19th july

1) Leading mobile wallet service Paytm recently requested asked Reserve Bank of

India (RBI) to hike the limit on money that can be kept in a mobile wallet to Rs.

25,000. What is the present RBI limited for mobile wallet services? – Rs. 10,000

Explanation: Under the existing RBI norms, only a minimum know your customer

(KYC) of the mobile number and e-mail ID verification is sufficient to hold Rs. 10,000

in a mobile wallet. For anything higher, a full KYC, similar to what is required for

opening of a bank account, is mandatory. This maximum cash limit of Rs. 10,000

was set by the RBI some years ago. But the recent trends have disclosed that in

major metros and large cities, where cost of living and mobile penetration are high,

customers are crossing the Rs. 10,000 limit set by the RBI. Over 85 million people

now use Paytm mobile wallet for transactions worth Rs. 700 crore every month. In

this respect Paytm has requested the RBI to raise the upper cash limit for mobile

wallets. Indians, both with and without bank accounts, are finding mobile wallets a

convenient way to pay for a number of goods and services such as online

purchases, recharges, utility payments and online-to-offline services such as cabs or

food ordering.

2) The Reserve Bank of India (RBI) on 9 July 2015 allowed mass transit system

(MTS) operators like Mumbai Metro, Delhi Metro, Indian Railways, etc. to issue pre-

paid cards to their customer. This is expected to provide a huge relief to the

commuters who face problems while purchasing tickets. According to the related RBI

guidelines, what is the maximum limit of these proposed prepaid instruments? – Rs.

2,000

Explanation: MTS operators will now be able to issue pre-paid cards to their

customers. The customers can easily transfer money to these cards that can be

swiped on machines instead of standing in long queues to purchase travel tickets.

RBI guidelines also say that the balance in the prepaid instrument issued by the

MTS should not exceed Rs 2,000 at any point of time. Also, MTS would not be

allowed to refunds cash that is stocked in the pre-paid instruments (PPI). These PPIs

will have a minimum validity of six months from the date of issue. The PPI-MTS will

enhance commuter convenience and will also facilitate the migration to electronic

payments in line with the country’s vision of moving to a less-cash society.

3) State Bank of India (SBI) on 17 July 2015 announced its proposal of sharing

profits with its employees as part of an initiative for talent retention and motivation.

The bank has offered up to how much of its profits under this proposal, which has

been submitted to the Finance Ministry? – 3%

Explanation: SBI chairperson Arundhati Bhattacharya disclosed about this proposal

on 17 July 2015. It is worth mentioning that the Union Govt. already allows SBI to

share up to 1% of profits with its employees but the bank wants this limit to be hiked

to 3%. SBI Chairperson claimed that employees incentivisation through sharing

profits is necessary especially for people in senior management and mid-level

management as the amount that they get in the private sector is much higher than

they get in the public sector. So employees, who achieve higher levels of skills

because of their merit and hard work, are easily picked up by private sector. For the

fiscal ended March 2015, SBI’s net profit increased 20% to Rs 13,101.57 crore as

compared to Rs 10,891.17 crore for the year ended March 2014. The bank has

about 2.3 lakh employees.

4) In a first-of-its-kind initiative, Union Govt. on 8 July 2015 appointed an executive

from the private sector to head a public sector financial institution. This appointment

was done for the post of Managing Director and CEO of National Housing Bank

(NHB). What is the name of the executive appointed to head NHB? – Sriram

Kalyanaraman

Explanation: NHB is the regulator of India’s housing finance sector. Sriram

Kalyanaraman became the first person from the private sector to head a public

sector financial institution when he was appointed MD and CEO of NHB. His

appointment is for five years from the date of taking over the charge. At present,

Kalyanaraman is Director-Business Development, Equifax Credit Information

Services.

5) Who was named as the first Chairman of the soon to be opened Bandhan Bank,

which announced its Board of Directors on 9 July 2015? – Ashok K. Lahiri

Explanation: Ashok K. Lahiri, a former Chief Economic Advisor (CEA), was named

as the first Chairman of Bandhan Bank. Chandra Sekhar Ghosh will be the MD and

CEO of the bank. The other directors on board include B Sambamurthy, former CMD

of Corporation Bank; CM Dixit, Sr Partner at GD Apte & Co; Krishnamurthy

Subramanian, Associate Prof. at Indian School of Business; Snehomoy

Bhattacharya, former ED at Axis Bank; Pradip K. Saha, former CGM at SIDBI; Sisir

Kr Chakrabarti, former Dy MD at Axis Bank; Bhaskar Sen, former CMD at UBI and

PS Raji Gain, CGM NABARD. The bank will start its operations from 23 August 2015

and will be inaugurated by the President of India, Pranab Mukherjee.

6) Finance Minister Arun Jaitley on 16 July 2015 announced that the government

has simplified rules for foreign investment in companies by clubbing together

different categories. This will effectively give equal treatment to global capital

entering India. What will be the major benefit of this move for Indian banks? – Now it

will become easier for Indian banks to raise capital up to a foreign ownership

limit of 74%

Explanation: One of the most important decisions in relation to the investment is the

introduction of composite caps for simplification of foreign direct investments (FDI) in

the country. Previously, foreign capital had been subject to varying restrictions – a

legacy of India’s socialist past and its lingering reluctance to allow capital to move

freely across its borders. For Indian banks, the shift will lead to an increase in their

effective free float – or the number of shares that can be easily traded. That in turn

would lead to an increase in their weighting in benchmark indexes tracked by many

fund investors. Union Govt. has also allowed 100% investment in pharmaceuticals

and railway infrastructure under a so-called automatic route that does not require

official approvals.

7) Who was named as the first Chief of the Beijing-backed Asian Infrastructure

Investment Bank (AIIB), which is being established as an alternative financial entity

to the U.S. and Europe-dominated banking institutions? – Jin Liqun

Explanation: Jin Liqunis is a former Finance Minister of China and he was named

by China as the first Chief of the AIIB on 6 July 2015. AIIB is a multilateral

development bank proposed by the government of China to provide finance to

infrastructure projects in the Asia region. The bank was proposed by China in 2013

and launched at a ceremony in Beijing in October 2014. The bank has 33 founding

members from the Asian region and 17 founding members from outside the region.

India is one of the founding members of AIIB and has second highest stake in it after

China. AIIB is being seen as a rival to the U.S. and Europe-dominated banking

institutions.

8) Union Government on 7 July 2015 raised the minimum daily wage for workers by

Rs. 23. This increase was done after a gap of 2 years. What is the new minimum

wage for workers after this increase? – Rs. 160 per day

Explanation: The decision to revise upwards the National Floor Level Minimum

Wage (NFLMW) was taken in view of the increase in retail inflation for industrial

workers. It has been revised from present level of Rs. 137 to Rs. 160 per day and

became effective from 1 July 1995. While reviewing the movement of Consumer

Price Index (Industrial Workers) during April 2014 to March 2015 over April 2012 to

March 2013, it was observed that the average CPI-IW has risen from 215.17 to

250.83. The wage was last revised to Rs. 137 from Rs. 115 per day effective 1 July

2013.

9) Global economy and financial markets, including India on 8 July 2015 saw new

reasons for worry as the market meltdown in China reached worrying levels. For the

first time global markets were affected by continued decline in China. What is the

main reason for declining markets in China? – Reduction in demand which has

threatened a huge slowdown in Chinese economy

Explanation: China has been witnessing a decline in demand for almost all

commodities for several quarters. This has resulted in low production across sectors.

China’s stock market has lost over $3 trillion in value in less than a month, wiping

close to 37% off the market’s valuation from the peak of 12 June 2015. The intensity

of the loss can be judged from the fact that it is nearly twice the market capitalisation

of all stocks traded in India and more than the Spanish, Russian, Italian, Swedish

and Dutch stock markets combined. This decline was till now without a domino effect

across the world, mainly due to absence of foreign institutional investors (FIIs) in

China. However, as decline reaches new levels the global markets are now bracing

for its impact. The worldwide markets for the first time were affected by Chinese

decline on 8 July and global markets witnessed a huge decline. This was after

Chinese markets tumbled again on 8 July as a range of government measures

aimed at preventing a further decline in share prices had no impact. It is worth

mentioning that the markets had, till now, fixed their attention towards Greek

economy. But now it became clear that as market fall in China accelerates the

economic slowdown, other countries that have not been affected by China’s market

fall will be hit. This is mainly due to the fact that China is the largest consumer of a

number of goods and commodities in the world.

10) In an important step, Union Government on 8 July 2015 allowed seven state-

owned entities to raise Rs. 40,000 crore in the current fiscal through tax-free bonds.

Which are the seven PSUs that have been given the permission? – National

Highways Authority of India (NHAI), Indian Railways Finance Corporation

(IRFC), Housing and Urban Development Corporation (HUDCO), Indian

Renewable Energy Development Agency (IREDA), NTPC, Power Finance

Corporation (PFC) and Rural Electrification Corporation (REC)

Explanation: The National Highways Authority of India has been given the

permission to raise maximum amount of Rs. 24,000 among the 7 PSU entities. IRFC

has been allowed to raise Rs. 6,000 crore. HUDCO has been allowed to raise

Rs.5,000 crore and IREDA Rs.2,000 crore. NTPC, PFC and REC can issue tax-free

bonds of Rs.1,000 crore each. Retail investors, which include HUFs and NRIs

investing on repatriation basis, can invest up to Rs.10 lakh in such bonds. Those

investing higher amount would be classified as HNIs. The bonds will have a tenure of

10, 15 or 20 years and the interest rates is to be decided with reference to the rates

of Government Securities.

 

1) Which bank on 4 July 2015 became the first in the country to launch the MUDRA

Card, under the Pradhan Mantri MUDRA Yojana (PMMY) scheme? –Corporation

Bank

Explanation: The MUDRA (Micro Units Development and Refinance Agency) card

under the Pradhan Mantri MUDRA Yojana (PMMY) scheme was launched by the

Corporation Bank on 4 July 2015 and the bank thus became the first in the country to

do so. The card facilitates the withdrawal and use of the working capital finance by

micro entrepreneurs. Three loan schemes are offered to the entrepreneurs under

MUDRA based on their capacity to repay. “Shishu” scheme provides loan up to

Rs.50,000, while a loan amount up to Rs. 5 lakh will be lent under “Kishore” scheme.

Under “Tarun” scheme loan up to Rs. 10 lakh will be offered.

2) What is the percentage of gross non-performing assets (gross NPA) for public-

sector banks as on 31 March 2015 as reported in the recently held annual review

meeting of the Union Finance Minister with the CEOs of banks, insurance companies

and financial institutions (FIs)? – 5.17%

Explanation: It was reported that the public-sector banks continue to report higher

bad loans and the gross non-performing assets as on 31 March 2015, stood at

5.17%. The stressed assets ratio (which includes NPAs and restructured loans) was

13.2%. The rise was due to some infrastructure projects, slowdown in global

economic recovery, and continuing uncertainty in global markets leading to lower

growth of credit.

Other important points that came out of this annual review:

– The gross non-performing assets (GNPA) of 26 public sector banks (including 19

nationalised banks, State Bank of India and its associates and IDBI) have risen by

22.5% to Rs.2.78 lakh crore against Rs.2.27 lakh crore in the previous financial year.

– While the 19 nationalised banks have registered a rise of 39.8% in gross NPA at

Rs.1,92,270 crore against Rs.1,37,487 crore in the previous financial year, State

Bank of India and its associates have reported eight per cent drop in their NPAs at

Rs.73,508 crore against Rs.79,818 crore.

– The gross NPAs of new private sector banks — consisting of Axis Bank, DCB

Bank (Development Credit Bank), HDFC Bank, ICICI Bank, Kotak Mahindra Bank

and Yes Bank, has risen by 35.3% to Rs.24,534 crore in 2014-15 from Rs.18,133

crore in the previous financial year.

– Among the new private sector banks, ICICI Bank, with 43.7% rise in gross NPA at

Rs.15,095 crore against Rs.10,506 crore, contributes to the maximum followed by

DCB Bank (Development Credit Bank) at 33.8% (the increase is on a lower base).

– The gross NPAs of eight old private sector banks (listed on stock exchanges) and

Tamilnad Mercantile Bank put together shows a rise of 50% at Rs.7,755 crore

against Rs.5,170 crore in 2013-14.

– Among the eight old private sector banks, Jammu & Kashmir Bank tops the list

with a sharp rise of 253% at Rs.2,764 crore against only Rs.783 crore, followed by

Karur Vysya Bank with 143% rise at Rs.678 crore (Rs.279 crore) and South Indian

Bank (48.5%). Tamilnad Mercantile Bank has shown a reduction in NPA to 318.68

crore from Rs. 428 crore. Lakshmi Vilas Bank has reduced its NPA significantly to

Rs.455 crore from Rs.546 crore, followed by Federal Bank to Rs.1,058 crore from

Rs.1,087 crore.

3) The signing ceremony of the Asian Infrastructure Investment Bank (AIIB) took

place at the Great Hall of the People in Beijing on 29 June 2015. 50 founding

members of AIIB, including India, signed on the articles of AIIB that determine each

country’s share and the lender’s initial capital. What is India’s stake in AIIB? – 8.52%

Explanation: The AIIB is expected to focus on infrastructure development in Asia,

and unlike the existing International Monetary Fund (IMF) and World Bank, is

unlikely to restrict lending on political considerations. The bank will have its

headquarters in Beijing. India is its second largest shareholder with a stake of 8.52%

and voting share of 7.5%. The voting shares are based on the size of each member

country’s economy and not contribution to the Bank’s authorised capital. China’s

shareholding is 30.34% and it has retained 26.06% of the voting rights with veto

powers for certain key decisions. Some prominent countries, which are members of

AIIB include – Australia, Bangladesh, Brazil, Cambodia, Finland, France, Germany,

Italy, Jordan, Nepal, Netherlands, New Zealand, Norway, Pakistan, Portugal,

Republic of Korea, Russia, Saudi Arabia, Singapore, Spain, Sri Lanka, Sweden,

Switzerland, and the U.K.

4) What is the name of the online forex platform launched by State Bank of India

(SBI) on 19 June 2015 that enables customers to book their foreign exchange

transactions online? – SBI eforex

Explanation: eforex is the name given to the Internet-based forex (foreign

exchange) platform launched by the SBI that facilitates the customers of the bank to

obtain forex rates without having to physically visit the branch and enable customers

to book their foreign exchange transactions online. SBI eforex is also an innovative

platform incorporating robust security features and is designed to be user-friendly,

fast and convenient. It is a highly flexible product offering the facility to the customers

to customise and set their own limits for deal size, daily transaction limits etc.

