Welcome to Daily Banking Digest, your premier source for the latest news and insights on March 05, 2024, focusing on banking, the economy, and finance. Our platform offers a comprehensive overview of the day’s most critical financial stories, market trends, and economic developments. Whether you’re a professional in the financial sector, an investor monitoring market movement, or someone interested in staying informed about the economic landscape, Daily Banking Digest provides reliable, up-to-date information.
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Table of Contents
RBI directs IIFL Finance to halt gold lending, allows servicing of existing portfolio.
The Reserve Bank of India (RBI) has ordered IIFL Finance to cease all gold lending activities due to serious concerns with its gold loan portfolio, including deviations in gold purity and weight certification, breaches in Loan-to-Value ratios, and non-adherence to auction processes. The company’s gold loan portfolio accounts for 32% of its total assets under management, and the RBI’s restrictions will remain in place until a special audit is completed and adverse findings are rectified.
Key Points:
RBI’s Directive: – IIFL Finance is prohibited from sanctioning, disbursing, securitizing, or selling gold loans.
Gold Loan Portfolio Concerns: – Deviations in gold purity and weight certification at loan sanction. – Breaches in Loan-to-Value ratios. – Significant cash disbursals and collections exceeding statutory limits. – Non-adherence to standard auction processes. – Lack of transparency in customer account charges.
Impact on Customers: – RBI states that these practices adversely impact customer interests.
RBI’s Engagement and Corrective Action: – RBI has engaged with IIFL Finance’s management and auditors on deficiencies. – No meaningful corrective action has been taken.
Business Restrictions: – Restrictions imposed with immediate effect. – Restrictions will be reviewed after a special audit and rectification of findings.
Other Regulatory Actions: – RBI may initiate additional regulatory or supervisory actions.
IIFL Finance’s Gold Loan Portfolio: – Gold loans provided to salaried, self-employed, and MSME customers. – Portfolio has grown 35% year-on-year to ₹24,692 crore. – Accounts for 32% of total assets under management.
Financial Performance: – Net profit increased 30% to ₹490 crore. – Gross non-performing assets ratio for gold loans is 0.80%.
Market Reaction: – IIFL Finance shares declined 4% on BSE.
RBI approves merger of Fincare SFB with AU Small Finance Bank
The Reserve Bank of India (RBI) has approved the merger between Fincare Small Finance Bank Ltd. and AU Small Finance Bank Ltd., effective April 1, 2024. All branches of Fincare Small Finance Bank will operate as branches of AU Small Finance Bank from that date.
Key Points:
- Approval: RBI approved the merger between Fincare Small Finance Bank and AU Small Finance Bank.
- Effective Date: The merger will take effect on April 1, 2024.
- Branch Operations: All branches of Fincare Small Finance Bank will become branches of AU Small Finance Bank.
- Shareholder Approval: The merger received shareholder approval in November 2023.
- Board Approval: The bank’s board approved the merger in October 2023.
Indian Newspaper Society Appeals Government to Lift 5% customs duty on newsprint amidst global supply chain challenges.
The Indian Newspaper Society (INS) has appealed for the reconsideration of the 5% Customs Duty on Newsprint, citing the critical role of the print media industry in disseminating knowledge, aiding government communication, and maintaining trust in the face of online misinformation. The industry is facing challenges due to disruptions in the supply and pricing of Newsprint, including global geopolitical uncertainties, logistical complexities, and the depreciation of the Indian rupee.
Key Points:
- Critical Role of Print Media:
- Disseminates affordable knowledge
- Aids government communication
- Maintains trust amidst online misinformation
- Challenges Faced by Publishers:
- Disruptions in Newsprint supply and pricing
- Global geopolitical uncertainties
- Logistical complexities
- Depreciation of the Indian rupee
- Customs duties on Newsprint
- Impact of Global Events:
- Escalating conflicts in the Midwest
- Russia-Ukraine crisis
- Concerns in the Red Sea
- Financial Strain on Newspapers:
- Newsprint shortages
- Cancellation of confirmed orders
- Suspension of mill operations
- Increased import costs due to currency fluctuations
Cooperative sugar mills urge Centre to divert surplus sugar output to ethanol.
