Issue: 1287
·
Govt launches LIC OFS to sell up to 6.5% stake at Rs
382/share; non-retail issue opens on Aug 4.
·
RBI appoints Monisha Chakraborty as executive director.
·
EbixCash World Money's perpetual RBI licence brings trade and
family remittances within reach of millions.
·
Adani group proposes to invest Rs.1 trillion for data centre
in Odisha.
·
Govt considers duty parity for SEZ units on domestic market
sales.
·
Prasanta Mahapatra assumes charge as Sebi's Executive
Director.
·
RBI appoints Monisha Chakraborty as executive director from
August 3.
·
Nalco fined by BSE, NSE over shortfall in independent
directors on Board.
India’s kharif sowing
deficit shrinks to less than 3%; 81% of normal area covered: Farmers have planted kharif crops in nearly
107 lakh hectares (lh) during the July 25-31 week, aided by a 23 per cent
surplus in rain from the previous week that created suitable soil conditions
for sowing, compared to 94.5 lh a year ago. The higher sowing in the past week
has helped to further narrow the overall deficit to less than 3 per cent. The
deficit was 5 per cent until July 24. The sowing area in the ongoing kharif
season has reached 894.22 lh as of July 31 compared with 920.72 lh in the
year-ago period, down by 2.9 per cent, the Agriculture Ministry said in its
weekly update on Monday. The current coverage is 81 per cent of the season’s
normal area of 1,104.46 lh.
(Business Line)
PMI Manufacturing slips to
near 5-year low in July: The manufacturing sector
moderated in July, as the Purchasing Manager’s Index (PMI) for the month
slipped to a five-year low to 53.5 as against 54.2 in June, S&P Global
reported on Monday. Job creation also weakened in July. The index is below the
long-run series average of 54.2. According to the agency, manufacturers in
India continued to benefit from demand resilience, with a sustained rise in new
orders underpinning a further expansion in output during July. “However, growth
cooled across some metrics such as total sales, input purchasing and employment,”
it said.
(Business Line)
Rise in wholesale inflation
driven by global commodity, energy costs: Govt: The increase in wholesale
price inflation in June to 9.87 per cent was largely driven by price pressures
in items that are more sensitive to global commodity and energy costs,
Parliament was informed on Monday. Minister of State for Finance
Pankaj Chaudhary said in the Lok Sabha that the government has been actively
undertaking a series of measures to control inflation and mitigate its impact
on consumers. These measures include augmenting buffer stocks for essential
food items, strategically selling procured grains in the open market, and
calibrating trade policies. As a result of the government's measures, the
retail or Consumer Price Index (CPI)-based inflation rate has been below the 4
per cent target over the last two quarters -- 3.1 per cent (January-March of
FY26) and 3.9 per cent (April-June FY'27).
(Business Standard)
Govt takes first step to
levy MDR on UPI; bill proposes to repeal earlier amendment of Zero MDR: The Finance Ministry has taken
the first step to possibly levy Merchant Discount Rate (MDR) on UPI payments
for large merchants. The ministry has proposed
repealing the amendment of section 10A, which mandated that banks and payment
companies should not levy MDR on UPI payments. Once passed in Parliament,
this will help the government issue a Gazette notification imposing MDR on UPI.
(Moneycontrol)
Govt tables Bankers’ Books
Evidence Bill, 2026, in the Lok Sabha : The government on Monday
introduced the Bankers’ Books Evidence Bill, 2026, in the Lok Sabha to expand
the definition of “bankers’ books” to include all forms of records maintained
by banks, covering physical, electronic, digital, virtual, cloud-based or any
other format. This is intended to create a comprehensive and future-ready
framework for using banking records in legal proceedings.The Bill seeks to
modernise and strengthen the existing legal framework to meet the requirements
of the present banking system, recognising that banking records today are
increasingly created, stored and maintained using contemporary technology
rather than only in physical form, Finance Minister Nirmala Sitharaman said in
the Statement of Objects and Reasons for introducing the bill. A
key change proposed in the Bill is the explicit recognition of electronic bank
records as admissible evidence. It provides that courts can receive such
records either in physical or electronic form. The Bill also proposes
standardised certificate formats for bank records and allows authentication
through a “manual, digital, or electronic signature”.
