Issue: 1242
· Shri Sanjay Lohiya,
Secretary, Department of Financial Services, nominated on RBI Central Board.
· USFDA issues import alert for
drugs made at a Dabur India plant.
· The European Central Bank on
Thursday raised its key interest rate to 2.25 percent to tackle a jump in
inflation.
· Trump names prosecutor Jay
Clayton as new US intelligence chief.
· High logistics costs, static
interchange fees lead to ATM cash shortages.
· Foreign funds move SAT
against Sebi over adjudication procedure dispute.
· ICICI, Axis, BoB raise
FCNR(B) deposit rates to 6% after RBI move.
· India restricts diesel and
petrol sales at retail pumps for bulk users.
· Petrol blended with 22-30%
ethanol exempted from central excise.
India to remain fastest
growing economy at 6.6% in FY27, says World Bank: India is expected to remain
the world's fastest-growing major economy in financial year 2026-27, although
growth is projected to ease to 6.6 per cent from 7.7 per cent in the previous
fiscal year amid higher energy prices and rising input costs, according to the
World Bank's latest Global Economic Prospects report. “Growth in India is
projected to moderate to 6.6 per cent in fiscal year 2026/27 (April 2026 to
March 2027), reflecting a slowdown in private demand growth owing to higher
energy prices and other input costs,” the World Bank said in the report. The
multilateral lender expects India's growth to recover to 7.2 per cent in fiscal
year 2027-28, supported by stronger domestic demand and an improvement in
exports. Forecasts published in the report show India growing at 7.7 per cent
in FY26, 6.6 per cent in FY27, and 7.2 per cent in FY28.
(Business Today)
Govt mulls expanding
India’s fuel availability to cover three months of demand from 60 days
currently: Public
sector oil companies may be asked to build additional crude stockpiles after geopolitical
situation stabilises; move aimed at strengthening India’s energy security amid
volatile global markets. At the moment, Indian government has said that
India has fuel availability for 60 days. However, this is not indicative of
strategic petroleum reserves and includes refined fuel in storage with OMCs and
product in pipelines or in transit for supply across the country. A
medium-term plan to expand India’s emergency fuel availability to cover up to
three months of demand is under consideration with the government, a senior
official said. This proposal is part of a larger strategy in the works to
reassess the country’s energy security framework following recent geopolitical
disruptions and volatility in global crude markets. India imports nearly 89
percent of its oil needs, making it highly vulnerable to global supply shocks
and swings in crude prices.
(Moneycontrol)
India’s allocation in
global emerging markets hits 5-year low: Citi: In its latest report, Citi
Research said India’s allocation in Global Emerging Market (GEM) funds is
currently at a five-year low. The brokerage noted that India’s weight in the
global emerging market index has declined from around 20% in mid-2024 to about
11%, while global portfolios remain close to a 20-year high underweight
position on Indian equities. According to Citi, foreign investor sentiment
towards India remains subdued amid persistent geopolitical uncertainty and the
associated macroeconomic challenges. The brokerage also highlighted concerns
that India is not a significant participant in the global AI infrastructure
buildout, making it important to monitor the medium- to long-term implications
for employment, wages and consumption.
(Financial Express)
Banks seek clarity on
leveraging FCNR deposits through foreign branches: Indian lenders have sought
clarity from the Reserve Bank of India (RBI) on whether domestic banks can
leverage the foreign currency non-resident bank [FCNR(B)] deposit scheme by
extending loans to depositors through their overseas branches, bankers said. This
follows the RBI’s decision to allow depositors to borrow from foreign banks for
placing FCNR(B) deposits with Indian banks, while permitting Indian banks to
issue letters of credit (LoCs) to support such borrowings. “It remains unclear
whether the guidelines permit overseas branches of Indian banks to provide
leverage to their own customers. The current rules do not explicitly address
that scenario, and further clarification is needed,” said a senior executive at
a large private-sector bank.
(Financial Express)
Bank credit grows over 17%
in May, extending double-digit rise for 9th month in a row: Bank credit saw a strong 17.44
percent growth in May. This marks the ninth straight month of double-digit
expansion. Demand for loans from individuals and businesses remains high.
Credit growth has consistently stayed above 13 percent since January. The
Reserve Bank data shows a sustained upward trend in lending. On
May 15, credit growth was seen at 16.06 per cent, indicating a sharp pickup by
month-end.
(Economic Times)
Eight public sector banks
add 13,223 employees in FY26; SBI leads hiring spree: Eight of the 12 public sector
banks added 13,223 employees in FY26, taking their combined workforce to over
6.28 lakh, with State Bank of India (SBI) accounting for the bulk of the
hiring. Analysis of data compiled by
PTI from banks' annual reports shows that the total employee strength of the
eight public sector banks stood at 6,28,203 at the end of March 31, 2026,
compared with 6,14,980 in FY25, marking an increase of 13,223 employees.
(Economic Times)
84% of Indian banking
leaders report rising fraud losses, AI-driven threats emerge as major concern: As artificial intelligence
increasingly reshapes the financial sector, Indian banks are facing a sharp
rise in fraud-related challenges, with 84 per cent of banking leaders reporting
higher fraud losses over the past year, according to a survey report by
BioCatch. The survey, which covered
1,440 fraud-management, anti-money laundering (AML), and risk and compliance
leaders across 25 countries, found that India has emerged as one of the most
concerned and heavily impacted markets when it comes to financial fraud and
AI-enabled threats. It stated "84 per cent of
respondents recognize AI agents as the industry's greatest exploitable
vulnerability in the next year"
(Economic Times)
RBI issues draft CCR
framework aligned with global standards: RBI has issued draft
guidelines for computing banks' counterparty credit risk (CCR) from derivative transactions
and capital requirements for bank exposures to central counterparties to bring
it in line with international standards. In draft guidelines the
central bank has clarified on the scope of CCR across both banking and trading
book exposures and how banks can treat multiple margin agreements and multiple
netting sets in line with regulatory developments.
