FINANCE CURRENT AFFAIRS

MAY WEEK I
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Contents

RBI
Guidelines on Compensation of Key Managerial Personnel (KMP) and Senior Management in NBFCs .......... 2
Modified Interest Subvention Scheme for short-term Agri Loans availed through Kisan Credit Card (KCC) ... 4
Report on Currency and Finance (RCF) for the year 2021-22............................................................................ 5
Rajiv Ranjan nominated as an ex-officio member of the Monetary Policy Committee (MPC) ......................... 7
Off-cycle meeting of the Monetary Policy committee (MPC) ........................................................................... 8
RBI launches the May 2022 round of Consumer Confidence Survey (CCS) ...................................................... 9
RBI launches the May 2022 round of the Inflation Expectations Survey of Households (IESH) ....................... 9

SEBI
SEBI modifies operational guidelines for FPIs, Depository Participants .......................................................... 10
SEBI slaps Rs 6 lakh fine on Pace Stock Broking in NSE co-location case ........................................................ 11
SEBI cancelled registration of Alpha Commodity ............................................................................................ 12
SEBI rejigs Secondary Market Advisory Panel ................................................................................................. 13
SEBI Orders in different cases: ......................................................................................................................... 14

OTHERS
IFSCA issues Framework for FinTech Entity in the IFSCs ................................................................................. 15
Indian Bank launches Pre-Approved Personal Loan (PAPL) product under Project WAVE ............................. 16
Religare Broking partners Spice Money to help open Demat Accounts in Rural India ................................... 17
Exposure of Insurance Companies to Financial and Insurance Activities increased ....................................... 17

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RBI
Guidelines on Compensation of Key
Managerial Personnel (KMP) and Senior
Management in NBFCs
What
▪ Recently, RBI has issued the guidelines for NBFCs and their Nomination and Remuneration
Committees (NRCs) to formulate their compensation policy.
o The guidelines will be effective from April 1, 2023.

Why
▪ RBI has issued the guidelines in accordance with the revised Scale Based Regulatory (SBR)
framework put in place for the NBFCs in October 2021.
o Under the SBR Framework, NBFCs were required to put in place a Board approved
compensation policy in order to address the issues arising out of excessive risk taking
caused by misaligned compensation packages.

Tell me more
Applicability
These guidelines will be applicable for fixing the compensation policy of Key Managerial Personnel (KMP)
and members of Senior Management (SM) of all NBFCs under SBR framework, except:
➢ those categorised under the ‘Base Layer’ and
➢ Government owned NBFCs.
Constituent of the Compensation Policy
The policy, at the minimum will include:

1. Constitution of a
Remuneration Committee
2. Principles for
fixed/variable pay
structures
3. Malus/ Clawback
provisions

Also, while formulating the compensation policy, NBFCs are required to ensure that all statutory mandates
and the rules and directions issued by RBI are fully complied with.
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Key Guidelines

▪ The Boards of all applicable NBFCs shall constitute a Nomination and

Remuneration Committee (NRC), which will oversee the framing, review
and implementation of the Board-approved compensation policy.
▪ The NRC formed, will have the constitution, powers, functions and duties as
laid down in Section 178 of the Companies Act, 2013.
Nomination
and Functions of NRC:
Remuneration
➢ The NRC will work in close coordination with Risk Management Committee
Committee (RMC) to achieve effective alignment between compensation and risks.
(NRC) ➢ It will ensure that compensation levels are supported by the need to
maintain adequate capital by the company.
➢ NRC will also ensure that there is no conflict of interest in the appointment
of directors, KMPs and senior management.

The compensation of KMPs and senior management should be reasonable and may
Principles for comprise of fixed and variable pay components aligned effectively with prudent risk
compensation to ensure that compensation is adjusted for all types of risks.

Guaranteed bonus may not be paid to KMPs and senior management. However,
Guaranteed NBFCs can consider new hiring joining/sign-on bonus and such bonus will not be
bonus considered as part of fixed pay or variable pay.