5) In an unprecedented event, the Reserve Bank of India (RBI) remained opened on

1 July 2015 so as to facilitate settlement of public and market transactions. Normally,

RBI remains closed for public transactions on every year’s 1 July. Why? –  Because

RBI has its annual closing of accounts on this day

Explanation: It is worth mentioning that while April to March is the accounting year

for almost whole business fraternity in India, RBI’s accounting year is from July to

June. Hence, till date RBI used to remain close for public transactions on 1 July. But

moving away from the tradition, the RBI remained opened for public on 1 July 2015

and continued to provide services such as RTGS/NEFT, transfer of funds and

settlement of securities, etc. to the general public.

6) Greek banks went into a bank holiday from 29 June 2015 after talks between

Greece and the European Union (EU) and other creditors failed to reach any

conclusion. What is the main reason for Greek Government imposing this bank

holiday? –Because the European Central Bank (ECB) announced it would turn

off emergency lending to Greek banks

Explanation: The failure to reach a deal with creditors leaves Greece set to default

on 1.6 billion euros of loans from the International Monetary Fund (IMF) that fall due

on 30 June 2015. It is worth mentioning that the (ECB) has been providing the so-

called Emergency Liquidity Assistance (ELA) to Greek banks. The ECB maintained

that it will maintain its ELA to Greece at current levels. But without an increase in the

ELA, Greece will likely run out of cash before 5 July 2015. Greek Prime Minister has

announced to call a referendum on 5 July on a proposed bailout package from the

EU. And since Greeks have been withdrawing money in heavy amounts from banks,

the Greek govt. announced a bank holiday effective from 29 June. A bank holiday

involves closing banks thereby limiting the ability for funds to be withdrawn. It is

typically implemented to avoid a bank run. Under the bank holiday, all Greek banks

were closed and the stock markets shut for a week, and there will be a daily 60 euro

limit on cash withdrawals from cash machines. The holiday will end on 6 July 2015.

7) Country’s largest bank State Bank of India (SBI) on 30 June 2015 announced its

tie-up with which travel company with an objective to capitalise on the business

opportunities of the booming e-commerce and m-commerce ecosystem? –

MakeMyTrip.com

Explanation: The partnership between SBI and MakeMyTrip.com includes

partnership with personal banking unit for consumer facing propositions – including

EMIs on purchase of holidays & international travel, customized travel products like

Forex cards and travel products that inspire SBI customers to travel. On the other

hand MakeMyTrip customers will be able to access special offers from SBI on

debit/credit cards and personal financing. SBI chairperson Arundhati Bhattacharya

said that “SBI aims at becoming a “One Stop” solution provider for the entire range of

financial needs of e-Commerce players as well as our customers in the market.”

8) Which African country is on its way to legally end its virtually worthless local

currency which has witnessed hyper-inflation as high as 500 billion per cent in the

recent times? – Zimbabwe

Explanation: Zimbabwe has decided to end the local currency (Zimbabwean Dollar)

by September 2015. This process started from 15 June 2015 bank accounts with

balances of up to 175 quadrillion Zimbabwean dollars to be paid just US$ 5 in the

exchange. This is due to the fact that the Zimbabwean dollar has become almost

worthless. It is worth mentioning that at the height of Zimbabwe’s economic crisis in

2008, Zimbabweans had to carry plastic bags bulging with bank notes to buy basic

goods like bread and milk. Prices were rising at least twice a day. According to the

Reserve Bank Zimbabwe (RBZ), the customers who held Zimbabwean dollar

accounts before March 2009 can approach their banks to convert their Zimbabwean

dollar balance into dollars. The process will legally end the local currency.

Zimbabweans have until September 2015 to turn in their old bank notes. Customers

who still have stashes of old Zimbabwean dollar notes can walk into any bank and

get $1 for every 250 trillion they hold.

9) An annual report by the Boston Consulting Group (BCG) concluded that Asia has

overtaken Europe as the world’s second-richest region in the world. The report

concluded that The Asia Pacific, excluding Japan, held $47 trillion (£30tn) in private

wealth during 2014 to overtake Europe. Which region still remains world’s richest

region according to the report? – North America

Explanation: North America is the world’s richest region with $51 trillion, but is

expected to be surpassed by Asia in 2016. Asia is also projected to hold 34% of

global wealth in 2019. Overall, global private financial wealth grew by nearly 12%

last year to $164 trillion, lifted by strong gains in the stock and bond markets. The

BCG report concluded that as in both 2012 and 2013, Asia-Pacific (excluding Japan)

remained the fastest-growing region in 2014. By contrast, growth rates in all ‘old

world’ regions remained in the single digits, led by Western Europe and North

America, and with Japan lagging somewhat behind.

1) The Reserve Bank of India (RBI) on 2 June 2015 cut the Repo Rate by 25 basis

points. The latest cut takes the number of rate cuts this calendar year to three. What

is the new Repo Rate after this cut? – 7.25%

Explanation: Taking advantage of subdued inflation to give more support to the

economy, the RBI Governor Raghuram Rajan cut the benchmark Repo Rate by 25

basis points to 7.25%. Previous cuts, in January and March 2015, had also been by

25 basis points. But, two other important rates – Cash Reserve Ratio (CRR) and

Statutory Liquidity Ratio (SLR), were left unchanged. The reduction showed

policymakers recognised the need to put the economy on a sounder footing,

regardless of data released on 29 May 2015 that disclosed that India outpaced

China by growing 7.5% in the March quarter. The rate reduction answered calls from

both the government and businesses for the RBI to do more to shore up the

economy. Corporate earnings have been dismal, growth in bank lending has been

the lowest in almost two decades, and weak industrial output data is at odds with the

strong GDP numbers.

2) The Reserve Bank of India (RBI) on 8 June 2015 made which important

announcement which is being seen as a significant move to provide a more flexible

process for banks to recover bad loans? – It allowed banks to acquire 51% or

more stake in companies defaulting after restructuring of their loans

Explanation: It is worth mentioning that banks have been reporting more losses

from restructured assets of-late and the RBI move is primarily aimed at resolving

stress in the banking system. The RBI has, however, advised banks to sell the stake

to a new promoter ‘as soon as possible’, but they should ensure the buyer is in no

way related to the borrower. The other measures announced under the new scheme

‘strategic debt restructuring’ (SDR) include allowing lenders to convert debt into

equity within 30 days of review of companies’ accounts. In addition, lenders

acquiring shares of listed companies under restructuring would be exempted from

making open offers. These restructuring norms would also apply to all company

accounts before 8 June 2015.

3) Who was nominated as the new non-executive Chairman of ICICI Bank by the

board of the bank on 9 June 2015 to replace K.V. Kamath? – M.K. Sharma

Explanation: M. K. Sharma will succeed KV Kamath, who would step down from the

Board to take on a bigger role as the first President of New Development Bank,

established by the BRICS nations. He was earlier the Vice Chairman of Hindustan

Unilever Ltd (HUL). Sharma was also an independent Director on the Board of ICICI

Bank for eight years from 2003 to 2011 and is an independent director of several

companies. Sharma will have tenure of 5 years.

4) Which major international banking entity on 9 June 2015 made announcement to

cut almost 50,000 jobs from its payroll, axe its investment bank and shrink its risk

weighted assets by $290 billion in an effort to improve its sluggish performance? –

HSBC

Explanation: HSBC is the largest bank in Europe. It made this announcement to the

Hong Kong stock exchange ahead of an important presentation to investors and

analysts. This is the second major strategic plan for HSBC CEO Stuart Gulliver since

he took the charge at the start of 2011. The job cuts, which will affect almost a fifth of

the bank’s workforce, involve 25,000 staff from the expected sales of the lender’s

Brazil and Turkey units and 22,000-25,000 from the consolidation of IT and back

office operations and branch closures. However the cuts, to be completed by 2017,

will be followed by some hiring in growth businesses and the bank’s compliance

division. Apart from this, HSBC will shrink the global banking and markets division to

less than one third of its $2.6 trillion balance sheet from its current level of around

40%. It is worth mentioning that HSBC has been under pressure from investors for

carrying out radical cuts at its global banking and markets divisions.

5) Which mutual fund house retained its position as the most profitable fund house in

India in 2014-15 as disclosed in the data released by industry body AMFI recently? –

HDFC Mutual Fund

Explanation: The profit after tax (PAT) for HDFC Mutual Fund stood at Rs. 416

crore during 2014-15. Its rival Reliance Mutual Fund was able to retain its second

position with PAT of Rs. 357 crore during last fiscal. ICICI Prudential MF, the second

largest fund house in terms of assets base, reported a profit after tax of Rs. 247

crore, while Birla Sunlife MF posted a PAT of Rs. 123 crore. On the assets under

management (AUM) front, HDFC maintained its lead with assets base of Rs. 1.46

lakh crore, followed by ICICI MF Rs. 1.32 lakh crore, Reliance MF Rs. 1.24 lakh

crore and Birla Sunlife MF at Rs.1.07 lakh crore.

6) The State Bank of India (SBI) on 2 June 2015 cut its base lending rate by 15 basis

points hours after the RBI had reduced the Repo Rate by 25 basis points. What is

the new lending rate of SBI after this cut? – 9.7%

Explanation: SBI, which is India’s top lender by assets, cut its base lending rate by

15 basis points to 9.7%, which will came into effect from 8 June 2015. With this, the

equated monthly installments (EMIs) on home and auto loans are likely to come

down. Apart from SBI, some other smaller state lenders also announced base

lending rate cuts of between 25 and 30 basis points. Allahabad Bank, Dena Bank,

and Punjab and Sind Bank also announced rate cuts on the same day.

7) The Reserve Bank India (RBI) on 11 June 2015 gave permission to which investor

segment to invest in regulated chit funds in India? – Non-Resident Indians (NRIs)

Explanation: The permission to Indians abroad for participation in chit funds comes

with riders. NRIs can subscribe to chit funds through banking channels, including

accounts maintained in India. The state governments or Registrar of Chits may

permit chit funds to accept subscription from NRIs on non-repatriation basis. This

should be done in accordance with the provisions of the Chit Fund Act.

8) The Bangladesh government recently allowed Life Insurance Corporation of India

(LIC) to form a joint-venture to operate its services in the country. What will be the

name of the joint-venture to be formed by LIC in Bangladesh? – LIC Bangladesh

Explanation: The Bangladesh IRDA gave its consent letter to LIC to start its

operations in Bangladesh. LIC would thus become the second foreign insurer to

operate in the country. LIC was allowed to start operations as a joint venture entity to

be called “LIC Bangladesh” with a paid up capital of Taka 1 billion ($1=Tk 80). LIC

will hold half of the amount while the rest would be owned by its Bangladeshi

partners raising the amount from the capital market and local entrepreneurs. LIC

thus became the second foreign insurance agency after the US-based MetLife-

ALICO, which only has a branch office in Bangladesh and is not a joint venture

registered company. Apart from two state-run insurance companies, Bangladesh

currently has 60 insurance companies in private sector, 43 of them being general

and 17 life.

9) Union Govt. on 3 June 2015 notified the amendments in the definition of NRIs as

contained in the FDI policy. What is the broad change in this definition? – According

to the new definition NRIs would also include Overseas Citizens of India (OCIs)

and Persons of Indian origin (PIOs)

Explanation: The Union Cabinet, chaired by Prime Minister Narendra Modi, had

cleared these amendments during May 2015. According to the notified policy

relaxations for NRIs by the Department of Industrial Policy and Promotion (DIPP),

non-repatriable investments by non-resident Indians, overseas citizens of India and

persons of Indian origin will be treated as domestic investments and will not be

subject to foreign direct investment caps. The decision is expected to result in

increased investments across sectors and greater inflow of foreign exchange

remittances leading to higher economic growth. The government has also notified

increase in FIPB’s power to recommend foreign investment proposals of up to Rs.

3,000 crore from the earlier Rs 2,000 crore. Beyond this limit, proposals will go to the

Cabinet Committee on Economic Affairs for approval.

10) The Union Cabinet on 10 June 2015 decided to bring in an ordinance to amend

the Negotiable Instruments Act, which provides for filing of cheque bounce cases in

place where the cheque was issued. What the govt. wants to achieve by brining this

ordinance? – It seeks to overturn a Supreme Court 2014 ruling said the case

has to be initiated where the cheque-issuing branch was located

Explanation: The Supreme Court had passed a judgement in 2014 that if a person

receives a cheque from someone and the cheque gets bounced, then the jurisdiction

for initiating action lies in the State where it was issued. This ruling resulted in filing

of over 18 lakh cases in various courts spread across the country and immense

hardships to people involved in these cases. Government had brought a Bill

(Negotiable Instruments (Amendment) Act, 2015) in this regard in Parliament and it

was passed in the Lok Sabha in May 2015. The amendment passed by the Lok

Sabha provided that cases of bouncing of cheques can be filed only in a court in

whose jurisdiction the bank branch of the payee (person who receives the cheque)

lies. If a complaint against a person issuing a cheque has been filed in the court with

the appropriate jurisdiction, then all subsequent complaints against that person will

be filed in the same court, irrespective of the relevant jurisdiction area. However, as

the Rajya Sabha could not pass it, the government has brought this ordinance so as

to give relief to these people.

1) India’s largest commercial bank SBI on 21 May 2015 signed an MoU with which

leading international digital payments company to facilitate cross-border

transactions? – PayPal

Explanation: PayPal has a presence in 203 countries and processes 11.5 million

transactions daily. SBI on 21 May entered into an agreement with PayPal to help its

nine lakh SME customers make varied international transactions in a safe and

secured manner. The agreement initially aims at facilitating cross-border

transactions after which domestic payments would be covered. Subsequently, SBI

would look into e-governance areas such as e-visas, e-travel documents. The facility

would also be available to SBI debit card holders.

2) Country’s largest private bank – ICICI Bank on 25 May 2015 launched which new

password service for its customers? – Voice Password Service

Explanation: Under ICICI Bank’s Voice Password Service, the customers can make

transactions using just their voice, without using other means of authentication like a

password. The voice recognition service authenticates customers based on their

speech patterns and allows them to execute banking transactions through the bank’s

call centre. Customers, in general, use various means of authentication like entering

card numbers, answering security questions and entering a personal identification

number (PIN) to carry out a phone banking transaction. Over 33 million savings bank

and credit card customers of ICICI Bank will be able to use the service. This

password service works on unique ‘voice prints’ which comprise over 100

characteristics, including voice modulation, speed, accent and pronunciation, which

are impossible to imitate. The voice print is stored and matched whenever the

customer calls from the registered mobile number.

