Banking Awareness Study Material – Financial and Banking  Current Affairs

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Finance Ministry Contributed Rail Safety Fund
The Finance Ministry agreed to contribute partially to a new dedicated railway safety fund in the upcoming Budget to be presented on February 1, 2017. Train derailments have increased to a six-year high of 74 till January 23 this year compared to 65 in 2015-16 and this may prompt the Railways to brint ack a cess on railway tickets to fund safety efforts. The dedicated rail safety fund is proposed to beutilised for track improvement, bridge rehabilitation work, rolling stock replacement, human resource development, improved inspection system and safety work at level-crossings, among other things.

Income Tax Department Launched Operation Clean Money
Income Tax Department (ITD) initiated Operation Clean Money, on January 31, 2017. Initial phase of the operation involves e-verification of large cash deposits made during November 9 to December 30, 2016. ITD has enabled online verification of these transactions to reduce compliance cost for the taxpayers while optimising its resources. The information in respect of these cases is being made available in the e-filing window of the PAN holder.

BSNL Launched Mobile TV Service ‘Ditto TV’
Bharat Sanchar Nigam Limited (BSNL) launched mobile TV service ‘Ditto TV’ and limited fixed mobile telephony, an app that virtually turns mobiles into cordless phone working in sync with landlines within home premises on January 16, 2017. This service will turn mobile handset into a cordless device within the home premises, which means that customers can still avail the attractive landline tariffs of BSNL like free calls on Sundays and night time calling.

NITI Aayog Announced Launch of Two Schemes
NITI Aayog announced the launch of the schemes Lucky Grahak Yojana and the Digi Vyapar Yojana on December 15, 2016 to give cash awards to consumers and merchants who utilise digital payment instruments for personal consumption expenditures. The scheme specially focuses on bringing the poor, lower middle class and small businesses into the digital payment fold.

Insolvency and Bankruptcy Board Set-up Two Advisory Panels
Insolvency and Bankruptcy Board of India (IBBI) set-up under the Insolvency and Bankruptcy Code that seeks to consolidate and amend laws relating to reorganisation as well as insolvency resolution of corporate persons, partnership firms and individuals in a time-bound manner, on November 27, 2016. The nine-member advisory committee on service providers is headed by educationist Mohandas Pai while the panel on corporate insolvency and liquidation is chaired by noted banker Uday Kotak. The members of the panel on service providers include National Institute of Public Finance and Policy’s Professor Ajay N. Shah, National Stock Exchange Vice-Chairman Ravi Narain, SEBI’s Executive Director J. Ranganayakulu and senior lawyer Amarjit Singh Chandiok.

SEBI Relaxed Investment Rules for Angel Funds Giving Boost to Startups
Markets regulator SEBI relaxed some of the investment rules for angel investors in Indian startups in a bid to channelise more investments into these companies on November 24, 2016. Angel investors are financiers who put money in new companies at their formative stages, in expectation of superior returns.
The SEBI raised the total number of angel investors who can now invest in a startup company to 200 from 49. It also reduced the minimum investment amount to ₹ 25 lakh from ₹ 50 lakh earlier.

Union Government Set-up HEFA to Provide Funds for Creating Infrastructure
The Union government set-up Higher Education Financing Agency (HEFA) to provide funds for creating infrastructure and promoting research facilities in the Centrally-aided institutions of higher learning on November 22, 2016. The agency will leverage funds from the market. The agency will mobilise funds under Corporate Social Responsibility and function as a non-banking financing company.

Finance Ministry Set-up PDMC
The Finance Ministry set-up a Public Debt Management Cell (PDMC) with a view to streamline government borrowings and better cash management with the overall objective of deepening bond markets on October 4, 2016. The PDMC will have only advisory functions to avoid any conflict with the statutory functions of the RBI. The Joint Secretary (Budget), Department of Economic Affairs would be the overall in-charge of the PDMC. The PDMC has been tasked to plan government borrowings, including market borrowings and other borrowings, like Sovereign Gold Bond issuance.