(Economic Times)
PLI scheme attracts Rs 2.4
lakh crore in investments till March 2026: The flagship Production Linked Incentive (PLI)
scheme attracted investments worth Rs 2.4 lakh crore by the end of FY26, with
the highest inflows recorded in sectors such as solar PV modules,
pharmaceutical drugs and automobiles and auto components. According to data
obtained by Business Today through a RTI request, 892 applications had been
approved under the PLI scheme as of March 2026. By the end of FY26, the scheme
had generated production and sales worth Rs 22.66 lakh crore and contributed Rs
14.15 lakh crore in value addition. The PLI scheme was launched in April 2020 as part
of the Centre’s Make in India programme to promote domestic manufacturing. With
an initial outlay of Rs 1.91 lakh crore, the scheme has been implemented across
14 key sectors, including large-scale electronics manufacturing, IT hardware,
pharmaceuticals, bulk drugs and medical devices, among others.
(Business Today)
TCS partners with Anthropic
to accelerate enterprise AI adoption with Claude: Tata Consultancy Services (TCS) today
announced a global partnership with Anthropic AI to scale enterprise AI
adoption by providing early access to Claude models through a Business Unit. Noting
that in regulated industries, most AI initiatives stall at the pilot stage, TCS
will bring Claude models to enterprises that demand accuracy, deep integration,
resilience and strong governance.
(Business Line)
Citi cuts Nifty
target to 26,000 on geopolitical risks, AI concerns: Global brokerage Citi has lowered its
target for the Nifty 50 index to 26,000 from 27,000, citing persistent
geopolitical tensions, risks to corporate earnings growth, and concerns about
India's position in the global artificial intelligence (AI) ecosystem. The
Nifty 50 index last closed at 23,162, implying a 12 per cent upside from
current levels. Citi has rolled forward its valuation framework to March 2028
earnings and now values the benchmark index at 18 times forward earnings.
(Business Standard)
SEBI proposes uniform
price-band mechanism for stocks listed on multiple exchanges: SEB proposed a uniform
mechanism to determine price bands and pre-open session base prices for stocks
listed on multiple exchanges, to address instances of significant price divergence
in illiquid securities.The regulator has proposed that where a stock trades on
only one exchange on a given day, the other exchange should use the closing
price of the exchange where trading occurred to determine the next day’s price
band and the base price for the pre-open call auction session. Further, where a
stock trades on two or more exchanges but remains inactive on one or more of
them, the non-trading exchange would use the closing price of the exchange with
the highest trading volume for that stock to determine the subsequent day’s
price band and pre-open base price.
(Business Line)
Supreme Court introduces
compensation for homemaker accident deaths: The Supreme Court on Thursday
recognised “loss of domestic care” as a separate head of compensation in motor
accident cases involving the death of a homemaker, holding that the economic
value of domestic and caregiving work performed by women has long been
undervalued. To address this gap, a Bench of Justice Sanjay Karol and Justice
NK Singh directed that in cases involving the death of a homemaker, tribunals
and courts should award a composite sum under the new head of “loss of domestic
care”. The amount has been fixed at Rs.30,000 per month, subject to a
cumulative 10 per cent increase every three years. The Bench delivered the
ruling while enhancing compensation in a 2001 accident case from Haryana, where
a homemaker died in a road accident.
(Business Standard)
X-EFFICIENCY
§ X-efficiency
refers to the degree of efficiency maintained by firms under conditions of
imperfect competition. Efficiency in this context means a company getting the
maximum outputs from its inputs, including employee productivity and
manufacturing efficiency.
§ In
a highly competitive market, firms are forced to be as efficient as possible to
ensure strong profits and continued existence. This is not true in situations
of imperfect competition, such as with a monopoly or duopoly.
§ When
calculating x-efficiency, a data point is usually selected to represent an
industry and then it is modeled using regression-analysis. For example, a bank
might be judged by total costs divided by total assets to get a single data
point for a firm. Then, the data points for all the banks would be compared
using regression analysis to identify the most x-efficient and where the
majority fall.
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 : 95.7205
INR
/ 1 GBP : 128.0491
INR
/ 1 EUR : 110.5017
INR
/100 JPY: 59.6100
EQUITY INDEX
Sensex:
73832.55 (-150.63)
NIFTY:
23161.60 (-53.35)
Bnk NIFTY: 55176.75 (+76.45)
World Day Against
Child Labour: June 12th is
globally recognized as the World Day Against Child Labour, an international
observance established by the International Labour Organization (ILO) to raise
awareness and campaign against child labor. This day also commemorates the
declaration of independence of Philippines from Spain in 1898.
Historical
events: June 12 marks
significant global milestones, notably the 1964 sentencing of Nelson Mandela to
life in prison and the 1975 ruling invalidating PM Indira Gandhi's election,
which triggered the Indian Emergency. Globally, it also commemorates the 1967
U.S. Supreme Court ruling on interracial marriage and the UN's World Day
Against Child Labour.
****Have a nice Day****
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