(Financial Express)
RBI swap facility triggers
dollar rush as FCNR(B) deposits surge 86%, cross $60 billion in under 60 days: The Foreign Currency
Non-Resident (Bank) deposits in the Indian banking system have witnessed a huge
surge in under 60 days. This comes as the Reserve Bank of India’s concessional
swap facility, introduced on June 8, has helped push the FCNR(B) outstanding
balance to nearly double between June 5 and July 30, 2026. The FCNR(B)
outstanding balance rose from $32.5 billion (USD 32,558.5 million) to $60.5
billion (USD 60,548.7 million) — an 86% jump in under two months. Some
of the banks that are prominent in the recent dollar drive from NRIs include
HSBC, SBI, UCO Bank, Punjab National Bank and Standard Chartered.
(Financial Express)
Credit to tech infrastructure
sector doubles in two years: Bank loans for India's
technology infrastructure sector have doubled in two years. This growth
reflects India's position as a global hub for data centers. Loans to IT
services and digital infrastructure rose significantly year on year. This
expansion is driven by data centers, GCCs, and IT enabled services. These
segments are now showing robust growth in bank credit.
(Economic Times)
Private banks
step up FCNR (B) mobilisation with higher deposit rates: With two months left before the RBI's
concessional FCNR(B) swap window closes, private sector lenders are stepping up
efforts to mobilise deposits after foreign banks and SBI dominated inflows so
far. Large private sector banks such as HDFC Bank and ICICI Bank have increased
FCNR(B) deposit rates by 25 basis points (bps) to 6.25 per cent in the three-to-five-year
maturity bucket. According to data shared by the government in Parliament,
foreign banks mobilised $8.37 billion, taking their outstanding FCNR(B)
deposits to $8.97 billion from $603 million. Private sector banks garnered
$10.73 billion, while public sector banks mobilised $8.84 billion.
(Business Standard)
India achieves
near-universal banking coverage, with 99.92% of inhabited villages now served
by a banking outlet: The country has achieved near-universal
banking coverage, with 99.92% of inhabited villages (6,00,868 out of 6,01,328)
now served by a banking outlet (Bank branch / Business Correspondent / India
Post Payments Bank (IPPB)) within a radius of 5 km, as per the data uploaded by
banks on Jan Dhan Darshak (JDD) App. This banking expansion is supported by a
robust infrastructure of over 1.81 lakh bank branches, 17.36 lakh Business
Correspondents (BCs), and 1.65 lakh IPPB centers, as on 17.07.2026.
(Business Standard)
EPF wage ceiling hike to Rs.25,000
set to bring millions under pension net: A major overhaul of India’s retirement savings
framework is gathering momentum. The Finance Ministry has cleared a proposal to
raise the mandatory Employees’ Provident Fund (EPF) wage ceiling from Rs.15,000
to Rs.25,000 per month, shifting millions of private sector employees closer to
compulsory social security coverage. The proposal now awaits final sign-off
from the Union Cabinet. If approved, the decision will mark the first
revision to the threshold since September 2014, when the limit was raised from Rs.6,500
to Rs.15,000. While the government initially evaluated raising the threshold
even higher to Rs.30,000, officials eventually settled on the Rs.25,000 mark. Under existing rules,
compulsory enrolment in the Employees’ Provident Fund (EPF) and Employees’
Pension Scheme (EPS) applies only to workers earning a basic monthly salary of
up to Rs.15,000.
