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GA Topper Series: RBI Annual Report

Mandate: Section 53(2) of RBI act 1935, the governor of the RBI sends a copy of the RBI annual report to the finance secretary and this transfer is done via, a letter of transmittal.

Important Facts

The report contains information about what RBI has done in the last year. Students need to focus on facts and figures. 

 

RBI Annual Report in Hindi

 

  • Recently the accounting year for the Reserve Bank was changed to April-March (earlier July-June) from the financial year 2020-21 onwards. This recommendation was suggested by the Economic Capital Framework Committee (ECF) which was headed by Dr. Bimal Jalan.
  • In spite of formidable headwinds, India’s merchandise exports touched a record of US$ 421.9 billion during 2021-22, with a volume expansion of 16.6 percent over the pre-pandemic level. 
  • With the growing interconnectedness of NBFCs with other segments of the financial system, the Reserve Bank issued guidelines on scale-based regulations for NBFCs on October 22, 2021. The Reserve Bank has also issued guidelines on December 14, 2021, to extend the prompt corrective action (PCA) framework to NBFCs.The framework will be applicable to all non-government NBFCs in the middle, upper and top layers excluding primary dealers, housing finance companies, and those NBFCs which are not accepting public funds. These measures will strengthen the financial health of the NBFCs.
  • The Reserve Bank’s Financial Inclusion Index (FIIndex) is drawn on 97 indicators, reflecting the ease of access, availability, usage of services, and quality of services. By end-March 2021, the value of the index reached 53.9 (43.4 in end-March 2017), indicating the road traversed so far and the miles to go.
  • The UPI system was leveraged to introduce UPI123Pay to facilitate the digital enablement of over 40 crore feature phone users in the country
  • Payments Infrastructure Development Fund (PIDF) helped expand the digital payment acceptance footprint across the country, with over 85 lakh payment touch points deployed in 2021 alone.
  • Clearing Corporation of India Limited (CCIL) and operationalization of the National Automated Clearing House (NACH) on all days helped reduce credit and settlement risks in the payment space
  • The Reserve Bank Innovation Hub (RBIH) was also set up during the year to build an ecosystem for the development of prototypes, patents, and proofs of concept while promoting cross-thinking spanning regulatory domains and national boundaries
  • Reserve Bank rolled out an Integrated Ombudsman Scheme, 2021 by adopting a ‘One Nation One Ombudsman’ approach in November 2021. The Reserve Bank set up a Centralized Receipt and Processing Centre (CRPC) for the initial processing of physical and e-mail complaints. Furthermore, the Reserve Bank set up the first-ever Contact Centre to provide information/assistance to complainants on its alternate grievance redress mechanism. The Internal Ombudsman mechanism was extended to eligible NBFCs
  • In landmark legislation in pursuance of the announcement made in the Union Budget 2021-22, the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act 1961 was amended on August 13, 2021. The amendments, which came into force on September 1, 2021, empowered the DICGC to make payments to depositors up to the amount insured, in the case of banks with restrictions on withdrawal of deposits imposed by the Reserve Bank, within 90 days from the date of imposition of such directions
  • MPC revised downwards real GDP growth for 2022-23 to 7.2 percent in its April resolution – a decline of 60 basis points from its pre-war projection, mainly due to higher oil prices weighing on private consumption and higher imports reducing net exports.
  • Increase the cash reserve ratio (CRR) by 50 bps to 4.50 percent, effective the fortnight beginning May 21, 2022, which would withdraw liquidity to the tune of ₹87,000 crores from the banking system.
  • Testing and evaluation of entities under the third and fourth cohorts of the Regulatory Sandbox on “MSME Lending” and “Prevention and Mitigation of Financial Frauds” as also the outcomes from the hackathon HARBINGER 2021 are expected to provide innovative solutions for the financial sector
  • National Strategy for Financial Education (NSFE): 2020-25 intends to realize the vision of a financially aware and empowered India by helping the people of the country to develop adequate knowledge, skills, attitudes, and behaviour that are needed to manage their money better and to plan for the future.
  • In 2021- 22, Financial Literacy Week  was observed during February 14 -18, 2022 on the theme of “Go Digital, Go Secure”
  • Stabilization of Sarthi Application – Sarthi, the less-paper solution for the Reserve Bank’s internal processes was launched on January 1, 2021
  • Keeping in view the importance of IMPS in the processing of domestic payment transactions, the per transaction limit was enhanced from ₹2 lakh to ₹5 lakh for all channels other than SMS and IVRS (₹5 thousand)
  • Under the guidance of the Reserve Bank, NPCI in association with the payments industry set up a centralized industry-wide 24×7 helpline for digital payments christened – DigiSaathi.
  • The erstwhile ombudsman schemes of the Reserve Bank have been merged into RB-IOS with effect from November 12, 2021. There are two sets of complaints that do not fall under the RB-IOS: (i) complaints against entities not covered under RB-IOS (i.e., non-scheduled UCBs having deposit size of less than ₹50 crores, NBFCs with asset size below ₹100 crores, All India Financial Institutions, Credit Information Companies, etc.), which are handled by the Consumer Education and Protection Cells (CEPCs) set up at the ROs of the Reserve Bank across the country; and (ii) complaints appearing in the exclusion list of the RB-IOS (complaints against management, policy matters, etc.)

 

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