1. Which of the following is NOT a correct statement? a. Interest rates on unsecured loans is higher than the secured loansb. Mortgage Loan is a kind of secured loanc. Credit Card is a kind of secured loand. Unsecured loans are given out on the basis of credit worthiness of the borrowers

Answer

c. Credit Card is a kind of secured loan* In unsecured loans, the borrowers assets are not pledged as collateral. Examples of such loans are personal loans, education loans, credit cards etc. They are given out on the basis of credit worthiness of the borrowers.

2. “No Risk, No reward”. This quote is most closely associated with__?a. Risk Diversificationb. Collateral Damagec. Risk-return trade-offd. None of the above

Answer

c. Risk-return trade-off* The principle of Risk-return trade-off says that higher the potential return, higher is the risk. Low risk is associated with low potential returns, whereas high risk is associated with high potential returns.

3. In which among the following accounts, no cheque book is issued? a. Minor Accountb. Joint Account

c. Illiterate Accountd. Non Resident Account

Answer

Illiterate Account* Illiterate accounts are opened on discretion of the banks if the person personally goes to the bank along with a witness already known to the bank and the depositor. No cheque books are issued for such accounts. Any withdrawal is done by a thumb impression of the depositor in presence of the bank officer who is able to verify the identity

4. What is the priority sector loan target has been given to the foreign banks operating in India in terms of agriculture loans? a. 32%b. 15%c. 21%d. No specific target

Answer

No specific target* In total loans, their target is fixed at 32%. There is no specific target for agricultural loans.

5. Which among the following are often described as Double Financial Repression for Banks in India? a. Priority Sector Loans and Cash Reserve Ratiob. Priority Sector Loans and Statutory Liquidity Ratioc. Cash Reserve Ratio and Statutory Liquidity Ratiod. Statutory Liquidity Ratio and Margin Requirements

Answer

Priority Sector Loans and Statutory Liquidity Ratio* Priority Sector lending in India has been made a salient feature of the banking in India mainly due to the social and economic objectives that underlie PSL. However, banks are also required to keep certain amount to maintain Statutory Liquidity Ratio ( SLR) and from the remaining disposable amount, 40 per cent is dedicated for the priority sector. Thus, large fraction of banks’ resources cause the so called “Double Repression” on the banking system.

6. In banking language, which among the following is called Contingent Liability of the banks? a. Fund based lendingb. Non fund based lendingc. Priority sector lendingd. Statutory pre-emptions

Answer

Non fund based lending* In Non-fund based lending, bank does not make any funds outlay but only gives assurance. The “letter of credit” and “bank guarantees” fall into the category of non-funding loans. The non-funding loan can be converted to a fund-based advance if the client fails to fulfil the term of contract with the counterparty. In banking language, the non-funding advances are called Contingent Liability of the banks.

7. In terms of agricultural loans in India, the short term credit refers to the loans made for a period less than __: a. 1 yearb. 15 Monthsc. 18 Monthsd. 24 Months

Answer

b. 15 Months* In case of agriculture loans, there are three types of loans viz. Short term (tenure 5 years).

8. To call a loan NPA, the interest or instalment of principal should remain overdue for a minimum period of more than __? a. 60 Daysb. 90 Daysc. 120 Daysd. 180 Days

Answer

90 Days* According to RBI, terms loans on which interest or instalment of principal remain overdue for a period of more than 90 days from the end of a particular quarter is called a Non- performing Asset.

9. What is the loan limit for education under Priority Sector Lending (PSL) for studying in India and abroad respectively? a. Rs. 20 lakh, Rs. 10 Lakhb. Rs. 10 lakh, Rs. 20 Lakhc. Rs. 25 lakh, Rs. 25 Lakhd. Rs. 20 lakh, Rs. 25 Lakh

Answer

Rs. 10 lakh, Rs. 20 Lakh* Under Priority Sector Lending (PSL), the loans and advances granted to only individuals for educational purposes up to Rs.10 lakh for studies in India and Rs. 20 lakh for studies abroad.

10. Who monitors Priority Sector Lending (PSL) in commercial banks? a. Reserve Bank of India (RBI)b. Small Industries Development Bank of India (SIDBI)c. National Bank for Agriculture and Rural Development (NABARD)d. Government of India (GOI)

Answer

Reserve Bank of India (RBI)* The priority sector lending by commercial banks is monitored by Reserve Bank of India (RBI) through periodical returns received from them.

1. ____ nominates Jin Liqun for President of AIIBa. Chinab. Indiac. Pakistand. Japan

Answer

a. China* China has nominated its former finance Minister Jin Liqun as the Presidential candidate for $100 billion Asian Infrastructure Investment Bank (AIIB). Presently, Jin is Secretary General of AIIB’s interim secretariat. Prior to this he was chairman of China International Capital Corporation (CICC), one of the mainland’s largest investment banks. He also had held various positions at the World Bank. He was the first Chinese national to serve as a Vice President of Asian Development Bank (ADB) which is controlled by Japan. Jin headed programmes for South,

Central and West Asia and private sector operations during his 5-year-long tenure at ADB.

2. Union Government appoints Sriram Kalyanaraman as MD and CEO of ____a. NHBb. SBIc. PNBd. NABARD

Answer

a. NHB* Union government has appointed Sriram Kalyanaraman as the Managing Director (MD) and Chief Executive Officer (CEO) of National Housing Bank (NHB) for a period of five years. With this he became the first person from private sector to be appointed as head of a public sector financial institution. Presently, Kalyanaraman is director-business development Equifax Credit Information Services. Prior to joining Equifax, he was Director, Business Clients and Asset Products at Deutsche Bank India.

3. _____ launches mobile wallet service ‘Speed Pay’a. BSNLb. NABARDc. SBId. PNB

Answer

a. BSNL* State run telecom giant Bharat Sanchar Nigam Limited (BSNL) launched pre-paid card linked mobile wallet service ‘Speed Pay’. It was launched by Union Telecom Minister Ravi Shankar

Prasad in New Delhi. This service was launched by BSNL has launched the service in partnership with IT company Pyro.

4. ____ nations, including India sign 60-article agreement on China-led AIIB

a. 50b. 60c. 80d. 90

Answer

a. 50* 50 founding nations including India have signed 60-article agreement of China-led multilateral Asian Infrastructure Investment Bank (AIIB). Australia was the first country to sign the agreement and was followed by 49 other members. Indian Ambassador Ashok Kantha signed the agreement on behalf of country.

5. ____ to join China led AIIB

a. UKb. QATARc. Australiad. UAE

Answer

c. Australia* Australia has decided to join the China-led Asian Infrastructure Investment Bank (AIIB) as a founding member. In this regard, Australia will contribute paid-in capital of 718.5

million US dollars over next five years i.e. till 2020. With this investment it will become sixth largest shareholder in AIIB.

6. RBI extends deadline for exchanging pre- ____ currency notes till December 2015a. 2005b. 2006c. 2003d. 2004

Answer

a. 2005* The Reserve Bank of India (RBI) has extended the date to exchange pre-2005 bank notes till December 31, 2015 for third time. Earlier in December 2014, RBI had set the last date for public to exchange these notes as June 30, 2015. RBI has urged people to deposit the old design notes in the bank accounts or exchange them at a bank branch. The apex bank also has stated that the notes can be exchanged for their full value and all such notes continue to remain legal tender.

7. ______ Bank launches 10-second paperless instant loan Schemea. HDFCb. SBIc. PNBd. IDBI

Answer

a. HDFC

* HDFC Bank, India’s second-largest private sector lender has launched a 10-second paperless instant loan Scheme for its existing customers. The 10-second loan Scheme was launched as part of HDFC

Bank’s digital banking platform GoDigital. With this, HDFC bank became first banking institution to completely automate the entire process of loan approval and disbursement. Under this scheme, bank will now disburse personal loans to its customers in just 10 seconds and a pre-approved loan amount will be available to them 24×7. The entire process of availing the loan under this scheme will be completely paperless. In this case, its customers by using net-banking or mobile banking avail of this loan. Earlier, the bank had launched PayZapp application to cater to e-commerce space under its digital platform. It should be noted that, in financial year 2014-15, 63 per cent of HDFC Bank’s all transactions were conducted through various digital channels.

8. RBI allows NRIs to subscribe ______a. Bank Accountsb. Draftc. Chit fundsd. Cheat Funds

Answer

c. Chit Funds* Reserve Bank of Indian has allowed non-resident Indians (NRIs) to invest in chit fund to encourage flow of capital into the country. Decision in this regard was taken after RBI had revised the extant guidelines for subscription to the chit funds in consultation with the government. Henceforth, NRIs on non-repatriation basis will be allowed to invest in chit fund without any ceiling. However, the subscription to the chit funds by NRIs will be mandatorily brought in through normal banking channel, including through an account maintained with a bank in India. The state government may permit any chit fund to accept subscription from NRIs on non-repatriation basis. It will be permitted by the registrar of chits or an officer authorized

by the state government in accordance with the provisions of the Chit Fund Act, 1982. Earlier in May 2000, RBI had barred NRIs from investing in a company or firms engaged in the business of chit fund. Apart from this decision, RBI also extended the scheme allowing airline companies to raise external commercial borrowings (ECB) for working capital as a permissible end-use under the approval route. Now, the ECB scheme will continue till March 31, 2016.

9. Mahendra Kumar Sharma appointed as non-executive Chairman of ____ Banka. HDFCb. PNBc. SBId. ICICI

Answer

d. ICICI* Mahendra Kumar Sharma was appointed as non-executive chairman of India’s largest private sector lender Industrial Credit and Investment Corporation of India (ICICI) Bank. He will replace K V Kamath who had resigned from top most in order to join as President of the Shanghai based New Development Bank established by the BRICS nations. Presently, Sharma is an independent director of two subsidiaries of ICICI Bank viz ICICI Lombard General Insurance Company and ICICI Prudential Asset Management Company. Earlier from 2003 to 2011, he also had served as an independent director on the board of ICICI Bank. Prior to joining ICICI Bank, Sharma was vice-president of Hindustan Unilever (HUL) and was associated with HUL from 1974 to 2007. He has a strong understanding of legal and corporate governance matters and had joined HUL in 1974 as a legal manager.

10. Kotak Mahindra, ____ Bank ink MoU for cross-border businessa. INGb. SBIc. PNBd. RBI

Answer

a. ING* Kotak Mahindra Bank and ING Bank have inked a memorandum of understanding (MoU) for exploring opportunities arising from cross-border business, investment and trade flows across various regions, including Europe. It was signed between the two parties and covers an array of co-operation in various areas such as trade remittances, finance. It also includes services related to non-resident Indians, corporate relationships, funding to counterparties’, fee-based products, direct banking and digital strategy and cross-border debt capital markets, mergers and acquisitions. Under the ambit of MoU, ING Bank will give its clients from The Netherlands and the other 39 countries commercial banking access to Kotak’s services in the vast Indian market. At the same time it will also offer the combined clients in India the opportunities of ING’s international network. It should be noted that Kotak Mahindra and associates are significant shareholders in Business Standard Private Ltd. ING Bank holds 6.5 per cent stake in Kotak Mahindra Bank which is India’s fourth largest private sector lender.

1. If a bank ties up with a retail vendor and then both of them sponsor a credit card, then such card would be known as_____a. Retail Credit Cardb. Vendor cardc. Co – Branded Cardd. Cash Back Card

Answer

c. Co- Branded Card* It is a special type of credit card which is sponsored by both the credit card issuing company and the participating retail company or vendor. Co-branded credit card carries special deals and savings from the participating merchants.

2. In terms of Banking Terminology, Affinity Card refers to ______a. The Credit Cards that are linked to special organizationsb. The Credit Cards with zero interest rate on repaymentsc. The Credit Cards exclusively for the Bank’s employeesd. All above the above

Answer

a. The Credit Cards that are linked to special organizations* Credit cards linked to special organizations like sports clubs, exclusive clubs and charities. Affinity credit cards can also help raise funds, when a part of income from every transaction goes toward the benefit of relevant organization.

3. From which country, the concept of Credit Card originated? a. UKb. USAc. Franced. Australia

Answer

b. USA* The use of Credit Card first started in 1920s in United States of America for selling the fuel to the automobile owners. Later, it reached the customers when Diners Club was launched in early 1950s. In 1958, the Bank of America issued the BankAmericard in the California state and this is known to be the first successful modern credit card.

4. The business entity that is authorized to accept cards for the payment of goods and services is called? a. Issuerb. Acquirerc. Merchantd. Authorised Issuer

Answer

c. Merchant* Merchant or Point of sale is any business entity that is authorized to accept cards for the payment of goods and services; it can be a brick and mortar shop or a website.

5. The international standard which defines the shape and size of the I-Cards is ______a. ISO/IEC 5200b. ISO/IEC 9910c. ISO/IEC 14000d. ISO/IEC 7810

Answer

d. ISO/IEC 7810

* ISO/IEC 7810 is the international standard which defines the shape and size of the I-Cards including debit / credit cards.

6. Which is the first credit card facility to be recognised worldwide?a. Visa Cardb. Maestro Cardc. Master Cardd. Diner Card

Answer

a. Visa Card* In 1977, Visa was adopted internationally and became the first credit card facility to be recognised worldwide. It is a conditional authorization given by a competent authority of a country for a person who is not a citizen of that country to enter its territory and to remain there for limited duration.

7. With reference to the prepaid credit cards, which among the following is / are correct statements?1. credit facility is offered for the purchaser of the card2. no interest charged from the purchaser of the card3. no purchasing fee and monthly fees charged before an arbitrary time period Select the correct option from the codes given below:

a. Only 1 & 2b. Only 2 & 3c. Only 1 & 3d. 1 & 2 & 3

Answer

b. Only 2 & 3* The Prepaid cards require the cardholder to load money onto the card before the card can be used. Purchases are withdrawn from the card’s balance. The spending limit does not renew until more money is loaded onto the card. Some points in context of prepaid cards.

8. What does the cirrus logo on ATM / debit cards signifies__?

a. have cash access facility anywhere in India onlyb. have cash access facility outside the India onlyc. have cash access facility in or outside the Indiad. have cash access facility in and outside the India

Answer

d. have cash access facility in and outside India* The Cirrus is one of the logos found on the ATM or debit card and provides the card owner worldwide cash access facility . The Cirrus ATM network gives immediate access to the card owner’s funds available in the local currency when travelling abroad. Cirrus logo provides cash access facility in and outside the India .

9. The Secured credit cards are generally available to the person with _____:

a. Strong credit historyb. Poor Credit Historyc. High Net worth Incomed. Government Job

Answer

b. Poor Credit History* The Secured credit cards are an option to allow a person with a poor credit history or no credit history to have a credit card which might not otherwise be available. These cards require a security deposit to be placed on the card. The credit limit on a secured credit card is typically equal to the deposit made on the card, but it could be more in some cases. These cards are available with both Visa and MasterCard logos on them.

10. What is the time period during which no interest is charged on a credit card? a. Grace periodb. Term periodc.Loan periodd. Sanction Period

Answer

a. Grace period* A credit card’s grace period is the time the customer has to pay the balance before interest is charged to the balance. Grace periods vary, but usually range from 20 to 30 days depending on the type of credit card and the issuing bank. If a customer is late paying the balance, finance charges will be calculated and the grace period does not apply.

1. ____ to sell private banking business in India to Sanctum Wealtha. RBSb. RBIc. SBId. World Bank

Answer

a. RBS* the Royal Bank of Scotland (RBS) has decided to sell its private banking business in India to Sanctum Wealth Management, in line of its prior decision to exit the Indian market. Britain’s largest public bank Royal Bank of Scotland (RBS) has signed a non-binding framework agreement with Sanctum Wealth Management, which is a start up firm set by Shiv Gupta. He is also the present managing director of RBS’ private banking operations in India. RBS has four private banking offices in India located in New Delhi, Mumbai, Bengaluru and Chennai. The reason behind this decision is to formulate RBS into a stronger, more sustainable and simpler business for its aim to consolidate its business in the UK and Western Europe.

2. ______ acquires RBS’ bullion financing business for Rs 4,100 crore

a. Indusland Bankb. Syndicate Bankc. IDBId. PNB

Answer

a. Indusland Bank* IndusInd Bank has acquired the diamond and jewellery (bullion) financing business and related deposit portfolio of Royal Bank of Scotland (RBS) for 4,100 crore rupees on 28 July 2015. Britain’s largest public bank Royal Bank of Scotland (RBS) was in talks with IndusInd Bank to sell off its bullion financing business and had signed a non-binding agreement in April 2015. According to the agreement RBS’s employees within the diamond and jewellery clients in India would be

transferred to IndusInd Bank. RBS in 2008, had acquired ABN AMRO Bank the oldest banks in diamond and jewellery financing and started dealing in bullion financing in India through RBS Mumbai branch. The reason behind this sell-off comes on the back of RBS’s decision in 2013 to exit its banking operations from India and to consolidate its business in UK and Western Europe. However, it has decided to retain its back-office operations in India and has moved over 60 back-offices roles from the UK to India that has workforce of 12,000 people. Prior to RBS’s decision it had shut down its 23 out of 31 branches in India and had also sold off its credit card business, commercial banking portfolios and mortgage business to Ratnakar Bank Ltd (RBL) Bank in 2013.

3. ___ formed Financial Inclusion Fund with Rs. 2000 crore corpusa. RBIb. SBIc. PNBd. IDBI

Answer

a. RBI* Reserve Bank of India (RBI) has established Financial Inclusion Fund (FIF) with Rs. 2000 crore corpus expanding reach of banking services. This fund will support the developmental and promotional activities covered under the financial inclusion initiatives.

4. CSC and ___ forms joint venture to provide technology services, solutions to banksa. HCLb. RBI

c. SBId. NABARD

Answer

a. HCL* Computer Science Corporation (CSC) and Hindustan Computer Limited (HCL) to big IT companies have signed an agreement to form a new company to provide technology services and solutions to the banking industry. In the joint statement the partners said that their main focus will be on platform modernisation, product functionality enhancement and to capitalise their capabilities in addressing global core banking software market. According to the agreement CSC that serves in 15 countries with 100 premier banking and financial services clients, will provide its core banking expertise for software and product development. Whereas, HCL will provide funds, it’s banking sales and client engagement expertise and also its experience in product engineering and application implementation services in order to modernise the banking industries. The two entities have agreed to work in accordance to meet the increasing demands for data analytics services, regulatory compliance and multi-channel deployments from the banking industries.

5. ____ gets banking licence from RBI

a. IDFCb. IGHLc. IJKLd. LKHB

Answer

a. IDFC* Infrastructure Development Financing Company (IDFC). Ltd became second lender to enter the banking sector since 2004, as the Reserve Bank of India granted Banking licence on 24 July 2015. It was Yes Bank that got banking licence in 2004. However, IDFC and Microfinance Company Bandhan Financial Services Pvt Ltd were granted preliminary bank permits by RBI in April 2014 and Bandhan got Banking licence from RBI in June 2015 and plans to start its operations from August 2015, whereas IDFC plans to start operations from 1 October 2015. IDFC will start its operations with 20 branches and with initial loan book of 55,000 crore rupees.

6. Anand Krishnamurthy appointed CEO and MD of ____ banka. CSBb. SBIc. PNBd. RBI

Answer

a. CSB* Anand Krishnamurthy is now the new MD and CEO of Catholic Syrian Bank (CSB) replacing Rakesh Bhatia who had quit due to personal reason. This appointment was done by the board of directors of CSB among the three named sent to RBI.

About The Catholic Syrian Bank (CSB):

The Catholic Syrian Bank is 94 year old private sector bank founded on 26th November 1920. It has its strong base in Kerala along with significant presence in Karnataka, Tamil Nadu and Maharashtra. Recently it has filed for an IPO for 400 crore rupees.

7. ____ bank starts its operations from Shanghai, Chinaa. BRICSb. World Bankc. RBId. PNB

Answer

a. BRICS* The New Development Bank (NDB) created by Brazil, Russia, India, China and South Africa (BRICS) nations formally started its operations from its headquarters in Shanghai, China. Chinese Finance Minister Lou Jiwei, Shanghai Mayor Yang Xiong and the bank’s first President K V Kamath from India attended the opening ceremony.

Purpose: To fund infrastructure projects in the emerging economies. It is seen as an alternative institute to west dominated World Bank and the International Monetary Fund (IMF).

Capital: It will have initial capital of US 50 billion dollars and will be raised to US 100 billion dollars within the next couple of years.

Each members role: They will have an equal say in the bank’s management, regardless of GDP size and contribute an equal share in establishing a startup capital.

President: Eminent banker Kundapur Vaman Kamath from India is President of Bank for the first five years i.e. till 2020.

8. ____ , Central Bank of Sri Lanka ink currency swap agreementa. CSBb. SBI

c. World Bankd. RBI

Answer

d. RBI* Reserve Bank of India has signed a special currency swap agreement with the Central Bank of Sri Lanka (CBS). Under this agreement, Sri Lankan bank can draw up to 1.1 billion dollars for a maximum period of 6 months. It was signed with an intention to mitigate the possible currency volatility in the spirit of strengthening bilateral relations and economic ties of India with Sri Lanka. It should be noted that, this special arrangement was signed in addition to the existing Framework on Currency Swap Arrangement for the SAARC member countries.

SAARC Currency Swap Framework :

This Currency Swap Framework is signed between SAARC member countries. It seeks to provide a backstop line of funding to member countries in order to meet any balance of payments and liquidity crises. During the crisis, this fund will be provided till longer term arrangements are made or till the need for short-term liquidity due to stressed market conditions.

9. _______ to provide Rs 30,000 crore credit to farmers for irrigationa. NABARDb. RBIc. SBId. PNB

Answer

a. NABARD* State-run National Bank for Agriculture and Rural Development (NABARD) has set a target of providing 30,000 crore rupees as credit to farmers for irrigational purpose. It was announced by Bank’s Chairman and Managing Director Dr. Harsh Kumar Bhanwala in Mumbai on the occasion of 34th Foundation Day of NABARD. This credit will be provided over the next three years i.e. till 2018 and for this NABARD already has sanctioned 1,000 crore rupees. This funding will be in addition to the government’s 50,000 crore rupees of loans to farmers over the next five years (till 2020) under the Pradhan Mantri Krishi Sinchai Yojana (PMKSY). Besides, it was also announced that NABARD has been accredited as the national implementation agency for climate change at the rural level by the Green Climate Fund (GCF). It should be noted that, NABARD is only the banking entity from South Asia to be shortlisted for the purpose by GEF. The World Bank and Asian Development Bank among others are the 20 such entities which have already been shortlisted.

10. _____ launches eSign Servicesa. RBIb. eMoneyc. eMudhrad. ePaisa

Answer

c. Emudra* eMudhra Limited, a leading certifying firm in the country for digital signatures launched first of its kind eSign services in the country as part of the Digital India Vision. eSign is an online electronic signature service legally valid and secure under the Information Technology Act, 2000. It will facilitate an

Aadhaar holder to digitally sign a document within seconds. It seeks to pave the way for a digital transformation into a paperless environment by revolutionising the way of business and governance conducted in the country. eMudhra Limited also launched eMlocker which facilitates a person to store important documents such as Aadhaar cards, PAN cards, electricity bills or any other documents electronically.

About eMudhra

eMudhra Limited is a statutory licensed Certifying Authority of India to issue digital signature certificates. Established: in 2008 under the Information Technology (IT) Act, 2000. eMudhra offers variety of other services including Tax filing Services, Digital Signing Solutions, PAN Card Online applications. Digital Certificate Authentication System and Trusted Time Stamping etc. Its clients are corporates, Banks, government organizations, individuals and several small and medium businesses.

Digital Signature:It is an electronic signature used to authenticate the identity of the sender and signer of a message or document. It ensures that original content of the message or document remains unchanged or tapered after it is send.

1.  __________ to form Bank Board Bureau:a. Union Governmentb. RBIc. SBId. World Bank

Answer

a. Union GovernmentExplanation :* Union Government has decided to set up a Bank Board Bureau (BBB) to monitor key performance indicators of two dozen public sector banks (PSBs). It was announced by Union Finance Minister Arun Jailtley as part of a seven-pronged revamp plan for PSBs dubbed as Indradhanush (rainbow) plan. Facts about Bank Board Bureau : Bank Board Bureau (BBB) will start the functioning from next financial year i.e. from 1st April 2016 and the selection of its member will start in the next six months. It will replace existing system Appointments Board in which appointments for top level jobs at PSBs are made by an appointments committee led by the Reserve Bank of India (RBI) Governor. Composition: The BBB will be a body of ’eminent’ professionals and shall consist of only one government official. It will be six members body with at least 3 former bankers, 2 professionals and secretary, department of financial services representing government. Functions: Give recommendations for appointment of full-time Directors as well as non-Executive Chairman of PSBs. Give advice to PSBs in developing differentiated strategies for raising funds through innovative financial methods and instruments and to deal with issues of stressed assets. Guide banks on mergers and consolidations.

2.  ______ launched the First Multi-Currency Contactless Card service in Indiaa. RBIb. Axis Bankc. SBId. PNB

Answer

b. Axis BankExplanation :* India’s third largest private sector lender, Axis Bank has launched the first Contactless Debit, Credit and Multi-Currency Forex Card in association with VISA payWave in the country. Axis Bank will offer a contactless debit/credit cards to its 1.7 million premium customers which also enables withdrawal of 15 currencies via Multi-Currency Forex facility. To facilitate contactless cards operations bank will upgrade 50,000, of its point of sale (PoS) machines across the country.

3.  ______ allows Banks to tie up with insurersa. IRDAIb. RBIc. SBId. World Bank

Answer

a. IRDAIExplanation :* The Insurance Regulatory and Development Authority of India (IRDAI) has allowed banks to tie up with insurers. This decision was taken as part of the IRDAI’s new Bancassurance model guidelines which will be notified soon. Prior to this decision, banks were not allowed to have insurance agency tie-ups with more than one insurer. As per new decision banks can tie up with nine insurers from three segments viz. life, non–life and standalone health. It will not be binding on banks and they are free to take their call. Earlier, IRDAI had constituted a 7 member committee to study the reviewing of the existing architecture of the Banacassurance model.

4.  ____ Bank launches ‘Saral-Rural Housing Loan’ Scheme for weaker sectionsa. ICICIb. SBIc. PNBd. Syndicate Bank

Answer

a. ICICIExplanation :* India’s largest private sector lender Industrial Credit and Investment Corporation of India (ICICI) Bank has launched ‘ICICI Bank Saral-Rural Housing Loan’ Scheme for weaker sections of society. The scheme is new home loan proposition of the bank with special interest rate to cater people from rural areas including women borrowers as well as from weaker sections.

5. __________ launches Suraksha Bandhan drive in Mission Modea. Union Governmentb. RBIc. World Bankd. PNB

Answer

a. a. Union GovernmentExplanation :* Union Government has launched Suraksha Bandhan drive in a Mission Mode through participating insurance companies and banks. The drive aims at taking forward Union Government’s objective of creating a universal social security system in the country, especially for the poor and the under-privileged sections.

6.  ___ allows banks to merge, shift or close branches in urban areasa. RBIb. SBIc. Union governmentd. World bank

Answer

a. RBIExplanation :* Reserve Bank of India (RBI) has taken decision to allow banks to merge, shift or close branches in urban areas on their own discretion. In this regard, RBI has issued a notification that mention detailed provisions of above decisions. This move will give banks greater operational freedom but it won’t be valid for rural areas.As per RBI notifcation :Merger, shifting or closure of any rural branch as well as a sole semi urban branch will require prior approval of the District Level Review Committee (DLRC) or District Consultative Committee (DCC). Banks making changes should inform customers of its branch time before actual merger, shifting or closure of the office. The banking activity, which include deposit or loan business should not be maintained at both places. In case of new location as part shifting should be located within 1 km of the existing location. The banks should ensure that they continue to fulfill the role entrusted to these branches under the Direct Benefit Transfer Schemes (DBTS) and other government sponsored programmes. It should be noted that the apex bank has allowed banks to shift their some branch in any centre due rent or space constraints without seeking prior approval of RBI.

