Current Affairs - Banking

Raghavendra S Bhat was appointed as the interim Managing Director and Chief Executive Officer of Karnataka Bank effective 16 July 2025, following the resignation of the former MD & CEO, Srikrishnan Hari Hara Sarma. With over four decades of experience at Karnataka Bank, Bhat joined as a clerk in 1981 and rose through the ranks to become Chief Operating Officer in 2019. His appointment as interim CEO is for a three-month period or until a permanent successor is appointed. His longstanding association with the bank ensures operational stability during this leadership transition phase.

Starting from July 16, 2025, all Indian government payments exceeding ₹75 crore are required to be processed through the RBI’s e-Kuber system. This decision aims to enhance transparency, efficiency, and accuracy in handling large-value government transactions. e-Kuber, developed by the Reserve Bank of India, offers features like real-time tracking, 24-hour reconciliation, and quicker settlements. By centralising and digitizing high-value transactions through e-Kuber, the government seeks to reduce processing delays and improve accountability in public fund disbursement and usage.

Indian Bank implemented two major customer-friendly reforms in July 2025. First, it eliminated penalties for not maintaining a minimum balance in savings accounts starting July 7, helping to expand financial access for students, senior citizens, rural families, and small business owners. Second, Indian Bank reduced its one-year Marginal Cost of Funds-Based Lending Rate (MCLR) by 5 basis points, bringing it down to 9%, effective July 3, 2025. This cut in lending rates means borrowers will benefit from slightly lower interest costs on new loans. Both measures reflect the bank’s effort to promote financial inclusion and make banking more accessible and affordable.

Mashreq, one of the leading banks in the United Arab Emirates, has become the first UAE-based bank to receive in-principle approval from the International Financial Services Centres Authority (IFSCA) to establish a banking unit in GIFT City, Gujarat, India. This strategic move aims to support international and cross-border banking, including foreign currency loans, trade finance, and risk management. Scheduled to begin operations by the end of 2025, the new branch will function as an International Financial Services Centre Banking Unit (IBU). This development strengthens financial ties between India and the UAE and positions GIFT City as a rising global financial hub.

Karnataka Bank faced a major leadership change when both its Managing Director & CEO, Srikrishnan Hari Hara Sarma, and Executive Director, Sekhar Rao, submitted their resignations citing personal reasons. Sarma plans to relocate to Mumbai, while Rao is unable to move to Mangaluru, the bank's headquarters. These resignations, effective from July 2025, come during the bank’s strategic transformation efforts aimed at digitization and operational modernization. In response, a search committee has been formed to identify new leadership, and a Chief Operating Officer will temporarily oversee operations. The development underscores the importance of succession planning in sustaining institutional momentum and investor confidence.