BANKERS PLUS

Volume III, Issue 12 March 2023

Bankers Plus-Monthly e magazine by Ramya Education Enterprise

BANKERS PLUS | VOLUME III, ISSUE 12 | MARCH 2023

CONTENTS
COVER PAGE ARTICLE
ChatGPT and Generative
AI solutions
Beginning of a new era era

….Page 1-5

6 24 34 50
Regulatory Industry Knowledge Quiz
Updates Updates Hub Time

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 Bankers Plus
BANKERS PLUS | VOLUME III, ISSUE 12 | MARCH 2023
June 2021

From the Editor’s Desk

Welcome to March 2023 edition of „Bankers Plus‟.
Thank you all for using „Bankers Plus‟ as your
trusted source to update professional knowledge.
Keep reading and keep updating yourself.
Many countries in the world are presently witnessing recession and
we are already noticing mass laying off employees in few sectors and
global companies. India is said to be in better position compared to
the other countries due to various favourable domestic factors.
Indian Banking sector has witnessed crisis due to high accumulation
of non performing assets in corporate loans segment in the years
2015,2016 & 2017. Most of the issues during that period were
triggered due to over financing which led to diversion of funds to
unrelated sectors and huge exposure in infrastructure segment.
Presently the banks have learnt from the mistake and there is an
improved due diligence practices adopted in corporate loan book.
In the present situation of increasing interest rates, economic slow
down, credit appetite in the economy is getting reduced. However, to
keep the pace, banks have shifted their focus on retail & small
business loan segment. Banks are trying to push credit in the form of
Pre approved loans, credit cards, unsecured overdrafts to individuals
and small business entities which are instant and assessed based on
CIBIL scores and repayment track record. Banks need to exercise a
caution in this segment as "Past performance is no guarantee of
future results‟. Over reliance on unsecured retail loans, unhealthy
competition for credit growth, recessionary factors and global slow
down may also trigger a new NPA crisis in the future.
Shivaprasad K
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 Cover page Article BANKERS PLUS

ChatGPT and Generative AI

solutions :
Beginning of a new era
- Venkatesh Prasanna H M
ChatGPT is the talk of the town today. Everyone is trying it out -
asking questions to get answers for their work assignments, explore
interests, finalize travel plans, confirm cooking recipes and what not!
And they are getting their answers too - and are going back happy on
most occasions, or are making fun of the strange answers they get
once in a while. Either way, this is a major technological
advancement. What has made this possible? Why are the Chatbots
suddenly so good? Why are big companies like Google and
Microsoft fighting over the supremacy of chatbots as enhancements
to their search engines and other offerings? What are the
opportunities and challenges in this progress? This article tries to
address some of these questions.
ChatGPT is a computer program that can have conversations with
humans. It is like a virtual assistant or a chatbot that you might
encounter on a website or in a messaging app. More technically,
ChatGPT belongs to the class of “large language models” (LLMs)
that can generate human-like responses to text-based conversational
prompts. It is designed to simulate human conversation and can be
used in a variety of applications, such as virtual assistants and
customer support systems. Developed by OpenAI, it is based on the
GPT (Generative Pre-trained Transformer) architecture, which is a
type of deep neural network that has been trained on a large corpus
of text data. This training allows ChatGPT to “understand” the
nuances of language and generate responses that are contextually
relevant and coherent. The training data for ChatGPT includes a wide
variety of text sources, such as books, articles, and web pages. This
allows the model to generate responses on a wide range of topics--
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 Bankers
Cover pagePlus-March
Article 2022 BANKERS PLUS
-and to adapt to different conversational styles and contexts. There
are many similar LLMs too, like LaMDA from Google, BLOOM,
Turing NLG, Chichilla, OPT, and more.
So when you ask ChatGPT a question or say something to it, it will
analyze what you said and try to come up with a response that
makes sense in the context of the conversation. It can even learn
from the conversation as it goes along. This makes it a powerful tool
for businesses and organizations that want to provide customer
support or engage with users in a more natural and conversational
way. It can save time and resources by handling simple or repetitive
tasks, and it can also provide a personalized experience for users.
LLM-based chatbots have the potential to transform the way we
interact with technology today.
Historically, chatbots have been around for over half
a century now. ELIZA, an early natural language
processing computer program created by Joseph
Weizenbaum in the mid 1960s at Massachusetts
Institute of Technology Artificial Intelligence
Laboratory fooled quite a few users into believing
that they were indeed conversing with a real human.
However, it did not have any framework for contextualizing
conversational events. It acted superficially, merely based on
recognizing clue words or phrases in the input, and generated output
corresponding to them through pre-programmed responses that could
move the conversation forward in an apparently meaningful way. This
has been the method deployed by most of the chatbots throughout
the last many decades and they have been able to address specific
problems and domains well. All along, the ability to identify and
manage the clue phrases, as well as the field of natural language
processing (NLP) in general have progressed significantly, thanks to
the technological advances on both computer hardware and software
fronts.
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Article 2022 BANKERS PLUS
So, how does ChatGPT and similar new-age chatbots work?
They generate responses to the questions
asked using the large language models and
the information codified in them. Here's how it
works, at a high level:
(a) Analyzing the input: When you provide ChatGPT with a prompt or
question, it analyzes the text using natural language processing
techniques. This involves breaking down the text into its component
parts, such as words, phrases, and grammar, and understanding the
structure of the text.
(b) Predicting the next word: Based on the input text, ChatGPT then
tries to predict the next word that should come after it. It does this by
using a statistical language model that has been trained on a large
dataset of text, such as books, articles, and conversations. The model
predicts the next word based on the likelihood of that word appearing
in that context, given what it has learned from the training data.
(c) Generating the response: Once ChatGPT has predicted the next
word, it generates a full response by repeating this process multiple
times, predicting the next word based on the previous words and
context. This generates a full sentence or paragraph that responds to
the user's input.
(d) Refining the response: Finally, it refines its response based on
various factors, such as the tone of the input, previous interactions
with the user, and any feedback it receives. It uses machine learning
algorithms to adjust its responses and improve its accuracy over time.
So, these major improvements to the chatbot technology have been
possible due to a lot of work that originally happened in the fields of
deep learning, neural networks, and artificial intelligence as applicable
to computer vision, but was then extended to see how it works for
large amounts of text. The results have been very encouraging. So,
what does this progress mean to various business sectors?

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Cover pagePlus-March
Article 2022 BANKERS PLUS

ChatGPT for Banking Sector

There are several potential use cases for ChatGPT-like AI solutions in
the banking sector, for example:
(a) Customer service: It can be used to provide customer service
through chatbots, which can help customers with simple questions or
issues like checking their account balance or resetting their password.
This can reduce the workload on customer service representatives
and improve the overall customer experience.
(b) Personalized recommendations: It can analyze a customer's
transaction history and use that data to provide personalized
recommendations for products or services that might be of interest to
them, such as credit cards, loans, or investment options.
(c) Fraud detection: It can be used to analyze
transaction data and flag any suspicious
activity that might indicate fraud or other
security issues. This can help banks quickly
identify and respond to potential threats.
(d) Financial planning: It can provide personalized financial planning
advice based on a customer's income, expenses, and investment
goals. This can help customers make informed decisions about their
finances and improve their overall financial health.
(e) Compliance monitoring: On the side of the banks themselves, it
can be used to monitor and analyze regulatory compliance issues,
such as detecting suspicious transactions or ensuring that customer
data is being handled appropriately. This can help banks avoid
regulatory penalties and ensure that they are operating within legal
and ethical guidelines.
While customer service and personalized recommendation use cases
make sense right away, how can ChatGPT help in fraud detection? It
can do so by analyzing transaction data & identifying anomalies that
might indicate fraudulent activity. Here's how it can work:
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 Bankers
Cover pagePlus-March
Article 2022 BANKERS PLUS
(a) Analyses transaction data: ChatGPT can be trained on a large
dataset of transaction data, including information such as transaction
amount, location, and time. This allows the model to learn patterns
and trends in legitimate transactions.
(b) Flag suspicious activity: When a new transaction is made,
ChatGPT can compare it to the patterns it has learned and flag any
activity that appears unusual or suspicious. For example, if a large
transaction is made at an unusual time or location, or if a customer
suddenly starts making transactions that are outside their usual
spending habits, ChatGPT can flag it for further investigation.
(c) Provide alerts and recommendations: When ChatGPT flags
suspicious activity, it can alert bank staff or security teams so they
can investigate further.
By using ChatGPT to help with fraud detection, banks can identify
potential threats more quickly and efficiently than relying on human
analysts alone. This can help reduce the risk of financial loss and
protect customers' personal and financial information.
So, there are a lot of possibilities out there, and this will be an area of
great progress in the near future too. Conversational engines will
soon become part of user search experience as well, through the
search engines of Google and Microsoft (Bing). We can look forward
to a major transformation in human computer interaction in the years
to come.