The National Federation of Cooperative Sugar Factories Ltd (NFCSF) has requested the government to permit the diversion of 18 lakh tonnes of surplus sugar for ethanol production. Sugar mills are experiencing financial difficulties due to restrictions on ethanol production imposed by the government. The industry argues that the surplus sugar should be utilized for ethanol production to alleviate the crisis.
Key Points:
Government Restrictions on Ethanol Production: – The government has banned the use of sugarcane juice or sugar syrup for ethanol production to ensure adequate sugar availability for domestic consumption. – The Centre has allocated 17 lakh tonnes of sugar for ethanol production for the entire season.
Surplus Sugar Production: – Due to an extended sugar crushing season and high extract rate, there will be an estimated 18 lakh tonnes of surplus sugar at the end of the season.
Industry Demand for Surplus Sugar Diversion: – NFCSF and sugar industry players in Maharashtra urge the government to allow the diversion of surplus sugar for ethanol production. – They argue that this will benefit millers and enable them to pay Fair and Remunerative Price (FRP) to farmers.
Consequences of Restrictions: – Restrictions on ethanol production and low MSP may force many sugar mills to close permanently from the next season.
Despite higher risk weights, banks’ credit card exposure up 31% y-o-y
Despite increased risk weights on unsecured loans, banks’ credit card exposure continues to grow rapidly, reaching ₹2.6 lakh crore in January 2024. While personal loans and bank credit to NBFCs have moderated, credit card growth remains strong. Banks are focusing on premium customers and higher spending rather than volume of card issuances due to higher capital requirements and stagnating revolve rates.
Key Points:
Growth in Credit Card Outstanding: – Credit card outstanding grew by 31.3% in January 2024, reaching ₹2.6 lakh crore. – Growth for FY24 so far has been 26.3%.
Impact of RBI’s Risk Weight Increase: – RBI increased risk weights on unsecured consumer loans, including credit card receivables, in November 2023. – This led to moderation in bank credit to NBFCs and personal loans.
Banks’ Focus on Premium Customers: – Banks are focusing on premium customers and higher spending due to higher capital requirements and stagnating revolve rates.
Stagnating Revolve Rates: – Revolve rates have plateaued post-pandemic due to better credit discipline and caution against higher interest rates. – Some cardholders are opting for lower-cost personal loans to repay credit dues.
Foreign Banks’ Performance: – Foreign banks saw a decline in their outstanding card balances in January 2024.
Ananya Birla’s Svatantra Microfin gets ₹1,930 crore investment from Advent and Multiples
Svatantra Microfin Pvt. Ltd., led by Ananya Birla, has secured an investment of ₹1,930 crore ($230 million) from Advent International and Multiples Private Equity. This investment marks the largest private equity investment in India’s microfinance sector. The combined entity, formed after Svatantra’s acquisition of Chaitanya India Fin Credit Ltd., will become one of the largest non-banking microfinance companies in India.
Key Points:
Investment: – Svatantra Microfin has received an investment of ₹1,930 crore ($230 million) from Advent International and Multiples Private Equity. – This is the largest private equity investment in India’s microfinance sector.
Combined Entity: – Upon completion of the transaction and merger with Chaitanya, the combined entity will be among the largest non-banking microfinance companies in India. – The current promoter group, led by Ananya Birla, will continue to hold a significant majority stake.
Vision and Goals: – Ananya Birla, Chairperson of Svatantra, aims to make the company the foremost and most impactful microfinance institution in India. – The investment will support Svatantra’s goal of creating a conducive environment for entrepreneurs who drive India’s growth.
Investor Perspectives: – Advent International believes the microfinance sector is crucial for financial inclusion in rural areas. – Multiples is committed to powering new possibilities and expanding Svatantra’s reach through product expansion, technology advancements, and enhanced analytics.
Advent’s Investment History: – Advent has been investing in India since 2007. – The firm has committed around $6 billion across 18 investments, including $1.2 billion in the financial services sector.
Multiples’ Investments: – Multiples has investments in Cholamandalam Finance, RBL Bank, Vastu, Veritas Finance, and Acko Tech, among others.
