Issue: 1258
· UPI Goes Live in Greece with
the the live demonstration of the Eurobank-NIPL partnership enabling UPI
services at Eurobank headquarters in Athens.
· Banks NPA at multi-decadal
low of 1.8%, Indian financial system remains resilient: RBI report.
· RBI says microfinance credit
grows after seven quarters, borrower base continues to shrink.
· IRDAI chairman urges insurers
to build affordable products for Rs 5-25 lakh cover to boost penetration.
· Bima Sugam's first products
set for Sept-end launch: Irdai Chairman.
India emerges as UK’s
second biggest FDI investor, creating 12,700 jobs: India has been the second most
important foreign direct investor into the UK in 2025-26, helping create
thousands of jobs. This position is likely to improve further once the India-UK
Comprehensive Economic and Trade Agreement (CETA) comes into force on July 15.
The agreement, which provides duty-free access for nearly 99 per cent of Indian
exports to the UK and expands market access across 137 services sub-sectors, is
expected to encourage companies to establish a stronger presence in each
other’s markets.
(Business Line)
VB-G RAM G Act to come into
force from July 1: The Viksit Bharat -- Guarantee
for Rozgar and Ajeevika Mission (Gramin) Act, 2025 will come into force from
July 1.The Ministry of Rural Development said the Act provides a statutory
guarantee of up to 125 days of wage employment to eligible rural households,
compared to the 100 days provided under the existing rural employment
framework. The ministry said an interim allocation of Rs 95,692.31 crore has
been made to states and Union Territories to ensure a smooth transition, timely
wage payments and uninterrupted implementation of works under the new
framework.
(Business Standard)
Govt's fiscal deficit up
12-fold in April-May as revenue collections weaken: The government's fiscal
deficit widened sharply to Rs 1.62 trillion in April-May, more than 12 times
higher than a year ago, as pressure on revenue collections became more
pronounced despite the record-high surplus transfer from the Reserve Bank of
India (RBI) in May. At Rs 1.62 trillion, the government's fiscal deficit
accounted for 9.6 per cent of the Budget Estimate (BE) of Rs 16.96 trillion,
data released by the Controller General of Accounts on Tuesday showed. In
April-May 2025, the fiscal deficit was only 0.8 per cent of the BE..
(Business Standard)
HDFC Mid Cap Fund joins the
Rs 1 lakh crore club: HDFC Mid Cap Fund has crossed
Rs 1 lakh crore in assets under management (AUM), becoming one of the largest
actively managed mutual funds in the country. The milestone comes nearly 19
years after the fund was launched in June 2007 and highlights how investor interest
in equity mutual funds has grown over the years. According to HDFC AMC, the
fund has delivered a compound annual growth rate (CAGR) of 17.13 percent since
inception, outperforming its benchmark return of 15.04 percent over the same
period. The scheme has been managed by Chirag Setalvad since its launch. With
this milestone, HDFC Mid Cap Fund joins a small group of mutual funds with
assets of Rs 1 lakh crore or more.
(Moneycontrol)
Kotak Mahindra Bank to buy
Deutsche Bank’s India retail, wealth business for Rs 282 crore: Kotak Mahindra Bank Ltd will
acquire Deutsche Bank’s retail banking, affluent private banking and wealth
management business in India for Rs 282 crore, the lender said on June 30. The
business being acquired comprises about Rs 29,000 crore in loans, Rs 16,000
crore in deposits and Rs 10,500 crore in assets under management. It serves
around 1.5 lakh customers and has a team of about 1,000 employees. The
acquisition is expected to close by September 2027, subject to regulatory
approvals, including from the Competition Commission of India, and other
customary conditions, the release said.
(Moneycontrol)
PFRDA to launch NPS
Swasthya with top-up health insurance through insurer tie-ups: Health insurance companies
will soon be able to offer top-up health cover to National Pension System (NPS)
subscribers through partnerships with the Pension Fund Regulatory and
Development Authority (PFRDA). PFRDA Chairperson S. Ramann said the insurance
regulator is set to roll out NPS Swasthya product in the next 60-70 days,
Moneycontrol reported on Tuesday. The regulator's board has already approved
the product and it will soon issue a circular detailing its standard operating
procedure (SOP).