3) Which private-sector bank on 31 May 2015 announced that it will discontinue

issuing slips after cash withdrawals at ATMs and will alert the customer through

SMSes? – HDFC Bank

Explanation: This is a part of the digital initiative by the HDFC Bank, under which it

had last year launched the ‘green PIN’ scheme wherein card-users were given the

PIN numbers electronically rather than in a printed kit. The bank is piloting the

initiative at a few ATMs at present and will roll out the same across its network of

over 11,700 ATMs by the end of June 2015. Cash withdrawals account for the bulk

of transactions at ATMs and the bank witnesses an average of 2 crore cash

withdrawals every month at its ATMs. At present, customers are given a choice on

whether they want a printed receipt or not. However, much of the receipts get

discarded as soon as they come out and if not disposed off in the right way, also

pose a security risk as they contain private information. The bank expects that the

switch to paperless mode will help it save under Rs. 10 crore a year spent on paper.

4) The US Department of Justice on 20 May 2015 imposed record $5.7bn fine on 5

banks for rigging foreign exchange markets. Which five banks are involved in this

case? – Barclays, Royal Bank of Scotland (RBS), UBS, Citigroup and JP

Morgan

Explanation: The imposition of fines was announced by Loretta Lynch, the US

Attorney General, who said that the banks had exhibited flagrancy in setting up a

group they called “the cartel” to manipulate the foreign exchange market between

2007 and the end of 2013. The decision came as another huge blow to these banks.

The new fines followed £2.6bn of penalties announced in November 2014 for

manipulation of the £3.5 trillion a day currency markets. An unprecedented series of

guilty pleas was extracted by the US DoJ from four of the banks: Barclays, RBS,

Citigroup and JP Morgan. Swiss bank UBS was granted immunity for being the first

to report the manipulation of the foreign exchange markets, although it was forced

admit to wrongdoing in other offences.

5) Bank unions and the Indian Banks’ Association (IBA) on 25 May 2015 signed a

wage revision agreement, which will benefit 1 million bank employees, including

some from foreign and private banks. How much increase in bank employees’ salary

and allowances has been agreed to in this agreement? – 15%

Explanation: The wage revision affected by the agreement is effective

retrospectively from 1 November 2012. Following the wage revisions, the scale of

pay of officer-level employees has been revised from Rs.14,500–Rs.52,000

to Rs.23,700–Rs.85,000, including special allowance and dearness allowance. The

scale of pay of workmen-non-subordinate has been revised fromRs.7,200–

Rs.19,300 to Rs.11,765–Rs.31,540, while the scale of subordinate staff has been

revised from Rs.5,850–Rs.11,350 to Rs.9,560–Rs.18,545, including allowances. The

wage settlement also includes a medical insurance scheme for the families of

employees.

6) Which major European country slipped into deflation recently as disclosed by the

government on 19 May 2015? – Britain

Explanation: This is the first time Britain has fallen into deflation since official

records began in 1996. Modelled data produced by the Office for National Statistics

(ONS) suggest it is also the lowest rate since 1960. Prices, as measured by the

consumer prices index (CPI), fell by 0.1% in the year to April 2015, following zero

inflation in February and March. Deflation is the economic stage of an economy

when there is decrease in prices of commodities and services. It occurs when the

inflation rate falls below 0% (a negative inflation rate). Deflation thus increases the

real value of money, i.e., a person can buy more goods with the same amount of

money over time. Deflation is generally regarded negatively, as it causes a transfer

of wealth from borrowers and holders of illiquid assets, to the benefit of savers and of

holders of liquid assets and currency. It results in reduction in investments (or under-

investment).

7) On 26 May 2015 who was appointed as the head of the newly constituted

committee that will give recommendations to recast the model of the so-called

public-private-partnership (PPP) model in India? – Vijay Kelkar

Explanation: Vijay Kelkar is a renowned economist and a former Finance Secretary.

The Kelkar committee will review the PPP policy and suggest a better risk-sharing

mechanism between private developers and the government after analysing such

projects in different. It is worth mentioning that Union Finance Minister Arun Jaitley in

his budget speech had announced the committee after stating that the current PPP

model was not robust enough to reduce risk for the private companies to increase

investment in infrastructure. He had advocated increased public spending and

promised to look into ways to resolve issues hampering the so-called public-private-

partnership (PPP) model. India is one the largest PPP markets with over 900

projects at various stages of development.

8) The State Bank of India (SBI) on 20 May 2015 signed a Memorandum of

Understanding (MoU) with which e-commerce entity to develop payment and

commerce solutions for customers and small businesses? – Amazon

Explanation: SBI is presently in the process of being aggressive in digital and online

space with the aim to grab a piece of the business in the digital commerce space. As

part of this initiative, the bank on 20 May signed an MoU with Amazon under which it

will develop payment and commerce solutions for customers and small businesses

pertaining to Amazon. SBI is working on ways to enrich customers’ payment

experience and opening up the window of e-commerce to its customers. SBI will also

provide loans to SME customers which supply products to Amazon, to help them

increase their operations. The bank also elaborated that it is open to similar tie-ups

with other e-commerce players. It might soon sign an agreement with Snapdeal,

another major e-commerce entity.

9) State Bank of India (SBI), on 22 May 2015 reported a better-than-expected 23%

increase in quarterly profit for fourth quarter ended March 2015. What was the total

net profit during the quarter? – Rs. 3742 crore ($589.11 million)

Explanation: Net profit earnings thus were 23% more as compared to the same

quarter of 2015, which it stood at Rs. 3041 crore. SBI’s gross bad loans ratio stood

at 4.25% in the March quarter, compared with 4.9% in the December quarter. SBI

accounts for about a quarter of Indian loans and deposits.

10) Which Indian stock exchange on 18 May 2015 announced the introduction of the

first-of-its-kind Overnight Liquid Fund product which will provide the facility to invest

even for a single night in liquid funds? – BSE

Explanation: India’s leading stock exchange BSE announced the introduction of an

Overnight Liquid Fund product on the Exchange’s Mutual Fund platform, BSE StAR

MF. The product will help the smallest investor, corporate or trust to invest even for a

single night in liquid funds anywhere in India. It will be an alternative investment

avenue for idle monies which would be invested in liquid mutual funds for better

returns and relatively lower risk. The facility will be available only for non-Demat

mode.

1) Which noted banker of India was on 11 May 2015 appointed as the first President

of the $100-billion New Development Bank (NDB) of the BRICS countries, to be

based in China’s financial hub Shanghai? – KV Kamath

Explanation: KV Kamath is one of India’s most well-known bankers. He retired as

Managing Director and CEO of ICICI bank in April 2009, and took up his current

position as non-executive chairman. 5 BRICS countries – Brazil, Russia, India, China

and South Africa – had agreed to set up the $100 billion development bank last July,

in a step toward reshaping the Western-dominated international financial system.

The name of the bank – the New Development Bank – was suggested by Prime

Minster Narendra Modi at a meeting of member countries in Fortaleza, Brazil in

November 2014. It was also agreed that the New Development Bank (NDB), which

will fund infrastructure projects in developing nations, would be based in Shanghai. It

would be headed by an Indian for a first five-year term, followed by a Brazilian and

then a Russian.

2) The credit-card base in India, at the end of 2014, crossed which level of year

2010, which is often described as the pre-crisis level in banking parlance? –20

million

Explanation: According to the data released by the Reserve Bank of India (RBI), the

number of outstanding credit cards at the end of December was 20.29 million. This

was the first time that the total number of credit cards in India has crossed 20 million

mark since February 2010. The period after 2010 is generally assumed as the crisis

period for Indian credit card industry when number of cards swelled despite payment

incapability of numerous card holders. Banking experts believe that rise in e-

commerce and improved infrastructure in the banking system, leading to easy

acceptance of cards, have helped in growth of credit cards. RBI data also suggests it

is not just the number of cards in the system but even the spends on these cards

have gone up significantly. At the end of December 2011, the spends on credit cards

stood at Rs. 8,532.6 crore, which has more than doubled to Rs. 17,437.1 crore by

the end of December 2014.

3) Mangaluru-headquartered Corporation Bank recently dropped plans to take over

the assets and liabilities of a Maharashtra-based cooperative bank whose license

was cancelled by the RBI in 2013. Which bank is this? – Rupee Co-operative Bank

Limited

Explanation: Rupee Co-operative Bank Limited is based in Pune (Maharashtra). It

is over 100 year old and is one of India’s oldest cooperative banks. The bank

operates 36 branches across Maharashtra, and has accumulated losses of Rs. 652

crore. Due to increasing bad loans, the RBI had suspended the license of the Rupee

Co-operative Bank and had imposed severe monetary strictures in 2013. Since the

imposition of the moratorium, talks for merger with other banks have been on.

Corporation Bank had evinced interest in merging the operations of Rupee Co-

operative Bank with it and had asked for various reports from the bank to assess its

financial health. Corporation Bank was the most serious among the prospective

suitors for the bank in the two years since it was put under a Reserve Bank of India

(RBI)-appointed administrator. But now Corporation Bank has dropped plans to

acquire Rupee Co-operative Bank. The latest development will affect over 6.30 lakh

depositors of Rupee Bank, bringing upon the beleaguered bank the spectre of going

into liquidation unless another suitor or some method of reviving bank’s interest is

found.

4) Private-sector Federal Bank on 18 May 2015 forayed into credit card segment

with the launch of a co-branded credit card. It has tied up with which PSU bank for

this co-branded credit card? – SBI

Explanation: This is for the first time that Federal Bank has entered into credit card

segment. In the first year, the bank aims to issue as many as 1.5 lakh credit cards to

its customers. Initially, two variants-Platinum and Gold’ N More-will be issued under

the Visa platform for a specified fee. Federal Bank is among the largest Indian

private sector banks and is headquartered in Aluva, Koch (Kerala). It had over 1200

branches and over 1400 ATMs all over India at the end of October 2014.

5) From May 2015 National Payments Corporation of India (NPCI) has reduced the

switching fee it charges banks for processing inter-bank ATM transactions by five

paise. What is the new switching fee after this reduction? – 45 paise per

transaction

Explanation: Till now NPCI’s switching fee for processing inter-bank ATM

transactions was 50 paise per transaction, which stood since four years when NPCI

had cut the switching fee to 50 paise from Rs. 1 through its National Financial Switch

in 2011. The reduction in switching fee came on the back of ATM transaction

volumes rising to about 27 crore a month from eight crore five years back. Currently,

each time a customer of a particular bank withdraws cash at the ATM of another

bank, the former bank has to pay the later a transaction fee of Rs. 20. Further, the

first bank has to pay NPCI a switching fee of Rs. 0.45.

6) The Finance Ministry on 19 May 2015 put up draft of the ambitious Gold

Monetisation Scheme which aims to bring out around 20,000 tonnes of gold lying idle

with households. Based on the views of the public and stakeholders, the new

scheme will be finalised and made operational. What will be the main benefit of this

scheme? – The new scheme will allow the depositors of gold to earn interest in

their metal accounts and the jewellers to obtain loans in their metal account

Explanation: The new Gold Monetisation Scheme (GMS) was announced in the

Union Budget 2015-16 with the aim of replacing both the present Gold Deposit and

Gold Metal Loan Schemes. The new scheme will allow the depositors of gold to earn

interest in their metal accounts and the jewellers to obtain loans in their metal

account. Banks/other dealers would also be able to monetise this gold. The minimum

quantity of gold that a customer can bring in proposed to be set at 30 grams, so that

even small depositors are encouraged. Gold can be in any form (bullion or jewellery)

and the scheme will give interest as well as tax benefits. The depositors will have the

option to take cash or physical gold at the time of maturity. Minimum tenure of such

account will be one year with an option of rolling over in multiples of one year.

Earlier, one Gold Deposit scheme was introduced in 1999 with an aim to mobilise the

idle gold in the country and put it into productive use. However, it has not been very

successful and less than 10 tonnes of gold has been collected.

7) What was the fiscal deficit (estimated) for 2014-15 as announced by the Union

Finance Ministry on 17 May 2015? – 4% of the GDP

Explanation: The Union Finance Ministry announced that it was able to contain the

fiscal deficit for 2014-15 at 4% of GDP against 4.1% set to be achieved in the Union

Budget. Similarly the revenue deficit was estimated at 2.8% of the as against the

revised estimate of 2.9% of GDP, marking a sharp improvement over 3.2% for 2013-

14. The Narendra Modi-led NDA government had adopted the fiscal deficit target set

by the UPA government in its interim budget for 2014-15 even as it pointed out that it

would be a ‘challenge’ to meet the target. The government has budgeted a fiscal

deficit of 3.9% of GDP in the current fiscal (2015-16). Fiscal deficit is the gap

between the government’s expenditure and revenue for a stipulated period. On the

other hand revenue deficit refers to the shortfall in total government revenue

realization from the targeted figure.

8) The Companies (Amendment) Bill, 2014 was passed by the Rajya Sabha on 13

May. How many amendments in total were affected in the Companies Act of 2013

through this amendment bill? – Sixteen

Explanation: The Lok Sabha had passed the Companies (Amendment) Bill, 2014, in

December last year and with the bill being passed by the Rajya Sabha, a total of

sixteen amendments were made to the Companies Act of 2013. The amendments to

the Companies Act, 2013, which came into effect from 1 April 2015, are designed to

address some issues raised by stakeholders. The amendments include winding up

of companies, board resolutions, bail provisions and utilisation of unclaimed

dividends, protecting confidentiality of board resolutions, the provision of auditors

being required to report suspected frauds, etc.

9) In a setback to the Narendra Modi govt., which global financial entity on 13 May

2015 downgraded India to “underweight” category, which was the first major

downgrade for the India in the past one year? – HSBC

Explanation: Global brokerage house HSBC downgraded India by changing its

stance on the country to “underweight”. In doing so it cited projections for weak

monsoon, muted corporate earnings, and odds against further rate cuts. It also said

India has become the second most expensive and one of the most over-owned

markets in Asia, after a strong rally on the back of reform optimism generated by the

Modi government over the past one year. The downgrade came at a time when

Indian markets are already under acute pressure, primarily because of foreign

investors turning heavy sellers on concerns related to the controversial MAT levy

and delay in the ambitious indirect tax (GST) and land reforms.

10) A new set of insider trading norms came into effect from 15 May 2015 with the

aim to tackle insider trading menace in Indian capital markets. The Securities and

Exchange Board of India (SEBI) had imposed the old regulations on insider trading

in which year? – 1992

Explanation: Indian capital markets were run by over two decade old insider trading

norms that were imposed by the SEBI in 1992. It is worth mentioning that the SEBI

had notified the new regulations (Prohibition of Insider Trading Regulations, 2015) on

insider trading in January 2015. These norms came into force from 15 May 2015.

