Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman unveiled EASE 3.0, the Public Sector Bank (PSB) Reforms Agenda 2020-21 for smart, tech-enabled banking, and the PSB EASE Reforms Annual Report 2019-20 on February 26, 2020 during an event in New Delhi.
RBI allowed the banks to deduct the equivalent amount of incremental credit disbursed by them as retail loans to automobiles, residential housing, and loans to micro, small and medium enterprises (MSMEs), over and above the outstanding level of credit to these segments as at the end of the fortnight ended January 31, 2020 from their net demand and time liabilities (NDTL) for maintenance of the cash reserve ratio (CRR).
RBI allows RRBs to act as merchant acquiring banks using Aadhaar Pay – BHIM app and POS terminals.
RBI has announced conduct of LTRO’s for one-year and three-year tenors for up to a total amount of ₹ 1,00,000 crores at the policy repo rate wef 17th February 2020
The Union Budget has been structured on the overall theme of “Ease of Living.” The Finance Minister said that the Union Budget Aims: To achieve seamless delivery of services through Digital governance; To improve physical quality of life through National Infrastructure Pipeline; Risk mitigation through Disaster Resilience; Social security through Pension and Insurance penetration.
The budget is woven around three prominent themes:
Aspirational India in which all sections of the society seek better standards of living, with access to health, education and better jobs. Economic development for all, indicated in the Prime Minister’s exhortation of “SabkaSaath, SabkaVikas, SabkaVishwas”. Caring Society that is both humane and compassionate, where Antyodaya is an article of faith.
The three broad themes are held together by
Corruption free – policy-driven good governance
Clean and sound financial sector.
The three components of Aspirational India are- a) Agriculture, Irrigation and Rural Development , b) Wellness, Water and Sanitation and c) Education and Skills
Statement on Developmental and Regulatory Policies sets out various developmental and regulatory policy measures for improving credit flows to certain sectors; reinforcing monetary transmission; strengthening regulation and supervision; broadening and deepening financial markets; and improving payment and settlement systems.
RBI released the Sixth Bi-Monthly Monetary Policy leaving the Rates unchanged and giving booster dose for the growth of Economy.
The central bank has asked the banks to no longer issue contactless cards by default; and has also allowed the card users to enable, disable cards for online use. RBI believes the move will improve user convenience and increase the security of card transactions.
RBI introduces video-based identification process for KYC. RBI approves Aadhaar-based video authentication as alternative to e-KYC. Video KYC will have to be verified through Aadhaar.
RBI decided to further rationalize the SAF to make it more effective in bringing about the desired improvement in the UCBs as also expeditious resolution of UCBs experiencing financial stress. Reserve Bank will continue to monitor asset quality, profitability and capital / net worth of UCBs under the revised SAF. The revised SAF envisages initiation of corrective action by the UCB and/or supervisory action by the Reserve Bank on breach of the specified thresholds (triggers) in respect of the specified financial parameters/indicators.