Union Government Constituted Insolvency and Bankruptcy Board
The Union government constituted a four-member Insolvency and Bankruptcy Board of India (IBBI) under the Chairmanship of MS Sahoo on October 2, 2016. Sahoo, who was till recently Competition Commission of India (CCI) Member, assumed charge as Chairman of IBBI. The members of the IBBI are Ajay Tyagi, Additional Secretary, Finance Ministry; Amardeep Singh Bhatia, Joint Secretary, Ministry of Corporate Affairs; GS Yadav, Joint Secretary, Department of Legal Affairs; and Unnikrishnan, Legal Advisor, Reserve Bank of India (RBI).

Union Government Approved Merger of Union and Railway Budgets
The Union governments approved three crucial proposals to merge the Railway and General Budgets, scrap the distinction between the Plan and Non-Plan Expenditure and advance the date for the presentation of the General Budget on September 20, 2016. The changes will come into effect from 2017-18. There will be a single General Budget. Till now, budget was presented on the last day of February and it is not until’mid-May that the Parliament approves it in two parts.

CBDT Launched ‘e-Nivaran’ Facility
The Central Board of Direct Taxes (CBDT) launched the ‘e-Nivaran’ facility for online redressal of taxpayers’ grievances related to refunds, ITRs and PAN among others as part of its initiative to reduce instances of harassment of the public on September 11, 2016. The ‘e-Nivaran’ module, will work on the lines of the internet-based Income Tax Returns (ITRs) filing system and taxpayers can register all complaints related to delay in refunds, filing of e-returns, Tax Deducted at Source (TDS), PAN issues, and those pertaining to their Assessing Officer (AO).

NPCI Launched Bharat Bill Payment System Pilot Project
National Payments Corporation of India launched the pilot project for Bharat Bill Payment System (BBPS) with 26 Bharat Bill Payment Operating Units on August 31, 2016. Bharat Bill Payment System (BBPS) is the Reserve Bank mandated system which will provide interoperable bill payment services to customers. In the first phase, BBPS will cover repetitive payments for everyday utility services such as electricity, water, gas, telephone and Direct-To-Home (DTH).

CBDT Signed 7 Advance Pricing Agreements to cut Tax Litigation
The Central Board of Direct Taxes (CBDT) signed seven more unilateral Advance Pricing Agreements (APAs) with Indian taxpayers on July 18, 2016. The APAs provide for signing an agreement between a taxpayer and the income tax department on an appropriate transfer pricing methodology for determining the value of assets and taxes on intra-group overseas transactions. The scheme attempts to provide certainty to taxpayers in the domain of transfer pricing by specifying the methods of pricing and setting the prices of international transactions in advance.

NSE Started Online Bidding Platform for Gold Bond Issuance
To facilitate orderly trading in sovereign gold bonds, top stock exchange NSE introduced online bid collection facility for such issuances on July 11, 2016. An online bid collection facility shall be available to trading members on existing web based e-IPO platform, Bid entry for gold bonds shall be available through single bid entry and bulk upload facility. The bourse has received approval from the Reserve Bank of India (RBI) to act as a receiving office for Sovereign Gold Bond (SGB) issuances.
So far, three tranches of the bonds have been issued amounting to about ₹ 1322 crore.

RBI’s Activity 

Opposed Proposal to Set-up Separate Payments Regulator
The RBI has opposed a move on December 16, 2016 to establish a separate entity to regulate payments and settlements, which is currently under the Central bank’s purview. In September, 2016, a panel was formed to study and recommend changes in the regulatory mechanism under various acts such as the Payments and Settlement Act, the RBI Act, and the Information Technology Act among others. In September, 2016, the Centre had set-up this 11-member Committee on Digital Payments headed by Finance Secretary Ratan Watal, and including the RBI’s former Deputy Governor HR Khan and Executive Director Chandan Sinha as its members.

Announced Its First Policy Review Post-demonetisation
The RBI announced its monetary policy review on December 7, 2016, the first after demonetisation of old ₹ 500 and ₹ 1000 notes. This is the 2nd meeting of MPC headed by the RBI Governor Urjit Patel after the first in October, when it hatj cut repo, or the short-term lending rate, by 0.25% to 6.25%.
What are in the policy revie-w?