About the Author

Mr. Venkateshprasanna is a seasoned software professional
with over 15 years of experience, specializing on information
retrieval, machine learning, recommendation systems and
artificial intelligence. His expertise in these areas has enabled
him to deliver advanced search solutions that leverage the
power of machine learning and AI. He is currently heading the
AI/ML innovations for a leading Ed Tech product.

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 BANKERS PLUS | VOLUME III, ISSUE 12 | MARCH 2023
Volume II- Issue 8

Regulatory
Volume III, Issue 1
Volume III, Issue 11 Updates February 2023

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Bankers PlusUpdates
Regulatory REGULATORY UPDATES
BANKERS PLUS

Extension of Market
Regulatory Updates
RTGS Hours
The trading hours for various markets regulated by the
Reserve Bank were amended with effect from April 7, 2020 in
view of the operational dislocations and elevated levels of
health risks posed by COVID-19. Restoration of market hours
in a phased manner was commenced with effect from
November 09, 2020, and market hours in respect of
call/notice/term money, market repo and tri-party repo in
government securities, commercial papers, certificates of
deposit and rupee interest rate derivatives traded outside the
recognised stock exchanges
P which is ahave since been
subsidiary on. restored to pre-
pandemic level. RBI has now decided to also restore market
hours in respect of government securities from 9:00 AM to
3:30 PM to 9:00 AM to 5:00 PM. Revised market hours for
various markets regulated by RBI are,
Timings with effect
Market
from February 13, 2023
Call/notice/term money 9:00 AM to 5:00 PM
Market repo in government securities 9:00 AM to 2:30 PM
Tri-party repo in government securities 9:00 AM to 3:00 PM
Commercial paper and Certificates of Deposit 9:00 AM to 5:00 PM
Repo in Corporate Bonds 9:00 AM to 5:00 PM
Government Securities (Central Government Securities,
9:00 AM to 5:00 PM
State Development Loans and Treasury Bills)
Foreign Currency (FCY)/Indian Rupee (INR) Trades
9:00 AM to 3:30 PM
including Forex Derivatives*
Rupee Interest Rate Derivatives 9:00 AM to 5:00 PM

7
Bankers Plus PLUS
BANKERS Regulatory
REGULATORY UPDATESUpdates

Real-time Payment
Systems Linkage
Regulatory between
Updates
RTGS
India and Singapore
Cross-border linkage between India and Singapore using
their respective Fast Payment Systems, viz. Unified
Payments Interface (UPI) and PayNow has been
inaugurated recently.
The UPI-PayNow linkage will enable users of the two fast
payment systems in either country to make convenient, safe,
instant, and cost-effective cross-border funds transfers
using their respective mobile apps. Funds held in bank
accounts or e-wallets
SBICAPcan be transferred
which to /on.
is a subsidiary from India using
just the UPI-id, mobile number, or Virtual Payment
Address (VPA).
To begin with, SBI, IOB, Indian Bank and ICICI Bank will
facilitate both inward and outward remittances while Axis
Bank and DBS India will facilitate inward remittances. For
Singapore users, the service will be made available through
DBS-Singapore and Liquid Group .
Customers of the above participating banks can undertake
cross-border remittances to Singapore using the bank‟s
mobile banking app / internet banking. To begin with, an
Indian user can remit up to ₹60,000 in a day (equivalent to
around SGD 1,000). At the time of making the transaction,
the system shall dynamically calculate and display the amount
in both the currencies for convenience of the user.

8
Bankers PlusUpdates
Regulatory BANKERS PLUS

FCRA related
Regulatory Updates transaction code in
RTGS
NEFT and RTGS
Under the Foreign Contribution Regulation Act (FCRA)-
2010 (amended as on September 28, 2020), foreign
contributions must be received only in the “FCRA account”
of State Bank of India (SBI), New Delhi Main Branch
(NDMB). The contributions to the FCRA account are received
directly from foreign banks through SWIFT and from Indian
intermediary banks through NEFT and RTGS systems.
In terms of extant requirements of Ministry of Home Affairs
(MHA), Government
SBICAPofwhich
India,
is athe donor on.
subsidiary details such as
name, address, country of origin, amount, currency, and
purpose of remittance are required to be captured in such
transactions and SBI is required to report the same to MHA on
daily basis.
Keeping in view the above, necessary changes have been
introduced in NEFT and RTGS systems to identify the
transactions. Transferring banks should populate appropriate
codes while transferring contributions through NEFT/RTGS.
FCRA Transaction Code in NEFT and RTGS Systems
Field Type Code to be used
6305 (in N06 message) NEFT 41
PmtTpInf/CtgyPurp/Cd (in Pacs.008
RTGS FCRA
message)

9
Bankers PlusUpdates
Regulatory BANKERS PLUS
Originating banks are required to pass on donor details in the
following formats of „Sender to remitter information‟ (field
Regulatory
no. 7495) Updates
of NEFT and „RmtInf‟ tag of RTGS:
RTGS
Transaction
Transaction
Code to without Legal
Item Field / Tag with LEI
be used Entity Identifier
details
(LEI) details
6305
Field- 7495 Field- 7495
NEFT (in N06 41
message)
PmtTpInf /
Tag-
CtgyPurp / Cd Tag- RmtInf/Ustrd
RTGS FCRA RmtInf/Ustrd
(in Pacs.008
SBICAP which is a subsidiary on.
message)

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Bankers Plus PLUS
BANKERS RegulatoryPLUS
BANKERS Updates

Expanding the scope

of Trade Receivables
Regulatory Updates
RTGS
Discounting System
RBI has issued guidelines on Trade Receivables
Discounting System (TReDS) in December 2014 with an
objective of facilitating the financing of trade receivables of
MSMEs. Subsequently, three entities started operating
TReDS platforms and two more entities have been granted in-
principle authorization. These entities process about ₹60,000
crore worth of transactions annually.
To provide further impetus to TReDS platforms, RBI has
recently decided to extend
SBICAP whichthe
is ascope of activity
subsidiary on. of these
Platforms to further boosting the cash flows of MSMEs.
(a) Insurance facility will now be permitted on TReDS. This
will encourage financing / discounting of payables of buyers
irrespective of their credit ratings. Accordingly, insurance
companies will be permitted to participate as a “fourth
participant” on TReDS, apart from the MSME sellers,
buyers and financiers.
(b) All entities / institutions eligible to undertake factoring
business under the Factoring Regulation Act will be permitted
to participate as financiers in TReDS.
(c) Secondary market operations will now be enabled on
TReDS platforms. This would allow financiers to offload their
existing portfolio to other financiers within the same TReDS
platform, if required.

