A Monthly Newsletter of Indian Institute of Banking & Finance

(ISO 21001 : 2018 CERTIFIED)

Volume No. : 16 Issue No. : 9 April 2024 No. of No.

Pages
of -Pages
8 -8

MISSION
VISION To develop professionally qualified and
To be premier Institute for competent bankers and finance professionals
developing and nurturing competent primarily through a process of education,
professionals in banking and finance training, examination, consultancy /
field. counselling and continuing professional
development programs.

Online
Examination
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E-Learning
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Training

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Video
Lecture INSIDE
Top Stories...............................................2
Banking Policies.....................................3
Banking Developments..........................3
Regulator Speaks....................................3
Economic Wrap Up................................4
Forex.........................................................5
Glossary...................................................5
Financial Basics......................................6
Institute's Training Activities................6
News from the Institute.........................6
Green Initiative.......................................7
Market Roundup....................................7
"The information / news items contained in this publication have appeared in various external sources / media for public use or consumption and
are now meant only for members and subscribers. The views expressed and / or events narrated/ stated in the said information / news items are as
perceived by the respective sources. IIBF neither holds nor assumes any responsibility for the correctness or adequacy or otherwise of the news items
IIBF
/ events VISION
or any information whatsoever."
 Top Stories

TOP STORIES

Monetary Policy Highlights (April 3-5, 2024)

The Monetary Policy Committee (MPC) was held on April 3-5, 2024. Its key highlights are as follows:
• Repo rate kept unchanged at 6.5%.
• Standing Deposit Facility (SDF) rate remains unchanged at 6.25% and the Marginal Standing Facility (MSF)
rate and the Bank Rate at 6.75%.
• Real GDP growth for 2024-25 projected at 7%.
• Retail inflation is projected at 4.5% for 2024-25.
• Trading of Sovereign Green Bonds permitted in International Financial Services Centre (IFSC).
• RBI to launch a mobile app to facilitate retail participation in G-secs.
• RBI permits non-bank payment system operators to offer Central Bank Digital Currency (CBDC) wallets.
• RBI to allow cash deposits in Cash Deposit Machines (CDMs) through UPI.
• RBI to allow UPI payments from Prepaid Payment Instruments (PPIs) wallets via third-party apps.
• RBI to modify Liquidity Coverage Ratio (LCR) framework to facilitate better management of liquidity risk
by banks.
• Small Finance Banks permitted to deal in rupees interest derivative products.
RBI recognises SROs for REs via Omnibus framework; tasks them with regulatory compliance
With Regulated Entities (REs) experiencing exponential growth in terms of number, scale of operations,
customer outreach and adopting innovative technologies, the Reserve Bank of India (RBI) has issued an omnibus
framework for recognising Self-Regulatory Organisations (SROs) for REs.
The SROs will operate under the RBI’s watchful eye, but all the same, they shall also be the regulator’s ally in
ensuring that regulatory guidelines are being followed, stakeholders’ interests are being protected, innovation is
being fostered and red signals are being captured faster.
SROs have been tasked to enhance regulatory compliance while operating with credibility, objectivity and
responsibility. Their primary responsibility shall be to promote best business practices amongst its members.
To this end, they shall establish minimum benchmarks and conventions for the members to follow regarding
professional market conduct.
SROs will be registered as a not-for-profit company under Section 8 of the Companies Act, 2013. The SROs that
were recognised by RBI earlier, shall continue to operate as per the terms & conditions stipulated during that
time. Membership to SROs shall be voluntary and optional.
Trade settlements to get expedited with SEBI’s T+0 settlement cycle
After China, India has become the second country in the world to operate on a short settlement cycle, with
SEBI issuing a framework for introducing the Beta version of T+0 settlement cycle on an optional basis, initially
for a limited set of 25 scrips with a limited number of brokers. Introduction of the optional T+0 settlement
and subsequent optional Instant Settlement to be made in the wake of significant evolution of technology,
architecture, and capacity of MIIs (All stock exchanges, clearing corporations and depositories collectively
referred to as “Market Infrastructure Institutions”), as well as, the ability of India’s depository ecosystem to carry
out immediate transfer of securities and real time transfer of funds.
SEBI widens ambit of QSB framework to garner more market trust
SEBI has widened the ambit of the Qualified Stock Broker (QSB) framework to bring more brokers under
enhanced obligations. Presently, there are four parameters being applied to classify a stock broker under the
QSB framework viz. total number of active clients, available total assets of clients with the stock broker, trading