Flipkart launches UPI service in partnership with Axis Bank
Flipkart has launched its own Unified Payments Interface (UPI) offering in partnership with Axis Bank, marking its second fintech collaboration with the lender. The UPI service, currently available only to Android users, allows customers to make fund transfers and checkout payments using the Flipkart app. This move comes amid regulatory challenges faced by Paytm and the separation of PhonePe from Flipkart.
Key Points:
1. Flipkart UPI Launch: – Flipkart has launched its own UPI offering in partnership with Axis Bank. – The service is currently available only to Android users. – Customers can register for UPI with the @fkaxis handle and make fund transfers and checkout payments using the Flipkart app.
2. Regulatory Crisis and Market Opportunity: – The launch comes as Paytm faces regulatory challenges. – Flipkart’s rivals in the fintech space are using this opportunity to increase market share and acquire talent.
3. Separation from PhonePe: – The move comes over a year after PhonePe, the country’s UPI payments leader, separated from Flipkart.
4. Features and Benefits: – The UPI offering allows users to avail features for online and offline merchant transactions within and outside the Flipkart marketplace. – It introduces one-click and quick functionalities for recharges and bill payments. – Customers will get a convenient digital payment experience through its integrated checkout funnel.
5. Fintech Ventures: – Flipkart has previously ventured into the fintech space through Super.money, a platform where it holds a majority stake.
Google apologises to India over Gemini’s results on Modi, calls its own AI platform ‘unreliable’
Google has apologized to Prime Minister Modi after its AI platform, Gemini, generated controversial results about him. The Indian government has expressed concerns about the reliability of AI platforms and has announced that they will now require a permit to operate in India. The government has also issued an advisory to AI-led startups, emphasizing the need to label unverified information as potentially false.
Key Points:
Google’s Apology: – Google apologized to PM Modi for Gemini’s unreliable results.
Government’s Concerns: – AI platforms have been providing unsubstantiated, biased, and unverified results. – AI data is being released onto the public internet without proper testing or safeguards. – AI platforms apologize for providing unreliable information without facing consequences.
Government’s Actions: – AI platforms will now require a permit to operate in India. – AI platforms can be prosecuted under Indian IT and criminal laws for violations.
Advisory to AI-Led Startups: – Unverified information must be labeled as potentially false and error-prone.
Bond yields, FII action among 9 factors to impact D-Street movement this week.
Nifty ended the week with gains of 0.75%, led by banks, auto, and metals sectors. Key events and factors to watch in the upcoming week include US market performance, rupee-dollar movement, corporate actions, global macros, technical factors, FII/DII action, IPO activity, crude oil prices, and bond yields.
Key Points
- US Markets: US markets closed higher on Friday, providing a positive handover for Indian markets.
- Rupee Vs Dollar: The Indian rupee ended little changed on Friday, with a weekly gain of 0.04%.
- Corporate Action: Several corporate actions are scheduled this week, including EGMs, ex-dates, and record dates for stock splits and dividends.
- Global Macros: US and Eurozone PMI data, as well as Fed Chair Powell’s testimony, will be released this week.
- Technical Factors: Nifty’s primary trend remains positive, with support at 22,100 and resistance at 22,550.
- FII / DII Action: FIIs were net buyers on Friday, while DIIs were net buyers for the week.
- IPO Action: Seven IPOs are scheduled to launch this week, including three mainboard IPOs.
- Crude Oil: Oil prices traded sideways, with a decision on OPEC+ production cuts expected in early March.
- Bond Yields: Indian government bond yields ended the week steady, with the benchmark 10-year yield at 7.0572%.
India allows export of 30,000 tonnes of non-basmati white rice to Tanzania.
The Indian government has authorized the export of 30,000 tonnes of non-basmati white rice to Tanzania and 80,000 tonnes of broken rice to Djibouti and Guinea Bissau. These exports are permitted through the National Cooperative Exports Limited (NCEL) to meet the food security needs of these countries.
