Source: Business Standard Context: The government and the Reserve Bank of India are considering introducing fixed tenures for top executives of upper-layer non-banking financial companies (NBFCs) as part of governance reforms. RBI’s Scale-Based Regulation (SBR) The proposal aligns with RBI’s four-tier Scale-Based Regulation framework for NBFCs, which aims to strengthen oversight and reduce regulatory arbitrage between banks and NBFCs. The four layers are: Proposed Governance Changes Existing RBI Rules for Banks
Fiscal Health Index (FHI) 2026
Source: Mint Context: The NITI Aayog released the second annual edition of the Fiscal Health Index, assessing the fiscal performance of Indian states for FY 2023–24. What is the Fiscal Health Index? The Fiscal Health Index (FHI) is a framework designed to evaluate and compare the fiscal health of Indian states.Unlike simple deficit measures, it provides a multi-dimensional assessment of fiscal sustainability, revenue strength, and debt management. Core Pillars of the Index The FHI evaluates states based on five key pillars: State Rankings (FY 2023–24) Top Performing States Bottom Performing States Key Findings of the Report 1. Expanded Coverage 2. Strong Performance by Odisha 3. Fiscal Stress in Some States States like Punjab, Kerala, and West Bengal face challenges due to: 4. Shift Toward Capital Expenditure 5. Macro-Fiscal Importance Key Fiscal Challenges 1. High Committed Expenditure 2. Weak Own Revenue Mobilisation 3. Fiscal Deficit Breaches 4. Rising Interest Burden 5. Geographic Constraints
RBI Caps Bank Dividend Payout at 75% of Profit After Tax
Source: Business Standard Context: The Reserve Bank of India has issued revised guidelines on dividend declaration by banks, linking payouts to capital adequacy and asset quality. The new framework caps dividend payouts at 75% of Profit After Tax (PAT) and will come into effect from FY27. Key Provisions of the New Norms 1. Dividend Cap 2. Link with Capital Adequacy 3. Adjusted PAT Calculation Adjusted PAT =PAT – 50% of Net Non-Performing Assets (NPAs) as on March 31 of the financial year. This adjusted figure determines the maximum dividend that can be paid. Additional Conditions Before declaring dividends, banks must ensure: Restrictions on Dividend Sources Dividends cannot be paid from certain income sources, including: Norms for Foreign Banks Foreign banks operating in India in branch mode may remit profits to their head offices without prior approval if: Any excess remittance must be returned
FDI Policy Relaxation under Press Note 3
Source: Indian Express Context: The Union Cabinet has approved changes to Press Note 3 (2020), easing restrictions on Foreign Direct Investment (FDI) from countries sharing a land border with India, including China. The move aims to boost investment flows and strengthen India’s integration with global supply chains. What is Press Note 3? Press Note 3, issued in April 2020 by the Department for Promotion of Industry and Internal Trade, mandates that FDI from countries sharing land borders with India must receive prior government approval, irrespective of sector or investment size. Why was Press Note 3 introduced? Key Changes in the Revised Framework
No Minimum Balance Penalty for Jan Dhan Accounts
Source: BS Context: The Union Finance Minister Nirmala Sitharaman informed Parliament that Basic Savings Bank Deposit Accounts (BSBDAs), including those opened under Pradhan Mantri Jan Dhan Yojana, are not subject to penalties for failing to maintain a minimum balance. Key Points: What is a BSBD Account? A Basic Savings Bank Deposit Account (BSBDA) is a no-frills savings bank account introduced by the Reserve Bank of India to promote financial inclusion by providing basic banking services to all sections of society, especially low-income and unbanked individuals. Purpose of BSBDA Accounts:
Bank of Baroda Raises ₹10,000 Crore Through Green Infrastructure Bonds
Context: In March 2026, Bank of Baroda raised ₹10,000 crore through Series-I long-term Green Infrastructure Bonds, becoming the first bank in India to issue domestic green bonds specifically for infrastructure financing. What is a Green Bond? A green bond is a fixed-income financial instrument used to raise funds for projects that have environmental or climate benefits. The money raised through these bonds is specifically earmarked for environmentally sustainable activities. Financial Terms About the Green Bond Issuance Credit Ratings The bonds received ‘AAA’ (Stable) ratings from: These ratings indicate high safety and strong credit quality. Use of Funds The funds raised will finance projects under BoB’s Green Financing Framework, including:
