A Monthly Newsletter of Indian Institute of Banking & Finance

(ISO 21001 : 2018 CERTIFIED)

Volume No. : 17 Issue No. : 2 September 2024 No. of No.

Pages
of -Pages
8 -8

MISSION
VISION To develop professionally qualified and
To be premier Institute for competent bankers and finance professionals
developing and nurturing competent primarily through a process of education,
professionals in banking and finance training, examination, consultancy /
field. counselling and continuing professional
development programs.

Online
Examination
Mock Test
E-Learning
Face Book

You
Tube

Training

Video
Lecture INSIDE
Top Stories...............................................2
Banking Policies.....................................2
Banking Developments..........................3
Regulator Speaks....................................3
New Appointments................................5
Economic Wrap Up................................5
Forex.........................................................5
Glossary...................................................6
Financial Basics......................................6
Institute's Training Activities................6
News from the Institute.........................7
Green Initiative.......................................7
Market Roundup....................................7
"The information / news items contained in this publication have appeared in various external sources / media for public use or consumption and
are now meant only for members and subscribers. The views expressed and / or events narrated/ stated in the said information / news items are as
perceived by the respective sources. IIBF neither holds nor assumes any responsibility for the correctness or adequacy or otherwise of the news items
IIBF
/ events VISION
or any information whatsoever."
 Top Stories - Banking Policies

TOP STORIES

NBFC-P2P lending platforms get revised norms from the RBI

The Reserve Bank of India (RBI) has issued revised Master Directions to improve transparency and compliance
in Non-Banking Financial Company-Peer to Peer Lending Platforms (NBFC-P2P Lending Platform). As per
the revised norms, a P2P platform shall refrain from promoting peer-to-peer lending as an investment product.
These platforms shall not cross-sell any insurance product that is akin to credit enhancement or credit guaran-
tee. Loans shall be disbursed only after the lenders and borrowers are matched/mapped as per the board-ap-
proved policies.
Performance in cash market, administrative concerns to be eligibility markers for stocks to enter F&O
segment
To ensure that only high-quality stocks with sufficient market depth can trade in the derivatives segment, Se-
curities and Exchange Board of India (SEBI) has revised the eligibility criteria for stocks to enter this segment.
The stock’s performance in the cash market over the previous six months, is a significant marker. As per the
revised norms, the stock’s Median Quarter Sigma Order Size (MQSOS) over the previous six months, on a
rolling basis, must be at least Rs. 75 lakhs (instead of the present Rs. 25 lakhs). The Market Wide Position Limit
(MWPL) has been increased from the present Rs. 500 crores to Rs. 1,500 crores. The stock’s Average Daily De-
livery Value in the cash market has gone up from Rs. 10 crores to Rs. 35 crores, due to a significant increase in
the average daily delivery value. SEBI will also examine other aspects like any surveillance concerns, ongoing
investigations, or other administrative considerations while allowing a stock into the derivatives segment.
Category I and II AIFs get revised market borrowing norms from SEBI
The guidelines for borrowing by Category I and Category II Alternative Investment Funds (AIFs), as well as,
maximum permissible limit for extension of tenure by Large Value Fund for Accredited Investors (LVFs) have
been revised by SEBI. According to these revisions, Category I and II AIFs will not be allowed to borrow or use
leverage for investments. An exception will only be made in limited cases to fulfil temporary funding needs,
or, to manage daily operational expenses. However, these exceptions will also be subject to certain limitations.
Such borrowing is permitted for a maximum of up to 30 days; it can occur for a maximum of four times in one
calendar year; and it must not exceed 10% of the investable funds.
SEBI allows AT-1 bonds valuation by Mutual Funds on yield-to-call basis
In keeping with the recommendation of National Financial Reporting Authority (NFRA) regarding valuation
methodology, SEBI has decided that valuation of Additional Tier 1 (AT-1) bonds by mutual funds shall be based
on Yield-to-Call (YTC) will be consistent with the principles of market-based measurement under Ind AS 113.
This applies only to the valuation of AT-1 bonds under Ind AS 113.