The new norms, which revamped the 1992 norms, are also expected to ensure that

genuine trades are not impacted. The tightening of norms assumes significance in

the wake of SEBI coming across cases of insider trading not just at small companies

but at big corporates as well. Under the new framework, the definition of ‘Insider’ has

been expanded to include persons connected on the basis of being in any

contractual, fiduciary or employment relationship that allows such people access to

unpublished price sensitive information (UPSI). The broader definition of ‘insider’ will

also bring into its ambit persons who may not seemingly occupy any position in a

company, but are in regular touch with the company and its officers who are involved

in the operations.

1) The Reserve Bank of India (RBI) on 7 May 2015 put in place a new framework for

banks to check loan frauds. Under this framework early warning signals will be

integrated at banks to give quick information about loan frauds being committed. A

new concept has been introduced in the current framework as an important step in

fraud risk control. What is this new concept? – Red Flagged Account (RFA)

Explanation: The concept of a Red Flagged Account (RFA) is being introduced in

the current framework as an important step in fraud risk control. An RFA is one

where a suspicion of fraudulent activity is thrown up by the presence of one or more

early warning signals (EWS). These signals in a loan account should immediately

put the bank on alert regarding a weakness or wrong doing which may ultimately turn

out to be fraudulent. No restructuring or grant of additional facilities may be made in

the case of RFA or fraud accounts.

2) Which public sector bank launched “Rupay Platinum Debit Card” on 20 April 2015

by tying up with National Payments Corporation of India (NPCI)? – IDBI Bank

Explanation: The “Rupay Platinum Debit Card” fulfils the vision of the RBI of offering

a domestic, open-loop, multilateral payment system to all banks and financial

institutions in India. All transactions under this card scheme will be processed within

the country and will be in compliance with the regulatory requirement for debit cards

and the PIN has been made mandatory for performing any kind of transactions. This

ensures a higher level of security to the customers. The card enables cost-effective,

fast and secure access to large number of ATMs, POS terminals, e-commerce

websites and participating merchant-establishments across the country.

3) ICICI Bank on 20 April 2015 launched a new payment service called ‘Tap-n-Pay’

which enables customers make over-the-counter payments without using cash. This

first-of-its-kind payment service was launched in collaboration with which IT

company? – Tech Mahindra

Explanation: ICICI Bank’s ‘Tap-n-Pay’ payment service is based on the near-field

communications (NFC) technology. It can be used for merchant payments by merely

tapping a NFC-enabled mobile phone or a tag on the counter. One important feature

of this service is that it is a close-end one, only for a close group of customers, like

canteen payments at the work place, and not universal like a debit or credit card.

Any person having any bank account, and not limited to ICICI customers, can avail

the service. For making payments, the user will have to bring the NFC tag or the

mobile phone near a device at the merchant’s facility and the amount will

automatically get debited from the prepaid account, without keying-in any code.

4) According to a latest report of the World Bank, what percentage of India’s bank

accounts were lying dormant in 2014? – 43%

Explanation: The World Bank Global Findex for 2014 stated that 43% of adults with

bank accounts made no deposits or withdrawals in the past year. It also mentioned

that 230 million (people) with accounts paid utility bills and school fees in cash. This

meant that significantly higher bank accounts were not being utilized to undertake

cashless transactions. It is worth mentioning that nearly every Indian household now

has access to a bank account, thanks to a renewed push to financial inclusion under

the government’s Pradhan Mantri Jan Dhan Yojana (PMJDY).

5) What is the rate of interest for General Provident Fund (GPF) and other related

schemes that has been retained for 2015-16 as notified by the Finance Ministry on

21 April 2015? – 8.7%

Explanation: The 8.7% rate of interest will be effective from 1 April 2015 and will

apply on Provident Funds of central government employees, railways and defence

forces. The interest rate for GPF is in line with the interest rate fixed for Public

Provident Fund (PPF) at 8.7% for 2015-16. The Government had, however, raised

the interest rates for other small saving schemes. The interest rate for senior citizens

savings scheme was hiked from 9.2% to 9.3% and for Sukanya Samriddhi Account

(SSA), the special deposit scheme for girl child, the interest rate has been hiked from

9.1% to 9.2%, respectively. The interest earning for Kisan Vikas Patra (KVP) has

been retained at 8.7%.

6) The Central Board of Direct Taxes (CBDT), the apex policy making body of the

Income Tax department, notified the new Income Tax Return (ITR) Forms on 17

April 2015. However, seeing the furious backlash against the proposal to seek

plethora of details in these forms, the govt. on 18 April decided to put them on hold.

What was the additional information sought in these new forms that was apparently

criticized by various quarters? – Apart from the usual information, the new forms

sought details of all bank accounts held, foreign assets, beneficiaries, foreign

travel, expenses incurred and detailed break-up of capital gains

Explanation: With these changes, this was the fifth revamp of the income tax forms

in the past five years. The new forms (ITR-1 and ITR-2) were supposed to be used

to file returns from July 2015 for the assessment year 2015-16. They sought

enhanced disclosure of foreign assets – financial and physical -income generated

through foreign assets, and the beneficiaries and beneficial owners of these assets.

Govt. expected that higher disclosure of domestic assets will help check undisclosed

domestic (benami) assets, which will form a part of the benami property Bill to be

introduced by the government. The new forms required an assessee also to furnish

the number of bank accounts held by the individual “at any time (including

opened/closed) during the previous year” with the last balance in his or her account

on March 31 of the just concluded fiscal year. Another controversial disclosure

sought was whether one has travelled abroad, as well as the expenses incurred

during the travel. It was required to disclose whether the expenses incurred during

foreign travel were from a personal account or billed to the company, while on an

official trip. However, taxpayers were worried about the extra effort needed to fill in

the details and experts believed that it would add to paperwork and harassment.

Seeing the backlash, the govt. decided to put the new forms on hold.

7) What was the annual trade deficit for India for year 2014-15, the figures for which

were released by the govt. on 17 April 2015? – $137 billion

Explanation: The annual trade deficit for India for fiscal year 2014-15 increased by

$1.2 billion to touch $137 billion. The figure stood at $135.8 billion during 2013-14.

During 2014-15, India’s merchandise exports declined 1.2% to $310.5 billion, while

imports were down 0.6%, at $447.6 billion. On the other hand, India’s trade deficit in

March 2015 was the highest in four months, at $11.79 billion. These figures have

underscored risks for growth prospects in Indian economy with continuous fall in

exports. As far as steep decline in imports is concerned it was mainly due to a

plunge in global prices of crude oil, by nearly half since last June.

8) In an important step the Union Govt. made it easier to incorporate a new business

from 1 May 2015. Under this initiative, entrepreneurs keen on setting up new

enterprises will be able to incorporate their entities by filing just one form as against

eight as was the practice till now. Which new form is this? – INC-29

Explanation: This initiative is part of the government’s drive to improve India’s

ranking on the globally tracked parameter of ease of doing business. It is worth

mentioning that Prime Minister Narendra Modi has made it a personal mission to

improve India’s scores on this parameter. The government wants to reduce the time

taken to register a company in India to one day. From 1 May 2015, the Ministry of

Corporate Affairs made available, an integrated company incorporation form (INC-

29) that makes compliance and reporting easier and convenient for corporates. All

important procedures associated with incorporation (such as availability, allotment of

Director Identification Number (DIN), company incorporation and commencement of

business) will be facilitated through this single form. The red tape that businesses

faces while registering themselves, including at least 8 different forms for various

permissions has been a pet peeve of entrepreneurs in India.

9) According to the latest SEBI data, mutual fund (MF) managers invested a net sum

of Rs.7,618 crore in equity segment during April this year, which is the highest

monthly net inflow (equity) in more than seven years. This was the best MF equity

inflow since which month? – January 2008

Explanation: The net MF inflow of Rs. 7,618 crore recorded in April this year was

the highest net inflow in equities since January 2008, when fund managers poured in

Rs. 7,703 crore. In comparison, the MF equity inflow during April 2014 was just

Rs.2,698 crore. Besides, fund managers invested a net amount of Rs. 28,650 crore

in debt markets during April 2015. Experts have attributed this strong inflow in stock

markets to positive investor sentiments, government’s reforms agenda, improved

fundamentals of the domestic economy, and increased participation from retail

investors. Fund managers have shown interest in equity markets in the past one

year. They pumped in over Rs. 40,000 crore in equity markets in 2014-15, making it

their first net inflow in six years, for an entire fiscal. The huge inflows also helped the

MF industry reach around Rs.12 lakh crore-mark in assets under management

(AUM) at the end of the financial year.

10) A noted Indian investor and mutual fund entrepreneur passed away during May

2015 after a car accident in the United States. At the time of accident he was going

to attend the annual general meeting of Berkshire Hathaway, the company controlled

by legendary investor Warren Buffett. Who was this renowned Indian investor? –

Parag Parikh

Explanation: Parag Parikh died while the car he was travelling in met with an

accident in Omaha, Nebraska. 61-year old Parikh was the founder of Parag Parikh

Financial Advisory Services (PPFAS), a mutual fund company with long term

investment focus as its vision.

1) MUDRA Bank, an ambitious initiative to provide boost to India’s micro and small

business entities, was inaugurated by Prime Minister Narendra Modi at a programme

held in New Delhi on 8 April 2015. What is the full expansion of the term MUDRA?

– Micro Units Development and Refinance Agency

Explanation: MUDRA Bank will primarily serve the financial needs of small

entrepreneurs and will also act as a regulator for ‘Micro-Finance Institutions (MFIs). It

is being set up through a statutory enactment and will be responsible for developing

and refinancing through the Pradhan Mantri MUDRA Yojana, which was also

launched on this occasion. MUDRA Bank has a corpus of Rs 20,000 crore and a

credit guarantee corpus of Rs 3,000 crore. Initially it will work as part of the Small

Industries Development Bank of India (SIDBI).

2) The Reserve Bank of India (RBI) on 17 April 2015 came out with which important

proposal pertaining to term deposits? – It proposed to allow banks to offer

differential interest rates for term deposits

Explanation:  The RBI allowed banks to offer differential interest rates, based on

whether their term deposits are with or without a premature withdrawal facility. In its

sixth bi-monthly monetary policy review, in February 2015, the RBI had had decided

to introduce the feature of early withdrawal facility in a term deposit as a

distinguishing feature for offering differential rates of interest. Liquidity or ease of

withdrawal, touted as the biggest advantage of bank fixed deposits (FDs), might

soon be restricted due to this proposed move. According to RBI’s proposal, all term

deposits of individuals held singly or jointly of Rs 15 lakh and below should have

such a facility. Banks have also been allowed to offer deposits without the option.

3) Which entity has become India’s newest public sector undertaking (PSU) during

April 2015 after Union Govt. increased its stake to over 51% in this entity? – IFCI

Limited

Explanation: IFCI was earlier known as the Industrial Finance Corporation of India

and was incorporated on 1 July 1948 as a government company. It was the first

development finance institution in the country. Till now the Union Govt. had 47.93%

stake in it. Some time back the govt. acquired IFCI’s 6 crore preference shares and

taking up its stake up to 51.04%. Thus, as per the provisions of Section 2(45) of the

Companies Act, 2013 IFCI became a government company (PSU) with effect from 7

April 2015. IFCI is at present the leading infrastructure finance company in the

country.

4) Small Industries Development Bank of India (SIDBI) completed how many years

of its operations during April 2015? – 25 years

Explanation: SIDBI is the leading financial entity engaged in the growth and

development of micro, small and medium-scale enterprises (MSME) in India. It is a

non-independent financial institution which was set up through a Parliamentary act

on 2 April 1990. It was initially the wholly-owned subsidiary of IDBI while at present

Govt. of India holds 33% stake in it. It initially started its operations as a refinance

agency to banks and state level financial institutions for their credit to small

industries. But later it expanded its activities by including direct credit to the SME

through 100 branches in all major industrial clusters in India.

5) Which bank was placed at the top spot among all banking entities in mobile

banking transactions during January 2015 according to the pertaining data released

by RBI on 14 April 2015? – HDFC Bank

Explanation: Private sector-based HDFC Bank maintained the lead in mobile

transactions, with Rs 4,906.86 crore worth recorded in January 2015. The bank saw

a huge nine-fold growth in mobile banking transactions during January 2015 as

compared to January 2014. ICICI Bank followed HDFC Bank with mobile banking

transactions worth Rs 2,224.97 crore while SBI was third in the list with Rs. 1,586.4

crore. HDFC Bank has seen robust growth in the internet banking space and recent

trends suggest mobile banking, a subset of internet banking, has far outpaced the

latter.

6) India continued to be the leading nation in remittances during 2014 as announced

by the World Bank on 14 April 2015. How much net remittance was received by India

from its global migrant workforce in 2014? – $70 billion

Explanation: According to World Bank’s Report on Remittance, India, China,

Philippines, Mexico and Nigeria were the top five remittance recipient countries, in

terms of value of remittances during 2014. Total remittances in 2014 reached $583

billion. This is more than double the official development assistance (ODA) in the

world. India received $ 70 billion, China $ 64 billion, the Philippines $ 28 billion. On

the other hand, United States, Saudi Arabia, Germany, Russia and the United Arab

Emirates (UAE) remained the top five migrant destination countries.

7) The first ever International Financial Services Centre (IFSC) or Finance Special

Economic Zone (FSEZ) became operational on 10 April 2015 after it was

inaugurated by Union Finance Minister Arun Jaitley. This first-of-its-kind IFSC called

Gujarat International Finance Tech-City (GIFT City) is situated at which place of

Gujarat? – Between Gandhinagar and Ahmedabad

Explanation: GIFT City is the first-of-its-kind IFSC to be established in India and has

been centrally and strategically located between Gujarat capital Gandhinagar and

Ahmedabad. Its main purpose is to provide high quality physical infrastructure

(electricity, water, gas, district cooling, roads, telecoms and broadband), so that

finance and tech firms can relocate their operations there from Mumbai, Bangalore,

Gurgaon etc. where infrastructure is either inadequate or very expensive. This

project is also called a FSEZ (Finance Special Economic Zone). This is one of the

dream projects of Prime Minister Narendra Modi, when he was the Chief Minister of

Gujarat. Union Govt. expects that GIFT City will likely get back much of

the business of financial services -currency derivatives and reinsurance businesses,

for instance -that India is losing out to Singapore, Dubai and London now. During

inauguration of GIFT City, Arun Jaitley also unveiled rules and regulations for this

global financial hub. The regulations are aimed at creating a vibrant IFSC on the

lines of those in Dubai and Singapore and check the flight of trading in rupee and

Indian securities to such offshore financial hubs.

8) What would be the maximum sum assured for life insurance policies sold through

common service centres (CSCs) as proposed in the draft regulations released by the

Insurance Regulatory and Development Authority of India (IRDA)? – Rs. 2 lakh

Explanation: The common service centre (CSC) platform is currently being used by

citizens to access and pay for the services offered by multiple government agencies

and private sector players. Set up under the national e-governance plan, about

150,000 CSCs are functioning under different names in different states. The IRDA

had issued guidelines for utilising the CSC network to sell insurance products in

September 2013. The IRDA has now proposed a maximum sum assured of Rs. 2

lakh for life insurance policies sold through CSCs. However, motor insurance would

be allowed to exceed this limit.