11
Bankers PlusUpdates
Regulatory BANKERS PLUS

Interest Rate Risk in

Regulatory Updates
RTGS
Banking Book-
Revised Guidelines
Interest Rate Risk in Banking Book (IRRBB) refers to the
current or prospective risk to banks‟ capital and earnings
arising from adverse movements in interest rates that affect
its banking book positions. Excessive IRRBB can pose a
significant risk to banks‟ current capital base and/or future
earnings.
RBI has recently issued revised guidelines for banks to
measure, monitor, and disclose their exposure to IRRBB
which is aligned with revised
SBICAP framework
which is issued
a subsidiary on. by the Basel
Committee on Banking Supervision (BCBS).
The date for implementation of the revised guidelines will be
communicated in due course by RBI. Banks are advised to be
in preparedness for measuring, monitoring, and disclosing
their exposure to interest rate risk in the banking book in
terms of the revised guidelines. Ahead of the implementation,
banks shall submit the disclosures stipulated below within two
months from the end of the respective quarter, as per
following schedule:
Return to be
Entities Frequency submitted from the
quarter ended
D-SIBs Quarterly March 2023
Other Banks Quarterly June 2023
12
Bankers PlusUpdates
Regulatory BANKERS PLUS
RBI has also indicated phasing out of the existing guidelines
on Asset Liability Management (ALM) system‟ which
requireRegulatory Updates „Traditional Gap Analysis‟ and
banks to undertake RTGS
guidelines on Banks‟ Asset Liability Management Framework
- Interest Rate Risk‟ which require banks to undertake
„Duration Gap Analysis‟, post implementation of new
guidelines.
Complete revised guidelines issued by RBI can be referred
by clicking below. We shall cover the salient features of
revised guidelines post implementation by RBI.

Revised IRRBB of RBI-Click here

SBICAP
BANKERS Regulatory
PLUS which is a subsidiary on. Updates

Regulatory Initiatives
on Climate Risk and
Sustainable Finance
RBI recognizes that climate change can translate into climate-
related financial risks for Regulated Entities (REs) which can
have broader financial stability implications. To prepare a
strategy based on global best practices on mitigating the
adverse impacts of climate change, RBI has decided to issue
the following guidelines for REs in a phased manner.
(a) Broad framework for acceptance of Green Deposits.
(b) Disclosure framework on Climate-related Financial Risks.
(c) Guidance on Climate Scenario Analysis and Stress Testing.
13
Bankers PlusUpdates
Regulatory BANKERS PLUS

Extending UPI for

Regulatory Updates Inbound Travellers to
RTGS
India
As announced in the recent monitory policy, RBI has
introduced a facility to enable all in-bound travelers (foreign
nationals and NRIs) visiting India to make local payments
using Unified Payments Interface (UPI) while they are in
India. This facility is made available from Feb 21,2023.
To start with, it is available to travelers from G-20 countries,
at select international airports (Bengaluru, Mumbai and New
Delhi). Eligible travelers would be issued Prepaid Payment
Instruments (PPI) wallets
SBICAP linked
which is a to UPI for making
subsidiary on. payments
at merchant outlets. Delegates from G20 countries can also
avail this facility at various meeting venues. To begin with,
ICICI Bank, IDFC First Bank and two non-bank PPI issuers,
Pine Labs Private Limited and Transcorp International
Limited will issue UPI linked wallets.
Travellers visiting India can now experience the convenience
of UPI payments at over five crore merchant outlets across
India, that accept QR Code-based UPI payments.

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Bankers Plus
REGULATORY
BANKERS PLUSUPDATES Regulatory Updates

Outcomes FATF
Plenary,
Regulatory 22-24
Updates
February 2023
In the recently concluded FATF Plenary, Financial Action
Task Force (FATF) has suspended the membership of the
„Russian Federation‟ on the back ground of one-year
anniversary of its full-scale invasion of Ukraine.
FATF has added „South Africa‟ and „Nigeria‟ to the list of
„Jurisdictions under increased monitoring‟ due to strategic
deficiencies in their regimes to counter money laundering,
terrorist financing, and proliferation financing.
SBICAP
FATF also identifies which is or
countries a subsidiary on. with „serious
jurisdictions
strategic deficiencies‟ to counter money laundering, terrorist
financing, and proliferation financing. No new
countries/jurisdictions have been added to this list in the Feb
2023 plenary.
FATF has removed „Cambodia‟ and „Morocco‟ from the list
of countries or jurisdictions with increased monitoring due
to improvements in the KYC AML practices of these countries.
FATF is an intergovernmental organization that seeks to
combat money laundering and terrorist financing. It is a
global standard bearer of sorts in that it checks and
rechecks to see if countries are following basic principles of
financial regulatory oversight. FATF is having it‟s head
quarters at Paris.

15
Bankers PlusUpdates
Regulatory BANKERS PLUS

New Income Tax

Regulatory Updates Proposals- Union
Budget 2023-24
In the Union Budget 2023-24, government of India has
announced following changes in the Income tax related
aspects from financial year 2023-24.
(a) Rebate limit of Personal Income Tax to be increased to
Rs. 7 lakh from the current Rs. 5 lakh in the new tax regime.
Thus, persons in the new tax regime, with income up to Rs. 7
lakh to not pay any tax.
(b) Tax structure in new personal income tax regime,
introduced in SBICAP
2020 withwhich
six isincome
a subsidiary
slabs,on.to change by
reducing the number of slabs to five and increasing the tax
exemption limit to Rs. 3 lakh. Change to provide major relief
to all tax payers in the new regime.
Total Income (Rs) Rate (per cent)
Up to 3,00,000 Nil
From 3,00,001 to 6,00,000 5
From 6,00,001 to 9,00,000 10
From 9,00,001 to 12,00,000 15
From 12,00,001 to 15,00,000 20
Above 15,00,000 30

(c) Proposal is made to extend the benefit of standard

deduction of Rs. 50,000 to salaried individual, and deduction
from family pension up to Rs. 15,000, in the new tax regime.

16
 Bankers Plus-March
Bankers PlusUpdates
Regulatory 2022 BANKERS PLUS
Regulatory Updates REGULATORY UPDATES
Regulatory Updates
(d) Highest surcharge rate to reduce from 37 per cent to 25
per cent in the new tax regime. This to further result in
reduction of the maximum personal income tax rate to 39 per
cent.
(e) The limit for tax exemption on leave encashment on
retirement of non-government salaried employees to increase
to Rs. 25 lakh.

SBICAP which is a subsidiary on.

17
 Bankers
Bankers Plus-March
Plus PLUS
BANKERS 2022 Regulatory Updates
Regulatory Updates REGULATORY UPDATES
Regulatory Updates
Key highlights-Union
Budget 2023 (Banking
& Finance related)
Key highlights of Union Budget 2023-24 which are mainly
relevant to banking professionals are captured in this
article.
(1) Urban Infrastructure Development Fund (UIDF) will be
established through use of priority Sector Lending shortfall,
which will be managed by the National Housing Bank
(NHB), and will be used by public agencies to create urban
infrastructure in Tier 2 and Tier 3 cities.
(2) RevampedSBICAP which is a scheme
credit guarantee subsidiary
foron.
MSMEs to take
effect from 1st April 2023 through infusion of Rs 9,000 crore
in the corpus. This scheme would enable additional collateral-
free guaranteed credit of Rs 2 lakh crore and also reduce the
cost of the credit by about 1 per cent.
(3) The maximum deposit limit for Senior Citizen Savings
Scheme to be enhanced from Rs 15 lakh to Rs 30 lakh.
(4) ₹20 lakh crore agricultural credit targeted at animal
husbandry, dairy and fisheries.
(5) A new sub-scheme of PM Matsya Sampada Yojana with
targeted investment of ₹6,000 crore to be launched to further
enable activities of fishermen, fish vendors, and micro & small
enterprises, improve value chain efficiencies, and expand the
market.

