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A bill seeking to provide for four nominees by a bank account holder was introduced in the <keyword id="19895394" type="General" weightage="20" keywordseo="Lok-Sabha" source="keywords" meta.keywordsubtype="org" meta.entityname="Lok Sabha" meta.hostid="153" meta.entityid="Lok Sabha">Lok Sabha</keyword> on Friday to ensure better protection of depositors and enhance customer convenience. Introduced by Minister of State for Finance Pankaj Chaudhary in the Lower House, the Banking Laws (Amendment) Bill, 2024, has a provision for simultaneous and successive nominations to bank accounts, lockers, etc. As per the provision of the bill, a bank account holder can nominate up to four persons. The bill also seeks to transfer of unclaimed dividends, shares, and interest or redemption of bonds to the Investor Education and Protection Fund (IEPF), allowing individuals to claim transfers or refunds from the fund, and thus safeguarding investors' interests. As the banking sector has evolved over the years, and with a view to improving bank governance and investor protection, it has become necessary to make certain amendments to five Acts, according to Statement of Objects and Reasons of the Bill. The Bill, which was approved by the <keyword id="19916620" type="General" weightage="20" keywordseo="Union-Cabinet" source="keywords" meta.keywordsubtype="org" meta.entityname="Union Cabinet" meta.hostid="153" meta.entityid="Union Cabinet">Union Cabinet</keyword> last week, proposes to amend the <keyword id="20824389" type="General" weightage="20" keywordseo="Reserve-Bank-of-India-Act" source="keywords">Reserve Bank of India Act</keyword>, 1934, the Banking Regulation Act, 1949, the State Bank of India Act, 1955, the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980. The proposed bill seeks to improve governance standards, provide consistency in reporting by banks to the Reserve Bank of India, ensure better protection for depositors and investors, improve audit quality in public sector banks, bring customer convenience in respect of nominations, and to provide for increase in the tenure of the directors in co-operative banks. Another proposed change relates to redefining 'substantial interest' for directorships, which could increase to Rs 2 crore instead of the current limit of Rs 5 lakh, which was fixed almost six decades ago. Congress member Manish Tewari opposed the introduction of the bill, saying the power to legislate with regard to cooperatives vests with state governments. RSP member N K Premachandran opposed amending five legislations through one bill, while TMC member Saugata Roy termed the bill "superfluous", saying the the amendments proposed in the bill could have been done through administrative decisions. Responding to opposition's remarks, <keyword id="19956758" type="General" weightage="20" keywordseo="Finance-Minister" source="keywords">Finance Minister</keyword> Nirmala Sitharaman said the various amendments done in Banking Regulations Act with respect to <keyword id="20814377" type="General" weightage="20" keywordseo="cooperative-banks" source="keywords">cooperative banks</keyword> are not just one or two but several. "Simple understanding is we are not touching any aspect of the cooperatives other than that which claims under the name of banking...the sections which have been brought in for amendments, as also the court verdicts, have repeatedly reinforced the point that Banking Regulation Act and the Cooperative Banks do have this relationship and therefore it has to be taken through this route," she said. Otherwise, there is no attempt to undermine the cooperatives, particularly cooperatives dealing with everything other than banks, she said defending the Bill. The bill proposes to increase the tenure of directors (excluding the chairman and whole-time director) in cooperative banks from 8 years to 10 years, so as to align with the Constitution (Ninety-Seventh Amendment) Act, 2011. Once passed, the bill would allow a director of a Central Cooperative Bank to serve on the board of a State Cooperative Bank. The bill also seeks to give greater freedom to banks in deciding the remuneration to be paid to statutory auditors. It also seeks to redefine the reporting dates for banks for regulatory compliance to the 15th and last day of every month, instead of the second and fourth Fridays. "What's the rationale behind it? The current reporting Friday system has several limitations that impact the accuracy and effectiveness of the reporting of data. "These limitations are incomplete coverage of monthly data, seasonal fluctuations in banking activity which lead to inconsistent reporting, and the need for adjustment every 11th year which introduces complications and inconsistencies. That is why, in order to address the issue, it is proposed to amend the legislation," she said. The announcement about amendments to the Banking Regulation Act was made by the Finance Minister in the 2023-24 Budget speech. "To improve bank governance and enhance <keyword id="22728161" type="General" weightage="20" keywordseo="investors-protection" source="keywords">investors' protection</keyword>, certain amendments to the Banking Regulation Act, the Banking Companies Act and the Reserve Bank of India Act are proposed," she had said.