9) Which company became the first Indian private company since the year 2000 to

list overseas as it recently made its debut on US stock exchange NASDAQ?

– Videocon D2h

Explanation: Videocon D2h is a private company from the stable of Videocon Group

and is engaged in providing direct-to-home services across India. It made its debut

on New York-based NASDAQ by raising $ 325 million through issuance of American

Depository Receipts (ADRs). Thus it became the first Indian private company since

the year 2000 to list overseas. VideoconD2h also became the first sizeable Indian

listing on US exchanges and the first Indian media company to be listed at NASDAQ.

With a market capitalization of around $1.15 billion, it is now among the most valued

Indian companies at NASDAQ.

10) Which leading online retail company acquired mobile transactions platform

FreeCharge as announced by the company on 8 April 2015? –Snapdeal

Explanation: Snapdeal, which is one of India’s largest online retail marketplace,

acquired FreeCharge, a mobile commerce platform where users can pay their

mobile, DTH and utility payments across most major operators. However,

FreeCharge will continue to function as an independent platform and without any

changes in its shopping experience. With this acquisition, Snapdeal can offer a wide

range of products and services, including financial services, mobile recharge and

utility payments with a growing user base of over 40 million.

 

1) India Post, the postal department of Govt. of India, on 1 April 2015 closed its 135-

year old Money Order (MO) service. The Money Order service, which provided pan-

India door-delivery of funds to a payee from over 155,000 post offices, was an

integral part of the department since 1880. India Post is now focusing on which 2

postal remittance services? – Electronic Money Order (eMO) and Instant Money

Order (iMO)

Explanation: The legendary MO service was the traditional money transfer service

of India Post and end of its service did evoke a sense of nostalgia for numerous

Indians who grew upon being part of this service. However, in the era of instant

communications the MO service made way for its electronic versions – eMO and

iMO. Both these are much faster and simpler means to remit money. Under eMO

service money is paid at the door-step of a payee – from Rs.1 to Rs.5,000 – within a

day, along with 21 standard messages. It is booked at an authorised post office and

delivered pan-India from all delivery post offices. This can also be tracked on the

India Post website. The iMO system provides instant money order service for

amounts ranging from Rs.1,000 to Rs. 50,000. An instant, web-based system,

money can be remitted by designated iMO post offices – where an electronic version

of a form is filled along with an identity proof.

2) Which entity became the first public sector undertaking (PSU) to hit the market in

fiscal year 2015-16 with its disinvestment taking place on 8 April 2015? – Rural

Electrification Corporation (REC)

Explanation: Union Govt. sold 5% of its stake in REC on 8 April at Rs. 315 a share

to mop up over Rs. 1,550 crore, marking the first PSU disinvestment of the current

fiscal. The price for the offer for sale (OFS) of 4.93 crore REC shares was decided

on 7 April at a meeting headed by Finance Minister Arun Jaitley. The government

has budgeted to raise Rs. 41,000 crore through minority stake sale in 2015-16. The

disinvestment department has a pipeline of companies to sell minority stake to avoid

bunching up of disinvestment towards the end of end of the fiscal. The companies

which have been lined up for disinvestment include BHEL, Dredging Corporation,

NALCO, IOC and NMDC.

3) RBI presented its first bi-monthly Monetary Policy Review on 7 April 2015 and

kept all primary rates, including the Repo Rate, unchanged. What is the estimated

GDP growth rate proposed to be achieved by RBI during fiscal year 2015-16?

– 7.8%

Explanation: The RBI estimated that the Indian economy would achieve a healthy

growth rate of 7.8% during 2015-16, up from 7.5% in 2014-15. RBI has already

reduced the repo rate by 50 basis points (bps) so far this year and hence restrained

itself from further reduction this time. It kept the cash reserve ratio (CRR) or the

proportion of deposits banks have to keep aside with RBI unchanged. Banks were

hoping for a cut in CRR to cut interest rates. But in another important move, the RBI

asked banks to pass on the Repo Rate cut benefits to customers and the industry.

Following are the major highlights of RBI’s First bi-monthly Monetary Policy

Review for 2015-16

– Short-term lending rate (Repo) unchanged at 7.5%

– Cash Reserve Ratio (CRR) unchanged at 4%

– Statutory Liquidity Ratio unchanged at 21.5%

– Consumer Price Index (CPI)-based inflation forecasted at 5.8% by March 2016

4) Union Govt. has planned which step to promote the Kisan Vikas Patra (KVP),

which was re-launched during November 2014? – It has roped in Public Sector

Banks (PSBs) to sell KVP certificates

Explanation: There-launched Kisan Vikas Patra has failed to garner much interest

and collected just Rs 1,100 crore in 2014-15. Gross collections for KVP were as high

as Rs 21,631.16 crore in 2010-11, which was the year before it was discontinued.

KVP is presently issued through Post Offices only and the Union Govt. has now

decided to sell KVPs through PSBs also. Finance minister Arun Jaitley had in

November 2014 re-launched the KVP, which was a hugely popular small saving

scheme of the 1990s. On the other hand, another small saving scheme launched last

year, the Sukanya Samriddhi Account (SSA), is fast gaining popularity with over 27

lakh accounts already opened under it.

5) The amalgamation scheme of which two private sector banks came into effect on

1 April 2015 after the Reserve Bank of India (RBI) gave its approval for their merger?

–Kotak Mahindra Bank and ING Vysya Bank

Explanation: The RBI on 31 March 2015 approved the merger of ING Vysya Bank

into Kotak Mahindra Bank. In November 2014, Kotak Mahindra Bank had announced

it was acquiring Bengalaru-headquartered ING Vysya Bank in an all-stock deal of

over Rs. 15,000 crore ($2.4 billion). The merger deal was approved by the

Competition Commission of India (CCI) during February 2015. Following RBI’s

approval, all the tangible and intangible assets of the two entities were transferred to

Kotak Mahindra Bank to make it the fourth largest private-sector bank in India after

ICICI Bank, HDFC Bank and Axis Bank respectively. The merged entity has now

1,214 branches, with a wide-spread pan-India network. ING Vysya had around

10,000 employees, while Kotak Mahindra Bank has around 29,000.

6) The State Bank of India (SBI) on 31 March 2015 announced plans to divest 10%

stake in its life insurance arm SBI Life. Which foreign financial entity is the minority

partner in SBI Life? – BNP Paribas Cardif (France)

Explanation: SBI Life Insurance is a joint venture between SBI and BNP Paribas

Cardif of France. At present, SBI owns 74% of the total capital and BNP Paribas

Cardif has the remaining 26% in the joint venture. There have been increased efforts

to restructure the insurance sector in the country after the Parliament in March 2015

had passed the Insurance Laws (Amendment) Bill, 2015 which seeks to increase

foreign investment in private sector companies to 49% from the existing 26%.

7) The Union Govt. on 1 April 2015 revamped the procedure for appointment of non-

official directors (NoDs) on the Boards of public sector banks, insurance companies

and financial institutions. What the new age limit for appointment of NoDs is, as

prescribed in these guidelines? – Less than 67 years

Explanation: The revamp in the procedure for appointment of NoDs was done with

a view to professionalise the Boards of these banks and financial institutions and

further provide requires skill sets to improve the quality of deliberations on the

Boards. According to the new guidelines, the applicant for the post of NoD must less

than 67 years of age and have 20 years of prescribed professional work experience.

NoDs could be appointed for maximum six years or two terms. Apart from this, a

dedicated web portal (http://financialservices.gov.in/nod) was created where

interested persons can apply online.

8) What was India’s external debt stood as on 31 December 2014 according to the

data released by the Finance Ministry on 31 March 2015? – $462 billion

Explanation: India’s external debt of $462 billion as of end-December 2014 was

thus 3.5% greater than the figure at the end of March 2014. However, India’s

external debt-to-gross domestic product (GDP) ratio stood at 23.2% as of end-

December, thus showing marginal compared with 23.7% as of end-March 2014. The

country’s short-term debt fell 6.7% from March-end 2014 to $85.6 billion as of

December-end, while long-term debt rose 6.1% to $376.4 billion.

9) What was the total foreign fund inflow into India by foreign institutional investors

(FIIs) during 2014-15 that was the highest annual FII investment in Indian capital

markets? – Around Rs. 2.7 lakh crore

Explanation: According to the latest data available with Central Depository Services

Ltd (CDSL), the Foreign Institutional Investors (FIIs) made a net equity investment

of Rs. 1.09 lakh crore in 2014-15, and a further Rs. 1.64 lakh crore into debt

markets. Thus total FII inflows during 2014-15 stood at Rs. 2.73 lakh crore. This was

the highest net inflow by FIIs since being allowed to invest in Indian capital markets

(equity and debt) over two decades ago in November 1992. The previous high was

in 2012-13, when the net investments climbed to Rs. 1.68 lakh crore.

10) The Income Tax Department on 31 March 2015 took which extreme step against

big tax defaulters? – It published their names in newspapers

Explanation: The IT Department had, till now limited itself to posting the names of

some of its biggest defaulters on its website. But the department on 31 March

adopted the extreme step of publishing the name of the defaulters in reputed

newspapers. This was done so that the common man can come forward to help the

department in knowing the whereabouts of these. The step is to enhance public

awareness against these entities who are acting against law. The newspapers

carried the names of the tax defaulters and the data published was quoted to have

been published by the Principal Chief Commissioner of Income Tax (Administration).

This is the first time the department has put in public domain a list of those wilful tax

defaulters who have a tax liability of Rs. 10 crore and above.

 

1) The Securities and Exchange Board of India (SEBI) on 22 March 2015 gave what

relaxation primarily to PSU banks on non-performing assets? – It relaxed the norms

for conversion of the distressed loans of listed companies into equity by

banks and financial institutions

Explanation: The SEBI on 22 March decided to adopt a fair price mechanism for

conversion of distressed loans in place of the current market pricing formula. SEBI

will prescribe how the fair value will be decided. The new rule will be applied only

when banks acquire at least 51% of the equity. Bad debts or non-performing assets

of all public sector banks rose to 5.64% of advances at the end of December 2014,

which is the highest after the 5.73% recorded in 2004-05.

2) The Reserve Bank of India (RBI) on 30 March 2015 relaxed provisioning rules

against bad loans by allowing banks to set aside up to 50% of floating provisions.

What was the present rule for the same? – Till now RBI allowed up to 33% of

floating provisions against bad loans

Explanation: These provisioning rules broadly refer to the specific amount that

banks need to set aside in good times above the mandatory provisioning

requirement as prescribed by RBI. Banks have started building such reserves since

2010. In February 2014, RBI had allowed to utilise up to 33% of countercyclical

provisioning buffer/floating provisions held by them as on 31 March 2013. Mounting

bad loans have been a concern for the RBI and this relaxation may help banks

provide for such loans thereby reducing the hit banks may face on their profitability

due to the bad loans.

3) Indian Railways on 23 March 2015 launched its RuPay pre-paid debit card service

for the benefit of railway passengers. Passengers would be able to book railway

tickets and make online payments through this debit card launched by the IRCTC.

Which PSU bank is collaborating with the National Payment Corporation of India

(NPCI) and IRCTC in this service? – Union Bank of India (UBI)

Explanation: The RuPay pre-paid debit card of railway will be made available from

the branches of Union Bank of India (UBI) or through IRCTC for free. This card is the

first of its kind in the market where both virtual as well as physical cards are being

issued to the customer in two variants – Partial KYC with a loading limit of Rs.10,000

and full KYC with a loading limit of Rs.50,000. The first 5 transactions per card every

month done on IRCTC for purchase of railways tickets will be FREE (no transaction

charges) to the customer for the first 6 months only. For every subsequent

transaction post the free usage, customer will be charged Rs.10/- per transaction.

4) Who was appointed as the Chairman of the Empowered Committee of State

Finance Ministers on the Goods and Services Tax (GST) as announced by the

government on 25 March 2015? – K.M. Mani (Finance Minister of Kerala)

Explanation: The post of the Chairman of the Empowered Committee of State

Finance Ministers on the GST fell vacant when Abdul Rahim Rather quit following

defeat of National Conference in the Jammu and Kashmir elections. Kerala Finance

Minister K.M. Mani was appointed for this post as announced by the Finance Ministry

on 25 March. The chairman of the committee has generally been from an opposition

ruled state. Mani represents the Kerala Congress (M). His appointment could help

the government garner support from the opposition when Parliament takes up the

Constitution amendment bill for GST. The GST, a much-awaited reform to replace

multiple indirect taxes with one levy, is proposed to be rolled out from April 2016.

5) Which entity became the first-ever public sector undertaking (PSU) to issue bonus

debentures as done by it on 26 March 2015? – NTPC Ltd.

Explanation: NTPC on 26 March issued bonus debentures amounting to Rs.

7725.76 crore to Government of India by virtue of its 74.96% shareholding in NTPC.

In addition to the bonus debentures, the Government of India has also received Rs.

2060.75 crore as dividend distribution tax on the debentures. This thus became the

first-ever instance of a PSU issuing bonus debenture issues. Under this bonus issue,

NTPC issued one fully paid-up, secured debenture of Rs. 12.50 each, for every one

fully paid-up equity share of Rs. 10 each held by its members. The issue size of the

bonus debenture thus stood at Rs. 10306.83 crore which is the biggest issue of its

kind in the country and also the first ever by any PSU.

6) The SEBI on 22 March 2015 approved guidelines to govern international financial

services centres (IFSC). Which centre is expected to be India’s first such IFSC? –

Gujarat International Finance Tec-City (GIFT City)

Explanation: The GIFT City is being established near Ahmedabad in Gujarat. The

new norms for IFSCs approved by SEBI on 22 March aims to ease the setting up of

stock exchanges and capital market infrastructure in such centres. A stock exchange

can be set up with Rs. 25 crore capital, against the normal requirement of Rs. 100

crore. However, this will have to be raised to Rs. 100 crore within three years. For a

clearing corporation, the initial capital requirement will be Rs. 50 crore, against the

norm of Rs. 300 crore, which will have to be achieved in three years.

7) The Securities and Exchange Board of India (SEBI) on 22 March 2015 came up

with guidelines for which category of bonds which will help the Union Govt. in its

“Smart Cities” plan? – Municipal Bonds

Explanation: The SEBI on 22 March approved a new set of norms for listing and

trading of municipal bonds on stock exchanges. Municipal bonds, also to be known

as “Muni Bonds”, would allow authorities to raise funds including for setting up of

smart cities, by raising funds from the public and from the institutional investors. The

municipal authorities, desiring of issuing these bonds, would need to have a strong

financial track record and such bonds would be listed on the stock exchanges. In

December 2014, SEBI had floated draft norms for ‘Issue and Listing of Debt

Securities by Municipality’ and had sought public comments till 30 January 2015.

