Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg.

1
 FOREWORD

From the Desk of the DGM & CDO

Dear Colleagues,

I am extremely delighted to know that State Bank Institute of Learning

and Development, Hyderabad is publishing “Interview Material for
Executive Cadre Officials Series -2”, an e-booklet for promotional
aspirants. This is a period when all the career-focused employees are
busy trying to glean whatever knowledge they can, in preparation for
the Interviews.

The e-booklet has a topic-based approach, with brief explanations,

which I am sure, will be beneficial to readers to learn and imbibe easily.
Moreover, it has been compiled as a composite booklet and is thus
extremely useful to promotional aspirants.

I compliment the Director SBILD “Smt. Rajni Bala Mazumder” and

the Author “Mr. Suresh Kumar Madella” for their initiative in getting
this e-booklet published and for the meticulousness with which it has
been compiled.

My best wishes to all the promotional aspirants.

With Best Wishes,

(Jitendra Kumar Sharma)

Deputy General Manager & CDO,
Local Head Office,
Hyderabad
Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg. 2
 Foreword

From the Director’s Desk, SBILD Hyderabad

Madam / Dear Sir,

I am glad to share with you that we have come up with an e-booklet, a

study material for ‘Executive Cadre Officials Series-2” being published
by our Team SBILD, Hyderabad.

I compliment the efforts made by Mr. Suresh Kumar Madella for

coming out with the latest developments in the BFSI, regulatory
guidelines, and international issues.

Every effort has been made by us to avoid errors or omissions in this

publication. If any error or discrepancy observed may be brought to
our notice through e-mail to director.sbildhyderabad@sbi.co.in

I wish all the best to the officials in the executive cadre in their
endeavours.

With Best Wishes

(Ms Rajni Bala Mazumder)

Director & Asst. General Manager,
SBILD Hyderabad

Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg. 3

Key Highlights of the Monetary Policy
The key highlights of the Monetary Policy Committee (MPC) meeting, held on April 06,
2023, are mentioned below:

➢ Keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged
at 6.50 percent.
➢ The standing deposit facility (SDF) rate remains unchanged at 6.25 percent and
the marginal standing facility (MSF) rate and the Bank Rate at 6.75 percent.
➢ These decisions are in consonance with the objective of achieving the medium-
term target for consumer price index (CPI) inflation of 4 percent within a band of
+/- 2 percent, while supporting growth.
➢ RBI has indicated that the Government’s focus on capital expenditure in the
recent budgets, including the Union Budget 2023-24, could be effective in
stimulating private investment and domestic demand with beneficial effects
accruing over time. A 1 percentage point increase in public investment
increases private investment by 0.6 percentage point in the first year and the
cumulative impact over a 3-year period is over 1.0 percentage point. The
multiplier for public investment on private investment is 1.2 and on overall GDP
is 1.7 over a three-year period.

With CPI headline inflation ruling persistently above the tolerance band, the MPC
decided to remain resolutely focused on aligning inflation with the target. It is essential
to rein in the generalization of price pressures and anchor inflation expectations. An
environment of low and stable prices is necessary for the resilience in domestic
economic activity to be sustained. While the policy rate has been increased by a
cumulative 250 basis points since May 2022, which is still working through the system,
there can be no room for letting down the guard on price stability. Taking these factors
into account, the MPC decided to keep the policy repo rate unchanged at 6.50 per
cent in this meeting, with readiness to act, should the situation so warrant. The MPC
will continue to keep a strong vigil on the evolving inflation and growth outlook and
will not hesitate to take further action as may be required in its future meetings. The
MPC also decided to remain focused on the withdrawal of accommodation to ensure
that inflation progressively aligns with the target, while supporting growth.

Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg. 4

Developing an Onshore Non-deliverable Derivatives Market:

Much water has flown since RBI permitted offshore units of Indian banks to participate
in the NDF market in mid-2020, to curb the volatility induced by rupee through
heightened activity taking place in offshore markets. The recent stability in rupee,
notwithstanding a tumultuous phase for currencies stuck in a dollar trap globally, has
also been attributed to RBI’s ability to manoeuvre successfully through both offshore,
as also onshore NDF markets apart from having a say in the spot market too. Further,
with crisis brewing in global financial system and the opaqueness of the offshore
dealings sans much regulatory insights or control, it is a prudent move indeed to
permit banks with IBUs to offer NDDCs involving INR to resident users (corporates/
institutions from different territories to begin with) in the onshore market (chiefly GIFT
city which, with some luck on its side, should be able to push through in the league of
major global financial centres as a credible alternative to not only meaty neighbours
like Hong Kong or Singapore but also taking a slice from established names like
London or NY further facilitating internationalization of domestic currency plans) while
saving big on fees paid in overseas jurisdictions.
This measure will further deepen the forex market in India and provide enhanced
flexibility to residents in meeting their hedging requirements. A non-deliverable
forward contract allows two parties to lock in exchange rate for a period of time.

RBI extends UPI for foreign travellers, NRIs

Following the immense popularity of Unified Payments Interface (UPI) for retail digital
payments in the country, the RBI has extended the benefits of using UPI to foreign
travellers and NRIs visiting India. To start with, this facility will be extended to travellers
from G-20 countries arriving at select international airports. These countries include
Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy,
Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, UK,
USA, and EU. The facility, which will shortly be enabled across all other entry points
in the country, will allow a seamless payment experience for inbound international
travellers, who will not need to carry or worry about exchanging currency in cash. It
will also boost further growth of digital payments system in India.
UPI-PayNow linkage to increase global digital payment transfer, reduce
dependency on SWIFT
The two countries have linked their digital payment systems - Unified Payments
Interface (UPI) in India and PayNow in Singapore to do real-time money transfers with
just a mobile number. The National Payments Corporation of India (NPCI) has kick-
started its ambitious project of enabling NRIs from Singapore to digitally transfer funds
up to ₹60,000 in a day (equivalent to around SGD 1,000) using the UPI platform from
their NRE/NRO accounts. Apart from Singapore, the other 9 countries include USA,

Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg. 5

UK, UAE, Canada, Hong Kong, Oman, Qatar, Saudi Arabia, and Australia. This will,
thus, reduce dependency on SWIFT network for cross border payments.