▪ The deferred compensation may be subject to malus/clawback

arrangements.
Malus / ▪ NBFCs are required to identify a representative set of situations to invoke
Clawback the malus and clawback clauses that may be applicable on entire variable
pay.

A malus arrangement permits the NBFC to prevent vesting all or part of the
amount of a deferred remuneration to the executive/employee.

A clawback is a contractual agreement between the employee and the NBFC

in which the employee agrees to return previously paid or vested
remuneration to the NBFC under certain circumstances.

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Modified Interest Subvention Scheme for

short-term Agri Loans availed through Kisan
Credit Card (KCC)
What
RBI notified that the Government of India has approved the continuation of the Interest Subvention
Scheme (ISS) with modifications for the FY 2021-22:

1. The interest subvention will be 2% per annum to Lending Institutions (LIs) on use of their own
resources in order to provide short term crop loans and short-term loans for allied activities up to
an overall limit of ₹3 lakh to farmers through KCC at concessional interest rate during the year
2021-22.
a. This interest subvention of 2% p.a. will be calculated on the loan amount from the date of
disbursement/drawal up to the date of actual repayment/ due date of the loan, whichever is
earlier, subject to a maximum period of 1 year.

Lending Institutions (LIs) include Public Sector Banks (PSBs) and Private Sector Banks (in
respect of loans given by their rural and semi-urban branches only), Small Finance Banks
(SFBs) and computerized Primary Agriculture Cooperative Societies (PACS) which have been
ceded with Scheduled Commercial Banks (SCBs).

The applicable lending rate to farmers and the rate of interest subvention to LIs for the FY 2021-22 will
be as follows:
Financial Year (FY) Lending rate to farmers Rate for Interest Subvention
2021-22 7% 2%

2. An additional interest subvention of 3% per annum will be provided to such of those farmers
repaying in time (maximum 1 year).
a. This means that the farmers will be able to get the loan for the aforementioned purpose up
to ₹3 lakh at an effective interest rate of 4% p.a. [7% - 3%]; if repaid promptly.

3. Interest subvention (2%) and prompt repayment incentive benefits (3%) on short term crop loans
and short-term loans for allied activities will be available on an overall limit of ₹3 lakh per annum,
subject to a maximum sub-limit of ₹2 lakh per farmer for allied activities.

4. In order to discourage distress sale, benefits of interest subvention under KCC will be available to
small and marginal farmers for a further period of up to 6 months post the harvest of the crop
against Negotiable Warehouse Receipts (NWR) on the produce stored in warehouses accredited
with Warehousing Development Regulatory Authority (WDRA).

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5. To provide relief to farmers affected by natural calamities, the interest subvention of 2% p.a. will
be provided to banks for the 1st year on the restructured loan amount. From 2nd year onwards, it
will attract normal rate of interest.

6. In case of severe natural calamities [to be decided by a High-Level Committee], it will be available
for the 1st 3 years /entire period (subject to a maximum of 5 years) on the restructured loan
amount. Further, in all such cases, the benefit of prompt repayment incentive @ 3% p.a. will also
be provided to the affected farmers.

Note:
❖ In respect of interest subvention, banks are required to submit their claims on annual basis duly
certified by their Statutory Auditors as true and correct, within a quarter from the close of the
year.
▪ Thus, pending claims of FY22 can be submitted by June 30, 2023.

Tell me more
Interest Subvention Scheme (ISS)
➢ The Interest Subvention Scheme for farmers aims at providing short term credit to farmers at
subsidised interest rate.
➢ The policy came into force with effect from Kharif 2006-07.
➢ Government of India approved the continuation of the Interest Subvention Scheme (ISS) with
modifications for the FY 2021-22.
➢ The interest subvention will be given to Public Sector Banks (PSBs), Private Sector Banks,
Cooperative Banks and Regional Rural Banks (RRBs) on use of own funds and to NABARD for
refinance to RRBs and Cooperative Banks.
➢ Implementation: By NABARD and RBI.

Report on Currency and Finance (RCF) for

the year 2021-22
What
On April 29, 2022, RBI released the Report on Currency and Finance (RCF) for the year 2020-21 on the
theme: “Revive and Reconstruct” in the context of nurturing a durable recovery post-COVID and raising
trend growth in the medium-term.