18
 Bankers
Bankers Plus-March
Plus PLUS
BANKERS 2022 Regulatory Updates
Regulatory Updates REGULATORY UPDATES
Regulatory Updates
(6) Computerisation of 63,000 Primary Agricultural Credit
Societies (PACS) with an investment of ₹2,516 crore initiated.
(7) 95 per cent of the forfeited amount
relating to bid or performance security, will
be returned to MSME‟s by government and
government undertakings in cases the
MSME‟s failed to execute contracts during
Covid period.
(8) National Financial Information Registry to be set up to
serve as the central repository of financial and ancillary
information for facilitating efficient flow of credit, promoting
financial inclusion, and fostering financial stability. A new
legislative framework
SBICAPtowhich
be designed in consultation
is a subsidiary on. with RBI
to govern this credit public infrastructure.
(9) To enhance business activities in GIFT IFSC, the following
measures will be taken by the government.
(a) Delegating powers under the SEZ Act to IFSCA to avoid
dual regulation.
(b) Setting up a single window IT system for registration and
approval from IFSCA, SEZ authorities, GSTN, RBI, SEBI and
IRDAI.
(c) Permitting acquisition financing by IFSC Banking Units of
foreign bank.
(d) Establishing a subsidiary of EXIM Bank for trade re-
financing.
(e) Recognizing offshore derivative instruments as valid
contracts.
19
 Bankers
Bankers Plus-March
Plus PLUS
BANKERS 2022 Regulatory Updates
Regulatory Updates REGULATORY UPDATES
(f) Amending IFSCA Act for statutory provisions for
arbitration, ancillary services, and avoiding dual regulation
under SEZ Act.
(g) Amendments proposed to the BR Act, the Banking
Companies Act and the RBI Act to improve bank
governance and enhance investors‟ protection.
(h) Countries looking for digital continuity solutions would be
facilitated for setting up of their Data Embassies in GIFT
IFSC.
(10) To commemorate Azadi Ka Amrit Mahotsav, a one-time
new small savings scheme, Mahila Samman Savings
Certificate to be launched. It will offer deposit facility upto Rs
2 lakh in the name of women
SBICAP or agirls
which is for tenure
subsidiary on.of 2 years (up
to March 2025) at fixed interest rate of 7.5 per cent with
partial withdrawal option.
(11) The maximum deposit limit for Monthly Income Account
Scheme to be enhanced from Rs. 4.5 lakh to Rs. 9 lakh for
single account and from Rs. 9 lakh to Rs. 15 lakh for joint
account.
(12) Provision of a higher limit of Rs. 2 lakh per member for
cash deposits to and loans in cash by Primary Agricultural
Co-operative Societies (PACS) and Primary Co-operative
Agriculture and Rural Development Banks (PCARDBs)
(13) Period of tax benefits to funds relocating to IFSC, GIFT
CityRs.
extended
350/-
till 31.03.2025.
(14) Carry forward of losses on strategic disinvestment
including that of IDBI Bank to be allowed.
20
 Bankers Plus-March
Bankers PlusUpdates
Regulatory 2022 BANKERS PLUS
Regulatory Updates REGULATORY UPDATES
Regulatory Updates
Financial Statements -
Presentation &
Disclosures
Directions- 2021
Reserve Bank of India (Financial Statements-Presentation
and Disclosures) Directions, 2021 are applicable to
Commercial Banks and Primary Urban Co-operative Banks
(UCBs). The directions harmonize the regulatory instructions
on presentation and disclosure in financial statements
across the banking sector.
In consultation with the National Bank for Agriculture and Rural
SBICAP which is a subsidiary on.
Development (NABARD), RBI has now decided to make this
Master Direction also applicable to State and Central
Cooperative Banks (together referred to as „Rural Co-
operative Banks‟ or „RCBs‟) mutatis mutandis, from the
financial year ending March 31, 2023. Certain disclosure
requirements under these directions shall be applicable, to
RCBs, from the financial year ending March 31, 2024.

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 Bankers
Bankers Plus-March
Plus PLUS
BANKERS 2022 Regulatory Updates
Regulatory Updates REGULATORY UPDATES
Regulatory Updates

Recovery of Penal
Charges on Loans

In terms of extant guidelines, Banks and financial institutes

have an operational autonomy to formulate Board approved
policy for levy of penal interest on advances which shall be
fair and transparent. The intent of penal interest was
essentially to inculcate a sense of credit discipline among
borrowers through negative incentives but such charges are
not meant to be used as a revenue enhancement tool over
and above the contracted rate of interest.
SBICAP
The extant regulatory which is aonsubsidiary
guidelines on. interest have
levy of penal
been reviewed by RBI in the above context. RBI has decided
that any penalty for delay/default in servicing of the loan or
any other non-compliance of material terms and conditions of
loan contract by the borrower shall be in the form of „penal
charges‟ in a reasonable and transparent manner and shall
not be levied in the form of „penal interest‟ that is added to
the rate of interest being charged on the advances. Further,
there shall be no capitalisation of penal charges (i.e., the
same shall be recovered separately and shall not be added to
the principal outstanding).
However, in case of any deterioration in credit risk profile of
the borrower, REs shall be free to alter the credit risk
premium under extant guidelines on interest rate. RBI is
going to issue, detailed guidelines in this context shortly.
22
 Bankers Bankers
Plus-March Plus7
Bankers Plus PLUS2022
Bankers Plus
REGULATORY UPDATES
REGULATORY Volume
UPDATES II, Issue
Regulatory Updates BANKERS
June 2021
REGULATORY UPDATES
July 2021
Key policy rates as
on 28.02.2023 RTGS

Key Rate-As on 31.01.2023 28.02.2023

Policy Repo Rate 6.25% 6.50%
Fixed Reverse Repo Rate 3.35% 3.35%
Standing Deposit Facility Rate 6.00% 6.25%
MSF Rate 6.50% 6.75%
Bank Rate 6.50% 6.75%
CRR 4.50% 4.50%
SBICAP
SLR which is a subsidiary of the State Bank of 18.00%
18.00% India has
set up a SPV (SLS Trust) to8.65%
Base Rate manage this operation.
- 9.40% 8.65% - 9.40%
MCLR (Overnight) 7.30% - 8.40% 7.50% - 8.40%
Savings Deposit Rate 2.70% - 3.00% 2.70% - 3.00%
Term Deposit Rate > 1 Year 6.00% - 7.25% Volume
6.00%II,- 7.25%
Issue 7
REGULATORY UPDATES
BANKERS PLUS-MONTHLY E-MAGAZINE
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 www.ramyaedu.com
BANKERS PLUS | VOLUME III, ISSUE 12 |Volume II, Issue
MARCH 11
2023
Volume II- Issue 8
Industry
Volume II, Issue 6 December 2021
Volume III, Issue 1
Updates
RTGS

REGULATORY UPDATES

SBICAP which is a subsidiary of the State Bank of India has

set up a SPV (SLS Trust) to manage this operation.

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 Cover page Article
Industry Updates BANKERS PLUS

HARBINGER 2023

Reserve Bank is organising its second global hackathon -

“HARBINGER 2023 – Innovation for Transformation” with
the theme „Inclusive Digital Services‟. The Hackathon
invites participants to develop solutions that have the potential
to make digital financial services accessible to the differently
abled, facilitate efficient compliance, extend the reach of
Central Bank Digital Currencies and enhance the scalability of
blockchains.
HARBINGER 2023 invites
email and innovative
Subscribe online atideas for the
following problem statements:
(a) Innovative, easy-to-use, digital banking services for
differently abled (Divyaang).
(b) RegTech solutions to facilitate more efficient compliance
by Regulated Entities (REs).
(c) Exploring use cases/solutions for CBDC-Retail
transactions, including transactions in offline mode.
(d) Increasing Transactions Per Second (TPS)/ throughput
and scalability of blockchains.
Being part of HARBINGER 2023 gives an opportunity to the
participants to get mentored by industry experts and exhibit
their innovative solutions before an eminent jury and win
exciting prizes in each category upto ₹40 lakh for Winner &
₹20 lakh for Runner-up.

25
 Cover page Article
BANKERS PLUS Industry Updates

Financial Literacy
Week 2023

Reserve Bank of India (RBI) has been conducting Financial

Literacy Week (FLW) every year since 2016 to propagate
financial education messages on a particular theme among
members of public across the country.
The theme selected for current year Financial Literacy Week is
“Good Financial Behaviour - Your Saviour” which was
observed between February 13 and 17, 2023. The theme
aligns with the overall strategic objectives of the National
Strategy for Financial Education:
email and Subscribe2020-2025
online at which aims at
building financial resilience and well-being while creating
awareness among members of public. Focus will be on
creating awareness about savings, planning and budgeting,
and prudent use of digital financial services.
RBI will undertake a centralized mass media campaign during
the month of February 2023 to disseminate financial
awareness messages. Banks too have been advised to give
out information and create awareness among their customers.