7. Lok Sabha passes ____________ , 2015a. Negotiable Instruments (Amendment) Bill

b. Lokpal billc. Easy Banking Billd. None of these

Answer

a. Negotiable Instruments (Amendment) BillExplanation :* Lok Sabha has passed Negotiable Instruments (Amendment) Bill 2015 by a voice vote. The bill seeks to amend The Negotiable Instruments Act, 1881 in order to make cheque-bounce filing of cases more convenient for check payees (person who receives the cheque). The bill also seeks to replace an ordinance which was re-promulgated in this regard earlier in May 2015 after it was not passed in Rajya Sabha, though it was passed by the Lok Sabha in the May 2015.

8. ____ India plans to launch ‘green bonds’a. HSBCb. RBIc. SBId. PNB

Answer

a. HSBCExplanation :* HSBC India’s chairman Naina Lal Kidwai announced to launch ’green bonds’ in India for raising funds for investments in environmental projects. Announcement was done by the HSBC chairman in a Ficci event held on 3 August 2015. The total investment attracted by Green Bonds in last two years is 37 million dollars. HSBC is the fourth largest issuer in the world. Green Bonds in India was initially launched by Axis Bank and Yes Bank in February 2015 that attracted investment of 1,000 crore rupees against the target of 500 crore rupees.What is Green Bond?

A bond is a debt instrument with which a bond issuer gets capital while the investors receive fixed income in the form of interest. The issuer of green bond gets capital from the investors only if the investment is being raised to fund ‘green’ projects relating to renewable energy or emission reductions etc.

9. RBI to issue Rs ____ coins to mark International Yoga Daya. 10b. 20c. 50d. 5

Answer

a. 10Explanation :* Reserve Bank of India (RBI) will soon issue 10 rupee denomination coins to commemorate International Yoga Day which is being observed every year on 21 June.

10.  _____ bank launches ‘Kotak Bharat’ mobile banking app for ‘un-banked’ regionsa. Kotakb. SBIc. RBId. Axix Bank

Answer

a. KotakExplanation :* Kotak Mahindra Bank (KMB) launched a mobile banking app ‘Kotak Bharat’ aiming to provide mobile banking services to customers in the remotest regions of India.

1. Which of the following is NOT banking related terms?a. SME Financeb. Overfraftsc. Drawing Powerd. Equinox

Answer

d. Equinox* 1. SME finance is the funding of small and medium-sized enterprises, and represents a major function of the general business finance market – in which capital for different types of firms are supplied, acquired, and costed or priced.2. Overdraft – A deficit in a bank account caused by drawing more money than the account holds.3. Drawing power of an account is the amount that can be withdrawn from it. Generally, in a savings account this will be equal to your outstanding balance (amount of cash in the account). There are accounts with overdraft facility that can withdraw some more money in addition to their cash balance.Outstanding amount of a bank loan is the amount of loan (withdrawn) taken from the bank. If you have a loan sanctioned for $1000 and you have withdrawn $200 from this account, your outstanding balance is $200. This is the amount on which the bank charges you interest.

2. Bad loans in banking terminology are generally known as:a. Prime loansb. Prime assetsc. BPOsd. NPAs

Answer

d. NPAs* A Non-performing asset (NPA) is defined as a credit facility in respect of which the interest and/or installment of principal has remained ‘past due’ for a specified period of time.

3. Which of the following organization is not associated with the financial banking sector in India ?a. NABARDb. BSEc. ISROd. SEBI

Answer

c.ISRO

4. Which of the following terms is not used in the field of banking and finance?a. Overdraftb. Baselinec. RTGSd. GBC

Answer

d. GBC*BASELINE – A benchmark that is used as a foundation for measuring or comparing current and past values. For example, a company wanting to measure the success of one of its product lines can use the number of units sold during the first year as a baseline from which to evaluate subsequent sales growth. In business, baselines and benchmarks serve a similar purpose.Real-time gross settlement systems (RTGS) are specialist funds transfer

systems where transfer of money or securities takes place from one bank to another on a “real time” and on “gross” basis. Settlement in “real time” means payment transaction is not subjected to any waiting period.

5. Which of the following is the name of the bank founded by the winner of the Nobel Peace Prize 2006 Mr. Muhammad Yunus a. Bank for the poorb. Swadeshi bankc. Rashtriya bankd. Grameen bank

Answer

d. Grameen bank * The Grameen Bank is a Nobel Peace Prize-winning microfinance organization and community development bank founded in Bangladesh. It makes small loans to the impoverished without requiring collateral.

6. The foreign exchange reserves of India are kept in the custody of: a. World bankb. RBIc. SBId. Prime minister

Answer

b. RBI

7. When more than one bank is allowing credit facilities to one party in coordination with each other under a formal arrangement, the arrangement is generally known as:a. Participation

b. Consortiumc. Syndicationd. Multiple Banking

Answer

b. Consortium* ‘Consortium Bank’ A subsidiary bank created by numerous banks. A consortium bank is created to fund a specific project (such as providing affordable homeownership for low- and moderate-income home buyers) or to execute a specific deal (such as selling loans in the loan syndication market).

8. Reverse Repo Rate means:a. Injecting liquidity by the central bank of a country through purchase of government securitiesb. Absorption of liquidity from the market by sale of government securitiesc. Balancing liquidity with a view to enhance economic growth rated. Any of above

Answer

b. Absorption of liquidity from the market by sale of government securities* Reverse repo rate is the rate at which the central bank of a country (RBI in case of India) borrows money from commercial banks within the country.

9. The bank rate means: a. Rate of interest charged by commercial banks from borrowersb. Rate of interest which commercial banks discounted bills of their borrowersc. Rate of interest allowed by commercial banks on their deposits

d. Rate at which RBI purchases or rediscounts bill of exchange of commercial banks

Answer

d. Rate at which RBI purchases or rediscounts bill of exchange of commercial banks* Bank Rate is the rate at which central bank of the country  (in India it is RBI)  allows finance to commercial banks. Bank Rate is a tool, which central bank  uses for short-term purposes. Any upward revision in Bank Rate by central bank is an indication that banks should also increase deposit rates as well as Base Rate / Benchmark Prime Lending Rate.  Thus any revision in the Bank rate indicates that it is likely that interest rates on your deposits are likely to either go up or go down,  and it can also indicate  an increase or decrease in your EMI.

10. Open market operations, one of the measures taken by RBI in order to control credit expansion in the economy means :a. Sale or purchase of government securitiesb. Issuance of different types of bondsc. Auction of goldd. All of these

Answer

a. Sale or purchase of government securities* An open market operation (OMO) is an activity by a central bank to buy or sell government bonds on the open market. A central bank uses them as the primary means of implementing monetary policy. The usual aim of open market operations is to manipulate the short-term interest rate and the supply of base money in an economy, and thus indirectly control the total money supply, in effect expanding money or contracting the money supply. This involves meeting the demand of base money at the target interest rate by buying and selling

government securities, or other financial instruments. Monetary targets, such as inflation, interest rates, or exchange rates, are used to guide this implementation

1. Insurances service provided by various bank is commonly known as:a. Investment bankingb. Portfolio managementc. Merchant bankingd. Banc assurance

Answer

d. Banc Assurance* The bank insurance model (BIM), also sometimes known as bancassurance, is the partnership or relationship between a bank and an insurance company whereby the insurance company uses the bank sales channel in order to sell insurance products, an arrangement in which a bank and an insurance company form a partnership so that the insurance company can sell its products to the bank’s client base.BIM allows the insurance company to maintain smaller direct sales teams as their products are sold through the bank to bank customers by bank staff and employees as well.

2. What is the full form of NBFC as used in the financial sector?a. New banking finance companyb. National banking and Finance Corporationc. New business finance and creditd. Non of these

Answer

d. Non of these* A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance .

3. In India, the bank NABARD does not provide refinance to:a. Scheduled commercial banksb. Regional rural banksc. State land development banksd. Export-import bank

Answer

d. Export-import bank* Criteria for Refinance :Technical Feasibility of the projectFinancial viability and bankabilityOrganisational arrangements for credit supervision

4. Which of the following public sector bank emblem figures a dog and the words ‘faithful, friendly’ in it ?a. Punjab National Bankb. Oriental Bank of Commercec. Syndicate bankd. SBI

Answer

c. Syndicate bank

5. If the Cash Reserve Ratio (CRR) is lowered by the RBI, its impact on credit creation will be:a. Increases

b. Decreasesc. No impactd. Non of these

Answer

a. Increases* The Cash Reserve means, RBI informs the banks to maintain particular cash as reserve. So if the reserve ratio is lower then the bank can utilize those cash for credit purpose.

6. Which one of the following is a private bank?a. Allahabad bankb. Punjab and Sind bankc. Punjab National Bankd. Punjab Bank

Answer

d. Punjab Bank

7. Which of the following pairs is not correctly matched?a. SEBI … Security Market regulatory bodyb. RBI … Banking regulatory authorityc. SBI … Commercial bankd. IDBI … World bank

Answer

d. IDBI … World Bank

8. ‘Repo Rate’ is the rate at which:a. The RBI lends to state governmentb. The international aid agencies to RBIc. The RBI lends to banksd. The banks lend to RBI

Answer

c. The RBI lends to banks* Repo rate is the rate at which the central bank of a country (RBI in case of India) lends money to commercial banks in the event of any shortfall of funds.

9. A customer wishes to purchase some US dollars in India. She/he should go to:a. Public Debt Division of the RBI onlyb. American Express Bank onlyc. RBI or any branch of a bank which is authorized for such businessd. Ministry of foreign affairs

Answer

c. RBI or any branch of a bank which is authorized for such business

10. Which amongst the following organizations make major credit policies for the RRBs ? a. NABARDb. Asian development bankc. World bankd. SBI

Answer

a. NABARD* Role of NABARDIt is an apex institution which has power to deal with all matters concerning policy, planning as well as operations in giving credit for agriculture and other economic activities in the rural areas.it is a refinancing agency for those institutions that provide investment and production credit for promoting the several developmental

programs for rural development.It is improving the absorptive capacity of the credit delivery system in India, including monitoring, formulation of rehabilitation schemes, restructuring of credit institutions, and training of personnel.It co-ordinates the rural credit financing activities of all sorts of institutions engaged in developmental work at the field level while maintaining liaison with Government of India, and State Governments, and also RBI and other national level institutions that are concerned with policy formulation.It prepares rural credit plans, annually, for all districts in the country.It also promotes research in rural banking, and the field of agriculture and rural development.

1. The functions of the lead bank are performed by:a. SBIb. RBIc. Any bankd. A bank designed for this purpose

Answer

d.A bank designed for this purpose* DEFINITION of ‘Lead Bank’ A bank that oversees the arrangement of a loan syndication. The lead bank is paid an additional fee for this service, which involves recruiting the members and negotiating the financing terms. In the eurobond market, the lead bank acts in an agent capacity for an underwriting syndicate.

2. Central Co-operative banks work at:a. District levelb. National level

c. Block leveld. State level

Answer

a. District level* Central Cooperative Bank, founded on 28 March 1991 is a universal commercial bank, belonging to the financial structure of CCB Group.

3. The largest public sector commercial bank of India is the ____a. SBIb. RBIc. Bank of indiad. Union bank of india

Answer

a. SBI* As of December 2013, it had assets of US$388 billion and 13,000 branches, including 190 foreign offices, making it the largest banking and financial services company in India by assets. State Bank of India is one of the Big Four banks of India, along with Bank of Baroda, Punjab National Bank and ICICI Bank.

4. PAN card issued by the income tax department cannot be used for which of the following purpose?a. Proof of identityb. Proof of a registered tax payerc. Proof of addressd. Proof of date of birth

Answer

b. Proof of a registered tax payer* Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in the form of a laminated card, by the Income Tax Department, to any “person” who applies for it or to whom the department allots the number without an application.

5. Which one of the following statements is correct regarding increase in the CRR in India?a. It increases credit creationb. It reduces credit creationc. It does not affect creditd. It denoted liberal monetary policy

Answer

b. It reduces credit creation* CRR is a cash reserve ratio and SLR is statutory liquidity ratio. Under CRR a certain percentage of the total bank deposits has to be kept in the current account with RBI which means banks do not have access to that much amount for any economic activity or commercial activity.

6. Which among the following sectors contributes most to the saving in India?a. Banking and financial sectorb. Private corporate sectorc. Export sectord. Household sector

Answer

d. Household sector

7. The EXIM bank of India was established in ____a. 1964

b. 1970c. 1982d. 1984

Answer

c. 1982* Export-Import Bank of India is the premier export finance institution in India, established in 1982 under the Export-Import Bank of India Act 1981

8. The term plastic money applies to____a. Bank draft made of plastic coated paperb. Currency notes impregnated with plastic threadc. Currency notes printed on plastic coated paperd. Credit cards mainly issued by the banks

Answer

d. Credit cards mainly issued by the banks* PLASTIC MONEY Plastic money is a term that is used predominantly in reference to the hard plastic cards we use everyday in place of actual bank notes. They can come in many different forms such as cash cards, credit cards, debit cards, pre-paid cash cards and store cards.

9. Which bank became the first bank to open its branch in china ?a. IDBI bankb. SBIc. HDFCd. PNB

Answer

b. SBI

10. Government of India, for the first time nationalized 14 large commercial banks in the year___a. 1956b. 1969c. 1959d. 1972

Answer

b. 1969The following 14 Major Commercial Banks were nationalized on 19th July 1969 during the then Prime Minister of India, Mrs.Indira Gandhi:-1. Allahabad Bank-Founded by a Group of Europeans on 24th April 1865 at Allahabad2. Bank of Baroda-Founded in the year 1908 in Baroda3. Bank of Maharashtra-Founded on 16th September 1935 at Pune4. Bank of India-Founded in September 1906 at Mumbai5. Canara Bank-Founded on 1st July 1906 at Bangalore6. Central Bank of India-Founded by Sir Sorabji Pochkhanawala at Mumbai in the year 1911.7. Dena Bank-Founded on 26th May 1938 by Devkaran Nanjee family8. Indian Bank-Founded on 15th August 1907 as a part of Indian Swadeshi Movement at Chennai (then Madras)9. Indian Overseas Bank-Founded in the year 1937 at Chennai (then Madras)10. Punjab National Bank-Founded in Lahore in the year 189411. Syndicate Bank -Founded in Udipi in Karnataka in the year 192512. UCO Bank-Founded in 1943 by Birla at Kolkata (the then Calcutta)13. Union Bank of India-Inaugurated by Mahatma Gandhi in November 1919 .

14. United Bank of India-Inaugurated by Mahatma Gandhi in November 1919 – nationalized in 1975

In Banking terminology, NPA means a.Non-Promise Accountb.Non-Personal Accountc.Non-Performing Assetd.Net-performing Asset

Answer

c.Non-Performing Asset

Which of the following schemes has been launched for providing health services in rural areas? a.Operation Floodb.Look Eastc.SJSRYd.ASHA

Answer

d.ASHA

Which of the following schemes has been launched for the school-going children? a.Lok Jumbishb.Mid-Day Mealc.AYUSHd.SarvaShikshaAbhiyan

Answer

b.Mid-Day Meal

‘Sugam’ is a scheme launched for a.Small tax payersb.Pensioners getting old age pensionc.Big corporate housesd.Getting all sorts of permission

Answer

a.Small tax payers

What is the full form of ‘ULIP’, the term which was in the news recently? a.Universal Life & Investment Planb.Unit Loan & Investment Planc.Unit Linked Insurance Pland.Uniformly Loaded Investment Plan

Answer

c.Unit Linked Insurance Plan

Which of the following is NOT a banking related term? a.Radiationb.Outstanding Amountc.Explicit Guaranteed.Benchmark Prime Lending Rate

Answer

a.Radiation

Insurance service provided by various banks is commonly known as ______ a.Investment banking

b.Portfolio managementc.Merchant bankingd.Bancassurance

Answer

d.Bancassurance

Which from the following is NOT true when the interest rate in the economy goes up? a.Saving increasesb.Lending decreasesc.Cost of production increasesd.Return on capital increases

Answer

d.Return on capital increases

Rate of interest is determined by: a.The rate of return on the capital investedb.Central Governmentc.Liquidity preferencesd.Commercial Banks

Answer

d.Commercial Banks

1. LIBOR stands for London Interbank Offer Rate. What does MIBOR stands for________A. Mumbai Interbank Offer RateB. Manchester Interbank Offer Rate

C. Mexico Interbank Offer RateD. None of these

Answer

A. Mumbai Inter bank Offer Rate

2. What is inflation________A. increase in value of currencyB. decrease in value of currencyC. increase in value of commoditiesD. decrease in value of commodities

Answer

C. increase in value of commodities

3. Advantages of The GST_________A. Simple uniform tax structureB. It can increase tax revenue for governmentC. It can boost exportD. All of the above

Answer

D. All of the above

4. In General Budget 2015-16, government has reduced the Corporate Tax from 30 % to________A. 20 %B. 25 %C. 15 %D. 10 %

Answer

B. 25 %

5. All are Direct Tax except_________A. Income taxB. corporation taxC. property taxD. sales tax

Answer

D. sales tax

6. What is the full form of NABARD________A. National Bank for Agriculture and Rural DevelopmentB. National Bank for Agriculture and Rural DepartmentC. National Agricultural Bank and Rural DevelopmentD. National Agricultural Bank and Rural Department

Answer

A. National Bank for Agriculture and Rural Development

7. To block the endorsement of cheque, which type of crossing will be used________A. Account Payee crossingB. Generally crossingC. Specially crossingD. Non-negotiable crossing

Answer

A. Non-negotiable crossing

8. CTS Stands for________A. Cheque Transaction SystemB. Cheque Truncation SystemC. Cheque Transfer SystemD. Cheque Transmit System

Answer

B. Cheque Truncation System

9. SIDBI provides short term loans and refinance to__________A. Micro, Small and Medium Enterprises (MSMEs)B. Large IndustriesC. Small FarmersD. None of the above

Answer

A. Micro, Small and Medium Enterprises (MSMEs)

10. Where is the headquarter of National Housing Bank (NHB)________A. New DelhiB. MumbaiC. BengaluruD. Chennai

Answer

A. New DelhiNational Housing Bank (NHB), a subsidiary of RBI, regulates and refinances social housing programs in India.

1. Which one of the following rates is not decided by RBI__________A. Bank rateB. Base rateC. Repo rateD. Prime Lending rate

Answer

D. Prime Lending rate

2. Which of the following banks is not nationalized in 1969___________A. Central Bank of IndiaB. Dena BankC. Canara BankD. Oriental Bank of Commerce

Answer

D. Oriental Bank of Commerce

3. regional rural banks were established in india on the recommendation of which committees_________A. Recommendations of Narsimham CommitteeB. Recommendations of Shivraman committeeC. Recommendations of RG Saraiya CommitteeD. Recommendations of RN Mirdha committee

Answer

A. Recommendations of Narsimham Committee

4. Regulatory Authority for Regional Rural Bank is of___________A. RBI and NABARDB. NABARDC. RBID. Central bank

Answer

A. RBI and NABARD

5. Mutual Funds are regulated by________A. Reserve Bank of India

B. Securities and Exchange Board of IndiaC. Small industrial development bank of IndiaD. State Bank of indi

Answer

B. Securities and Exchange Board of India

6. Maximum age for retirement for MD/CEO of all private banks is__________A. 70B. 65C. 60D. 68

Answer

A. 70

7. Which term is not associated with banking operations___________A. Repo rateB. Prime Lending RateC. EquatorD. None of these

Answer

C. Equator

8. Who is the first Indian Governor of RBI__________A. Osborne SmithB. C.D.DeshmukhC. James Braid TaylorD. Bimal Jalan

Answer

B. C.D.Deshmukh

9. Where is the headquarter of Federal Bank___________A. PuneB. KochiC. HyderabadD. Mumbai

Answer

B. Kochi

10. Reserve Bank of India (RBI) was established on the recommendations of__________A. U.K.Patel CommitteeB. Hilton Young CommissionC. S.Chetty CommissionD. None of these

Answer

B. Hilton Young Commission

1. Which committee is heading the conversion of Urban Cooperative Banks into Regular Banks?A. R GandhiB. H R KhanC. Urjit R. PatelD. S. S. Mundra

Answer

A. R Gandhi

2. How many entities have been barred recently for trading, buying, selling or dealing in the securities markets, either directly or indirectly by Securities and Exchange Board of India for manipulating markets and evading taxes?A. 60B. 55C. 59D. 45

Answer

C. 59

3. The announcement of Bank holidays on 2nd and 4th Saturday will be effective from-A. 31st August 2015B. 1st September 2015C. 30th August 2015D. 30th September 2015

Answer

B. 1st September 2015

4. When the conversion rate of our currency goes high in compared to other currency , it is known as-A. Rupee AppreciationB. Rupee DevaluationC. Rupee DemodulationD. Rupee Depreciation

Answer

D. Rupee Depreciation

5. In which of the following market does devaluation of currency happen?A. Fixed exchange rateB. Floating exchange rateC. Pegged exchange rateD. Either A or B

Answer

A. Fixed exchange rate

6. Which of the following is not the function of Payment bank?A. Issue of ATM /Debit cardB. Issue of Credit CardC. Accepts DepositesD. Provides remittances

Answer

B. Issue of Credit Card

7. At Present, What is the maximum amount that a payment bank can accept from a depositer?A. Rs.5 lakhsB. Rs.1 lakhC. Rs.2 lakhsD. Rs.75000

Answer

B. Rs.1 lakh

8. M-wallet (mobile wallet) application called Buddy lauched by which of the following bank?A. AxisB. State bank of Travancore

C. ICICID. SBI

Answer

D. SBI

9. Which of the following will be the co-investor for India Aspiration Fund (IAF) and SIDBI Make In India Loan For Enterprises (SMILE),funds launched by SIDBI?A. GICB. LICC. SBI FinanceD. Tech M

Answer

B. LIC

10. Which of the following Indian company sets it record to be the first comapany to over take its parent company in terms of ‘market valuation’?A. Mahindra & MahindraB. Tata MotorsC. Ashok LeylandD. Maruti suzuki

Answer

D. Maruti suzuki

1. The banks get benefited most from which of the following entity ?A. Fee of services

B. LoansC. SecuritiesD.Saving Account

Answer

B. Loans

2. What can be the maximum limit of CRR for a commercial bank to maintain cash with RBI?A. 55%B. 40%C. 50%D. 49%

Answer

B. 40%

3. Which of the following is a not function of National Bank for Agriculture & Rural Development ?A. Co-ordinates the rural credit institutionsB. Acts a coordinator of commercial bank for commercial purposeC. Acts as regulator for cooperative and RRBsD. Provides assistance to eligible institutions of agriculture and ruraldevelopment

Answer

B. Acts a coordinator of commercial bank for commercial purpose

4. Which of the following is the Qualitative parameter of Key Performance Indicators For Public Sector Banks?

A. Return on AssetsB. NIM (Domestic)C. Cost (Overhead) as % of total incomeD. Efforts made to conserve capital

Answer

D. Efforts made to conserve capital ( All the other options are quantitative parameter)

5. Mr. Mohan has filled the income tax in the month of July 2015.Based on this information which will be the financial year and Assessment year respectively for which Mr. Mohan has submitted his Income tax?A. 2014-15 & 2015-16B. 2015-16 & 2014-15C. 2013-14 & 2014-15D. 2014-15 & 2015-14

Answer

A. 2014-15( Financial year) & 2015-16 (Assessment year)

6. For which of the following bank account there is no deduction of TDS?A. Saving Bank accountsB. Recurring Deposit accountsC. Term deposit AccountsD. Both A & B

Answer

D. Both A & B

7. Foreign direct Investment is prohibited in which of the following sector of India under Govt Route as well as the Automatic Route?A. Business of Chit FundB. Housing and Real estate BusinessC. Manufacture of cigars and tobacco substitutesD. All of the above

Answer

D. All of the above

8. Which of the following authorities is not involved with FDI dealing?A. Reserve bank of IndiaB. Foreign Investment Implementation AuthorityC. Securities and Exchange board of IndiaD. Foreign Investment Promotion Board

Answer

C. Securities and Exchange board of India

9. Which among the following bank has offered the best interest on saving accounts in India by Jan 2015?A. Yes bankB. Kotatk Mahindra BankC. IndusInd BankD. Lakshmi Vilas Bank

Answer

A. Yes bank

10. Which of the following is the most valid reason for India to export gold to Bank of England in 1991?A. To set up India-UK bilateral relationshipB. India returned UK goldC. To meet foreign exchange crisisD. For Investment in Bristish companies

Answer

C. To meet foreign exchange crisis

1. Find the correct order in respect of the following when it comes to issue of shares by a company :A. Authorized capital- Issued Capital- Subscribed Capital-Paid up capitalB. Authorized capital- Subscribed Capital- Issued Capital-Paid up capitalC. Authorized capital- Paid up capital-Subscribed Capital-Issued CapitalD. Authorized capital- Issued Capital- Paid up capital-Subscribed Capital

Answer

A. Authorized capital- Issued Capital- Subscribed Capital-Paid up capital

2. Which of the following appears in the balance sheet of a company?A. Subscribed CapitalB. Authorized CapitalC. Partner’s CapitalD. Paid up Capital

Answer

D. Paid up Capital

3. What do you mean by ‘Money Laundering’?A. Washing the currency notes in a good launderyB. Converting money obtained through illegal sources in to legal moneyC. Keeping the money in currency chestsD. Sending excess cash to other branch

Answer

B. Converting money obtained through illegal sources in to legal money

4. What does M stand for In CAMELS?A. MaintenanceB. ManagementC. MisappropriationD. Money

Answer

B. Management

5. Which entity became the first-ever public sector undertaking (PSU) to issue bonus debentures as done by it on 26 March 2015?A. SAILB. NTPCLC. OPTCLD. Both  B & C

Answer

B. NTPCL

6. The main foreign exchange reserves in the country are:A. Foreign Currency assetsB. Gold StockC. Special Drawing RightsD. All of the above

Answer

D. All of the above

7. Which of the following banks are not insured by DICGC?A. Commercial bankB. Regional rural bankC. Foreign bank branches functioning in IndiaD. None of the above

Answer

D. None of the above

8. Which of the following are the government bonds which are used to raise funds from money market?A. Treasury billsB. Certificate of depositeC. Commercial PapersD. Dated Goverment securities

Answer

A. Treasury bills

9. What is current Reverse Repo rate?A. 6.50B. 6.25

C. 6.75D. 7.25

Answer

B. 6.25

10. Find out the mismatch of nationalized bank and its headquarter.A. Bank of India -MumbaiB. Dena bank- HyderabadC. Syndicate bank -ManipalD. United Bank of India- Kolkata

Answer

B. Dena bank- Hyderabad

1. The ratio of the cash reserves that banks are required to keep with RBI is known as-A. Liquidity RatioB. CRRC. SLRD. Bank rate

Answer

B. CRR

2. What does R stands for in SLR?A. RateB. RatioC. ReserveD. none of the above

Answer

B. Ratio

3. Which of the following is not a fuction at ATMs?A. Account InformationB. Cheque WithdrawalC. Regular bills paymentD. Mini statement

Answer

B. Cheque Withdrawal

4. Which of the following is a capital market instrument?A. Notice moneyB. Treasury-billsC. DebenturesD. Only B & C

Answer

C. Debentures

5. State-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard is called –A. Fiat MoneyB. Commercial Bank MoneyC. Rpresentative MoneyD. Liquid Money

Answer

A. Fiat Money

6. Banking sector comes under which of the following sector?A. Agriculture SectorB. Rural SectorC. Service SectorD. Finance Sector

Answer

C. Service Sector

7. An account in which trading of shares in their electronic form is done is known as-A. NRO AccountB. NRE AccountC. Demat AccountD. RFC Account

Answer

C. Demat Account

8. The maximum compensation by Banking Ombudsman for a complaint is-A. Rs.1lakhB. Rs.2lakhC. Rs.5lakhD. Rs.10lakh

Answer

D. Rs.10lakh

9. The Reserve Bank of India was established on 1935 in accordance with the provision of which of the following Act?A. The Reserve Bank of India Act, 1934B. The Reserve Bank of India Act,1935

C. The Reserve Bank of India Act, 1947D. The Reserve Bank of India Act, 1949

Answer

A. The Reserve Bank of India Act, 1934

10. Which of the following Cheque is not honoured by the bank?A. Stale ChequeB. Crossed ChequeC. Self ChequeD. Open Cheque

Answer

A. Stale Cheque

1. Through which of the following sources domestic funds are raised by companies?(a) IPO only(b) FPO only(c) Commercial papers only(d) Both IPO and FPO(e) All IPO, FPO and commercial papers

Answer

(a) IPO only

2. Out of FDI and FII, which is considered more permanent (stable)?(a) FII is considered more stable than FDI.(b) Both are equally stable.(c) Both are equally unstable.