Concerns Highlighted by the Report:

❖ The Covid-19 pandemic will go down in history as one of the worst health crises the world has ever
faced, confronting challenges of rebuilding livelihoods, safeguarding businesses and reviving the
economy.
❖ Taking the actual growth rate of (-) 6.6% for 2020-21, 8.9% for 2021-22 and assuming growth rate
of 7.2% for 2022-23 and 7.5% beyond that, India is expected to overcome Covid-19 losses in 2034-
35; which is more than a decade.
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❖ Russia-Ukraine Conflict: The Russia-Ukraine conflict has dampened the momentum of recovery,
with its impact transmitting through record high commodity prices, weaker global growth outlook
and tighter global financial conditions.
❖ Deglobalization Threat: Concerns surrounding deglobalisation impacting future trade, capital flows
and supply chains have amplified uncertainties for the business environment.

Reforms Highlighted in the Report

7 Wheels of Economic Progress:

The blueprint of reforms proposed in the Report revolves around 7 wheels of economic progress:

Aggregate
demand

Aggregate
Sustainability
supply

7 Wheels of
Economic Institutions,
Structural Progress intermediar-
change ies and
markets

Productivity Macroecon-
and omic stability
technological and policy
progress coordination

▪ According to the report, the feasible range for medium-term steady state Gross Domestic Product
(GDP) growth in India should be 6.5 – 8.5%.

▪ Reducing Government Debt: Reducing general government debt to below 66% of GDP over the
next 5 years is important to secure India’s medium-term growth prospects.

▪ Structural Reforms: Suggested structural reforms include:

o Enhancing access to litigation free low-cost land.
o Raising the quality of labour through public expenditure on education and health and the
Skill India Mission.
o Scaling up R&D activities with an emphasis on innovation and technology.
o Creating an enabling environment for start-ups and unicorns.
o Rationalization of subsidies that promote inefficiencies.
o Encouraging urban agglomerations by improving the housing and physical infrastructure.

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▪ Promoting Industrial revolution 4.0: Industrial revolution 4.0 and committed transition to a net-
zero emission target warrant a policy ecosystem that facilitates provision of adequate access to risk
capital and a globally competitive environment for doing business.

▪ Better FTA Negotiations: India’s ongoing and future free trade agreement (FTA) negotiations
should focus on the transfer of technology and better trade terms for high quality imports from
partner countries to improve the outlook for exports and domestic manufacturing.

▪ Incentive Mechanism for PSBs in order to deal with moral hazard: The government should set up
an incentive mechanism, where banks with better performance in terms of loan recovery and
asset quality improvement should be given priority in terms of access to fresh capital. This will
help to better deal with the problem of moral hazard posed by absence of market discipline,
implicit government guarantees, and repeated unconditional recapitalisation of PSBs.

▪ Unemployment Insurance Fund: The report has suggested the formation of unemployment
insurance fund during periods of economic boom at the firm level, so that it can be utilised to
financially support workers up to a limited period after retrenchment.

▪ Moreover, the report suggests a policy action to provide universal access to social security
irrespective of firm size, whereby, requiring each firm to earmark a certain percentage of their
profits for the social security of the workers.

Rajiv Ranjan nominated as an ex-officio member

of the Monetary Policy Committee (MPC)
➢ The Central Board of Directors of RBI, on 2nd May, 2022
approved the nomination of Dr. Rajiv Ranjan, Executive
Director as an ex-officio member of the Monetary Policy
Committee (MPC).
➢ The approval was announced in the 595th meeting of the Board
under the Chairmanship of Shri Shaktikanta Das (Governor,
RBI), through video conferencing.
➢ Dr. Ranjan will be replacing Mridul Saggar, who was reported to
retire by the end of April, 2022.

About Dr. Ranjan

▪ Dr. Ranjan has been associated with RBI for over 33 years.
▪ He was recently appointed as the head of the Department of Economic and Policy Research, a
department aligned with the monetary policy and research function of RBI.