Bill to provide up to four nominees to a bank account introduced in Lok Sabha

<div type="image" title="For the unversed, trading in futures and options can be akin to setting their hard-earned money on fire" height="900" width="1200" msid="114064202" hostid="261" caption="&amp;lt;p&amp;gt;For the unversed, trading in futures and options can be akin to setting their hard-earned money on fire&amp;lt;/p&amp;gt;"></div> Once upon a time, there thrived a wild, wild land. Here, it was all about super high monetary stakes, lightning-fast trade deals, and bucketloads of money shifting hands every single second. This wilderness lured millions of individuals with the promise of super duper high returns. But, at what cost? Welcome to the unforgiving, ultra-risky wild west of <keyword id="19991165" type="General" weightage="20" keywordseo="Indian-equity-markets" source="keywords">Indian equity markets</keyword> called the <keyword id="145718" type="General" weightage="100" keywordseo="Futures-and-Options" source="Orion">futures and options</keyword>. Here, everyone seems to just fly right through the bright red-flagged warnings of financial risks to earn even a fraction of these promised returns. Most burn themselves in the process, but carry on nevertheless, as if nothing ever happened. <h2>Chasing the cloudy profits</h2>The data conclusively proves that every 9 out of 10 individuals only lost their hard-earned money in this land. But hey, what do the numbers know? Some hide their losses out of shame, some out of fear. The proponents, meanwhile, proudly boast unusually high returns on their investments, some open social media channels while others encourage their friends and family to take the plunge. Naturally, news of this unstoppable and humongous en-masse migration to the F&amp;O (futures and options) town has reached sheriff <keyword id="19901201" type="General" weightage="20" keywordseo="SEBI" source="keywords" meta.keywordsubtype="org" meta.entityname="SEBI" meta.hostid="261" meta.entityid="SEBI">SEBI</keyword>, galvanising them into action. After all, it was time to put a leash on this madness and save the common man. The inhabitants of this town doubled in the last 2 years, from 51 lakh in FY22 to 96 lakh in FY24—99.8% of whom were small and mid-income traders. But profits? Well, that's a different, rather completely absent story. <h2>Que Sera Sera, much?</h2>A recent report by SEBI (Securities and Exchange Board of India) that studied profits and losses made by traders in the equity derivatives segment between FY22-24 exposed the mad mania of futures and options trading in India, especially since the pandemic. Per the report, 91.1% of individual traders, or about 73 lakh traders had only lost money trading in futures and options in FY24. Between FY 22-24, over 1 crore traders, or about 92.8% of individual traders, had lost Rs 2 lakh each. But once bitten, twice shy? Well, not in this case. More than 75% of individuals, who had only made losses trading in F&amp;O in FY22 and FY23, continued to trade vigorously in FY24 as well, without any changes in the bottom line, which remained deep in red and negative. So, then all these traders must be uber-rich, with tons of cash and not much care to spare? Nope. 76% of traders in the F&amp;O space in FY24 had an annual income of less than Rs 5 lakh. 2 years ago, their share stood at 71%. And their choice of poison? Options! In FY24, 60% of traders made losses trading in futures, but a whopping 91.5% burnt their funds trading in options. Mind you, futures are riskier than options. With futures, which require significant capital investment, the buyer and seller both are contractually bound to adhere to the pre-determined strike price of the futures or options contract, irrespective of whether the prevailing prices are higher or lower (and thus, resulting in losses for either the buyer or seller). With options, since this adherence ain't necessary, individuals end up taking debt to take highly leveraged positions while trading here. <h2>Scale of the explosion</h2>Anyone who trades even infrequently will tell you that a demat account is the mitochondria or powerhouse of the trading cell. As of August 2024, India had over 17.1 crore <keyword id="20957284" type="General" weightage="20" keywordseo="demat-accounts" source="keywords">demat accounts</keyword>, which are a prerequisite for trading in the markets. India is the 9th biggest country in the world, in terms of total demat accounts. Did you know that our demat accounts are at par with the entire population of Bangladesh? Talk about scale! Just 4 years ago, in March 2020, this number was a mere 4 crore. Naturally, the total F&amp;O turnover on both <keyword id="20004725" type="General" weightage="20" keywordseo="NSE" source="keywords" meta.keywordsubtype="org" meta.entityname="NSE" meta.hostid="261" meta.entityid="NSE">NSE</keyword> and BSE has hit the roof, and also broken it. As of October 4, 2024, the total futures and options turnover on NSE stood at a massive Rs 4,78,27,27,750.30 crore. Good luck counting the thousands! <table style="border-width: initial; border-style: none;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Year </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Total Turnover (Both Futures and Options) (In Rs Crore) </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2020-21 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">64,36,03,951.51 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2021-22 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1,69,52,33,134.47 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2022-23 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">3,82,23,26,468.06 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2023-24 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7,99,27,67,152.43 </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table>Source : NSE Another metric that underlines the meteoric growth of trading in India is the collection of STT or <keyword id="20930760" type="General" weightage="20" keywordseo="Securities-Transaction-Tax" source="keywords">Securities Transaction Tax</keyword>. As of September 2024, India's STT mop-up had gone past Rs 26,000 crore. Traders have to pay STT whenever they buy or sell any security in the market. So, more trading brings in more STT, and hence, more revenue for the government, so they're not really complaining. After all, this is certainly what they'd call enviable growth. As of August 2023, our STT collection stood at about Rs 21,599 crores. And in FY20-21, India's STT collection had been Rs 16,000 crore. If only our salaries also managed to grow at this rate! <h2>So, what's happening?</h2>Two things. One, it's the big bulls who are raking in all the moolah. And it's the younger lot (those aged under 30) who are propping them up for this. In FY24, 43% of individual traders in the market were less than 30 years of age. In just one year, this number has swelled by 12 percentage points from just 31% of individual traders. But who says ageing is bad? Wrinkles and silver hair seemingly have a propensity of incurring lesser losses in the market. In FY24, only 79% of traders aged above 60 years made losses, as compared to 93% of those aged below 30. Small and mid-income traders, which make up 98% of the total trader base, witnessed average losses per person of Rs 65,000 and Rs 1.5 lakh in FY24 in futures and options, respectively. The winner here? Clearly, the big bulls, who declared an annual income of over Rs 1 crore, ended up with average profits of Rs 96,000 per person this year. <h2>What’s the sheriff up to?</h2>The government has finally swung into action, hiking the STT rate for F&amp;O during this year’s budget. Effective October 1, 2024, the STT on futures stands at 0.02%, up from 0.0125%. For options, it was upped to 0.1% versus 0.0625% previously. Small margins, but huge impact oncoming. Says Puneet Sharma- CEO and Fund Manager at Whitespace Alpha, “SEBI aims to enhance market stability while safeguarding investor interests, reflecting the regulator's intent to balance risk management with market participation”. But this might come with its own share of challenges, too. “Stricter norms around leverage, transparency, and capital adequacy could limit the ability of investors to determine their own risk appetite, thereby stifling innovation in trading strategies. Over-regulation in an environment that thrives on strategic flexibility and creativity could dampen the market’s dynamism, affecting India's competitiveness in the global derivatives landscape”, he observes. SEBI recently came out with a set of guidelines that aim to thwart <keyword id="19972907" type="General" weightage="20" keywordseo="retail-investors" source="keywords">retail investors</keyword>' participation in futures and options and hinder them from taking undue risks. Here's a quick recap of what's to come for the residents of the F&amp;O town Margin Requirements: To battle the high volatility and chaos which is generally seen on expiry days(i.e the last mandated date, post which an option becomes invalid), SEBI will put in place an extreme loss margin (ELM) of 2% for all open short options on the day of expiry. Translation? Traders will need to pony up more cash upfront, leaving them with fewer funds to take on risky bets. It ain't a choice: No more of one expiry every single day! Going ahead, an exchange like BSE or NSE will just be able to offer weekly expiries, that too, only on one benchmark index, as opposed to an entire buffet it currently offers. At present, NSE offers weekly options contracts for its financial index, bank and midcap indices. But say goodbye to this, and hello to derivatives on only 1 index per exchange. Raising the bar: Effective November 30, 2024, the minimum contract value for index derivatives will be upped to Rs 15 lakh, from the present Rs 5-10 lakh. The hope is that by making it ultra-expensive to enter these trades, investors will be dissuaded from taking on risky trades. Pay upfront: Starting February 2025, those trading in options will have to pay the entire options premium upfront, even before their trades are executed. This is because options generally carry very high leverage, and paying a significant sum upfront can force traders to think twice. Invigilation Pro Max: Starting April 1 2025, to make sure that the number of positions for equity index derivatives does not slyly slip over the mandated limit, especially on expiry days when trade volumes are huge, the exchanges will have to take a minimum of 4 position snapshots randomly. The question is, will these injections of sobriety be enough to calm down the steroid-fed bull of the futures and options market in India? Well, only time and market turnover will tell! For more insights into the financial markets and business news, stay tuned to our site and social media handles. And don’t forget to subscribe to Business Insider India’s newsletters for your weekly dose of Simply Put! Disclaimer: The content on this website is for informational purposes only and should not be construed as investment advice. We recommend readers consult certified, qualified and registered advisors for professional and personalised financial advice.

SIMPLY PUT: SEBI is on a mission to take on the wild, wild west of futures and options in India. Here’s why, what, and how