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 Cover page Article
Industry Updates BANKERS PLUS

QR Code based Coin

Vending Machine -
Pilot project
To improve distribution of coins among members of the public,
the Reserve Bank of India is preparing a pilot project on QR
Code based Coin Vending Machine (QCVM) in
collaboration with a few leading banks.
The QR Code based Coin Vending Machine (QCVM) is a
cashless coin dispensation machine which would dispense
coins against a debit to the customer‟s bank account using
Unified Payments Interface
email (UPI). online at
and Subscribe
Unlike cash-based traditional Coin Vending Machine, the
QCVM would eliminate the need for physical tendering of
banknotes and their authentication. Customers will also have
the option to withdraw coins in required quantity and
denominations in QCVMs.
The pilot project is planned to be initially rolled out at 19
locations in 12 cities across the country. These vending
machines are intended to be installed at public places such as
railway stations, shopping malls, marketplaces to enhance
ease and accessibility.
Based on the learning from the pilot tests, guidelines would be
issued to banks to promote better distribution of coins using
QR Code based Coin Vending Machine (QCVM).

27
 Cover page Article
BANKERS PLUS Industry Updates

Credit assessment
framework for
microfinance loans
Sa-Dhan, a self-regulatory organisation for the microfinance
sector, has recently introduced the Credit Assessment
Framework (CAF) for microfinance borrowers. The CAF has
been developed based on national and international models
of poverty assessment like PPI (Progress out of Poverty
Index) and Poverty Assessment framework of National Rural
Livelihoods Mission, Government of India.
The framework will help to supplement and improve the
existing income email and Subscribe
assessment model online at with verifiable
of MFIs
wellbeing indicators, utilise and integrate existing data points
of clients available with MFIs and provide a credit
worthiness score (CWS), risk profiling for each client. It will
also promote risk-based loan pricing and loan sizing and
prevent over-indebtedness of vulnerable and low-income
households. Once implemented, the framework will aid in
creating a conducive lending and repayment environment for
the industry.
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 Cover page Article
Industry Updates BANKERS PLUS

NHB RESIDEX for

Quarter Ended
December 2022
National Housing Bank (NHB) has recently released NHB
RESIDEX for Quarter ended December 2022. The Housing
Price Index (HPI) tracks the movement in prices of residential
properties in select 50 cities on quarterly basis with FY 2017-
18 as the base year.
The 50 city HPI based on valuation prices of properties
collected from Primary Lending Institutions (HPI @
Assessment Prices)
emailrecorded an annual
and Subscribe increase
online at (Y-o-Y) of
7.1% in QE Dec 2022 as compared with 4.5% a year ago.
The annual change in HPI @ Assessment Price varied widely
across the cities – ranging from an increase of 21.4%
(Gandhinagar) to a decline of 11.6% (Ludhiana).
Out of the 50 cities, 44 cities registered increase in the index
whereas 6 cities registered decline on an annual basis. All
the eight major metros of the country viz., Ahmedabad
(14.4%), Bengaluru (8.0%), Chennai (8.7%), Delhi (1.8%),
Hyderabad (10.2%), Kolkata (7.4%), Mumbai (4.4%) & Pune
(7.2%) recorded increase in the index on an annual basis.
On a sequential (Q-o-Q) basis, the 50-city index registered
an expansion of 1.5% in October- December 2022 as against
1.2% in the previous quarter. The index is showing an
increasing trend on Q-o-Q basis since June-21.

29
 Cover page
Volume II, Article
Issue 7
BANKERS PLUS Industry Updates
Industry Updates
SEBI‟s approval to
launch Social Stock
Exchange at NSE
The National Stock Exchange (NSE) has received final
approval from the Securities and Exchange Board of India
(SEBI) recently, to set up a Social Stock Exchange (SSE) as
a separate segment of the NSE.
Social Stock Exchange aims to provide a new avenue for
social enterprises to finance social initiatives, give them
visibility, and increase transparency in fund mobilisation and
ANNUAL
utilisation SUBSCRIPTION
by social CHARGES-RS.
enterprises. Any 300/- Non-
social enterprise,
Published in e-version only
Profit Organisation and shared
(NPOs) through email
or For-Profit and
Social
Subscribe
Enterprises online at
(FPEs), that establishes its primacy of social
intent can get registered or listed on the Social Stock
Exchange segment.
Eligible NPOs can begin by registering on the SSE segment.
After onboarding, NPOs can initiate the fund mobilisation
process by issuing instruments such as Zero Coupon Zero
Principal (ZCZP) via a public issue or private placement.
Currently, the regulations have prescribed a minimum issue
size of Rs 1 crore and a minimum application size for
subscription of Rs. 2 lakhs for ZCZP issuance.
For FPEs, the process of issue and listing of securities shall
be the same as applicable for issue and listing of securities
under the existing processes of the Exchange.

30
 Cover page Article
Industry Updates BANKERS PLUS
Industry Updates
Report on
Microfinance
Industry Q3: 2022-23
As per the latest report published by Sa-Dhan, Microfinance
portfolio for lenders grew by 26% to more than Rs 3.24 lakh
crore at the end of the December quarter of 2022-23. The
micro credit portfolio for all the lenders combined together
stood at Rs 2.56 lakh crore a year ago, and Rs 3.04 lakh crore
at the end of the preceding September quarter.
ANNUAL SUBSCRIPTION CHARGES-RS. 300/-
In the December quarter, the NBFC-MFI segment witnessed a
Published in e-version only and shared through email and
faster growth in portfolio at 43.37% as against 9.23% for banks
which helped its overall market share to grow to nearly 8.50%
as against 6.69% in the year-ago period.
On the asset
Subscribe quality
online at front, proportion of loans unpaid for over
90 days have improved to 1.76% from 2.27% as of September.
From a loans due for over 30 days perspective, the ratio has
improved to 3.43% from 8.77%. West Bengal, Delhi,
Puducherry, Uttarakhand, Punjab, Chhattisgarh, Madhya
Pradesh and Rajasthan are among the major states and UTs
where the stress is higher than the industry average of 3.43%.
From a portfolio contribution perspective, Bihar, Tamil Nadu,
West Bengal, Uttar Pradesh and Karnataka were the top five
MFI markets in the country and account for approximately 55%
of the total portfolio. The average ticket size has increased to
Rs 41,095 for the industry as compared to Rs 39,045 a year
ago.
31
 Cover page Article
BANKERS PLUS Industry Updates
Industry Updates
Japan‟s Official
Development Assistance
(ODA) to India
Government of Japan has recently signed an agreement with
Government of India to extend Official Development
Assistance (ODA) of JPY 30.755 billion (Rs. 1,728 crore
approx) for Mumbai Trans-Harbour Link Project (III) and JPY
9.918 billion (Rs. 560 crore approx.) for the Establishment of
Mizoram State Super-Specialty Cancer and Research Centre.
ANNUAL SUBSCRIPTION CHARGES-RS. 300/-
Mumbai
Published Trans-Harbour Linkshared
in e-version only and Project aimsemail
through to and
improve
connectivity in Mumbai Metropolitan Region by connecting
Mumbai with Navi Mumbai, thereby contributing to mitigation
of traffic congestion and promoting regional economic
development. Thisatis tranche-III loan for the project.
Subscribe online
Project for the Establishment of Mizoram State Super-
Specialty Cancer and Research Centre aims to improve
access to cancer prevention, detection, and treatment as well
as human resource development and research that support
cancer control system, thereby contributing to achieving
Universal Health Coverage through strengthening the
healthcare system pertaining to cancer in the state.
India and Japan have had a long history of bilateral
development cooperation since 1958. In the last few years,
the economic cooperation between India and Japan has
steadily progressed. This further consolidates the Strategic
and Global Partnership between India and Japan.
32
 Cover page
Volume II, Article
Issue 7
Industry Updates BANKERS PLUS
Industry Updates
SBI raises Syndicated
Social Loan of
USD 1 Billion
State Bank of India has recently raised $1 billion (USD 500
million and greenshoe of USD 500 million) via syndicated
social loan from global banks for further lending to certain
kinds of socially impactful businesses in India. The funds will
be used to further lend to microfinance institutions and
self-help groups.
The loan facility SUBSCRIPTION
ANNUAL was arranged through Japan-based
CHARGES-RS. 300/-MUFG
Bank and Taiwan-based
Published Taipei
in e-version only Fubon
and Commercial
shared Bank Co.
through email and
Ltd. Thisonline
Subscribe is at the largest overseas loan linked to
Environmental, Social and Governance (ESG) norms
raised by a commercial bank in the Asia Pacific region and the
second-largest social loan globally.

