BANKING REGULATION ACT

BANKING REGULATION ACT 1949 a) Passed as the Banking Companies Act 1949 (came into force wef 16.3.49 and changed to Banking Regulation Act 1949 w.e.f. 01.03.66, it was made applicable to J and K in 1956 (and now applicable throughout India). b) The Act is not applicable to primary agricultural credit societies, cooperative land mortgage banks and non-agricultural primary credit societies.

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Functions of RBI

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BUSINESS NEWS (NATIONAL and INTERNATIONAL)

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ECONOMY NEWS

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SBI IN NEWS

Nepal SBI Bank has launched payment gateway to facilitate online trade and non-trade transactions between the Himalayan nation 'Nepal' and India. SBI's point of sales terminal (PoS) network is now the largest in the country. Announced the launch of mVisa, a mobile based payment solution. Will help customers make payments through by simply scanning the unique merchant Quick Response code. SBI has been asked by RBI to provide for losses on food grain related loans issued to Punjab Govt.. Meghalaya CM Mukul M Sangma inaugurated the first Digital Branch of State Bank of India in North East. SBI has launched a facility under 'SBI Quick: SMS and Missed Call Banking' service whereby the customer can choose to activate or deactivate their cards. SBI launched e-Smart SME, a working capital loan offering for sellers on ecommerce platforms. Myanmar has granted operating licenses to four Asian banks. Out if the 4, one is SBI. SBI has launched ‘Japan Desk’, a single window for inbound Japanese investments in India and vice-versa. This is a first-of-its-kind initiative that seeks to facilitate Japanese corporate looking to invest in India with banking and advisory services. SBI ties up with Taxi Aggregator, Uber to provide instant vehicle finance to “driver partners’ on the latter’s platform.

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RBI IN NEWS

Reserve Bank said the aggregate ceiling for foreign investors to invest in Ujjivan Financial Services will remain at 49%. RBI has authorised 29 agency banks to accept payments of Income Tax dues. Some of the agency banks authorized by RBI to collect tax include Allahabad Bank, UCO Bank, BOI, Canara Bank, SBI and its five associate banks, CBI, Dena Bank, HDFC Bank Ltd, OBC, Axis Bank Ltd, ICICI Bank and PNB. It has stated that entities from Pakistan, China, Bangladesh, Sri Lanka, Afghanistan, Iran and Hong Kong or Macau will require its prior approval to establish branch office or project office or liaison office in India. The Cabinet has given approval to the MoU between the Reserve Bank and the Central Bank of United Arab Emirates (UAE) on co-operation on currency swap agreement. As per RBI it will shortly issue Rs. 1,000 denomination bank notes in the Mahatma Gandhi Series of 2005 with the insert letter of 'R' in both the number panels. RBI released Non-Banking Financial Company -Account Aggregator Directions, 2016. This will put in place the regulatory framework to allow a new kind of Non-Banking Financial Company (NBFC), which could act as an account aggregator. The Net Owned Fund of such companies should not be less than 2 cr. Rs.. RBI issued revised Framework for Revival and Rehabilitation of Medium, Small and Micro Enterprises (MSMEs). The Framework has to be put in place by the banks not later than 30 June 2016.
Key Guidelines • It shall be applicable to MSMEs having loan limits up to 25 cr. Rs. including accounts under consortium or multiple banking arrangement (MBA). • It classifies three categories in Special Mention Account (SMA) to identify incipient stress in the accounts of MSMEs in case of Non-Performing Assets (NPAs): a) SMA-0: Principal or interest payment not overdue for more than 30 days but account showing signs of incipient stress b) SMA-1: Principal or interest payment overdue between 31-60 days c) SMA-2: Principal or interest payment overdue between 61-90 days RBI signed a Special Currency Swap Agreement with the Central Bank of Sri Lanka. Under the arrangement, the Central Bank of Sri Lanka can draw up to 700 million US dollars. To streamline monitoring of fraud cases in Urban Cooperative Banks, RBI said those involving Rs 1 cr. and above will have to be reported to its Central Fraud Monitoring Cell (CFMC) at Bengaluru within three weeks of detection. Fraud cases below Rs 1 cr. should be reported to respective regional offices of the Department of Cooperative Bank Supervision (DCBS) of the RBI. Reserve Bank Governor Raghuram Rajan has joined a task force of the World Economic Forum (WEF) to study the future of global financial system. The central bank has directed commercial banks to increase the provisioning by 2.5% every quarter so that by March 31, 2017, provisioning reached the 15% level — in line with sub-standard accounts. RBI has extended the $2 billion currency swap arrangement to SAARC nations till mid-November 2017. Under the arrangement, RBI is to offer swap arrangement up to an overall amount of $2 billion both in foreign currency and Indian rupee. RBI has signed a pact with Bank of Israel for Information Exchange and Banking supervision. RBI has decided to share FDI-related data with the country's intelligence agencies, Intelligence Bureau (IB) and Research and Analysis Wing (RAW), to check the black money entering India. Tata Consultancy Services (TCS) CEO and MD Natarajan Chandrasekaran, former Chief Secretary of Gujarat Sudhir Mankad and Bharat Narotam Doshi appointed as Non Officials Directors to the board of RBI for a tenure of 4 year. 

