Banking Current Affairs 2016

Government launched education loan portal for students seeking loans

On 20 August 2015, Government launched a web-based portal www.vidyalakshmi.co.in for the students seeking educational loans.

In order to ensure that no student misses out on higher education due to lack of funds, finance minister in the Union Budget for 2015-16 had proposed to set a fully IT-based Student Financial Aid Authority.

In line with this proposal this portal was launched with an aim to administer and monitor scholarship as well as educational loan schemes under the Pradhan Mantri Vidya Lakshmi Karyakram (PMVLK).

The launch of this portal also aims to bring all banks providing educational loans under one roof.

About the portal:

  • The portal has been developed and maintained by NSDL e-Governance Infrastructure Limited (NSDL e-Gov) under the guidance of Ministry of Finance, Department of Higher Education, Ministry of Human Resource Development and Indian Banks’ Association (IBA).
  • It is a first of its kind portal that provides access to information and makes application for educational loans provided by banks and also government scholarships under a single window.
  • The portal also has a provision to apply to multiple banks for educational loans and facility for banks to download students’ loan applications among others.
  • It also carter facility for banks to upload loan processing status and students can view status of their loan application and linkage to National Scholarship Portal for information and application for government scholarships on the dashboard of the portal.
  • Up till now over 13 banks have registered and 22 educational loan schemes on the Vidya Lakshmi Portal.
  • SBI, Bank of India, IDBI Bank, Canara Bank & Union Bank of India have integrated their system with the portal for providing loan processing status to students.

Note: PMVLK was launched on 15 July 2015 under the government’s ambitious National Skill Development Mission.

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Reserve Bank of India granted ‘in-principle’ approval to 11 applicants to start a payments bank

Reserve Bank of India granted ‘in-principle’ approval to 11 applicants to start payments banks. The Committee of the Central Board (CCB) of RBI has selected 11 entities among the 41 applicant who has the reach and the technological and financial strength to provide service to the customers and promote government’s initiative of financial inclusion across the country.

The selected applicants are:

  • Reliance Industries
  • Airtel M Commerce Services
  • Tech Mahindra
  • Vodafone m-pesa
  • Aditya Birla Nuvo
  • Department of Posts
  • Cholamandalam Distribution Services
  • Fino PayTech
  • PayTm
  • National Securities Depository Ltd (NSDL)
  • Sun Pharma.

As per RBI notification for Payment Banks:

  • RBI has given ‘in principle’ approval to these 11 applicants to set payment banks is valid for 18 month period.
  • The payments banks will be able to take deposits and remittances, internet banking and other specified services but cannot undertake lending services.
  • Their holding are restricted to a maximum balance of Rs 1 lakh per individual customer.
  • They can issue ATM/debit cards but not credit cards and can also issue other prepaid payment instruments.
  • They can distribute non-risk sharing simple financial products like mutual funds and insurance products.
  • Non resident Indians will not be allowed to open accounts in payment banks.
  • Finance Minister had directed RBI to create a framework for licensing payment banks so as to meet government’s financial inclusion target.
  • It is mandatory for payment banks to hold minimum capital of Rs. 100 crore. FDI of 74 per cent is allowed in payment bank.

Selection: The applicants were detailed inspected by an External Advisory Committee (EAC) under the Chairmanship of Dr. Nachiket Mor the Director, Central Board of the Reserve Bank of India.

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LIC launches maiden unit linked insurance plan (ULIP)

State run insurer, Life Insurance Corporation of India (LIC) has launched its maiden unit linked insurance plan (ULIP) product across the country.

The ULIP which is also called as ‘New Endowment Plus’ offers investment-cum-insurance provision during the term policy providing dual benefit for the policy holder.

Specifications of ULIP:

  • It provides dual benefits of risk cover and investment opportunity in market to the policy holder and also provides option of partial withdrawal under this plan.
  • ULIP provides four fund options to policy holders in form of — bond fund, balance fund, secured fund, and growth fund to which policy holder can switch over according to their conveniences.
  • Policy holders can switch over among the fund options for four times in a given policy for free of charge.
  • ULIP provides double death benefit .i.e. it gives assured amount equal to the higher of basic sum assured or policy holder’s fund value on death before or after the date of commencement of risk.
  • It also provides accident death benefit to rider which provides for an additional amount equal to accident death benefit sum assured on death due to accident.
  • The basic sum assured under ULIP is higher by 10 times the annualised premium and 105% of the total premiums paid.
  • The minimum lock-in period for ULIP plan is for five years and if surrender before that an additional charge is levied.

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