by households and institutions in the 

country. The scheme allows bank’s customers to deposit their idle gold holdings for a fixed period in return for

interest in the range of 2.25-2.50%.

RBI fined Rs. 1 crore fine on Bank of Maharashtra

>>The Reserve Bank of India imposed a Rs. 1 crore penalty on state owned Bank of Maharashtra (BoM) for non-

compliance of Know Your Customer guidelines and fraud classification norms.

>>This penalty has been imposed taking into account the failure of the bank to adhere to directions issued by the RBI.

Reserve Bank of India to inject Rs 37,500 crore through OMO in February

>>Reserve Bank of India will inject Rs 37,500 crore into the system through purchase of government securities in 

February to increase liquidity. RBI has been decided to conduct purchase of government securities under Open 

Market Operations (OMOs) for an aggregate amount of Rs 375 billion in the month of February 2019 through three 

auctions of Rs 125 billion each during the 2nd, 3rd and 4th week. There will be no auction during the first week due to 

the scheduled Monetary Policy Committee meeting

RBI released December 2018 Financial Stability Report

Overall assessment of systemic risks

>> India’s financial system remains stable, and the banking sector shows signs of improvement, even though the global 

economic environment and the emerging trends in financial sector pose challenges.

Financial Institutions: Performance and risks

>>Credit growth of scheduled commercial banks (SCBs) has improved between March 2018 and September 2018, 

driven largely by private sector banks (PVBs).

>>The asset quality of banks showed an improvement with the gross non-performing assets (GNPA) ratio of SCBs 

declining from 11.5 per cent in March 2018 to 10.8 per cent in September 2018.

>> Under the baseline scenario, GNPA ratio may decline from 10.8 per cent in September 2018 to 10.3 per cent in March

2019.

>> Analysis of the financial network structure for the period September 2017 – September 2018 reveals a shrinking 

inter-bank market and increasing bank linkages with asset management companies-mutual funds (AMC-MFs) for

raising funds and with NBFCs/Housing Finance Companies (HFCs) for lending.

Global and domestic macro-financial risks

>>The global growth outlook for 2018 and 2019 remains steady although the underlying downside risks have risen.

 >>Spill-over risk to emerging economies engendered by tightening of financial conditions in Advanced Economies,

protectionist trade policies and global geopolitical tension has significantly increased.

>>The gradual monetary policy normalisation in advanced economies (AEs) as also the uncertainty in global trade

regime may adversely affect capital flows to emerging markets (EMs) and exert upward pressure on EM interest rates

and corporate spreads.

>> On the domestic front, growth of gross domestic product (GDP) showed slight moderation in Q2:2018-19 while

inflation remains contained.

>>In domestic financial markets, structural shifts in credit intermediation and the evolving interconnectivity between

banks and the non-banks call for greater vigilance.