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Off-cycle meeting of the Monetary Policy

committee (MPC)
What
On 2nd and 4th May, 2022, MPC decided to hold an off-cycle meeting to reassess the evolving inflation-
growth dynamics and the impact of the developments after the MPC meeting of April 6-8, 2022.
▪ On the basis of an assessment of the current and
evolving macroeconomic situation, the Monetary
Policy Committee (MPC) decided to:
❖ Increase the policy repo rate under the
liquidity adjustment facility (LAF) by 40 basis
points to 4.40% with immediate effect.

▪ Consequently,
❖ Standing Deposit Facility (SDF) rate stands
adjusted to 4.15% (Earlier, 3.75%) and
❖ Marginal Standing Facility (MSF) rate and the
Bank Rate to 4.65% (Earlier, 4.25%).

▪ The MPC also decided to remain accommodative

while focusing on withdrawal of accommodation to
ensure that inflation remains within the target going
forward, while supporting growth.
▪
The approach will be to focus on a careful and calibrated withdrawal of pandemic-related extraordinary
accommodation, keeping in mind the inflation-growth dynamics.

Tell me more
▪ It is the 1st repo rate hike since August 2018.
▪ The Cash Reserve Ratio (CRR) is also hiked by 50 basis points from 4% to 4.5% of NDTL, which will
be effective from May 21, 2022. Statutory Liquidity Ratio (SLR) stands at 18%.

Rationale:
The main considerations underlying MPC’s decision are stated below:

Global Economy
▪ Since the MPC’s meeting in April 2022, disruptions, shortages and escalating prices induced by the
geopolitical tensions and sanctions have persisted and downside risks have increased.
▪ IMF has revised down its forecast of global output growth for 2022 by 0.8% to 3.6%. in a span of
less than three months.
▪ WTO has also scaled down projection of world trade growth for 2022 by 1.7% to 3.0%.

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Domestic Economy
▪ Overall system liquidity remained in large surplus. Bank credit rose (y-o-y) by 11.1% as on April 22,
2022. India’s foreign exchange reserves declined by US$ 6.9 billion in 2022-23 (up to April 22) to
US$ 600.4 billion.
▪ In March 2022, headline CPI inflation surged to 7% from 6.1% in February, largely reflecting the
impact of geopolitical spill overs. Food inflation increased by 154 basis points to 7.5% and core
inflation rose by 54 bps to 6.4%.
▪ The IMF projects inflation to increase by 2.6% to 5.7% in advanced economies in 2022 and by
2.8% to 8.7% in emerging market and developing economies.
Sustained high inflation inevitably hurts savings, investment, competitiveness and output growth.
Inflation must be tamed in order to keep the Indian economy resolute on its course to sustained and
inclusive growth.
❖ The next meeting of the MPC is scheduled during June 6-8, 2022

RBI launches the May 2022 round of

Consumer Confidence Survey (CCS)
▪ The May 2022 round of the Consumer Confidence Survey (CCS) was launched by RBI on 1st May,
2022 to seek qualitative responses from households, regarding their sentiments on general
economic situation, employment scenario, price level, households’ income and spending.
o The results of the survey provide useful inputs for monetary policy.
▪ RBI conducts this survey regularly in 19 cities: Ahmedabad, Bengaluru, Bhopal, Bhubaneswar,
Chandigarh, Chennai, Delhi, Guwahati, Hyderabad, Jaipur, Jammu, Kolkata, Lucknow, Mumbai,
Nagpur, Patna Raipur, Ranchi and Thiruvananthapuram.
o M/s Hansa Research Group Pvt. Ltd., Mumbai has been engaged to conduct the survey on
behalf of RBI.

RBI launches the May 2022 round of the Inflation

Expectations Survey of Households (IESH)
▪ On 1st May, 2022, RBI launched ‘the May 2022 round of the IESH survey’.
▪ Aim: The survey aims at capturing subjective assessments of households on price movements and
inflation, based on their individual consumption baskets, across the aforementioned 19 cities.
▪ The survey seeks qualitative responses from households on price changes (general prices as well as
prices of specific product groups) in the 3 months ahead as well as in the 1 year ahead period and
quantitative responses on current, 3 months ahead and 1 year ahead inflation rates.
▪ The results of the survey provide useful inputs for monetary policy.
▪ Agency: M/s Hansa Research Group Pvt. Ltd., Mumbai will conduct the survey on behalf of RBI.