RBI Conducts ₹50,000 Crore OMO Purchase
Source: The Hindu Context:The Reserve Bank of India (RBI) conducted Open Market Operations (OMO) to purchase ₹50,000 crore worth of Government Securities (G-Secs) to ease liquidity in the banking system amid global economic uncertainty and rising oil prices. What is an Open Market Operation (OMO)? Open Market Operations are a monetary policy tool used by the RBI to regulate liquidity in the economy by buying or selling government securities in the open market. Purpose of the OMO Purchase The latest OMO purchase was undertaken to:
RBI Allows NBFCs and ARCs to Include Quarterly Profits in Capital Base
Source: Financial Express Context: The Reserve Bank of India has clarified regulatory norms allowing Non-Banking Financial Companies (NBFCs) and Asset Reconstruction Companies (ARCs) to include quarterly profits in their capital base, resolving long-standing ambiguity in capital calculation. What Has Changed? Earlier, most NBFCs and ARCs relied only on audited annual financial statements (typically as of March 31) to calculate: Due to regulatory uncertainty, quarterly profits were generally not included in capital calculations, limiting their ability to expand lending and investment activities during the year. Under the revised RBI directions: Conditions for Recognising Quarterly Profits To ensure prudential safeguards, the RBI has imposed strict conditions: Why the Change Matters The reform is expected to:
RBI Tightens Banks’ Dividend Payout Norms
Source: Financial Express Context: The Reserve Bank of India has issued final guidelines tightening dividend distribution by banks, linking payouts to capital strength and asset quality to ensure financial stability. Key Provisions of the New Guidelines Capital Adequacy Conditions Banks must meet the following requirements before declaring dividends: For foreign banks operating in India in branch mode, dividend remittance is allowed only if they have positive net profit. RBI’s Position on Industry Requests The RBI rejected several suggestions from banks:
Daily Current Affairs (DCA) 08 & 09 March, 2026
Daily Current Affairs Quiz08 & 09 March, 2026 National Affairs 1. SHINE App Launched by Indian Railways Source: TH Why in News? The Indian Railways launched a new mobile application called SHINE (Sexual Harassment Incident Notification for Empowerment) on International Women’s Day (March 8) to help women employees report workplace harassment. Key Features of the SHINE App Purpose Integration with HR System Confidential Reporting Wider Reporting Scope Legal & Institutional Framework Vishakha Guidelines (1997) POSH Act, 2013 2. Standards for Green Ammonia and Green Methanol Source: TH Why in News? The Government of India has announced standards for green ammonia and green methanol to promote trade and production of green hydrogen derivatives under the National Green Hydrogen Mission. Objective of the Standards About the National Green Hydrogen Mission What is Green Hydrogen? Green Hydrogen Derivatives 3. PM Modi on “Nari Shakti” on International Women’s Day Source: TOI Why in News? Prime Minister Narendra Modi extended greetings on International Women’s Day (March 8), highlighting the role of “Nari Shakti” (women power) in driving India’s development and nation-building. Key Highlights: 1. Recognition of Women’s Contribution 2. Focus on Women Empowerment 3. Role of Women in Nation Building 4. Very Low Earth Orbit (VLEO) Satellite Systems Source: The Times of India Why in News? Bharat Electronics Limited (BEL) and Bellatrix Aerospace signed a Memorandum of Understanding (MoU) to jointly develop Very Low Earth Orbit (VLEO) satellite systems, aiming to strengthen India’s indigenous space technology and defense capabilities. What is Very Low Earth Orbit (VLEO)? Organizations Involved Aim of the Collaboration 5. Khelo India Tribal Games (KITG) Source: News in Air Why in News? The first-ever Khelo India Tribal Games (KITG) will be held in Chhattisgarh from 25 March to 6 April 2026, as announced by the Union Ministry of Youth Affairs and Sports. What is Khelo India Tribal Games (KITG)? Host and Venue About Khelo India Programme 6. Sukhoi Su-30MKI Fighter Aircraft Source: ET Why in News? An Indian Air Force (IAF) Sukhoi Su-30MKI fighter jet crashed at Inglong Ekopi Hill