These bonds products are very popular among investors in many developed nations,

especially the United States, where they have attracted investments totalling over

$500 billion and are among preferred avenues for household savings.

8) The Union Govt. on 18 March 2015 launched a Rs. 200 crore scheme to set up a

network of technology and incubation centres to accelerate entrepreneurship and

promote start-ups for innovation and entrepreneurship in agro-industry. Which entity

would provide financial aid under this scheme? – Small Industries Development

Bank of India (SIDBI)

Explanation: This scheme was launched by the Micro, Small and Medium

Enterprises (MSME) Ministry. In order to ensure that credit is available for start-ups,

the MSME Ministry has created a fund of Rs. 60 crore which will be channelised

through SIDBI. The scheme is designed to provide necessary skill set for setting up

business enterprises in the agro sector. The primary focus of the scheme is to

provide a platform on which multiple stakeholders can work together and address the

employment needs of rural areas. For successful commercialisation and mentoring,

a grant of Rs. 1 lakh per year for three years subject to a maximum of Rs. 3 lakh

would be given.

9) The Union Govt. during March 2015 established a fund with a corpus of Rs. 500

crore which seeks to keep prices of perishable farm commodities under control

through suitable market interventions. What is the name of this fund? – ‘Price

Stabilization Fund’ (PSF)

Explanation: The ‘Price Stabilization Fund (PSF) will be used to advance interest

free loans to state governments and central agencies to support their working capital

and other expenses on “procurement and distribution” interventions for such

commodities. It has initially been proposed for onion and potato. The fund has been

set up as a follow-up of a budget announcement made by finance minister Arun

Jaitley on 28 February 2015. According to operational details of the fund, the states

will set up a “revolving fund” for adequate market interventions. The Centre and state

will contribute equally (50:50) for the revolving fund. The ratio of Centre-state

contribution to the state level corpus in respect of north-east states will be 75:25.

Apart from this an eight-member price stabilization fund management committee has

been set up under the chairmanship of additional secretary in agriculture ministry to

manage the fund at the Centre and monitor revolving funds in each state.

10) The sale of mobile phone airwaves (spectrum auction) ended on 25 March 2015

after 19 days of fierce bidding between telecom operators. What amount was raised

by the Union Govt. through this auction as announced by Union Telecommunications

Minister Ravi Shankar Prasad on 26 March 2015? – Rs. 109,874 crore

Explanation: The details pertaining to the spectrum auction were revealed after the

Supreme Court, which is hearing a host of petitions on the issue of spectrum,

allowed the government on 26 March to go ahead and finalise the bids and name the

winners, but take a decision only after its order on that matter. This sale was the

largest-ever spectrum auction in India. The numbers revealed by the

communications minister suggest that the latest tranch of auction has come as a

windfall for the government, surpassing the previous high of Rs. 106,200 crore that

the government had received in the 2010 auction, spread over 34 days with 183

rounds of bidding.

 

1) What was the gross non-performing assets (NPAs) of public sector banks as on

December 2014 as disclosed by the Reserve Bank of India (RBI) recently? – Rs.

2,60,531 crore

Explanation: While the gross NPA of public sectors banks stood at Rs. 2,60,531

crore at the end of December 2014, the contribution of top 30 defaulters in this

amount was as high as Rs. 95,122 crore, which is more than one-third of the entire

NPA. In terms of percentage it amounts to 36.5%. As per the data made available by

the RBI, the total number of NPA borrowers having Rs. 10 crore and above at the

end of September 2014 stood at 2,897 with outstanding amount of Rs. 1,60,164

crore.

2) Indian Railways on 11 March 2015 signed a Memorandum of Understanding

(MoU) that will raise Rs. 1.5 lakh crore worth of funds to finance its infrastructure.

This is the largest-ever funding in Railways’ history. This historic MoU was signed

with which financial entity? – Life Insurance Corporation of India (LIC)

Explanation: Under this MoU, the LIC will make available to the Ministry of

Railways/its entities a financial assistance with a limit of Rs. 1,50,000 crore over the

next five years for implementing its infrastructure projects. The financial assistance

will be available from the financial year 2015-16. The railways will use the funds to

augment its capacity. LIC will invest in bonds issued by various railway entities such

as Indian Railways Finance Corporation (IRFC), beginning next fiscal. There would

be a five-year moratorium in interest and loan repayment. The bonds will have a

tenor of 30 years and will be disbursed over the next five years.  In his Budget

Speech, Union Rail Minister Suresh Prabhu had announced his intention of meeting

a part of the total Plan Budget of Rs. 1,00,011 crore for the financial year 2015-16,

through extra budgetary resources, such as market borrowings by tapping low cost

long term funds.

3) According to the information given by the govt. in Parliament on 11 March 2015,

two public sector undertakings (PSUs) were added to the list of sick PSUs. There

were as many as 65 units in the list of sick PSUs as on 31 March 2014. Which two

PSUs are these? – Air India and MTNL

Explanation: Air India and MTNL, once market leaders in aviation and mobile

telephony sectors respectively, were declared sick as per the criteria for a PSU to be

declared as such, after they incurred losses worth 50% or more of their average net

worth during four preceding years. Govt. also announced that it will close down 5

PSUs that include three HMT units whose brand of watches and tractors once ruled

the market. However, name of other PSUs to be closed were not provided.

4) Which associate bank of the State Bank Group on 8 March 2015 announced a 10

basis-point cut in the base rate to 10.15% and with thus became first major to come

out with a rate cut in the post-Budget phase? – State Bank of Travancore (SBT)

Explanation: State Bank of Travancore (SBT) announced a 10 basis-point cut in the

base rate to 10.15% effective from 16 March 2015. It became the first major bank to

announce rate cut after RBI’s second Repo rate cut of the year was announced on

March. It is worth mentioning that the SBT has sought to cut base rate at a time

when even market leader and parent SBI was mulling its option.

5) Which company recently became the private company in the Indian life insurance

industry to cross Rs. 1 lakh crore mark in Assets Under Management (AUM) as

announced during March 2015? – ICICI Prudential Life Insurance Company

Explanation: ICICI Prudential Life Insurance Company had started its operations in

India in December 2000 shortly after the insurance sector in the country was opened

for the private companies. Company’s AUM recently crossed the figure of Rs. 1 lakh

crore and thus became the first private company in the Indian life insurance industry

to achieve the milestone. ICICI Prudential is now the largest private player in

country’s life insurance space. The AUM for a life insurer qualitatively symbolizes the

amount of trust placed by policyholders in the company.

6) The Reserve Bank of India (RBI) on 13 March 2015 entered into a $1.5 billion

currency swap agreement with the central bank of Sri Lanka. What is the primary

objective of this agreement? – To help keep the Sri Lankan rupee stable

Explanation: Sri Lanka rupee has been under pressure since January 2015 and

fallen around 1.5% so far this year despite the fact that the Sri Lankan central bank

defended it with selling dollars.

7) What was the insurance penetration in India during 2013 as informed by the

government in Parliament on 10 March 2015? – 3.9%

Explanation: The Parliament was informed that the penetration for the insurance

sector as a whole in the year 2013 was 3.9% in India, as against world average of

6.3%. Insurance penetration, measured as the ratio of premium to Gross Domestic

Product (GDP), was 3.1% of life insurance and 0.8% for general insurance in 2013.

The level of insurance penetration depends on a large number of factors like level of

economic development of the country, the extent of the savings in financial

instruments and the size and reach of the insurance sector. In relation to BRICS

countries, India’s insurance penetration was better than China and Russia but well

below South Africa and only a tad lower than Brazil. The insurance penetration of

South Africa stands at 15.4% (in 2013); China 3%; Brazil 4% and Russia 1.3%.

8) The NDA govt. led by Narendra Modi was able to pass its first major reform bill in

the form of the Insurance Laws (Amendment) Bill, 2015 when it was passed by the

Rajya Sabha on 12 March 2015. The lower house (Lok Sabha) had already passed

this bill. When the insurance bill was first introduced in the Parliament? – 2008

Explanation: The bill was first introduced by the UPA govt. in 2008. It sought to

raise the FDI cap in insurance sector from 26% to 49% among several other

provisions and was opposed by the BJP then. Now with the passing of the Insurance

Laws (Amendment) Bill, 2015, an earlier ordinance issued in 2014 by the Narendra

Modi government will be replaced. The legislation will shake up India’s overcrowded

life insurance sector, allowing global insurers such as Britain’s Prudential and others

to increase their Indian stakes. The passage of the bill represents a rare victory for

Modi, who was elected last May on a promise of jobs and economic growth.

9) Which company is the largest in India in terms of assets as disclosed by the

recent data compiled by the Corporate Affairs Ministry? – Reliance Industries Ltd

(RIL)

Explanation: According to data compiled by the Corporate Affairs Ministry, RIL is

the country’s largest corporate with assets worth Rs. 3.68 lakh crore, followed by

state-owned Indian Oil Corporation (IOC) and mortgage lender (Housing

Development Finance Corp (HDFC). At the end of March 2014, RIL’s assets stood

at Rs. 3.68 lakh crore, while that of IOC and HDFC was at Rs. 2.52 lakh crore

and Rs. 2.25 lakh crore, respectively. Other entities in the top ten are Power Finance

Corp (4), NTPC (5), Rural Electrification Corp (6), Power Grid Corp (7), LIC Housing

Finance (8), Steel Authority of India (9) and Bharat Sanchar Nigam Ltd (10). Power

Finance Corp’s assets stood at Rs. 1.94 lakh crore, NTPC (Rs. 1.80 lakh crore),

Rural Electrification Corp (Rs. 1.53 lakh crore), Power Grid Corp (1.40 lakh crore),

LIC Housing Finance (Rs. 95,777 crore), Steel Authority of India (Rs. 91,962 crore)

and Bharat Sanchar Nigam Ltd (Rs. 89,333 crore). In the list of top 10 corporates in

terms of assets, RIL and HDFC were the only two firms from the private sector. The

list is based on data from 4,15,886 companies which had filed their balance sheets

for the year 2013-14 till  30 November 2014.

10) Country’s jewellers have put forth its demand to the Union Govt. to scrap the

mandatory requirement of Permanent Account Number (PAN) Card during purchase

of gold ornaments. They feel that this step announced in the Union Budget of 2015-

16 would be impractical to implement and hurt the jewellery sector. What is the

buying limit for PAN cards? – Above Rs. 1 lakh

Explanation: In the Union Budget 2015-16, the Finance Minister had mandated that

PAN card has to be produced for purchase of gold ornaments above Rs. 1 lakh. This

provision was announced to prevent the circulation of black money which easily gets

converted into gold bars or jewellery. The All India Gems and Jewellery Trade

Federation (GJF), the national federation of the gems & jewellery sector, feels that

this move would discriminate against 70% of the rural buyers who do not have PAN

cards and do not come under the income tax net. According to jewellers, the

requirement of PAN card would result in shifting of business from law-abiding

jewellers to unscrupulous elements in the trade.

 

1) According to information disclosed on 2 March 2015, an agreement was signed

between the Centre and the Reserve Bank of India (RBI) during February 2015 that

sets inflation target for the RBI. What is this target? – To bring inflation down to

6% by January 2016

Explanation: The agreement formalised a policy the RBI had been following since

January 2014, which is a significant development in India’s monetary policy

formulation championed by Governor Raghuram Rajan. Under this agreement the

RBI will be deemed to have missed its target if consumer inflation remains above the

6% level for three consecutive quarters during 2015-16 or if it remains below 2% for

three consecutive quarters during the year 2016-17. The bank will have to explain to

the government the causes, and what steps it intends to take to steer inflation back

within a given time if it misses the target.

2) The Reserve Bank of India (RBI) on 4 March 2015 lowered its policy repo rate by

25 basis points. This was the second cut this year on the back of easing inflation and

a government commitment to fiscal discipline. What is the new Repo rate after this

cut? – 7.5%

Explanation: The Repo rate stood at 7.75% before this cut. It is worth mentioning

that the RBI had lowered interest rates by 25 bps on 15 January 2015. Another

important thing associated with rate cut is that both the rate cuts this year have taken

place outside of the central bank’s scheduled policy review meetings.

3) What important recommendation pertaining to domestic financial institutions

(DFIs) was given by the 14th Finance Commission that was tabled in the Parliament

on 24 February 2015? – A dedicated panel should be constituted for DFIs

Explanation: The 14th Finance Commission stated that domestic financial institutions

(DFIs), such as public sector banks have a dominant role in the financial framework

of the economy. Hence it recommended that a Financial Sector Public Enterprises

Committee (FSPEC) be appointed to examine and recommend parameters for

appropriate future fiscal support to financial sector public enterprises. This

suggestion has come at a time when these banks need around Rs. 2.84 lakh crore

additional capital to meet the BASEL-III requirement. These requirements are critical

to make banks healthy with growing business. At present, there are 27 public sector

banks. These are divided into – nationalised banks (21) and State Bank of India

group (6).

4) Which state-owned bank of Britain has decided to close its banking operations in

India as disclosed recently? – Royal Bank of Scotland (RBS)

Explanation: RBS has decided to close its banking operations in India but will be

retaining the back office. The balance sheet exposure of RBS’s India business has

also almost halved in calendar year 2014. At the end of December 2014, the net

balance sheet exposure of the bank’s operations in India fell by £1.7 billion to £2.0

billion. Bank’s Indian banking operations mainly include investment and wholesale

banking.  The bank also has a wealth management business and retail presence as

well. According to reports, RBS’ Indian banking business employs about 1,200-1,500

people.

5) International rating agency Moody’s on 3 March 2015 downgraded the ratings of

some securities of which two public-sector banks? – Central Bank of India and

Indian Overseas Bank

Explanation: The agency downgraded to BA1 from BAA3 its ratings on local and

foreign-currency deposits of Central Bank of India and Indian Overseas Bank (IOB).

Apart from this IOB’s senior unsecured debt was also downgraded to BA1 from

BAA3. BAA3 rating means below investment grade ratings. This downgrade by

Moody’s is being seen as possibly the start of similar rating revisions for other

weaker public-sector banks by the agency. However, Central Bank of India and IOB

continue to have standalone ratings of B3 and B2, respectively, from Moody’s.

Moody’s action reflects its assumption of a lower level of support from the

Government.