RBI issues final guidelines on interest rate risk in banking book

Banks need to measure, monitor, and disclose their exposure to Interest Rate Risk in
Banking Book (IRRBB). The IRRBB refers to the current or prospective risk that
adverse movement in interest rates may have on the banks’ capital and earnings, thus
affecting its banking book positions. Excessive IRRBB poses a significant risk to
banks’ current capital base and/or future earnings. Hence, RBI has issued final
guidelines on IRRBB.
Digital lending norms to now encompass debit card loans.
The master direction on credit card and debit card issuance (2022) governs EMI
programmes on credit cards; but, loan products other than these (which are not
covered under the master direction) have now been taken under the RBI’s digital
lending guidelines. These products comprise loans offered on debit cards, including
Equated Monthly Instalment (EMI) programmes.
According to the digital lending guidelines, Regulated Entites (REs) have to provide a
Key Fact Statement (KFS), containing details of annual percentage rate, recovery
mechanism, details of grievance redressal officer designated to deal with digital
lending matter, and the cooling-off/ lock-up period. All loan disbursements, servicing,
repayment, etc., have to be executed by the borrower directly in the RE’s bank account
without any pass-through account/pool account of any third party, except in case of
flow of money between REs for co lending transactions. Entities offering only Payment
Aggregator (PA) services are not included under the digital lending guidelines, unless
they’re also acting as a lending service provider.

RBI decrees penal charges for loan repayment delay, default

Any delay or default in servicing a loan will now be met with penal charges, as decreed
by the RBI. These charges will be levied in a transparent manner but not as a penal
interest rate, which has often been found to be added to the interest rate charged on
the advances. Penal interest rate is a tool to inculcate credit discipline in borrowers
and not to be used as a method of revenue enhancement for the lender / REs. In view
of this, penal charges will now be recovered from th e borrower separately without
being added to the outstanding principal amount. However, the lender can alter the
credit risk premium if there’s a deterioration in the borrower’s credit risk profile.

RBI makes changes in NEFT, RTGS systems for reporting foreign remittances
Under the Foreign Contribution (Regulation) Act (FCRA), foreign contributions have to
be received only in the "FCRA account" of State Bank of India (SBI), New Delhi Main
Branch (NDMB). These contributions are received directly from foreign banks through
SWIFT, and from Indian intermediary banks through NEFT and RTGS systems.

Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg. 6

Now, RBI has made changes in NEFT and RTGS systems for such transactions, in
keeping with the extant requirements of the Ministry of Home Affairs (MHA).
Accordingly, from March 15, 2023, the donor details viz. name, address, country of
origin, amount, currency, and purpose of remittance are required to be captured in
such transactions and SBI has to report the same to MHA on daily basis.
Banks need to incorporate necessary changes in their core banking/ middleware
solutions before the given deadline.
India’s Current Account Deficit
Governor Mr. Shaktikanta Das averred that India’s Current Account Deficit (CAD) is
manageable and within the parameters of viability. While merchandise exports are
being somewhat affected by slowing global demand, its effect is offset by strong
service exports and remittances inflow.
Mr. Das also said that in spite of CPI inflation easing to 5.72% in December 2022 from
7.41% in September 2022, core inflation remains sticky and elevated.
The government bond market has also remained resilient, with average bid-ask
spreads being the lowest among peer nations. In spite of significantly higher
government borrowing, the yield curve also evolved in an orderly manner without any
undue volatility. However, the secondary market liquidity in G-secs remains
concentrated in a few securities and tenors. MIBOR-based OIS seems to be the only
major liquid product in the interest rate derivative market.
The Monthly Economic Report February 2023 from the Department of Economic
Affairs outlined the performance of some key economic indicators, as follows:
✓ CPI inflation eased slightly in February 2023 to 6.4 per cent from 6.5 per cent
in January 2023, with a decline in both food and core inflation.
✓ The WPI inflation, however, moderated in February 2023 to 25-month low of
3.8 per cent, driven by a decline in manufactured goods and primary articles.
✓ The PMI indices for employment in manufacturing and services remained in an
✓ expansionary zone in February 2023, with manufacturers experiencing an
increase in new work intakes.
✓ The focus on ‘Infrastructure and Investment’ and ‘Green Growth’ in the Union
Budget 2023-24 will likely attract more FDI.

Highlights of Union Budget, 2023-24

❖ ‘Saptarishi’: The Budget’s seven priorities include inclusive development,
reaching the last mile, infrastructure & investment, unleashing the potential, green
growth, youth power and financial sector.
❖ MSMEs, large business and charitable trusts to benefit from Entity DigiLocker
facility to store and share documents online securely.

Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg. 7

 ❖ Environment (Protection) Act to encompass Green Credit Programme to
incentivize and mobilize additional resources for environmentally sustainable and
responsive actions.
❖ Rollout of Direct Benefit Transfer under a Pan -India National Apprenticeship
Promotion Scheme to provide stipend support to 47 lakh youths in three years.
❖ National Financial Information Registry to be established in consultation with
RBI, for facilitating efficient flow of credit, promoting financial inclusion, and
fostering financial stability.
❖ Financial sector regulators to carry out a comprehensive review of existing
regulations in consultation with public and regulated entities. Single window IT
system to be set up for registration and approval from IFSCA, SEZ authorities,
GSTN, RBI, SEBI and IRDAI.
❖ IFSC Banking Units of foreign banks can do acquisition financing.
❖ Amendments proposed to the Banking Regulation Act, the Banking Companies
Act and the Reserve Bank of India Act for improved bank governance and
investors’ protection.