Banking Policies
BDDR for Co-op banks overhauled to ensure uniformity in treatment
To ensure uniformity in the treatment given to the Bad and Doubtful Debt Reserve (BDDR), the RBI has issued
revised instructions that will come in effect from FY 2024-25. These will be applicable to all Primary (Urban)
Co-operative Banks, State Cooperative Banks and Central Co-operative Banks. As per the changes made, all
provisions as per Income Recognition, Asset Classification and Provisioning (IRACP) norms, (whether ac-
counted for under the head ‘BDDR’ or any other head of account), shall be charged as an expense to the P&L
account in the respective accounting period. Banks will be allowed to make appropriations of net profits below
the line to BDDR, after charging all applicable provisions as per IRACP norms and other extant regulations to
the P&L Account.

IIBF VISION 2 September 2024

 Banking Developments - Regulator Speaks

Banking Developments
Foreign investors in IFSC can invest in SGrBs; RBI expands ambit for wider participation
To encourage a wider non-resident participation in Sovereign Green Bonds (SGrBs), RBI has introduced a
scheme to permit foreign investors in the International Financial Services Centre (IFSC) to invest in these in-
struments. Presently, Foreign Portfolio Investors (FPIs) registered with SEBI are permitted to invest in SGrBs
under different routes available for investment by FPIs in Government Securities. Investors eligible for this
scheme can participate in the primary auctions of securities undertaken by RBI and transact in the secondary
market for securities in the IFSC. Eligible IFSC Banking Unit (IBUs) are not permitted to participate in the
primary auctions under the scheme, but they can undertake transactions in the secondary market. The KYC
verification or due diligence of investors will be done as per rules and procedures prescribed by the International
Financial Services Centre Authority (IFSCA).
Public deposit-taking HFCs get more regulatory rigours by RBI; akin to NBFCs
To be eligible to accept public deposits, Housing Finance Companies (HFCs) will need to obtain minimum
investment grade credit rating at least once a year. The ceiling on quantum of public deposits held by the HFCs,
has been reduced from 3 times to 1.5 times of net owned fund. Deposits accepted or renewed by HFCs will be
repayable after a period of twelve months or more up to a maximum of 60 months (as against the current 120
months). HFCs can repay existing deposits with maturities above 60 months, as per their existing repayment
profile. HFCs must maintain liquid assets, on an ongoing basis, up to 15% (against the current 13%) of the pub-
lic deposits held by them, in a phased manner – 14% by January 1, 2025 and 15% by July 1, 2025. Like NBFCs,
HFCs have also been given leeway to hedge the risks arising out of their operations and to issue co-branded
credit cards.
Review of Risk weights of HFCs
In order to address a potential anomaly in the computation of risk-weighted assets for undisbursed amounts of
housing loans/other loans, vis-à-vis that for an equivalent disbursed amount of similar exposures, RBI has de-
cided that the risk-weighted assets computed for the former, shall be capped at the risk-weighted asset computed
on a notional basis for an equivalent amount of the latter. Furthermore, RBI has also segregated risk weights for
standard and other commercial real estate - residential buildings. Risk weight for Commercial Real Estate – Res-
idential Buildings classified as standard would continue to be 75%; whereas, for those not classified as standard,
it will be 100%.

Regulator Speaks
RBI Governor Mr. Shaktikanta Das elucidates five strategies to make India an economic superpower
Delivering an address at the Global Fintech Fest (GFF) 2024, RBI Governor Mr. Shaktikanta Das outlined five
strategic priorities that are key for transforming India’s financial landscape. These include:
Priority 1: Digital Financial Inclusion
Priority 2: Digital Public Infrastructure (DPI)
Priority 3: Consumer Protection and Cyber Security
Priority 4: Sustainable Finance, and
Priority 5: Global Integration and Cooperation.
Mr. Das cautioned about adopting artificial intelligence carefully and in a calibrated manner, understanding
both, the potential and risks that it brings along. Emphasising on the need for more innovation to boost the
country’s financial infrastructure, he highlighted the Internet of Things (IoT) to be the next frontier of oppor-
tunity for the financial sector. Focussing on the essential components of a robust and resilient financial system,
the Governor’s vision for the future comprised of leveraging technology, ensuring security, and encouraging
innovation to make India an economic powerhouse.