6) The proposed merger of Forwards Markets Commission (FMC) with SEBI as

announced in the Union Budget on 28 February 2015 is expected to sound a death

knell for the so-called ‘dabba trading’. What is meant by ‘dabba trading’? – Illegal

trading in commodities market

Explanation: The so-called ‘dabba trading’ in commodities market is widely

prevalent across Gujarat and many other parts of the country with estimated turnover

to the tune of Rs. 50,000-1,00,000 crore a day. While regulators and enforcement

agencies have been trying hard to curb this menace for a long time, the lack of a

unified regulatory mechanism has so far made it difficult to fully control this problem.

In his Union Budget on 28 February, Finance Minister Arun Jaitley proposed to

merge the commodity markets regulator FMC (Forwards Markets Commission) with

the capital markets watchdog SEBI (Securities and Exchange Board of India). With

this the efforts to check this menace are likely to get a major boost as SEBI already

enjoys greater powers including those to conduct search and seizure, impose

penalties, order arrests and take other strict actions against wrongdoers.

7) The report of the 14th Finance Commission was tabled in the Parliament by

Finance Minister Arun Jaitley on 24 February 2015. How much raise in share of

states in central taxes has been suggested in this report that has been accepted by

the Union Govt.? – 10%

Explanation: According to an Action Taken Report on the recommendations given

by the Commission, the Centre has decided to devolve a much higher share of 42%

of the Union’s tax receipts to the States. Compared to 2014-15, this will be a

significant enhancement of 10% over the 32% during the award period of the

13th Finance Commission. As against a total devolution of Rs. 3.48 lakh crore

approximately in 2014-15, the total devolution to the States in 2015-16 will

be Rs. 5.26 lakh crore approximately, a year-on-year increase of Rs. 1.78 lakh crore

approximately. The higher tax devolution will allow States greater autonomy in

financing and designing schemes as per their needs and requirements. The

Commission, headed by former RBI Governor Y.V. Reddy, gave its report to the

President on 15 December 2014. The recommendations of the Finance Commission

are binding upon the Government as it is constituted by the President under a

constitutional provision. These recommendations will be valid from April 1, 2015, for

a period of five years.

8) Union Finance Minister Arun Jaitley presented the Economic Survey for 2015-16

in the Parliament on 27 February 2015. What the growth forecast is for fiscal year

2015-16 as disclosed in the Survey? – 8.1 to 8.5%

Explanation: With expected growth for 2015-16 to be over 8%, India is on its way to

become the fastest growing major economy in the World. The Survey also disclosed

that the growth of Indian economy could be launched on a double digit trajectory in

the medium term. And that there is a scope for Big Bang reforms now.

9) Indian capital market regulator SEBI has recently asked individual investment

advisers providing opinion on securities or public offers through TV channels or other

media platforms to get them registered with it. This is being done with an aim to

safeguard Indian markets from any manipulative research reports. These individuals

would be registered in which capacity by SEBI for the same? – “Research

Analysts”

Explanation: Last year, the Securities and Exchange Board of India (SEBI) had

ushered in norms for ‘Research Analysts’. Individuals (including journalists) who offer

opinion on securities and public issues through the media, are also required to obtain

registration as research analysts with SEBI. Investment advice refers to advice on

investments in securities or investment products in written, oral or through any other

means of communication for the benefit of the client and includes financial planning.

However, the members of the Institute of Company Secretaries of India (ICSI),

Institute of Chartered Accountants of India (ICAI), Institute of Cost and Works

Accountants of India (ICWAI) who provide investment advice to their clients’

incidental to their professional services are exempted from obtaining registration as

investment advisers.

10) According to the data pertaining to mutual fund industry released on 5 March

2015 the assets under management for the mutual fund industry crossed a milestone

figure for the first time during February 2015. What is this milestone figure? – Rs. 12

lakh crore

Explanation: The assets under management (AUM) that stood at Rs. 10.5 lakh

crore at the end of December 2014 rose to Rs. 11.81 crore in January 2015 and then

to Rs. 12.02 lakh crore at the end of February 2015 registering a growth of 14% over

the past two months. This is the highest ever AUM registered by the industry that

has seen AUM’s value rise by Rs. 3,76,956 crore or 46% since the beginning of this

financial year. This means that domestic retail investors have returned to the mutual

fund route in large numbers in the current year. The year witnessed strong

participation from retail investors into domestic equities through mutual funds after

the BJP-led NDA gained a clear majority in the 2014 general elections and in

anticipation of reform measures promised by them

1) The State Bank of India has recently launched a massive initiative to empower its

customers through technology and awareness. Under this initiative special SBI

centers across the length and breadth of the country have started holding interactive

learning sessions and demos of the bank’s tech-channels. What is the name of these

special centers? – Tech Learning Centres (TLCs)

Explanation: This initiative has been on since December 2014. Under this 385 State

Bank TLCs across the length and breadth of the country have started holding

interactive learning sessions and demos of the bank’s tech-channels for over ten

thousand customers every month. A large number of customers are having an initial

fear and hesitation to use technology for their banking needs. But through this

initiative SBI seeks to remove such hesitation among them.  After launching in

December, 2014, more than 30,000 customers were trained in these TLCs. TLCs will

spread awareness of the Bank’s various tech channels including Cash Deposit

Machines, Mobile Banking apps, Net Banking and Green Remit Cards, in addition to

providing guidance on how to use these channels safely and in a secure manner.

2) An important agreement pertaining to wage revision of bank employees was

signed on 23 February 2015 between the Indian Banks’ Association (IBA) and bank

trade unions at Mumbai which resulted in the aversion of the proposed 4-day bank

strike from 25 February. What are the main points under this agreement? – 15%

hike in wages and off on second and fourth Saturdays of the month

Explanation: The wage hike will be applicable to nearly 10 lakh employees in public

sector banks, old generation private sector banks and some foreign banks. Though

bank employees have got second and fourth Saturday off, they will have to work full

day on the first and third Saturdays. The wage revision negotiations had been going

on for more than two years. The agreement on the wage revision would be

implemented with effect from 1 November 2012. With the settlement, the Indian

Banks’ Association (IBA) was successful in averting the proposed 4-day strike

proposed by the United Forum of Banking Unions (UFBU) from 25 February. The

last round of negotiations between the unions and the IBA, held on 3 February 2015

had failed after the IBA offered a 13% hike compared to 12.5% offered earlier.

3) In a unique experiment State Bank of India (SBI) has recently initiated a new loan

collection model that allows borrowers to pay back on a daily instalment basis. This

initiative has been started primarily to keep bad loans in check. This first-of-its-kind

loan product offering has been made to which entity? – Olacabs

Explanation: Olacabs is a renowned cab-hailing service company. Under the tie-up,

cab owners associated with Olacabs can avail themselves of car loans from SBI on a

preferential basis, with faster loan turnaround time. Since repayments will be on a

daily basis, the loans could come a tad cheaper. Each time the driver makes a

payment to Olacabs, a part of it will automatically go to SBI towards loan servicing,

through Olacabs’ pre-paid wallet. This is a departure from the existing loan servicing

model where borrowers repay by way of equated monthly instalments. Any break in

the daily collection cycle will serve as an early warning signal and the bank can

quickly intervene and resolve the matter, ensuring that the loan does not become

non-performing. These loans will be covered under the Credit Guarantee Fund Trust

for Micro and Small Enterprises. Under the cover, if a borrower fails to discharge his

liabilities to the lender, the Trust makes good the loss incurred by the lender for up to

85% of the credit facility.

4) The Reserve Bank of India (RBI) on 18 February 2015 allowed banks to lend

against gold and thus lifted the ban on the same. When was this ban imposed?

– June 2013

Explanation: Apart from listing the ban on lending against gold, the RBI also

allowed banks to import gold on a “consignment basis”, under which they act as

intermediaries and don’t pay for the stock until a buyer has been found, which is

usually quickly. On the other hand trading houses will be allowed to bring in gold with

no conditions attached. Gold flows into the country have slowed despite the removal

in November 2014 of the so-called 80-20 rule that required importing agencies to re-

export a fifth of total imports, as importers and customs officials waited for more

clarity. Imports had dropped despite the reversal of the rule as the industry was

taken aback by the sudden change in the central bank’s position and banks

remained wary, fearing customs officials would hold up incoming shipments.

5) National Payments Corporation of India (NPCI), the umbrella organisation for

retail payment system in India, on 18 February 2015 launched a unified platform for

providing a single payment interface across all systems. What is the name of this

interface that will enable all account holders to send and receive money from their

smartphones with a single identifier? – Unified Payment Interface (UPI)

Explanation: The UPI will make possible paying and receiving payments as easy as

swiping a phone book entry and making a call on mobile phone. Anyone who has an

account should be able to send and receive money from their mobile phone with just

an identifier without having any other bank/account details. It is designed to enable

all account holders to send and receive money from their smartphones with a single

identifier – Aadhaar number, mobile number, virtual payments address – without

entering any bank account information. UPI will make payments possible only by

providing an address with others without having ever provided account details or

credentials on 3rd party applications or websites.

6) Which private bank on 16 February 2015 announced plans to launch India’s first

Green Infrastructure Bond worth Rs. 500 crore, proceeds from which will be

deployed to fund renewable energy and energy efficiency projects? – Yes Bank

Explanation: This proposed Green Infrastructure Bond is claimed to be the first

such issue in the country and the money will be used to fund solar power, wind

power, biomass, and small hydel projects. The bond will have a tenor of ten years.

Yes Bank also claimed that globally, a sum of US$ 35 billion was raised by issuing

such green bonds in 2014, while the market in the country is either non-existent or

nascent. Yes Bank at present is the 4th largest private bank in the country.

7) The Reserve Bank of India (RBI) on 13 February announced it would soon put in

circulation currency notes with the denomination of Re 1. When printing of Re. 1

notes was discontinued by the govt. due to higher printing costs? – November 1994

Explanation: RBI announced that Re.1 currency notes are legal tender as provided

in The Coinage Act, 2011 and the existing currency notes in this denomination in

circulation will also continue to be legal tender. The RBI has been gradually

withdrawing lower denomination notes as the perceived benefit is lesser than the

cost of printing such notes. However, the move to re-start printing of Re.1 note is

being seen as a symbolic gesture as Re 1 coins are expected to be more in

circulation. While the RBI has the authority to issue bank notes of denominational

values of Rs. 2, Rs. 5, Rs. 10, Rs. 20, Rs. 50, Rs. 100, Rs. 500, Rs. 1,000, Rs. 5,000

and Rs. 10,000, the one rupee note is printed and issued by the central government.

8) The State Bank of India (SBI) made how much commitment for clean energy

generation (renewable energy) as announced by it at Re-Invest India 2015 on 15

February 2015? – Rs. 75,000 crore

Explanation: SBI committed Rs. 75,000 crore for generation of 15,000 MW of

renewable energy in the next 5 years. SBI has a loan exposure of Rs. 1.78 lakh

crore in the power sector including conventional energy and discoms. Of this the

bank’s outstanding loan towards clean energy is to the tune of Rs. 7,500 crore.

9) The Union Govt. on 20 February 2015 notified rules to implement the decision to

increase foreign direct investment limit in the insurance sector to 49%. What is the

name of the bill associated with this subject that will be presented in the Budget

session of Parliament? – The Indian Insurance Companies (Foreign Investment)

Rules 2015

Explanation: The Indian Insurance Companies (Foreign Investment) Rules Bill

allows up to 26% foreign investment through the automatic route, while foreign

partners can increase their stake beyond that limit up to 49% with the approval of the

Foreign Investment Promotion Board (FIPB). The rules will also apply to insurance

brokers, third party administrators, surveyors and loss assessors, and other

insurance intermediaries appointed under the provisions of the IRDA Act, 1999. Any

increase of foreign investment of an Indian insurance company will have to be in

accordance with the pricing guidelines specified by the RBI under the FEMA rules.

With this bill, Union Govt. seeks to replace The Insurance Laws (Amendment)

Ordinance, 2014, that was promulgated by the President of India, in December 2014.

10) The Corporate Affairs Ministry during February 2015 removed curbs on

acquisition of shares and other securities that was imposed on banking, insurance

and housing finance companies. This exemption was earlier available to these

entities. The said curb was imposed under which act? – The new company law

(Companies Act, 2013)

Explanation: The new company law had placed restrictions on banking, insurance

and housing finance companies as far as acquisition of securities and shares was

concerned. Prior to this these entities were required to follow compliance

requirements including shareholders’ approval in some cases whenever they

acquired shares or any other securities. Now the Corporate Affairs Ministry has

placed banking companies, private insurers and housing finance companies in the

same footing as was the situation under the erstwhile Companies Act 1956.  The

latest corporate affairs ministry move is being counted as step towards ease of doing

business in India. However, the latest relief will not cover most public sector banks

as they are governed under a separate law and restrictions on investments under the

company law did not apply to them. Currently, there are only two banks – IDBI Bank

and Bharatiya Mahila Bank (BMB) – that are registered as companies under the new

company law.

 

1) The Union Govt. on 20 February 2015 notified rules to implement the decision to

increase foreign direct investment limit in the insurance sector to 49%. What is the

name of the bill associated with this subject that will be presented in the Budget

session of Parliament? – The Indian Insurance Companies (Foreign Investment)

Rules 2015

Explanation: The Indian Insurance Companies (Foreign Investment) Rules Bill

allows up to 26% foreign investment through the automatic route, while foreign

partners can increase their stake beyond that limit up to 49% with the approval of the

Foreign Investment Promotion Board (FIPB). The rules will also apply to insurance

brokers, third party administrators, surveyors and loss assessors, and other

insurance intermediaries appointed under the provisions of the IRDA Act, 1999. Any

increase of foreign investment of an Indian insurance company will have to be in

accordance with the pricing guidelines specified by the RBI under the FEMA rules.

With this bill, Union Govt. seeks to replace The Insurance Laws (Amendment)

Ordinance, 2014, that was promulgated by the President of India, in December 2014.

2) The State Bank of India has recently launched a massive initiative to empower its

customers through technology and awareness. Under this initiative special SBI

centers across the length and breadth of the country have started holding interactive

learning sessions and demos of the bank’s tech-channels. What is the name of these

special centers? – Tech Learning Centres (TLCs)

Explanation: This initiative has been on since December 2014. Under this 385 State

Bank TLCs across the length and breadth of the country have started holding

interactive learning sessions and demos of the bank’s tech-channels for over ten

thousand customers every month. A large number of customers are having an initial

fear and hesitation to use technology for their banking needs. But through this

initiative SBI seeks to remove such hesitation among them.  After launching in

December, 2014, more than 30,000 customers were trained in these TLCs. TLCs will

spread awareness of the Bank’s various tech channels including Cash Deposit

Machines, Mobile Banking apps, Net Banking and Green Remit Cards, in addition to

providing guidance on how to use these channels safely and in a secure manner.