The overall size of the budget has remained almost unchanged from the interim one presented in February, indicating the government's strong commitment to move along the <keyword id="20099794" type="General" weightage="20" keywordseo="fiscal-prudence" source="keywords">fiscal prudence</keyword> path, said experts on Tuesday. According to the <keyword id="19908389" type="General" weightage="100" keywordseo="Union-Budget" source="keywords">Union Budget</keyword> 2024-25 presented by Finance Minister Nirmala Sitharaman, the total expenditure in Budget Estimates (BE) 2024-25 is estimated at Rs 48,20,512 crore of which total <keyword id="20018917" type="General" weightage="20" keywordseo="capital-expenditure" source="keywords">capital expenditure</keyword> is Rs 11,11,111 crore. The total expenditure in the Interim Budget presented in February was estimated at Rs 47,65,768 crore of which total capital expenditure was Rs 11.11 lakh crore. Debadatta Chand, Managing Director &amp; CEO, <keyword id="19920717" type="General" weightage="20" keywordseo="Bank-of-Baroda" source="keywords" meta.keywordsubtype="org" meta.entityname="Bank of Baroda" meta.hostid="261" meta.entityid="Bank of Baroda">Bank of Baroda</keyword>, said the Union Budget complements the main takeaways from the Economic Survey and focusses clearly on medium term development of the economy. "The overall size of the budget has remained almost unchanged from the interim one. The budget has shown strong intent on moving along the fiscal prudence path and targeted the <keyword id="19942084" type="General" weightage="20" keywordseo="fiscal-deficit" source="keywords">fiscal deficit</keyword> at 4.9 per cent for the year," he said. The said action will keep the growth steady as well as robust not only for economy but also banking. Aditi Nayar, Chief Economist, ICRA Limited, said the budget has kept the capital expenditure unchanged and pared the fiscal deficit to 4.9 per cent of GDP. "The anticipated reiteration of the reduction in the fiscal deficit to below 4.5 per cent of GDP in FY2026 is welcome. Interestingly, the new medium term fiscal consolidation path has been linked to a reduction in the debt/GDP ratio instead of continued compression of the fiscal deficit/GDP ratio," she said. Buoyed by improvement in revenue collection, the government has lowered fiscal deficit target to 4.9 per cent for the current <keyword id="19910979" type="General" weightage="20" keywordseo="financial-year" source="keywords">financial year</keyword> as against 5.1 per cent estimated in February's interim budget. Ranen Banerjee, Partner and Leader Economic Advisory, PwC India, said that fiscal prudence is the highlight of the full Union Budget 2024-25. The government has gone with realistic projections on its revenue and expenditure estimates and refrained from announcing overly populist measures. "The majority of the allocations, including the capex allocation, are as outlined in the interim budget, thus providing continuity. The capex being kept at INR 11.11 trillion was expected, given that the ability to consume this allocation is limited due to disruption from the elections in the first quarter and the second quarter being typically slowed down by the monsoons," Banerjee said. Institute of Chartered Accountants of India (ICAI) President Ranjeet Kumar Agarwal said the government has announced five schemes to facilitate employment and skilling for 4.1 crore youth over the next five years with a central outlay of Rs 2 lakh crore. "This is a welcome step that will create a skilled workforce to address the existing deficit and generate <keyword id="19972727" type="General" weightage="20" keywordseo="employment-opportunities" source="keywords">employment opportunities</keyword>. Additionally, financial support for loans up to Rs 10 lakh for higher education will help students pursue higher education and acquire skills," he added. Indian Institute of Insolvency Professionals of ICAI (IIIPI) Chairman Ashok Haldia said the budget proposals for an integrated technology platform and sprucing up NCLT infrastructure will provide a fillip to the Insolvency and Bankruptcy Code (IBC) regime. IIIPI is promoted by ICAI. Meanwhile, Kumarmangalam Vijay, Partner, JSA Advocates and Solicitors, opined that in its new avatar, it seems that the Modi government is keen to deliver on its promise of 'ease of doing business'. "Its focus on making it simpler is evident from the abolition of the angel tax, the increase in new income tax regime thresholds, new Vivad se Vishwas Scheme 2024 for the resolution of pending cases and the increase in the threshold for appeal by tax departments at various levels, decriminalising the non-reporting of shares received from non-resident employers and reducing the period for re-opening of the cases," Vijay said. The Institute of Company Secretaries of India (ICSI) said there has been a focus on the manufacturing sector in the budget. Measures have been taken for simplifying the FDI/ODI rules and regulations, and the <keyword id="21847964" type="General" weightage="20" keywordseo="tax-regimes" source="keywords">tax regimes</keyword>. The enhanced Mudra loan limit and the abolition of angel tax are all set to incentivize the startup and MSME ecosystem of the country. "The nine priorities identified in this progressive and inclusive budget 2024 are aimed at generating ample opportunities for all. Besides agricultural reforms, the budget focuses on skilling, educating and employing the youth, a priority that the ICSI has been concentrating on," said ICSI President B Narasimhan. Rajesh Magow, Co-Founder and Group CEO, MakeMyTrip, said the government's continued emphasis on infrastructure development is commendable. Enhanced road infrastructure will bolster the travel and tourism sector. "We also welcome the initiatives to develop iconic spiritual and cultural sites into world-class tourist hotspots," Magow said. Furthermore, he said the provision of credit for TCS against income tax under 'Income from Salaries' is logical and will provide much-desired relief to taxpayers who travel internationally.

Budget size almost unchanged from interim, shows govt's commitment to fiscal prudence: Experts

According to a new analysis, <keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords">India</keyword> contributed $1.28 billion in <keyword id="20000757" type="General" weightage="20" keywordseo="climate-finance" source="keywords">climate finance</keyword> through <keyword id="20401772" type="General" weightage="20" keywordseo="multilateral-development-banks" source="keywords">multilateral development banks</keyword> (MDBs) in 2022, surpassing the contributions of many developed countries. The study, conducted by the UK-based think tank ODI and the <keyword id="23038658" type="General" weightage="20" keywordseo="Zurich-Climate-Resilience-Alliance" source="Orion">Zurich Climate Resilience Alliance</keyword>, comes amid a renewed push by some developed countries to broaden the donor base for climate finance to include developing countries like China and <keyword id="50996" type="General" weightage="20" keywordseo="Saudi-Arabia" source="Orion">Saudi Arabia</keyword>. The report reveals that only 12 developed countries provided their fair share of international climate finance in 2022. These countries are -- Norway, France, Luxembourg, Germany, Sweden, Denmark, Switzerland, Japan, the Netherlands, Austria, Belgium and Finland. Researchers noted that the significant gap in climate finance is largely due to the United States failing to contribute its fair share. Australia, Spain, Canada and the United Kingdom also performed relatively poorly in this regard. The analysis has identified the top 30 non-Annex II countries that provided substantial climate finance to developing countries in 2022 through multilateral contributions to development banks and climate funds. This group includes former economies in transition like Poland and Russia, countries that have achieved high-income status since 1992, such as Chile, Kuwait, Saudi Arabia and South Korea, and middle-income countries with large populations, including Brazil, China, India, Indonesia, Mexico, Nigeria, the Philippines and Pakistan. India provided $1.287 billion in climate finance to other developing countries through MDBs in 2022, a sum larger than what was contributed by some developed countries like Greece ($0.23 billion), Portugal ($0.23 billion), Ireland ($0.3 billion) and New Zealand ($0.27 billion). China provided $ 2.52 billion in climate finance through MDBs in 2022, Brazil gave $ 1.135 billion, South Korea gave $1.13 billion and Argentina gave $1.01 billion. According to the United Nations Framework Convention on Climate Change (<keyword id="21931277" type="General" weightage="20" keywordseo="UNFCCC" source="keywords">UNFCCC</keyword>), adopted in 1992, high-income, industrialised countries (referred to as Annex-II countries) are responsible for providing finance and technology to help developing countries combat and adapt to climate change. These countries, including the US, Canada, Japan, Australia, New Zealand and European Union (EU) member states, such as Germany, France and the UK, have historically benefitted from industrialisation and contributed the most to greenhouse gas emissions. At COP15 in Copenhagen in 2009, these developed countries pledged to jointly provide $100 billion each year by 2020 to help developing countries mitigate and adapt to climate change. However, this target has not been fully met, leading to a significant finance gap. This shortfall has eroded trust and hindered climate action in developing countries. In May, the Organisation for Economic Cooperation and Development (<keyword id="19916574" type="General" weightage="20" keywordseo="OECD" source="keywords">OECD</keyword>) claimed that developed countries had met the long-standing $ 100 billion-a-year promise by providing nearly $ 116 billion in climate finance to developing countries in 2022, with nearly 70 % of the money given in the form of loans. The ODI researchers pointed out that many developed countries, despite performing well in terms of climate-finance contributions, would make "markedly less progress towards meeting their fair share if the finance provided was accounted for on grant-equivalence terms" -- in other words, if it reflected their real fiscal effort. The report calls for the inclusion of a "burden-sharing mechanism" in the New Collective Quantified Goal (NCQG) to provide clarity on each country's obligations and hold countries accountable. The NCQG refers to the new, larger amount that developed nations must mobilise annually, starting 2025, to support climate action in developing countries. Countries are expected to finalise the NCQG at this year's UN climate conference -- <keyword id="20082972" type="General" weightage="20" keywordseo="COP29" source="keywords">COP29</keyword> -- in Baku, Azerbaijan in November. The current $100 billion annual climate-finance goal is a collective commitment by developed countries. Its collective nature has meant that individual developed countries are not accountable for specific sums of money, potentially reducing the overall amount of climate finance provided due to the lack of individual scrutiny. The inclusion of a burden-sharing arrangement among developed countries could potentially strengthen the NCQG by fostering greater accountability and trust among parties, according to the ODI researchers. Many developing countries, including India, have recently advocated for such an arrangement to enhance accountability among developed countries.

