WEEKLY FINANCIAL SNIPPETS- 23/12/2017

  1. FINANCE MINISTER SAYS STRENGTHENING PUBLIC SECTOR BANKS IS TOP PRIORITY: Finance Minister Arun Jaitley has said that strengthening the Public sector banks is the top most agenda of the government. The government has already announced the detailed recapitalisation move and this will ensure to some extent that banks are able to support their lending capacity. Mr. Jaitley gave more emphasis on MSME sector lending as he said that MSME sector has been on receiving end in last few years particularly with lending capacity of banks being depleted as a result of NPAs.

 

  1. RBI PLACES RESTRICTIONS ON BANK OF INDIA: Reserve Bank of India has triggered Prompt corrective Action (PCA) on Bank of India in view of high Non-Performing Assets and negative return on assets for two consecutive years. This makes Bank of India 9th bank to face PCA in a span of 10 months.

 

  1. CONSUMER CONSENT MUST FOR CHANGING SUBSIDY- RECEIVING BANK ACCOUNT: The government has issued notification directing banks and National payment Corporation of India (NPCI) to change the process of mapping Aadhaar linked bank accounts for receiving government subsidies. Further the government has also temporarily halted the existing provision of overwriting existing subsidy-linked bank accounts with freshly opened /mapped Aadhaar accounts. NPCI will now allow override of account request only if it is accompanied by name of his current bank on Aadhaar Payment Bridge (APB) mapper and a confirmation from the requesting bank that it has obtained the requisite consent of the account holder for switching to the requesting bank.

 

  1. GOVERNMENT TO BEAR MDR CHARGES ON DIGITAL PAYMENT TRANSACTIONS UPTO Rs. 2,000: The government will bear the Merchant discount Rate (MDR) on digital transactions up to Rs. 2,000. Such MDR will be borne by the government for two years with effect from January 1, 2018 by reimbursing the same to the banks.

 

  1. CABINET CLEARS AMENDMENT TO LAW FOR PAYMENT OF INTERIM COMPENSATION IN CHEQUE BOUNCE CASES: The Cabinet has approved an amendment to the Negotiable Instrument Act to allow for payment of an interim compensation in cheque dishonour cases with a view not to allow unscrupulous elements by holding payments and pending long trials.

 

  1. RBI BLAMES I-BANKERS FOR RISE IN NPAs: RBI has blamed conflicts of interest among merchant bankers as one of the prime reasons for faulty project appraisals of big corporate/consortium advances that has led to piling up of huge non-performing assets in the system which has crossed a whopping 10 trillion mark as on September 2017. RBI in its Financial Stability Report (FSR) has pointed out certain basic deficiencies with regard to the appraisal of long-term projects with a significant gestation time.

 

  1. AIRTEL PAYMENT BANK PENALISED FOR OPENING PAYMENT BANK ACCOUNTS WITHOUT THE USER CONSENT: Airtel Payments Bank has been penalised with Rs 2.5 crores as an interim penalty by Aadhaar-issuing body UIDAI for allegedly opening payments bank accounts of its mobile subscribers without their informed consent.
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