What’s new in the banking space
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India, China among top remittance recipientsThe top five remittance recipients in current US dollar terms in 2021 were India ($87 billion), China ($53
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NPAs of NBFCs, HFCs may rise for 3-4 quarters due to tweak in norms
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Non-banking finance companies (NBFCs), including housing finance companies (HFCs), may see an increase in non-performing assets (NPAs) for three-four quarters due to the tweak in norms relating to when a borrower account can be flagged as overdue and tightening of rules relating to upgradation of NPA accounts.
However, NPAs are expected to stablise a couple of quarters after the Reserve Bank of India’s modified “Prudential norms on Income Recognition, Asset Classification and Provisioning (IRACP) pertaining to Advances” take effect, say industry experts.
The RBI has asked lending institutions to comply with the aforementioned prudential norms at the earliest, but not later than March 31, 2022.
Limited economic impact
Experts assessed that the impact of the modified norms could only be an accounting one and not so much economic as many NBFCs are not only holding more than required provisions under the expected credit loss (ECL) framework but also Covid-related provisioning buffer.
“Many NBFCs are following monthly tagging of NPAs but RBI has proposed NPA tagging as part of day-end process for the relevant date. So, due to the changed norm, assets in the special mention account/SMA-2 category (when principal or interest payment in a loan account is overdue for more than 60 days and up to 90 days) could migrate to the NPA category,” said a senior NBFC official.
Krishnan Sitaraman, Senior Director and Deputy Chief Ratings Officer, CRISIL Ratings, assessed that the RBI’s clarifications to the ‘Prudential norms on IRACP pertaining to Advances’, which now ask the NBFCs to recognise NPAs on a daily due date basis as part of their day-end process, will lead to higher gross NPAs (GNPAs).
No more flexibility
Referring to most NBFCs following month-end NPA recognition, he noted that typically, they ramp up collection activity on overdue accounts between the due date and the month end, which is why overdues reduce towards the month-ends. Now, this flexibility is no longer available.
“Bounce rates in the 60-90 days bucket are estimated at 25-35 per cent. Consequently, a significant proportion of the loans in the 60-90 days bucket may slip into the more than 90 days overdue bucket and will have to be recognised as NPA,” Sitaraman said.
On RBI stipulation that loan accounts classified as NPAs can be upgraded as ‘standard’ asset only if entire arrears of interest and principal are paid by the borrower, he opined that typically, it has been difficult for retail borrowers classified as NPAs to fully clear their three or more overdue instalments quickly.
Data shows these borrowers clear only one or two additional instalments typically, so their accounts remain overdue even when it’s for less than 90 days.
Sitaraman said:“The combination of day-end recognition and tighter upgradation criteria means such accounts are likely to remain classified as NPAs for a longer period.
“Consequently, the headline reported GNPAs will rise and stay elevated for some time. This will also increase the operational intensity for NBFCs as they align their systems for daily stamping of NPAs.”
RBI tweaked the criteria for upgradation of accounts classified as NPAs as it found some lending institutions upgrading accounts classified as NPAs to ‘standard’ asset category upon payment of only interest overdues, partial overdues, etc. To avoid any ambiguity in this regard, the central bank clarified that loan accounts classified as NPAs may be upgraded as ‘standard’ asset only if entire arrears of interest and principal are paid by borrower.
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Fall in share of MCLR-linked loans
PMJDY adds 1.3 crore beneficiaries in H1 of FY22
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Interest in the Pradhan Mantri Jan Dhan Yojana (the world’s largest financial inclusion scheme, continues unabated with 1.30 crore new beneficiaries getting added in the first half of the financial year 2021-22.
The total number of beneficiaries has gone up to 43.50 crore at the end of September 2021 while it was at 42.20 crore on April 1, 2021. The total balance in the basic savings bank accounts opened under the scheme, however, almost remained flat at ₹1,45,272 crore (as on September 29, 2021), as per the government data.
The continued growth in the number of accounts is driven by strong efforts by the banks as well as increasing interest among the low-income groups in seeing the scheme as a ‘passport’ to government schemes, according to bankers.
