Banking and Financial Awareness Digest: January 2023

IRDAI mandates KYC starting from January 1, 2023

• Starting January 1, 2023, all new insurance policies—regardless of their premiums—must comply with Know Your Customer (KYC) regulations, according to the Insurance Regulatory and Development Authority of India (IRDAI).
• All forms of insurance, including life, general, and health insurance, are subject to this rule.
• Currently, purchasing non-life or general insurance plans like health insurance, auto insurance, and travel insurance does not require KYC documentation.
• The time limit will be two years for "low-risk" policyholders and one year for all other customers, including "high-risk" customers, for the insurers to obtain the KYC papers from existing clients.
• Currently, customers must only present their PAN (Permanent Account Number) card and Aadhar at the time of a health insurance claim, especially if the claim amount exceeds Rs 1 lakh.
• Until recently, customers who buy new general insurance products have been free to choose whether or not to share their KYC documents.

Stock exchanges to set up an Investor Risk Reduction Access (IRRA) platform

• The Securities and Exchanges Board of India (SEBI) has ordered stock exchanges to establish an Investor Risk Reduction Access (IRRA) platform.
• There are more instances of system errors among trading participants as a result of the securities market's increasing reliance on technology, some of which have caused the disruption of trading services. In these situations, investors who hold open positions run the risk of being unable to close them, especially when the markets are volatile.
• Investor Risk Reduction Access (IRRA) platform:
• The stock exchanges will work together to create the Investor Risk Reduction Access (IRRA) platform, which would let investors close out their positions or revoke pending orders in the event that the trading members' services are interrupted. Trading members are those who conduct transactions both on their own behalf and on behalf of their customers.
• The new SEBI circular states that in the event of technical difficulties that could interrupt the trading services, the trading members may seek the enablement of the IRRA service.
• The trading members can request the enabling of the IRRA service in the event that they encounter technical issues that could interrupt the trading services, per the new SEBI circular.
• When a request is made in this respect and the trading system is revived, the SEBI also urged the stock exchanges to set up a comprehensive framework to assist the reverse migration from the IRRA system to the trading member's trading system.
• By October 1, 2023, the stock exchanges and clearing companies must make the IRRA platform operational per a request from the SEBI.

Metro raising Rs 3,586 crore for Phase II from ADB and EIB

• For the second phase of the metro project in Nagpur, the Mahametro Corporation has finalized its financial arrangement and secured a loan of Rs. 3,586 crores from the Asian Development Bank (ADB) and the European Investment Bank (EIB).
• The project's initial phase was sponsored by the French AFD and the German KFW, totaling about 630 million Euros.
• ADB would provide $200 million in USD, while the EIB would provide about 239 million Euros for the project.
• A total of Rs 15,388 crore would be invested as a result of phases I and II combined. The project’s second phase will cost around Rs. 6,700 crores, of which Rs. 3,100 crores will come from equity contributions from the federal and state governments.
• Nagpur Metro Phase- II
• The project's Phase II will encompass a total of 43.8 km by extending the four existing Phase I corridors. By 2026, the second phase will be finished.
• The 43.8 km long corridor will reach Hingna in the west, Transport Nagar (Kapsi) in the east, Butibori MIDC in the south, and Kanhan in the north.

RBI launched UTKARSH 2.0

• The Reserve Bank of India has started the second phase of its plan to improve regulatory and supervisory systems, called Utkarsh 2.0.
• Utkarsh 2.0 builds upon the previous phase, Utkarsh 2022, which began in July 2019 and covered the period through 2022. The new phase, which will run from 2023 to 2025, aims to improve the effectiveness of the Reserve Bank of India's statutory and other duties, increase its importance and relevance nationally and internationally, and enhance its internal governance, infrastructure, and human resources through six vision statements.
• The six vision statements of Utkarsh 2.0 include:

1. Excellence in performing statutory and other functions: This goal aims to improve the effectiveness of the Reserve Bank of India's duties in serving the needs of the Indian people and economy.
2. The strengthened trust of citizens and institutions in the Reserve Bank of India: This goal aims to increase trust in the Reserve Bank of India, which is essential for the bank to carry out its mandate effectively.
3. Enhanced relevance and significance in national and global roles: This goal aims to increase the importance and relevance of the Reserve Bank of India both nationally and globally in order to better contribute to the stability and development of the Indian economy.
4. Transparent, accountable, and ethics-driven internal governance: This goal focuses on improving the Reserve Bank of India's internal governance by making it more transparent, accountable, and guided by strong ethical principles.
5. Best-in-class and environment-friendly digital and physical infrastructure: This goal aims to improve the Reserve Bank of India's digital and physical infrastructure by making it top-quality and environmentally friendly.
6. Innovative, dynamic, and skilled human resources: This goal aims to improve the quality and capabilities of the Reserve Bank of India's workforce by making them more innovative, dynamic, and skilled.
7. The Reserve Bank of India places significant value on its medium-term strategy and regularly assesses its implementation and progress through a sub-committee of its Central Board. This helps the bank stay on track in achieving the goals set out in Utkarsh 2.0 and allows it to adapt to any changes that may occur.

SBI Card and Punjab & Sind Bank to launch a co-branded credit card

• Public sector bank Punjab & Sind Bank (PSB) and SBI Card have teamed together to offer co-branded credit cards to the bank's clients. This signifies PSB's introduction into the "credit cards" product area as a new addition to the bank's product line.
• Three card variants—PSB SBI Card ELITE, PSB SBI Card PRIME, and PSB SimplySAVE SBI Card—have been introduced due to the agreement.
• The card was introduced to give PSB customers special advantages for their spending needs.
• SBI Card ELITE and PSB SBI Card PRIME were created to provide premium and mass premium clients, respectively, with lifestyle perks and the best-in-class experience.
• The joining price for the PSB SBI Card ELITE is Rs. 4,999 plus taxes, while the joining fee for the PSB SBI Card PRIME is Rs. 2,999 plus taxes.
• The PSB SimplySAVE SBI Card provides value-conscious clients with a rewarding experience by accelerating rewards and advantages on their expenditures. The cost of the card, including taxes, is Rs. 499.
• The PSB SBI Cards ELITE and PRIME will be offered on the VISA platform, while the PSB SimplySAVE SBI Card will be offered on the RuPay network.

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