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The Hindu Editorial Vocabulary

That scarcity of water and its poor quality plague many parts of India this year is widely acknowledged today. Yet it has taken the Supreme Court to call out the reluctance of some States to declare a drought while simultaneously decrying the Centre’s recourse to “federalism” as an excuse to avoid taking up the matter with these States. In the judgment, delivered on a writ petition filed by the non-governmental organisation Swaraj Abhiyan, the Supreme Court concluded that Bihar and Haryana had been remiss in not officially declaring a drought despite clear indications of water scarcity; also that Gujarat was late in its declaration made in April 2016. The governments of Bihar and Haryana had argued that a declaration of drought was not necessary as rainfall deficits had eased in many districts by July 2015. But the Supreme Court has pointed out that many districts in these States have since progressively suffered rainfall deficits till as late as October 2015. The court also said that steps taken by State governments for irrigation and foodgrain production, or the presence of perennial rivers (which the Bihar government has submitted as a factor), alone cannot determine whether there is a drought-like situation or not. It has directed the Centre to take proactive steps in drought mitigation as well as in assessment, planning and relief as mandated by the Disaster Management Act, 2005. Drought is attributed to rainfall deficit in several States, suggesting that meteorological and natural factors are primarily responsible for the phenomenon. This, however, is an incomplete explanation. Water scarcity — in both surface and ground water — is also the result of failure to regulate water extraction, storage, wastage and patterns of use. The excessive use of deep borewells to extract groundwater has eroded the capacity of aquifers to replenish. Poor reservoir management has led to silt accumulation among other issues limiting water storage. Lack of water harvesting and over-irrigation owing to cropping choices and patterns have depleted water tables. Preparation for drought and ipso facto for a deficit in annual rainfall must go beyond mitigation and include steps to address this man-made scarcity. This cannot be done without a coordinated effort at all levels of government. The Supreme Court has directed the Centre to constitute a National Disaster Response Force, establish a National Disaster Mitigation Fund, formulate a National Plan on mitigation and crisis management, and standardise the methodology for declaring a drought. If one sets aside the question of whether this is another case of judicial overreach, it is difficult to deny that this is a truly landmark judgment. By laying down a broad framework for dealing with such situations and firmly emphasising that the government cannot absolve itself from acting decisively, the manner in which we deal with drought in the future may change markedly, and for the better.

Plague: ~ verb cause to suffer a blight Too much rain may blight the garden with mold / annoy continually or chronically call out ~ verb utter aloud; often with surprise, horror, or joy reluctance : a certain degree of unwillingness decry ~ verb express strong disapproval of federalism ~ noun the idea of a federal organization of more or less self-governing units recourse ~ noun act of turning to for assistance writ ~ noun (law) a legal document issued by a court or judicial officer remiss ~ adj failing in what duty requires deficit ~ noun the property of being an amount by which something is less than expected or required irrigation ~ noun supplying dry land with water by means of ditches etc perennial ~ adj lasting three seasons or more proactive ~ adj descriptive of any event or stimulus or process that has an effect on events or stimuli or processes that occur subsequently erode ~ verb become ground down or deteriorate aquifer ~ noun underground bed or layer yielding ground water for wells and springs etc replenish ~ verb fill something that had previously been emptied silt ~ noun mud or clay or small rocks deposited by a river or lake silt ~ verb become chocked with silt accumulation ~ noun an increase by natural growth or addition deplete ~ verb use up (resources or materials) mitigation ~ noun to act in such a way as to cause an offense to seem less serious the action of lessening in severity or intensity ipso facto ~ adv by the fact itself overreach ~ verb 1. fail by aiming too high or trying too hard 2. beat through cleverness and wit emphasise ~ verb 1. give extra weight to (a communication) 2. to stress, single out as important decisively ~ adv uncommon 1. with firmness absolve: declare (someone) free from guilt, obligation, or punishment.

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