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 Cover page
Volume II, Article
Issue 7
Industry Updates BANKERS PLUS
Industry Updates

Status of Indian
Economy Q3-2022-23

India‟s latest GDP data for the third quarter of the current
fiscal 2022-23 (Q3 FY23) was released by NSO recently. As
per the data, Indian economy grows by 4.4% in October-
December 2022 compared to 11.2% year ago. GDP at
Constant (2011-12) Prices in Q3 2022-23 is estimated at
₹40.19 lakh crore, as against ₹38.51 lakh crore in Q3 2021-
22, showing a growth of 4.4 percent.
The central
ANNUALgovernment‟s fiscal CHARGES-RS. 300/-
SUBSCRIPTION
deficit
Publishedtouched 67.8 per
in e-version onlycent
and shared through email and
of the full-year
Subscribe onlinetarget
at at the end
of January due to higher
expenses and lower revenue
realizations. In actual terms, the
fiscal deficit or gap between the
expenditure and revenue
collection during April-January
period stood at Rs 11.9 lakh
crore.
In the first advance estimates of the national income for
FY23 in early January, the NSO estimated the Indian
economy to grow at 7 per cent in 2022-23, as against 8.7 per
cent in the previous fiscal, mainly due to poor performance of
the manufacturing sector.

34
 Cover page
Volume II, Article
Issue 7
BANKERS PLUS | VOLUME III, ISSUE 12 | MARCH 2023
Industry Updates

Knowledge Hub

ANNUAL SUBSCRIPTION CHARGES-RS. 300/-

Published in e-version only and shared through email and
Subscribe online at

LIST OF ARTICLES
Sl.No Name of the Article Author Page no.
1 Open Banking Model- A Shri. Pankaj 36-39
Next-Gen Digital Banking Srivastava
2 Corporate Governance in Shri. Lalit Kumar 40-43
India: Legal framework,
Governing Principles and
Emerging Trends
3 India Adopts Trading of Shri. Hargovind 44-47
Carbon Credits Sachdev
4 NPCI to allow NRIs to Use Shri. Mohit 48-49
UPI: A Significant move Mishra
35
 Cover Bankers Plus
page Article
INDUSTRY
Knowledge Hub UPDATES Bankers Plus-March
PLUS2022
Bankers Plus
Bankers
Volume II,Plus
Issue
BANKERS
June 2021
Open Banking 7 Model-
Volume II, Issue 6
A Next-Gen Digital
Banking
-Shri. Pankaj Srivastava
COVID19 has emerged as black swan event of 21st century which has
adversely impacted the financial eco system of many countries of
world. This pandemic has forced many people to make more use of
digital platforms for the goods and services they need every day. Due
to changing consumer behaviour banks tends to embrace the leading-
edge technology to evolve and transform their businesses. The
banking industry has undergone an extensive transformation over a
period due to advent of digital technologies. Technology companies
that areANNUAL
operatingSUBSCRIPTION CHARGES-RS.
in the financial ecosystem have also300/-
leveraged
Published in
emerging technologies such as machine learning (ML), artificial
intelligence (AI) and internet of things (IoT) among others to
transform the banking services. In this article, we will take a look at
how the digital ecosystem has evolved over the years around open
banking, what is in it for the present and future, different participants
and stakeholders, as well as various risks associated with the new
landscape. As per a leading business consultancy, the GDP of global
economies which will facilitate sharing of data for financial services will
gain 1-5 percent by 2030. The global open banking market is to grow
from $27 billion in 2019 to $395 billion by 2026 in terms of size.
What is open banking model?
Open banking is a new-age banking model that allow third party to
access consumer data, financial information etc from banks and
NBFCs through application programming interfaces (API). It is an
ecosystem where the banking world converges with the rest of the
universe through various touch points.

36
 Cover Bankers Plus
page Article
INDUSTRY
Knowledge Hub UPDATES Bankers Plus-March
PLUS2022
Bankers Plus
Bankers
Volume II,Plus
Issue
BANKERS
June 2021
Open banking is based on the idea that customers should have
control over their 7 financial data and should be able to share it with
Volume II, Issue 6
third-party providers of their choice. Third-party providers can then
use this data to create new financial services and products, such as
budgeting apps, investment tools, and lending platforms.
Open banking is intended to promote innovation, competition, and
customer choice in the banking sector. By allowing TPPs to access
customer data, open banking can help to create a more level playing
field for fintech startups and other innovative companies, which can
develop new products and services that meet the needs of
customers.
How Open Banking Model Work?
It is an ANNUAL
API based SUBSCRIPTION
model where in customer consent will300/-
CHARGES-RS. be required
to access the desired data, the process flow of information will in
Published : in
chronological order as:
e-version
(a) Customeronlyconsent
and shared through
to share data:email and Subscribe
The customer online
gives consent
at
to their bank to share financial data with a third-party provider. This
consent may be given through the TPPs App, the bank's website, or
through other channels.
(b) TPPs requests access: The third-party provider requests access
to the customer's financial data from the bank's API.
(c) Authentication & authorization Request: The bank
authenticates the TPPs and authorizes the request for data access,
using secure authentication and authorization mechanisms.
(d) Data sharing: The bank then shares the requested data with the
TPPs through the API.
(e) TPPs uses data to provide services: The third-party provider
uses the customer's financial data to provide value-added services,
such as financial planning, budgeting, or loan applications.
(f) Customer consent revocation: The customer can revoke their
consent at any time to stop sharing their financial data with the third-
party provider.
37
 Cover Bankers Plus
page Article
INDUSTRY
Knowledge Hub UPDATES Bankers Plus-March
PLUS2022
Bankers Plus
Bankers
Volume II,Plus
Issue
BANKERS
June 2021
7 Open banking may offer benefits in the form
Volume II, Issue 6 of convenient access to financial data and
services to consumers and streamlining
some costs for financial institutions.
However, it also potentially poses significant
risks and concerns such as:
(a) Financial privacy and data security: In open banking
frameworks, risks associated with the loss or theft of personal data on
account of poor security, data protection violations, money laundering,
and terrorist financing concerns cannot be ruled out.
(b) Customer liability: In absence of explicit arrangements for
redressal of customer grievances and limiting their liability in case of
erroneous or fraudulent activity, the acceptability of open banking
ANNUAL
frameworks SUBSCRIPTION
may remain limited. CHARGES-RS. 300/-
(c) Cyber security
Published : in and Operational Risks: Use of open banking
architectures,
e-version onlywhich is premised
and shared on the
through enhanced
email sharing ofonline
and Subscribe data,
increases
at the surface area for cyber frauds.
(d) Compliance and Reputational Risk: While open banking
expands vistas of traditional banking and offers unique business
opportunities, it also reposes extreme responsibilities with respect to
compliance with applicable prudential regulations and privacy laws.
(e) Grievance Redressal: With more parties and intermediaries
involved in the provision of financial services in an open banking
model, it is more difficult to assign liability.
How „Open Banking‟ is being evolved in India?
(a) 2010-Aadhaar Stack: First foundational step for creating public
digital infrastructure, with the launch of digital identity.
(b) 2016-UPI: First launched for public use in the market, enabling
access to any bank account from third-party apps using API protocols.
Eventually, many other payment systems were launched by NPCI over
the year (AEPS, BBPS) enabled by open API architecture.