India provided more climate finance in 2022 than many rich nations, noted recent report

The <keyword id="20018890" type="General" weightage="20" keywordseo="digital-infrastructure" source="keywords">digital infrastructure</keyword> has made the <keyword id="20572901" type="General" weightage="20" keywordseo="loan-sanctioning" source="keywords">loan sanctioning</keyword> system adopt an online mode, but the <keyword id="21614839" type="General" weightage="20" keywordseo="loan-recovery" source="keywords">loan recovery</keyword> still requires a 'feet on the street' approach, says <keyword id="20506781" type="General" weightage="20" keywordseo="swaminathan-j" source="keywords">Swaminathan J</keyword>, Deputy Governor of Reserve Bank of India (RBI). Speaking at a media event in Mumbai, the deputy Governor of RBI noted that with the digital infrastructure at place, many <keyword id="22721545" type="General" weightage="20" keywordseo="fintech-players" source="keywords">fintech players</keyword> are giving loans to customers with poor credit profiles, and up on default, use aggressive recovery tactics. "While loan sanctioning and disbursement have become increasingly digital, effective collection and recovery still require a 'feet on the street' and empathetic approach. Many fintech platforms operate on a business model that involves extending <keyword id="22791879" type="General" weightage="20" keywordseo="small-value-loans" source="keywords">small-value loans</keyword> to customers who often have a poor credit profiles" said the deputy governor. He emphasized that the business model of many fintech platforms involves offering small-value loans to customers who often have poor credit profiles. This has led to the adoption of aggressive recovery strategies, which on many occasions also crosses ethical boundaries. He also highlighted one particularly concerning practice that involves the invasion of customers' privacy, where recovery agents access the personal data and contacts of borrowers and use that as a threat practice. Swaminathan cautioned that such tactics not only infringe on individuals right to privacy, but also risk damaging the reputation of regulated lenders associated with these fintech platforms. He also highlighted RBI's regulations on outsourcing, that even though regulated financial entities delegate certain activities to third parties, they remain ultimately accountable for the actions of their outsourced agents. The deputy governor also noted that the digitisation allows banks and NBFCs to leverage data for greater insights into their customers' requirements and behaviour, which can be used for developing bespoke products apart from facilitating better risk management and compliance. He stated that the role of RBI as a regulator is to establish guardrails or a balanced framework that encourages innovation while ensuring that risks are managed prudently. The deputy governor also indicated the primary goal of RBI is to ensure the stability and integrity of the financial system and not to hinder business operations.

Loan sanctioning has gone digital, but recovery still needs a 'feet on the street' approach, says RBI Deputy Governor

Mumbai, Union Bank of India on Friday said it has identified eight troubled accounts worth Rs 3,000 crore to be sold to the national <keyword id="6605010" type="General" weightage="20" keywordseo="bad-bank" source="Orion">bad bank</keyword> <keyword id="11291018" type="General" weightage="20" keywordseo="narcl" source="Orion">NARCL</keyword> this fiscal. The lender has more than doubled its net income at Rs 3,236 crore in the June 2023 quarter on improved asset quality and recoveries. The city-based bank had already sold three accounts worth Rs 900 crore last fiscal to the national bad bank at a recovery of 33 per cent. We have sort of identified as many as 42 troubled accounts with an outstanding of Rs 10,000 crore to be sold to the National Asset Reconstruction Company (NARCL). Of these, we hope to sell at least eight of them to that central government-owned bad bank this fiscal, A Manimekhalai, the chief executive and managing director of the public sector lender, told reporters at the bank's post-earnings presser here. Union Bank was one of the first lenders to sell its NPAs to NARCL in the first lot of the bad bank's such transactions. The bank had recovered Rs 20,000 crore from written-offs/upgrades or one-time settlements but this year it will be around a quarter of that only, she said as the overall quantum of bad assets has fallen drastically. Of the Rs 20,000 crore, cash recovery alone was Rs 5,500 crore, which it expects to fall to Rs 4,500 crore this year. The bank's overall gross bad loan ratio is came down by 288 bps to 7.34 per cent (Rs 60,104 crore) now and net NPAs by 173 bps to 1.58 per cent (Rs 12,138 crore), and hopes to bring it further down to under-6 per cent by March, she said, adding as a result, provisions for bad loans came down to Rs 1,984 crore from Rs 3,653 crore. Manimekhalai also said the bank will be raising Rs 10,000 crore in equity capital not to buffer up its core capital base but to meet the Sebi mandate of having a 25 per cent public float. Of the planned Rs 10,000 crore capital raising, Rs 8,000 crore will be equity capital and the remaining will be tier 1 &amp; 2 capital. We are more than adequately capitalised. This fundraising is to meet the 25 per cent mandatory public float, she explained. The government currently holds an 83.49 per cent stake in the bank, which has to be brought down to 75 per cent under the Sebi's listing rules. The core capital stood at 15.95 per cent from 14.42 per cent of which CET 1 (Common Equity Tier 1) stood at 12.34 per cent from 10.68 per cent, she said. The bank's profit rose 107.7 per cent to Rs 3,236 crore from Rs 1,558 crore on a steep fall in bad loans and an improvement in interest income. The total income rose to Rs 27,381 crore from Rs 20,991 crore in the same period a year ago, of which interest income improved to Rs 23,478 crore from Rs 18,174 crore.