(d) FDI is considered more stable than FII.(e) None of these

Answer

(d) FDI is considered more stable than FII.

3. In the time of monetary shortage, RBI can buy commercial bills from the market. By using this method what does RBI provide to the market?(a) It sucks credit from the market.(b) It injects credit into the market.(c) There is no effect on the credit situation in the market.(d) None of these

Answer

(b) It injects credit into the market.

4. Expand LIBOR?(a) London Inter Bank Offered Rate(b) London Inter Bank Official Rate(c) London Inter Bank Offered Ratio(d) London International Bank Offered Rate(e) None of these

Answer

(a) London Inter Bank Offered Rate

5. When was IDBI delinked from the RBI and taken over by Government of India?(a) 1976(b) 1977(c) 1978

(d) 1980(e) None of these

Answer

(a) 1976

6. If the price rises by not more than 3% per annum, what type of inflation it is?(a) Walking inflation(b) Running inflation(c) Creeping inflation(d) Galloping inflation(e) None of these

Answer

(c) Creeping inflation

7. If the price rises by more than 20% and less than 1000% per annum, what type of inflation it is?(a) Galloping inflation(b) Creeping inflation(c) Stagflation(d) Hyperinflation(e) None of these

Answer

(a) Galloping inflation

8. If the Cash Reserve Ratio (CRR) is lowered by the RBI, its impact on the credit creation will be to(a) Decrease it(b) No effect

(c) Increase it(d) None of these

Answer

(c) Increase it

9. Who was the first Indian Governor of RBI?(a) Yash Pal Singh(b) Hemant Rao(c) CD Deshmukh(d) Jaipal Singh(e) None of these

Answer

(c) CD Deshmukh

10. Expand CRAR in terms of banking sector.(a) Capital- to- Return Asset Ratio(b) Capital –to-Risk Asset Ratio(c) Capital –to-Risk Asset Range(d) Core Risk Asset Return(e) None of these

Answer

(b) Capital –to-Risk Asset Ratio

1. Which of the following is not shared by the centre and the states?(a) Income tax(b) Corporation tax(c) Sales tax

(d) None of these(e) All of these

Answer

(c) Sales tax

2. Credit is a(a) Stock concept(b) Flow concept(c) A stock-flow concept(d) A holding concept(e) None of these

Answer

(c) A stock-flow concept

3. The place where bankers meet and settle their mutual claims and accounts is known as(a) Clearing house(b) Dumping ground(c) Collection and clearing centre(d) Treasury(e) None of these

Answer

(a) Clearing house

4. Economic planning is an essential feature of(a) Dual economy(b) Mixed economy(c) Social economy(d) Capitalist economy(e) None of these

Answer

(c) Social economy

5. Which of the following is considered as the founding father of World Bank?(a) Harry Dexter(b) Lord Keynes(c) LB Johnson(d) Both (a) and (b)(e) Both (a) and (c)

Answer

(d) Both (a) and (b)

6. Who compiles Economic Survey report in India?(a) RBI(b) Ministry of Finance(c) SEBI(d) IRDA(e) (a) and (b) combined

Answer

(b) Ministry of Finance

7. SEBI is a(a) Constitutional body(b) Statutory body(c) Advisory body(d) Non-statutory body(e) None of these

Answer

(b) Statutory body

8. Who nominates directors on the central board of RBI?(a) Governor of RBI(b) Government of India(c) A Panel of all commercial banks(d) Empowered group of ministers(e) None of these

Answer

(b) Government of India

9. Which of the following remains at the top of organizational structure of RBI?(a) Governor(b) Executive directors(c) Central board of directors(d) Chief general manager(e) Principal chief general manager

Answer

(c) Central board of directors

10. Teaser loan are generally given for(a) Home loans(b) Car loans(c) Personal loans(d) Can be given on any loan(e) None of these

Answer

(a) Home loans

1. The tax payers data flows directly from banks to Tax Information Network (TIN). Who maintains TIN?(a) RBI(b) National Securities Depository Ltd.(c) National Securities Defense Ltd.(d) Enforcement Directorate(e) None of these

Answer

(b) National Securities Depository Ltd.

2. What is the meaning of ‘I promise to pay’ clause written on notes?(a) The bank’s obligation to pay the value of banknote does not arise out of a contract but out of statutory provisions.(b) The bank’s obligation to pay the value of banknote does arise out of a contract but not out of statutory provisions.(c) This obligation is neither due to a contract nor a statutory provision.(d) It means that to pay you the value, there is sovereign guaranty.(e) None of these.

Answer

(a) The bank’s obligation to pay the value of banknote does not arise out of a contract but out of statutory provisions.

3. RBI issued its first banknote in Jan 1938 bearing the portrait of George IV. What was its denomination?(a) Rs. 5(b) Rs. 10(c) Rs. 1(d) Rs. 2(e) None of these

Answer

(a) Rs. 5

4. Expand CIN with respect to OLTAS.(a) Challan Identification Number(b) Challan Identification Notary(c) Channel Identification Number(d) Challan Inventory Number(e) None of these

Answer

(a) Challan Identification Number

5. When were banknotes in the Mahatma Gandhi Series introduced?(a) 1991(b) 1995(c) 1996(d) 2000(e) None of these

Answer

(c) 1996

6. Banknotes can be issued in any denominations but coins can be issued up to what denomination?(a) Rs. 5000(b) Rs. 1000(c) Rs. 500(d) Rs. 100(e) None of these

Answer

(b) Rs. 1000

7. Consider these statements:-Statement I – One rupee note is the liability of GOI.Statement II – Two rupee note is the liability of RBI.(a) Both statements are true.(b) Both are false.(c) Statement I is true, whereas II is false.(d) Statement I is false, whereas II is true.(e) None of these.

Answer

(a) Both statements are true.

8. Consider these statements:-Statement I – RBI decides volume and value of banknotes to be printed.Statement II – RBI decides volume and value of coins to be minted.(a) Both are true.(b) Both are false.(c) Statement I is true, but statement II is false.(d) Statement I is false, whereas II is true.(e) None of these.

Answer

(c) Statement I is true, but statement II is false.

9. To enforce law and order Government of India has many agencies. SFIO is one of them. Expand it.(a) Serious Fraud Interrogation Office(b) Serious Fraud Investigation Office(c) Serious Feud Interrogation Office

(d) Serious Fraud Interrogation Ordinance(e) None of these.

Answer

(b) Serious Fraud Investigation Office

10. Consider these statements:-Statement I – Other than Rs. 1000 note, the security threads of the banknotes contain the word ‘Bharat’ in Devanagari script and ‘RBI’ alternatively.Statement II – In Rs. 1000 note, the security thread contains the word ‘Bharat’ in Devanagari script, ‘1000’, and ‘RBI”.(a) Both are false.(b) Both are true.(c) Statement I is true but II is false.(d) Statement I is false but II is true.(e) None of these

Answer

(b) Both are true.

1. If the RBI wants to infuse credit in Banking system in our country, which of the followings can be done?(a) Decreasing CRR(b) Decreasing SLR(c) Both (a) and (b)(d) None of the above

Answer

(c) Both (a) and (b)

2. Buying and selling of eligible securities by RBI in the money market can be termed as(a) Open Economy Operations(b) Open Market Operations(c) Credit Control Measures(d) Credit Creation Measures(e) None of these

Answer

(b) Open Market Operations

3. Which agency in India provides refinance of export credit?(a) SIDBI(b) NABARD(c) RBI(d) EXIM Bank(e) Government of India

Answer

(d) EXIM Bank

4. When the Government of India cannot raise enough financial resources through taxation, it finances its expenditure through various means like borrowing from market, running down its balances with RBI etc. This can be exactly called as(a) Fiscal Deficit Financing(b) Deficit Financing(c) Capital Infusion(d) Restructuring(e) None of these

Answer

(b) Deficit Financing

5. Expand MAT related to tax?(a) Minimum Additional Tax(b) Maximum Alternative Tax(c) Maximum Additional Tax(d) Minimum Alternative Tax(e) None of these

Answer

(d) Minimum Alternative Tax

6. Expand FRBM.(a) Financial Responsibility and Budget Management(b) Fiscal Responsibility and Budget Maintenance(c) Fiscal Responsibility and Budget Management(d) Fiscal Risk and Budget Management(e) None of these

Answer

(c) Fiscal Responsibility and Budget Management

7. Deficit financing can (these are also demerits of it)(a) Cause inflation(b) Bring rise in fiscal deficit(c) Bring rise in credit creation in banks(d) All above(e) None of the above

Answer

(d) All above

8. If the rupees depreciate, what is the effect on the exporters?(a) They are unaffected(b) They are in loss

(c) They are in profit(d) They get credit crunch(e) None of these

Answer

(c) They are in profit

9. What is Reserve Money (RM)?(a) Currency in circulation with the public(b) Deposits of some people with RBI(c) Cash reserves of the banks(d) Total of the above three options(e) None of the above

Answer

(d) Total of the above three options

10. What is the objective of introduction of ‘Marginal Standing Facility’ by RBI?(a) To contain volatility in the overnight inter-bank rates(b) To contain volatility in MIBOR(c) To contain volatility in LIBOR(d)To match with standard Tier 1 capital Ratio(e) None of these

Answer

(a) To contain volatility in the overnight inter-bank rates

1. Which of the following is not shared by the centre and the states?(a) Income tax

(b) Corporation tax(c) Sales tax(d) None of these(e) All of these

Answer

(c) Sales tax

2. Credit is a(a) Stock concept(b) Flow concept(c) A stock-flow concept(d) A holding concept(e) None of these

Answer

(c) A stock-flow concept

3. The place where bankers meet and settle their mutual claims and accounts is known as(a) Clearing house(b) Dumping ground(c) Collection and clearing centre(d) Treasury(e) None of these

Answer

(a) Clearing house

4. Economic planning is an essential feature of(a) Dual economy(b) Mixed economy(c) Social economy

(d) Capitalist economy(e) None of these

Answer

(c) Social economy

5. Which of the following is considered as the founding father of World Bank?(a) Harry Dexter(b) Lord Keynes(c) LB Johnson(d) Both (a) and (b)(e) Both (a) and (c)

Answer

(d) Both (a) and (b)

6. Who compiles Economic Survey report in India?(a) RBI(b) Ministry of Finance(c) SEBI(d) IRDA(e) (a) and (b) combined

Answer

(b) Ministry of Finance

7. SEBI is a(a) Constitutional body(b) Statutory body(c) Advisory body(d) Non-statutory body(e) None of these

Answer

(b) Statutory body

8. Who nominates directors on the central board of RBI?(a) Governor of RBI(b) Government of India(c) A Panel of all commercial banks(d) Empowered group of ministers(e) None of these

Answer

(b) Government of India

9. Which of the following remains at the top of organizational structure of RBI?(a) Governor(b) Executive directors(c) Central board of directors(d) Chief general manager(e) Principal chief general manager

Answer

(c) Central board of directors

10. Teaser loan are generally given for(a) Home loans(b) Car loans(c) Personal loans(d) Can be given on any loan(e) None of these

Answer

(a) Home loans

1. The tax payers data flows directly from banks to Tax Information Network (TIN). Who maintains TIN?(a) RBI(b) National Securities Depository Ltd.(c) National Securities Defense Ltd.(d) Enforcement Directorate(e) None of these

Answer

(b) National Securities Depository Ltd.

2. What is the meaning of ‘I promise to pay’ clause written on notes?(a) The bank’s obligation to pay the value of banknote does not arise out of a contract but out of statutory provisions.(b) The bank’s obligation to pay the value of banknote does arise out of a contract but not out of statutory provisions.(c) This obligation is neither due to a contract nor a statutory provision.(d) It means that to pay you the value, there is sovereign guaranty.(e) None of these.

Answer

(a) The bank’s obligation to pay the value of banknote does not arise out of a contract but out of statutory provisions.

3. RBI issued its first banknote in Jan 1938 bearing the portrait of George IV. What was its denomination?(a) Rs. 5(b) Rs. 10(c) Rs. 1

(d) Rs. 2(e) None of these

Answer

(a) Rs. 5

4. Expand CIN with respect to OLTAS.(a) Challan Identification Number(b) Challan Identification Notary(c) Channel Identification Number(d) Challan Inventory Number(e) None of these

Answer

(a) Challan Identification Number

5. When were banknotes in the Mahatma Gandhi Series introduced?(a) 1991(b) 1995(c) 1996(d) 2000(e) None of these

Answer

(c) 1996

6. Banknotes can be issued in any denominations but coins can be issued up to what denomination?(a) Rs. 5000(b) Rs. 1000(c) Rs. 500

(d) Rs. 100(e) None of these

Answer

(b) Rs. 1000

7. Consider these statements:-Statement I – One rupee note is the liability of GOI.Statement II – Two rupee note is the liability of RBI.(a) Both statements are true.(b) Both are false.(c) Statement I is true, whereas II is false.(d) Statement I is false, whereas II is true.(e) None of these.

Answer

(a) Both statements are true.

8. Consider these statements:-Statement I – RBI decides volume and value of banknotes to be printed.Statement II – RBI decides volume and value of coins to be minted.(a) Both are true.(b) Both are false.(c) Statement I is true, but statement II is false.(d) Statement I is false, whereas II is true.(e) None of these.

Answer

(c) Statement I is true, but statement II is false.

9. To enforce law and order Government of India has many agencies. SFIO is one of them. Expand it.(a) Serious Fraud Interrogation Office(b) Serious Fraud Investigation Office(c) Serious Feud Interrogation Office(d) Serious Fraud Interrogation Ordinance(e) None of these.

Answer

(b) Serious Fraud Investigation Office

10. Consider these statements:-Statement I – Other than Rs. 1000 note, the security threads of the banknotes contain the word ‘Bharat’ in Devanagari script and ‘RBI’ alternatively.Statement II – In Rs. 1000 note, the security thread contains the word ‘Bharat’ in Devanagari script, ‘1000’, and ‘RBI”.(a) Both are false.(b) Both are true.(c) Statement I is true but II is false.(d) Statement I is false but II is true.(e) None of these

Answer

(b) Both are true.

1. If the RBI wants to infuse credit in Banking system in our country, which of the followings can be done?(a) Decreasing CRR(b) Decreasing SLR

(c) Both (a) and (b)(d) None of the above

Answer

(c) Both (a) and (b)

2. Buying and selling of eligible securities by RBI in the money market can be termed as(a) Open Economy Operations(b) Open Market Operations(c) Credit Control Measures(d) Credit Creation Measures(e) None of these

Answer

(b) Open Market Operations

3. Which agency in India provides refinance of export credit?(a) SIDBI(b) NABARD(c) RBI(d) EXIM Bank(e) Government of India

Answer

(d) EXIM Bank

4. When the Government of India cannot raise enough financial resources through taxation, it finances its expenditure through various means like borrowing from market, running down its balances with RBI etc. This can be exactly called as(a) Fiscal Deficit Financing(b) Deficit Financing

(c) Capital Infusion(d) Restructuring(e) None of these

Answer

(b) Deficit Financing

5. Expand MAT related to tax?(a) Minimum Additional Tax(b) Maximum Alternative Tax(c) Maximum Additional Tax(d) Minimum Alternative Tax(e) None of these

Answer

(d) Minimum Alternative Tax

6. Expand FRBM.(a) Financial Responsibility and Budget Management(b) Fiscal Responsibility and Budget Maintenance(c) Fiscal Responsibility and Budget Management(d) Fiscal Risk and Budget Management(e) None of these

Answer

(c) Fiscal Responsibility and Budget Management

7. Deficit financing can (these are also demerits of it)(a) Cause inflation(b) Bring rise in fiscal deficit(c) Bring rise in credit creation in banks(d) All above(e) None of the above

Answer

(d) All above

8. If the rupees depreciate, what is the effect on the exporters?(a) They are unaffected(b) They are in loss(c) They are in profit(d) They get credit crunch(e) None of these

Answer

(c) They are in profit

9. What is Reserve Money (RM)?(a) Currency in circulation with the public(b) Deposits of some people with RBI(c) Cash reserves of the banks(d) Total of the above three options(e) None of the above

Answer

(d) Total of the above three options

10. What is the objective of introduction of ‘Marginal Standing Facility’ by RBI?(a) To contain volatility in the overnight inter-bank rates(b) To contain volatility in MIBOR(c) To contain volatility in LIBOR(d)To match with standard Tier 1 capital Ratio(e) None of these

Answer

(a) To contain volatility in the overnight inter-bank rates

1. Which of the following can be called as ‘National Income’?(a) Net National Income at factor cost(b) Gross National Income at factor cost(c) Net Domestic Product at factor cost(d) Gross Domestic Product at factor cost(e) None of these

Answer

(a) Net National Income at factor cost

2. What is ‘STT’?(a) Standard Transaction Tax(b) Securities transaction tax(c) Securities transfer tax(d) Standard transfer tax(e) None of these

Answer

(b) Securities transaction tax

3. Which of the followings can be used for Current Account Deficit financing?(a) FII only(b) FDI only(c) ECB only(d) Both FII and FDI only(e) All FII, FDI and ECB

Answer

(e) All FII, FDI and ECB

4. Expand FIPP –(a) Foreign Investment Promotion Brochure(b) Foreign Investment Production Board(c) Foreign Investment Promotion Board(d) Foreign Direct Investment Promotion Board(e) None of these

Answer

(c) Foreign Investment Promotion Board

5. Bureau of Indian Standards (BIS) has its headquarters in(a) Mumbai(b) Kolkata(c) Bhubaneswar(d) New Delhi(e) None of these

Answer

(d) New Delhi

6. Who regulates chit funds in India?(a) Government of India(b) State Governments(c) Not regulated at all(d) Concerned Districts(e) None of these

Answer

(b) State Governments

7. If the Statuary Liquidity Ratio (SLR) is increased, what will be the effect on Bank’s credit situation?(a) It will be reduced(b) It will be increased(c) It will remain unaffected(d) None of these

Answer

(a) It will be reduced

8. You might have heard about PMI data. What is PMI?(a) Prudential Managers Index(b) Purchasing Managers Indian(c) Purchasing Managers Index(d) Prudential Managers Indian(e) None of these

Answer

(c) Purchasing Managers Index

9. Banking sector comes under which sector?(a) Services sector(b) Manufacturing sector(c) Realty sector(d) Industrial sector(e) None of these

Answer

(a) Services sector

10. Which of the following agreement/accord is related to baking reforms?(a) Vienna agreement

(b) Basel accord(c) Nagoya Protocol(d) Cartagena Protocol(e) None of these

Answer

(b) Basel accord

1. Which of the following deposits cannot be withdrawn for a preset fixed period of time?(a) Current(b) Term(c) Saving(d) Recurring

Answer

(e) None pf these

2. Which of the following is an example of world-wide financial messaging network?(a) NEFT(b) CHIPS(c) SFMS(d) SWIFT(e) None of these

Answer

(d) SWIFT

3. Which of the following techniques, Indian currency notes do not use?(a) Security threads(b) Optically variable ink

(c) Micro lettering(d) Intaglio printing(e) All of the above are used.

Answer

(e) All of the above are used.

4. For issuing notes, RBI is required to hold the minimum reserves of ______ crores Rs. in Gold.(a) 85(b) 125(c) 115(d) 100(e) None of these

Answer

(c) 115

5. Which of the following is not a money market instrument?(a) T-Bills(b) Commercial paper(c) Certificate of deposits(d) Mutual funds(e) All of the above

Answer

(d) Mutual funds

6. Which of the following is not a credit rating agency?(a) CRISIL(b) Moody(c) S & P

(d) Fitch(e) All of the above are credit rating agency

Answer

(e) All of the above are credit rating agency

7. When a customer deposits a sum with bank, the bank becomes his _______.(a) Creditor(b) Debtors(c) Trustee(d) Convener(e) None of these

Answer

(b) Debtors

8. Agriculture sector contributes ______% in GDP.( Approx)(a) Below 1%(b) Above 50% but below 70%(c) Below 10% but more than 5%(d) Near about 20%(e) None of these

Answer

(d) Near about 20%

9. Which of the following is related to banking industry?(a) CAPART(b) PURA(c) CMOS(d) LIEN(e) All of the above

Answer

(d) LIEN

10. Commercial banks money is divided into M1-M3, whereas central bank money is known as(a) MBZ(b) MBM(c) MB(d) MCB(e) None of these

Answer

(c) MB

1. Which of the following is not a credit rating agency?(a) WADA(b) Fitch(c) CRISIL(d) Moody(e) S & P

Answer

(a) WADA

2. Who used to be the chairman of the Board for Financial Supervision (BFS) in RBI?(a) RBI dupty governor(b) RBI governor(c) RBI chief general manager(d) Finance Minister(e) None of these

Answer

(b) RBI governor

3. Which of the following scheme is related to Financial Inclusion?(a) AADHAR(b) AAY(c) Swabhiman(d) Swavalamban(e) All of the above

Answer

(c) Swabhiman

4. What is MZM in money market?(a) Money with highest return(b) Money with zero maturity(c) Money with sovereign guarantee(d) Monetary base or total currency(e) None of these

Answer

(b) Money with zero maturity

5. Among M1, M2, and M3 (Different criteria of money), which is used to forecast inflation data of a country? However it is not used by Indian economy.(a) M3(b) M1(c) M2(d) All of the above(e) None of the above

Answer

(c) M2

6. The Tier-1 capital of banks does not include(a) Paid-up capital(b) Revaluation reserves(c) Statutory reserves(d) Investment fluctuation reserves(e) None of these

Answer

(b) Revaluation reserves

7. When was the Board for Financial Supervision (BFS) constituted, which undertakes integrated supervision of different sectors of the financial system?(a) 1991(b) 1992(c) 1993(d) 1994(e) None of these

Answer

(d) 1994

8. Where is National Institute of Bank Management (NIBM) located?(a) Nasik(b) Mumbai(c) Pune(d) New Delhi(e) None of these

Answer

(c) Pune

9. Which of the following is a fully-owned subsidiary of RBI?(a) NHB(b) DICGC(c) BRBNMPL(d) All of the above(e) Only (a) and (b)

Answer

(d) All of the above

10. Expand DICGC.(a) Deposit insurance and credit guarantee corporation(b) Deposit investment and credit guarantee corporation(c) Deposit investment and credit governing corporation(d) Deposit insurance and credit governing corporation(e) None of these

Answer

(a) Deposit insurance and credit guarantee corporation

1. What does ‘Kite Flying’ refers to in the banking terminology?(A) The practice of depositing and withdrawing frequently in a bank account.(B) Opening of multiple accounts with different names by any individual(C) Doing unauthorised business(D) Permitting drawls against uncleared cheques(E) None of these

Answer

(D) Permitting drawls against uncleared cheques

2. Under which of the following type of account is a specified amount deposited every month for a specified period, says, 12, 24, 36 and 60 months?(a) Fixed Deposit Account(b) Saving Bank Account(c) Current account(d) Recurring Account

Answer

(d) Recurring Account

3. RBI was established on ___________.(a) April 1, 1925(b) April 1, 1935(c) April 1, 1945(d) April 1, 1955

Answer

(b) April 1, 1935

4. Under which act does RBI issue directives to banks?(a) PMLA Act, 2002(b) RBI Act, 1934(c) DICGC Act, 1961(d) Banking Regulation Act, 1949

Answer

(d) Banking Regulation Act, 1949

5. When the Reserve Bank of India (RBI) is the lender of last resort, what does it mean?(a) RBI advances money to public whenever there is any emergency(b) Commercial banks give fund to the RBI

(c) RBI advances necessary credit against eligible securities(d) All of the above(e) None of the above

Answer

(c) RBI advances necessary credit against eligiblesecurities

6. Which of the following conditions must be fulfilled before a bank is included in the Second Schedule to the Reserve Bank of India Act?(a) It must be a State co-operative bank or a company as defined in the Companies Act, 1956 or an institution notified by the Central Government in this behalf or a corporation or a company incorporated by or under any law in force in any place outside In(b) It must satisfy the Reserve Bank of India that its affairs are not being conducted in a manner detrimental to the interests of the depositors(c) It must have a paid-up capital and reserves of an aggregate value of not less than Rs. 5 lakh(d) Only (a)(e) All of the above

Answer

(e) All of the above

7. What is macro-economics?(a) macro economics deals with economic activities of the level of an economy as a whole(b) it deals with only a segment of an economy(c) it deals with both 1 and 2(d) none of these

Answer

(a) macro economics deals with economic activities of the level of an economy as a whole

8. Which of the following banks was first to establish merchant banking business in India?(a) ABN Amro Bank(b) Citibank(c) HDFC Bank(d) Standard chartered(e) Grindlays Bank

Answer

(e) Grindlays Bank

9. Free Trade Refers to(a) Free movement of Goods from one country to other.(b) Movement of Goods from one Country to another free of cost.(c) Unrestricted exchange of Goods and Services.(d) Tool free of Duty

Answer

(c) Unrestricted exchange of Goods and Services.