IIBF VISION 3 September 2024

 Regulator Speaks

Unified Lending Interface in pilot stage: RBI Governor Mr. Shaktikanta Das
Delivering the keynote address at the ‘Global Conference on Digital Public Infrastructure and Emerging Tech-
nologies’, a part of RBI@90 initiative, RBI Governor Mr. Shaktikanta Das revealed that the apex bank’s new
platform called Unified Lending Interface (ULI) is now at the pilot stage and will soon be launched all over the
country. This platform is aimed to provide frictionless credit via simplified multiple technical integrations and
reducing the time taken for appraisal, especially for smaller borrowers in rural areas.
Speaking on the core theme of Digital Public Infrastructure (DPI) Mr. Das averred that the new trinity of JAM-
UPI-ULI will be revolutionary step forward in India’s digital infrastructure journey. He added that UPI has now
emerged as a robust cost-effective and portable retail payment system catching global attention. It has the poten-
tial to evolve into a cheaper and quicker alternative to the available channels of cross-border payments. All this
hints at the scope of India to become a global leader in the digital portrait.
RBI Deputy Governor Mr. Michael Debabrata Patra highlights the challenges associated with digital finan-
cial innovations
Speaking at the International Association of Deposit Insurers-Asia Pacific Regional Committee (IADI-APRC)
International Conference, RBI Deputy Governor Mr. Michael Debabrata Patra stated that digitalisation of finan-
cial services has helped deposit insurers to fulfil their mandate in more efficient and effective ways, including
modernisation in reimbursement, supervision, resolution and in communication.
Digital innovations in currencies and payment systems merit special attention as both have implications for
deposit insurance. The Deputy Governor cautioned that Central Bank Digital Currencies (CBDC) can be used
as “safe haven”, thus, making bank deposits, particularly uninsured deposits more prone to sudden withdrawal
during crisis. He also spoke about the growing adoption and utilisation of blockchains and distributed ledger
technology, that have given traction to tokenised deposits or digital representations of traditional bank deposits
hosted on a secure blockchain. Tokenisation brings along regulatory and financial stability issues. These include
the potential to amplify bank runs in times of stress; the legal architecture required to ensure that tokenised
deposits are treated as traditional deposits for various purposes.
MSME sector needs innovative solutions, customised services to compete globally: RBI Deputy Governor
Mr. Swaminathan J
Speaking at the Annual Day of the Foreign Exchange Dealers' Association of India (FEDAI), RBI Deputy Gov-
ernor Mr. Swaminathan J elaborated on the importance of and challenges faced by MSMEs. Lauding MSMEs
for being the backbone of our economy, apart from being the engines of growth, innovation and employment,
the Deputy Governor stated that simply offering credit to MSMEs is not enough. The financial sector needs to
provide innovative solutions, sensitivity and a forward-looking approach to help MSME enterprises truly thrive
and scale up. Such wholesome support will empower the MSME sector to compete globally, drive exports and
contribute to the nation’s goal of becoming a developed economy by 2047. Elucidating on the RBI’s efforts to pro-
mote innovation in MSME financing, Mr. Swaminathan J revealed that the third cohort of the RBI Regulatory
Sandbox was dedicated for MSME lending, where five ideas were found viable.
RBI Deputy Governor Mr. M Rajeshwar Rao advocates periodical revision in deposit insurance coverage limit
Delivering his valedictory address at the International Association of Deposit Insurers - Asia Pacific Regional
Committee (IADI-APRC) International Conference, RBI Deputy Governor Mr. M Rajeshwar Rao averred that
a periodical upward revision of the deposit insurance coverage limit may be warranted, considering multiple
factors viz. growth in the value of bank deposits, economic growth rate, inflation and increase in income lev-
els. With digital products becoming more pervasive, coverage of such digital deposit-like products should also
be mulled over as an option for the Deposit Insurer. Mr. Rao further spoke about the rapid growth of climate
change related financial risks. On this backdrop, assessing the impact of climate change on risks and framing
a comprehensive policy to tackle such risks may also be needed more than ever before. The Deputy Governor
shone light on the need for making a system that gives depositors prompt access to their insured deposits when
a bank is liquidated. During such a crisis, timely settlement of claims may become challenging due to delay in
submission of the list of eligible depositors, non-availability of complete information with the bank and/or lack
of alternate bank accounts of these depositors (especially in case of smaller co-operative banks).

