This booklet entitled ” Latest Banking Updates – Bank Promotions (Updated as of 31.05.2020)” has been prepared with an intention to provide ‘Latest Developments in Banking and Financial Sector’ for the enrichment of Bank’s Staff, the Banking knowledge and Banking Developments taking place in present day scenario, when the entire Banking Industry is facing heavy Turbulence in the form of huge NPA and mounting losses.
The Statement on Developmental and Regulatory Policies sets out various developmental and regulatory policy measures to improve the functioning of markets and market participants; measures to support exports and imports; efforts to further ease financial stress caused by COVID-19 disruptions by providing relief on debt servicing and improving access to working capital; and steps to ease financial constraints faced by state governments.
In view of the recent release of Macro Economic Data the RBI preponed the need for an off-cycle meeting of the monetary policy committee (MPC) in lieu of the scheduled meeting to be held during June 3 to 5, 2020. The MPC met on 20th, 21st and 22nd May 2020, the MPC reviewed domestic and global developments and their implications for the outlook. MPC voted unanimously for a reduction in the policy repo rate and for maintaining the accommodative stance of monetary policy as long as necessary to revive growth, mitigate the impact of COVID-19, while ensuring that inflation remains within the target. On the quantum of reduction, the MPC voted with a 5-1 majority to reduce the policy rate by 40 basis points from 4.4 per cent to 4.0 per cent. Consequently, the Marginal Standing Facility (MSF) rate and the Bank rate stand reduced to 4.25% from 4.65%. The reverse repo rate stands reduced to 3.35% from 3.75%.
In an hour-long interview to Cogencis, Das said even though there is an animated discussion on the subject of the central bank monetising the government’s budget deficit amidst the ongoing fight against COVID-19 pandemic, he has not taken a view on the issue.
RBI has allowed cash withdrawal facility at POS Terminals. Latest updates on FAQ’s as of May 5,2020.
RBI Governor meets MD & CEOs of Public and Private Sector Banks, NBFCs & Mutual Funds to review theCurrent Economic condition, over Video Conference. Credit flows to different sectors of the economy, including liquidity to Non-Banking Financial Companies, Micro Finance Institutions, Housing Finance Companies, Mutual Funds, etc.;Post lockdown strategies for supply of credit, including working capital, to MSMEs, traders and bottom of pyramid customers in semi-urban, rural and urban areas; Impact of measures taken by the Reserve Bank with regard to the provision of liquidity etc.
RBI decided that the regulatory benefits announced under the SLF-MF scheme will be extended to all banks, irrespective of whether they avail funding from the Reserve Bank or deploy their own resources under the above-mentioned scheme.
With a view to easing liquidity pressures on MFs, it has been decided to open a special liquidity facility for mutual funds of ₹ 50,000 crore. Funds availed under the SLF-MF shall be used by banks exclusively for meeting the liquidity requirements of MFs by (1) extending loans, and (2) undertaking outright purchase of and/or repos against the collateral of investment grade corporate bonds, commercial papers (CPs), debentures and certificates of Deposit (CDs) held by MFs.
On April 17th 2020 RBI Governor Shri Shakti Kanta Das announced the second series of measures to give boost to ailing economy by providing relief to various sectors and financial institutions including NBFC. The measures were aimed to (i) maintain adequate liquidity in the system and its constituents in the face of COVID-19 related dislocations; (ii) facilitate and incentivise bank credit flows; (iii) ease financial stress; and (iv) enable the normal functioning of markets.
The Reserve Bank of India (RBI) has announced further measures, including extending the time for realisation and repatriation of proceeds for exports made up to or on July 31, 2020 to 15 months from the date of export against nine months earlier, while upping the temporary accommodation it provides to States and Union Territories to deal with the COVID-19 pandemic. The central bank also said it is not activating the counter cyclical capital buffer for banks.