38
 Cover page Article
INDUSTRY
Knowledge Hub UPDATES Bankers Plus-March
PLUS2022
Bankers Plus
Bankers
Volume II,Plus
Issue
BANKERS
2016-Account Aggregator: Framework launched by RBI to create
7
consent managers and democratize financial data by empowering
Volume II, Issue 6
customers. The system went live in 2021.
2020-OCEN: It aimed to change the way credit is enabled to the
end-customers by introducing new touch points for distribution.
2020-DEPA: This is a consent-based data-sharing framework
launched by NITI Aayog, aimed at data democratization and financial
inclusion. It complements the AA framework.
2022-PCR: A holistic information repository where all information
about existing as well as new borrowers is stored, for both
individuals and corporate. It is intended to solve information
asymmetry for lenders.
Conclusion: Financial eco-system in our country has proved its
mettle by implementing a UPI platform which is now being adopted
by many ANNUAL SUBSCRIPTION
other countries as well. TheCHARGES-RS.
next big platform 300/-
for financial
Published
data sharinginise-version only and As
Account Aggregator. shared throughsurvey
per economic email2023
and
Subscribe
More than 1.1 online at bank accounts are now eligible to share data on
billion
the Reserve Bank of India's regulated data sharing system, the
account aggregator (AA) framework, and around 3.8 million users
have successfully shared data via the platform. Technological
innovation is of paramount importance at the same time customer
privacy and data protection are non-negotiable. The impetus is to
generate trust amongst the customers that their data is safe and
secure in all their financial relationships with regulated entities and
for that - innovation and regulation should go hand-in-hand then only
the open banking model can be freely adopted.

About the Author

Mr. Pankaj Srivastava is currently working as Chief
Manager (Faculty) in Union Bank of India and posted
at Bengaluru.

39
 Cover page Article
INDUSTRY UPDATES Bankers Plus-March
Bankers2022
Knowledge Plus
Hub
Bankers Plus
BANKERS PLUS
Volume II, Issue
7 Corporate Governance
Volume II, Issue 6
in India: Legal
framework, Governing
Principles and
Emerging Trends
- Shri. Lalit Kumar

Corporate governance is the system of rules, practices, and

processes by which a company is directed and controlled. It involves
the balance of power and responsibilities among the board of
directors, management, and shareholders of a company.
Legal Framework for Corporate Governance
ANNUAL SUBSCRIPTION in India 300/-
CHARGES-RS.
Published in e-version
The legal framework only and
for corporate shared inthrough
governance email and
India is governed by
a number ofonline
Subscribe at regulations, including the Companies Act, 2013,
laws and
the Securities and Exchange Board of India (SEBI) Listing
Obligations and Disclosure Requirements Regulations, 2015 and the
National Voluntary Guidelines on Social, Environmental and
Economic Responsibilities of Business (NVGs).
The Companies Act, 2013 is the primary legislation that governs the
operations of companies in India, and it includes provisions on
corporate governance, such as the appointment of independent
directors, the formation of audit committees, and the rights of
shareholders.
The SEBI Listing Obligations and Disclosure Requirements
Regulations, 2015 require listed companies to comply with certain
corporate governance norms, such as the appointment of independent
directors, the formation of audit committees, and the requirement for
timely disclosure of financial and other relevant information to
shareholders and investors.
40
 Cover Bankers Plus
page Article
INDUSTRY UPDATES Bankers Plus-March
Bankers2022
Knowledge Plus
Hub
Bankers Plus
BANKERS PLUS
Volume II, Issue
June 2021
The NVGs, issued by the Ministry of Corporate Affairs in 2011, are
7
non-binding guidelines that provide a framework for companies to
Volume II, Issue 6 and responsible business practices. The guidelines
adopt sustainable
cover areas such as corporate governance, environment, social
responsibility, and economic responsibility.
Governing Principles of Corporate Governance in India
The governing principles of corporate governance in India are
grounded in the principles of fairness, transparency, and
accountability. These principles are reflected in the various laws and
regulations that govern the operations of companies in India, as well
as in the codes of conduct and best practices that have been
developed by industry groups and other organizations. Some of the
major concepts are discussed below –
ANNUAL
(a) Concept SUBSCRIPTION
of "shareholder CHARGES-RS. 300/-
democracy"
Published
One of the in
keye-version
principles only and shared
of corporate through
governance emailis and
in India the
Subscribe online at
concept of "shareholder democracy." This principle holds that
shareholders have the right to elect the members of a company's
board of directors and to approve major corporate decisions, such as
mergers and acquisitions, capital raises, and dividend payments.
Shareholder democracy is intended to ensure that companies are run
in the best interests of their shareholders and that the rights of minority
shareholders are protected.
(b) Concept of "Disclosure and Transparency"
Another important principle of corporate governance in India is the
concept of "disclosure and transparency." This principle holds that
companies must disclose accurate and timely information about their
financial performance and operations to shareholders and other
stakeholders. Disclosure and transparency are intended to ensure that
shareholders and other stakeholders have the information they need
to make informed decisions about the companies in which they invest.

41
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(c) Concept of "Accountability and Responsibility"
7 of corporate governance in India is the concept of
A third principle
Volume II, Issueand
6 responsibility." This principle holds that the board
"accountability
of directors and senior management of a company are accountable
for the company's performance and for ensuring that the company is
run in an ethical and responsible manner. Accountability and
responsibility are intended to ensure that companies are run in the
best interests of all stakeholders, not just shareholders.
Emerging Trends in Corporate Governance in India
In recent years, there has been a growing focus on sustainability and
environmental, social, and governance (ESG) issues in the corporate
governance in India and several emerging trends have begun to
shape the way companies are governed in the country.
One of the key emerging trends in corporate
. 300/-
governance in India is the increasing focus on
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sustainability and social responsibility. More and
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more companies online in
at India are recognizing the
importance of sustainable business practices and
are taking steps to reduce their environmental
footprint and minimize their social impact.
This trend is being driven by a growing awareness of the importance
of protecting the environment and addressing social issues, as well as
by the increasing pressure from investors and consumers for
companies to be more socially responsible.
Another emerging trend in corporate governance in India is the
increasing use of technology and data analytics. Companies are
beginning to use technology and data analytics to improve the
efficiency and effectiveness of their corporate governance processes.
This includes using technology to monitor and analyze the
performance of companies, as well as using data analytics to identify
potential risks and opportunities.

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There is also a growing focus on diversity and inclusion in corporate
governance in7 India. This includes a focus on increasing the
Volume II, Issueof
6 women and other underrepresented groups on the
representation
boards of companies and in senior management positions.
Companies are also beginning to focus on the inclusion of diverse
perspectives in decision-making and to ensure that their policies and
practices promote diversity and inclusion.
Conclusion:
In conclusion, corporate governance in India is a dynamic and rapidly
evolving field, shaped by a complex interplay of laws, regulations, and
best practices. The governing principles of corporate governance in
India are fairness, transparency and accountability. The current state
of corporate governance in India is marked by strengths such as a
well-developed
ANNUAL legal framework, a strong
SUBSCRIPTION tradition of 300/-
CHARGES-RS. shareholder
democracy,
Published and a growing only
in e-version numberandof shared
independent directors
through on and
email the
boards of companies, but also by weaknesses such as a lack of
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consistency in the application of corporate governance principles, lack
of transparency and accountability and a lack of diversity. As the
country continue to grow and globalize, the opportunities for Indian
companies to adopt international standards of corporate governance
and to focus on sustainability and social responsibility will be key. It is
important for companies to stay informed of the latest trends and
developments in corporate governance in India, in order to stay
competitive and protect the interests of all stakeholders.

About the Author

Mr. Lalit Kumar is currently working as Chief Manager

(Faculty) in Union Bank of India and posted at
Hyderabad.