IIBF VISION 4 September 2024

 New Appointments - Economic Wrap Up - Forex

New Appointments
NAME DESIGNATION
Shri. Challa Sreenivasulu Setty Chairman, State Bank of India

Economic Wrap Up
The key highlights of the Monthly Economy Review, July 2024 released by the Department of Economic
Affairs are mentioned below:
• Retail inflation decreased to 3.5% in July 2024, the lowest since September 2019, driven by moderation in
food inflation.
• The Purchasing Managers’ Index (PMI) Manufacturing stood at 58.1 in July 2024.
• PMI services remained in an expansionary zone at 60.3 in July 2024, driven by expansion in international
sales, an increase in new order uptakes and a rise in new export orders.
• The Index of Industrial Production (IIP) registered a YoY growth of 5.2% in Q1 of FY25, compared to
4.7% in Q1 of the previous year, with the most robust growth seen in the production of primary goods,
intermediate goods and consumer durables.
• Capital expenditure is budgeted to increase by 17.1% to ₹11.1 lakh crore.
• India’s services exports grew by 9.9% in the first four months of FY25 (April 2024 to July 2024).
• Foreign Direct Investment (FDI) flows picked up in FY25 as net FDI inflows increased by 42.7% during the
Q1 of FY25.
• The total gross GST revenue rose by 10.3% year-on-year (YoY), bringing the total for FY24 (April to July)
to ₹7.4 lakh crore.

Forex
Trends in Forex Reserve(US$ Mn)
Foreign Exchange Reserves
last 6 months
As on August 30, 2024
Item ₹ Cr. US$ Mn.
1 2
1 Total Reserves 5736861 683987
1.1 Foreign Currency Assets 5024359 599037
1.2 Gold 518835 61859
1.3 SDRs 154901 18468
1.4 Reserve Position in the IMF 38766 4622
Source: Reserve Bank of India

IIBF VISION 5 September 2024

 Forex - Glossary - Financial Basics - Institute's Training Activities

Base Rates of Alternative Reference Rates (ARRs) for FCNR (B) Deposits as on August 30, 2024 -
applicable for the month of September 2024
Currency Rates Currency Rates Currency Rates
USD 5.35 AUD 4.35 HKD 2.92923
GBP 4.95 CHF 1.209164 MYR 3.00
EUR 3.666 NZD 5.25 DKK 3.2650
JPY 0.227 SEK 3.390 Source: www.fbil.org.in
CAD 4.5300 SGD 3.3159

Glossary
Unified Lending Interface
It is a digital platform launched by RBI that provides customer’s financial and non-financial data at one place with
the objective of providing frictionless tailored credit. The ULI architecture is designed for a ‘plug and play’ approach
to ensure digital access to information from diverse sources. This may speed up the credit appraisal process.

Financial Basics
Finternet
The term ‘Finternet’ refers to multiple financial ecosystems interconnected with each other. It is an emerging
approach to global finance which is defined by the three U’s i.e. User centre, Unified and Universal – that is keeping
the user at the centre, it has to be universal and it has to cut through asset classes of all types.

Institute’s Training Activities

Training Programmes for the month of September 2024
Programmes Dates Location
Programme on Preventive Vigilance & Fraud Man-
10th - 12th September, 2024
agement
Program for Internal Auditors of Banks & FIs 11th - 12th September, 2024
Programme on Balance Sheet Reading & Ratio Virtual
17th - 19th September, 2024
Analysis
Programme for Legal & Recovery Officers of Public &
18th - 21st September, 2024
Private Sector Banks & FIs
Programme on Leadership & Development of Soft Leadership Development
Skills for Branch Managers 19th - 21st September, 2024 Center, Kurla (West),
Mumbai
Programme on Effective Marketing for Retail Banking 20th - 21st September, 2024 IIBF, Professional
Development Centre, South
Zone, Chennai
Programme on IT Security and Prevention of Cyber
23rd - 24th September, 2024
Crimes
Programme on MSME Credit Appraisal & Financing 23rd - 25th September, 2024 Virtual
Programme on Foreign exchange operations 24 - 26 September, 2024
th th