3) The “Halwa Ceremony”, which was held on 19 February 2015, is associated with

which keenly awaited event of the Union Govt.? – “Union Budget”

Explanation: The process of printing documents for the Budget starts with the ritual

called “Halwa Ceremony”. It has been a tradition which has continued for long. As

part of the ritual, halwa is prepared in a big-kadhai (cauldron vessel) and served to

the staff of the Ministry. The significance of the sweet dish (Halwa) is that after it is

served, a large number of officials and support staff, who are directly associated with

budget making and printing process, are required to stay in the Ministry and remain

cut off from their families till the presentation of the budget by the Minister. They are

not even allowed to contact their near and dear ones through phone or any other

form of communication, like email. Only very senior officials in the Finance Ministry

are permitted to go home. The “Halwa Ceremony” was held in North Block and was

attended by Finance Minister Arun Jaitley.

4) National Payments Corporation of India (NPCI), the umbrella organisation for

retail payment system in India, on 18 February 2015 launched a unified platform for

providing a single payment interface across all systems. What is the name of this

interface that will enable all account holders to send and receive money from their

smartphones with a single identifier? – Unified Payment Interface (UPI)

Explanation: The UPI will make possible paying and receiving payments as easy as

swiping a phone book entry and making a call on mobile phone. Anyone who has an

account should be able to send and receive money from their mobile phone with just

an identifier without having any other bank/account details. It is designed to enable

all account holders to send and receive money from their smartphones with a single

identifier – Aadhaar number, mobile number, virtual payments address – without

entering any bank account information. UPI will make payments possible only by

providing an address with others without having ever provided account details or

credentials on 3rd party applications or websites.

5) Which private bank on 16 February 2015 announced plans to launch India’s first

Green Infrastructure Bond worth Rs. 500 crore, proceeds from which will be

deployed to fund renewable energy and energy efficiency projects? – Yes Bank

Explanation: This proposed Green Infrastructure Bond is claimed to be the first

such issue in the country and the money will be used to fund solar power, wind

power, biomass, and small hydel projects. The bond will have a tenor of ten years.

Yes Bank also claimed that globally, a sum of US$ 35 billion was raised by issuing

such green bonds in 2014, while the market in the country is either non-existent or

nascent. Yes Bank at present is the 4th largest private bank in the country.

6) The State Bank of India (SBI) made how much commitment for clean energy

generation (renewable energy) as announced by it at Re-Invest India 2015 on 15

February 2015? – Rs. 75,000 crore

Explanation: SBI committed Rs. 75,000 crore for generation of 15,000 MW of

renewable energy in the next 5 years. SBI has a loan exposure of Rs. 1.78 lakh

crore in the power sector including conventional energy and discoms. Of this the

bank’s outstanding loan towards clean energy is to the tune of Rs. 7,500 crore.

7) The Reserve Bank of India (RBI) on 13 February announced it would soon put in

circulation currency notes with the denomination of Re 1. When printing of Re. 1

notes was discontinued by the govt. due to higher printing costs? – November 1994

Explanation: RBI announced that Re.1 currency notes are legal tender as provided

in The Coinage Act, 2011 and the existing currency notes in this denomination in

circulation will also continue to be legal tender. The RBI has been gradually

withdrawing lower denomination notes as the perceived benefit is lesser than the

cost of printing such notes. However, the move to re-start printing of Re.1 note is

being seen as a symbolic gesture as Re 1 coins are expected to be more in

circulation. While the RBI has the authority to issue bank notes of denominational

values of Rs. 2, Rs. 5, Rs. 10, Rs. 20, Rs. 50, Rs. 100, Rs. 500, Rs. 1,000, Rs. 5,000

and Rs. 10,000, the one rupee note is printed and issued by the central government.

8) The Corporate Affairs Ministry during February 2015 removed curbs on acquisition

of shares and other securities that was imposed on banking, insurance and housing

finance companies. This exemption was earlier available to these entities. The said

curb was imposed under which act? – The new company law (Companies Act,

2013)

Explanation: The new company law had placed restrictions on banking, insurance

and housing finance companies as far as acquisition of securities and shares was

concerned. Prior to this these entities were required to follow compliance

requirements including shareholders’ approval in some cases whenever they

acquired shares or any other securities. Now the Corporate Affairs Ministry has

placed banking companies, private insurers and housing finance companies in the

same footing as was the situation under the erstwhile Companies Act 1956.  The

latest corporate affairs ministry move is being counted as step towards ease of doing

business in India. However, the latest relief will not cover most public sector banks

as they are governed under a separate law and restrictions on investments under the

company law did not apply to them. Currently, there are only two banks – IDBI Bank

and Bharatiya Mahila Bank (BMB) – that are registered as companies under the new

company law.

9) The Reserve Bank of India (RBI) on 18 February 2015 allowed banks to lend

against gold and thus lifted the ban on the same. When was this ban imposed?

– June 2013

Explanation: Apart from listing the ban on lending against gold, the RBI also

allowed banks to import gold on a “consignment basis”, under which they act as

intermediaries and don’t pay for the stock until a buyer has been found, which is

usually quickly. On the other hand trading houses will be allowed to bring in gold with

no conditions attached. Gold flows into the country have slowed despite the removal

in November 2014 of the so-called 80-20 rule that required importing agencies to re-

export a fifth of total imports, as importers and customs officials waited for more

clarity. Imports had dropped despite the reversal of the rule as the industry was

taken aback by the sudden change in the central bank’s position and banks

remained wary, fearing customs officials would hold up incoming shipments.

10) What is the period of loan extension that was given to Greek government by the

finance ministers of euro zone on 20 February 2015 to avert a potential crash crunch

in March 2015? – 4 months

Explanation: The agreement, clinched after the third ministerial meeting of euro

zone finance ministers held at Brussels offers a breathing space for the new Greek

government to try to negotiate longer-term debt relief with its official creditors. This

loan extension ends weeks of uncertainty since the election of a leftist-led

government in Greece which pledged to reverse austerity measures that were

imposed on Greek as conditions of the bail-out package given to it in 2010.

1) The Finance Ministry on 7 February 2015 announced that it will soon provide

capital infusion worth Rs. 6,990 crore to nine public sector banks. This infusion will

be made from the Rs. 11,200-crore provided for in this year’s budget for

capitalisation of banks. Which bank would get highest capital infusion? – State Bank

of India (SBI)

Explanation: SBI would get capital infusion amounting to Rs. 2,970 crore, followed

by Bank of Baroda (Rs. 1,260 crore) and Punjab National Bank (Rs. 870 crore). For

this year’s allocation, a new criterion has been adopted by the Government. Only

banks that are more efficient would be rewarded with extra capital for their equity so

that they can further strengthen their position. The methodology for arriving at the

amount to be infused into these banks has been based on efficiency parameters.

First, the weighted average of return on assets (ROA) for all public sector banks, for

the last three years put together, was arrived at and all those who were above the

average were considered. The second parameter that has been used is return on

equity (ROE) for these banks for the last financial year.

Break-up of Capital Infusion

Name of Bank                             Amount (in Rs. Crore)

SBI                                                      2,970

Bank of Baroda                                 1,260

Punjab National Bank                     870

Canara Bank                                     570

Syndicate Bank                                460

Allahabad Bank                                320

Indian Bank                                       280

Dena Bank                                        140

Andhra Bank                                     120

2) The Reserve Bank of India on 3 February 2015 constituted a committee to

evaluate applications received for the proposed small finance banks. Who is heading

this committee? – Usha Thorat, former Deputy Governor of RBI

Explanation: The purpose of the small banks will be to provide a whole suite of

basic banking products such as deposits and supply of credit, but in a limited area of

operation. The objective for these Small Banks is to increase financial inclusion by

provision of savings vehicles to under-served and unserved sections of the

population, supply of credit to small farmers, micro and small industries, and other

unorganised sector entities through high technology-low cost operations. RBI had

received 72 applications for small finance banks till 2 February 2015. However, the

number could change as this excludes applications that might have been received at

other venues. Those who applied to the Reserve Bank of India (RBI) for small bank

licences included Nirmal Jain-led IIFL Holdings Ltd, UAE Exchange, Kerala-based

ESAF Microfinance, Punjab-based Capital Area Local Bank and Andhra Pradesh-

based Coastal local Area Bank.

3) The Reserve Bank of India on 3 February 2015 constituted a committee to

evaluate applications received for payments banks. Who is heading this committee?

–Dr. Nachiket Mor, Director, Central Board, RBI

Explanation: Objective of payments banks is to increase financial inclusion by

providing small savings accounts, payment/remittance services to migrant labour,

low income households, small businesses, other unorganised sector entities and

other users by enabling high volume-low value transactions in deposits and

payments/remittance services in a secured technology-driven environment. Those

who can promote a payments bank can be a non-bank PPIs, NBFCs, corporate’s,

mobile telephone companies, super market chains, real sector cooperatives

companies and public sector entities. Even banks can take equity in Payments

Banks. RBI received 41 applications for payments banks till 2 February 2015 which

was the deadline for the same. Prominent applicants for payments bank include

Reliance Industries Limited (RIL), Aditya Birla Nuvo Ltd., Future Group, UAE

Exchange India, Bharti Airtel, Vodafone, IIFL, PayTM and Oxigen.

4) Finance Ministry released latest data for the Pradhan Mantri Jan Dhan Yojana

(PMJDY) on 11 February 2015. According to it, a little more than 127 million new

bank accounts have been opened since launch of the scheme on 28 August 2014.

What is an important achievement associated with this figure? – The number of

people added to the country’s banking system in the past five months is

higher than that in the period from 2001 to 2011

Explanation: With opening of around 127 million bank accounts in last five months,

the total number of bank accounts in the country stand at 210.5 million (21 crore).

According to census data, only 36% of Indian households had access to banking

services in 2001. This increased to 59% in 2011. If the latest figures for the PMJDY

are anything to go by, all but 23,000 Indian households have already been made part

of the banking system. However, even as the government continues to add

accounts, the speed of linking the accounts with Aadhar numbers has not been as

fast. Until 4 February 2015, seeding of Aadhar numbers, to ease the process of

direct transfer of cash subsidies in beneficiaries’ bank accounts, had been done for

35% of all new bank accounts.

5) The RBI on 2 February 2015 directed banks to prominently display the name of

unclaimed bank account holders on the websites and provide them with a “Find”

option to locate the information easily. What are the present provisions for such

unclaimed and inoperative bank accounts? – Banks are required to pay back the

amounts laying in inoperative accounts for ten years or more, along with

interest

Explanation: The banks can later lodge a claim for refund from the Depositor

Education and Awareness Fund for an equivalent amount paid to the

customer/depositor. This was done in a bid to help people who have unclaimed

deposits lying with banks. The banks were asked to complete the action by 31 March

2015. In its directions to the banks, the RBI cautioned against disclosing the account

numbers of such holders. It said that they should give information about process of

claiming the unclaimed deposits or activating the inoperative account. As per

government estimates, banks had Rs 5,124 crore in unclaimed deposits lying with

them as on 31 December 2013.

6) Which private bank on 10 February 2015 launched first-of-its-kind digital banking

service called “Pockets”, which enables users to instantly send money to any e-mail

id, mobile number, friends on Facebook and bank account? – ICICI Bank

Explanation: Under the “Pockets” service, anyone including those who are not

customers of ICICI Bank, can easily download the e-wallet from Google Playstore,

fund it from any bank account in the country and start transacting immediately. This

wallet uses a virtual VISA card which enables the users to transact on any website or

mobile application in India. The universal wallet and the savings account are the first

two products to be launched as part of ICICI’s ‘Pockets’ digital bank initiative.

7) The largest share sale by a private sector entity and the second largest fund-

raising by selling shares in the secondary market in India took place on 5 February

2015 when a leading private bank raised Rs. 9,880 crore. Which bank is this?

– HDFC Bank

Explanation: HDFC Bank sold its shares worth Rs. 9,880 crore in the secondary

market on 5 February through a mix of qualified institutional placement (QIPs) and

American Depository Shares (ADRs) to domestic and overseas investors. This was

the largest share sale by a private sector entity and the second largest fund-raising

by selling shares in the secondary market in India after the bumper Rs. 22,500-crore

issue of Coal India Limited (CIL) on 30 January 2015. HDFC Bank is the largest

bank in India by market capitalization.

8) State Bank of India (SBI)’s net profit for the October to December quarter for

2014-15 stood at Rs. 2,910 crore as announced by the bank on 13 February 2015.

These results were cheered by the stock and financial markets of the country. Why?

–SBI’s bad loans rose only slightly and its asset quality made an improvement

Explanation: SBI’s net profit rose by around 30% as compared to corresponding

quarter of 2013-14. However, the markets were happier because the bank was able

to improve on its non-performing assets (NPAs) during the quarter. Gross non-

performing assets (NPA) as a percentage of total advances improved to 4.90%

during the quarter from 5.73% in the year-ago period. Net NPA was 2.80% during

the quarter, down from 3.24% in corresponding quarter of last fiscal. SBI is country’s

largest bank and it controls nearly 25% of India’s banking business. Thus better

results from SBI were cheered after poor results by many PSU banks earlier.

9) Union Govt. on 9 February 2015 came up with a new forecast of annual economic

growth that makes India the fastest growing major economy in the world. This

became possible as the system of measuring economic activities was changed

recently. What is the new growth forecast for year ending 2014-15 according to this?

– 7.4%

Explanation: The new estimate is sharply higher than the Reserve Bank of India’s

(RBI) growth projection of around 5.5% under the old method as well as a revised

6.9% growth a year earlier. Under the new method, the economy grew 7.5% in the

quarter ending in December 2014, outpacing China’s 7.3% growth in the latest

quarter and making India the fastest growing major economy in the world. The

apparent recovery is, however, in large measure due to changes both in the way

authorities calculate gross domestic product (GDP) and the base year. India now

measures GDP by market prices instead of factor cost, to take into account gross

value addition in goods and services as well as indirect taxes. The base year has

been shifted to 2011-12 from 2004-05. The reading, however, is at odds with other

indicators such as industrial production and trade data, which suggest the economy

is still suffering from slack.

10) Which country became the world’s top FDI destination during 2014 and thus

replaced the United States from top place as disclosed by a latest report by United

Nations Conference of Trade and Development (UNCTAD)? – China

Explanation: This UNCTAD report released on 29 January 2015 disclosed that

during 2014 total foreign direct investments (FDI) or investment by foreign firms in

China stood at $128 billion while the same for the U.S. stood at $86 billion. Hong

Kong stood second in this list with FDI worth $111 billion. The U.S. was occupying

the top position since 2003. Other countries among top 10 in this list include

Singapore ($81 billion), Brazil ($62 billion), UK ($61 billion), Canada ($53 billion),

Australia ($49 billion), the Netherlands ($42 billion) and Luxembourg ($36 billion).