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SEBI
SEBI modifies operational guidelines for
FPIs, Depository Participants
What
Recently, SEBI modified the Operational Guidelines (issued in November, 2019) for Foreign Portfolio
Investors (FPIs), Designated Depository Participants (DDPs) and Eligible Foreign Investors; which will be
effective from 9th May, 2022.

The modification is pertaining to:

Certificate of Registration (CoR) of FPI

• The Designated Depository Participant (DDP) will grant CoR, bearing registration
number generated by SEBI.
Name Change
• If request for name change in the certificate is received, DDPs will give effect to the
name change by issuing a letter and fresh registration certificate to such applicant.
• Apart from that, DDP will also issue a statement, acknowledging that the name
change has been granted.

Why
▪ In January 2022, SEBI notified a circular under SEBI FPI Amendment Regulations 2022, for
generation of FPIs registration number by SEBI.
▪ Subsequently, the Finance Ministry in March 2022, amended the Common Application Form (CAF),
wherein both the Depositories - NSDL and CDSL have been allowed to host the CAF for FPI
registration.
Thus, in order to operationalise the same, SEBI amended the operational guidelines.

Tell me more

Common Application Form (CAF) for FPI: The CAF will act as a Single Window clearance
wherein FPI applicants shall fill a single form (as prescribed by Govt. of India) in an
electronic manner and obtain registration with SEBI, PAN from Income Tax Department,
KYC and Open bank and demat account in India.

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SEBI slaps Rs 6 lakh fine on Pace Stock

Broking in NSE co-location case
What
SEBI has imposed Rs 6 lakh penalty on Pace Stock Broking Services, pertaining to malpractices in the
National Stock Exchange's (NSE) co-location facility.

Why
The order came after SEBI received multiple complaints against the broker.

Tell me more
▪ NSE had given preferential access to the Tick-by-Tick (TBT) data feed to certain trading members
(Pace Stock Broking was one of them).
▪ As per NSE's co-location guidelines, the secondary source for TBT (Tick-by-Tick) data is to be used
in the event of non-availability of the TBT primary source and trading members should not
routinely connect to the secondary server.
▪ NSE had also advised the broker (Pace Stock Broking) not to connect to the secondary server.
▪ However, the broker continued to log in to the secondary server.
▪ It also engaged in conduct, which undermined the trading system set up to provide fair and
equitable access to all brokers who connected to it.
▪ Through such acts, Pace Stock Broking violated the provisions of the NSE By-laws and code of
conduct specified under the stockbroker rule as well as PFUTP (Prohibition of Fraudulent and
Unfair Trade Practices) norms.

Tick-by-Tick (TBT) data: In tick-by-tick (TBT) data, the stock exchange provides data for every
tick received by the exchange from various market participants.

Tick by tick data includes:

▪ A new order accepted and added to the order book.
▪ Any order modified and added to the order book.
▪ Price and quantity of the order.
▪ Any executed order, whether partially or fully executed.
▪ Any cancelled order.

Benefits of TBT data to the traders:

▪
Better understanding of Market Microstructure: Using TBT data one can analyse the market
better.
▪ Better understanding of liquidity: TBT data helps in understanding spreads to a micro level. This
in turn helps traders to infuse liquidity with lower spreads.
Improved market efficiency: As more data is available, and the ability to analyze and respond to such
data makes the market more efficient.

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SEBI cancelled registration of Alpha

Commodity
What & Why
➢ SEBI cancelled the registration of Alpha Commodity for facilitating its clients to trade in illegal
contracts on National Spot Exchange Ltd (NSEL) and failing to fulfil the ''fit and proper'' criteria for
holding the certificate of registration as a commodity derivatives broker in the securities market.

