What is the News? Reserve Bank of India(RBI) has taken out IDBI Bank from the prompt corrective action(PCA) framework. But it is still subject to certain conditions and continuous monitoring. What is Prompt corrective action(PCA) Framework? PCA is an RBI framework. Banks with weak financial metrics are put under the PCA framework by the Reserve… Continue reading IDBI Bank out of “PCA framework”
Tag: ECO_4
Cryptocurrencies in India
Source: The Hindu Syllabus: GS 3. Indian Economy and issues relating to planning, mobilization, of resources, growth, development, and employment. Synopsis: The government should ensure a smart regulation of cryptocurrencies instead of shutting them out. Background The government has given a statement to bring a law on cryptocurrencies. It is a positive step. Considering the… Continue reading Cryptocurrencies in India
Privatisation of banking sector: Issues and analysis
Source: The Indian Express Syllabus: GS -3 Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment. Synopsis: The government has decided to privatise two public sector banks. The move will give the private sector a key role in the banking sector. Introduction The government has announced the disinvestment policies for… Continue reading Privatisation of banking sector: Issues and analysis
Why RBI kept interest rates Unchanged?
Source- The Hindu Syllabus- GS 2 – Government policies and interventions for development in various sectors and issues arising out of their design and implementation. Synopsis- Monetary Policy Committee [MPC] has kept the benchmark interest rates unchanged. It is proceeding with an accommodative stance of monetary policy. Introduction MPC is keeping the rates unchanged to… Continue reading Why RBI kept interest rates Unchanged?
Bad Banks – pros and cons
Source: The Hindu Syllabus: GS 3 – Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment. Synopsis: The centre is proposing to set up Bad Banks or Asset Reconstruction Company to acquire bad loans from banks. Introduction There is a persisting issue of bad loans in the Indian banking sector… Continue reading Bad Banks – pros and cons
Govt. releases new guidelines for banks under “Foreign Contribution (Regulation) Act”
What is the News? Union Home Ministry has announced new guidelines for banks, under the Foreign Contribution (Regulation) Act. These guidelines are related to the donations received by non-governmental organizations (NGOs) and associations. What are the new FCRA guidelines? The donations received in Indian rupees by the NGOs and associations from any foreign source should… Continue reading Govt. releases new guidelines for banks under “Foreign Contribution (Regulation) Act”
Need for New 4-tier Regulations for NBFCs
Source: click here Syllabus: GS 3 Synopsis: The RBI’s plan to tighten regulations on large NBFCs is critical for financial stability. Introduction The RBI has planned an important change in its regulatory approach towards India’s non-banking financial companies (NBFCs). It plans to monitor larger NBFCs almost as closely as it monitors banks. Read – 4-tier… Continue reading Need for New 4-tier Regulations for NBFCs
4-tier structure for regulation of NBFCs
Why in News? Reserve Bank of India (RBI) has proposed a tighter regulatory framework for non-banking financial companies (NBFCs) by creating a four-tier structure. The intensity of regulations will be greatest at the top layer and lowest at the base layer. Objective: It is to keep the big NBFCs in good financial health. It has… Continue reading 4-tier structure for regulation of NBFCs
Too Big To Fail: Domestic Systemically Important Banks (D-SIBs)
Why in News? Reserve Bank of India(RBI) has retained SBI, ICICI and HDFC Bank in Domestic Systemically Important Banks (D-SIBs) list or banks that are considered as “Too Big To Fail”. Facts: Domestic Systemically Important Banks(D-SIBs): D-SIBs are banks that are Too Big To Fail(TBTF). According to RBI, banks become D-SIBs due to their size, cross-jurisdictional activities, complexity and lack of substitute and interconnection. Banks, whose assets exceed 2% of GDP are considered part of this group. Significance of… Continue reading Too Big To Fail: Domestic Systemically Important Banks (D-SIBs)
Establishment of Bad Banks – associated Issues and Significance
As a result of the Covid-19 pandemic induced economic slowdown, the commercial banks are about to witness the spike in NPAs, or bad loans. To deal with it, Reserve Bank of India (RBI) Governor is considering the proposal for the creation of a bad bank. What is a Bad Bank? A bad bank is an asset reconstruction company (ARC), involved in management and recovery of bad loans or NPAs of other banks. Generally, these Banks are initially funded… Continue reading Establishment of Bad Banks – associated Issues and Significance