(Mint)
Irdai has granted two
general insurance licences since 100% FDI: Chairman: The Insurance Regulatory and
Development Authority of India (Irdai) has granted two new general insurance
licences since the government allowed 100% foreign direct investment (FDI) in
the sector in December, Chairman Ajay Seth said on Tuesday. “After the sector
was opened up for 100% FDI, we have already given two licences on the general
insurance side. One was approved yesterday,” Seth said at an event in Mumbai on
Tuesday, without naming the insurers.
(Financial Express)
BoB, Mizuho Bank forge
partnership to enhance collaboration in M&A financing: Bank of Baroda has joined
forces with Japan's Mizuho Bank to boost their capabilities in mergers and
acquisitions financing. This collaboration leverages Mizuho's global reach and
structured finance expertise with BoB's strong Indian market presence and
corporate ties. The partnership aims to enhance joint origination, structuring,
and syndication of acquisition financing, alongside M&A advisory and risk
distribution, promising a significant boost for cross-border deals.
(Economic Times)
RBI revises Certificate of
Registration surrender norms for NBFCs: RBI on Tuesday revised the
application form and indicative checklist for NBFCs, including housing finance
companies (HFCs), seeking voluntary surrender of their Certificate of
Registration (CoR), following changes to the regulatory framework for
Unregistered Type I NBFCs. The central bank said NBFCs and HFCs intending to
surrender their registration should submit the revised application form along
with the prescribed documents through its PRAVAAH portal. The changes follow
the RBI's amendment directions issued on 29 April 2026. The RBI had announced
in September last year that the application form and checklist for voluntary
surrender of registration would be made available on the PRAVAAH portal. The
latest revision incorporates changes arising from the new regulatory framework
for Unregistered Type I NBFCs.
(Business Standard)
Finance Ministry clears Rs.1.25-lakh
crore for India Semiconductor Mission 2.0: The Ministry of Finance has approved a Budget
proposal of approximately Rs.1.25 lakh crore for the India Semiconductor
Mission 2.0 (ISM 2.0). This funding supports the expansion of domestic
chip-making facilities and aims to attract global companies, reinforcing
India’s status as a premier global semiconductor hub. According to top
officials, the Department of Expenditure under the Ministry of Finance has
approved the proposal. This new allocation marks a significant increase over
the Rs.76,000 crore budget previously earmarked for ISM 1.0.
(Business Line)
Govt extends zero-duty
window for 40 petrochemicals till July 15: The government on Tuesday extended the nil
customs duty on imports of 40 critical petrochemical products by 15 days to
July 15, seeking to prevent supply disruptions and ease cost pressures on
downstream industries as conditions linked to the West Asia crisis gradually
normalise. The full duty exemption, introduced on April 2, was due to expire on
June 30. The finance ministry said the measure had been provided as temporary
and targeted relief to maintain adequate domestic availability after Indian
petroleum companies were asked to prioritise LPG production.
(Financial Express)
RBI flags
nascent stress in micro enterprises; retail loans need monitoring: Asset quality is holding up in the MSME
segment, but there are nascent signs of stress visible in micro enterprises,
and the retail loan segment needs close monitoring, the Reserve Bank of India’s
Financial Stability Report has noted. “In the MSME segment, while some nascent
stress is visible in micro enterprises, the overall gross NPA ratio has shown
improvement,” the report said, stressing that overall asset quality remains
benign amid above-average loan growth in the MSME and retail segments.
Household debt continued to rise, reaching 45.5 per cent of GDP at the end of
September 2025. The increase was driven mainly by non-housing retail loans,
which accounted for 58.4 per cent of total household borrowings as of March
2026. Borrowings for consumption purposes constituted nearly half of household
debt, followed by loans for productive purposes, while loans for asset creation
grew at a slower pace.
(Business Standard)
Performance-linked mutual
fund fee framework in place, but industry yet to adopt it: Market regulator SEBI has
already put in place an enabling framework that allows mutual funds to charge
performance-linked fees, but the provision has remained largely unused by the
industry, a senior official said on Tuesday. Speaking at Moneycontrol
Mutual Fund Summit in Mumbai, SEBI Executive Director Manoj Kumar said the
regulator considers the move one of the most significant reforms in the mutual
fund space, even though it has received little attention from market participants.