(Business Today)
Govt to offload 6.54% in
LIC, likely to get over Rs.31,000 crore: Government on Monday announced offloading up
to 6.54 per cent of its holding in the Life Insurance Corporation of India
through offer for sale (OFS)mechanism. Going by the floor price, it is expected
to fetch over Rs.31,000 crore to the government, which will be biggest proceed
from any OFS till date. “Offer for Sale in LIC opens tomorrow for non-retail
investors. Retail investors can bid on Wednesday. Government offers to
disinvest 2.5 per cent equity with an additional 4 per cent as a green shoe
option. Floor price has been fixed as Rs.382 per share,”
(Business Line)
India's next road safety
upgrade? Govt proposes mandatory V2V systems for vehicles from 2028: India is preparing for a major shift in
automotive safety, with the government proposing to make Vehicle-to-Vehicle
(V2V) communication systems mandatory in new vehicles. The move is aimed at
enabling cars, buses, trucks and two-wheelers to exchange real-time information
that could help prevent collisions, warn drivers of hazards before they are
visible, and lay the foundation for a connected transportation ecosystem. Vehicle-to-Vehicle (V2V)
communication allows nearby vehicles to wirelessly exchange critical
information such as speed, position, direction and acceleration.
(Business Today)
India proposes tax relief
for offshore funds using local managers: India has
proposed tax law amendments to shield offshore investment funds from
Indian tax liabilities when they route investments through India-based fund
managers, a draft bill showed. The proposed change comes as
the country faces significant foreign outflows, prompting the government to
take measures to attract overseas investors by easing access. Investors have
long complained about aggressive tax administration in India. The
government described the new rules as being framed "in order to promote
fund management activity and provide tax certainty."
(Moneycontrol)
Parliamentary panel
proposes mandatory NCLT insolvency benches, expands NFRA powers: A parliamentary committee on Monday proposed
key changes to the Corporate Laws (Amendment) Bill 2026, including mandatory
dedicated insolvency benches at the National Company Law Tribunal (NCLT) and
proposing wider prosecution powers for the National Financial Reporting
Authority (NFRA). In a report tabled in parliament, the 31-member joint
committee said that apart from regular benches dealing with cases of corporate
laws, mergers, acquisitions, specialised dedicated Insolvency and Bankruptcy
Code (IBC) benches must be established through a binding statutory obligation
rather than an enabling administrative option.
(Financial Express)
Parliamentary panel urges
govt to examine feasibility of permitting CSR contributions in kind: A Parliamentary panel has recommended to the
government to examine the feasibility of permitting CSR contributions in kind
through an appropriate statutory or regulatory framework. It has supported
increasing the threshold of profit to Rs.10 crore for CSR, which would benefit
Micro, Small and Medium Enterprises (MSME). At present, the Companies Act says
a company having net worth of Rs.500 crore or more or turnover of Rs.1,000
crore or more or a net profit of Rs.5 crore or more in the immediately
preceding financial years need to spend 2 per cent of its profit on Corporate
Social Responsibility (CSR). The Corporate Laws (Amendment) Bill proposed
raising the threshold for applicability of CSR to Rs.10 crore.
(Business Line)
CONTINGENT CONVERTIBLE (CoCo) BONDS
§ Contingent
Convertible (CoCo) Bonds are hybrid debt instruments issued by banks to
strengthen their capital base under the Basel III framework. These bonds
automatically convert into equity or are written down when a bank's capital
ratio falls below a predetermined trigger level, thereby absorbing losses
without requiring external capital support.
§ CoCo
Bonds enhance a bank's resilience during financial stress and reduce the burden
on taxpayers in case of bank failures. For bankers, understanding CoCo Bonds is
essential because they form part of Additional Tier 1 (AT1) capital and play a
significant role in capital adequacy, risk management, and regulatory
compliance.
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 : 95.2601
INR
/ 1 GBP : 128.2633
INR
/ 1 EUR : 109.8247
INR
/100 JPY: 60.7900
EQUITY INDEX
Sensex:
78639.03 (+544.39)
NIFTY:
24774.30 (+390.70)
Bnk NIFTY: 58247.95 (+983.10)
Historical events: World War I began
on 4 August 1914 when Britain declared war on Germany following Germany's
invasion of Belgium, marking the start of one of history's deadliest conflicts.
On 4 August 1789, during the French Revolution, the French National Constituent
Assembly abolished the feudal system, a landmark step toward equality and
modern democracy. The day is also observed globally as the International Day of
the African Child's Education Awareness in some educational initiatives, while
in the United States it is recognized as the birth anniversary of Louis
Armstrong (1901), the legendary jazz musician who transformed modern music.
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