10. ‘Swabhiman’, the financial inclusion scheme, comes under the purview of which ministry?(a) Ministry of Commerce(b) Ministry of Home Affairs(c) Ministry of Finance(d) Ministry of External Affairs

Answer

(c) Ministry of Finance

1. Who among the following is the head of the committee, which is recently set up to suggest measures for cost-cutting and optional utilization of assets of Air India?(1) Suresh Malhotra(2) Ravindra H. Dholakia(3) Nagendra Kumar(4) Vijay Sinha(5) None of these

Answer

(2) Ravindra H. Dholakia

2. Who is the head of the committee appointed for Capital Account Convertibility in Banks?(1) M.B. Shah(2) Mukul Mudgal(3) M. Damodaran(4) S.S. Tarapore(5) None of these

Answer

(4) S.S. Tarapore

3. Who among the following is the head of the three member committee of jurists, constituted to give recommendations on amending laws to provide speedier justice and enhanced punishment in sexual assault cases?(1) Leila Seth(2) J.S. Verma(3) Gopal Subramaniam

(4) S.P. Barucha(5) None of these

Answer

(2) J.S. Verma

4. Which among the following committee is working on the revision of the Whole sale Price Index?(1) Saumitra Chaudhuri committee(2) Mihir Shah committee(3) Narendra Jadhav committee(4) Syeda Hameed committee(5) None of these

Answer

(1) Saumitra Chaudhuri committee

5. The Concept of ‘Universal Banking’ was implemented in India on the recommendations of:(1) Abid Hussai Committee(2) R H Khan Committee(3) S Padmanabhan Committee(4) YH Malegam Committee(5) None of these

Answer

(2) R H Khan Committee

6. Which among the following committee has looked inot the maladies affecting the proper functioning of the public distribution systems (PDS) in India?(1) Suresh Tendulkar Committee(2) Kaushik Basu Committee

(3) Wadhwa Committee(4) Rangarajan Committee(5) None of these

Answer

(3) Wadhwa Committee

7. Who among the following is the head of the one-man inquire committee appointed by the government to inquire into reports on the US lobbying activities of Wal-Mart for access to India market?(1) V.N. Khare(2) Y.K. Sabharwal(3) Mukul Mudgal(4) R.C. Lahoti(5) None of these

Answer

(1) V.N. Khare

8. The foundation for induction of computer technology in the Indian banking system was laid with the recommendations of which of the following committees?(1) Abid Hussain Committee(2) Deepak Parekh Committee(3) Rangarajan Committee(4) Narsimham Committee(5) Tarapore Committee

Answer

(3) Rangarajan Committee

9. Which among the following committee has suggested a common national; examination with weight age to the State Board results normalized on the basis of percentile formula for admission to engineering institutions?(1) Suresh Tandon Committee(2) T. Ramasami Committee(3) Rajendra Kumar Committee(4) Dharam Paul Committee(5) M. Damodran Committee

Answer

(2) T. Ramasami Committee

10. Which among the following committee is related with the issues and concerns in the Non-banking financial Companies (NBFCs) sector?(1) Ragu Ram Committee(2) Usha Thorat Comiittee(3) Shome Committee(4) Tarapore Committee(5) None of these

Answer

(2) Usha Thorat Comiittee

11. In the context of the 12th five year plan, Planning Commission has set up committee to recommend detail mythology for identification of BPL families in Urban areas?(1) R.Puri Committee(2) Tendulkar Committee(3) S.R. Hashim Committee(4) Chaturvedi Committee(5) None of these

Answer

(3) S.R. Hashim Committee

12. Who among the following is the head of the expert committee on Streamlining Short-term Co-operative Structure in India?(1) MB Shah Committee(2) P Kotaiah(3) Prakash Bakshi(4) R K Singh(5) None of these

Answer

(3) Prakash Bakshi

13. Who among the following heads the RBI Working group on boosting Export Finance?(1) Govind Kumar Menon(2) Mukul Mudgal(3) Gopal Kundu(4) G Padmanabhan(5) None of these

Answer

(4) G Padmanabhan

14. Who among the following is appointed by the Prime Minister Manmohan Singh as the Chairman of the committee on General Anti Avoidance Rules (GAAR)?(1) Ravindra H. Dholakia(2) Suresh Malhotra(3) D.K. Jain

(4) Parthasarathi Shome(5) None of these

Answer

(4) Parthasarathi Shome

15. Who among the following is the head of the committee formed by SEBI to frame a single set of guidelines for all types of foreign investors?(1) Prabhat Kumar(2) T.R. Prasad(3) K.M. Chandrashekhar(4) Kamal Pande(5) None of these

Answer

(3) K.M. Chandrashekhar

1. ___, Nepal Rastra Bank ink MoU for supervisory information exchangea. RBIb. SBIc. PNBd. NABARD

Answer

a. RBI* The Nepal Rastra Bank was established in April 26, 1956 and is the central bank of Nepal. It supervises the banks and financial institutions in Nepal and guides monetary policy.

2. Union Cabinet allows 100 per cent FDI under automatic route for _____ label ATMsa. Whiteb. Blackc. Redd. Green

Answer

b. White* Traditionally, Automated Teller Machines (ATMs) have respective bank’s logo. So just by looking, this is SBI’s ATM, this is ICICI’s ATM and so on.But White label ATM doesn’t have such Bank logo, hence called White label ATMs.RBI has given license / permission to non-bank entities to open such ATMs.Any non-bank entity with a minimum net worth of Rs.100 crore, can apply for white label ATMs. (not just NBFC, any non-bank entity can apply.)Late 80s: first ATM in India; 2012: RBI issues guideline for White label; 2013: RBI gives license/permission.Tata Communications Payment Solutions Limited =the first company to get RBI’s permission to open White label ATMs.They started their chain under brandname “Indicash”.Other White label= Muthoot Finance, Srei Infra., Vakrangee Software, Prizm Payments, AGS. More than 15 companies given such permission.

3. ____ to join UN’s Better Than Cash Alliance to achieve financial inclusiona. Indiab. Japan

c. Brazild. Pakistan

Answer

a. India* The Better Than Cash Alliance(BTCA) is a group of businesses, government organizations, and philanthropic foundations that are attempting to move the global economy to a cashless system. Its members include the Bill and Melinda Gates Foundation, Citi, the Ford Foundation, MasterCard, Omidyar Network, USAID, United Nations Capital Development Fund, and Visa Inc.. UNCDF serves as the secretariat to BTCA.

4. Government of India Issues Norms for Selection of CEOs and MDs of Smaller PSU Banks a. Government of Indiab. RBIc. NABARDd. World Bank

Answer

a. Government of India* After the irk raised due to appointment of two private sector bankers to head Bank of Baroda and Canara Bank the government has issued norms for selection of MDs and CEOs in Mid and Small Public Sector Banks (PSBs) on 20 August 2015. The guideline was issued after the approval by the Appointments Committee of Cabinet (ACC) for selection of MDs & CEOs in Public Sector Banks (PSBs) other than five large Public Sector Banks.

5. ___ launches maiden unit linked insurance plan (ULIP)a. LIC

b. SBIc. PNBd. RBI

Answer

a. LIC* A Unit Linked Insurance Plan (ULIP) is a product offered by insurance companies that unlike a pure insurance policy gives investors the benefits of both insurance and investment under a single integrated plan.

6. ___ launches mobile wallet app ‘Buddy’a. SBIb. RBIc. PNBd. NABARD

Answer

a. SBI* India’s largest banking entity State Bank of India (SBI) launched a Mobile wallet application dubbed as ‘SBI Buddy’. It was launched by Union Finance Minister Arun Jaitley at a function held at State Bank Bhavan, Nariman Point in Mumbai. SBI’s first female Chairperson Arundhati Bhattacharya was also present on the occasion.

7. ____ appointed Kishor Piraji Kharat as its MD and CEOa. IDBIb. PNBc. SBId. Syndicate Bank

Answer

a. IDBI* Industrial Development Bank of India (IDBI) has appointed Kishor Piraji Kharat as its new Managing Director & Chief Executive Officer. Kishor Kharat is a graduate in commerce and law who is also a certified associate of the Indian Institute of Bankers. He had earlier assumed post of executive director of Union Bank of India and before that he had served Bank of Baroda for three decades. He has wide exposure across various verticals of banking, international business, including credit, information technology and general administration in India as well as overseas.

8. RBI suspended licence of _____ non-banking finance companies (NBFCs) a. Sevenb. Ninec. Eightd. Five

Answer

a. Seven* On 17 August the Reserve Bank of India (RBI) suspends licence of seven non-banking finance companies (NBFCs). The seven NBFCs whose licences were suspended are – Religare Finance, Artisans Micro Finance, Eden Trade & Commerce, RCS Parivar Finance, Nott Investments, Dewra Stocks & Securities, Swetasree Finance. Being a dormant entity, Religare Finance licence was suspended by RBI as it did not conducted lending operation for long period of time.

9. Union Government appoints two private sector professionals to head BoB, Canara Banka. BoB , Canara Bank

b. PNB , SBIc. SBI . IDBId. NABARD, SBI

Answer

a. BoB , Canara Bank* Union government has appointed two private sector banking professionals as Managing Director (MD) and Chief Executive Officer of Bank of Baroda (BoB) and Canara Bank. This is the first time that Union government has appointed the two candidates from the private sector to head the Public Sector Banks (PSBs). Appointed persons are P S jayakumar: MD and CEO of Bank of Baroda (BoB). Rakesh Sharma: MD and CEO of Canara Bank. Apart from these appointments, Union Government also appointed MD and CEO of other three PSBs who are serving government officials. They are MO Rego: MD and CEO of Bank of India (BoI). Kishore Kharat Piraji: MD and CEO IDBI Bank. Usha Ananthasubramanian: MD and CEO of Punjab National Bank (PNB).

10. _____ unveils Indradhanush Mission for PSBsa. RBIb. Union Governmentc. NABARDd. World Bank

Answer

b. Union Government* It seeks to achieve the objective of economic growth revival through improving credit and minimising the political interference in the functioning of PSBs.Appointments: Selection of non-executive chairman in remaining 6 state owned PSBs till November 2015. Appointing

MD & CEO of two PSBs as early as possible.Bank Board Bureau (BBB): It will be a body of ’eminent’ professionals to be selected within 6 months i.e. February 2015. It will become functional from Financial year 2016-17 i.e. form 1st April 2016.Capitalisation: Infuse 25,000 crore rupees of capital into debt-laden banks in this fiscal in phased manner. Out of this 20,000 crore rupees would be injected in August 2015. Rest 5,000 crore rupees will be performance based allocation to be allocated in the last quarter of 2016.De-stressing PSBs: To develop vibrant debt market for PSBs in order to reduce lending pressure on banks. Strengthen asset reconstruction of companies.Empowerment: Provide greater flexibility in hiring of manpower in PSBs.Framework of accountability: It will seek to streamline vigilance process for quick action in case major frauds and also include connivance of staff.Governance reforms in PSBs: Next Gyan Sangam (also known as the Banker’s Retreat) will be held from 14 to 16 January 2016. Employee Stock Option Plan (ESOP) will be initiated for top management.

1. RBI lowers repo rate by ___ basis points to 6.75 per centa. 50b. 20c. 10d. 40

Answer

a. 50* Repo rate is the rate at which the central bank of a country (RBI in case of India) lends money to commercial banks in the event of any shortfall of funds.

2. RBI approves ___ entities to set up Small Finance Banksa. 30b. 40c. 10d. 60

Answer

c. 10* Small finance banks are a type of niche banks in India. Banks with a small finance bank license can provide basic banking service of acceptance of deposits and lending.

3. _____ state tops in ease of doing business in India: World Bank Reporta. Gujaratb. Uttar pradeshc. Jammu and kashmird. Tamil Nadu

Answer

a. Gujarat

4. Union Cabinet allows ____ per cent FDI under automatic route for white label ATMsa. 100b. 90c. 80d. 70

Answer

a. 100* FDI is allowed under the automatic route without prior approval either of the Government or the Reserve Bank of India in all activities/sectors as specified in the consolidated FDI Policy, issued by the Government of India from time to time.

5. _____ launches IndPay mobile app servicea.Indian Bankb. SBIc. RBId. PNB

Answer

a. Indian Bank* Indian Bank customers can operate their banking accounts anytime and anywhere using the recently launched IndPay mobile app. The app is compatible with Android, Windows and iOS mobile operating systems.

6. _______, first micro finance company to start operation as a commercial banka. Bandhanb. SBIc. RBId. PNB

Answer

a. Bandhan* The microfinance activities are carried on by Bandhan Financial Services Pvt. Ltd

7. _______ of RBI recommends conversion of UCBs into regular banksa. R Gandhi Commiteeb. S Gandhi commiteec. I Gandhi Commiteed. SRR Commmitee

Answer

a. R Gandhi Commitee

8. Government launched _______ loan portal for students seeking loansa. Educationb. Homec. Personald. Marriage

Answer

a. Education* Vidya Lakshmi Portal is the first of its kind portal providing single window for students to access information and make applications for educational loans provided by banks as also government scholarships

9. Reserve Bank of India granted ‘in-principle’ approval to __ applicants to start a payments banka. 12b. 11c. 10d. 9

Answer

b. 11* Who has Reserve Bank granted in-principle approval to be a payment bank?-Aditya Birla Nuvo Ltd-Airtel M Commerce Services Ltd-Cholamandalam Distribution Services Ltd-Department of Posts-Fino PayTech Ltd-National Securities Depository Ltd-Reliance Industries Ltd-Dilip Shantilal Shanghvi-Vijay Shekhar Sharma-Tech Mahindra Ltd-Vodafone m-pesa Ltd

10. ____ Bank launches ‘Smart Vault’ digital locker facilitya. ICICIb. PNBc. SBId. RBI

Answer

a. ICICI* ICICI Bank, India’s largest private sector bank, has launched the ‘Smart Vault’, a fully automated locker available 24×7, including weekends and after banking hours. The ‘Smart Vault’ uses robotic technology to access lockers from the safe vault. It enables customers to access their lockers in a secure lounge where the locker automatically comes up to the customer.

What is Financial Inclusion & Importance in IndiaBy M.r.CooL - August 5, 2015

 FINANCIAL INCLUSION

 FINANCIAL inclusion is the delivery of FINANCIAL services at affordable costs to vast sections of disadvantaged and low income groups.

History evolution of Financial inclusion

Policy makers have grapped with the issue of reducing the scope of informal sector since colonial times .

Nicholson report (1895) was the first to highlight the need to establish “LAND BANKS” as an alternative to dominace of money lenders . resulting , the cooperative credit socities Act , 1904 was passed to provide , amongst other things , a legal basis for cooperative credit socities .

Even after 70  years of independence, a large section of Indian population still remain unbanked.This malaise has led generation of FINANCIAL instability and pauperism among the lower income group who do not have access to FINANCIAL products and services.

Historical Perspective  1954 : All-India Rural Credit Survey Committee report -suggested Multi-agency approach for financing the rural and agricultural sector;

1963 : Formation of Agricultural Refinance Corporation

1969: Nationalization of 14 major Private Banks – The flow of agricultural and rural credit witnessed a rapid increase

1972–Mandatory system of Priority Sector Lending (PSL)

1975 : Establishment of RRBs

1980 : Nationalisation of 6 more private banks

1982 : Establishment of NABARD through the transfer of RBI’s agricultural credit department Provision of bank credit under Govt. Sponsored Subsidy Schemes Linking Agricultural Credit Targets at 18% with individual bank’s net bank credit

1990–Implementation of the concept of Village level credit planning for 15 to 20 villages allotted to each of rural, semi-urban and urban branches of PSBs and RRBs under Service Area Approach

Formulation of potential linked credit plan for each district annually by NABARD

Agricultural Debt Relief Scheme and Financial Sector Reforms

SHG-Bank Linkage as the most suitable model in Indian context a/c to NABARD

2000-Reforms sharply focused on Agricultural credit

doubling the flow of agricultural credit – implementation of agricultural credit package

Annual Special Agricultural Credit Plan

 On tracks _ of NDA govt ..

Financial inclusion is expected to make sigifcant changes in the economy , especially the rural economy , which is expected to witness a revolution in availability of financial instruments mainly because of —PMJDY

gold monetization scheme

MUDRA

DBT

 PMJDY _                          No.of accounts      Zero balanced accounts

Public sector banks ——– 12.7 ————— 52.3 %

private sector banks——- 2.9——————52.1%

RRBS                           ——–0.7 ——————49.3%

which will operate through the banking system will also ensure regularity of flow of liquidity in housholds and therefore opportunities for investment.

 Why FINANCIAL Inclusion in India  is Important ?

 The policy makers have been focusing on FINANCIAL inclusion of Indian rural and semi-rural areas primarily for three most important pressing needs.Creating a platform for inculcating the habit to save MONEY – The lower income category has been living under the constant shadow of financial duress mainly because of the absence of savings.

2.Providing formal credit avenues – So far the unbanked population has been vulnerably dependent of informal channels of credit like family, friends and moneylenders. Availability of adequate and transparent credit from formal banking channels shall allow the entrepreneurial spirit of the masses to increase outputs and prosperity in the countryside.

3.Plug gaps and leaks in public subsidies and welfare programmes – A considerable sum of money that is meant for the poorest of poor does not actually reach them. While this money meanders through large system of government bureaucracy much of it is widely believed to leak and is unable to reach the intended parties. Government is therefore, pushing for direct cash transfers to beneficiaries through their BANK ACCOUNTS rather than subsidizing products and making cash payments.

What are the steps taken by RBI to support FINANCIAL inclusion?

A.Initiation of no-frills account – These accounts provide basic facilities of deposit and withdrawal to accountholders makes banking affordable by cutting down on extra frills that are no use for the lower section of the society. These accounts are expected to provide a low-cost mode to access BANK ACCOUNTS.  RBI also eased KYC (Know

Your customer) norms for opening of such accounts.

B. Banking service reaches homes through business correspondents – The banking systems have started to adopt the business correspondent mechanism to facilitate banking services in those areas where banks are unable to open brick and mortar branches for cost considerations. Business Correspondents provide affordability and easy accessibility to this unbanked population. Armed with suitable technology, the business correspondents help in taking the banks to the doorsteps of rural households.

C.EBT – Electronic Benefits Transfer – To plug the leakages that are present in transfer of payments through the various levels of bureaucracy, government has begun the procedure of transferring payment directly to accounts of the beneficiaries. This “human-less” transfer of payment is expected to

provide better benefits and relief to the beneficiaries while reducing government’s cost of transfer and monitoring. Once the benefits starts to accrue to the masses, those who remain unbanked shall start looking to enter the formal FINANCIAL sector.

What more is to be done for FINANCIAL inclusion?

FINANCIAL inclusion of the unbanked masses is a critical step that requires political will, bureaucratic support and dogged persuasion by RBI. It is expected to unleash the hugely untapped potential of the bottom of pyramid section of Indian economy. Perhaps, financial inclusion can begin the next revolution of growth and prosperity.

India had scored poorly on financial inclusion parameters when compared with the global average

 as per Reserve Bank of India in its annual report

The report quoted a World Bank study in April 2012, which had shown half of the world’s population held accounts with formal financial institutions. The study said only nine per cent of the population had taken new loans from a bank, CREDIT UNION or microfinance institution in the past year. In India, only 35 per cent have formal accounts versus an average of 41 per cent in developing economies.

*India also scored poorly in respect of_CREDIT CARDS

Outstanding mortgage

Health insurance

Adult origination of new loans and mobile banking.

Intiatives by RBI __BCs — 110,000 business correspondents employed through the business facilitator and business correspondent (BC) models and set up goals for banks to provide access to formal banking to all 74,414 villages with population over 2000.

RBI also adopted the information, communication, technology-based agent bank model through BCs for door-step delivery of financial products and services since 2006

Minimum infrastructure for operating small customer transactions and supporting up to 8-10 BCs at a reasonable distance of 2-3 km.

FINANCIAL INCLUSION & RURAL CREDIT

OverviewFrench proverb rightly stresses the urgency of Credit to the farmers “Credit supports the farmer as the hangman’s rope supports the hanged”

RBI estimates : 40% of the Indians do not even have a bank account.

Sources of credit for cultivator households

27% of the households from formal sources

22% from informal sources

51% with virtually no access

Mico-Finance Servicescredit / savings

insurance,

pension services,

money transfer,

Leasing

issue / discount of warehouse receipts and future / option contracts for agricultural commodities and forest produce.

IndicesIndex of Financial Inclusion (IFI) : Kerala -> MH -> Karnataka-> Bihar

Micro-finance Penetration index(MPI)

Micro-finance Poverty penetration index(MPPI)

Even states like Gujarat and MH lag behind the national average of 40.1%

Short-term loans for (working capital) cultivation of all crops of economic importance;

Long-term loans for the development of irrigation potential, purchase of farm equipment and machinery, Land Development, Plantation crops and horticulture,Sericulture, hi-tech agriculture, Cold-storage and market yards

There has been a growing realization that the needs of rural credit cannot be adequately served by the use of large financial institutions such as commercial banks; the micro information that is required for these operations precludes efficient market coverage on the part of these organizations. Two kinds of policies can arise in response:

To recognize explicitly that informal lenders are much better placed to grant and recover loans from small borrowers than formal institutions; The idea then is not to try to replace this form of lending but to encourage it by expanding formal credit to economic agents who are likely to use these funds in informal markets

To design credit organizations at the micro level that will take advantage of local information in innovative ways

Credit removes financial constraints and accelerates the adoption of new technology and hence agricultural modernisation

Financial inclusion & Institutional Structure & MechanismsInstitutional Structure of Rural Banking includes & Formal : (direct/indirect & short-term/long-term)

RBI – regulator of SCBs

NABARD: (re-financing)

Commercial Banks – Credit Disbursal

Local Area Banks (LABs) – their geographical spread is constrained to few districts; Private in nature

RRBs – Credit Disbursal — Equity holdings of __

Central Govt. : State Govt. : Sponsoring Bank = 50 : 15 : 35Cooperatives – Credit Disbursal

3-tier Cooperative Credit Delivery (Short-term Credit)

PACS – Primary Agricultural Cooperative Societies; 40.74% if PACS were loss-making; Village/PACS ratio – 7.8

DCCB, SCB,MFIs,SHGs

PCARDBs – Primary Cooperative agricultural and Rural Development banks

SCARDBs – State Cooperative agricultural and Rural Development banks

They belong to both money market and capital market and offer both short-term and long-term loans. SCBs and some UCBs(Urban cooperative banks) are scheduled banks.

Land Development Banks – Credit Disbursal

National Scheduled Tribes Finance and Development Corporation (NSTFDC)

The National Scheduled Castes Finance and Development Corporation (NSCFDC)

National SafaiKaramcharis Finance and Development Corporation (NSKFDC)

National Backward Classes Finance and Development Corporation (NBCFDC)

National Minorities Development and Finance Corporation (NMDFC)

North-East Development Finance Corporation Ltd

Credit extended by banks through Govt. employment generation programmes: also involves an element of govt. subsidy

Swarnajayanti Gram SwarozgarYojana (SGSY)

Prime Minister’s RozgarYojana (PMRY)

NBFCs and NGOs

Informal :Money-Lenders, Friends and Relatives

TrendsAgricultural credit (Loan amount : Commercial banks > Cooperative banks > RRBs);

Domination of Cooperative banks in credit disbursement till 2000 is being replaced by Commercial banks (as % of total credit);

1993 : Cooperatives – 61% ; Commercial banks – 32.7%; RRBs – 5.9%

2000 : Cooperatives – 37.9% ; Commercial banks – 54.1%; RRBs – 7.8%

2012 : Cooperatives – 18.3% ; Commercial banks – 71.2% ; RRBs – 10.5%

But, in terms of number of agricultural credit accounts, the STCCS(Short-term cooperative credit structures) has 50% more accounts than the commercial banks and RRBs put together.Directly or indirectly, it covers nearly half of India’s total population

Kisan Credit Card Scheme (No.of cards : Commercial > Cooperative > RRBs ; Amount sanctioned : Commercial > RRBs > Cooperatives)

of SHGs served and loan amount : Commercial Banks > Cooperative banks > RRBs

Category of Farmers served by Commercial Banks : Wide gap exists between the Loan Accounts and Credit Disbursal to Small, Medium Farmers and Big Farmers (> 5 acres)

Increasing Trend in the flow of indirect financing (Not a direct credit disbursal, but through Micro-credit channels)

196 RRBs have been under the process of amalgamation since 2005 and their number have been reduced to 64 in 2013;

Essential Elements of Rural CreditCredit can neither be cheap and facile nor on easy terms without regard to its use, but it should be guarded, guided and productive

Credit institution should have tailor-made loan products to match the specific needs of target groups

Loans must be linked to credit-worthiness of the purpose rather than to the credit-worthiness of the Person

Approach, Attitude and Management style must be conducive to the genius and ethos of rural areas – Effective communication helps to deal with rural clientele and earn their confidence

Financial Literacy and Credit counseling of Farmers

policy must focus on promoting recovery climate and in no case should vitiate the recovery climate

 Financial Inclusion Strategies

BC-model

PoS(Point of Sale)

No-frills accounts (With very little or no minimum balance), simplification of KYC norms

KCC – Kisan Credit Card – from the year 1998-99 –to meet production credit requirements and short-term credit needs in a timely and hassle-free manner credit for crop production

Lead Bank Scheme -1969 aimed at forming a coordinated approach for providing banking facilities. To enable banks to assume their lead role in an effective and systematic manner, all districts in the country (excepting the metropolitan cities of Mumbai, Kolkata, Chennai and certain Union Territories) were allotted among Public Sector Banks and a few Private Sector Banks The Lead bank role is to act as a consortium leader for co-coordinating the efforts of all credit institutions in each of the allotted districts for expansion of branch banking facilities and for meeting the credit needs of the rural economy. For the preparation of District Credit Plans and monitoring their implementation a Lead bank Officer (LBO) now designated as Lead District Manager was appointed in 1979

Local Area Banks (1996) –are expected to bridge the gap in credit availability and strengthen the institutional credit framework in the rural and semi-urban areas Although the geographical area of operation of such banks will be limited, they will be allowed to perform all functions of a scheduled commercial bank Licences are given out in under-banked or unbanked areas of the country. Some of these local area banks could eventually become full-fledged banks at some stage the local area banks are likely to have a capital adequacy ratio higher than 15% to offset higher risk arising from being geographically focused.. The scheduled commercial banks are required to have a capital adequacy ratio — ratio of capital fund to risk weighted assets expressed in percentage terms — of 12%

Swabhiman – Opening of Bank accounts covering the habitations with minimum population atleast through Business correspondent model providing cash services.Habitations with population more than 1600 in plain areas and 1000 in north-eastern and hilly states as per 2001 census are covered.

Ultra small Branches with Bank officers offering other services , undertake field verification and follow-up banking transactions.

Direct Benefit Transfer : Cash transfer through Aadhar payment Bridge requires Bank accounts which leads to financial inclusion.

Interest subvention scheme : facilitates access to cheap credit from the banks indirectly through interest subsidies from the govt. It is a subsidy of interest given by Government to certain sectors like Textiles, Farm .. For eg. Textile company borrow from Bank at 10% and Government gives subvention of 2%. Hence net bank takes interest from textiles companies 8%. Other sectors have to pay 10% to the bank. Likewise, Farm or Agriculture sectors borrows from Bank at 10% and they will get 4% subvention from the govt. Certain sectors are covered by the system of Differential rate interest(DRI) which is less than base rate.Eg : Educational loans, export credit, agriculture, credit to weaker sections.

Priority Sector Lending – target of 40% of Net Bank Credit to select few sectors for all banks including foreign private ones;

RashtriyaMahilaKosh (RMK)- to facilitate credit support to poor women for their socio-economic upliftment;

Dedicated bank for Women(National Bank for Women) proposed in 2013-14 budget. Objective of broadening the SHG-bank linkages.

Committee on financial inclusion

Khan Commission

 RBI set up in 2004 to look into FINANCIAL inclusion and the recommendations of the commission were incorporated into the mid-term review of the policy (2005–06)  and urged banks to review their existing practices to align them with the objective of FINANCIAL inclusion.    RBI  also exhorted the banks and stressed the need  to make available a basic banking ‘no frills’ account either with ‘NIL’ or very minimum balances as well as charges that would make such accounts accessible to vast sections of the population

Of the many schemes and programmes pushed forward by RBI the following need special mention.