IIBF VISION 2 April 2024

 Top Stories - Banking Policies - Banking Developments - Regulator Speaks

volumes of the stock broker (excluding the proprietary trading volume of the stock broker) and the end of day
margin obligations of all clients of a stock broker (excluding the proprietary margin obligation of the stock
broker in all segments). Now, additional parameters of proprietary trading volumes, compliance and grievance
redressal scores of stock broker will also be considered while making this classification.
Certain FPIs to benefit from easing of additional disclosure norms
Amending the August 2023 circular mandating additional disclosures by Foreign Portfolio Investors (FPIs),
the Securities and Exchange Board of India (SEBI) has eased the rules further. Accordingly, an FPI with more
than 50% of its Indian equity Assets Under Management (AUM) in a corporate group, are now exempted from
making additional disclosures, but subject to a few caveats.

Banking Policies
RBI modifies AIF norms for Banks, NBFCs
Earlier, in view of evergreening of loans, banks and NBFCs were prevented from investing in Alternative
Investment Funds (AIFs) with exposure to a firm to which they have already lent. The REs were asked to make
100% provisions for the entire investment in such AIF schemes. However, now REs have received a major relief
from the regulators, as they will need to make provisioning only to the extent of the amount invested by the AIF
scheme in the debtor company and not the entire amount. In addition, investments made through intermediaries
like fund of funds and mutual funds, have also been excluded by RBI.

Banking Developments
Credit cards, debit cards subject to amended regulations by RBI; customer-centricity upheld
W.e.f. March 7, 2024, the regulator has asked all credit card and debit card issuing banks to install a proper
mechanism to track the use of money. Apart from that, the following provisions have been made mandatory,
essentially to make these instruments more customer-friendly:
• Interest shall be levied only on the outstanding amount, adjusted for payments/refunds/reversed transactions.
• Card-issuers’ websites and bill statements shall contain a wholesome list of payment modes that customers
can use to clear their credit card dues.
• Credit card account shall be debited only as per the authentication framework prescribed by RBI and no
other mode/instrument.
• The liability of payment towards business credit cards rests with the corporate or business entity (i.e.,
principal account holder). Considering this factor, the timeframe for payment of dues and adjustment of
refunds can be decided mutually by the card-issuer and the principal account holder.
• Card-issuers may use their discretion to block/deactivate/suspend a debit or credit card, but only via the
standard operating procedure approved by their Board.
• Blocking/deactivating/suspending a card or withdrawing any benefits available on any card shall be
immediately intimated to the cardholder (with due reasons) through electronic means (SMS, email, etc.)
and other available modes.
• At least once, the cardholder will get an option to choose any date as the starting or closing date of their
billing cycle.

Regulator Speaks
RBI Governor seeks improvement in internal ombudsman mechanism
Speaking at the Annual Conference of RBI Ombudsman, RBI Governor Mr. Shaktikanta Das stated that even
though RBI has instated an Internal Ombudsman (IO) mechanism to help REs strengthen their internal
grievance redressal mechanism, the functioning of IO mechanism needs considerable improvement. Reminding
lenders that they are the first touch points in the overall grievance redressal framework, Mr. Das stated that it is
not appropriate to re-direct aggrieved customers to the alternate grievance machinery of the RBI ombudsman.