Key Points:
Export Authorization: – 30,000 tonnes of non-basmati white rice to Tanzania – 80,000 tonnes of broken rice to Djibouti and Guinea Bissau
Exporting Entity: – National Cooperative Exports Limited (NCEL)
Export Restrictions: – Non-basmati white rice exports are generally banned since July 20, 2023, but exceptions are made for specific countries.
Recipient Countries: – Tanzania (East Africa) – Djibouti (Northeast Africa) – Guinea Bissau (West Africa)
Previous Export Approvals: – India has previously allowed rice exports to Nepal, Cameroon, Cote D’ Ivore, Guinea, Malaysia, Philippines, and Seychelles.
NCEL Background: – Multi-state cooperative society – Promoted by leading cooperatives like AMUL, IFFCO, KRIBHCO, and NAFED
India permits 64,400 tonnes of onion exports to UAE, Bangladesh
The Indian government has authorized the export of 64,400 tonnes of onions to the UAE and Bangladesh through the National Cooperative Exports Ltd (NCEL). This decision comes despite an existing ban on onion exports, with the government allowing specific quantities to friendly nations based on their requests.
Key Points:
- Export Permission:
- 50,000 tonnes of onions permitted for export to Bangladesh
- 14,400 tonnes of onions permitted for export to the UAE
- Export Modalities:
- For Bangladesh, modalities to be worked out by NCEL in consultation with the Department of Consumer Affairs
- Export Restrictions:
- Onion exports are generally banned, but exceptions are made for friendly nations
- Government Measures to Control Prices:
- Ban on onion exports until March 31, 2024
- Sale of buffer onion stock at a subsidized rate
- Minimum export price (MEP) of USD 800 per tonne
- 40% export duty on onions
- Export Statistics:
- 9.75 lakh tonnes of onions exported between April 1, 2023, and August 4, 2023
- Top importing countries: Bangladesh, Malaysia, and the UAE
- Political Sensitivity:
- Onion is a politically-sensitive commodity
- NCEL:
- Multi-state cooperative society
- Jointly promoted by leading cooperative societies, including AMUL, IFFCO, KRIBHCO, and NAFED
RBI OKs interoperable payment system for internet banking transactions
The Reserve Bank of India (RBI) has approved the implementation of an interoperable payment system for internet banking transactions by the National Payment Corporation of India (NPCI) Bharat BillPay Ltd. This system aims to facilitate quicker settlement of funds for merchants and address challenges faced by the current system.
Key Points:
1. Interoperable Payment System for Internet Banking: – RBI has approved the implementation of an interoperable payment system for internet banking transactions. – The system is expected to launch during the current calendar year.
2. Challenges of the Current System: – Internet banking is a popular channel for online merchant payments. – The current system requires banks to integrate with each payment aggregator of various online merchants. – This integration process is complex and time-consuming. – Delays in payment receipt and settlement risks occur due to the lack of a payment system and rules.
3. Growth of Digital Payments in India: – Retail digital payments in India have grown significantly in recent years. – India accounts for 46% of the world’s digital transactions.
4. Success of UPI: – The Unified Payments Interface (UPI) has become India’s flagship payment system. – UPI’s share in digital payments reached close to 80% in 2023. – UPI transactions have increased from Rs 43 crore in 2017 to Rs 11,761 crore in 2023.
5. Evolution of UPI: – UPI has evolved to include new functions such as: – Offline payments through near field communication technology – Payments through feature phones – AI-based conversational payments
AU Small Finance Bank explores corporate tie-ups to engage more FPOs.
AU Small Finance Bank plans to expand its lending to farmers’ producer organizations (FPOs), which are gaining attention from major corporations like Adani Group, ITC, and Reliance. The bank aims to collaborate with these corporates to support FPOs and procure farm produce from them.
Key Points:
1. AU Bank’s FPO Lending Strategy: – Plans to increase stake in the farm sector by lending to FPOs. – Exploring partnerships with corporates that promote FPOs and procure farm produce.
2. Existing Partnerships and Support: – Tie-up with ITC to support 225 ITC-enabled FPOs. – Created 275 FPOs independently in western and central India. – Approved loans totaling Rs 72 crore to 500 FPOs, with Rs 56 crore disbursed.