Rangarajan Committee

4 major reasons for lack of financial inclusion

Inability to provide collateral security Poor credit absorption capacity, Inadequate reach of the institutions Weak community network there is need to organize Urban/peri-Urban poor people into

Neighbourhood Groups (NHGs) on the same pattern as has been adopted for the rural poor.(Need to extend the mandate of NABARD to cover beyond rural areas)

alter the emphasis somewhat from the large Bank led, public sector dominated, mandate ridden and branch-expansion-focused strategy to Micro Banks.

2nd ARC(Administrative reforms commission) on Financial Inclusion:

Innovation is critical for financial inclusion. This would mean developing newer financial products in terms of loans, savings, insurance services etc. which are tailored to the needs of the poor.

Currently, most public sector Banks and micro-finance institutions have a narrow product offering, which limits the choice of the SHGs and also constrains them in terms of utilizing the loans productively.

extension of the RRB network to the remaining non-financed areas would considerably speed up the process of inclusive banking and help in extending micro-finance to local SHGs.

high penetration of telecom connectivity in India, together with the latest mobile technology could be used to enhance financial inclusion in the country.

MFIs should handle thrift / saving and money transfer only as business correspondents of Scheduled Banks, but not in their individual capacity as a micro-finance lender as it involves hard earned savings of the poorest of the society

4 models of SHG-Bank Linkage:

SHG-Bank linkage promoted by a mentor institute (Eg: Self-Help Promotion Agencies & NGOs) – SHPAs provide the seed money. 2nd ARC believed that this is an appropriate model to be replicated on large scale

SHG-Bank direct linkage – Very less frequent because of meagre initial savings of SHGs

SHG-Mentor Institution linkage(indirect linkage) – SHPAs act as financial intermediaries. SHPI accepts the contractual responsibility for repayment of the loan to the Bank unlike in case 1

SHG-Federation model – Cluster of SHGs forming a federation to attain economic sustainability. This federation acts as an intermediary. Some federation are even capable of accessing credit from large MFIs.

Nachiket mor commitee

Committee on Comprehensive Financial Services for Small Businesses and Low Income Households” was set up by the RBI in Sep 2013 under the chairmanship of Nachiket Mor, an RBI board member.

Key Recommendations

1. Providing a universal bank account to all Indians above the age of 18 years by January 1, 2016. To achieve this, a vertically differentiated banking system with payments banks for deposits and payments

2. wholesale banks for credit outreach. These banks need to have Rs.50 crore by way of capital, which is a tenth of what is applicable for new banks that are to be licensed.

3. Aadhaar will be the prime driver towards rapid expansion in the number of bank accounts. Monitoring at the district level such as deposits and advances as a percentage of gross domestic product (GDP).

4. Adjusted 50 per cent priority sector lending target with adjustments for sectors and regions based on difficulty in lending.

5. Increase the Priority Sector Lending Mandate The Mor committee has recommended that the priority sector lending mandate for banks should be raised from the current 40 per cent to 50 per cent. At the same time, the banks must be freed from all pricing and other restrictions.

6. Allow differentiated Licenses —The committee has taken ahead the case of differentiated banking licences. It has proposed that three new categories of banks viz. payment, wholesale investment and wholesale consumer should be allowed. At the same time, the regulations for non-banking financial companies, or NBFCs should be streamlined. The biggest problem here would be the business viability of such banks. One example of differentiated banking license is Regional Rural Banks, which were started off with great promises but ultimately broke down.

7. Meaningful Financial Inclusion —The Nachiket Mor committee has suggested two specific district-level penetration metrics viz. the credit- GDP and life cover-GDP ratios to monitor the meaningful financial inclusion. This is a slight departure from the number of accounts formula of financial inclusion. It is a meaningful recommendation and must be taken ahead.

DEEPAK MOHANTY

The Reserve Bank of India (RBI) on 15 July 2015 constituted a committee to work out a five-year (medium-term) action plan for financial inclusion. The 14-member panel will be headed by RBI executive director Deepak Mohanty.

1. The Committee will work to spread the reach of financial services to unbanked population.

2. To review the existing policy of financial inclusion including supportive payment system and customer protection framework taking into account the recommendations made by various committees set up earlier.

3. To study cross country experiences in financial inclusion to identify key learnings, particularly in the area of technology-based delivery models, that could inform our policies and practices.

4. To articulate the underlying policy and institutional framework, also covering consumer protection and financial literacy, as well as delivery mechanism of financial inclusion encompassing both households and small businesses, with particular emphasis on rural inclusion including group-based credit delivery mechanisms.

5. To suggest a monitorable medium-term action plan for financial inclusion in terms of its various components like payments, deposit, credit, social security transfers, pension and insurance.

Participatory Notes 

Financial instruments used by investors or hedge funds that are not registered with the Securities and Exchange Board of India to invest in Indian securities. Indian-based brokerages buy India-based securities and then issue participatory notes to foreign investors. Any dividends or capital gains collected from the underlying securities go back to the investors.

* Note –> P-notes are no need to register with SEBI , they are derivates of FIIs

P-NOTES working

Participatory notes are instruments used for making investments in the stock markets. However, they are not used within the country. They are used outside India for making investments in shares listed in the Indian stock market. That is why they are also called offshore derivative instruments.

In the Indian context, foreign institutional investors (FIIs) and their sub-accounts mostly use these instruments for facilitating the participation of their overseas clients, who are not interested in participating directly in the Indian stock market.

For example, Indian-based brokerages buy India-based securities and then issue participatory notes to foreign investors. Any dividends or capital gains collected from the underlying securities go back to the investors.

* p-notes pool the individuals into derivate of FIIs

Example — P-NOTES — applicants are 100 people with short investments

Example of each 10 lakh can make into pool and investment in stock market as combined form

* overseas clients showing interest on buying shares like blue chip companies

INFOSYS, WIPRO, HCL, TCS  etc….

they will invest in the p-notes –> It leads to money laundering & black money curbs into the stock market ( As it having no  registration to sebi and participants details )

RECENT P-NOTES in news & SIT clarification

P-notes are popular as it allows the idenity of the investor to be kept anonymous. FIIs are required to register with SEBI, but P-notes who trade through them are not.

No wonder P-notes have been controversial instruments from the start and every time the government wants to regulate them, market start falling preventing the government to take the harsh step. The government fears that P-notes are being used as instruments for money laundering.

Even listed company promoters are believed to re-route their investments in their own companies through the P-note route. This allows them to flout the stringent insider trading norms that regulate such proprietary investments.

P-notes however, have other inherent advantages. They are easy to operate rather than the cumbersome rules that India has for its foreign investors. P-notes are like contract notes transferrable by endorsement and delivery. This nature of P-notes has attracted the SIT’s attention and rightly so.

P-notes are freely traded overseas, and is done without any jurisdiction or control of SEBI over it. This nature of P-note is like that of an informal ADR (American Depository Receipt) where the stocks are held by brokerages for their foreign investors.

Since P-notes are opaque and the identity of the owner is known only to the FII, trading them freely makes it very difficult to find the original owner of these P-notes.

However, SIT’s decision to seek a clarification is a welcome move. For the markets, knowing the identity of the participant is healthy, but the initial reaction to the news seems to be a knee-jerk reaction. Further, SIT has asked for stricter compliance norms of P-notes and has said nothing on banning them.

Share of P-notes has already come down from 50 per cent in 2007 to around 11.5 per cent presently. However, memories of the sharp 1744 point fall on October 17, 2007 and subsequent volatilities on following days when SEBI first proposed curbs on P-notes is enough to spread fear in the mind of investors and government alike.

What are Participatory Notes (or P-Notes, as they are commonly referred to)   

In 1992, India allowed Foreign Institutional Investors (FIIs) to buy stocks listed on Indian exchanges. However, all investors, whether institutions or individuals, were required to register themselves with the capital markets regulator, Sebi. To get around these restrictions, FIIs started to issue so-called participatory notes (or PNs) to investors who, for various reasons, wanted to remain anonymous

Since PNs tracked the value of Indian stocks, their values rose or fell according to the movement of the markets.

Initially, nobody complained, as FIIs generated a lot of business from monies routed through them and their accounts. These monies fuelled the market boom from the early period of liberalisation. At their peak during 2007, the value of PNs constituted well over 50 per cent of the outstanding assets in the custody of FIIs

Participatory Notes Crisis of 2007

On the 16th of October, 2007, SEBI (Securities & Exchange Board of India) proposed curbs on participatory notes which accounted for roughly 50% of FII investment in 2007. SEBI was not happy with P-Notes because it is not possible to know who owns the underlying securities and hedge funds acting through PNs might therefore cause volatility in the Indian markets.

However the proposals of SEBI were not clear and this led to a knee-jerk crash when the markets opened on the following day (October 17, 2007). Within a minute of opening trade, the Sensex crashed by 1744 points or about 9% of its value – the biggest intra-day fall in Indian stock-markets in absolute terms. This led to automatic suspension of trade for 1 hour. at that time –>Finance Minister P.Chidambaram

What has the SIT on black money said?

Why is the stock market worried?

In its third report, contents of which were released on Friday, the SIT recommended that the government should obtain details of beneficial ownership — or identity of the final holder or investor — of P-Notes, and make it non-transferable. The SIT wants investors due diligence — or KYC — details to be known to the regulator. It has also made the point that a bulk of P-Notes investments were from overseas jurisdictions such as the Cayman Islands, a tax haven that accounted for 31 per cent of all foreign inflows from offshore derivative instruments. The worry is on account of the fact that the outstanding value of PNs at the end of February 2015 was  2.85 lakh crore — which, if unwound, can lead to carnage in a market where local institutional investors are not as influential.

Finance Minister Arun Jaitley has, however, assured that there would be no kneejerk reaction.

“kneejerk reaction” –> By finance minister —Arun Jaitley

To soothe nerves of foreign investors after an SIT on black money suggested stricter norms for P-Notes, the government today said it will not take any “knee-jerk” reaction that will will adversely impact country’s investment climate.

With markets tanking on the recommendations of the Supreme Court-appointed SIT on black money last week that Sebi should tighten norms related to Participatory Notes (P-Notes) investments into India, Finance Minister Arun Jaitley said the government will study the suggestions before taking a stand.

Finance minister, Arun Jaitley, who was heavily criticised on the issue of application of MAT on FIIs, seems to be a quick learner. His ministry has issued statements assuring investors that the government will not take steps that will affect investments, following the SIT report.

U.K.SINHA –> on P-notes

Sebi has progressively tightened rules governing participatory notes (PN) and is aware of the identity of their owners, the market regulator’s chairman UK Sinha has said.

Sinha pointed out that both issuers and buyers of PNs have to be from countries compliant with regulations of the financial action task force (FATF). FATF is an inter-governmental body tasked with curbing illicit finance at a global level.

What are the broad concerns about P-Notes?

Concerns have been expressed over anonymous investors who are beyond the reach of Indian regulators or taxmen, and over indications that wealthy Indians, including promoters of Indian companies, have been using this route to bring back unaccounted funds and to rig their stocks. The concerns were first flagged by the Joint Parliamentary Committee on the 2001 securities market scam, which said that P-Notes enabled their holders to conceal their identities. The committee also pointed to the links that stock market player Ketan Parekh had with foreign entities, which allowed him to allegedly rig stocks, and to the role of Overseas Corporate Bodies or OCBs owned predominantly by Indians in the stock market crash. The JPC wanted action on these issues.

What has Sebi done so far to regulate P-Notes?  

In 2004, Sebi tightened rules to ensure PNs were issued — and transferred — only to regulated entities. On October 16, 2007, against the backdrop of a surge in capital flows

and excess liquidity, the regulator banned P-Notes. M Damodaran was Sebi chief then, and

P.Chidambaram was Finance Minister. The markets crashed immediately, but recovered after the regulator unveiled rules a week later, saying FIIs could not take any fresh exposure, and their existing investments would have to be wound up in 18 months. But exactly a year later, during the tenure of Damodaran’s successor, C B Bhave, all restrictions on PNs were removed in the wake of the global financial crisis, amid fears of capital outflows. But rules were tightened again subsequently.

Why is it difficult to ban P-Notes?

The RBI may be pushing hard, but the government, which has the final say in foreign investment rules, appears to be reluctant to impose a full ban, presumably because of a fear that the stock markets would tank, and there would be a flight of capital.

With FIIs now controlling 20 per cent of the free float in listed Indian companies, policymakers would want to think several times, especially in a country which runs a current account deficit and needs foreign investment to bridge the gap in savings.

During the UPA government’s tenure, a committee headed by the then Chief Economic Advisor, Ashok Lahiri,  released a report in November 2005 on encouraging FII flows and checking the vulnerability of capital markets to speculative flows.

The committee suggested measures such as greater broadbasing of foreign entities investing in the Indian market, and a ceiling on FIIs and their sub-accounts. The majority view, however, was that the existing dispensation for PNs ought to continue. In a move that was rare for a situation in which a government-led panel was involved, the RBI dissented, arguing that PNs should not be permitted because it remained difficult to identify their final holders.

 So, what policy options are available on PNs?

With more broadbased flows and greater global pressure now on checking illicit fund flows, it should be possible to phase out PNs over the medium term. That is, if it is grandfathered — or, in other words, spread out over a specified period with a sunset clause. That should go hand in hand with reforms in taxation, including greater clarity, easier norms, lowering of transaction costs, and encouraging more local institutional investors — especially pension funds and FDI — to reduce reliance on volatile flows.

Types of ChequesBy M.r.CooL - July 14, 2015

1. Order Cheque:

A cheque which is payable to a particular person or his order is called an order cheque.

This is a cheque whereby the printed word “Bearer” on the cheque is cancelled. The cancellation of the word “Bearer” automatically makes the cheque an “order” cheque.

An order cheque can be paid to the named payee across the bank’s account if so presented.

Identification must be insisted on by the bank when encashing the order cheque for the presenter. The ID number and the named payee’s signature will be asked for on the back of the cheque.

2. Bearer Cheque :

A cheque which is payable to a person whosoever bears, is called bearer cheque.

The cheque sometimes can be made payable to “Cash” or bearer or made payable to a specific name, for example, “bujji sekhar or Bearer”.

This cheque is payable by the drawee bank over the counter to the Bearer or presenter of the cheque.

A Bearer cheque can be negotiated or pass to another person by mere delivery. In other words, the holder (or the Transferer), when giving it to another person need not endorse the cheque.

No identification is needed when a bearer cheque is presented for encashment. However, in normal banking practice, where the amount of the cheque is substantial, the identity of the encasher is insisted on.

A bearer cheque can be collected by the bank for the credit of anyone’s account

In banking practice, the need for the encasher’s signature on the back of the cheque is merely to evidence that the encasher has received the money from the bank.

3. Blank Cheque:

A cheque on which the drawer puts his signature and leaves all other columns blank is called a blank cheque.

1. A check that is signed by the payer but with no specific amount indicated, leaving this determination up to the drawee.

2. More generally, a term used for any situation in which an usually high level of trust is afforded by one party to another.

“ My wife must have a high level of trust for her sister, because when she asked to

borrow some money my wife gave her a blank check. ”

4. Counter cheque:

Blank cheque was also commonly used as a synonym for counter cheque. requiring that cheque be MICR encoded in order to be handled by their clearing houses, it was fairly common for banks, especially in small towns, to issue cheque to customers which were not personalized other than the name of the bank.

Businesses would have pads of counter cheque which did not even have the bank specified on them – the customer had to not only fill in the value of the cheque, the date, and their signature, but also had to designate the bank on which funds were to be drawn.

5. Stale Cheque:

Check presented at the paying bank after a certain period (typically six months) of its payment date. A stale check is not an invalid check, but it may be deemed an ‘irregular’ bill of exchange. A bank may refuse to honor it unless its drawer reconfirms it payment either by inserting a new payment date or by issuing a new check. Also called stale dated check.

*NOW __The cheque which is more than three months old is a stale cheque.

Eg. If Mr.CooL issues cheque to Miss. Bujji,  if Mr. CooL has issued cheque from his SBI A/c then SBI is a drawee bank.

The banking regulation Act has not define specific period after which the instrument (cheque) becomes stale. Some of the banks write specific instruction on the cheque where the validity period is mentioned. In such case the cheque will become stale after expiry of the period from the date of issue (date on the instrument)

6. Multilated Cheque:

If a cheque is torn into two or more pieces such cheque is Mutilated Cheque. If it   presented for payment, such a cheque the bank will not make payment against such a cheque without getting confirmation of the drawer.  In case, if a cheque is torn at the corners and no material fact is erased or cancelled, the bank may make payment against such a cheque.

If the payee is clear, signature and the MICR line intact – they can process it. There are sealable plastic carriers used to put such cheques through the high speed transports used in Clearing.

7. Post Dated Cheque:

If a cheque bears a date later than the date of issue, it is termed as post dated cheque.

Any check or draft that has a future date written upon it by the user. The amount of the check will not be drawn from the account until the date written on the check. For example, a check written on the 14th of the month but dated for the 28th will not be cashed for another two weeks.

8. Open Cheque:

  A cheque that is not a crossed cheque. The person whose name appears on the cheque can write the name of another person on it, and the money will be paid to them.

An open cheque is a cheque that is not crossed on the left corner and payable at the drawee bank on presentation of the cheque.

The words ‘OPEN’ should not be struck off and the person issuing the cheque should sign on the reverse of the cheque also before giving it to another person; otherwise the bank may refuse payment. The latter can collect the money from any branch of the bank nowadays, depending on the bank. S/he should also sign at the back of the cheque while receiving the amount.

9. Crossed Cheque

A crossed cheque is one which has two short parallel lines marked across its face.

A cheque which carries too parallel transverse lines across the face of the cheque with or without the words “I and co”, is said to be crossed.

Crossed cheques are of two types. By simply crossing a cheque or with the words ” & Co”, by the payer, the payee can either deposit it in his/her account or endorse it in favour of another person on the reverse. This practice is nowadays not accepted by the banks.

The advantage of crossing is that it reduces the danger of unauthorised persons getting possession of a cheque and cashing it. A crossed cheque can only be cashed through a bank of which the payee of the cheque is a customer.

A cheque crossed generally will be paid to any bank through which it is presented.

A cheque crossed specially will be paid only when it is presented for collection by the bank named between the parallel lines. Such crossing affords a greater measure of protection against loss.

10. Gift Cheques

Gift cheque, it is a cheque forirted in decorative form issued for a small extra charge by the banks for use by customers who wish to give presents of money on special occasions.

Gift cheques may be purchased in unlimited numbers from every branch of the ‘X’ Bank.

Gift cheques may be used to give presents of money as

Birthday Gift Wedding Gift Honour Gift EASI SMART Gift

Gift cheques are used for offering presentations on occasions like birthday, weddings and such other situations. It is available in various denominations.

Features and Benefits

Convenient Pre-denominated Elegant – Improve promotional impact with packaging customization

and personalization options Flexible – Provide redemption flexibility by offering the reward with no

expiration date Replaceable – Protect your investment and offer Reward Earners

increased security and peace of mind with lost and stolen Cheque protection

Simple – Order and administer rewards easily for timely reinforcement Reliable – Feel at ease with the American Express brand name — it

conveys reliability, security and prestige

11. Traveller’s Cheques :

It is an instrument issued by a bank for remittance of money from one place to another.

Travelers Cheques are accepted almost everywhere and are available in many denominations. Plus, the no-expiration feature allows you to cash in leftover cheques or retain them for the next time you travel.

benefits

Convenience : Easy to use. Secured to protect your money when on the move.

Choice : Available in United States Dollars (USD), Great Britain Pounds (GBP), EURO, Japanese Yen (JPY), Australian Dollars (AUD) and Canadian dollars (CAD).

Acceptance : Accepted worldwide in over 400,000 locations spread across 200 countries. TCs can be encashed or used at Exchange bureaus, Banks, Hotels Shops, Restaurants and other establishments.

Security : Signature based security. If your cheques are lost or stolen, the 24 hour Call Centre is just a phone call away. Replacement of lost TCs is attended to on priority across the world.

Buy-Back : When you return back to India, you can encash any unused TCs issued by us, at any of the Axis Bank Branches.

Expiry : Valid forever! You can save any unused Travellers Cheques for future trips.

12. Self cheques :

A self cheque is written by the account holder as pay self to receive the money in the physical form from the branch where he holds his account.

If your friend wants to pay YOU the amount of 10000/-, he/she should have written YOUR NAME in the space provided for PAYEE on the cheque. If he/she has written SELF in that area, it is supposed to be used by him (or the bearer as written on the cheque) and whoever possess that cheque can go to the same branch and bank of the account holder to cash the cheque.

Some banks may honour cheques in their other branches than the account holder branch. However, this cannot be encashed in any other BANK.

You can either encash it by visitng the bank and the branch of your friend’s account or should return or tear this cheque off (If lost, the person who finds it can get it cashed from the bank and branch mentioned on the cheque) and ask for another cheque in your name that you can deposit in your account.

13. Bankers Cheque:

The banker’s cheque is an instrument issued by the bank on behalf of customer containing an order to pay a certain sum to a specified person within the city. The validity period of the Banker’scheque is 3 months, however it can be re-validated subject to some legal formalities.

In Banker’s cheque the chances of dishonor is not possible because it is always prepaid. It is always pre-printed with the words ‘not negotiable’ which means it cannot be further negotiated.

Banker’s Cheque or Payment Order is a cheque issued for making payments within the same city.

Banker’s cheque is valid up to 3 months from the date of issue. All banker’s cheque are pre-printed with “NOT NEGOTIABLE”. It can be cleared in any branch of the same city.

14. Outstanding cheque:

A cheque which has been written and therefore has been entered in the company’s ledgers, but which has not been presented for payment and so has not been debited from the company’s bank account

Foreign Investments and Indian Stock MarketBy M.r.CooL - July 11, 2015

The BSE and NSE

Most of the trading in the Indian stock market takes place on its two stock exchanges: the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The BSE has been in existence since 1875. The NSE, on the other hand, was founded in 1992 and started trading in 1994. However, both exchanges follow the same trading mechanism, trading hours, settlement process, etc. At the last count, the BSE had about 4,700 listed firms, whereas the rival NSE had about 1,200. Out of all the listed firms on the BSE, only about 500 firms constitute more than 90% of its market capitalization; the rest of the crowd consists of highly illiquid shares.

Almost all the significant firms of India are listed on both the exchanges. NSE enjoys a dominant share in spot trading, with about 70% of the market share, as of 2009, and almost a complete monopoly in derivatives trading, with about a 98% share in this market, also as of 2009. Both exchanges compete for the order flow that leads to reduced costs, market efficiency and innovation. The presence of arbitrageurs keeps the prices on the two stock exchanges within a very tight range.

Market Regulation

The overall responsibility of development, regulation and supervision of the stock market rests with the Securities & Exchange Board of India (SEBI), which was formed in 1992 as an independent authority. Since then, SEBI has consistently tried to lay down market rules in line with the best market practices.

Who Can Invest In India?

India started permitting outside investments only in the 1990s. Foreign investments are classified into two categories: foreign direct investment (FDI) and foreign portfolio investment (FPI). All investments in which an investor takes part in the day-to-day management and operations of the company, are treated as FDI, whereas investments in shares without any control over management and operations, are treated as FPI.

1.INVESTORS & TYPES

A.FIIs__foreign institutional investor (FII) is a person or a group of people operating or registered in a country that’s not their domicile.  Foreign institutional investor groups often operate as hedge funds, pension funds, insurance companies, and mutual funds.

FIIs are mostly associated with India, which has had, until recently, very restrictive laws on foreign investment. FIIs in India are still regulated by India’s Securities and Exchange Board (which is similar to the Securities and Exchange Commission in the United States).  Foreign investment in India by FIIs has played a substantial part in India’s

economic growth.  This was true even under India’s restrictive foreign investment laws.  Until recently, FII’s were limited as how much equity they could purchase in a domestic Indian company.  The interest was always less than 50%.

But recently, India has changed its foreign investor laws to allow FIIs to own up to 100% of Indian companies in certain industries.  This change, made in 2014, brings India into conformance with other countries foreign investment policies.  Because of the change, India expects FIIs to make investments in India that will help its economy double in size in 2015.

*Note_ FIIs need account on stock market to invest in india

B.FDI__FOREIGN DIRECT INVESTMENT

An investment made by a company or entity based in one country, into a company or entity based in another country. Foreign direct investments differ substantially from indirect investments such as portfolio flows, wherein overseas institutions invest in equities listed on a nation’s stock exchange. Entities making direct investments typically have a significant degree of influence and control over the company into which the investment is made. Open economies with skilled workforces and good growth prospects tend to attract larger amounts of foreign direct investment than closed, highly regulated economies.

*Note_An example of foreign direct investment would be an INDIAN company taking a majority stake in a company in China.

FDI Limititations__

Agriculture-100% Asset Reconstruction Companies–100% Civil Aviation–100% Commodity Exchanges–49% Courier Services–100%

Credit Information Companies–74% Defence–49% Insurance–49% Multi Brand Retail–51% Pension–26% Petroleum and Natural Gas–49% Power Exchanges–49% Print Media–49% Private Sector Banks–100% Public Sector Banks–20% Single Brand Retail–49% Special Economic Zones–100% Stock Exchanges/Clearing Corporations–49% Tea Plantation–100% Telecom–100% Tourism–100%

*Note _ Railways — 49% & some categories -100% (Under proposal)

#RBI — Recently banned FDI in Tobacco.

NOTE

Automatic Route

FDI is allowed under the automatic route without prior approval either of the Government or the Reserve Bank of India in all activities/sectors as specified in the consolidated FDI Policy, issued by the Government of India from time to time.

Government Route

FDI in activities not covered under the automatic route requires prior approval of the Government which are considered by the Foreign Investment Promotion Board (FIPB), Department of Economic Affairs.

C.ODI__OUTWARD DIRECT INVESTMENT

A business strategy where a domestic firm expands its operations to a foreign country either via a Green field investment, merger/acquisition and/or expansion of an existing foreign facility. Employing outward direct investment is a natural progression for firms as better business opportunities will be available in foreign countries when domestic markets become too saturated.

Note_The increase of a nation’s outward direct investment can be seen as a proxy that the nation’s economy is booming to the extent that sufficient risk capital is available for further ventures.

D.FPIs__Foreign portfolio investment

Foreign direct investment (FDI) involves establishing a direct business interest in a foreign country, such as buying or establishing a manufacturing business, while foreign portfolio investment (FPI) is investing in financial assets, such as stocks or bonds, in a foreign country. A number of other differences follow from the basic difference in the nature of the two types of investments.

FPI typically has a shorter time frame for investment return than FDI. As with any equity investment, FPI investors usually expect to quickly realize a profit on their investments. Unlike FDI, FPI doesn’t offer control over the business entity in which the investment is made. Because securities are easily traded, the liquidity of FPIs makes them much easier to sell than FDIs. FPIs are more accessible for the average investor than FDIs, since they require much less investment capital.

When making foreign investments, investors have to consider economic factors as well as other risk factors, such as political instability and currency exchange risk.

*Note _

Investment less than 10% –FPIs greater than 10% — FDIs

E.QFIIs__QUALIFIED FOREIGN INSTITUTIONAL INVESTOR

A program that permits certain licensed international investors to participate in india stock exchanges.Prior to QFII, foreign investors were not able to buy or sell shares on india stock exchanges because of india’s tight capital controls. With the launch of the QFII program, licensed investors can buy and sell RUPPEE-denominated “A” shares. Foreign access to these shares is limited by specified quotas that determine the amount of money that the licensed foreign investors are permitted to invest in india’s capital markets.