IIBF VISION 3 April 2024

 Regulator Speaks - Economic Wrap Up

Mr. Das also shone a light on the need for lenders to strengthen their monitoring mechanisms and utilise
technology to detect frauds before they are committed. His advice came on the backdrop of rising fraudulent
transactions and increasing customer grievances regarding the same. Further, the Governor spoke about the
risk of cybersecurity challenges such as identity theft, fraud and unauthorised access to personal data growing
due to the advent of Artificial Intelligence (AI). Cautioning about how such incidents can fast erode customer
trust, the Governor asked lenders to work towards creating customer awareness about threats such as phishing,
phone scams, deepfakes, among others.
‘Interoperable payment system’ will ensure quick fund settlements, increased user confidence: RBI
Governor
RBI Governor Mr. Shaktikanta Das recently announced the introduction of an ‘interoperable payment system’
for internet banking to enable quicker settlements of funds to merchants. Interoperability has the capability of
various digital systems, applications and databases to link and exchange information. Payment platforms use
fintech to enable connectivity and data sharing among banks, payment gateways, processors, merchants and
consumers.
The Unified Payments Interface (UPI) system has become the biggest contributor to digital payments in India,
with UPI payments capturing 80% of the digital transactions space in 2023, growing at a Compound Annual
Growth Rate (CAGR) of 147% in terms of volume. Now, the introduction of the interoperable payment system
is hoped to further increase users’ confidence in digital payments, while also facilitating quick funds settlements
towards merchants.
India set to become second-largest economy by 2032: RBI Deputy Governor
Speaking at Nomura’s 40th Central Bankers Seminar in Kyoto, Japan, RBI Deputy Governor Dr. Michael Debabrata
Patra asserted that given the energies and transformation driving the nation to overcome its challenges, India
can well achieve a growth rate of 10% in the next decade and become the second-largest economy by 2032.
Dr. Patra encapsulated the India growth story by drawing attention to the International Monetary Fund (IMF)
cumulatively revising its forecast for India upwards by 80 bps between April 2023 and January 2024 - based on
its favourable demography, the rupee being among the least volatile currencies in 2023 and transformation being
brought along by technology. Dr. Patra spoke about the need for intensified efforts to raise India’s exports of
goods and services from USD 768 billion (2.4% of the global total) to USD 1 trillion each for merchandise and
service exports (or 5% of the global total) by 2030. Sectors like IT and digital services, value-added agricultural
products, high-value tourism, financial services, retail and e-commerce hold good potential to make this possible.
Lastly, he addressed the challenge of greening of the Indian economy for sustainable development. He reiterated
India’s commitment towards the environment as expressed at the Conference of the Parties 26 (COP26): (i) 500
GW non-fossil energy capacity; (ii) energy mix comprising 50% renewable energy; (iii) reducing total projected
carbon emissions by one billion tonnes; (iv) reducing the carbon intensity of its economy by 45%; and (v)
achieving net zero by 2070.

Economic Wrap Up
Key highlights of the Monthly Economy Review, February 2024 released by the Department of
Economic Affairs:
• India’s economic growth exceeds 8% for third time in a row; achieves a six-quarter high in Q3FY24.
• India manufacturing PMI stood at a five-months high of 56.9 in December 2023. It was supported by new
orders and favourable demand conditions.
• Continuing its fall for the 9th consecutive month in February 2024, core inflation went down from 6.1% in
FY23 to 4.4% in FY24 (April-Feb).
• Exports of engineering goods, electronics, chemicals, pharmaceuticals and petroleum products boosted
India’s merchandise export by 11.9% in February 2024.
• Meanwhile, merchandise imports grew to 12.2% in February 2024. This caused trade deficit to widen from
USD 16.6 billion in February 2023 to USD 18.7 billion in February 2024.

