Lakshya UPSC PT 2022 – Economic Lecture - 1 – Complete One Year Current Affairs

Table of Contents

Payment Bank gets Schedule Status

News –

RBI granted status of scheduled bank to payment banks like Paytm Payments, Airtel Payments Bank.
To become a scheduled bank, banks have to be listed under Second Schedule of RBI Act, 1934

Payment Bank gets Schedule Status

It allows banks to participate in Marginal Standing Facility and will be eligible to partner in government-run ﬁnancial inclusion schemes
They become eligible for low interest loans from the banks
They get the membership in the clearing houses
They also get Access to currency storage

Q) The establishment of ‘Payment Banks’ is being allowed in India to promote ﬁnancial inclusion. Which of the following statements is/are correct in this context?

Mobile telephone companies and supermarket chains that are owned and controlled by residents are eligible to be promoters of Payment Banks.
Payment Banks can issue both credit cards and debit cards.
Payment Banks cannot undertake lending activities. Select the correct answer using the code given below.

1 and 2 only
1 and 3 only
2 only
1, 2 and 3

Tokenization

News –

Reserve Bank of India (RBI) Prohibited merchants from storing the customer credit card details on their servers after July 1, 2022.
Card-on-file (CoF) tokenization must be used instead of card storage. This rule covers domestic and Online purchases.

Tokenization

Tokenization refers to the replacement of actual credit and debit card information with an alternate code called a “token,” which is unique for each card, token requestor, and
A “tokenized” card transaction is thought to be more secure because the merchant doesn’t get to see the actual card number during the transaction
The token can be used for contactless card transactions at point-of-sale (PoS) and for QR code payments with merchant’s

Central Bank Digital Currency

News –

The Union Finance Minister has announced the launch of DIgital Rupee – a central bank digital currency 2022-23

How Digital Currency is different from Cryptocurrency

RBI SURPLUS TRANSFER

News –

Recently, Reserve Bank’s (RBI) reserves, India’s central government recently received a surplus of 99,122 crores (extra income over expenditure).

NBFCs To come under the ambit of Prompt Corrective Action

News –

RBI brings Non-Banking Financial Companies under the ambit of Prompt Corrective Action Framework

Prompt Corrective Action

It is a framework under which ﬁnancial institutions with weak ﬁnancial metrics are put under watch by the RBI
The scheme was initiated by RBI in 2002, in order to protect the interest of the investor
Initially it was applicable on banks only but now RBI has brought NBFC also under this ambit.
Following are the ﬁnancial metrics or regulatory triggers used by RBI-

Thresholds for invoking PCA

Capital to Risk weighted asset Ratio
Non Performing Assets
Return to Assets

Bad Banks

News –

Central Government guarantee of Rs.30,600 crore to back Security Receipts issued by National Asset Reconstruction Company Limited (NARCL) for acquiring stressed loan assets

What is NARCL and IDRCL ?

NARCL is an ARC which will acquire the stressed assets from Whereas the responsibility to dispose and recover the money will be of IDRCL.
Deposit Insurance and Credit Guarantee Corporation Act, 1961

News –

DICGC Bill 2021 has been approved by the Union Cabinet making an amendment to The DICGC Act of 1961

Key Features of DICGC (Amendment) Act, 2021

Interim payments from the DICGC will be made to certain depositors for 90 days
For banks to make timely payments to the DICGC, provisions for penal interest are in place.
Prior RBI permission is required to remove the previous premium ceiling of 15% and revise.

News

Recently, Parliament passed the Insolvency and Bankruptcy Code (Amendment Bill) in 2021 in the Lok

About the Amendment

It introduced an alternate insolvency resolution process for Micro, Small, and Medium Enterprises (MSMEs) with defaults up to Rs 1 crore called the Pre-packaged Insolvency Resolution Process (PIRP).
PPIR is a form of restructuring that allows creditors and debtors to work on an informal plan and then submit it for Under this system, ﬁnancial creditors will agree to a potential investor’s terms.
The PIRP also allows for a Swiss challenge to the resolution plan. A Swiss Challenge is a method of bidding, often used in public projects, in which an interested party initiates a proposal for a contract or the bid for a project.