Highlights of Economic Survey 2022-23

o The Economic Survey for 2022-23 is confident that the post-pandemic, Indian
economy is now poised to reap the benefits of reforms. The Economic Survey 2022-
23 projects a baseline GDP growth of 6.5 percent in real terms in FY24. The
projection is broadly comparable to the estimates provided by multilateral agencies
such as the World Bank, the IMF, and the ADB and by RBI, domestically.
o The finances of the public sector banks have seen a significant turnaround, with
profits being booked at regular intervals and their Non -Performing Assets (NPAs)
being fast-tracked for quicker resolution/ liquidation by the Insolvency and
Bankruptcy Board of India (IBBI).
o At the same time, the government has been providing adequate budgetary
support for keeping the PSBs well-capitalized, ensuring that their Capital Risk-
Weighted Adjusted Ratio (CRAR) remains comfortably above the threshold levels
of adequacy.
o RBI has projected headline inflation at 6.8 percent in FY23, which is outside its
target range.
o Increase in the overall bank credit has been influenced by the shift in borrowers’
funding choices from volatile bond markets, where yields have increased. Central
Government’s Capital Expenditure (Capex) increased by 63.4% in the first eight
months of FY23.
o CAD may continue to widen due to elevated global commodity prices, albeit our
economy’s growth remains strong.
o Credit growth to MSME sector has been remarkably high, over 30.6%, on
average during Jan-Nov 2022.
o The global PMI composite index has been in the contractionary zone since
August 2022.
Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg. 8
 o Private Consumption as a percentage of GDP stood at 58.4% in Q2 of FY23,
the highest among Q2s of all the years since 2013-14.
o The challenge of the depreciating rupee, although better performing than most
other currencies, persists with the likelihood of further increases in policy rates
by the US Fed.

Picking up more than 5% stake in banks needs RBI’s prior approval

Any person looking to acquire more than 5% stake in a bank, will now have to seek
RBI’s prior approval by submitting an application. This move has been mandated after
RBI has defined “major shareholding” as “aggregate holding” of 5% or more of the
paid-up share capital or voting rights in a banking company by a person.
Following acquisition, if the person’s shareholding falls below 5%, and he/she again
wishes to raise one’s holding to 5% or more, they will need to seek fresh approval from
RBI.
RBI allows hedging of gold; players can be better equipped against
uncertainties
Indian residents have now received RBI’s formal nod to hedge gold on recognised
exchanges in the International Financial Services Centre (IFSC). The move will help
participants hedge their positions to protect themselves against uncertainties like price
fluctuations and downward currency movement. It will increase volumes and activities
at IFSC. It will become a major enabler for gold importers and exporters who use
yellow metal as the primary raw material for production. Further, it will also help
increase the price competitiveness of the Indian jewellery industry.
Banks showing double-digit growth, less NPAs, better capital position: RBI
report
According to RBI’s annual report on Trend and Progress of Banking in India, banks in
India have shown a double-digit growth in 2021-22, after a big gap of seven years.
Apart from an upswing in their balance sheet, the banks are also bettering their asset
quality and capital position. The robust growth is particularly seen in public sector
banks (PSBs), which account for 62% of the deposits of scheduled commercial banks,
and command 58% market share of loans.
By September 2022, gross non-performing assets (GNPAs) fell to 5% of gross
advances, as compared to 5.8% in March 2022, on account of lower slippages, and,
reduction in outstanding GNPAs through recoveries, upgradations, and write-offs.

Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg. 9

Dispensation for enhanced cap limit for parking SLR securities extended by RBI
Presently, banks hold a special dispensation of enhanced Held to Maturity (HTM) limit
of 23% of Net Demand and Time Liabilities (NDTL), for Statutory Liquidity Ratio (SLR)
eligible securities acquired between September 1, 2020 and March 31, 2023, until
March 31, 2023. RBI has now extended this dispensation towards eligible securities
acquired up to March 31, 2024. Beginning from the quarter ending June 30, 2024, the
enhanced HTM limit shall be restored to 19.5% in a phased manner.
Govt. green bonds can be a benchmark for private sector bonds for ESG-linked
debt: RBI Dy Governor
RBI Deputy Governor M Rajeshwar Rao has opined that pricing of the Centre’s
sovereign green bonds can become a benchmark for private sector players raising
funds through rupee bonds for environmental, social and governance (ESG)-linked
debt. He avers that to support this acceleration, several structural changes may be
needed in the traditional lending approach, including evaluation and certification of the
green credentials of projects. Banks and financial institutions will need to invest in
human resources and capacity-building efforts, as well as integrate environmental and
social risk considerations into their corporate credit appraisal mechanisms, in order to
scale up green finance in a focused way.
Green Bonds are a type of fixed-income instrument that is specifically earmarked to
raise money for climate and environmental projects. These bonds are typically asset-
linked and backed by the issuing entity’s balance sheet, so they usually carry the same
credit rating as their issuers’ other debt obligations.

RBI pilots retail CBDC aka e-Rupee

After a successful pilot of its wholesale central bank digital currency (CBDC), the
Reserve Bank of India (RBI) has piloted its retail CBDC from December 1. State Bank
of India (SBI), ICICI Bank, Yes Bank, and IDFC First Bank in four cities viz. Mumbai,
New Delhi, Bengaluru, and Bhubaneswar have been chosen as distribution channels
for this pilot project.
Commonly known as the e-Rupee aka (e₹-R), the retail CBDC is a digital token
representing legal tender and is issued in the same denominations as the paper
currency and coins currently in circulation. There will be a unique serial number for
every note with Governor’s signature with the promise to pay the bearer the sum. To
begin with, digital currency worth Rs 1.71 crore has been issued. The token indent
and issuances to banks will be increased as per user demand and bank’s liquidity
requirements.
Users can transact in e₹-R through a digital wallet being offered by the participating
banks. RBI will use Distributed Ledger Technology to provide the currency to the
banks. Subsequently, Banks will use API to transfer the currency to the CBDC wallet.

Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg. 10

Easily storable on mobile phones/devices, the e₹-R is much akin to physical cash in
terms of offering features like trust, safety, and settlement finality. Transactions in e₹-
R can be made person-to-person, as well as, person to-merchant – the latter using
QR codes. It offers the same anonymity as in cash transactions because the wallet to
wallet exchange will not be reflected in the bank’s CBS. While the e₹-R does not earn
any interest, it can be converted into other forms such as bank deposits.

RBI spells out its concerns to banks about lower deposit mobilisation
Concerned about the faster growth in bank credit vis-à-vis slower deposit mobilisation
in the last one decade, the RBI met up with the top-brass of several public- and private-
sector banks. In this meeting, the RBI Governor Shaktikanta Das advised banks to be
cognizant of the continually-evolving macroeconomic situation and take proactive
measures for mitigation well in time. This will help reduce the potential impact on their
balance sheets and contain financial risks before they turn too detrimental.