• Repo rate remained unchanged at 6.25%.
• Reverse Repo stayed at 5.75%.
• Cash Reserve Ratio (CRR) unchanged at 4%.
• The RBI has lowered the GDP growth forecast from 7.6% to 7.1% for the current fiscal. Inflation target remains 5% for March, 2017 with risks tilted to the upside.
• Demonetisation to lower prices of perishables and could reduce inflation by 10-15 basis points by December, 2016.

Revised Priority Sector Lending Norms for RRBs
The Reserve Bank of India (RBI) on December 1, 2016 revised the priority sector lending target for Regional Rural Banks (RRBs) to 75% of total outstanding loans from 60% earlier, effective from January, 2016. The priority sector loans sanctioned under the guidelines issued prior to this date will continue to be classified under priority sector till repayment/maturity/renewal. Categories of the priority sector include, medium enterprises, social infrastructure and renewable energy, With a cap of 15% of total outstanding. Agriculture should constitute 18% of total outstanding; target of 8% of total outstanding for small and marginal farmers within agriculture. Within agriculture, three categories are eligible for priority sector lending.

Utkarsh Micro Finance got RBI Approval for Small Finance Bank
Utkarsh Micro Finance Private Limited received the final licence from the Reserve Bank of India (RBI) on November 28, 2016 to set-up small finance bank. All small finance bank licence holders need to start operations by March, 2017 before the in-principle approval lapses. It is one of the 10 entities that got in-principle approval to set-up Small Finance Bank in September, 2015. Among 10 in-principle licence holders, six entities have received the final nod so far. Capital Small Finance Bank and Equitas Small Finance Bank have started operations so far. Utkarsh intends to start operations by January 14, 2017.

Opened Second Banking Ombudsman Office
The Reserve Bank of India (RBI) has opened a second office of the Banking Ombudsman on November 1, 2016 in New Delhi, taking into account the significant increase of the banking network. The first office of the Banking Ombudsman at RBI, New Delhi, will have the jurisdiction over Delhi and Jammu & Kashmir. The second office will have jurisdiction over Haryana (except Panchkula, Yamuna Nagar and Ambala Districts) and Ghaziabad and Gautam Buddha Nagar districts of Uttar Pradesh.
The office of the Banking Ombudsman handles cases related to operation in deposit accounts, complaints relating to interest rates, non-honouring of bank guarantee, remittances from abroad and related complaints, and loan related complaints.

Union Government Notified Constitution of Monetary Policy Committee under RBI Act
The Union government notified the constitution of the Monetary Policy Committee (MPC) under the Reserve Bank of India Act, 1934 on September 30, 2016. The notification comes a week after it appointed nominees in the panel that will set interest rates and keep inflation within the stipulated range. The members of the committee from RBI are governor Patel, Deputy Governor R. Gandhi, who is also in charge of monetary policy, and executive director Michael Patra. The RBI governor will have a casting vote in case of a tie. MPC would be entrusted with the task of fixing the benchmark policy rate (repo rate) required to contain inflation within the specified target level.

RBI Allowed 100% Foreign Investment in CG Consumer Electricals
The Reserve Bank of India (RBI) allowed foreign investors to buy up to 100% in Crompton Greaves Consumer Electricals Limited on September 10, 2016. Foreign Institutional Investors (FIIs)/Registered Foreign Portfolios Investors (RFPIs) can now invest up to 100% of the paid up capital of Crompton Greaves Consumer Electricals Limited under the Portfolio Investment Scheme (PIS).

Banking 

India Post got Payments Bank Licence to Start Services
India Post became the third entity to receive a final licence last week from the Central Bank to start its payment bank operations on January 30, 2017. Country’s largest telcom service provider Bharti Airtel and digital payments firm Paytm are the other two to have received the license while only Airtel has started operations so far. The government has also appointed AP Singh has interim MD and CEO of the India Post Payment Bank.

Government Barred Cooperative Banks from Accepting Deposits under PMGKY
The government barred cooperative banks from accepting deposits Pradhan Mantri Garib Kalyan Deposit Scheme on January 21, 2017. The deposit scheme is a part of the new income disclosure scheme under which a declarant has to deposit 25% of the declared undisclosed income in an authorised bank as notified by the government. Initially, cooperative banks were allowed to take deposits of old currency notes and as per estimates, about ? 16000 crore was deposited. But, six days into demonetisation, the RBI barred these banks from exchanging old currency notes or accepting deposits.