“In actual terms, the number would have been much higher but the first quarter of the current fiscal had seen the massive impact of the second pandemic wave, resulting in scaling down of operations and deployment of staff on a staggered basis by the public sector banks,” said a senior official of SBI, adding that “utmost priority” is being given to the scheme.
Interestingly, the first half of the last financial year (FY2020-21) was better for the flagship financial inclusion drive of the Centre.
Despite the first wave of the pandemic and the national lockdown from the end of March 2020, there was a massive addition of 2.83 crore new beneficiaries between April 1 and September 30, 2020, with the total number of beneficiaries increasing from 38.07 crore to 40.90 crore. “The rollout of some of the benefits of Pradhan Mantri Garib Kalyan Yojana as Covid relief to Jan Dhan accounts holders had led to a greater rush in opening new accounts last year. If we exclude that impact, the surge in new numbers in the first half of current fiscal year is impressive, thanks to efforts of the public sector banks,” said an economist with a leading private bank, adding that the private sector banks are placing the scheme on the back burner.
Enabler
The expansion of the financial inclusion scheme in the country is still on. As on November 10, 2021, the total beneficiaries stood at 43.85 crore even as the total balance in the accounts edged up to ₹1,48,069 crore. Thus, the scheme has come a long way since its launch in 2014 offering a host of benefits to the beneficiaries. PMJDY has now become an effective enabler for the digitisation of financial transactions apart from being a tool to bring the unbanked into the ambit of the formal banking system.
This has been ably supported by initiatives to ensure last-mile delivery of banking services through innovative banking channels like the ‘BC model’. Thanks to technology, there has been a massive improvement in the deepening of digital financial services, more so after the demonetisation of 2016.
The Jan Dhan, Aadhaar and Mobile (JAM) ecosystem has made a significant difference in the universe of financial inclusion. PMJDY formed the bedrock of Reserve Bank’s pilot project, launched in 2019, in association with banks of making at least one district in each State/UT 100 per cent digitally enabled. This project covered 42 districts and was aimed at facilitating greater access and usage of digital payments by the common man.
The State Level Bankers’ Committees (SLBCs) have been advised by RBI to give renewed focus and emphasis to ensure sustenance of the digital progress in these identified districts. Further, to promote ‘universal access to financial services’ under the National Strategy for Financial Inclusion (NSFI), access to some form of banking outlet has been provided to 99.9 per cent of the targeted villages within a 5 km radius/ hamlets with 500 households in hilly areas. All these efforts are being supported to a larger extent by the Jan Dhan scheme. According to RBI data, as of March 2021, banks have achieved a digital coverage of 95.9 per cent of individuals while the achievement for businesses stood at 89.8 per cent.
Road ahead
The achievements of PMJDY have been duly recognised by many. While there is much to cheer over the progress made so far, it is pertinent that the scheme needs to be scaled up on a priority basis. The government in particular and banks, in general, must continue their efforts for greater financial inclusion in pursuance of the goal of a sustainable future for all. There is a need to speed up the issue of RuPay cards to Jan Dhan account holders.
Almost 28 percent of PMJDY beneficiaries are yet to be issued RuPay Cards. Out of 43.85 crore beneficiaries (as on November 10, 2021), 31.72 crore have been issued the cards.
As observed by the RBI governor Shaktikanta Das recently, there is a need for an accelerated universal reach of bank accounts along with access to financial products relating to credit, investment, insurance and pension.
It is the responsibility of all the stakeholders to ensure that the financial ecosystem (including the digital medium) is inclusive and capable of effectively addressing the risks like mis-selling, cyber security, data privacy and promoting trust in the financial system through appropriate financial education and awareness. These efforts have to be supported by a robust grievance redressal mechanism, according to Das.
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Vulnerability in PNB server exposed customer data for about seven months: CyberX9
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A vulnerability in the server of Punjab National Bank allegedly exposed the personal and financial information of its about 180 million customers for about seven months, according to cyber security firm CyberX9.
CyberX9 has claimed that the vulnerability provided access to the entire digital banking system of PNB with administrative control.
Meanwhile, the bank has confirmed the glitch but denied any exposure of critical data due to the vulnerability.
