1. MASALA BONDS IN FOREIGN MARKETS: Masala Bonds is a way for Indian Companies to raise funds from abroad without incurring the risk of depreciating exchange rates. They borrow not from a bank but by selling bonds to investors. These bonds are denominated in Indian rupees and are to be repaid in Indian rupees only. So there is no currency risk to the borrower. That risk isto be borne by the foreign investor. The Reserve Bank of India has formally approved of such bonds and HDFC was the first company to avail this facility last month. It sold Masala bonds at 8.37%, still cheaper than 9 or 10% which they might have paid in India. These bonds are free to trade in London stock exchange.
2.LARGE FIRMS HAVE TO PAY MORE FOR BANK LOANS: RBI has proposed a major overhaul in the way large companies borrow from banks. Starting next financial year, large Indian companies will have to pay more for borrowing from banks, a part of an effort by the Central Bank to curb lenders’exposureto stressed corporate entities. The Central Bank is also taking steps to increase liquidity and participation in the corporate bond market.
3.PRADHAN MANTRI FASAL BIMA YOZANA: The Hon’ble Prime Minister of India has announced a brand new crop Insurance scheme on 13th January 2016 and this scheme is called Pradhan Mantri Fasal Bima Yozana( PMFBY). This will be implemented in every state. The main motto of this crop insurance is to provide efficient and low cost insurance support to the farmers which will give financial supportto thousands of farmers so that they can sustain even if the yield is damaged. Every Bank Branch in India has been now provided with a portal and details of farmers have to be made in that portal. RBI has directed Banks for strict compliance for implementation of this Fasal Bima Yozana.
4.TRANSFER FUNDS WITHOUT AN ACCOUNT NUMBER VIA UNIFIED PAYMENT SYSTEM( UPI): Reserve Bank of India has cleared the Unified Payment Interface ( UPI), a platform which links bank account numbers to virtual payment addresses. So you can now transfer funds to anyone without even knowing the recipient’s account number through a mobile banking app. The UPI enabled app in effect turns your smartphone into a bank. This has come as a boost to a cashless economy. This mode is even better than RTGS and NEFT as it allows access to more than one bank account, does not need 16 digit bank account, and 11 digit IFSC code. Presently up to Rs 1.00 lakh can be transferred and no charges on money transfer as of now.
5.RBI CURBS LARGE LOANS TO SINGLE BORROWER: The Reserve Bank of India on Thursday announced series of measures to prevent banks from giving large exposure to a few big corporates. The measures come after a handful of distressed borrowers wiped out profits of several banks due to large loans going bad. As a first step the RBI proposed to cap the exposure limit of banks to a single borrower group to 25% of the bank’s equity capital. At present the banks can go up to 55% of their Tier I capital in case of Infra loans. In case of individual entities, the limit has been raised from 15% to 20%. At the same time RBI has paved the way for the corporates to move towards bond market.
6.DOMESTIC SYSTEMATICALLY IMPORTANT BANKS (D-SIB): SBI and ICICI Bank have been given the status of Domestic systematically Important Banks ( D-SIBs) by Reserve Bank of India for a second consecutive year. As these banks are named as D-SIBs it imposes additional capital requirement. RBI follows the Systematic Importance Score (SISs) for selecting a bank .The selection is also based on the Bank’s size as a percentage of annual GDP.