HDFC Bank Launched First ‘Humanoid’ Robot
The private lender HDFC Bank launched what it claimed to be the first ‘humanoid’ in the domestic banking space, e Tanuary 7, 2017. The bank showcased human-sized robot Ira, developed in association with Kochi-based Asimov Robotics. The robot will perform a limited role and act largely as a receptionist, though the humanoid can also move around in the branch.

‘Au Financiers’ got Approval to Start Small Finance Bank
Non-banking finance company Au Financiers (India) received final approval of the RBI to start operations as small finance bank on December 28, 2016. The company has operations in 10 States with 300 branche s and finances commercial and personal vehicle loans, as well as caters to micro, small and medium enterprises. It will focus on world-class technology and create unique and digitally differentiated experience for the customers.

Allahabad Bank Merged AllBank Finance with Itself
Public sector Allahabad Bank on December 23, 2016 merged its wholly-owned subsidiary AllBank Finance Limited (ABFL) with itself. The ABFL offers basket of fee-based financial services such as IPO management, debt/loan syndication, trusteeship services (debenture trustee/security trusty) structured finance, placement of equity shares to Qualified Institutional Buyers (QIBs), investment advisory and portfolio management services.

Paytm Launched ‘Each One, Teach One’ to Increase Digital Inclusion
Paytm announced a programme to increase the digital inclusion in the country wherein it is calling upon consumers and merchants across India to teach others on how to use Paytm to pay and accept money, on December 15, 2016. The campaign is aimed at transforming user behavior and further accelerating the country’s ongoing shift from cash to digital payments. As a part of the drive, Paytm has also announced an incentive including ? 1 crore grand prize along with additional prizes like motorcycles, smartphones, laptops and other exciting gifts. All users transacting between December 1, 2016 and March 31, 2017 are eligible to win these prizes.

100 Banks Joined National Financial Switch Network as Direct Members
The NPCI said on December 7, 2016 that 100 banks have joined the NFS network as direct members. Direct members are those banks that directly participate in clearing and settlement with NPCI. Direct member bank can also act as a sponsor bank. The NFS is the largest interoperable ATM network in the country and it manages more than 95% of the domestic interbank ATM transactions. Till date, NFS network comprise of 745 members which include 100 direct members, 645 sub-members including Regional Rural Banks (RRBs) and White Label ATM operators (WLAOs). The network now has 230000 ATMs.

Bharti Airtel Started First Payments Bank Service
Airtel Payments Bank Limited (Airtel Bank), a subsidiary of the country’s largest telecom operator Bharti Airtel, started its first pilot banking services in Rajasthan from November 23,2016.
Airtel started India’s first payments bank service in Rajasthan. The banking service is aimed at testing systems and processes before a full scale pan Indian is launched. Airtel Bank got payments bank license from the RBI on April 11, 2016. It became the first entity in India to receive a payments bank license from the RBI.

ICICI Bank UK Launched ‘Money2India Europe’
The British subsidiary of ICICI Bank, ICICI Bank UK Pic, announced the launch of online money transfer services on October 27, 2016 to facilitate transaction from any bank accounts in Sweden, Norway and Denmark to any recipient account based in India. The service called ‘Money2India Europe’ verifies the credentials of the customers over video call from Money2India Europe website. The website is owned by ICICI Bank UK Pic and it eliminates the need to courier the Know Your Customer (KYC) documents. Money2India Europe service is now available in 20 countries in Europe and the service is completely online and can be completed within 15 minutes.

NABARD Sanctioned for 50 Loan Irrigation Projects
The National Bank for Agriculture and Rural Development (NABARD) has sanctioned ₹ 19702 crore loan to National Water Development Agency (NWDA) for 50 irrigation projects on October 23, 2016. The loan is sanctioned under Long Term Irrigation Fund (LTIF), announced by Finance Minister Arun jaitley during the Budget 2016-17. This would help create additional irrigation potential of 39.14 lakh hectares under these projects in 11 States. NABARD gave the 1st instalment of ₹ 1500 crore to NWDA, which is an agency of Ministry of Water Resources.