PNB said, “customer data/applications are not affected due to this” and “server has been shut down as a precautionary measure.” “Punjab National Bank kept severely compromising the security of funds, personal and financial information of over 180 million (all) its customers for about the last 7 months. PNB only woke up and fixed the vulnerability when CyberX9 discovered the vulnerability and notified PNB through CERT-In and NCIIPC,” CyberX9 founder and MD Himanshu Pathak told PTI.
He said CyberX9 research team discovered a critical security issue in PNB, leading to admin access to internal servers hence exposing a massive number of banks’ systems nationwide open for cyber-attacks for the last about seven months.
Pathak said that vulnerability was found in an exchange server interconnected with other exchanges and shares all access — including access to all email addresses, which results in access to all email addresses.
“The vulnerability which we discovered was leading to the highest level of admin privilege in PNB’s exchange servers. If you gain access to Domain Controller through an exchange server, the doors are easily open to make any computer accessible in the network.
“These computers even include those that are being used in their branches and other departments,” Pathak said.
When contacted, PNB said, the server in which the vulnerability was found had no sensitive or critical data.
“The server wherein the vulnerability was reported, was being used as one of the multiple Exchange Hybrid servers used to route emails from On-prim to Office 365 Cloud. There is no sensitive/critical data in this server,” PNB said.
PNB denied CyberX9 claim on the impact of the vulnerability on customer’s data.
“The server is in a separate VLAN segment and customer data/applications are not affected due to this. Vulnerability assessments and penetration testing is done periodically by external Cert-in empanelled Information Security Auditors and the observations are complied with.
Now this server has been shut down as a precautionary measure,” PNB said.
According to CyberX9, the vulnerability was mitigated on November 19, and it reported the incident to Indian cyber security watchdog Cert-In and National Critical Information Infrastructure Protection Centre (NCIIPC).
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Federal Bank Revises Interest Rates On FD: Now Get Up To 6.25%
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Federal Bank Resident Term Deposits Interest Rates
On single term deposits of less than Rs 2 Cr, regular customers and senior citizens will now get the following interest rates on their deposits maturing in 7 days to 5 years and above.
| Tenure | Regular Interest Rates (p.a.) | Senior Citizens (p.a.) |
|---|---|---|
| 7 days to 29 days | 2.50% | 3.00% |
| 30 days to 45 days | 2.75% | 3.25% |
| 46 days to 90 days | 3.00% | 3.50% |
| 91 days to 180 days | 3.75% | 4.25% |
| 181 days to 270 days | 4.00% | 4.50% |
| 271 days to less than 1 year | 4.40% | 4.90% |
| 1 year | 5.10% | 5.60% |
| Above 1 year to less than 16 Months | 5.00% | 5.50% |
| 16 Months | 5.25% | 5.75% |
| Above 16 months to less than 2 years | 5.00% | 5.50% |
| 2 years to less than 5 years | 5.35% | 5.85% |
| 5 years and above | 5.60% | 6.25% |
| Source: Bank Website. W.e.f 17/11/2021 |
Federal Bank NRE Term Deposits Interest Rates
On NRE term deposits of Rs.2 crore and above, Federal Bank is providing the following interest rates which are in effect from 16/11/2021.
| Period | Deposit of Rs.2 crore to Rs.5 crore | Deposit of above Rs.5 crore to Rs.25 crore | Deposit of above Rs.25 crore to Rs.50 crore | Deposit of above Rs.50 crore |
|---|---|---|---|---|
| 1 year | 4.25% | 4.25% | 4.25% | 4.25% |
| Above 1 year to 20 months | 4.25% | 4.25% | 4.25% | 4.25% |
| Above 20 months to 2 years | 4.75% | 4.75% | 4.75% | 4.75% |
| Above 2 years to 3 years | 4.75% | 4.75% | 4.75% | 4.75% |
| Above 3 years to 5 years | 4.75% | 4.75% | 4.75% | 4.75% |
| Above 5 years | 4.75% | 4.75% | 4.75% | 4.75% |
| Source: Bank Website. W.e.f 16/11/2021 |
Federal Bank Deposit Plus Interest Rates
Federal Bank also offers a Deposit Plus account to its resident Indian citizens, which requires a minimum deposit amount of Rs 15,00,001 and is only available as a cash certificate or fixed deposit. There is no option for premature withdrawal on these deposits, and the senior citizen rate is only applicable on deposits of less than Rs 200 lakhs. The bank has also modified the interest rates on these deposits, which are in force from 17th November 2021.