in Assam on March 5, 2026, during a routine training mission. What is the Sukhoi Su-30MKI? Development and Manufacturing 7. Essential Commodities Act, 1955 (ECA) Why in News? The Central Government invoked the Essential Commodities Act (ECA), 1955 in response to an energy crisis triggered by geopolitical tensions involving Iran, to regulate supply and prevent hoarding of essential resources. What is the Essential Commodities Act (ECA), 1955? Objectives Key Features 1. Declaration of Essential Commodities 2. Power to Amend the Schedule 3. Stock Limits 4. Price Regulation 5. Penalties 6. Confiscation Powers 8. SWAYATT Initiative Source: PIB Why in News? The Government e-Marketplace (GeM) celebrated the 7th anniversary of the SWAYATT initiative on 6 March 2026 in New Delhi, highlighting its role in promoting inclusive public procurement for startups, women entrepreneurs, and youth. About SWAYATT Initiative Full Form: Startups, Women and Youth Advantage through e-Transactions Key Objectives Highlights of the 7th Anniversary Event About Government e-Marketplace (GeM) Banking/Finance 1. RBI Waives NOFHC Condition for AU Small Finance Bank Source: Financial Express Why in News? The Reserve Bank of India (RBI) has relaxed the requirement of creating a Non-Operative Financial Holding Company (NOFHC) for AU Small Finance Bank (AU SFB) as it transitions to a universal bank. Key Developments 1. Relaxation by RBI 2. New Condition 3. Timeline for Universal Banking Licence What is a Universal Bank? A universal bank provides multiple financial services under one roof, including: Examples in India include SBI, ICICI Bank, and HDFC Bank. What is a Small Finance Bank (SFB)? Small Finance Banks were introduced by RBI to promote financial inclusion by providing: What is NOFHC? Non-Operative Financial Holding Company (NOFHC) 2. NBFCs Seek Risk-Weight Rejig Amid Rising RBI Scrutiny Source: Business Line Why in News? Large Non-Banking Financial Companies (NBFCs) classified under the Upper Layer have requested the Reserve Bank of India (RBI) to revise (reduce) risk weights on certain loan categories, particularly retail loans, citing stricter regulatory scrutiny and higher capital requirements. Key Issue Difference in Risk Weights: Banks vs NBFCs Retail Loans (Vehicle loans, MSME loans, loans against property, gold loans) Institution Risk Weight Banks 75% NBFCs 100% Corporate Loans Rating Banks Risk Weight NBFCs Risk Weight AAA 20% 100% AA 30% 100% A 50% 100% This difference raises the capital cost for NBFCs, making lending less competitive. Reasons for NBFC Demands Additional Demands by NBFCs 1. Dedicated Refinance Window 2. Permission to Accept Public Deposits Funding Challenges Key Concept: Upper Layer NBFCs Under RBI’s Scale-Based Regulation (SBR) Framework, NBFCs are classified into: Agriculture 1. National Climate Stack Innovation Challenge Source: ET Why in News? In March 2026, the National Bank for Agriculture and Rural Development (NABARD) launched the National Climate Stack Innovation Challenge to develop a National Climate Stack that provides decision-ready climate intelligence for agriculture, rural finance, and public planning. About the Initiative Key Features 1. Digital Infrastructure 2. Target Participants The challenge is open to India’s: 3. Awards Winners may also receive pilot project opportunities and adoption support through NABARD’s partner network. What is the National Climate Stack? About NABARD Facts To Remember 1. Cheetahs Moving from Kuno to Rajasthan Two cheetahs from Kuno National Park (Madhya Pradesh) have moved into Baran district of Rajasthan, travelling about 60–70 km. The National Tiger Conservation Authority (NTCA) clarified that this movement represents natural territorial behaviour of cheetahs. 2. SBI Launches USD 500 Million Social Loan for Women’s Empowerment State Bank of India launched a USD 500 million syndicated social loan facility to promote women’s economic empowerment. The funding will support MSMEs, Self-Help Groups and women-focused livelihood initiatives. Mitsubishi UFJ Financial Group acts as the mandated lead arranger and loan coordinator. The initiative aligns with the United Nations Sustainable Development Goal 5 on gender equality. 3. BEL and SASMOS Sign MoU to Strengthen Defence Manufacturing Bharat Electronics Limited signed an MoU with SASMOS HET Technologies Limited to enhance indigenous defence manufacturing and exports. The agreement was exchanged in the presence of Rajnath Singh at