➢ By providing such a facility for taking exposure to 'paired contracts', the broker engaged itself in
trades capable of exposing its clients to the risk involved in trading in a product that did not have
regulatory approval.

Tell me more
▪ The broker (Alpha Commodity) was a member of NSEL (National spot Exchange Limited) and had
facilitated trading in paired contracts on the NSEL platform.

▪ After the cancellation,

o SEBI has asked the broker to allow its existing clients to withdraw or transfer their securities
or funds held in its custody within 60 days.
o In case of failure of any client to withdraw or transfer their securities or funds within this
period, the broker will transfer the funds and securities on behalf of the client to another
broker within 30 days thereon.

NSEL and Paired Contract

NSEL was incorporated in May 2005 as a Spot Exchange for trading in commodities.

In September 2009, NSEL (now defunct) introduced the concept of ‘paired contracts’ for trading which
allowed buying and selling in the same commodity through two different contracts at two different
prices on the exchange platform, wherein the investors could buy a short duration contract and sell a
long duration contract and vice versa at the same time and at a pre-determined price.

It was further noticed that trades for the buy contract (T+2 /T+3) and the selling contract (T+25/ T+36)
used to happen on the NSEL on the same day at the same time and at different prices, involving the
same counterparties. Paired contracts are mainly used to mitigate risk and maximise profits.

The scheme of ‘paired contracts’ traded on the NSEL ultimately caused a huge loss to the investors to
the extent of Rs 5,500 crore.

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SEBI rejigs Secondary Market Advisory Panel

▪ SEBI has restructured its Secondary Market Advisory Committee (SMAC), which provides
suggestions on improving market safety, efficiency and transparency.

It will be an 18-member Previously, the panel had Apart from Mahalingam,

advisory committee and
will be chaired by G
Mahalingam, former
whole-time member of
SEBI.
17 members and was the panel has CEOs of
headed by SEBI stock exchanges and
chairperson Madhabi depositories,
Puri Buch. representatives of
various stakeholders and
senior officials of SEBI

▪ Other members of the panel include: Zerodha's co-founder and CEO, Nithin Kamath; Dhiraj Relli,
MD and CEO of HDFC Securities; Jaideep Hansraj, MD at Kotak Securities; Naresh Yadav, MD and
CEO of SBICAP Securities; and Leo Puri, Chairman, JP Morgan, South & Southeast Asia.

Terms of reference of the Committee

▪ To review the developments in Secondary market.
▪ To recommend measures for changes and improvements in market structure in view of the
impending changes.
▪ To recommend measures for improving market safety, efficiency, transparency and integr ity.
▪ To suggest measures for reducing transaction costs.
▪ To recommend changes if required in the risk management / margin system.
▪ To recommend changes if required in the regulatory framework in secondary market.
▪ To take note of any new development which may have taken place in the secondary market
between two consecutive meetings of the Committee and suggest measures.
▪ To review the investor protection measures in the stock exchanges and suggest improvements.
▪ Any other matter that Committee considers relevant or incidental thereto.

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SEBI Orders in different cases:

SEBI barred 9 entities from participating in the capital market for 3 months over
price manipulation in the securities of Super Sales India Ltd.

In another order, SEBI levied a fine of Rs 5 lakh on Champa Devi Jalan for indulging
in non-genuine trades in illiquid stock options at BSE.

In a separate case, the regulator barred 13 entities from the capital markets for 5
years for diverting the IPO proceeds for purposes other than the purposes stated in
the prospectus in the matter of Aster Silicates Ltd.

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OTHERS
IFSCA issues Framework for FinTech
Entity in the IFSCs
What
▪ The International Financial Services Centres Authority (IFSCA) has issued a detailed “Framework for
FinTech Entity in the IFSCs”; which is aimed at giving boost to the establishment of a world class
FinTech Hub at GIFT IFSC comparable with other International Financial Centres (IFCs) across the
world.

Why
▪ To develop and regulate financial products, financial services and financial institutions in the IFSC.
▪ To encourage promotion of financial technologies (‘FinTech’) across the spectrum of banking,
insurance, securities, and fund management in IFSC.