| Period | General Public | Senior Citizen |
|---|---|---|
| 1 year | 5.15% | 5.65% |
| Above 1 year to less than 16 months | 5.05% | 5.55% |
| 16 months | 5.35% | 5.85% |
| Above 16 months to less than 2 years | 5.05% | 5.55% |
| 2 years to less than 5 Years | 5.40% | 5.90% |
| 5 Years | 5.65% | 6.30% |
| Source: Bank Website. W.e.f 17/11/2021 |
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10 Most Precious Metals in the World
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Rhodium
Rhodium holds the title of being the most expensive precious metal on the planet.
This exceedingly uncommon precious metal is defined as a silver-white, robust, corrosion-resistant inert transition metal. After a price increase of more than 30% this year, rhodium is quietly one of the hottest trades right now.
One of the most valued precious metals is rhodium. Rhodium prices are, in fact, far greater than gold prices. Due to its rarity, rhodium is only available in a fraction of the amount of gold. The large price disparity between gold and rhodium is due to the fact that gold mines are far more numerous than rhodium mines. Rhodium is a precious metal that is mostly mined in Russia, South Africa, and Canada because of its great corrosion and heat resistance. Its reflecting surfaces are employed in search lights, mirrors, and jewellery finishes, and it gives everything it touches a wonderful shine.
Platinum
This highly malleable metal is extremely resistant to corrosion and is prized for its metallic luster and shiny appearance. Platinum, which is mostly used for jewelry, is also employed for a variety of weapons, aeronautics, and dental equipment due to its high level of resistance. Although it is a risky investment, platinum’s unique supply and demand dynamics have the potential to generate exceptional profits.
Many investors are astonished to learn that platinum is more scarce than gold.
South Africa, Russia, Canada, and other mineral processing countries are some of the largest producing countries.
Gold
Despite not being the rarest metal, gold remains the most desired metal on the planet due to its durability, flexibility, and desirability. Its golden lustre and chemical qualities make it a valuable component in a variety of machines. Of course, gold’s reputation as a prominent and valuable metal is not unfounded. Gold has been used as currency as a symbol of riches, prestige, and power in almost every society, and the modern world is no exception. Few objects occupy as important a space in our lives as gold, whether it be wedding bands, accolades, or even money.
It is still considered somewhat uncommon, hence the high price, and has been used significantly throughout history for coins, jewellery, and arts. South Africa, the United States, Australia, and China are the top gold producers.
Ruthenium
Ruthenium is fourth on our list of the most expensive precious metals.
Ruthenium is a chemical element with the symbol Ru and the atomic number 44. Ruthenium, one of platinum’s cousins, preserves many of the metal group’s best qualities and is frequently employed as a platinum alloy due to its resistance to outside elements. It is most typically found in electronic devices. It can be used as an alloy to increase the hardness and resistance of platinum and palladium. Ruthenium has become increasingly used in the electronics industry as a plating material for electrical connections.
Russia, North and South America, and Canada are largest producers of Ruthenium
Iridium
Iridium is a hard silvery-white transition metal with the second-highest density on the planet.
It is the most corrosion-resistant metal, and it can be found in meteorites and the earth’s crust in large quantities. Iridium has a gleaming white appearance and a ridiculously high melting point. It is one of the densest elements on the planet and contributes to many advances in health, vehicles, and electronics. It is exclusively found in South Africa.
Iridium, like other PGMs, is produced as a by-product of nickel mining, and its largest reserves are in South Africa and Russia. Because of its scarcity in the earth’s crust, it usually only makes up a minor part of a PGM miner’s portfolio.
Osmium
metal that can be found as a trace element in alloys and platinum ores.
It’s the densest naturally occurring element, and it’s used to manufacture fountain-pen nibs and electrical contacts. It can be found in sections of Russia, as well as regions of North and South America.