F.Participatory Notes_p-notes

Financial instruments used by investors or hedge funds that are not registered with the Securities and Exchange Board of India to invest in Indian securities. Indian-based brokerages buy India-based securities and then issue participatory notes to foreign investors. Any dividends or capital gains collected from the underlying securities go back to the investors.

2.Depositary Receipt

Say if an Indian company wants to mobilize capital from abroad, can it do it? Even a novice will instantaneously come up with an answer like ‘NO’. We have too many controls which will not allow raising of capital abroad easily. This is what we ‘perceive.’ As we are liberalizing our economy, raising of capital from outside the country is slowly enabled by the government. ADRs and GDRs are the result of such liberalization.

A.ADR_American Depositary Receipt_

A negotiable certificate issued by a U.S. bank representing a specified number of shares (or one share) in a foreign stock that is traded on a U.S. exchange. ADRs are denominated in U.S. dollars, with the underlying security held by a U.S. financial institution overseas. ADRs help to reduce administration and duty costs that would otherwise be levied on each transaction.

This is an excellent way to buy shares in a foreign company while realizing any dividends and capital gains in U.S. dollars. However, ADRs do not eliminate the currency and economic risks for the underlying shares in another country. For example, dividend payments in euros would be converted to U.S. dollars, net of conversion expenses and foreign taxes and in accordance with the deposit agreement. ADRs are listed on either the NYSE, AMEX or Nasdaq as well as OTC.

B.GDR_Global Depositary Receipt_

A bank certificate issued in more than one country for shares in a foreign company. The shares are held by a foreign branch of an international bank. The shares trade as domestic shares, but are offered for sale globally through the various bank branches.

A financial instrument used by private markets to raise capital denominated in either U.S. dollars or euros.

C.IDR__Indian Depository Receipts_

Indian Depository Receipt (IDR) is a financial instrument denominated in Indian Rupees in the form of a depository receipt created by a Domestic Depository (custodian of securities registered with the Securities and Exchange Board of India) against the underlying equity of issuing company to enable foreign companies to raise funds from the Indian securities Markets

D.EDR_European Depositary Receipt _

A negotiable security (receipt) that is issued by a European bank, and that represents securities which trade on exchanges outside of the bank’s home country. Abbreviated as “EDRs”, these securities are traded on local exchanges and used by banks – and issuing companies in the U.S. and other countries – to attract investment capital from the European region.

3.CITIZEN’s TYPES IN ABROAD

A.NRI_non-resident Indian_

 NRI is a citizen of India who holds an Indian passport and has temporarily immigrated to another country for six months or more for employment, residence, education or any other purpose.

the term non-resident refers only to the tax status of a person who, as per section 6 of the Income-tax Act of 1961, has not resided in India for a specified period for the purposes of the Income Tax Act.The rates of income tax are different for persons who are “resident in India” and for NRIs. For the purposes of the Income Tax Act, “residence in India” requires stay in India of at least 182 days in a calendar year or 365 days spread out over four consecutive years. According to the act, any Indian citizen who does not meet the criteria as a “resident of India” is a non-resident of India and is treated as NRI for paying income tax.

B.PIO__Person of indian origin is a person of Indian origin or ancestry but who is not a citizen of India and is the citizen of another country. A PIO might have been a citizen of India and subsequently taken the citizenship of another country, or have ancestors born in India or other states.

Other terms with vaguely the same meaning are overseas Indian and expatriate Indian. In common usage, this often includes Indian-born individuals (and also people of other nations with Indian ancestry) who have taken the citizenship of other countries.

Government of India considers anyone of Indian origin up to forty generations removed to be a PIO, with the exception of those who were ever nationals of Afghanistan, Bangladesh, Bhutan, Nepal, Pakistan, or Sri Lanka.The prohibited list periodically includes Iran as well.

The government issues a PIO Card to a PIO after verification of his or her origin or ancestry and this card entitles a PIO to enter India without a visa. The spouse of a PIO can also be issued a PIO card though the spouse might not be a PIO. This latter category includes foreign spouses of Indian nationals, regardless of ethnic origin, so long as they were not born in, or ever nationals of, the aforementioned prohibited countries.PIO Cards exempt holders from many restrictions that apply to foreign nationals, such as visa and work permit requirements, along with certain other economic limitations.

C.OCI_Overseas Citizenship of India_

In response to persistent demands for “dual citizenship” particularly from the Diaspora in North America and other developed countries and keeping in view the Government’s deep commitment towards fulfilling the aspirations and expectations of Overseas Indians.

The Overseas Citizenship of India (OCI) Scheme was introduced by amending the Citizenship Act, 1955 in August 2005. The Scheme was launched during the Pravasi Bharatiya Divas convention 2006 at Hyderabad. The Scheme provides for registration as Overseas Citizen of India (OCI) of all Persons of Indian Origin (PIOs) who were citizens of India on 26th January, 1950 or there after or were eligible to become citizens of India on 26th January, 1950 except who is or had been a citizen of Pakistan, Bangladesh or such other country as the Central Government may, by notification in the Official Gazette.

OCI is not to be misconstrued as ‘dual citizenship’. OCI does not confer political rights. The registered Overseas Citizens of India shall not be entitled to the rights conferred on a citizen of India under article 16 of the Constitution with regard to equality of opportunity in matters of public employment

1. Foreign Currency (Non-Resident) Account (Banks) Scheme _FCNR NRIs (individuals / entities of Bangladesh / Pakistan nationality / ownership require prior approval of RBI)

2. Non-Resident (External) Rupee Account Scheme [NRE Account]NRIs (individuals / entities of Bangladesh / Pakistan nationality/ownership require prior approval of RBI)

Non-Resident Ordinary Rupee Account Scheme [NRO Account]

Any person resident outside India (other than a person resident in Nepal and Bhutan). Individuals / entities of Pakistan nationality / ownership, entities of Bangladesh2 ownership and erstwhile Overseas Corporate Bodies5 require prior approval of the Reserve Bank.

4.ACCOUNTS

A.NOSTRO ACCOUNT_

A bank account held in a foreign country by a domestic bank, denominated in the currency of that country. Nostro accounts are used to facilitate settlement of foreign exchange and trade transactions. The term is derived from the Latin word for “ours.” Conversely, accounts that are held by the domestic bank in its home country for foreign banks are called vostro accounts

For example, a U.S. bank may have nostro accounts with one or more Canadian banks. These accounts will be denominated in Canadian dollars, which enables efficient settlement of transactions that are Canadian dollar denominated. Nostro accounts also minimize the exposure of the U.S. bank to undue exchange rate risk.

*Note_A nostro is our account of our money, held by the other bank

B.VOSTRO ACCOUNT_

The account that a correspondent bank, usually located in the United States or United Kingdom, holds on behalf of a foreign bank. A vostro account is one in which the domestic bank (from the point of view of the currency in which the account is held) acts as custodian or manages the account of a foreign counterpart. Also known as a loro account.

*Note_A vostro is our account of other bank money, held by us

*** Note __ Simpley saying foregin investments with indian market

Banking Concept: What is Teaser loan ??By Avi - July 10, 2015

What is a Teaser Loan?

If a bank offers a slightly lower rate in the initial years and higher rate in later years, it is called a teaser loan.

For this type of loan an introductory rate is offered. It is an interest rate charged to a customer during the initial stages of a loan. This rate, which can be as low as 0%, is not permanent. It has an expiration after a specified period of time.

Under the ‘teaser loan’ offer a bank charges lower interest rates for the first two or three years and later on from the fourth year the interest rate will automatically get reset to the then prevailing base rates.

For example, during 2010 State Bank of India offered 8 per cent rate of interest for the year and 9 per cent for the 2{+n}{+d}and 3{+r}{+d}year and assured of linking the rate to the base rate from the 4{+t}{+h}year onwards. The concept of teaser loan would also mean that the first couple of years the loan would be on fixed rate basis and eventually it gets converted to floating rate basis.

How it works

From a bank’s point of view though this could mean a strain on their profits, these type of strategies has worked positively for them which lures a customer who would be reeling under the raising loan rates and any sops like these would bring them to the bank’s premises.

From the customer’s point of view, a teaser loan can be a good beginning of a long term loan commitment for a customer because in a raising interest rate regime getting a loan sanctioned at a discount for the first couple of years makes a lot of sense.

But, why RBI is against it?

Because RBI sensed following implications with Teaser Loans:-

(a) The target segment for the banks is the low-income home buyers who are allured by the enticement by the banks. They would pay the first few years of the loan installments properly and eventually if there are any disturbances in the economy that could affect their jobs and/or income earning capacities the defaults could begin and in due course the entire banking system could be in disarray.

(b) The other obvious target are young people who would have just started their earning life, newly married and are looking to own a house (the biggest dream of a middle class family).

(c) RBI sensed an impending housing loan bubble on the lines of sub-prime that shattered the world financial system in 2008 and began issuing guidelines to banks on such offers (teaser loans

Concerns over risk in Algorithm trading: Explained

By cmvteja - June 30, 2015

The Financial Stability Report (FSR) June 2015, released by the Financial Stability and Development Council, which includes all financial market regulators, has raised concerns over the increasing clout of algorithm trading or high frequency trading (HFT).

What is Algorithm trading?

It is a trading system that utilizes very advanced mathematical models for making transaction decisions in the financial markets.

High-Frequency Trading is a subset of Algorithm trading. In HFT the focus is on transacting a large number of orders at very fast speeds.  Typically, the traders with the fastest execution speeds will be more profitable than traders with slower execution speeds.

Algo trading was introduced in India in April 2008 with the advent of direct market access (DMA).

The global debate on this issue was triggered by Michael Lewis’s best-selling book, Flash boys: A Wall Street Revolt, published in March last year, which discusses the rise of high frequency trading in U.S. equity markets and argues that the U.S. equity markets are rigged by the HFT traders.

Problems with Algorithm trading:

Algorithm trading or algo trading is leading to stock price manipulation. The report pointed fingers at certain instances of abnormal market movements in Indian stocks which have been attributed, by market experts, to algo trading/HFT.

While huge institutional investors will be able to take advantage of arbitrage of micro and nano-seconds, by engaging in high frequency trades, the interest of retail investors could be jeopardised.

Base Year ConceptBy M.r.CooL - June 24, 2015

A base year is the year used for comparison for the level of a particular economic index. The arbitrary level of 100 is selected so that percentage changes (either rising or falling) can be easily depicted.

*BASE YEAR also know as rebasing

why base year changes _

*By every 10 years there is change  will be minimum 4% rise in price of items so base year has to be changed .

How can we calculate base year

GDP growth rate = change in gdp/initial GDP * 100 GDP of any of the previous years is chosen as the intial GDP and the

eyar that is chosen is known as the base year. Suppose India’s GDP is Rs. 100 and base year is 2000. Now, in 2015,

many sectors such as IT, e-commerce, mobile telephony etc contributes to our economy, which were not present in 2000. Thus, India might be showing wrong GDP figures, since majority of economic activities driving sectors are not represented in Rs. 100. So, our govt. decides to change the base year to 2010. The revised base year will lead to all such sectors coming into play, and the GDP number will increase as the total output from these sectors will be added, which was not the case in 2000 base year.

Example __

India GDP is rs-100 and the base year is 2000

now it has been changed now in 2015 — the IT ,economy ,infra ,e-commerce are contributed more to base year need change

 The change in base year__

The govt of india will also coincide with other surveys that act as inputs in assigning weights in the National Income Accounts. In 2011-12, the five-yearly survey on employment and consumer expenditure will be repeated. They were carried out in 2009-10, but since bad monsoons would have affected employment and income growth, the surveys will need to be done again. The change in the base year of the GDP series is considered to be very important, as the other two major data series, IIP and WPI, are also expected to be changed to the same base year. This is a step in the right direction.

Economists say high inflation in the current year could mean lower inflation figures in future while the present spell of slowdown could mean higher growth rates later. Till now, 2011-12 has been a choppy year with a slowdown in growth and high inflation.

government, engineering an economic rebound with a slew of reforms, on Friday unveiled a new statistical method to calculate the national income with a broader framework that turned up a pleasant surprise: GDP in the past year 2013-14 grew 6.9% instead of the earlier 4.7%.

Note _ ** with in upcoming  5 years the indian gdp will be around 9%

BASE YEARS OF LATEST INDEX__

RESIDEX — —————————-2007– real estate , housing BANKEX ——————————-2002—- banking STOCK MARKET ——————–1978-79— stock market IIP—————————————-2004-05—industries CPI-IIW(industrial workers)———-2001-02 CPI-AL (agricultural labours)———1986-87 CPI-RL (rural labours)—————–1986-87 CPI-UNME(urban non manual)——-1984-85 CPI-RURAL —————————2010 CPI-URBAN—————————-2010 RUPEE BASE YEAR—————–1971 IAP(index of agricultural )————2007-08 NSE ————————————-1983-84 BSE– ———————————–1989-90 FTI—————————————1999-2000– foreign trade NEER — REER ————————1993-94 WPI—————————————2004-05 CPI—————————————2009-10(latest) GDP————————————–2011-12

How base year influence gdp & global economic growth rate __

GDP_ Gross Domestic Product, is the measure of a country’s economic growth.

1.GDP is typically measured by reference to the shape of the economy in a “base year”. Statisticians sample businesses in different industries to see how fast they are growing. The weight they give to each sector depends on its importance to the economy in the base year. However, as time passes the base year become less and less accurate due to the emergence of new sectors which drives the country’s economy, and which are not represented in the previously decided base year. Thus, countries changes their base years once they think that it has become irrelevant. This process of changing the base year for calculating GDP is commonly known has rebasing

2.The change in the base year and also the conceptual framework, the release said, will improve ease of understanding (data) for analysis and facilitate international compatibility.

The new series, it said, will also affect a wide range of indicators like trends in public expenditure, taxes and public sector debt that are conventionally analysed in terms of their ratios to nominal GDP. However, the release said, the level of revision in the present base revision “is not large enough to affect any of these ratios significantly.

WHO SAYS WHAT ?

INDIA GDP estimates __ 2015-16 IMF- 7.5% IBRD- 7.5% MOODY’s-7.5% OECD-7.7% ADB-7.8% FITCH-8% NOMURA -6.7% ECONOMIC SURVEY- 8.1-8.5%

List Of Maharatna, Navratna And Miniratna CPSEsBy Praveen -

 

October 27, 2014

The Complete list of Maharatna, Navratna and Miniratna CPSEs (Central Public Sector Enterprises) and their status criteria are as of date October 26, 2014 are as follows.

Maharatna CPSEs

The following are the criteria required to procure a Maharatna status for CPSEs.

 

The company should possess Navratna status. Its should be listed on Indian stock exchange with minimum

prescription of public shareholding under SEBI regulations. Average annual turnover of more than Rs. 25,000 crore, during the last

3 years. Average annual net worth of more than Rs. 15,000 crore, during the

last 3 years. Average annual net profit after tax of more than Rs. 5,000 crore, during

the last 3 years. The entity should have significant global presence/international

operations.

Seven CPSEs possess Maharatna status which are as follows

 

1. Bharat Heavy Electricals Limited2. Coal India Limited3. GAIL (India) Limited4. Indian Oil Corporation Limited5. NTPC Limited6. Oil & Natural Gas Corporation Limited7. Steel Authority of India Limited

Navratna CPSEs

The following are the criteria required to procure a Navaratna status for CPSEs.

And a composite score of 60 or above out of possible 100 marks in the six selected performance parameters which are as follows

At least three ‘Excellent’ or ‘Very Good’ Memorandum of Understanding (MoU) ratings during the last five years.

The entity must have Miniratna Category – I status alongwith Schedule ‘A’ listing.

 

1. Net Profit to Net Worth 2. Manpower cost to cost of production or services 3. Gross margin as capital employed 4. Gross profit as Turnover 5. Earnings per Share 6. Inter-Sectoral comparison based on Net profit to net worth.

Seventeen CPSEs possess Navratna status which are as follows

1. Bharat Electronics Limited2. Bharat Petroleum Corporation Limited3. Container Corporation of India Limited4. Engineers India Limited5. Hindustan Aeronautics Limited6. Hindustan Petroleum Corporation Limited7. Mahanagar Telephone Nigam Limited8. National Aluminium Company Limited9. National Buildings Construction Corporation Limited10. NMDC Limited11. Neyveli Lignite Corporation Limited

12. Oil India Limited13. Power Finance Corporation Limited14. Power Grid Corporation of India Limited15. Rashtriya Ispat Nigam Limited16. Rural Electrification Corporation Limited17. Shipping Corporation of India Limited

Miniratna Category – I CPSEs

The following are the criteria required to procure a Miniratna category – I status for CPSEs.

The CPSEs that have made profits in the last three years in a row and should have net

worth. The pre-tax profit should be Rs. 30 Crores or more in atleast one of the three

years.

Fifty four CPSEs possess Miniratna Category – I status which are as follows

1. Airports Authority of India2. Antrix Corporation Limited3. Balmer Lawrie & Co. Limited4. Bharat Coking Coal Limited5. Bharat Dynamics Limited6. BEML Limited7. Bharat Sanchar Nigam Limited8. Bridge & Roof Company (India) Limited9. Central Warehousing Corporation10. Central Coalfields Limited11. Chennai Petroleum Corporation Limited12. Cochin Shipyard Limited13. Dredging Corporation of India Limited14. Kamarajar Port Limited

15. Garden Reach Shipbuilders & Engineers Limited16. Goa Shipyard Limited17. Hindustan Copper Limited18. HLL Lifecare Limited19. Hindustan Newsprint Limited20. Hindustan Paper Corporation Limited21. Housing & Urban Development Corporation Limited22. India Tourism Development Corporation Limited23. Indian Rare Earths Limited24. Indian Railway Catering & Tourism Corporation Limited25. IRCON International Limited26. KIOCL Limited27. Mazagaon Dock Limited28. Mahanadi Coalfields Limited29. Manganese Ore (India) Limited30. Mangalore Refinery & Petrochemical Limited31. Mishra Dhatu Nigam Limited32. MMTC Limited33. MSTC Limited34. National Fertilizers Limited35. National Seeds Corporation Limited36. NHPC Limited37. Northern Coalfields Limited38. North Eastern Electric Power Corporation Limited39. Numaligarh Refinery Limited40. ONGC Videsh Limited41. Pawan Hans Helicopters Limited42. Projects & Development India Limited43. Railtel Corporation of India Limited44. Rail Vikas Nigam Limited45. Rashtriya Chemicals & Fertilizers Limited46. RITES Limited47. SJVN Limited

48. Security Printing and Minting Corporation of India Limited49. South Eastern Coalfields Limited50. State Trading Corporation of India Limited51. Telecommunications Consultants India Limited52. THDC India Limited53. Western Coalfields Limited54. WAPCOS Limited

Miniratna Category-II CPSEs

The following are the criteria required to procure a Miniratna category – II status for CPSEs.

The CPSEs that have made profits in the last three years in a row and should have net

worth. 

Eighteen CPSEs possess Miniratna Category – II status which are as follows

1. Bharat Pumps & Compressors Limited2. Broadcast Engineering Consultants (I) Limited3. Central Mine Planning & Design Institute Limited4. Central Railside Warehouse Company Limited5. Ed.CIL (India) Limited6. Engineering Projects (India) Limited7. FCI Aravali Gypsum & Minerals India Limited8. Ferro Scrap Nigam Limited9. HMT (International) Limited10. HSCC (India) Limited11. India Trade Promotion Organisation12. Indian Medicines & Pharmaceuticals Corporation Limited13. M E C O N Limited14. Mineral Exploration Corporation Limited

15. National Film Development Corporation Limited16. National Small Industries Corporation Limited17. P E C Limited18. Rajasthan Electronics & Instruments Limited

 

Banking Awareness (Part I)By moorthy -

 

September 27, 2014

What is a Bank?

A financial institution licensed as the receiver of deposits and lends them to the prospective borrowers as well as allows the depositors to withdraw their money from the accounts by cheque is a bank. There are two types of banks. They are

1. Commercial Banks2. Investment Banks

What are Commercial Banks?

Commercial banks manage deposit accounts, such as checking and savings accounts, for individuals and businesses. They make loans to the public using the money held on deposit.

What are Investment Banks?

Investment banks differ strongly; these institutions facilitate the buying and selling of stocks, bonds and other investments, as well as helping companies to go public with initial public offerings (IPO).

What is a Non-Banking Financial Company?

Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged in the business of loans and advances, acquisition of shares or stocks or bonds or debentures or securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale or purchase or construction of immovable property.

What is difference between banks & NBFCs ?

NBFCs lend and make investments and hence their activities are akin to that of banks; however there are a few differences as given below:

NBFC cannot accept demand deposits. NBFCs do not form part of the payment and settlement system and

cannot issue cheques drawn on itself. Deposit insurance facility of Deposit Insurance and Credit Guarantee

Corporation is not available to depositors of NBFCs, unlike in case of banks.

What is meant by Priority Sector?

Priority sector refers to those sectors of the economy which may not get timely and adequate credit in the absence of this special dispensation. Typically, these are small value loans to farmers for agriculture and allied activities, micro and small enterprises, poor people for housing, students for education and other low income groups and weaker sections.

What are the different categories under Priority Sector?

Priority Sector includes the following categories:

1. Agriculture

2. Micro and Small Enterprises3. Education4. Housing5. Export Credit6. Others

What is meant by MSME?

MSME stands for Micro, Small and Medium Enterprises.

The Government of India has enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006.

A   micro enterprise  is an enterprise where investment in plant and machinery does not exceed Rs. 25 lakh.

A   small enterprise  is an enterprise where the investment in plant and machinery is more than Rs. 25 lakh but does not exceed Rs. 5 crore.

A   medium enterprise  is an enterprise where the investment in plant and machinery is more than Rs.5 crore but does not exceed Rs.10 crore.

What is meant by Basis Points?

A basis point is a unit of measure to describe the percentage change in the value or rate of a financial instrument. One basis point is equivalent to 0.01% (1/100th of a percent). In most cases, it refers to changes in interest rates and bond yields.

For example, if the RBI has announced that it reduced current SLR 22 by 25 basis points, it means the new SLR will be 21.75.

What is meant by NPA?

NPA stands for Non-Performing Assets. An asset, including a leased asset, becomes non-performing when it ceases to generate income for the bank.

The net non-performing assets (NPAs) of banks had gone up 51% in FY13 to RS.92825/- crores. According to a recent CRISIL report, the gross NPAs of banks are slated to increase from 3.3% in March 2013 to 4% by March 2014.

Who is a Wilful Defaulter?

A person is declared “Wilful Defaulter” when he defaults in repayment obligations by him to the lender even though he has the capacity to honour the said obligations or when he diverted the  funds for other purposes or when he siphoned off the funds so that the funds have not been utilized for the specific purpose for which finance was availed of, nor are the funds available with the person in the form of other or when he disposed off or removed the movable fixed assets or immovable property given by it for the purpose of securing a term loan without the knowledge of the bank/lender.

What is meant by SARFAESI Act?

SARFAESI stands for Securitisation and Reconstruction of Financial Assets and

Enforcement of Security Interest. The Act was passed on 2002.

This Act empowers banks and financial institutions to auction properties (residential and commercial) when borrowers fail to repay their loans. This Act helps the bank to recover the bad loans.

SARFAESI Act was based on recommendation of two Committees.

1. Committee on Banking Sector Reforms – Narasimhan Committee II.

2. Restructuring of weak Public Sector Banks – Verma Committee.

Banking Awareness (Part II)By moorthy -

 

September 26, 2014

What is meant by Amortization?

Payment of a loan in installments by the borrower. It is usually done in an agreed period and every installment includes a part of the total loan plus the interest.The term is used for two separate processes. They are,

1. Amortization of loans2. Amortization of intangible assets.

What is meant by Asset?

Any item of economic value owned by an individual or corporation, especially that which could be converted to cash. Asset can be divided into three types.

Tangible Asset –  The assets which are in the material form such as land, machinery, building etc.

Intangible Assets – All non-physical/immaterial assets such as brand names, knowledge etc.

Financial Assets – All financially valid valuables other than tangibles and intangibles such as currencies, bank deposits, bonds, securities, shares, etc.

What is meant by Crony Capitalism? 

An economy that is nominally free-market, but allows for preferential regulation and other favorable government intervention based on personal relationships. In such a system, the false appearance of “pure” capitalism is publicly maintained to preserve the exclusive influence of well-connected individuals.

A description of capitalist society as being based on the close relationships between businessmen and the state.

What is meant by Market Capitalization?

The total market value of all of a company’s outstanding shares is called Market Capitalizationand it can be calculated by multiplying a company’s shares outstanding by the current market price of one share. It is also referred as Market Cap.

If a company has 35 thousand shares outstanding, each with a market value of Rs 100, the company’s market capitalization is Rs. 35.00,000/- (Rs Thirty Five Lakh)

What is meant by Free Trade?

The international trade among an agreed-upon group of countries without any barriers (such as tariffs, quotas, forex controls, etc.), promoted with the objective of securing international specialisation and an edge in their foreign trade. Free trade is exemplified by the European Union / European Economic Area and the North American Free Trade Agreement, which have established open markets.

What is Macro and Micro Economics?

Macroeconomics (‘macro’ means ‘large’) looks at the behaviour of the economy as a whole such as the issues like inflation, rate of unemployment, economic growth, balance of trade,etc.

Microeconomics (‘micro’ means ‘small’) looks on the behaviour of the units i.e. the individual, the households, the firms, a specific industry–which together make up the economy.

What is meant by Usury?

The practice of lending money and charging the borrower interest, especially at an exorbitant or illegally high rate is called as Usury. It is common on all parts of India and Government has imposed many laws to restrict this practice.

What is meant by Animal-Spirit?

The term “animal spirits” is used to describe human emotion that drives consumer confidence.  This term used by John Maynard Keynes used in one of his economics books.

What is meant by Balance of Payments?

Balance of Payments or BOP is a statement that summarizes an economy’s transactions with the rest of the world for a specified time period. The BoB encompasses all transactions between a country’s residents and its nonresidents involving goods, services and income; financial claims on and liabilities to the rest of the world; and transfers such as gifts.

What is meant by Liquidity?

The degree to which an asset or security can be bought or sold in the market without affecting the asset’s price is called Liquidity. It is characterized by a high level of trading activity. Assets that can be easily bought or sold are known as liquid assets.

In simple words, Liquidity is the ability to convert an asset to cash quickly. It is also known as “marketability“.

Banking Awareness (Part III)By moorthy -

 

September 25, 2014

What is meant by Fiscal Policy?

Fiscal Policy is a part of a Government’s economic policy which deals with taxation, expenditure, borrowing, and the management of public debt in the economy. It primarily concerns itself with the flow of funds in the economy.

What is a Hot Money?

‘Hot Money‘ is the flow of funds (or capital) from one country to another in order to earn a short-term profit on interest rate differences and/or anticipated exchange rate shifts. Hot Money can move very quickly in and out of markets, potentially leading to market instability.

What is Soft Currency?

A currency with a value that fluctuates as a result of the country’s political or economic uncertainty is called Soft Currency. As a result of the of this currency’s instability, foreign exchange dealers tend to avoid it.

What is Hard Currency?

A currency, usually from a highly industrialized country, that is widely accepted around the world as a form of payment for goods and services is called Hard Currency.

A hard currency is expected to remain relatively stable through a short period of time, and to be highly liquid in the FOREX market.

What is meant by Security?

Security refers to a share, bond or Government stock that can be bought and sold, usually on the stock exchange or on a secondary market. The company or entity that issues the security is known as the issuer.

Security is divided into two types.