SBP got Special Award for Excellence in MSME Lending
State Bank of Patiala (SBP) conferred “Special Award for Excellence in MSME lending” for its performance in lending to the MSME sector during the year 2013-14 and 2014-15 with a growth of? 2597 crore (annualised 23%) and ? 994 crore (annualised 7.10%) respectively, covering the entire range of services on October 19, 2016. The bank is maintaining momentum in lending to this sector during the current financial year also. With a view to extend the coverage of MSME sector, the Bank has 30 MSME specialised branches.

Union Government Approved Pact between EXIM Bank, New Development Bank
The Union Cabinet approved a pact between Export-Import Bank of India (Exim Bank) and BRICS-promoted NDB, along with other development financial institutions of member nations, with an aim to strengthen trade and economic ties on October 13, 2016. It signed a MoU on general cooperation with NDB through the BRICS Interbank Cooperation Mechanism by the government at the level of Secretary, Department of Economic Affairs/Export Import Bank of India.

SBI Board Cleared Merger of 5 Associate Banks and BMB
SBI approved scheme of merger of five associate lenders State Bank of Bikaner & Jaipur, State Bank of Mysore, State Bank of Travancore and Bharatiya Mahila Bank with itself on August 18, 2016. As per the merger proposal, SBBj shareholders will get 28 shares of SBI (₹ 1 each) for every 10 shares (₹ 10 each). Similarly, SBM and SBT shareholders will get 22 shares of SBI for every 10 shares. The consolidated entity will add ₹ 8 lakh crore (about $ 120 billion) to SBI’s assets and consolidated entity will get catapulted into the top 50 banks globally.

HDFC became First Company to Offer Masala Bond
The success of the first Masala Bond issued by a domestic finance company, by home loan major HDFC on July 17, 2016. It will open the market for other potential issuers, particularly Non-Bank Finance Companies and Government-Related Issuers. Private mortgage lender HDFC had a few days ago raised ₹ 3000 crore through masala bonds. Masala bonds although denominated in Indian rupees are
listed on the international market and offered and settled in US dollars, providing easier access for foreign investors.

SIDBI and Yes Bank became Partner for Loan Guarantee Under World Bank Scheme
The SIDBI entered into a partnership with private sector lender Yes Bank to guarantee 75% of loans of up to ₹ 15 crore extended to energy efficiency projects under a World Bank initiative on July 8, 2016.
A MoU was signed between SIDBI and Yes Bank under the Partial Risk Sharing Facility (PRSF) for financing energy efficiency projects programme sponsored by the World Bank.

SBI Launched 3 New Digital Offerings
The SBI, on the occasion of 61st State Bank Day, launched a social media banking platform for Facebook and Twitter users, called ‘SBI Mingle’ which will help the customers with a host of banking services on their social media accounts, at their own convenience on July 6, 2016. The SBI partnered with Flipkart to offer its consumers the facility of pre-approved EMI Facility on purchases. Under this partnership the SBI will provide overdraft facility to pre-qualified set of customers for transacting on Flipkart for a minimum purchase of ₹ 5000. The SBI also launched its new initiative SBI Digital Villages aimed at transforming villages into cashless eco-system by adopting them.

Corporate Sector 

Amazon Launched its Startup Programme ‘Launchpad’ in India
Amazon announced the launch of its global programme called Amazon Launchpad in India, which will help startups in the country on December 4, 2016. According to the company, the programme will help startups launch, market, and distribute their products to Amazon customers across India and around the world via a dedicated store. Amazon Launchpad store will be an exclusive corner with products from Indian startups. Amazon India has tied-up with Department of Industrial Policy and Promotion (DIPP)’s Startup India and Nasscom for its initiative. It will offer startups access to custom product pages, marketing support, and access to Amazons global customer base and their fulfillment network.