3. FPOs and Their Benefits: – Platforms for small and marginal farmers with land holdings less than 2 hectares. – Facilitate access to improved farm technology and markets. – Help reduce production costs through economies of scale.
4. Government Support for FPOs: – Central scheme launched in 2020 with a budget of Rs 6,865 crore. – Aim to form and promote 10,000 FPOs across India by 2024.
5. Historical Challenges for FPOs: – Limited government support before 2019 led to low survival rates.
High gap between credit, deposit growth to impact loan sales, NIMs: Report
The widening gap between credit growth and deposit growth rates in India is expected to impact banks’ future loan sales and net interest margins. The liquidity coverage ratio (LCR) has declined, particularly among private banks, due to the slower deposit growth. The credit-to-deposit ratio has increased, with private banks having a higher ratio than public sector banks.
Key Points:
- Credit Growth: Credit off-take grew at 20.3% in the current fiscal, while deposits grew at 13.6%.
- Deposit Growth: Deposit growth has been slower than credit growth, leading to a lower liquidity coverage ratio (LCR).
- LCR Decline: Private banks, including HDFC Bank, ICICI Bank, and Axis Bank, have reported lower LCRs than public sector banks.
- Credit-to-Deposit Ratio: The credit-to-deposit ratio has increased to around 81, with private banks having a higher ratio of 94%.
- Loan Composition: Retail loans constitute 34% of total credit outstanding, followed by industry (29%) and services (24%).
- Liquidity Tightness: The merger of HDFC twins has further tightened liquidity in the system.
- LCR Implementation: The LCR was implemented in phases by the Reserve Bank, reaching 100% in January 2019.
- CD Ratio Pressure: The continued lag in deposit growth is expected to put pressure on the credit-to-deposit ratio.
‘RBI likely to take delivery of maturing $5 bn FX swap next week’
The Reserve Bank of India (RBI) is expected to take delivery of a $5 billion foreign exchange (forex) swap maturing next week due to adequate dollar inflows and improved rupee liquidity. The swap, undertaken in March 2022, would inject around 400 billion rupees into the system.
Key Points:
- Dollar Inflows: Foreign inflows into the debt market have boosted dollar liquidity, with $3.8 billion invested in bonds in February.
- Rupee Liquidity: Rupee liquidity has tightened, with the banking system liquidity deficit standing at 400 billion rupees.
- Forward Premiums: March forward premiums are at 4.50 paisa a week, indicating ample dollar liquidity.
- Cash Outflows: Direct tax payments are expected to create a sustained deficit in the system.
- RBI’s Options: The RBI can either take delivery of the swap or roll it over, but the former is seen as more likely.
- Liquidity Management: Taking delivery of the swap will help the RBI manage domestic liquidity.
- Improved Situation: Compared to October 2022, the current liquidity situation is more comfortable, making the swap maturity less of a concern.
Moody’s raises India growth forecast to 6.8% on stronger economic data.
Moody’s has revised India’s growth forecast for 2024 to 6.8%, citing strong economic data and fading global headwinds. The agency expects India to remain the fastest-growing G-20 economy, with GDP growth estimated at 6.4% in 2025.
Key Points:
- Growth Forecast: Moody’s raises India’s 2024 growth forecast to 6.8% from 6.1%.
- Economic Performance: India’s real GDP expanded 8.4% in Q4 2023, resulting in 7.7% growth for the full year.
- Growth Drivers: Capital spending and strong manufacturing activity contributed to robust growth in 2023.
- Global Headwinds: Fading global headwinds will support India’s growth prospects.
- High-Frequency Indicators: Strong GST collections, rising auto sales, and double-digit credit growth indicate resilient urban consumption demand.
- Capital Expenditure: The interim budget targets a 16.9% increase in capital expenditure allocation for 2024-25.
- Policy Continuity: Moody’s expects policy continuity after the general election, with a focus on infrastructure development.
- Private Investment: Private industrial capital spending is expected to pick up due to supply chain diversification and government incentives.
- Election Year: 2024 is an election year for several G-20 countries, which can influence domestic and foreign policies.
