Banking Current Affairs - 2020
On June 12, 2020, the Reserve Bank of India has constituted an internal working group. The working group is to review guidelines of ownership of private sector banks.
The panel constituted by the apex bank is to examine regulations to hold financial subsidiaries through non-operative financial holding company. The group is to be headed by the Executive Director of RBI, P K Mohanty.
The Group is to examine the existing regulation and guidelines on ownership of private sector banks. Also, the panel will suggest appropriate norms to address the issue of concentration of control and ownership of banks. The group will also review the eligibility criteria of the individuals to apply for banking license.
The Group will also study the current regulations to hold financial subsidiaries through NOFHC (Non-Operative Financial Holding Company). It will also make recommendations to migrate all the banks towards a uniform regulation.
The NOHFC was formed in 2015 to separate financial activities carried out by the same company. This will help the company carry out other commercial and industrial activities.
The entities in public sector and private sector and in Non-Banking Financial Companies (NBFCs) shall set up bank that will be owned by NOFHC. The company formed is to be registered as NBFC.
Tags: Banking • Banking Governance • NBFC • Public Sector Banks (PSBs) • RBI Board
The Government of India has declared banking industry as public utility service till October 21. The order has been issued under provisions of Industrial Disputes Act.
The banking services have been brought under the Industrial Disputed Act in order to prevent strikes by the employees of banking sector. The order has been passed by the labour ministry.
Industrial Disputes Act
The Industrial Disputes act, 1947 regulates Indian labour laws. The main objective of the act is to secure harmony and peace in the work culture of Indian Industries. The act applies only to organized sector.
Path of the order
The order was initiated by Ministry of Finance and has then gone to Reserve Bank of India for clarification. Finally, the order was passed and implemented by the Ministry of Labour.
Reasons for the order
There are several decisions of the government that the bank unions do not agree. For instance, several bank unions protested against the bank mergers. The unions did not agree to the merger as they believed that consolidation of banks will lead to closing down of branches.
Public Utility Services
The Public Utility Services are those services that operate as public service corporation. They provide essential services such as telephones, electricity, natural gas, postal services and water.