Union Bank to sell 8 troubled accounts worth Rs 3,000 cr to bad bank NARCL

Mumbai (Maharashtra) [India], September 28 (ANI): The <keyword id="6354335" type="General" weightage="50" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword> (<keyword id="30067" type="General" weightage="50" keywordseo="rbi" source="Orion">RBI</keyword>) has released preliminary data on India's Balance of Payments (BoP) for the first quarter (Q1) of the fiscal year 2023-24, covering the period from April to June. The data reveals significant developments and trends in India's economic position on the global stage. One of the standout features of India's BoP in Q1: 2023-24 was the substantial narrowing of the Current Account Deficit (<keyword id="52599" type="General" weightage="50" keywordseo="cad" source="Orion">CAD</keyword>). The CAD decreased to USD 9.2 billion, equivalent to 1.1 per cent of GDP, showing an improvement from USD 17.9 billion, or 2.1 per cent of GDP, in the same quarter of the previous fiscal year (Q1: 2022-23). However, it was higher than the CAD recorded in the preceding quarter, which stood at USD 1.3 billion (0.2 per cent of GDP). The widening of the CAD on a quarter-on-quarter basis was primarily attributed to several factors. A higher trade deficit, coupled with a decrease in the surplus of net services and a decline in private transfer receipts, contributed to this trend. Net services receipts registered a sequential decrease in Q1: 2023-24, mainly due to a decline in exports of computer, travel, and business services. However, it's important to note that these receipts remained higher on a year-on-year basis. Private transfer receipts, primarily consisting of remittances by Indians employed overseas, moderated to USD 27.1 billion in Q1: 2023-24 from USD 28.6 billion in the previous quarter (Q4: 2022-23). Despite this decrease, they witnessed an increase on a year-on-year basis. The income account, which reflects payments of investment income, showed a decline to USD 10.6 billion in Q1: 2023-24 from USD 12.6 billion in Q4: 2022-23. However, this figure was still higher than the previous year. In the financial account, notable changes were observed. Net foreign direct investment decreased to USD 5.1 billion in Q1: 2023-24 from USD 13.4 billion a year ago. Net foreign portfolio investment recorded significant inflows of USD 15.7 billion compared to net outflows of USD 14.6 billion in Q1: 2022-23. Net external commercial borrowings to India recorded an inflow of USD 5.6 billion in Q1: 2023-24, contrasting with an outflow of USD 2.9 billion in the previous year. Non-resident deposits recorded net inflows of USD 2.2 billion in Q1: 2023-24, a notable increase compared to USD 0.3 billion in Q1: 2022-23. As of the end of June 2023, India's external debt reached USD 629.1 billion. This marked an increase of USD 4.7 billion over its level at the end of March 2023. The data from RBI's Balance of Payments report for Q1: 2023-24 reflects the dynamic nature of India's economic landscape. Despite fluctuations, the narrowing of the current account deficit and increased foreign investment inflows signal positive developments in India's global economic interactions. Analysts and policymakers will closely monitor these trends, as they have significant implications for India's overall economic stability and prospects in the coming fiscal year.

India's balance of payments shows improvement in Q1 FY24

The <keyword id="20613906" type="General" weightage="100" keywordseo="Economic-Survey" source="keywords">Economic Survey</keyword> presented by <keyword id="20426375" type="General" weightage="20" keywordseo="Union-Finance-Minister-Nirmala-Sitharaman" source="keywords" meta.keywordsubtype="org" meta.entityname="Union Finance Minister Nirmala Sitharaman" meta.hostid="83" meta.entityid="Union Finance Minister Nirmala Sitharaman">Union Finance Minister Nirmala Sitharaman</keyword> has projected a <keyword id="19997196" type="General" weightage="20" keywordseo="growth-rate" source="keywords">growth rate</keyword> of 6.5 per cent and 7 per cent further solidifying <keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords">India</keyword>'s strong <keyword id="20018805" type="General" weightage="20" keywordseo="macroeconomic-fundamentals" source="keywords">macroeconomic fundamentals</keyword>, <keyword id="20060150" type="General" weightage="20" keywordseo="CBRE" source="keywords" meta.keywordsubtype="org" meta.entityname="CBRE" meta.hostid="83" meta.entityid="CBRE">CBRE</keyword> Chairman and CEO-India, South-East Asia, Middle East and Africa, <keyword id="20177586" type="General" weightage="20" keywordseo="Anshuman-Magazine" source="keywords" meta.keywordsubtype="org" meta.entityname="Anshuman Magazine" meta.hostid="83" meta.entityid="Anshuman Magazine">Anshuman Magazine</keyword> said on Monday. The country's economic performance in FY'24 surpassed expectations, registering a robust growth rate of 8.2 per cent. "This momentum is noteworthy considering three out of the past four quarters exceeded the 8 per cent growth mark," he said in his reaction to the Economic Survey. <keyword id="19895000" type="General" weightage="20" keywordseo="inflation" source="keywords">Inflation</keyword> is anticipated to moderate around 4.5 per cent and it reflects a 'well-balanced' economic environment, he said. "The survey acknowledges the <keyword id="20152263" type="General" weightage="20" keywordseo="real-estate-sector" source="keywords">real estate sector</keyword>, particularly the residential segment, as a significant driver of <keyword id="20018651" type="General" weightage="20" keywordseo="private-investment" source="keywords">private investment</keyword>. The survey emphasizes the importance of continued collaboration between central and state governments, along with the private sector, to sustain this momentum," Magazine said in a statement. India's post-pandemic recovery has been orderly and expansive and it is testament to the underlying resilience of the economy, he said. "Looking ahead to FY'25, several indicators such as robust private consumption, increased bank lending activity and improved corporate capital expenditure indicate towards a good year ahead," he added.

Economic Survey pegs growth at 6.5-7%; solidifying India's strong macroeconomic fundamentals: CBRE

<keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords">India</keyword> requires an investment support of USD 1.4 trillion — an average of USD 28 billion per year — to become a net-zero economy by 2070 and raising <keyword id="20260327" type="General" weightage="20" keywordseo="financial-resources" source="keywords">financial resources</keyword> for adaptation and mitigation action of this scale is an "unprecedented challenge", according to the <keyword id="20613906" type="General" weightage="20" keywordseo="Economic-Survey" source="keywords">Economic Survey</keyword> 2023-24 tabled in Parliament on Monday. Reaching net zero means achieving a balance between greenhouse gas emissions and the amount of these gases removed from the atmosphere by either natural processes, such as photosynthesis, or by other methods of carbon capture and storage. The consolidated report on the state of the economy in the previous year said India's climate action has been largely financed through domestic resources and the flow of international finance has been "very limited". Citing the Reserve Bank of India's (RBI) data, the report said bridging the "substantial funding gap" necessitates allocating 2.5 per cent of India's annual Gross Domestic Product (GDP) to <keyword id="20018880" type="General" weightage="20" keywordseo="green-finance" source="keywords">green finance</keyword>. "Preliminary estimates indicate that the aggregate investment support required by India to achieve its 2070 net-zero target will be USD 1.4 trillion at an average of USD 28 billion per year. Raising financial resources for <keyword id="19907392" type="General" weightage="20" keywordseo="climate-change" source="keywords">climate change</keyword> adaptation and mitigation actions of this scale is an unprecedented challenge," the document read. A 2022 report by the Climate Policy Initiative found that domestic sources accounted for the majority of green finance in India, at 87 per cent and 83 per cent in financial years 2019 and 2020 respectively. While international sources are increasing (from 13 per cent in FY 2019 to 17 per cent in FY 2020), the economic survey said they are still insufficient to meet India's net-zero target. "Mobilising substantial capital from traditional sources presents multifaceted challenges in emerging economies like India. The perceived sovereign risks associated with emerging market and developing economies (EMDEs) and the capital-intensive nature of such projects, coupled with lengthy gestation periods and evolving regulatory frameworks, can create misalignment between investor expectations and project timelines," the government said. The economic survey also noted that the flows of global capital to <keyword id="20200084" type="General" weightage="20" keywordseo="developing-countries" source="keywords">developing countries</keyword> have been impeded by high costs of capital. Despite securing a good rating on its green-bond framework, Indian sovereign <keyword id="20177085" type="General" weightage="20" keywordseo="green-bonds" source="keywords">green bonds</keyword> have hardly received any "greenium" from private investors. It is more a "wall of capital" than a "flood of capital" that is waiting to fund energy transition in EMDEs. It is just not mobile. All of these together have severely hampered the flow of finance for green-transition projects, the survey said. "Greenium" or green premium refers to the savings an issuer of a green bond realises on the associated coupon payment because the bond is green. Financial support to help middle-income and poor countries fight climate change will be at the centre of this year's UN climate conference in Baku, Azerbaijan, where the world will reach the deadline to agree on the New Collective Quantified Goal (NCQG) -- the new amount developed nations must mobilise every year starting 2025 to support climate action in developing countries. But achieving consensus will not be easy, given the disappointing progress made on major conflict points at the mid-year UN climate talks in Bonn, Germany. At the 2009 UN climate conference in Copenhagen, rich nations pledged to provide USD 100 billion annually from 2020 to help developing countries mitigate and adapt to climate change. However, delays in achieving this goal have eroded trust between developed and developing nations and have been a continual source of contention during annual climate negotiations. In May, the Organisation for Economic Cooperation and Development (OECD) claimed that developed countries had met the long-standing USD 100 billion-a-year promise by providing nearly USD 116 billion in <keyword id="20000757" type="General" weightage="20" keywordseo="climate-finance" source="keywords">climate finance</keyword> to developing countries in 2022, with nearly 70 per cent of the money given in the form of loans. However, international non-profit organisation Oxfam last week said climate finance provided by rich countries in 2022 totalled no more than USD 35 billion. Developing nations argue that they cannot be expected to reduce carbon dioxide (CO2) emissions faster if developed countries -- historically responsible for climate change -- do not provide enhanced financial support. Rich countries are now expected to raise more than USD 100 billion, with developing countries, including India, demanding trillions of dollars to tackle climate change.