Banks' overnight SDF balances categorised as level-1 assets for LCR

computation
Effective immediately, overnight balances held by banks with the RBI under the
Standing Deposit Facility (SDF) have been made eligible as level-1 high quality liquid
assets for computing Liquidity Coverage Ratio (LCR). The change is applicable to all
commercial banks, excluding local area banks, regional rural banks, and payments
banks.
Banks get relief from maintaining claims received from NCGTC as part of CRR,
SLR
RBI has exempted claim amounts received by banks from National Credit Guarantee
Trustee Company Ltd (NCGTC) to be considered for computation of Cash Reserve
Ratio (CRR) and Statutory Liquidity Ratio (SLR). The move will help boost the banks’
lendable resources substantially.

RBI unveils features of digital currency; launches pilot project

The RBI recently unveiled the features of its digital currency aka digital rupee (e₹) aka
central bank digital currency (CBDC). The CBDC will be an RBI-issued legal tender in
e-format. It will hold the same value as fiat currency; it will be exchangeable with the
fiat currency; and it will provide an additional easier, faster, & inexpensive option to
the currently available forms of money.
The RBI launched the Digital Rupee – Wholesale segment (e₹-W) for carrying out
settlement of secondary market transactions in government securities. Nine banks
participated in the pilot. Other wholesale transactions and cross border payments to
follow basis the learnings from the pilot launch.

Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg. 11

The (e₹) is hoped to substantially boost India’s digital economy; enhance financial
inclusion; and, bolster the efficiency of monetary and payment systems.

BBPS can now be used to pay bills by NRIs

Bharat Bill Payment System (BBPS) has now been opened up by the RBI for rupee
drawing arrangement for cross-border remittances. This will help NRIs to make bill
payments through BBPs easily. Widening the scope of Bharat Bill Payment System
(BBPS) to facilitate non-resident Indians (NRIs), the RBI has enabled it to accept
cross-border in-bound bill payments. As a result, NRIs can make payments to any of
the 20,000 billers on-boarded on the BBPS, in an interoperable manner. The move will
allow NRIs to pay for education, utility, and many other kinds of bills on behalf of their
India-based relatives; that too, without an NRE account.

RBI Governor wants banks to mobilise deposits, lessen reliance on RBI money
RBI Governor Shaktikanta Das wants banks to start mobilising more deposits to
support credit growth. They cannot rely perennially on the central bank’s money to
support credit offtake. Banks have already started passing on the hike in repo rates to
their depositors and the trend is expected to continue.
As for liquidity, the RBI Governor avers that the apex bank is constantly ensuring that
there is adequate liquidity in the system. RBI will do two-way operations for dealing
with the prevailing liquidity situation. “Last month there was a sudden squeeze on
liquidity for 3-4 days because of very high GST and other tax collections. So, we
conducted a fine-tuning operation of injecting repo of three days maturity” he said.
RBI allows international trade settlement in INR; exporters can get payment in
rupees
With the global trading community showing increasing interest in the Indian rupee, the
Reserve Bank of India (RBI) has directed banks to make additional arrangements for
export and import transactions in Indian rupees. However, banks will need prior
approval from RBI’s Foreign Exchange Department before making such
arrangements. Exporters using this mechanism, to undertake overseas shipments of
goods & services, will receive payment of the export proceeds in INR. It will also help
them get advance payment against exports from overseas importers, in INR. These
payments will be made from the balances kept in the designated Special Vostro
account. RBI has specified that the rupee surplus balance can be used for permissible
capital and current account transactions (such as, payments for projects and
investments; export/import advance flow management; and investment in government
bonds) in accordance with mutual agreement.

RBI issues measures to attract foreign flows, protect local currency

On the backdrop of depleting foreign -exchange reserves, the RBI has issued several
measures to attract foreign flows in a bid to protect the local currency, while also
ensuring overall macroeconomic and financial stability.
Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg. 12
W.e.f. reporting fortnight that begun on July 30, banks have been exempted from
maintaining the cash reserve ratio (CRR) and statutory liquidity ratio (SLR) for
incremental NRE (non-residential external) and FCNR (B) (foreign currency non-
resident-bank) deposits. The exemption will be available for deposits mobilised up to
November 4, 2022 and is hoped to attract more dollars. Further, till October 31, 2022,
banks have been allowed to raise fresh FCNR (B) and NRE deposits without reference
to the regulations on interest rates, w.e.f. July 7.
RBI has relaxed FPI investment norms in government bonds by making new bond
issuances of 7-year and 14-year maturity eligible for the Fully Accessible Route.
Norms on residual maturity for FPI investments in government and corporate debt
have been relaxed. The limit for external commercial borrowing (ECB) under the
automatic route has been increased from $ 750 million to $ 1.5 billion. The all -in cost
ceiling under the ECB framework has been raised by 100 bps, subject to the borrower
being of investment grade rating.

E-mandates for recurring payments by cards increased to Rs 15,000

The limit of e-mandates for recurring payments (such as subscriptions, insurance
premiums etc.) made by credit/debit cards, has been increased by the RBI from Rs.
5000, to Rs 15,000. More than 62.5 million mandates had been registered in favour of
domestic and more than 3,400 international merchants for facilitating recurring
payments of larger value.

RBI wants ATMs to provide interoperable card-less cash withdrawal

Banks, ATM networks, white label ATM operators, and the National Payments
Corporation of India (NPCI) have been asked by RBI to provide interoperable card-
less cash withdrawal at all ATMs. The NPCI has been asked to facilitate Unified
Payments Interface (UPI) integration with all banks and ATM networks. UPI will aid in
customer authorisation in such transactions, whereas the National Financial Switch
(NFS) / ATM networks would aid in settlements. The on -us / off-us interoperable card-
less cash withdrawal transactions shall be processed without any extra charges,
except for the ones prescribed on interchange fee and customer charges. Withdrawal
limits will be the same as those for regular on -us / off-us ATM withdrawals.
RBI Governor Shaktikanta Das avers that this facility will not just enhance the ease of
transactions but would also help prevent frauds like card skimming and card cloning,
which become rampant while using cards. While financial experts laud the comfort and
convenience of this facility, they have also pointed to the adverse impact it will have
on debit cards.

RBI offers UPI123pay to feature-phone users.