- Geopolitical Dynamics: Geopolitical realities will shape international trade, capital flows, and migration trends.
At 4.3% in FY25, inflation may head lower than RBI forecast, estimates CMIE.
The Centre for Monitoring Indian Economy (CMIE) predicts a decline in inflation for two consecutive years. Inflation is projected to fall to 4.3% in 2024-25 from 5.4% in 2023-24, lower than the Reserve Bank of India’s (RBI) estimate of 4.5%. This decline is attributed to lower food inflation, particularly in vegetables.
Key Points:
Inflation Forecast: – Inflation is expected to decline to 4.3% in 2024-25 from 5.4% in 2023-24.
Food Inflation: – Food and beverages inflation is projected to fall to 3.4% in 2024-25, driven by lower food inflation and uninterrupted supply of vegetables.
Clothing and Footwear Inflation: – Clothing and footwear inflation is expected to moderate to 4.1% in 2024-25, down from 4.8% in 2023-24.
Housing Costs: – Housing costs are projected to increase, with inflation reaching 4.5% in 2024-25, the highest since 2019-20.
Pan, Tobacco, and Intoxicants Inflation: – Inflation in pan, tobacco, and intoxicants is expected to rise to 4.7% in 2024-25, the highest increase among components.
Core Inflation: – Core inflation (excluding food, fuel, and light) is projected to reach 5% in 2024-25, driven by rising prices in the miscellaneous group.
Miscellaneous Group Inflation: – Inflation in the miscellaneous group (household goods, health, transport, etc.) is expected to increase to 5.5% in 2024-25.
Indian app developers meet Ministers to resolve Google delisting issue.
Indian app developers have appealed to the government to intervene and restore their apps on the Google Play Store after Google delisted them for violating its billing policy. The developers argue that Google should await the final order of the Competition Commission of India (CCI), which is currently hearing the matter. The government has met with both the developers and Google to discuss the issue.
Key Points:
Government Intervention: – Indian app developers have urged the government to intervene and restore their apps on the Play Store. – The government has met with both the developers and Google to discuss the matter.
CCI Hearing: – The matter is pending before the CCI. – Developers argue that Google should await the CCI’s final order before taking action.
Google’s Delisting Action: – Google delisted nearly 200 apps last week for violating its billing policy. – Only a handful of apps have been reinstated after complying with Google’s policy.
Developers’ Concerns: – Developers accuse Google of discriminatory pricing and abusing its dominant position. – They argue that the delisting action prevents them from onboarding new customers.
Industry Body’s Response: – The Alliance of Digital India Federation (ADIF) has expressed concern about the delisting action. – ADIF advocates for fair policies and a level-playing field for businesses.
SBI moves Supreme Court, seeks more time to furnish electoral bond details.
State Bank of India (SBI) has requested the Supreme Court to extend the deadline for submitting details of electoral bonds until June 30, 2024, citing operational difficulties. The bank claims that the data is stored in separate silos, making it a labor-intensive task to reconcile and disclose donor information.
Key Points:
Operational Difficulty: – SBI states that details of electoral bond purchases and redemptions are not maintained centrally. – Donor details were stored in sealed covers at designated branches and transferred to the Mumbai main branch. – Political parties had to maintain designated accounts at authorized branches for depositing and redeeming bonds.
Laborious Process: – To disclose donor details, bond issuance dates must be cross-referenced with individual purchases. – Redeemed bonds were deposited in sealed envelopes at the Mumbai main branch. – A total of 44,434 information sets would need to be decoded, compiled, and compared.
Timeline: – The Supreme Court had initially set a deadline of March 6 for SBI to submit the details. – SBI argues that the three-week timeline is insufficient to complete the task.
Supreme Court Ruling: – On February 15, the Supreme Court quashed the electoral bonds scheme, citing concerns about transparency and potential quid pro quo arrangements. – The court held that the scheme violated citizens’ right to information.