Rhenium
Rhenium is one of the rarest metals in the earth’s crust, with the third-highest melting and boiling points of any stable element. It is one of the densest metals and has the third-highest melting point. Molybdenum, which is basically a by-product of copper mining, produces rhenium as a by-product. Chile, Kazakhstan, and the US are the top three producers. It is added to nickel-based superalloys to improve temperature strength and is utilized in high-temperature turbine engines. Filaments, electrical contact material, and thermocouples are some of the other applications.
Silver
Silver has the highest electrical conductivity, thermal conductivity, and reflectivity of any metal that has ever been discovered.
It can be found in the earth’s crust as an alloy with gold and other valuable metals, as well as in minerals such as Chlorargyrite and argentite. The majority of the world’s silver, on the other hand, is created as a by-product of gold, lead, copper, and zinc refining. Of all the metals, this one has the best electrical and thermal conductivity, as well as the lowest contact resistance.
Peru, China, Mexico, and Chile are the top four producers.
Scandium
Scandium was found in 1879 by spectrum investigation of the minerals euxenite and gadolinite in Scandinavia. Lars Nilsson, a Swedish scientist, is credited with giving it the Scandinavian name.
It has a silvery-white metallic hue and has been classed as a rare-earth element throughout history.
It’s present in most rare-earth and uranium-based deposits, but it’s only mined from certain ores in a few mines across the world.
Indium
Indium is the softest metal on the planet, except Alkali, and is a post-transition metal that makes up about 0.21 parts per million of the earth’s crust.
Indium has a melting point slightly higher than sodium and gallium, but slightly lower than lithium and tin.
Ferdinand Reich and Hieronymous Theodor Ritcher used spectroscopic methods to detect it in 1863. It was given the name Indium because of the indigo blue line in its spectrum.
China, South Korea, and Japan are the top three producers.
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Union finance minister Nirmala Sitharaman seeks greater coordination of bourses in GIFT, BFSI News, ET BFSI
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Clearing three proposals of the International Financial Services Centres Authority (IFSCA) on Saturday, Union finance minister Nirmala Sitharaman stated that greater coordination on certain aspects is needed among stock exchange authorities and different regulators for the development of GIFT City in Gandhinagar.
Clarifying that these aspects are not of major concerns, the FM who was on her maiden visit to the GIFT City, quickly added, “It is possible to sit around a table and sort them all out. That is the understanding that all of us have had (today).” The three proposals worth Rs 500 crore included sanctioning of Rs 269 crore for a supervisory technology fund for IT infrastructure, Rs 200 crore for IFSCA’s headquarter building in GIFT City and the FinTech scheme of Rs 45.75 crore. The FM was also informed that a bullion exchange will come up soon at the GIFT.
The FM, who was accompanied by Union ministers of state for finance Pankaj Chaudhary and Dr Bhagwat Kishanrao Karad as well as seven from the finance and corporate affairs ministries, listed out four points.
“First, the stock exchanges need to talk among themselves. Second, regulators, weather it is SEBI or RBI or insurance regulator (IRDAI) need to talk among themselves. Third, startups should be brought in and fourth the development of area outside IFSC (International Financial Services Centre) but within the GIFT City,” she said.
She suggested that the Gujarat government should engage with leading startups, not just those belonging to the fintech space, from Bengaluru, Hyderabad, Gurgaon among others and bring them to GIFT City, which will help create an ecosystem fora global financial hub at GIFT City.
Referring to the bilateral meetings with multinational business leaders during her visit to Washington in October for the World Bank meet, Sitharaman stated that several business leaders had then expressed their willingness to shift some of their core activities in different towns and cities in the US to India. “In that context, I did recommend to them that they must visit GIFT City,” said the FM,who shared the list of such companies with the authorities of GIFT City.
“Hopefully, an interaction and engagement with them will bring more business here,” added the FM.
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CyberX9, BFSI News, ET BFSI
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A vulnerability in the server of Punjab National Bank allegedly exposed the personal and financial information of its about 180 million customers for about seven months, according to cyber security firm CyberX9. CyberX9 has claimed that the vulnerability provided access to the entire digital banking system of PNB with administrative control.
Meanwhile, the bank has confirmed about the glitch but denied any exposure of critical data due to the vulnerability.
PNB said “customer data/applications are not affected due to this” and “server has been shut down as a precautionary measure.”
