- The growth of aggregate deposits of scheduled commercial banks (SCB) decelerated during 2014-15 till December, mainly due to base effect, i.e. high accretion to NRI deposits, last year during September-November and due to lower deposit mobilization during this year. The growth in non-food credit also decelerated.
- The capital to risk weighted assets ratio (CRAR) at system level was 13.02% as at end March 2014 (Basel-III). It moved to 75% in September 2014. The regulatory requirement for CRAR is 9% for FY 2015.
- As per the RBI’s Financial Stability Report (December 2014), the gross nonperforming advances (GNPA) of scheduled commercial banks as a percentage of the total gross advances increased to 4.5% in September 2014 from 4.1% in March 2014. Five subsectors, viz. infrastructure, iron & steel, textiles, mining (including coal), and aviation, hold 54% of total stressed advances of PSBs as on June 2014.
- The RBI has taken a number of steps to resolve the NPA issue. In January 2014, it came out with guidelines on ‘‘Early Recognition of Financial Distress, Prompt steps for Resolution and Fair Recovery for Lenders: Framework for Revitalizing Distressed Assets in the Economy’’, whereby banks have to start acting as soon as a sign of stress is noticed in a borrower’s actions and not wait for it to become an NPA.
- The RBI has also issued guidelines to bring flexibility in project loans to infrastructure and core industry projects, both existing and new. Towards strengthening recovery from non-cooperative borrowers, the RBI has tightened the norms for asset reconstruction companies (ARC) in August 2014, whereby the minimum investment in security receipts should be 15%, as against the earlier norm of 5%.
- Pradhan Mantri Jan-Dhan Yojana: To achieve the objective of financial inclusion by extending financial services to the large hitherto unserved population of the country and to unlock its growth potential, the Pradhan Mantri Jan- DhanYojana (PMJDY) was launched on 28 August 2014.
- The Yojana envisages universal access to banking facilities with at least one basic banking account for every household, financial literacy, access to credit and insurance. The beneficiaries will receive a RuPay Debit Card having inbuilt accident insurance cover of Rs1 lakh.
- In addition, there is a life insurance cover of 30,000 to those who opened their bank accounts for the first time between 15 August 2014 and 26 January 2015 and meet other eligibility conditions of the Yojana.
- The Yojana has entered the Guinness World Records for opening most bank accounts during the week starting 23 August 2014 as part of the financial campaign. As on 28 January 2015, 31 crore bank accounts have been opened, of which 7.36 crore are in rural areas and 4.95 crore in urban areas. Under the PMJDY, 67.5% of the accounts as on 28 January 2015 are with zero balance.
- Non-banking financial companies (NBFCs) have evolved as important financial intermediaries particularly for the small-scale and retail sectors. NBFCs as a whole accounted for 1% of bank assets and 0.2% of bank deposits as on 31 March 2014.
- There are two broad categories of NBFCs based on whether they accept public deposits, viz., deposit-taking NBFCs (NBFC-D) and non-deposit-taking NBFCs (NBFC-ND).
- The total number of NBFCs registered with the RBI declined from 12,158 (as on 30 September 2013) to 11,932 (as on 30 September 2014). The number of NBFCs-D declined from 253 to 226, while the number of NBFC-ND with asset size `100 crore and above increased from 437 to 465 during the same period. The number of NBFCs-ND-SI stood at 200 as on 30 September 2014.