40 crore feature-phones users in India can now avail benefits of Unified Payments
Interface (UPI) payments through the UPI123pay facility launched by Reserve Bank

Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg. 13

of India (RBI). UPI123pay can be accessed through Interactive Voice Response (IVR)
numbers, an app-based functionality, a sound-based format and also, missed calls.
Alongside, digital payments grievance redressal has also received a boost with the
RBI launching DigiSaathi, a dedicated and interactive helpline with toll-free numbers
that people can use to seek answers or redressal on digital payments, including cards.
As of now available in English and Hindi, DigiSaathi will soon be made available in
major regional languages too.

NPCI launches UPI Lite for small transactions

In order to reduce the stress on the banking system and make small transactions
simpler, the National Payments Corporation of India (NPCI) has launched the ‘on -
device’ wallet feature for Unified Payments Interface (UPI) users. Named as UPI Lite,
in its first phase the feature will process small-ticket transactions in near offline mode
i.e., debit offline and credit online. At a later stage, it will process transactions in
complete offline mode i.e., debit and credit both offline. UPI Lite comes with an upper
limit of Rs. 200 for any transaction, with the total limit of UPI Lite e-balance for an ‘on-
device’ wallet capped at Rs 2,000 at any point of time.
RBI issues guidelines for extended interest equalization scheme for export
credit
After the government extended the Interest Equalization Scheme for export credit till
March 2024, the RBI issued modified norms for the same. Accordingly, the telecom
instrument sector having six HS (Harmonised System) lines shall be out of the purview
of the plan, except for MSME manufacturer exporters.
Revised interest equalization rates under the scheme will now be 3% for MSME
manufacturer exporters exporting under any HS lines and 2% for manufacturer
exporters and merchant exporters exporting under 410 HS lines (after excluding 6 HS
lines of the telecom sector).
Banks have been asked to identify the eligible exporters as per the scheme for the
period from October 1, 2021, to March 31, 2022, credit their accounts with the eligible
amount of interest equalization, and submit a sector-wise consolidated reimbursement
claim for the said period to the RBI by April 30, 2022.

Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg. 14

Global Economy:
Global economic activity remains resilient amidst the persistence of inflation at
elevated levels, turmoil in the banking system in some advanced economies (AEs),
tight financial conditions, and lingering geopolitical hostilities. Recent financial stability
concerns have triggered risk aversion, flights to safety, and heightened financial
market volatility. Sovereign bond yields fell steeply in March on safe-haven demand,
reversing the sharp increase in February over aggressive monetary stances and
communication. Equity markets have declined since the last MPC meeting, and the
US dollar has pared its gains. Weakening external demand, spill overs from the
banking crisis in some AEs, volatile capital flows, and debt distress in certain
vulnerable economies weigh on growth prospects.

Domestic Growth:
The second advance estimate (SAE) released by the National Statistical Office (NSO)
on February 28, 2023, placed India’s real gross domestic product (GDP) growth at 7.0
percent in 2022-23. Private consumption and public investment were the major drivers
of growth.

Economic activity remained resilient in Q4. Rabi food grain production is expected to
increase by 6.2 percent in 2022-23. The index of industrial production (IIP) expanded
by 5.2 percent in January while the output of eight core industries rose even faster by
8.9 percent in January and 6.0 percent in February, indicative of the strength of
industrial activity. In the services sector, domestic air passenger traffic, port freight
traffic, e-way bills, and toll collections posted healthy growth in Q4, while railway freight
traffic registered modest growth. Purchasing managers’ indices (PMIs) pointed
towards sustained expansion in both manufacturing and services in March.

Amongst urban demand indicators, passenger vehicle sales recorded strong growth
in February while consumer durables contracted in January. Among rural demand
indicators, tractor and two-wheeler sales were robust in February. As regards
investment activity, growth in steel consumption and cement output accelerated in
February. Merchandise exports and non -oil non-gold imports contracted in February
while the strong growth in services exports continued.

Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg. 15

CPI headline inflation rose from 5.7 percent in December 2022 to 6.4 percent in
February 2023 on the back of higher inflation in cereals, milk, and fruits and slower
deflation in vegetable prices. Fuel inflation remained elevated, though some softening
was witnessed in February due to a fall in kerosene (PDS) prices and favorable base
effects. Core inflation (i.e., CPI excluding food and fuel) remained elevated and was
above 6 percent in January-February. The moderation observed in inflation in clothing
and footwear, and transportation and communication was largely offset by a pick-up
in inflation in personal care and effects and housing.

The average daily absorption under the LAF moderated to ₹1.4 lakh crore during
February-March from an average of ₹1.6 lakh crore in December-January. During
2022-23, money supply (M3) expanded by 9.0 percent and non-food bank credit rose
by 15.4 percent. India’s foreign exchange reserves were placed at US$ 578.4 billion
as on March 31, 2023.

Outlook:

The inflation trajectory for 2023-24 would be shaped by both domestic and global
factors. The expectation of a record rabi foodgrains production bodes well for the food
prices outlook. The impact of recent unseasonal rains and hailstorms, however, needs
to be watched. Milk prices could remain firm due to high input costs and seasonal
factors. The crude oil prices outlook is subject to high uncertainty. Global financial
market volatility has surged, with potential upsides for imported inflation risks. Easing
cost conditions are leading to some moderation in the pace of output price increases
in manufacturing and services, as indicated by the Reserve Bank’s enterprise surveys.
The lagged pass-through of input costs could, however, keep core inflation elevated.
Taking into account these factors and assuming an annual average crude oil price
(Indian basket) of US$ 85 per barrel and a normal monsoon, CPI inflation is projected
at 5.2 percent for 2023-24, with Q1 at 5.1 percent, Q2 at 5.4 percent, Q3 at 5.4 per
cent and Q4 at 5.2 percent, and risks evenly balanced.

A good rabi crop should strengthen rural demand, while the sustained bu oyancy in
contact-intensive services should support urban demand. The government’s thrust on
capital expenditure, above-trend capacity utilization in manufacturing, double-digit
credit growth, and the moderation in commodity prices are expected to bolster

Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg. 16

manufacturing and investment activity. According to the RBI’s surveys, businesses
and consumers are optimistic about the future outlook. The external demand drag
could accentuate, given slowing global trade and output. Protracted geopolitical
tensions, tight global financial conditions, and global financial market volatility pose
risks to the outlook. Taking all these factors into consideration, real GDP growth for
2023-24 is projected at 6.5 percent with Q1:2023-24 at 7.8 percent; Q2 at 6.2 percent;
Q3 at 6.1 percent; and Q4 at 5.9 percent, with risks evenly balanced.

Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg. 17

CURRENT RATES (as on 31.03.2023):
Policy Rates: Reserve Ratios:

Market Trends:

Policy Repo 6.50%

Rate
Fixed Reverse CRR: 4.50%
Repo Rate 3.35%
Marginal SLR: 18.00%
Standing
6.75% 8.00%
Facility Rate Call Rates
Bank Rate 6.75%
Standing 6.25%
Deposit Government Securities
Facility Rate Market

7.26% GS 2033 7.3099%

Capital Market: Commodities:
91-day T-bills -
Gold 59,948.00
Silver 72,143.00
Crude 6,195.00 182-day T-bills 7.282%
S&P BSE 58,991.52
Sensex 364-day T-bills 7.3064%

Nifty 50 17,359.75
Bank Nifty 35,410.10

Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg. 18

3. Foreign Currency Rates:
INR / 1 USD 82.2169

INR / 1 GBP 101.8728

INR / 1 EUR 89.6076

INR / 100 JPY 61.8000

Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg. 19

Global banking crisis: What just happened?
On March 10, the biggest failure of a US bank since the global financial crisis was
playing out in real-time as a major lender to the tech industry succumbed to a classic
bank run.
Silicon Valley Bank’s customers were frantically pulling their money from the
California-based lender before US regulators intervened to take control. But the
collapse panicked markets, piling pain on weaker financial institutions already
struggling with the unintended consequences of soaring interest rates and self -inflicted
wounds.
A week on, a second US regional bank — Signature Bank — has been shut down, a
third — First Republic Bank (FRC) — has been propped up, and the first major threat
since 2008 to a bank of global financial significance — Credit Suisse — has been
averted after it was taken over by UBS.
But the relative calm has been restored only thanks to the provision of huge sums of
emergency cash from lenders of last resort — central banks — and some of the industry’s
strongest players.

What just happened?

The US government’s Federal Deposit Insurance Corporation (FDIC) took control of
SVB. It was the biggest banking collapse in America since Washington Mutual in 2008.
The wheels started to come off 48 hours earlier when the bank took a multibillion-dollar
loss cashing out US government bonds to raise money to pay depositors. It tried —
unsuccessfully — to sell shares to shore up its finances. That triggered the panic that
led to its downfall.
The FDIC shut down Signature Bank after a run on its deposits by customers who were
spooked by the implosion of SVB. Both banks had an unusually high ratio of uninsured
deposits to fund their businesses.

After watching shares in Credit Suisse (CS) collapse by as much as 30%, Swiss
authorities announced a backstop for the country’s second-biggest bank. It calmed the
immediate market panic, but the global player is not out of the woods yet. Investors
and customers are worried that it doesn’t have a credible plan to reverse a long-term
decline in its business.
First Republic Bank was teetering on the brink as customers withdrew their deposits. In
a meeting in Washington, US Treasury Secretary Janet Yellen and Jamie Dimon, the
CEO of America’s biggest bank, drew up plans for a private sector rescue. The result
was an agreement with a group of American lenders to deposit tens of billions of dollars
of cash into First Republic to staunch the bleeding.

Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg. 20

How much has the rescue cost?

More than $400 billion so far in direct support. In guaranteeing all deposits at Silicon
Valley Bank and Signature Bank, the US Federal Reserve is on the hook for $140
billion. Then there’s the $54 billion the Swiss National Bank offered Credit Suisse in
the form of an emergency loan and 209 billion Swiss francs ($225 billion) offered to
UBS in loans, guaranteed by the Swiss state, and protection against potential losses.
The Fed has also agreed record amounts of loans to other banks last week. Banks
borrowed nearly $153 billion from the Fed in recent days, smashing the previous
record of $112 billion set during the crisis of 2008.
Banks also drew on nearly $12 billion of loans from the Fed’s new emergency lending
program established at the start of the week with the aim of preventing more banks
collapsing.
The $318 billion the Fed has loaned in total to the financial system is about half what
was extended during the global financial crisis.
The banking industry has also coughed up billions. JPMorgan Chase, Bank of America
and Citigroup are among a group of 11 lenders providing the $30 billion cash infusion
aimed at shoring up confidence in First Republic Bank.
HSBC has reportedly committed more than $2 billion to SVB’s UK business, which it
bought on Sunday for £1.

Is the Depositor’s money safe?

If you have less than $250,000 in an account at a US bank insured by the FDIC, then
you almost certainly have nothing to worry about. Joint accounts are insured up to
$500,000.
European countries operate similar programs. In Switzerland, up to 100,000 Swiss
francs ($108,000) is insured per depositor.
Customers of failed banks in the European Union are promised €100,000 ($105,431)
of their deposits back. Joint account holders can receive a combined €200,000
($210,956) in compensation.
In the United Kingdom, depositors can have up to £85,000 ($102,484) returned if their
bank goes under, doubling to £170,000 ($204,967) for joint accounts.

Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg. 21

Will all this make it harder to get a loan?
The short answer is yes. Stressed banks will pay much greater attention to the
creditworthiness of borrowers, whether they’re businesses looking for loans or home
buyers trying to find mortgages.

“If banks are under stress, they might be reluctant to lend,” US Treasury Secretary
Janet Yellen said Thursday in testimony to the Senate Finance Committee. “We could
see credit become more expensive and less available.”
Christine Lagarde, president of the European Central Bank, told reporters Thursday
that “persistently elevated market tensions” could further constrict credit conditions
that were already tightening in response to rising interest rates.

Does this make a recession more likely?

Yes, again. Here’s what Yellen also said to the Senate committee: “That could turn
this into a source of significant downside economic risk.”
Goldman Sachs said Wednesday that growing stress in the banking sector has
boosted the odds of a US recession within the next 12 months. The bank now believes
that the American economy has a 35% chance of entering a recession within a year,
up from 25% before the banking sector meltdown started.
The world’s second-biggest economy, China, is also sputtering despite a burst of
activity following the rapid ending of draconian Covid lockdown measures late last
year.
In a surprise move Friday, the Chinese central bank cut the amount of money the
country’s lenders are required to hold in reserve in a bid to keep cash flowing through
the economy.