  Debt Security   Equity

A debt security is a type of security that represents money that is borrowed that must be repaid, with terms that define the amount borrowed, interest rate and maturity/renewal date.

Equities represent ownership interest held by shareholders in a corporation, such as a stock. Unlike holders of debt securities who generally receive only interest and the repayment of the principal, holders of equity securities are able to profit from capital gains.

 What is meant by Prime Lending Rate (PLR)?

Prime Lending Rate is the rate of interest at which bank gives loan to its most reliable customers. Generally a bank’s best customers consist of large corporations. It is also known asPrime Interest Rate.

What is Monopoly?

Monopoly refers to a market structure where there is only one seller who controls the entire market and no substitute of that product is available in the market.

What is Monopsony?

Monopsony is also termed as ‘Buyer’s Monopoly‘. It means there is only one buyer of the product in the market.

What is meant by Autarchy?

Autarchy refers to a country which is self sufficient and does not require any kind of imports from other countries to meet the needs of the people.

What is meant by Buoyancy?

When the Government fails to check inflation, it raises the income tax as well as corporate tax to generate revenue. Such a tax is called as Buoyancy. It concerns with the revenue from taxation in the period of inflation.

Banking Awareness (Part IV)By moorthy -

 

September 24, 2014

What is a Commercial Paper?  

Commercial Paper (CP) is an unsecured money market instrument issued in the form of a promissory note. It is not usually backed by any form of collateral, so only firms with high-quality debt ratings will easily find buyers without having to offer a substantial discount (higher cost) for the debt issue.

It was introduced in India in 1990 with a view to enable highly rated corporate borrowers to diversify their sources of short-term borrowings and provide an additional instrument to the investors. The maturity period ranges from a minimum of 7 days to a maximum of one year from the date of issue.

What are Treasury Bills?

Treasury bills (T-bills) offer short-term investment opportunities, generally up to one year. They are thus useful in managing short-term liquidity. At present, the Government of India issues three types of treasury bills through auctions, namely, 91-day, 182-day and 364-day. There are no treasury bills issued by State Governments. Treasury bills are available for a minimum amount of Rs.25,000 and in multiples of Rs. 25,000. Treasury bills are issued at a discount and are redeemed at par. Treasury bills are also issued under the Market Stabilization Scheme (MSS).

What is NEFT?

NEFT stands for National Electronic Funds Transfer. It is a nation-wide payment system facilitating one-to-one funds transfer. Under this Scheme, individuals can electronically transfer funds from any bank branch to any individual having an account with any other bank branch in the country participating in the Scheme.

There is NO MINIMUM LIMIT and NO MAXIMUM LIMIT.

What is RTGS?  

RTGS stands for Real time gross settlement systems.  It is a fund transfer system where transfer of money or securities takes place from one bank to another on a “real time” and on “gross” basis. Settlement in “real time” means payment transaction is not subjected to any waiting period.

MINIMUM and MAXIMUM LIMIT of RTGS is 2 lakh. 

What is IFSC Code?

IFSC Code stands for Indian Financial System Code. It is an alphanumeric code that uniquely identifies a bank-branch participating in the two main Electronic Funds Settlement Systems in India: the RTGS and the NEFT Systems.

IFSC Code is an 11 digit code with the first 4 alpha characters representing the bank, The 5th character is 0 (zero), and the last 6 characters representing the particular bank branch.

What is NOSTRO and VOSTRO Account?

A NOSTRO account is maintained by an Indian Bank in the foreign countries and a VOSTROaccount is maintained by a foreign bank in India with their corresponding bank.

What is a Clearing House?

A clearing house is a place for exchange of cheques by banks; it facilitates transfer of funds from one bank to another, which represents the proceeds of cheques. It is as a central meeting place for bankers to exchange the cheques drawn on one another and claim funds for the same. Such operations are called as clearing operations.

How does RBI regulate payment systems?

The Board for regulation and supervision of Payment and Settlement Systems (BPSS) is a sub-committee of the Central Board of the RBI and is the highest policy making body

on payment system. The Board has been entrusted with the responsibility to authorize, prescribe policies and set standards for all existing and future payment systems in the country. The Board also has the powers to determine membership criteria to these systems and related policies.

What is   Certificate of Deposit?

Certificate of Deposit (CD) is a negotiable money market instrument and issued indematerialised form or as a Usance Promissory Note against funds deposited at a bank or other eligible financial institution for a specified time period.

What is MICR?

MICR stands for Magnetic Ink Character Recognition. MICR Code is a 9 numeric digit code which uniquely identifies a bank branch participating in the ECS Credit scheme.

The first 3 digits in MICR code represent the city, next 3 digits represent the bank, and last 3 digits represent the branch.

Banking OmbudsmanBy moorthy - September 23, 2014

Banking Ombudsman is a person who hears complaints relating to certain services rendered by banks. The Banking Ombudsman Scheme is introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995.

The Banking Ombudsman is a senior official appointed by the Reserve Bank of India to redress customer complaints. All Scheduled Commercial Banks, Regional Rural Banks

and Scheduled Primary Co-operative Banks are covered under the Scheme.

A Person can make a complaint to the Banking Ombudsman for things such as,

Inordinate delay in the payment or collection of cheques, drafts, bills etc.

Non-payment or delay in payment of inward remittances. Non-adherence to prescribed working hours Complaints from NRIs having accounts in India in relation to their

remittances from abroad, deposits and other bank-related matters Refusal to open deposit accounts without any valid reason for refusal Levying of charges without adequate prior notice to the customer Failure to provide or delay in providing a banking facility promised in

writing by a bank or its direct selling agents. Forced closure of deposit accounts without due notice or without

sufficient reason; Refusal to close or delay in closing the accounts. Refusal to accept or delay in accepting payment towards taxes, as

required by Reserve Bank/Government. Delays in receipts of export proceeds, handling of export bills,

collection of bills etc. for exporters provided the said complaints pertain to the Banks operations in India.

Non-acceptance of application for loans without furnishing valid reasons to the applicant

It is possible to file a complaint with the Banking Ombudsman simply by writing on a plain paper. One can also file it online by sending an email to the Banking Ombudsman. Banking Ombudsman can order the Bank to compensate the actual money loss OR Rs.10 lakh (whichever is lower). In case of Credit card related cases, the Ombudsman can order the bank to pay additional fines (upto Rs.1 lakh) for the mental harassment caused to the customer.

The Banking Ombudsman does not charge any fee for filing and resolving customers’ complaints.

If a person is not satisfied with the decision passed by the Banking Ombudsman, he/she can approach the appellate authority against the Banking Ombudsmen’s decision. Appellate Authority is vested with a Deputy Governor of the RBI.

What is National Income?By moorthy - September 23, 2014

It is easy to calculate the income of an individual or income of a family. Is it possible to find the income of a nation? Yes, it is possible. The income of a nation can be calculated by four different ways. They are,

GDP – Gross Domestic Product NDP – Net Domestic Product GNP – Gross National Product NNP – Net National Product

What is GDP?

GDP is the monetary value of the all finished goods and services produced within the boundary of a country in an year.  Usually, GDP is expressed as a comparison to the previous year. For example, if the year-to-year GDP is up 5%, this is thought to mean that the economy has grown by 5% over the last year. GDP calculation includes income of foreigners in a Country but excludes income of those people who are living outside of that country.

What is NDP?

NDP includes the depreciation happened in the assets while the goods and services were produced. Net domestic product accounts for capital that has been consumed over the year in the form of housing, vehicle, or machinery deterioration.

NDP = Gross Domestic Product – Depreciation. 

The depreciation accounted for is often referred to as capital consumption allowance and represents the amount needed in order to replace those depreciated assets.

What is GNP?

GNP is the value of all final goods and services produced by the citizens of a country in a financial year.

While Calculating GNP, income of foreigners in a country is excluded but income from abroad (interest of external loans and foreign remittances) from the people who are living outside of that country is included. The value of GNP is calculated on the basis of GDP.

If a person working in UK or USA sends money to India, it is calculated in GNP. At the same time, if a person belongs to USA works in India and earns money, it is excluded.

GNP = GDP + Income from Abroad – Income of Foreigners inside the country

What is NNP?

Net National Product (NNP) in an economy is the GNP after deducting the loss due to depreciation.

NNP = GNP – Depreciation.While calculating income, the two major things to consider is

Factor Cost Market Price

Factor Cost is nothing but the input cost. It can be also called Production Cost. It includes raw materials cost, salary of the workers, machine cost, and other things.

Market Cost is nothing but the showroom price. It includes indirect taxes, transportation cost, showroom maintenance cost, salary of the workers, and some marginal amount of profit.

NNP at Factor cost = NNP at Market cost – Indirect taxes + Subsidies

Different Sectors and Types of EconomiesBy moorthy - September 23, 2014

The economic activities of any country are classified into different categories which are known as the Sectors of the Economy. There are three main sectors. They are,

Primary Sector Secondary Sector Tertiary Sector

Primary Sector

Primary sector is an important sector in an economy where there is the direct use of natural resources as agriculture, forestry, fishing, minerals, etc. The primary sector is usually most important in less developed countries, and typically less important in industrial countries.

Secondary Sector

The Secondary Sector of the economy also known as Manufacturing Sector includes those economic sectors that create a finished, usable product – production and construction. This sector uses the products of the primary sector as its raw materials. For example, wheat or rice is the product from primary sector. Making biscuits or bread from rice or wheat in an industry comes under secondary sector.

Many of these industries consume large quantities of energy and require factories and machinery to convert the raw materials into goods and products. They also produce waste materials and waste heat that may pose environmental problems or cause pollution.

Tertiary Sector

This sector is also known as Service Sector. The basic characteristic of this sector is the production of services instead of end products. It includes all those economic activities where different ‘services’ are produced such as education, information technology, real estate, healthcare, entertainment, telecommunication, mass media, banking, insurance, transportation, tourism, legal services, etc.

 

Economies are classified into three main types based on the shares of the specific sectors in the total production of an economy and the ratio of the population depend on them. The three types are,

Agrarian Economy Industrial Economy Service Economy

Agrarian EconomyAn economy is called agrarian if the share of its primary sector is 50 per cent or more in the totaloutput (the GDP) of the economy. It is a type of economy that relies primarily on agricultural industry including livestock farming or crop production. It is one of the oldest forms of economies still in existence.

Industrial Economy

If the secondary sector contributes 50 per cent or more to the total produce value of an economy, it is an industrial economy. Higher the contribution, higher is the level of industrialization.

Service EconomyThe economy whose 50 per cent or more produce value comes from the tertiary sector is known as the service economy. India is a service economy. The tertiary sector has contributed more than 68 per cent in its GDP by 2012–13.

 

Monetary Policies of RBIBy moorthy -

 

September 22, 2014

What is Monetary Policy?

The policy by which the desired level of money flow and its demand is regulated by the RBI is known as

monetary policy. Monetary policy is maintained through actions such as increasing the interest rate, or

changing the amount of money banks need to keep in the vault (bank reserves).

The main objectives of Monetary Policy are,

To maintain price stability.

To ensure adequate flow of credit to productive sectors so as to assist growth.

Arrangement of full employment

Expansion of credit facility

Equality & Justice Stability in exchange rate

Promotion of Fixed Deposit

Equitable distribution of Credit

RBI use the following tools to regulate the monetary policy. They are,

Open Market Operations

Liquid Adjustment Facility

Bank Rate

Cash Reserve Ratio

Statutory Liquidity Ratio

Repo Rate

Reverse Repo Rate

What are Open Market Operations (OMOs)?

Open market operation is an instrument of monetary policy which involves buying or selling of government securities from or to the public and banks. OMOs are an effective quantitative policy tool in the armoury of the RBI, but are constrained by the stock of government securities available with it at a point in time.

What is meant by   Liquid Adjustment Facility?

Liquidity adjustment facility (LAF) is a monetary policy tool which allows banks to borrow money through repurchase agreements. LAF operations help the RBI effectively transmitinterest rate signals to the market.

What is meant by Bank Rate?

The bank rate, also known as the discount rate, is the rate of interest charged by the RBI for providing funds or loans to the banking system on its long-term lendings. The clients who borrow through this route are the GoI, State governments, Banks, Financial Institutions, Co-operative Banks, NBFCs, etc. 

Increase in Bank Rate increases the cost of borrowing by commercial banks which results into the reduction in credit volume to the banks and hence declines the supply of money.

What is meant by Cash Reserve Ratio? 

The cash reserve ratio (CRR) is the ratio (fixed by the RBI) of the total deposits of a bank in India which is kept with the RBI in cash form. Higher the CRR with the RBI lower will be the liquidity in the system and vice-versa. RBI is empowered to vary CRR between 15 percent and 3 percent.

What is meant by SLR?

The statutory liquidity ratio (SLR) is the ratio (fixed by the RBI) of the total deposits of a bank which is to be

maintained by the bank with itself in non-cash form prescribed by the Government to be in the range of 25 to

40 per cent. SLR rate is determined and maintained by RBI in order to control the expansion of the bank

credit.

SLR is used to control inflation and propel growth. Through SLR rate the money supply in the system can be

controlled effectively.

What is Repo Rate?

The rate of interest the RBI charges from its clients on their short-term borrowing is the repo rate in India

which is at present 7.5 per cent. Reduction in Repo rate helps the commercial banks to get money at a

cheaper rate and increase in Repo rate discourages the commercial banks to get money as the rate increases

and becomes expensive.

It has direct impact on the nominal interest rates of the bank’s lending. The repo rate was introduced

in December 1992.

What is Reverse Repo Rate?

It is the rate of interest the RBI pays to its clients who offer short term loan to it. It was started in November

1996 as part of Liquidity Adjustment Facility (LAF) by the RBI.

The increase in Repo Rate and Reverse Repo Rate by the RBI is a symbol of tightening of the policy.

What is Marginal Standing Facility?

Marginal Standing Facility is a scheme announced by the RBI in its Monetary Policy, 2011-12 which came into

effect from 9th May 2011. Under this scheme, banks can borrow overnight upto 1 per cent of their

net demand and time liabilities (NDTL) from the RBI, at the interest rate 1 per cent (100 basis points) higher

than the current repo rate.

Current Reserve Rates

Bank rate 8.5%

CRR 4%

SLR 21.5%

Repo rate 7.5%

Reverse repo rate 6.5%

Marginal Standing facility rate 8.5%

Different Types of Bank AccountsBy moorthy -

 

September 22, 2014

Bank Accounts are classified into four different types. They are,

1) Current Account

2) Savings Account

3) Recurring Deposit Account

4) Fixed Deposit Account

What is Current Account?

Current account is mainly for business persons, firms, companies, public enterprises etc and are never used for the purpose of investment or savings.These deposits are the most liquid deposits and there are no limits for number of transactions or the amount of transactions in a day. While, there is no interest paid on amount held in the account, banks charges certain  service charges, on such accounts. The current accounts do not have any fixed maturity as these are on continuous basis accounts.

What is Savings Account?  

Savings Account is meant for saving purposes. Any individual either single or jointly can open a savings account. Most of the salaried persons, pensioners and students use Savings Account. The advantage of having Savings Account is Banks pay interest for the savings. The saving account holder is allowed to withdraw money from the account as and when required.

The rate of interest ranges between 4% to 6% per annum in India. There is no restriction on the number and amount of deposits. But withdrawals are subjected to certain restrictions. Some banks recommend to maintain a minimum amount to keep it functioning.

What is Recurring Deposit Account?

Recurring deposit account or RD account is opened by those who want to save certain amount of money regularly for a certain period of time and earn a higher interest rate. In RD account a fixed amount is deposited every month for a specified period and the total amount is repaid with interest at the end of the particular fixed period. 

The period of deposit is minimum six months and maximum ten years. The interest rates vary for different plans based on the amount one saves and the period of time and also on banks. No withdrawals are allowed from the RD account. However, the bank may allow to close the account before the maturity period.

These accounts can be opened in single or joint names. Banks are also providing the Nomination facility to the RD account holders. 

What is Fixed Deposit Account?

In Fixed Deposit Account (also known as FD Account), a particular sum of money is deposited in a bank for specific period of time. It’s one time deposit and one time take away (withdraw) account. The money deposited in this account can not be withdrawn before the expiry of period. 

However, in case of need,  the depositor can ask for closing the fixed deposit prematurely by paying a penalty. The penalty amount varies with banks.

A high interest rate is paid on fixed deposits. The rate of interest paid for fixed deposit vary according to amount, period and also from bank to bank.

Cheque and its TypesBy moorthy -

 

September 20, 2014

A cheque is an agreement between two individuals or organizations to make a payment. In simple words Cheque is an order to a bank to pay a stated sum from the drawer’s account, written on a specially printed form. Cheque is used to make safe and convenient payment. It is less risky and the danger of loss is minimized.

Types of Cheques

Bearer Cheque

Bearer Cheque refer to a cheque that is payable to whoever presents the cheque, rather than to a designated payee.

Uncrossed/Open Cheque

When a cheque is not crossed, it is known as an “Open Cheque” or an “Uncrossed Cheque”. The payment of such a cheque can be obtained at the counter of the bank.

Crossed Cheque

Crossing of cheque means drawing two parallel lines on the face of the cheque. A crossed cheque cannot be encashed at the cash counter of a bank but it can only be credited to the payee’s account.

Anti-Dated Cheque

If a cheque bears a date earlier than the date on which it is presented to the bank, it is called as “anti-dated cheque”. Such a cheque is valid upto three months from the date of the cheque.

Post-Dated Cheque

If a cheque bears a date which is yet to come (future date) then it is known as post-dated cheque. A post dated cheque cannot be honoured earlier than the date on the cheque.

Stale Cheque

If a cheque is presented for payment after three months from the date of the cheque it is called stale cheque. A stale cheque is not honoured by the bank.

Inflation – Different Types and ImpactsBy moorthy -

 

September 19, 2014

Inflation is nothing but the more price we pay for goods. It is the persistent rise of all goods and services over a period of time. There are several factors that influences inflation in India. The major factors to be taken into account is the population, unbalanced economic growth, demand for more money and increased taxes. On the flip side it has adverse effects on consumers.

The day to day goods are sold considerably at a higher rate which makes difficult for the consumers to afford their basic needs. Hence the need for money increases which is one of the major cause.

There is huge money gap which could be the potential factor for increased price and inflation in India. Increase in enormous expenditure can cause inflammatory gap at current prices.

The rate of inflation is measured on the basis of price indices which are of two kinds—WholesalePrice Index (WPI) and Consumer Price Index (CPI).

Types of Inflation

Demand – Pull Inflation

When there is a mis-match between demand and supply, it will eventually pull up the prices. Here we have two cases. In first case, the demand increases over the same level of supply. In second case, the supply decreases with the same level of demand. In both cases the situation ofdemand-pull inflation arise.

Cost – Push Inflation

An increase in factor input costs pushes up prices. In general the factors that could contribute to Cost-Push inflation are increases in corporate taxes, rising wages, and rising raw materials cost.

Low Inflation

Low inflation takes place in a longer period and the range of increase is usually in ‘single digit’. Such inflation has also been called as ‘creeping inflation’.

Deflation

Deflation is the exact opposite of inflation. The persistent fall in the prices of all goods and services over a period of time is called deflation. When deflation occurs it is possible to buy more amount of goods with the same amount of money. Deflation has often had the side effect of increasing unemployment in an economy, since the process often leads to a lower level of demand in the economy.

Stagflation

Stagflation is a situation in an economy where inflation and unemployment both are at higher levels. Stagflation occurs when the economy isn’t growing but prices are going up. Stagflation is basically a combination of high inflation and low growth.

Galloping Inflation

This is a “very high inflation” running in the range of double-digit or triple digit (i.e. 20%, 100% or 200% a year). The Russian economy showed such inflation after the disintegration of the ex-USSR in the late 1980s.

Hyperinflation

This form of inflation is ‘large and accelerating’ which might have the annual rates in million or even trillion. In such inflation not only range of increase is very large but the increase takes place in a very short span of time, prices shoot up overnight. This hasn’t happened in the U.S. since the Civil War, occurred in Germany before World War II, and in Zimbabwe in the 2000s. Such an inflation quickly leads to a complete loss of confidence in the domestic currency and people start opting for other forms of money.

Skewflation

It is an un-usual inflation, where there is an inflation in one particular sector for a particular period of time, while the other sector is experiencing no changes at all or facing deflation.

Impacts of Inflation

It slow down the economic growth rate. Inflation redistributes wealth from creditors to debtors i.e. lenders

suffer and borrowers benefit out of inflation. Prices goes up, that mean you pay more money for the same product

which you got it lesser earlier.  With the rise in inflation, lending institutions feel the pressure of higher

lending. Investment in the economy is boosted by the inflation (in the short-

run).The standard of living declines. 

The export segment of the economy benefits due to inflation. Inflation gives an economy the advantage of lower imports and import-

substitution as foreign goods become costlier.

RBI Assistant Exam 1 August 2015 – Morning Shift Questions

With which country India recently signed uranium-supply agreement? – Canada

Authorised capital of RRB -2000 crores What is the Age Limit of Atal Pension Yojana – 18 Years to 40 Years Recently, who appointed Deputy Governor of RBI?- S.S. Mundra Currency of Switzerland? – Swiss franc Bibek Debroy committee is associated with – restructuring of Indian

Railways

Where is the headquarters of AIIB situated? – Beijing, China In Sukanya Samridhi Yojana Age limit for Girl Child is – 10 years Who is Nazim Zaidi – Chief Election Commissioner of India Author of the Book ” Test of My Life” – Yuvraj Singh National Teachers Day – 5th September Headquarters of IMF (International Monetary Fund) situated? –

Washington D.C. What is the capital of Dadra and Nagar Haveli? – Silvassa Who publishes Financial Stability Report? – RBI Who is the Information and Broadcasting Minister of India?- Arun Jaitely Which is the longest river in the world? – River Nile RBI Extended the Date of Pre 2005 Notes – 31st December 2015 Prime Minister Narendra Modi launched the MUDRA bank with a corpus

of – Rs. 20000 crores Carolina Marin is associated with which game – Badminton Floyd Mayweather is associated with which game – Boxing Which of the following gives maximum employment in India? – Indian

Railways Who has been appointed as the presidentof the $50 billion New

Development Bank being set up by BRICS? – K V Kamath What is the authorised capital of Regional Rural Banks? – Rs. 5 crore At which place India-Africa Forum 2015 is to be held? – New Delhi According to World Investment Report which of the following countries

became the highest recipient of FDI in 2014? – China Which NASA probe searched water on Moon – LCROSS

CONSTITUTIONAL OFFICES :1. President of India—Pranab Mukherjee2. Vice President of India / Chairman of the Rajya Sabha—Mohammad Hamid Ansari3. Chief Justice of India—H. L. Dattu

POLITICAL OFFICIAL :1. Prime Minister of India—Narendra Damodardas Modi2. Speaker of the Lok Sabha—Sumitra Mahajan

3. Minister of Defence—Manohar Parrikar4. Minister of External Affairs—Sushma Swaraj5. Minister of Finance—Arun Jaitley6. Minister of Home Affairs—Rajnath Singh7. Minister of Agriculture—Radha Mohan Singh8. Minister of Human Resource Development—Smriti Zubin Irani9. Minister of Railways—Suresh Prabhu10. Minister of Law and Justice—D. V. Sadananda Gowda11. Minister of Road & Transport minister–Nitin Jairam Gadkari 12. Minister of Minority Affairs– Dr. Najma A. Heptulla13. Minister of Water resources–Uma Bharati14. Minister of Micro,small and medium enterprises–Kalraj Mishra15. Minister of Women & child development–Meneka Gandhi16. Minister of Health & family welfare–Jagat Prakash Nadda 17. Minister of Food processing industries–Harsimrat Kaur Badal18. Minister of Mines and steel–Narendra Singh Tomar 19. Minister of Rural/panchayat raj/drinking water and saniation–Chaudhary Birender Singh20. Minister of Tribal affairs–Jual Oram21. Minister of Urban Development/housing and urban poverty alleviation/Parliamentary affairs–M. Venkaiah Naidu22. Minister of Consumer affairs,Food and Public Distribution–Ramvilas Paswan23. Minister of Science & technology,Earth science–Dr. Harsh Vardhan24. Minister of Social justice and empowerment–Thawar Chand Gehlot25. Minister of Chemicals and fertilizers–Ananth Kumar26. Minister of Communications and information technology–Ravi Shankar Prasad27. Minister of Civil aviation–Ashok Gajapathi Raju28. Minister of Heavy Industries and Public Enterprises–Anant Geete

HEADS OF GOVT. APEX WING :1. Chief Election Commissioner of India–Syed Nasim Ahmad Zaidi2. Chairperson, National Human Rights Commission–Justice Cyriac

Joseph3. Chief Commissioner, Central Information Commission–Vijai Sharma4. Chairman, National Commission for Minorities–Shri Naseem Ahmad5. Chairman, National Commission for SC–P. L. Punia6. Chairman, National Commission for ST–Rameshwar Oraon7. Chairperson, National Commission for Women–Lalitha Kumaramangalam8. Chairman, Atomic Energy Commission–Ratan Kumar Sinha9. Chairman, ISRO–A S Kiran Kumar10. Chairman, Union Public Service Commission–Deepak Gupta11. Chairman, National Knowledge Commission–Sam Pitroda12. Chairman, University Grants Commission–Ved Prakash13. Chairman, Central Water Commission of India–Ashwin B. Pandya14. Space Applications Center, Administrator(Director)–Tapan Misra

HEADS OF FINANCIAL BODIES :1. Governor of Reserve Bank of India–Raghuram Rajan2. Chairman, 14th Finance Commission of India–Y.Venugopal Reddy3. Chairman, Securities and Exchange Board of India (SEBI)–Upendra Kumar Sinha4. Chairman, Insurance Regulatory and Development Authority of India–T. S. Vijayan5. Chairman, 7th Pay Commission–Ashok Kumar Mathur6. Chairman, SIDBI–Kshatrapati Shiaji

BUREAUCRATS :1. Cabinet Secretary of India–Pradeep Kumar Sinha2. National Security Adviser–Ajit Kumar Doval3. Secretary-General of the Rajya Sabha–Shumsher K. Sheriff4. Secretary-General of the Lok Sabha–Anoop Mishra5. Attorney General of India–Mukul Rohatgi6. Comptroller and Auditor General of India–Shashi Kant Sharma7. Solicitor General of India–Ranjit Kumar8. Principal Scientific Adviser–R. Chidambaram9. Permanent Representative of India to the United Nations–Asoke

Kumar Mukerji10. Chairman, Railway Board–AK Mittal11. Foreign Secretary–Subrahmanyam Jaishankar12. Union Home Secretary–Rajiv Mehrishi13. Finance Secretary–Ratan P Watal

DEFENCE & SECURITY :1. Chief of Army Staff–General Dalbir Singh Suhag2. Chief of Air Staff–Air Chief Marshal Arup Raha3. Chief of Naval Staff–Admiral Robin K Dhowan4. Chief of Integrated Defence Staff–Air Marshal PP Reddy5. Director General, Border Security Force–D K Pathak6. Director General, Central Reserve Police Force–Prakash Mishra7. Director General, Central Industrial Security Force–Surender Singh8. Director-General of Military Intelligence–Lt. Gen K G Krishna9. Director, Central Bureau of Investigation–Anil Kumar Sinha10. Director, Intelligence Bureau–Dineshwar Sharma11. Director General, National Investigation Agency–Sharad Kumar12. Secretary (Research)–Rajinder Khanna13. Member (Investigation CBDT)–Anita Kapur14. Director General of ITBP–Krishna Chaudhary

CEO & MD OF BANKS :1. State Bank of India–Smt Arundhati BhattacharyaNationalised Banks :2. Allahabad Bank–Rakesh Sethi3. Andhra Bank–C.V.R. Rajendran4. Bank of Baroda–P.S. Jayakumar5. Bank of India–M.O. Rego6. Bank of Maharashtra–Sushil Muhnot7. Bharatiya Mahila Bank–Vacant8. Canara Bank–Rakesh Sharma9. Central Bank of India–Rajeev Rishi10. Corporation Bank–Sadhuram Bansal11. Dena Bank–Ashwani Kumar

12. IDBI Bank Ltd–Kishore Piraji Kharat13. Indian Bank–T. M. Bhasin14. Indian Overseas Bank–R Koteeswaram15. Oriental Bank of Commerce–Animesh Chauhan16. Punjab And Sind Bank–Jatinder Bir Singh17. Punjab National Bank–Usha Ananthasubramanian18. Syndicate Bank–Arun Shrivastava19. UCO Bank–Arun Kaul20. Union Bank of India–Arun Tiwari21. United Bank of India–P Srinivas22. Vijaya Bank–Kishore Kumar SansiPrivate Banks :23. Axis Bank–Smt. Shikha Sharma24. Catholic Syrian Bank–Anand Krishnamurthy25. City Union Bank–Dr. N. Kamakodi26. Development Credit Bank–Murali M. Natrajan27. Dhanalakshmi Bank–G. Sreeram28. Federal Bank–Shyam Srinivasan29. HDFC Bank–Aditya Puri30. ICICI Bank–Smt Chanda Kochar31. IndusInd Bank–Romesh Sobti32. ING Vysya Bank–Uday Sareen33. Jammu & Kashmir Bank–Mushtaq Ahmad34. Karnataka Bank–Polali Jayarama Bhat35. Karur Vysya Bank–K. Venkataraman36. Kotak Mahindra Bank–Uday Kotak37. Lakshmi Vilas Bank–Vacant38. Nainital Bank–Vacant39. Ratnakar Bank–Vishwavir Ahuja40. South Indian Bank–V.G. Mathew41. Tamilnad Mercantile Bank–H.S. Upendra Kamath42. Yes Bank’s Ltd–Rana Kapoor

“Thinking should become your capital asset, no matter whatever ups and downs you come across in your life.”