Raising massive financial resources for net-zero goal unprecedented challenge: Economic Survey

In March 2023, Citigroup CEO Jane Fraser anointed Anand Selva, as the bank's chief operating officer. His mandate: oversee a deeply unsexy yet crucial initiative to regain compliance with regulators. At the time, she praised his "long track record of delivering results."So far, Selva's tenure has been rocky.In July, two regulators <a target="_blank" href="https://www.businessinsider.com/citi-jane-fraser-regulatory-citigroup-transformation-2024-7">fined Citi $135.6 million</a> for failing to make enough progress in fixing its data-management issues. The bank had agreed in 2020 to work on this problem and others, including poor risk controls, after <a target="_blank" href="https://markets.businessinsider.com/news/stocks/citigroup-slammed-400-mln-fine-longstanding-deficiencies-regulation-occ-fed-2020-10-1029660295">paying $400 million</a> in fines to the Federal Reserve and the Office of the Comptroller of the Currency. The OCC said in July that the bank had made "meaningful progress overall" but that the agency wanted to ensure Citi allocated enough resources to address the "persistent weaknesses" regarding data.These new fines are despite Citi dedicating massive resources to a firmwide initiative to overhaul the bank's technology. This program, called the <a target="_blank" href="https://www.businessinsider.com/citi-transformation-citigroup-regulatory-fine-anand-selvakesari-2024-7">"Transformation"</a> and overseen by Selva, has about 13,000 employees. Citi spent $7.4 billion on the endeavor from 2021 through 2023. This year's budget has been increased by $250 million, to more than $3 billion.The pressure is on, with Sen. Elizabeth Warren urging the OCC to "impose growth restrictions" on Citi, arguing that it has grown "too big to manage." The regulator and Citi declined to comment."We've always said that progress wouldn't be linear," Fraser said after the latest fines, "and we have no doubt that we will be successful in getting our firm where it needs to be in terms of our Transformation."For Selva, leading the Transformation is unlike any test he has faced in his three-decade career at Citi. Selva, who goes by the shortened version of his last name, Selvakesari, joined Citi as an assistant operations manager in Chennai, India, in 1991. He rose through the ranks in Asia before taking over the US consumer bank in 2019. When Fraser was made CEO in 2021, she chose Selva, who's now 57, to replace her as the global head of consumer banking.In his current role, his mandate is to make the bank safer, not to turn a profit. To do so, he has to solve for Citi's <a target="_blank" href="https://www.businessinsider.com/inside-real-reasons-behind-citi-mike-corbat-early-retirement-2020-9">decades of underinvestment</a> in its infrastructure, which affects every business line of the bank.Business Insider talked to 14 current and former Citi employees who have worked under Selva to get a picture of the challenge facing him and why he was put in charge of the bank's No. 1 priority. All but two spoke on the condition of anonymity, citing fear of reprisal or the sensitivity of regulatory matters. Three senior executives pointed to his experience navigating regulation and working with technology from running Citi's consumer bank. Gonzalo Luchetti, Selva's successor as the head of the US consumer business, told BI that serving 70 million customers required handling tremendous operational risk."If we mess it up, usually you don't mess it up for one; you mess it up for hundreds of thousands, if not millions," he said. "You have to be super good at process orientation and making sure that there's high discipline and rigor."Luchetti also emphasized Selva's longevity at Citi and experience across regions."He knows the fabric of the firm very well," Luchetti said. "The Transformation is about really repiping the machine. He's touched a lot of the machine himself."But touching the machine isn't the same as fixing it. Eight employees told BI that they were surprised that Selva was made the head of the Transformation given that he had never held a leadership role in technology or compliance. They described Citi's culture as a cliquey environment that rewards managing up over results, noting that the COO promotion followed dismal performance for the wealth unit he oversaw."The biggest job was given to a guy who with 1 ½ years in wealth wasn't able to do anything," a former managing director said.Selva has also come under scrutiny for a lawsuit filed against him and the bank by an ex-Transformation executive in May. Kathleen Martin, a former interim data chair, alleged that Selva pressured her to hide information from the OCC that would make Citi "look bad" and that she was fired in September 2023 after multiple refusals. Citi denied the accusations and filed a counterclaim in late August, alleging that Martin was fired for underperformance. Citi has recently made leadership changes to Selva's unit. The bank tapped its new tech head, <a target="_blank" href="https://www.businessinsider.com/citi-data-tim-ryan-anand-selva-memo-transformation-regulators-2024-9">Tim Ryan</a>, to lead the data effort alongside Selva and take over management of the 800-employee data team. The work on data, along with risks and controls, is paramount to the Transformation.Splitting the burden may expedite the massive task, which requires coordinating work from employees across the entire bank. Citi declined to specify a timeline, citing the confidential nature of regulatory matters. A managing director in the Transformation estimated that the work required would take about two decades.Mike Mayo, a Wells Fargo analyst, said that until Citi meets the requirements of the OCC and the Federal Reserve, the bank is in "regulatory purgatory.""Citi has thrown over 10,000 people and $3 billion and more at this problem," Mayo told BI in July. "They just have to get it done."Selva does have a long track record at Citi. Born in Madurai, a large city in southern India, he studied engineering and played basketball at the Coimbatore Institute of Technology. He earned his master's in business administration at Madurai Kamaraj University before joining Citi in 1991.Selva made his name at Citi by shaping its consumer-bank businesses across Asia. He led retail banking in China and India before taking over the Asia Pacific market in 2015. His approach was digital-first, eschewing branches for banking apps. Despite closing 60% of bank branches in Asia from 2016 through 2018, Selva grew deposits by 10%.<div type="image" title="Citi's Anand Selva speaking at a panel, seated and wearing a pinstripe suit and a red tie." height="3307" width="4960" msid="114093573" hostid="261" sizebytes="2310830"></div>"He's very tech and digital-oriented," Luchetti said. "We've been to China together to look at startups and firms that were disrupting the world. He was always very connected with learning more about technology, had that curiosity, and then the execution chops to get it done here."In 2019, Selva moved from Singapore to New York, where he now lives with his family, to run the US consumer bank. He assumed the global consumer-banking business from Fraser in 2021. Selva leaned on credit-card and lending offerings, launching products like Citi Custom Cash which allowed customers to pick their reward categories, and Flex Pay, a buy-now, pay-later service. Under Selva, Citi was the No. 2 issuer of credit cards in the US, and deposits grew by more than a third, to about $220 billion.In 2021, Citi started divesting itself of more than a dozen consumer-bank markets across Asia, Europe, and the Middle East. Selva was an important player on both sides of the table, according to Adora Tidalgo, the head of operational risk management at Citi. She said he helped find Asian acquirers that maximized value for Citi while keeping the businesses running smoothly with low attrition."That skill of balancing how much you want to bring in terms of revenue and the credit loss you want to take is really a skill that very much needs to be honed in the consumer space," she said. "That balancing, to me, I have seen Anand over the year been very successful in doing that."There have been some bumps in the road. As part of Fraser's reorganization of the bank in 2021, Selva gained oversight of a newly formed wealth unit and its new leader, Jim O'Donnell. Six current and former managing directors told BI that Selva's approach focused more on scale and digital offerings than high-touch client service. For instance, he didn't approve loans that failed to meet a certain threshold of return, even if it meant losing an important client, two former managing directors said."The way that every private banker on earth thinks about relationships is you need to invest in relationships, and then as you start to do more business with clients, you start getting more and more valuable opportunities with them," one of the former managing directors said. "You have to look at the relationship. You can't just look at every single transaction."Employees argued that Selva's playbook may have worked to build scale in Asia but not to satisfy well-heeled — and much more sought-after — US clients."I think Anand's decisions were comparing everything to what he knew from his time in Asia, and they are completely different markets," another former managing director said. "In Asia, Citi has a very recognizable brand, and people actually want to bank with Citi. You don't have to sell it that hard."