***

Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg. 22

Payment Aggregators
Payment Aggregators (PAs) are entities that facilitate e-commerce sites and
merchants to accept various payment instruments from the customers for completion
of their payment obligations without the need for merchants to create a separate
payment integration system of their own. PAs facilitate merchants to connect with
acquirers. In the process, they receive payments from customers, pool and transfer
them on to the merchants after a time period.
Treasury Bills (T-Bills)
Treasury bills or T-bills, which are money market instruments, are short term debt
instruments issued by the Government of India and are presently issued in three
tenors, namely, 91 days, 182 days and 364 days.
Green Bonds
A green bond is a type of fixed-income instrument that is specifically earmarked to
raise money for climate and environmental projects. These bonds are typically asset-
linked and backed by the issuing entity’s balance sheet, so they usually carry the same
credit rating as their issuers’ other debt obligations.
Account Aggregator (AA)
An Account Aggregator (AA) is a type of RBI regulated entity (with an NBFC -AA
license) that helps an individual securely and digitally access and share information
from one financial institution they have an account with to any other regulated financial
institution in the AA network. Data cannot be shared without the consent of the
individual.
Unhedged Foreign Currency Exposure (UFCE)
Unhedged Foreign Currency Exposure (UFCE) shall mean Foreign Currency
Exposure (FCE) excluding items which are effective hedge of each other. While
estimating UFCE of an entity, banks shall consider only two types of hedges - financial
hedge and natural hedge.
Lending Service Provider
An agent of a Regulated Entity who carries out one or more of lender’s functions or
part thereof in customer acquisition, underwriting support, pricing support, servicing,
monitoring, recovery of specific loan or loan portfolio on behalf of REs in conformity
with extant outsourcing guidelines issued by the Reserve Bank.
External Commercial Borrowings
The External Commercial Borrowin gs or ECBs is the financial instrument used to
borrow money from the foreign sources of financing to invest in the commercial

Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg. 23

activities of the domestic country. External commercial borrowings cannot be used for
the investments in a stock market or any speculation business.
Foreign Currency Non-Resident (FCNR) Account
A Foreign Currency Non-Resident (FCNR) is a bank accoun t for NRIs to maintain a
Fixed Deposit account in India. This account allows you as an NRI to save your money
earned in the currency form of the country you’ve originally earned the money from.
Tokenisation
Tokenisation refers to replacement of actual card details with an alternate code called
the “token”, which shall be unique for a combination of card, token requestor (i.e. the
entity which accepts request from the customer for tokenisation of a card and passes
it on to the card network to issue a corresponding token) and device (referred as
“identified device”).
Tier-1 Capital ratio
The tier 1 capital ratio is the ratio of a bank’s core tier 1 capital-that is, its equity capital
and disclosed reserves-to its total risk-weighted assets. It is a key measure of a bank’s
financial strength that has been adopted as part of the Basel III Accord on bank
regulation.
Current Account Deficit (CAD)
The current account deficit is a measurement of a country’s trade where the value of
the goods and services it imports exceeds the value of the products it exports. The
current account includes net income, such as interest and dividends, and transfers,
such as foreign aid. The current account represents a country’s foreign transactions
and, like the capital account, is a component of a country’s balance of payments
(BOP).
Annuity
The term “annuity” refers to an insurance contract issued and distributed by financial
institutions with the intention of paying out invested funds in a fixed income stream in
the future. Investors invest in or purchase annuities with monthly premiums or lump-
sum payments. Annuities are mainly used for retirement purposes and help individuals
address the risk of outliving their savings.
Standing Deposit Facility (SDF)
It is an additional tool for absorbing liquidity without any collateral. By removing the
binding collateral constraint on the RBI, the SDF strengthens the operating framework
of monetary policy. The SDF is also a financial stability tool in addition to its role in
liquidity management.
Angel Investor
An angel investor (also known as a private investor, seed investor or angel funder) is
a high-net-worth individual who provides financial backing for small start-ups or
entrepreneurs, typically in exchange for ownership equity in the company. The funds
Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg. 24
that angel investors provide may be a one-time investment to help the business get
off the ground or an ongoing injection to support and carry the company through its
difficult early stages.
Alternative Investments Funds
Alternative Investment Fund or AIF means any fund established or incorporated in
India which is a privately pooled investment vehicle that collects funds from
sophisticated investors, whether Indian or foreign, for investing it in accordance with a
defined investment policy for the benefit of its investors.
Trade Receivables Discounting System (TReDS).
TReDS is an electronic platform for facilitating the financing / discounting of trade
receivables of Micro, Small and Medium Enterprises (MSMEs) through multiple
financiers. These receivables can be due from corporates and other buyers, including
Government Departments and Public Sector Undertakings (PSUs).
Acid-test Ratio
The acid-test ratio, commonly known as the quick ratio, uses a firm’s balance sheet
data as an indicator of whether it has sufficient short-term assets to cover its short-
term liabilities. It does not take into account the assets that take time or difficult to be
liquidated.
Financial Stability Report (FSR)
The Financial Stability Report (FSR) is published biannually. It reflects the collective
assessment of the Subcommittee of the Financial Stability and Development Council
(FSDC - headed by the Governor of RBI) on risks to financial stability and the resilience
of the financial system. The report highlights issues relating to the development and
regulation of the financial sector.
Net Stable Funding Ratio (NSFR)
The NSFR is defined as the amount of available stable funding relative to the amount
of required stable funding. “Available stable funding” (ASF) is the portion of capital and
liabilities expected to be reliable over the time horizon of 1 year. The amount of stable
funding required (“Required stable funding”) (RSF) is a function of the liquidity
characteristics and residual maturities of the various assets and off-balance sheet
(OBS) exposures.
Prompt Corrective Action (PCA) framework
The PCA framework is a framework under which banks with weak financial metrics
are supervised by the regulator at appropriate times to implement remedial measures
for restoring the bank’s financial health. Three key areas viz capital, asset quality and
leverage are monitored under the revised framework. The PCA Framework is also
intended to act as a tool for effective market discipline.

Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg. 25

Risk Reward Ratio
The risk/reward ratio is the prospective reward an investor can earn against the risk
an investment carries. Risk/ reward ratios are used to compare the expected returns
of an investment with the amount of risk an investor has to undertake to earn these
returns. An ideal risk-reward ratio is anything greater than 1:3.

Fully Accessible Route (FAR)

Certain specified categories of Central Government securities are opened to non-
resident investors without any restrictions under a separate route called the Fully
Accessible Route. The list of securities eligible for investment are listed by RBI.
Further, from FY2020-21, any new G-sec issuances with 5/10/30 year tenors will be
eligible securities. However, RBI may add any new tenors or change tenors of new
securities from time to time.
CD Ratio
Credit-Deposit (CD) Ratio indicates how much of the money mobilized by banks as
deposits has been deployed as advances. It is calculated as Total Advances/Total
Deposits x 100. Low CD ratio denotes poor credit growth and vice versa.
Swiss Challenge Method
The Swiss Challenge Method is a method where any person with credentials can
submit a development proposal to the government. That proposal will be made online
and a second person can give suggestions to improve and beat that proposal. This
method can be applied not only to projects that are taken up on a Public -Private
Partnership (PPP) basis but also used to supplement PPP in sectors that are not
covered under the PPP framework.
Payment System Operator (PSO)
PSOs are those who are authorised by RBI to commence or operate any payment
system in India. It has since authorised various PSOs such as CCIL (financial market
infrastructure - central counterparty), NPCI (retail payments organisation), card
payment networks, cross-border inbound money transfers entities, ATM networks, PPI
issuers, Instant Money Transfer operators, TReDS platform providers and Bharat Bill
Payment Operating Units (BBPOUs) to operate payment systems in the country.
Capex to Operating Cash Ratio
The ratio measures how much of a company’s operating cash flow is funnelled into
capital expenditure projects. The formula for calculating the ratio is given as Cash flow
from Operations / Capex.
Central Bank Digital Currency (CBDC)
CBDC is a form of virtual currency issued by a Central Bank as an alternative to cash.
Since they are backed by the sovereign reserves of nation states, CBDCs are not
subject to the volatility faced by cryptocurrencies. RBI defines CBDC as a digital form
Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg. 26
of sovereign currency that can be converted into cash or sovereign -backed deposits.
Going ahead, India to join the league of countries like China, Russia and the UK, which
have already taken steps towards introducing CBDCs.
Interchange fee
The inter-bank ATM networks facilitate the use of ATM cards of one bank at the
ATM(s) of other banks for basic services like cash withdrawal and balance enquiry.
Banks owning ATMs charge a fee for providing the ATM facility to the customers of
other banks. This fee referred to as ‘interchange fee’ is recovered by the ATM
deploying bank from the card issuing banks. Banks with larger ATM networks treat
interchange fee as an important stream of revenue.
G-Sec Acquisition Programme (G-SAP)
G-SAP is an additional instrument introduced by RBI for liquidity management. It is a
structured Open Market Operation (OMO) with a distinct character with RBI upfront
committing to buy G-secs irrespective of the market sentiment. This programme is to
supplement the other liquidity management operations like OMO,LAF, TLTROs etc.
Open Banking
Open banking is the sharing and leveraging of customer-permissioned data by banks
with third-party developers and firms to build applications and services, including those
that provide real-time payments, greater financial transparency options for account
holders, marketing and cross-selling opportunities.
Dividend Pay-out Ratio
The dividend pay-out ratio is the ratio of the total amount of dividends paid out to
shareholders relative to the net income of the company. It is the percentage of
earnings paid to shareholders in dividends. It is an indication of how much money a
company is returning to shareholders versus how much it is keeping on hand to
reinvest in growth,pay off debt, or add to cash reserves (retained earnings).
Additional Factor Authentication (AFA)
Additional Factor Authentication (AFA) or Two-factor Authentication (2FA) is a security
system that requires two distinct forms of identification in order to access something.
It is used to strengthen the security of online accounts or a person’s devices for making
it harder for attackers to gain access. 2FA does this by requiring two types of
information from the user, firstly a password or personal identification number (PIN)
and second factor by a security code or biometric factor such as fingerprint or facial
scan.
Liberalised Remittance Scheme (LRS)
Under the Liberalised Remittance Scheme (LRS), all resident individuals, including
minors, are allowed to freely remit up to USD 2,50,000 per financial year (April –
March) for any permissible current or capital account transaction or a combination of
both. The Scheme was introduced on February 4, 2004, with a limit of USD 25,000.
Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg. 27
The limit has been revised with prevailing macro and micro economic conditions. The
Scheme is not available to corporates, partnership firms, HUF, Trusts, etc.
Liquidity Coverage Ratio (LCR)
The Liquidity Coverage Ratio (LCR) aims to ensure that a bank maintains an adequate
level of unencumbered High-Quality Liquid Assets (HQLAs) that can be converted into
cash to meet its liquidity needs for a 30-calendar daytime horizon under a severe
liquidity stress scenario. It is computed as a Stock of HQLAs/Total Net Cash Outflows
over the next 30 calendar days >100%.
Legal Entity Identifier (LEI)
A 20-digit number used to uniquely identify parties to financial transactions all around
the world, the Legal Entity Identifier (LEI) was conceived after the global financial
crisis, as a key measure to improve the quality and accuracy of financial data systems
for better risk management. Entities can obtain LEI from any of the Local Operating
Units (LOUs) accredited by the Global Legal Entity Identifier Foundation (GLEIF). In
India, LEI can be obtained from Legal Entity Identifier India Ltd. (LEIL), recognised by
the RBI as an issuer of LEI under the Payment and Settlement Systems Act, 2007.

***

Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg. 28

 PREPARED & COMPILED BY

M.Suresh Kumar, CM Faculty

Email: sureshkumar.madella@sbi.co.in
Mobile No. 9985559799

TEAM SBILD HYDERABAD

Name Designation Mobile No

Smt. Rajni Bala Mazumder Asst Gen. Manager 9769020718

Shri M Suresh Kumar Chief Manager 9985559799

Shri Nithin Kumar Maletker Chief Manager 8919180288

Smt. T V Surya Preeti Chief Manager 9703019408

Shri. Madhu Balla Manager 9490250238

Prepared by M Suresh Kumar, Chief Manager Faculty, SBILD HYDERABAD pg. 29