Dynamic “Missile Man” by work and Simple “People’s President” by heart Sir Avul Pakir Jainulabdeen Abdul Kalamwas born on 15 October 1931 in Ramanathapuram District of Tamil Nadu in a family of a boat owner. The voyage of contributing in family’s income by selling newspaper to the contribution in Nation by developing Nation’s ballistic missiles is applausive and inspiring.

Physics and Mathematics as his favorite subject Dr. Kalam has done aerospace engineering from Madras Institute of Technology and after its completion he joined DRDO as a scientist and then transferred to ISRO. From here his journey to missile man started.

KALAM SIR AS MISSILE MAN

1969 – Project director of India’s first Satellite Launch Vehicle (SLV-III) 1970 – Project Devil and Project Valiant top secret liquid-fueled missile

projects developed by India under the directorship of Dr. Kalam. These projects become the base for ballistic Prithvi  missile.

1980 – SLV-III project that successfully deployed the Rohini satellite in near-earth orbit.

1992 – 1999 – Pokhran-II nuclear tests were conducted in which kalam played technical and political role as he was serving as the Chief Scientific Adviser to the Prime Minister and this established him as a “ Missile Man” to Nation.

2002 – 2007 DR. APJ Abdul Kalam chaired as the 11th President of India favoured by both BJP and ING. His presidency was preceded by K. R. Narayanan and succeeded by Pratibha Patil. From here his second journey of People’s president was started.

KALAM SIR AS PEOPLE’s PRESIDENT

He was the first scientist and the first bachelor to hold Rashtrapati Bhawan

He stressed on the importance of working hard and being punctual Kalam Sir addressed 400 students without electricity at a school

function Dr. Kalam took great care of his colleagues As a chief guest in IIT (BHU) Varanasi President Kalam refused special

seat as the chair was bigger in the size and was meant to give Kalam special honour.

Kalam Sir used to read both Kuran and Bhagvad Gita He was expert in playing Saraswati and Veena He took only 2 holidays in his life both for deaths, of his father and

mother.

After his Presidency Dr. Kalam sartred visiting Institutes as a Professor and Honourary fellow. In 2012 he launched a youth programme called “What Can I Give Movement” aimed to curb corruption.

BOOKS WRITTEN BY HIMDr. Kalam was fond of writing and he wrote many books, songs and poetry. Some important books are

2015 – Transcendence My Spiritual Experiences with Pramukh Swamiji 2015 – Reignited: Scientific Pathways to a Brighter Future 2014 – Forge your Future: Candid, Forthright, Inspiring 2013 – My Journey: Transforming Dreams into Actions 2007 – Inspiring Thoughts, 2007 1999 – Wings of Fire: An Autobiography of APJ Abdul Kalam 1998- India 2020: A vision for the New Millennium

AWARDS AND RECOGNITIONSKalam Sir was the third President of India to have been honored with a Bharat Ratna before being elected to the office of President.

Since 2008 “Dr APJ Abdul Kalam IGNITE awards” was given annually by National Innovation Foundation, a body of the Department of Science and Technology which celebrates Children’s Creativity and Innovation Day

In 2010 UN honoured Kalam Sir on his 79th birthday and declared October 15 as “ World Student Day”

Kalam Sir received honorary doctorates from 40 universities. Switzerland commemorate Kalam’s visit on May 26 to their country

as Science day. In 2011 an inspirational film was release named “I Am Kalam” which

portrayed Kalam Sir as a positive influence to a poor boy.

2013 Von Braun Award

1997 Bharat Ratna

1990 Padma Vibhushan

1981 Padma Bhushan

On 27th July 2015 he was delivering lecture on “Creating a Livable Planet Earth” at the IIM Shillong and it’s the time when he passed away due to sudden cardiac arrest.

POST DEATH COMMENDATIONSAs a mark of respect GOI declared 7 days mourning period and Bhutan’s flags flown at half-staff to mourn Kalam’s death and lit 1000 butter lamps in homage.

Bihar Govt renamed its agricultural college at Kishanganj as “Dr. Kalam Agricultural College, Kishanganj”

Uttar Pradesh Govt renamed Uttar Pradesh Technical University (UPTU) as “A.P.J. Abdul Kalam Technical University”

Tamil Nadu Govt instituted Award in the name of APJ Abdul Kalam and it first conferred on ISRO scientist N. Valarmathi. Award consists of Rs 5 lakh, certificate of appreciation and an 8gm gold medal.

TN Govt also announced Oct 15 as “Youth Awakening Day” In Travancore a new Research institute for digestive diseases

research will be named after him. Puducherry government inaugurated science centre-cum-

planetarium that would be named after Dr. A.P.J. Abdul Kalam. Mahatma Gandhi University in Thiruvananthapuram, Kerala will

named its upcoming academia complex after Sir A P J Abdul Kalam Delhi’s Aurangzeb Road renamed after APJ Abdul Kalam Wheeler Island in Odisha named after Dr. Kalam Assam would also set up a centre for innovation named after late A

P J Abdul Kalam Marking the 84th birth anniversary of Dr. Kalam, PM Modi

announced memorial in his honour that to be built at his birthplace Rameswaram and will be developed as an AMRUT city.

PM Modi also unveiled the bust of A.P.J. Abdul Kalam at the DRDO complex in New Delhi on his 84th birth anniversary.

Commemorating Kalam sir’s birth anniversary Defence minister Manohar Parrikarrenamed the DRDO missile complex in Hyderabad as “Dr APJ Abdul Kalam Missile Complex”

Indian Institute of Management-Shillong also announced the launch of a centre for policy research to honour Dr. A.P.J. Abdul Kalam

1. Slogan of HDFC is _______ ?

 We Understand Your World

 A premier government of Indian enterprise

 Relationship beyond banking

 A tradition of trust

2. Slogan of Federal Bank is _________?

 For all your needs

 One family one bank

 Together we can

 Your Perfect Banking PartnerAnswer : Your Perfect Banking Partner.

3. Slogan of ICICI Bank is _______?

 Indias central bank

 Hum Hai Na...

 Taking banking technology to the common men

 A premier government of IndianAnswer : Hum Hai Na...

4. Slogan of IDBI Bank is _______?

 Trusted family bank

 Where vision gets built

 Banking for All; Aao Sochein Bada

 Good people to grow withAnswer : Banking for All; Aao Sochein Bada

5. Slogan of Reserve Bank of India is _________?

 Indias central bank

 World wise

 Honors your trust

 Invest with confidence''Answer : Indias central bank

6. Slogan of Punjab National Bank is _______?

 indias international bank

 Smarter Money

 The Name you can BANK upon

 ProtectionAnswer: The Name you can BANK upon

7. Slogan of Oriental Bank of Commerce is _______ ?

 Banking for all

 What's in your wallet?

 You can count on us

 Where every individual is committedAnswer : Where every individual is committed

8. Slogan of State Bank of India is _______?

 Where money lives

 The Next Stage

 Banker to every Indian

 Embracing ingenuityAnswer: 1) Banker to every Indian, 2) Pure banking nothing else.

9. Slogan of Syndicate Bank is _______?

 Together we make a great team

 Smart way to Bank

 Invest with confidence

 Your Faithful And Friendly Financial PartnerAnswer : Your Faithful And Friendly Financial Partner

10. Slogan of Union Bank of India is _______?

 Good people to bank with

 Making more possible

 At the service of your ideas

 More human interestAnswer: Good people to bank with.

11. ''Yogakshemam Vahamyaha'' Slogan of ______?

 REC

 LIC

 Bachat Lamp Yojna

 Midday Meal SchemeAnswer : LIC

12. The Government to introduce plastic notes in the denomination of Rs _________?

 5/-

 10/-

 20/-

 100/-Answer : 10/-

13. Minimum limit on investment in Kisan Vikas Patra?

 Rs 1,000

 Rs 5,000

 Rs 10,000

 Rs 50,000Answer : Rs 1,000

14. Upper limit on investment in Kisan Vikas Patra (KVP) ?

 Rs. 5000

 Rs. 10000

 Rs. 50000

 No upper limit

15. The new KVP promises to double the invested money in _______ months?

 90

 100

 110

 120

Answer :

1] We Understand Your World, 2] Your Perfect Banking Partner, 3]Hum Hai Na…, 4] Banking for All; Aao Sochein Bada, 5] Indias central bank, 6] The Name you can BANK upon, 7] Where every individual is committed, 8] Banker to every Indian, 9] Your Faithful And Friendly Financial Partner, 10] Good people to bank with, 11] LIC, 12] 10/-,13] Rs 1,000, 14] No upper limit, 15] 100 months (8 years and 4 months).

1. A loan to pay for a home, business or other real estate over a period of time is a _______ ?

 Credit

 Deposit

 Mortgage

 Bankruptcy

2. Which bank was earlier called the ''Imperial Bank of India'' ?

 RBI

 SBI

 IDBI

 DENA Bank

3. The EXIM Bank of India was established in _________ ?

 1982

 1984

 1988

 1990

4. Finance Commission is constituted ?

 Once in 2 years

 Once in 3 years

 Once in 4 years

 Once in 5 years

5. Slogan of Allahabad Bank _______?

 Where money lives

 A Tradition of Trust

 The whole world in one bank

 Together we can

6. Slogan of Andhra Bank _______ ?

 Together we Prosper

 Serving to Empower

 Where India Banks

 Blending Modernity with Tradition

7. Slogan of Bank of Maharashtra _______?

 One Family, One Bank

 Prosperity to All

 Experience Next Generation Banking

 The name you can bank upon

8. Slogan of Bank of India _______ ?

 The Changing Face of Prosperity

 Experience our expertise

 Good people to bank with

 Relationship beyond banking

9. Slogan of Canara Bank _______ ?

 Leading to results

 The Thinking Behind the Money

 Commerzbank. Ideas ahead

 Together we can

10. Slogan of Central Bank Of India _______?

 Not Your Typical Bank

 ''Centrally Yours'' Becoz We Are ''Central To You Since 1911''

 Where every individual is committed

 Central Bank, We value your time

11. Slogan of Corporation Bank _______ ?

 A Primer Public Sector Bank

 Not Your Typical Bank

 The world's local bank

 What's in your wallet?

12. Slogan of Dena Bank _______ ?

 We value your time

 The power to do more

 Trusted Family Bank

 The Thinking Behind the Money

13. Slogan of Bank of Baroda _______ ?

 India's International Bank

 You live. We'll take care of the details

 The Bank in Your Mind

 India's best business bank

14. Slogan of Indian Bank _______ ?

 You can always bank on us

 Where every individual is committed

 Good people to bank with

 Your Tech-Friendly Bank

15. Slogan of Indian Overseas Bank (IOB) ______ ?

 Your Life. Anything is possible. Be with IOB

 Where series is a way of life

 Good people to Grow with

 Together we can

Answer :

1] Mortgage, 2] SBI, 3] 1982, 4] Once in 5 years, 5] A Tradition of Trust, 6] Where India Banks, 7] One Family, One Bank, 8]Relationship beyond banking, 9] Together we can, 10] “Centrally Yours” Becoz We Are “Central To You Since 1911″, 11] A Primer Public Sector Bank, 12] Trusted Family Bank, 13] India’s International Bank, 14] Your Tech-Friendly Bank, 15] Good people to Grow with

1. What does WPI stand for?

 Wholesale Price Index

 Wholesale Price India

 Wholesale Price International

 Wholesale Price Industrial

2. What does CRISIL stand for?

 Credit Rating and Industrial Services of India Limited

 Cash Rating and Industrial Services of India Limited

 Credit Rating and Investment Services of India Limited

 Currency Rating and Investment Services of India Limited

3. A sum of money paid regularly (typically annually) by a company to its shareholders out of its profits (or reserves) is called as?

 Bonus

 Profit

 Gratification

 Dividend

4. A person who sets up a business or businesses, taking on financial risks in the hope of profit is known as?

 Proprietor

 Owner

 Entrepreneur

 Partner

5. An _________ is a temporary pass through account held by a third party during the process of a transaction between two parties.

 Company Account

 Current Account

 Escrow Account

 Nominal Account

6. A debt investment in which an investor loans money to an entity (corporate or government) that borrows the funds for a defined period of time at a fixed interest rate is known as?

 Bond

 Shares

 Preference Shares

 Coupon

7. A financial market of a group of securities in which prices are rising or are expected to rise. The term is most often used to refer to the stock market, but can be applied to anything that is traded, such as bonds, currencies and commodities is known as _______?

 ''Bear Market''

 ''Bull Market''

 ''Currency Market''

 ''Commodity Market''

8. The stated principal amount of a financial instrument is known as _________?

 Face Value

 Book Value

 Maket Value

 None of the Above

9. A _________ contract is a contract between two parties where both parties agree to buy and sell a particular asset of specific quantity and at a predetermined price, at a specified date in future.

 Real Time

 Future

 Option

 Fixed

10. A contract whereby one party agrees to pay a sum to another party for a fee in the event that the latter suffers a particular loss. The person or firm that undertakes the risk is the insurer. The party desiring to be protected from loss is the insured party is known as _______?

 Future Contract

 Guarantee

 Warranty

 Insurance

11. A formal document issued by a bank on behalf of a customer, stating the conditions under which the bank will honour the commitments of the customer is known as ________?

 Letter Of Guarantee

 Authority Letter

 Letter of Credit

 Commitment Letter

12. A right to keep possession of property belonging to another person until a debt owed by that person is discharged is called as ________?

 Lien

 Mortgage

 Pledge

 Baile

13. A formal contract which grants the holder of the option the right to buy or sell a certain quantity of an underlying interest or asset at a stipulated price within a specific period of time is known as?

 Future

 Forward Contract

 Option

 None of the Above

14. What does PLR stand for?

 Price Lending Rate

 Prime Lending Rate

 Private Lending Rate

 Public Lending Rate

15. What does PSU stand for?

 Public Sector Utilities

 ublic Sector Units

 Public Sector Undertaking

 None of the Above

Answer:

1] Wholesale Price Index, 2] Credit Rating and Investment Services of India Limited, 3] Dividend, 4] Entrepreneur, 5] Escrow Account, 6]Bond, 7] “Bull Market”, 8] Face Value, 9] Future, 10] Insurance, 11]Letter of Credit (LC), 12] Lien, 13] Option, 14] Prime Lending Rate,15] Public Sector Undertaking.

1. What does 'GDP' stand for?

 Government Domestic Product

 Gross Domestic Product

 General Domestic Product

 Global Depository Product

2. What does 'IFCI' stand for?

 Industrial Finance Corporation of India

 Investment Finance Corporation of India

 International Finance Corporation of India

 None of the Above

3. What does 'IMF' stand for?

 India Monetary Fund

 Industrial Monetary Foundation

 International Monetary Fund

 International Monetary Foundation

4. What does 'IIP' stand for?

 Index of Industrial Production

 Index of Industrial Position

 Index of Indian Production

 None of the Above

5. What does ‘I’ in IDBI stand for?

 International

 Indian

 Investment

 Industrial

6. What does ‘I’ in LIC stand for?

 Investment

 Insurance

 Interest

 None of the Above

7. What does ‘N’ in NASSCOM stand for?

 Net

 Non

 National

 None of the Above

8. What does 'NBFC' stand for?

 Net Banking Financial Companies

 Nominal Banking Financial Companies

 National Banking Financial Companies

 Non Banking Financial Companies

9. What does 'NGO' stand for?

 Non-Governmental Organization

 Non-Global Organization

 National Governmental Organization

 Non-Goa Organization

10. What does 'NHB' stand for?

 National Head Bank

 National Haryana Bank

 National Housing Bank

 Non-Housing Bank

11. What does 'PF' stand for?

 Public Fund

 People Fund

 Paid Fund

 Provident Fund

12. What does 'PSE' stand for?

 Public Sector Entrepreneur

 Public Sector Enterprises

 Public Social Enterprise

 Public Social Entrepreneur

13. What does 'REC' stand for?

 Rural Electrification Corporation

 Rajasthan Electrification Corporation

 Ranchi Electrification Corporation

 None of the Above

14. What does 'SEBI' stand for?

 Securities and Exchange Board of India

 Science and Educational Board of India

 Social Equity Bureau of India

 Science and Engineering Board of India

15. What does SLR stand for?

 Statutory Liquidity Rate

 Statutory Liquidity Repo

 Statutory Liquidity Ratio

 Statutory Liquidity Return

16. 'RAND' is the currency of ?

 Indonesia

 Tunisian

 South Korea

 South Africa

Answer:

1] Gross Domestic Product, 2] Industrial Finance Corporation of India, 3] International Monetary Fund, 4] Index of Industrial Production, 5] Industrial (IDBI-Industrial Development Bank of India),6] Insurance [LIC – Life Insurance Corporation of India]”], 7] National [NASSCOM – National Association of Software and Services Companies], 8] Non Banking Financial Companies (NBFC), 9] Non-Governmental Organization, 10] National Housing Bank, 11]Provident Fund, 12] Public Sector Enterprises, 13] Rural Electrification Corporation, 14] Securities and Exchange Board of India 15] Statutory Liquidity Ratio, 16] South Africa

1. What is the full form of CBS?

 Cash Banking Solutions

 Core Banking Solutions

 Cash Balance Solutions

 Capital Banking Solutions

2. What does AGM stand for?

 Asian General Meeting

 American General Meeting

 Academic General Meeting

 Annual General Meeting

3. What does CAG stand for?

 Controller and Author General of India

 Constant Auditor General of India

 Controller and Auditor General of India

 None of the Above

4. What does CPI stand for ?

 Cash Price Index

 Consumer Price Index

 Cost Price Index

 Current Price Index

5. What does CRR stand for?

 Credit Reserve Ratio

 Cost Advisory Ratio

 Cash Reserve Ratio

 Cash Revenue Ratio

6. What does 'DD' stand for

 Demand Cheque

 Demand Credit

 Demand Cash

 Demand Draft

7. Which among the following does the RBI not decide?

 SLR

 CRR

 Bank Rate

 Base Rate

8. What does ‘T’ in RTGS stand for?

 Time

 Transaction

 Tax

 Transfer

9. RBI was established on _________ ?

 April 21st, 1940

 April 20st, 1943

 April 22nd, 1947

 April 1st, 1935

10. Which among the following is at times mentioned as a kind of Direct Debit Facility?

 RTGS

 ECS

 NEFT

 None of the Above

11. MICR on bank cheques is a 9-digit code which actually shows whether the cheque is real or fake. What does MICR stands for?

 Monetary Ink Cheque Recognition

 Magnetic Ink Character Retrieval

 Magnetic information Code Recognition

 Magnetic Ink Character Recognition

12. What does EXIM Bank stand for?

 Extra Import Bank of India

 Export Import Bank of India

 Export Information Bank of India

 None of the Above

13. What does FCCB stand for?

 Foreign Currency Convertible Bond

 France Currency Convertible Bond

 Freight Currency Convertible Bond

 None of the Above

14. Which of the following organizations is the Mutual Fund Market regulator?

 CIBIL

 MCX-SX

 SEBI

 National Stock Exchange of India

15. What does HDFC stand for?

 Housing Development Finance Corporation

 Haryana Development Finance Corporation

 Hyderabad Development Finance Corporation

 None of the Above

Answer:

1] Core Banking Solutions, 2] Annual General Meeting, 3] Controller and Auditor General of India, 4] Consumer Price Index, 5] Cash Reserve Ratio, 6] Demand Draft, 7] Base rate, 8] Time (Real Time Gross Settlement), 9] April 1st, 1935, 10] ECS (Electronic Clearing Service), 11] Magnetic Ink Character Recognition (MICR), 12] Export Import Bank of India, 13] Foreign Currency Convertible

Bond, 14]SEBI (Securities and Exchange Board of India), 15] Housing Development Finance Corporation

 The _________ is the method countries use to monitor all international monetary transactions at a specific period of time.

 Import Export Balance

 Balance of Payment

 Balance of Payment

 None of the Above

2. What does ADB stand for?

 American Development Bank

 Australian Development Bank

 Asian Development Bank

 None of the Above

3. ________ is the difference in value between a country's imports and exports.

 Balance Of Trade

 Balance of Payment

 Balance of power

 Credit Balance

4. What does ATM stand for?

 Any Time Money

 Automated Teller Machine

 All Time Money

 None of the above

5. _________ is a statement showing the assets and liabilities of a business at a certain date.

 Accounts Payable

 Account Sheet

 Accounts Receivable

 Balance Sheet

6. A short-term loan that is used until a person or company secures permanent financing or removes an existing obligation is called as ?

 Cash Credit

 Term Loan

 Bridge Loan

 Letter of Credit

7. Which of the following bank had its old name as ‘Devkaran Nanji Banking Company Limited’?

 Dhanlaxmi Bank

 Dena Bank

 Central Bank of India

 State Bank of Mysore

8. Money loaned by a bank or other institution which is repayable on demand is called as ?

 Call Money

 Demand Loan

 Cash Credit

 Short Term Loan

9. Discount and Finance House of India (DHFL) was set up in _________ ?

 April 1979

 May 1992

 August 1889

 March 1988

10. _________ is the means by which a government adjusts its spending levels and tax rates to monitor and influence a nation's economy.

 Economic Policy

 Fiscal Policy

 Long Term Planning

 Monetary Policy

11. Banks which are included in the second schedule of the Reserve Bank of India Act, 1934 are called as ?

 Public Sector Banks

 Co-Operative Banks

 Foreign Banks

 Scheduled Banks

12. A system that allows customers of a financial institution to conduct a number of financial transactions through a mobile device such as a mobile phone or tablet is known as _________?

 Mobile Banking

 eBanking

 Internet Banking

 None of the Above

13. When a customer uses banking channels to cover up his suspicious and unlawful financial activities, is called as _______ ?

 Black Money Transaction

 Money Transfer

 Hot Money Transaction

 Money Laundering

14. National Bank for Agriculture & Rural Development (NABARD) was setup in the year _________ ?

 1982

 1991

 1969

 1948

15. In banking parlance, ‘NPA’ stands for _________ ?

 Net Performing Asset

 Non Performing Asset

 Non-Productive Asset

 None of the Above

16. Banks where a majority stake (above 50%) is held by a government are known as

 Nationalised Banks

 Government Banks

 Public Sector Banks

 Commercial Banks

Answer:

1] Balance of Payment, 2] Asian Development Bank, 3] Balance Of Trade, 4] Automated Teller Machine, 5] Balance Sheet, 6] Bridge Loan,  7] Dena Bank,  8] Call Money, 9] March 1988,  10] Fiscal policy, 11] Scheduled Banks, 12] Mobile Banking,  13] Money Laundering, 14] 1982, 15] Non Performing Asset, 16] Public Sector Banks

1. Those amounts due to vendors or suppliers that must be paid within one year is known as ___________ ?

 Debtors

 Creditor

 Accounts Payable

 Current Assets

2. Short-term assets, representing amounts due to a vendor or suppliers of goods or services that were sold on credit terms is known as ______ ?

 Account Receivable

 Current Liabilities

 Fixed Asset

 None of the Above

3. ______ is the rate of interest which is levied on Short-Term loans taken by commercial banks from RBI.

 Bank Rate

 Reverse Repo Rate

 Base Rate

 Repo Rate

4. ______ is the rate at which commercial banks charge on their surplus funds with RBI.

 Repo Rate

 Reverse Repo Rate

 Interest Rate

 Bank Rate

5. _________ is the amount a commercial bank needs to maintain in the form of cash, or gold or government approved securities (Bonds) before providing credit to its customers.

 SLR

 CRR

 Term Deposit Rate

 Call Money

6. Reserve Bank of India was nationalized in:

 1946

 1947

 1948

 1949

7. _________ is the amount of cash funds that the banks have to maintain with RBI.

 Mortgage Rate

 Base Rate

 Cash reserve Ratio

 None of the above

8. _________ is the rate of interest which is levied on Longt-Term loans and Avances taken by commercial banks from RBI

 Fixed Interest Rate

 Bank Rate

 Fixed Deposit Rates

 Repo Rate

9. SEBI is a _________

 Constitutional body

 Statutory body

 Non statutory body

 Advisory body

10. What does FII stands for ?

 Foreign Institutional Investor

 France Institutional Investor

 Forestry Innovation Investment

 Foreign Indirect Investment

11. _________ is the rate at which banks can borrow overnight from RBI.

 Term Deposit Rate

 Marginal Standing Facility Rate

 Market Rate

 Call Money Rate

12. What does SEZ stand for?

 Special Economic Zone

 South East Zone

 State Enterprise Zones

 Stream Environment Zone

13. _________ a general increase in prices and fall in the purchasing value of money.

 Rising in Price of Money

 Inflation

 Increased Goods Supply

 None of the Above

14. _________ is a reduction of the general level of prices in an economy.

 Shortage of Goods

 Deflation

 Inflation

 None of the above

15. FDI stands for ?

 Foreign Diverse Investment

 Foreign Dealers in India

 Frequent Direct Interest

 Foreign Direct Investment

Answer :

1] Accounts Payable, 2] Account Receivable, 3] Repo Rate,4] Reverse Repo Rate, 5] SLR (Statutory Liquidity Ratio), 6] 1949,7] Cash Reserve Ratio (CRR), 8] Bank Rate, 9] Statutory body, 10]Foreign Institutional Investor, 11] Marginal Standing Facility Rate (MSF), 12] Special Economic Zone, 13] Inflation,  14] Deflation,15] Foreign Direct Investment