<div type="image" title="Citi CEO Jane Fraser testifying at Congress" height="3828" width="5846" msid="114093582" hostid="261" sizebytes="314760"></div>The wealth business' revenue dropped by 6% year over year at the end of 2022. Fraser called the division's performance "disappointing." O'Donnell's reign over wealth was cut short in January 2023, and it was later placed under <a target="_blank" href="https://www.businessinsider.com/andy-sieg-citi-wealth-management-ceo-2024-6">Andy Sieg</a>, the former head of Merrill Wealth Management. With Citi on a campaign to divest itself of 14 international consumer-bank markets, Selva's remit shrank.His appointment as COO thrust him into the spotlight. Tidalgo told BI that he was no stranger to the task of dealing with regulators."When you are the head of a country, you are the face of Citi to the regulators. Good, bad, or indifferent, you have to face them," she said. "That's part of the job."Citi's Transformation and its challenges predate Selva's appointment as COO. It existed as a firmwide initiative before the October 2020 fines but was kicked into overdrive after Citi entered consent orders with the OCC and the Federal Reserve.It can be viewed as two parts. The most visible is the strategy to simplify and modernize the bank, such as divesting Asian consumer businesses, removing five layers of management, and <a target="_blank" href="https://www.businessinsider.com/citigroup-reorganization-layoffs-management-overhaul-reorganization-jane-fraser-stock-price-2023-9">reorganizing</a> so that the five business lines report directly to Fraser.The second part is meant to address the 2020 consent orders. The initiative is separated into seven programs, including finance, compliance, and risk and controls. While some 13,000 employees are dedicated to the Transformation, much of this work is carried out by employees across the bank. Selva sits at the center, coordinating these efforts. He's in a tough position, as much of the Transformation's work is executed by employees in other divisions."The challenge with the Transformation role is you are accountable yet not responsible," the managing director in the Transformation said. "The role is really coordinating and getting others to do what they need to do, which is very different from running a business where the entire team follows your lead, you own it, you have the ability to actually get them to do this stuff."When everyone is accountable, effectively no one is, a former senior vice president in the Transformation said. Matters got stuck in bureaucracy, bouncing from one department to another and being debated in committee for months.A senior executive in the Transformation acknowledged that the programs often rely on each other's work. For example, a delay in data work can lead to one for a finance project."When we are asked sometimes why it is challenging to execute on the Transformation, one of the challenges is the interconnectivity of those seven works," she said.The senior executive said the Transformation's successes had been overlooked, partly because the bank is limited in what it can say on regulatory matters. For instance, Citi has retired or replaced a quarter of its applications, halfway to its overall goal. The bank declined to specify the number of existing or terminated applications, but as of July, it had retired nearly 300 applications this year. The senior executive also touted the bank's streamlining its risk-management workflow.But the Transformation has earned a middling grade from Citi itself. The bank evaluates the initiative's success for the purposes of a bonus program applicable to about 200 senior employees, including Selva. In 2022, an internal committee gave it a score of 94%, citing targets it met, such as submitting remediation plans to regulators.For 2023, the score sank to 80%, calculated by measuring the timeliness of executing scheduled work, the percentage of work deemed complete by the bank's internal auditors, and a "qualitative consideration of Citi's cultural change" derived from the bank's employee surveys.<div type="image" title="Headshot of Citi's new tech head Tim Ryan, smiling and wearing a black suit jacket with a light blue shirt" height="739" width="985" msid="114093578" hostid="261" sizebytes="32120"></div>Bringing in Ryan, the bank's head of technology and business enablement, to help the bank catch up makes sense. The recruiter Phil Waxelbaum argued that a more traditional candidate to help lead the Transformation would be a seasoned, high-ranking person from a regulatory agency. But someone with a nonbanking background such as consulting or technology can work, too, according to recruiter Jeffrey Warren. Ryan joined Citi in June after seven years leading the US business of PricewaterhouseCoopers."In situations like this when you are looking to drive transformation, you need someone who can work at the intersection of people, processes, and technology," said Warren, managing director at Russell Reynolds Associates. "That includes working from within and likely driving some change with new people who have experience in new technologies or new ways of doing things."Ryan is now sharing data, a significant component of the Transformation, with Selva. Another PwC alum, Citi's head of enterprise risk management, Ashutosh Nawani, will take over the chief data office from one of Selva's lieutenants, Japan Mehta, and report to Ryan. Mehta will move to another role that the bank declined to specify.Employees told BI that they thought bringing in Ryan and Nawani would help."Sure, there might be some reservation that more consultants are coming in to run Citi, but there is a positive vibe of changing senior leadership," the former senior vice president in the Transformation said. "Legacy Citi culture is what got us into this spot in the first place."While the July fines did not meaningfully move Citi's stock, they have placed the bank and the Transformation under greater scrutiny. The OCC has ordered Citi to provide a resource-review plan each quarter to ensure the bank is providing enough resources for the effort. The Securities and Exchange Commission has also required the bank to address the Transformation's progress in future filings.The outstanding issues have also impeded Citi from expanding in China. According to <a target="_blank" href="https://www.bloomberg.com/news/articles/2024-09-23/citigroup-s-china-expansion-plan-put-on-hold-by-us-regulators">Bloomberg</a>, the bank is still waiting on a clearance letter from the Federal Reserve to set up a securities office. The bank declined to comment on the process but said it was "fully committed to supporting clients" in China.<div type="image" title="Democratic Sen. Elizabeth Warren of Massachusetts at a hearing on Capitol Hill on January 11, 2024." height="1333" width="2000" msid="114093583" hostid="261" sizebytes="96482"></div>Regulators placing an asset cap on Citi, as Senator Warren has requested, isn't out of the realm of possibility, said Timothy Coffey, an analyst with Janney Montgomery Scott."At what point do the regulators just get fed up with Citi's inability to adequately resolve these issues or stick to the timeline that they've laid out?" he said. "That's an open-ended question."But the consent orders and the lack of progress are distractions in themselves. When Fraser took over Citi nearly four years ago, she said the Transformation was her No. 1 priority and asked for patience. Now her requests for time are wearing thin. Regardless of who leads the Transformation, Fraser is still accountable."This stays out here in terms of headline risk, and I think it puts a cap on the valuation that Citi can achieve," said Stephen Biggar, an Argus Research analyst. "It's an overhang on the stock. It's an overhang on the reputation of Fraser."Do you work for Citi? Have a tip or story to share? Reach out to Hayley Cuccinello at <a target="_blank" href="mailto:hcuccinello@businessinsider.com">hcuccinello@businessinsider.com</a> or 917 740 5340, which works for calls, text, and the encrypted messaging app Signal.