IIBF VISION 4 April 2024

 Economic Wrap Up - Forex - Glossary

• Rise in US treasury yields led to FPIs turning net buyers in February 2024, thus recording inflows of USD
3.8 billion.
• Share of Gross Fixed Capital Formation (GFCF) increased from 29.6% in FY22 to 31.3% of GDP in FY24,
thus reflecting pick-up in investment.
• NSDL and CDSL data showed a whopping 38.6% rise in opening of demat accounts in India in one year
from February 2023. The number of demat accounts in India opened in February 2024 soared to over
43.5 lakh. With this, the total number of demat accounts in the country now stands at 14.8 crore - a 31.7%
increase from a year ago. Notably, the surge is largely attributable to tier II and III cities.
• Convenience and financial flexibility have led to 54.4% YoY increase in transactions via UPI, in Q3 FY24.

Forex
Trends in Forex Reserve(US$ Mn)
Foreign Exchange Reserves
last 6 months
As on March 22, 2024
Item ₹ Cr. US$ Mn.
1 2
1 Total Reserves 5359608 642631
1.1 Foreign Currency Assets 4739393 568264
1.2 Gold 429410 51487
1.3 SDRs 151946 18219
1.4 Reserve Position in the IMF 38859 4662
Source: Reserve Bank of India
BASE RATES OF ALTERNATIVE REFERENCE RATES (ARRs) FOR FCNR (B) DEPOSITS AS ON
MARCH 28, 2024 - APPLICABLE FOR THE MONTH OF APRIL 2024
Currency Rates Currency Rates Currency Rates
USD 5.32 AUD 4.35 HKD 4.29380
GBP 5.1896 CHF 1.45452 MYR 3.01
EUR 3.906 NZD 5.5 DKK 3.5150
JPY 0.077 SEK 3.896 Source: www.fbil.org.in
CAD 5.0200 SGD 4.0357

Glossary
Self-Regulatory Organisation (SRO)
A Self-Regulatory Organization (SRO) is an entity such as a non-governmental organization, which has the power
to create and enforce stand-alone industry and professional regulations and standards. Although SROs are private
organizations, they are still subject to Government-imposed regulation to a degree. However, the Government does
delegate some aspects of the industry oversight to self-regulatory organizations. Since the SRO has some regulatory
influence over an industry or profession, it can often serve as a watchdog to guard against fraud or unprofessional
practices.

IIBF VISION 5 April 2024

 Financial Basics - Institute's Training Activities - News from the Institute

Financial Basics
Beta
Beta is a measure of the volatility or systematic risk of a portfolio or security. The degree to which different portfolios
are affected by the systematic risks as compared to the effect on the market as a whole, is different due to their
relationships with the market. The Beta factor describes the movement in a stock’s or a portfolio’s returns in relation
to that of the market returns. Beta is calculated as:

where, Y is the returns on your portfolio or stock; X is the market returns or index

Institute’s Training Activities

Training Programmes for the month of April 2024
Programmes Dates Location
Programme on Strategy for Compliance of
Annual Statutory Audit & RBI’s AFI Reports of 16th – 17th April 2024
Banks
Programme on Balance Sheet Reading and Ratio
16th – 18th April 2024
Analysis
Programme on Preventive Vigilance & Fraud
Management 18th – 20th April 2024
Virtual
Post-Examination Training for Certified
Banking Compliance Professional 18 – 20 April 2024
th th

Programme on MSME Financing 22nd – 24th April 2024

Programme on Basic Credit Analysis 24th – 25th April 2024
Post-Examination Training for Certificate in
Risk in Financial Services 24th – 26th April 2024