India to lower security deposit to 1% for farmers at WDRA-accredited warehouses
The government has launched a digital platform, ‘e-Kisan Upaj Nidhi,’ to provide farmers with post-harvest loans against their produce stored in accredited warehouses. The security deposit charges for farmers using these warehouses will be reduced from 3% to 1%. This initiative aims to encourage farmers, particularly small farmers, to utilize warehouses, enhance their income, and make agriculture more attractive.
Key Points:
Security Deposit Reduction: – Security deposit charges for farmers using WDRA-registered warehouses will be reduced from 3% to 1%.
e-Kisan Upaj Nidhi: – Digital gateway launched as a single-point window for farmers to obtain post-harvest loans against produce stored in WDRA-registered warehouses. – Loans provided against electronic Negotiable Warehouse Receipts (e-NWRs).
Warehousing Infrastructure: – Only about 5,500 out of an estimated 1 lakh agri-warehouses in India are registered with WDRA. – Government made registration compulsory for warehouses leased to the Food Corporation of India (FCI).
Technology Emphasis: – Minister emphasizes the need for technology in modernizing Indian agriculture to enhance farmers’ income. – Farmers can easily obtain loans at 7% interest rate without collateral through ‘e-Kisan Upaj Nidhi.’
Cooperative Sector: – World’s largest grain storage capacity program launched in the cooperative sector. – WDRA asked to register godowns established by cooperatives without fees.
Warehouse Modernization: – Need to modernize warehouses operated by state agencies like FCI and CWC.
Negotiable Warehouse Receipt System: – WDRA enables banks to improve their lending portfolio and enhance interest in lending against goods deposited in warehouses.
FASTag KYC deadline over; steps to check if your FASTag is still active.
The deadline for updating FASTag KYC was February 29, 2024, as set by the National Highway Authority of India (NHAI). The “One Vehicle, One FASTag” campaign aims to prevent multiple FASTag schemes for single vehicles. Incomplete KYC may result in FASTag deactivation or blacklisting, prohibiting toll payments using FASTag.
Key Points:
Deadline for FASTag KYC Update: – Deadline: February 29, 2024 – No extension granted
Consequences of Incomplete KYC: – FASTag deactivation or blacklisting – Inability to pay toll using FASTag
Reasons for FASTag Blacklisting: – Insufficient/negative balance – Rule violations or complaints
How to Check FASTag KYC Status: – Email, SMS, or app interface notifications – Online process for NHAI-issued FASTags – Bank-specific websites for FASTags issued by banks
How to Update FASTag KYC Online: – Visit the official FASTag website – Enter mobile number, OTP, and captcha – Search for FASTag KYC status – Enter vehicle registration number or FASTag ID – Check status
How to Check Status of Multiple FASTags: – Visit the official NPCI website – Enter vehicle details – View status of all FASTags linked to the vehicle
Process for Non-KYC to Full-KYC Upgrade: – Visit the IHMCL FASTag portal – Log in with registered mobile number – Select ‘My Profile’ and ‘KYC’ – Fill out mandatory fields and submit ID and address proof – KYC processed within 7 working days.
Banks to bring in extra KYC verification layers.
Banks are collaborating with the Reserve Bank of India and the government to enhance KYC (Know Your Customer) standards by implementing additional verification measures. These measures aim to identify accounts and account holders more effectively, particularly those with multiple accounts linked to a single phone number or opened with different documents. The government has also established a committee to standardize and ensure interoperability of KYC norms across the financial sector.
Key Points:
1. Enhanced KYC Standards: – Banks will implement multi-level secondary identifiers (PAN, Aadhaar, UMN) for joint accounts. – Secondary identifiers will enable tracing of multiple accounts opened with different KYC documents.
2. Account Aggregator Expansion: – Enhanced KYC standards will facilitate the extension of the account aggregator network to joint accounts. – Account aggregators collect and consolidate financial information from various sources.
3. Uniform KYC Norms: – The Finance Stability and Development Council (FSDC) is discussing uniform KYC norms and interoperability across the financial sector.
4. Simplification and Digitalization: – The KYC process will be simplified and digitized to improve efficiency.
5. Concerns with Fintech KYC Practices: – Banks have raised concerns about lax KYC norms by fintech companies. – Fintech companies may not report to credit bureaus, increasing risks for other lenders.