Tell me more
Permissible Activities under the Framework
The framework proposes to provide:
▪ financial technology (FinTech) solutions resulting in new business models, applications, process or
products in areas/activities linked to financial services regulated by IFSCA &
▪ advanced/innovative technological solutions which aid and assist activities in relation to financial
products, financial services and financial institutions (TechFin).

Key Features of the Framework

1. The framework provides for a dedicated Regulatory Sandbox for FinTech products or solutions,
known as IFSCA FinTech Regulatory Sandbox and empowers IFSCA to grant Limited Use
Authorization within the Sandbox to the eligible fintech entities in IFSC.
a. This will enable them to apply and avail Grants under the IFSCA FinTech Incentive Scheme
2022.
‘Regulatory Sandbox’ means a live environment with a limited set of real customers for a
limited timeframe wherein entities operating in the capital market, banking, insurance and
other financial services space in IFSC shall be granted certain exemptions / relaxations from
applicability of certain regulatory provisions for experimenting FinTech ideas and solutions.

2. The framework will incorporate the Inter Operable Regulatory Sandbox (IoRS) mechanism.
a. Thus, IFSCA will facilitate Indian FinTech’s seeking access to foreign markets and foreign
FinTech’s seeking entry into India.
IoRS is a proposed mechanism to facilitate testing of innovative hybrid financial products /
services falling within the regulatory ambit of more than 1 financial sector regulator.

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3. The framework also proposes a Regulatory Referral mechanism which will be governed as per the
provisions of the Memorandum of Understanding (MoU) or collaboration or special arrangement
between IFSCA and corresponding overseas Regulator(s).

‘Overseas regulatory referral' refers to a co-operation mechanism between the Authority and
any overseas financial sector regulator for facilitating the FinTechs that would like to operate in
each other’s jurisdictions.

Indian Bank launches Pre-Approved Personal

Loan (PAPL) product under Project WAVE
What
Recently, the Chennai-based public sector lender, Indian Bank launched its 1st digital product called Pre-
Approved Personal Loan (PAPL) under its Project Wave (World of Advance Virtual Experience).
▪ Project WAVE was launched in January 2022 to usher in a period of digital transformation at Indian
Bank.

Utility: PAPL will provide instant loan disbursement in three simple steps to its customers.

Features of PAPL
▪ The PAPL loan can be availed via 'IndOASIS' mobile app, bank’s website and internet banking
facility.
▪ At present, the loan carries an interest rate of 10% pa with no foreclosure charges.

Foreclosure Charge: A foreclosure charge, or prepayment penalty, is the extra amount that
lenders charge for closing the loan before the tenure is over.

▪ Currently, it is available for existing customers of the bank aged 21 years and above, holding regular
income and pension accounts.
▪ PAPL also comes with the flexibility to opt for a loan tenure between 24 and 48 months and the
ability to pre-close the loan without any penalties.

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Religare Broking partners Spice Money to

help open Demat Accounts in Rural India
➢ Fintech firm Spice Money announced its partnership with Religare Broking to provide people in
rural India access to platforms to invest in capital market.
➢ This will facilitate rural India to get assisted access to a Demat account and invest in capital
market-linked products.
➢ To start with it, Spice Money’s representatives will assist rural citizens to open a Demat account
and apply for Life Insurance Corporation of India's initial public offer (IPO) and invest in other
products in the future.

Exposure of Insurance Companies to

Financial and Insurance Activities increased
➢ IRDAI has increased the investment limit of all
insurers (insurance companies) in Financial and
Insurance activities (BFSI) to 30% of their assets
from 25%.
➢ With this, the exposure of insurance companies will
increase in this sector.
➢ The move has come just ahead of the Rs 21,000-
crore initial public offering (IPO) of Life Insurance
Corporation of India (LIC). It can increase the
insurer’s participation in this IPO.
➢ The sectoral cap of 25% was too restrictive,
particularly for the financial sector. As a result, most
insurance companies were underinvested in the
financial sector.
➢ Thus, with this increase, insurers will not have to
u divest their investment in BFSI in order to invest in
LIC.

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