43
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India Adopts
7 Trading
Volume II, Issue 6
of Carbon Credits
-Shri. Hargovind Sachdev

By polluting the oceans, not mitigating CO2 emissions and

destroying our biodiversity, we are killing our planet. Let us face
it; there is no planet B.” Emmanuel Macron, President of France.
Carbon trading is the process of buying and selling permits that
allow the industry to emit carbon dioxide. The European Union
Emissions Trading System (EU ETS) is the world's most extensive
carbon trading system. Countries like Brazil and China pursue this
carbon trading to tackle rising emissions. India is also establishing its
Carbon ANNUAL SUBSCRIPTION
Trading markets CHARGES-RS.
on the European model. 300/-
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How do carbon trading permits work?
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Carbon credits are certificates that represent quantities of
greenhouse gases that have been kept out of the air or removed from
it. One carbon credit certifies that one metric tonne of carbon dioxide
goes away from the atmosphere. Advancements in remote sensing
data and AI have enabled carbon-level prediction through satellite
data which serves as one of the methods through which carbon
credits quantify.
All current carbon trading schemes use a cap-and-trade model. Under
the plan, the government sets a legal limit on emissions over a
specific period. It grants a fixed number of licenses to those releasing
the emissions. A polluter must hold enough licenses to cover the
emissions it releases. Each license or permit equals one tonne of
carbon dioxide comparable (CO2e). Permits are sold – usually by
auction – so that from the outset, polluters are charged a price on
their emissions and incentivised to reduce to a bare minimum the
permits they seek.
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Polluters buy carbon from countries or industries outside the cap,
7
usually in the developing world. Their purchase allows the emitter to
Volume II, Issue 6
exceed the emissions cap by paying someone else somewhere else
to reduce their emissions instead. Carbon trading is criticised
because carbon dioxide emissions in industrialised countries are not
declining at the necessary rate to avert catastrophic climate change.
It is a fact that offsets do not reduce emissions; they merely replace
them. Many scientists, economists and NGOs believe carbon trading
is a distraction from the need to end fossil fuel use and move to a
low-carbon future. Carbon trading is an easy way to reduce
environmental harm despite the inherent flaws in pollution trading.
India Story
India has planned to operationalise the Carbon Trading market in
2026, covering
ANNUAL 37% of the country'sCHARGES-RS.
SUBSCRIPTION emissions. The 300/-
government
intends
Publishedto publish the market's
in e-version onlyrules
andsoon. The through
shared Indian market
emailwould
and
cover carbon dioxide emissions and five other greenhouse gases
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valued in terms of their carbon dioxide equivalence. The Central
Electricity Regulatory Commission is the market regulator.
Participation would be obligatory for entities in sectors such as oil
refining, steel, aluminium and cement.
If a stabilisation mechanism exists, the World Bank has shown
interest in financing the carbon market. The bank extended an $8
million grant to India in 2016/17. India is creating a stabilisation fund
to keep credit prices in its carbon market above a certain threshold,
ensuring that they remain attractive for investors and that the market
succeeds in cutting emissions. The market regulator would use
money in the fund to buy carbon credits if prices fell too low.
Consistent investor interest in recognition and a floor under the cost
deters sharp falls in the market and could discourage industries from
reducing carbon dioxide emissions. The committees of the
environment, power and renewable energy ministries set the targets
for lowering each sector's emissions.
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India has committed to cutting greenhouse emissions to the gross
domestic product 7 by 2030 to 45% of its 2005 level and net zero by
Volume II, Issue 6
2070.
Between 2010 and June 2022, India issued 35.94 million carbon
credits or nearly 17% of all voluntary carbon market credits given
globally. The market for carbon credits increased by 164% globally in
2021. The Energy Conservation (Amendment) Bill, 2022, passed in
the Lok Sabha on August 8, incorporated the aim of developing the
domestic carbon market.
In the European Union, a credit worth 1
tonne of carbon dioxide traded at just 5 euros
in 2012, down from around 30 euros in 2008,
so cutting emissions could have been more
rewarding.
ANNUAL SUBSCRIPTION CHARGES-RS. 300/-
But the creation
Published of a market
in e-version stability
only and reserve
shared inthrough
2019 has seenand
email the
price rise toonline
Subscribe between
at 75 and 95 euros per tonne. Indian market shall
soon formalise the pricing.
India's carbon market is evolving in two phases. In the first phase,
between 2023 and 2025, the existing energy-savings certificates will
be converted to carbon credits. India already has a market for trading
certificates in above-target energy savings. The new market will
subsume in which certificates for renewable energy generation trade.
Besides helping the renewable energy industry, carbon trading can
also benefit the country's farmers. Approximately 55 per cent of India's
population is in agriculture. Given its dependence on natural resources
such as soil and water, agriculture is significantly impacted by the
climate crisis, including land degradation, market volatility in prices,
and rising input costs. The turbulence affects the sustainability of
agricultural production and the livelihoods of farmers. The intensive
application of fertilisers and pesticides has depleted soil carbon levels
and degraded the soil.
46
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Issue
BANKERS
June 2021
7
Volume II, Issue 6

Soil comprises organic matter with carbon, nitrogen, and phosphorus

elements. Approximately 50 per cent of soil organic matter is carbon.
The soil carbon measurement provides an accurate indication of
overall soil health. Carbon sequestration increases soil carbon levels
and reduces carbon dioxide levels, a dual benefit to climate change
and agriculture. A farmer who sequesters one carbon credit can earn
INR 780 at current market prices; large corporations provide as high
as INR 2,000 when purchasing large chunks of carbon credits directly.
ANNUAL
Establishing SUBSCRIPTION
the Carbon CHARGES-RS.
Trading Market 300/-effort to
shall be an inclusive
Published in e-version
make India carbon neutral only and shared
in becoming a $ 5.0through email and
trillion economy by
2027.
Subscribe online at
Rightly said, "You will die, but the carbon will not; its career does
not end with you. Better trade it off for a safe living."

About the Author

Shri. Hargovind Sachdev is Ex-General Manager, with
State Bank of India, Former CVO UCO Bank and United
Bank of India and currently an independent director at
HPL Electric & Energy Limited.

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June 2021
7 NPCI
NPCI toNRIs
to allow allow
to UseNRIs
UPI: A to
Volume II, Issue 6
Use
Significant moveUPI:
A Significant move
- Shri. Mohit Mishra
In the present digital era, Unified Payment Interface (UPI) is an
instant real time payment system developed by National Payment
Corporation of India (NPCI) facilitating inter-bank transactions. The
NPCI has made a significant move that allows Indians residing
abroad to use the fast payment network UPI, as long as their
domestic bank accounts are linked to their foreign mobile numbers. It
means that there is no need to have an Indian mobile number for this
purpose as required
ANNUAL earlier when only
SUBSCRIPTION Indian phone numbers
CHARGES-RS. 300/- were
allowed on inUPIe-version
and Non-resident Indians (NRIs) could not access
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the UPI network because the feature is SIM binding.
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On January 10th 2023, NPCI issued a circular that paved the way for
wider adoption of UPI by NRIs. In the first phase, phone numbers
from 10 countries including Singapore, Australia, Canada, Hong
Kong, Oman, Qatar, United States, Saudi Arabia, United Arab
Emirates and United Kingdom have been allowed to be used on UPI.
NPCI has also stated that it could extend this facility for other nations
as well, in the future.
Mechanism:
The NPCI will be enabling transactions from mobile numbers having
country codes of 10 Countries mentioned above along with the
current domestic country code. According to NPCI, the NRE or NRO
account holders with international mobile numbers will be allowed to
register and transact on UPI platform by using partner platforms
such as Paytm, Google Pay, PhonePe etc., if following conditions are
being met.
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June 2021
 Partner banks
7 have to ensure such accounts are allowed as per
Foreign
Volume Exchange
II, Issue 6 Management Act (FEMA) regulation.
 All necessary checks for anti-money laundering, combating of
financing of terrorism and compliance validations according to the
rules have to be ensured by remitter and beneficiary banks.
 As per the NPCI, all on-boarding and transaction level checks as
per UPI guidelines will be applicable for such accounts as cooling
period, risk rules etc.
 Regulations and adherence to the guidelines/instructions issued
by the concerned regulatory departments of the Reserve Bank of
India (RBI) from time to time.
NPCI has given the partner banks time till April 30 to comply with the
directions and prepare their systems to enable UPI transactions from
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Conclusion:
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This moveonline
wouldat help in building a robust digital payment
ecosystem. It would also promote UPI Lite and UPI123PAY as
economical and user-friendly digital payments. According to
Payments council of India chairman and Infibeam Avenues executive
director Mr. Vishwas Patel, the major convenience factor would be in
form of “Payment/money transfer convenience” for NRIs when they
visit India and pay easily across millions of Indian merchants
accepting UPI and avoid use of their expensive international cards
as they can simply scan a QR code or use their UPI ID to pay for
their purchases and expenses in India. Now NRIs can seamlessly
pay at restaurants, do P2P transfers and invest via UPI. It is
expected that this will bring down the remittance cost by 10%.
About the Author
Mr. Mohit Mishra is currently working as Chief
Manager (Faculty) in UBI and posted at Lucknow.

49
 BANKERS PLUS | VOLUME III, ISSUE 12 | MARCH 2023

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