Meet the executive tasked with Citi's hardest challenge: getting the bank's house in order

In a bid to bolster the safety and security of <keyword id="19989657" type="General" weightage="20" keywordseo="digital-payments" source="keywords">digital payments</keyword> and enhance regulatory frameworks, the Reserve Bank of India (<keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords">RBI</keyword>) unveiled a series of proposals aimed at fostering innovation, inclusivity, and efficiency in the financial ecosystem. These initiatives, announced by RBI Governor <keyword id="19913110" type="General" weightage="20" keywordseo="shaktikanta-das" source="keywords">Shaktikanta Das</keyword>, signify the central bank's commitment to fortifying India's digital infrastructure and promoting a conducive environment for financial transactions. One of the key announcements made by Governor Das pertained to the establishment of a Digital Payments <keyword id="21971766" type="General" weightage="20" keywordseo="intelligence-platform" source="keywords">Intelligence Platform</keyword>. This platform, leveraging advanced technologies, aims to mitigate payment <keyword id="19898489" type="General" weightage="20" keywordseo="fraud" source="keywords">fraud</keyword> risks and enhance the safety of digital transactions. According to the annual report released by the Reserve Bank of India (RBI) on May 30, there was a significant surge in the number of financial frauds reported by banks, increasing by 166 per cent year-on-year in the financial year 2023-24 to reach 36,075 cases. This figure starkly contrasts with the 13,564 cases reported in the previous fiscal year, FY23. Despite the notable rise in the number of fraud cases, there was a substantial decrease in the total amount involved in these incidents. The amount of money associated with total bank frauds plummeted by 46.7 per cent year-on-year in the financial year 2023-24, totaling Rs 13,930 crore. In comparison, the amount recorded in FY23 stood at Rs 26,127 crore. RBI has proposed a revision of the limit of bulk deposits for Scheduled Commercial Banks (SCBs) and Small Finance Banks (SFBs). This move, aimed at enhancing flexibility and aligning with evolving market dynamics, underscores the RBI's commitment to fostering a conducive environment for the banking sector. Currently, banks have the discretion to offer differential rates of interest on bulk deposits based on their requirements and Asset-Liability Management (ALM) projections. The existing bulk deposit limit for SCBs (excluding Regional Rural Banks) and SFBs, set at 'Single Rupee term deposits of Rs 2 crore and above,' was established in 2019. However, following a comprehensive review, the RBI has proposed to revise this definition to 'Single Rupee term deposits of Rs 3 crore and above' for SCBs and SFBs. In addition to the proposed revision for SCBs and SFBs, the RBI has also suggested defining the bulk deposit limit for Local Area Banks (LABs) as 'Single Rupee term deposits of Rs 1 crore and above,' mirroring the criteria applicable to Regional Rural Banks (RRBs). RBI has also unveiled plans to rationalize export and import regulations under the Foreign Exchange Management Act (FEMA), 1999. This initiative, driven by the imperative of progressive liberalization and operational flexibility, underscores the RBI's commitment to fostering a conducive environment for international trade and investment. By eliminating redundancies, enhancing clarity, and reducing procedural complexities, the RBI aims to promote ease of doing business for all stakeholders involved in cross-border trade. The RBI aims to streamline and simplify operational procedures related to export and import transactions, thereby reducing administrative burdens and enhancing efficiency for businesses and authorized dealer banks. By aligning regulations with international best practices and market realities, the RBI seeks to create a business-friendly environment conducive to fostering trade and investment growth. Simplified regulations will facilitate smoother trade transactions, encouraging businesses to explore new markets and expand their global footprint. While promoting ease of doing business, the RBI remains committed to ensuring compliance with regulatory requirements and safeguarding the integrity of the financial system. The proposed rationalization will uphold the principles of transparency, accountability, and risk management in cross-border transactions. As part of the process, the RBI plans to publish draft regulations and directions on its official website by the end of June 2024. In a bid to enhance the convenience and efficiency of digital payments, RBI has unveiled plans to expand the e-mandate framework to include recurring payments for Fastag, National Common Mobility Card (NCMC), and similar services. This initiative, aimed at modernizing payment systems and promoting financial inclusion, underscores the RBI's commitment to fostering innovation and leveraging technology to meet evolving consumer needs. The current UPI Lite service permits customers to load their UPI Lite wallets with up to Rs 2000/- and conduct transactions of up to Rs 500 from the wallet. To enhance the seamless usage of UPI Lite for customers, and in response to feedback from various stakeholders, it is suggested to integrate UPI Lite into the e-mandate framework. This integration would introduce an auto-replenishment feature for UPI Lite wallets, automatically refilling the wallet balance when it falls below a predetermined threshold set by the customer. Since the funds remain under the customer's control (transferring from their account to the wallet), it is proposed to eliminate the need for additional authentication or pre-debit notifications. Relevant guidelines pertaining to this proposal will be issued shortly. RBI has embarked on a mission to foster innovation and transformation in the financial sector with the launch of its third edition of the global hackathon, "HARBINGER 2024 - Innovation for Transformation." It would feature two primary themes: 'Zero Financial Frauds' and 'Being Divyang Friendly.' Solutions aimed at bolstering the safety and security of digital transactions, with a specific emphasis on identifying, preventing, and combating financial frauds, will be solicited. Additionally, there will be a focus on fostering inclusivity for individuals with physical disabilities. Further details regarding the hackathon will be unveiled shortly. SEE ALSO:<a href="https://www.businessinsider.in/tech/news/indian-smartwatch-shipments-remain-flat-in-q1-2024-the-year-expected-to-end-in-a-decline/articleshow/110789121.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/news/indian-smartwatch-shipments-remain-flat-in-q1-2024-the-year-expected-to-end-in-a-decline/articleshow/110789121.cms" target="_blank">Indian smartwatch shipments remain flat in Q1 2024, the year expected to end in a decline</a><a href="https://www.businessinsider.in/tech/news/computex-2024-intel-debuts-lunar-lake-chips-with-focus-on-microsofts-ai-ambitions-for-pcs/articleshow/110745670.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/news/computex-2024-intel-debuts-lunar-lake-chips-with-focus-on-microsofts-ai-ambitions-for-pcs/articleshow/110745670.cms" target="_blank">Computex 2024: Intel Debuts Lunar Lake Chips With Focus On Microsoft’s AI Ambitions For PCs</a><a href="https://www.businessinsider.in/business/auto/news/may-auto-sales-tata-motors-and-hyundai-continue-to-fight-for-the-second-spot-as-car-sales-grow-by-4/articleshow/110649713.cms" target="_blank"></a> <a href="https://www.businessinsider.in/business/auto/news/may-auto-sales-tata-motors-and-hyundai-continue-to-fight-for-the-second-spot-as-car-sales-grow-by-4/articleshow/110649713.cms" target="_blank">May Auto Sales – Tata Motors and Hyundai continue to fight for the second spot as car sales grow by 4%</a>

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