"We have created an enabling provision for a performance-based incentive
structure. Mutual funds are governed by the Total Expense Ratio (TER) limits,
but we have provided an enabling clause where, if you perform, you can earn.
However, neither the industry nor other stakeholders have spoken much about
it," Kumar said.
(Moneycontrol)
Govt keeps small savings
interest rates unchanged for July-September quarter: The government has kept
interest rates on all small savings schemes unchanged for the July-September
2026 quarter (Q2 FY27), extending the status quo for another quarter. The rates
will remain the same as those notified for the April-June 2026 quarter. The
Senior Citizen Savings Scheme (SCSS) and Sukanya Samriddhi Yojana (SSY)
continue to offer the highest interest rate of 8.2% per annum among major small
savings schemes. The National Savings Certificate (NSC) offers 7.7%, while the
Public Provident Fund (PPF) continues at 7.1% per annum. The Post Office
Monthly Income Scheme (POMIS) will continue to offer 7.4%, while the Kisan
Vikas Patra (KVP) carries an interest rate of 7.5%, with the investment
maturing in 115 months.
(Business Today)
India launches
FCRA 2.0 to tighten surveillance on foreign funds with wrong intentions: Union Home Minister has launched the FCRA
2.0 Portal on June 30. Foreign Contribution (Regulation) Act, 2010 regulates
the acceptance and utilisation of foreign contributions or foreign hospitality
by certain individuals or associations, or companies, and prohibits the
acceptance and utilisation of foreign contributions or foreign hospitality for
any activities detrimental to the national interest. The FCRA 2.0 Portal has been developed to
simplify compliance under the Foreign Contribution (Regulation) Act and to
strengthen the monitoring and enforcement mechanism. All major processes
related to applications, renewals, annual returns, and other services have now
been made fully digital (end-to-end). At present, around 14,500 active FCRA
organisations are working across the country. Every year, approximately 15,000
to 20,000 applications and about 17,000 annual returns are received.
(Financial Express)
OPTIMAL CAPITAL STRUCTURE
§ The
optimal capital structure of a firm is the best mix of debt and equity
financing that maximizes a company’s market value while minimizing its cost of
capital. In theory, debt financing offers the lowest cost of capital due to its
tax deductibility.
§ However,
too much debt increases the financial risk to shareholders and the return on
equity that they require. Thus, companies have to find the optimal point at
which the marginal benefit of debt equals the marginal cost.
§ An
optimal capital structure is the best mix of debt and equity financing that
maximizes a company’s market value while minimizing its cost of capital.
§ Minimizing
the weighted average cost of capital (WACC) is one way to optimize for the
lowest cost mix of financing.
RBI KEY RATES
Repo
Rate: 5.25%
SDF:
5.00%
MSF
/Bank Rate: 5.50%
CRR:
3.00%
SLR:
18.00%
FOREX RATES (RBI REF. RATE)
INR
/ 1 USD : 94.5975
INR
/ 1 GBP : 125.1333
INR
/ 1 EUR : 107.7169
INR
/100 JPY: 58.2700
EQUITY INDEX
Sensex:
76478.67 (-249.70)
NIFTY:
23865.75 (-80.50)
Bnk NIFTY: 57542.90 (-184.45)
National Doctors'
Day and Chartered Accountants Day: July 1 is a
highly celebrated date globally, most notably recognized in India as National
Doctors' Day and Chartered Accountants Day. National Doctors'
Day (India): Commemorated annually on July 1 to honor the birth and death
anniversary of the legendary physician, Dr. Bidhan Chandra Roy. It recognizes
the selfless contributions and dedication of medical professionals to public
health. Chartered
Accountants Day (India): Marks the foundation of the Institute of Chartered
Accountants of India (ICAI), which was established on July 1, 1949. It is also
the foundation day of SBI.
Historical
events: July 1 is a
landmark date that witnessed the establishment of the Dominion of Canada in
1867, the peaceful handover of Hong Kong to China in 1997, and significant
Indian milestones like the nationalization of the State Bank of India in 1955
and the launch of the GST in 2017.
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