Programme on Internal Audit Officers of Banks 26th - 27th September, 2024

IIBF VISION 6 September 2024

 News from the Institute - Green Initiative - Market Roundup

News from the Institute

IIBF’s Leaders Speak Series
Mr. R. A. Sankara Narayanan, Independent Director, South Indian Bank & Former MD & CEO, Canara Bank &
Vijaya Bank delivered an address on “The Evolution of Banking in India: A look at its transformation over the
years” under IIBF’s leaders speak series organised on August 25, 2024.
IIBF & IGNOU - MoU for Credit Transfer scheme for JAIIB/CAIIB passed candidates
IIBF and IGNOU entered into a Memorandum of Understanding (MoU) for offering the MBA (B&F) programme
to the members of IIBF who have passed the JAIIB/CAIIB qualification under the revised syllabi of 2023. As per
the MoU, IGNOU shall grant credit transfer/exemption upto a maximum of 5 courses out of the 28 courses of
MBA (B&F) programme to the candidates successfully completed the corresponding subject(s) of JAIIB/CAIIB
from IIBF, within the maximum duration of the MBA (B&F) programme. For more details, kindly refer to
http://www.ignou.ac.in/ignou/aboutignou/school/soms/credittransfer
IIBF entered into MoU with FPSB for Certified Financial Planner certification program
IIBF entered into MoU with FPSB. Under this significant partnership, candidates who have successfully attained
the CAIIB qualification from IIBF and have a valid three-year experience in the BFSI sector will be exempted
from passing the first three modules of CFP certification and directly become eligible to enrol in FPSB India’s
Integrated Financial Planning module through the Fast Track Pathway. For more details, visit www.iibf.org.in
Bank Quest Theme for upcoming issue
The theme for the upcoming issue of Bank Quest for the quarter July– September, 2024 is “Emerging trends in
International Trade and Banking”.
Cut-off date of guidelines/important developments for examinations
The Institute has a practice of asking questions in each exam about the recent developments/guidelines issued by
the regulator(s) in order to test if the candidates keep themselves abreast of the current developments. However,
there could be changes in the developments/guidelines from the date the question papers are prepared and the
dates of the actual examinations. In order to address these issues effectively, it has been decided that: In respect of
the exams to be conducted by the Institute for the period from September 2024 to February 2025, instructions/
guidelines issued by the regulator(s) and important developments in banking and finance up to 30th June 2024
will only be considered for the purpose of inclusion in the question papers.

Green Initiative
Members are requested to update their e-mail address with the Institute and send their consent to receive the
Annual Report via e-mail.

Market Roundup
RBI Reference Rate Weighted Average Call Rates (%)

Source: FBIL Source: Weekly Newsletter of CCIL

IIBF VISION 7 September 2024

 Market Roundup

● Registered with Registrar of Newspapers Under RNI No. : 69228/1998 Crude Oil Price (Rs./bbl.)

Aggregate Deposit Growth (%)

Source: PPAC, Ministry of Petroleum and Natural Gas

Source: Monthly Review of Economy, CCIL, August 2024 BSE Sensex and NIFTY 50

Bank Credit Growth (%)

Source: BSE & NSE

Source: Reserve Bank of India
Printed by Biswa Ketan Das, Published by Biswa Ketan Das, on behalf
Non-food Credit Growth (%) of Indian Institute of Banking & Finance, and printed at Onlooker Press
16, Sasoon Dock, Colaba, Mumbai - 400 005 and published at Indian Institute
of Banking & Finance, Kohinoor City, Commercial-II, Tower-I, 2nd Floor,
Kirol Road, Kurla (W), Mumbai - 400 070.
Editor : Biswa Ketan Das

Source: Monthly Review of Economy, CCIL, August 2024

Gold Price 999per gm (Rs.)

INDIAN INSTITUTE OF BANKING & FINANCE

Kohinoor City, Commercial-II, Tower-I, 2nd Floor, Kirol Road, Kurla (W),
Mumbai - 400 070.
Tel. : 91-22-6850 7000
E-mail : [email protected]
Source: Gold Price India
Website : www.iibf.org.in

IIBF VISION 8 September 2024