“Punjab National Bank kept severely compromising the security of funds, personal and financial information of over 180 million (all) its customers for about the last 7 months. PNB only woke up and fixed the vulnerability when CyberX9 discovered the vulnerability and notified PNB through CERT-In and NCIIPC,” CyberX9 founder and MD Himanshu Pathak told PTI.
He said CyberX9 research team discovered a very critical security issue in PNB which was leading to admin access to internal servers hence exposing a massive number of banks’ systems nationwide open for cyber-attacks for the last about seven months.
Pathak said that vulnerability was found in an exchange server which is interconnected with other exchanges and shares all access — including access to all email addresses which results in access to all email addresses.
“The vulnerability which we discovered was leading to the highest level of admin privilege in PNB’s exchange servers. If you gain access to Domain Controller through an exchange server then the doors very easily open to make any computer accessible in the network.
“These computers even include those that are being used in their branches and other departments,” Pathak said.
When contacted, PNB said the server in which the vulnerability was found had no sensitive or critical data.
“The server wherein the vulnerability was reported, was being used as one of the multiple Exchange Hybrid servers used to route emails from On-prim to Office 365 Cloud. There is no sensitive/critical data in this server,” PNB said.
PNB denied CyberX9 claim on impact of the vulnerability on customer’s data.
“The server is in a separate VLAN segment and customer data/applications are not affected due to this. Vulnerability assessments and penetration testing is done periodically by external Cert-in empanelled Information Security Auditors and the observations are complied with.
Now this server has been shut down as a precautionary measure,” PNB said.
According to CyberX9, the vulnerability was mitigated on November 19, and it reported the incident to Indian cyber security watchdog Cert-In and National Critical Information Infrastructure Protection Centre (NCIIPC). PTI PRS DP DRR DRR
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How To Download Annual Information Statement AIS (JSON) Offline?
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Taxes
oi-Vipul Das
|
The Income Tax Department of India introduced the new Annual Information Statement (AIS) on the Compliance Portal at the beginning of November 2021. Additional information on interest, dividends, securities transactions, mutual fund transactions, foreign remittance information, and other details is included in the new AIS. The new AIS can be downloaded by clicking on “Annual Information Statement (AIS)” under the “Services” tab on the new Income tax e-filing portal (https://www.incometax.gov.in).
However, taxpayers will also be able to download AIS information in PDF, JSON, CSV formats and resulting in the same the department has recently claimed via its Twitter handle “Income Tax India” that “Some more details of the new AIS. Too much data? You can download AIS (JSON) & work offline using AIS Utility.” Taxpayers who are overwhelmed by the amount of data on AIS can now download the AIS (JSON) file and work offline with the AIS Utility.
Also read: The Do’s & Don’ts of Annual Information Statement (AIS) For Taxpayers
How To Access Annual Information Statement (AIS) On e-Filing Portal?
Steps to download AIS (JSON) using offline AIS utility
- Visit https://www.incometax.gov.in/iec/foportal and log in to your account using PAN or Aadhaar Number.
- Now click on the link ‘AIS’ under the ‘Services’ tab.
- On the compliance portal (AIS Homepage) download the AIS utility from the resource section.
- Now download AIS as JSON from the AIS section and import JSON in the AIS utility.
- Now submit feedback on the AIS utility and export the feedback file.
- Now upload the output file and you are done.
- You can also refer to the resources section related documents and HELP section for any queries on the AIS homepage or else you can call 1800-103-4215 for more assistance.
Some more details of the new AIS.
Too much data?
You can download AIS (JSON) & work offline using AIS Utility.
Pl follow the steps given in the infographic below.
Click on link ‘AIS’ under ‘Services’ tab on https://t.co/GYvO3n9wMf #AIS #TaxPayerInformation #EaseOfCompliance pic.twitter.com/g3qDQNluRz— Income Tax India (@IncomeTaxIndia) November 16, 2021
Taxpayers may refer to the AIS documents (AIS Handbook, Presentation, User Guide and FAQs) provided in the “Resources” section or connect with the helpdesk for any queries through the “Help” section on the AIS Homepage.
Story first published: Sunday, November 21, 2021, 13:08 [IST]
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