News from the Institute

IIBF entered into MoU with FPSB for Certified Financial Planner certification program
The Institute has entered into a strategic Memorandum of Understanding (MoU) with FPSB India, the Indian
subsidiary of Financial Planning Standards Board Ltd., the global standards-setting body for the financial
planning profession and owner of the International Certified Financial Planner (CFP) certification program.
Under this significant partnership, candidates who have successfully attained the CAIIB qualification from IIBF
and have a valid three-year experience in the BFSI sector will be exempted from passing the first three modules
of CFP certification and directly become eligible to enrol in FPSB India’s Integrated Financial Planning module
through the Fast Track Pathway. For more details, visit www.iibf.org.in
IIBF-IFC joint Certificate course on Climate Risk and Sustainable Finance
The Institute entered into an agreement with International Financial Corporation (IFC) for providing a
certification course on Climate Risk and Sustainable Finance. The course is divided into two parts- Basic and
Advanced. It is in the form of self-paced e-learning, comprising around 6 hours of learning in each part followed
by an assessment. On successful completion, a joint certificate will be issued by IIBF and IFC. For more details,
visit www.iibf.org.in

IIBF VISION 6 April 2024

 News from the Institute - Green Initiative - Market Roundup

IIBF releases the third edition of Banking & Finance Yearbook, 2024
IIBF releases the third edition of the “Banking & Finance Yearbook, 2024”. It is a comprehensive digest of all
major developments, trends, expert views and regulatory changes across different verticals in Banking & Finance
domain for the year ended December 31, 2023. The book is available on Amazon both as a paperback and as a
Kindle edition. It is available in the retail outlets of our publisher, M/s Taxmann Publications (Pvt.) Ltd.
Bank Quest Theme for upcoming issue
The theme for the upcoming issue of Bank Quest for the quarter April – June, 2024 is “Risk Management in
Banks- Beyond Regulations”.
Cut-off date of guidelines/important developments for examinations
The Institute has a practice of asking questions in each exam about the recent developments/guidelines issued by
the regulator(s) in order to test if the candidates keep themselves abreast of the current developments. However,
there could be changes in the developments/guidelines from the date the question papers are prepared and the
dates of the actual examinations.
In order to address these issues effectively, it has been decided that:
1) In respect of the exams to be conducted by the Institute for the period from March 2024 to August
2024, instructions/guidelines issued by the regulator(s) and important developments in banking and
finance up to 31st December 2023 will only be considered for the purpose of inclusion in the question
papers.

2) In respect of the exams to be conducted by the Institute for the period from September 2024 to February
2025, instructions/guidelines issued by the regulator(s) and important developments in banking and
finance up to 30th June 2024 will only be considered for the purpose of inclusion in the question papers.

Green Initiative
Members are requested to update their e-mail address with the Institute and send their consent to receive the
Annual Report via e-mail.

Market Roundup
RBI Reference Rate Weighted Average Call Rates (%)

Source: FBIL Source: Weekly Newsletter of CCIL

IIBF VISION 7 April 2024

 Market Roundup

● Registered with Registrar of Newspapers Under RNI No. : 69228/1998 Crude Oil Price (Rs./bbl.)

Aggregate Deposit Growth (%)

Source: PPAC, Ministry of Petroleum and Natural Gas

Source: Monthly Review of Economy, CCIL, March 2024

BSE Sensex and NIFTY 50

Bank Credit Growth (%)

Source: Reserve Bank of India Source: BSE & NSE

Printed by Biswa Ketan Das, Published by Biswa Ketan Das, on behalf
Non-food Credit Growth (%) of Indian Institute of Banking & Finance, and printed at Onlooker Press
16, Sasoon Dock, Colaba, Mumbai - 400 005 and published at Indian Institute
of Banking & Finance, Kohinoor City, Commercial-II, Tower-I, 2nd Floor,
Kirol Road, Kurla (W), Mumbai - 400 070.
Editor : Biswa Ketan Das

Source: Monthly Review of Economy, CCIL, March 2024

Gold Price 999per gm (Rs.)

INDIAN INSTITUTE OF BANKING & FINANCE

Kohinoor City, Commercial-II, Tower-I, 2nd Floor, Kirol Road, Kurla (W),
Mumbai - 400 070.
Tel. : 91-22-6850 7000
E-mail : [email protected]
Source: Gold Price India
Website : www.iibf.org.in

IIBF VISION 8 April 2024