Government Granted Licence to Set-up BP Petrol Pumps in India
The government has formally granted a licence on October 16, 2016 to BP, Europe’s third-biggest oil company, to set-up 3500 petrol pumps in India. It is a UK-based firm. BP granted licence to market Motor Spirit (petrol) and High Speed Diesel (diesel)—another milestone for BP in India. India currently has about 56190 petrol pumps, with public sector firms operating a majority of them. Private sector operators are limited to Essar Oil and Reliance Industries, who between them have some 3500 petrol pumps. Royal Dutch Shell operates 82 petrol stations. State-owned Indian Oil Corp (IOC) owns 25363 petrol pumps, Hindustan Petroleum Corp Limited (HPCL) 13802 stations and Bharat Petroleum Corp Limited (BPCL) 13439 outlets.

Paytm Launched Payment Method for People without Internet
Paytm has announced the launch of a new toll-free number 180018001234 on December 7, 2016 to help customers use Paytm without an internet connection. This is particularly important for the times when internet connectivity is patchy, and continued disconnections would stop people from using the Paytm app. Both users, as well as merchants, can now use the feature just by calling the toll-free number to pay and receive money.

Report/Index 

NITI Aayog Index 2016
Maharashtra has been adjudged the most farmer friendly State in the country followed by Gujarat and Rajasthan, according to NITI Aayog’s index on reforms in the farm sector on October 31, 2016. In a first of its kind of exercise, NITI Aayog has prepared ‘Agriculture Marketing and Farmer Friendly Reforms Index’ based on initiatives taken by the States in implementing farm sector reforms. Termed the Agricultural Marketing and Farmer Friendly Reforms Index, it ranks states on three major parameters, reforms in agricultural marketing, land lease and forestry on private land. The minimum score of zero implies no reforms at all; a score of 100 would mean the opposite and the friendliest to farmers. Maharashtra got 81.7 and Gujarat was second at 71.5, Puducherry, Delhi and Jammu & Kashmir got the lowest three grades, of 4.8, 7.3 and 7.4, respectively.

Business Index for World Bank’s Ease
After pinning its hopes on a significant improvement in the World Bank’s ease of doing business index, India has managed to move up by only a single rank in the latest Doing Business Report 2017 by the bank on October 25, 2016. The country remains at the 130th position globally. This is the same as last year, but qualifies for a single upward movement in rank as India’s position in 2016 has been revised to 131 by the World Bank. The World Bank ranks countries on 10 parameters starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority shareholders, paying taxes, enforcing contracts, trading across borders and resolving insolvency. New Zealand bagged the top spot in the rankings followed by Singapore, Denmark, Hong Kong and Korea.

Index to Track Performance of CBLO Rate
Asia Index, a joint venture between )5&P Dow Jones Indices and BSE, launched a new index to measure the performance of Collateralised Borrowing and Lending Obligation rate on August 15, 2016. The new index S&P BSE Liquid Rate Index can be used to create Exchange Traded Funds (ETFs) for both retail and institutional investors. The index is designed to measure the returns from a daily rolling deposit at the CBLO rate. The S&P BSE CBLO Index is calculated only on those days when both BSE and CCIL are open.

Agreements/Pacts/Deals
Agreement Between	Related Facts
Yes Bank tied-up -with Grofers (December 12, 2016)	Yes Bank has tied-up with e-grocer Grofers to deliver cash at doorstep, allowing customers to get cash of up to ₹ 2000 when they order grocery online. The cash delivery service started operating from December 12, 2016, to all customers of bank across Mumbai, Gurgaon and Bengaluru.
MMTC to tied-up with SBI (December 4, 2016)	India’s largest public sector trading body Metals and Minerals Trading Corporation (MMTC) tie-up with the State Bank of India (SBI) to sell government-minted Indian Gold Coin (24 Karat) which will be available in denominations of 5 gm, 10 gm and 20 gm bar.
Canara Bank and Bajaj Allianz (November 30, 2016)	A corporate agency agreement has been signed by the Canara Bank, a public sector bank, and Bajaj Allianz General Insurance, a private general insurance company. This is for the distribution of Bajaj Allianz’s general insurance products. A bouquet of personal lines of products are motor insurance, home insurance, health insurance, travel insurance and commercial line of products such as fire insurance, marine insurance, and engineering insurance.
‘Sun Pharma ’ and ‘ICGEB ’ (September 24, 2016)	Air India’s largest pharmaceutical company Sun Pharma has signed deal with International Centre for Genetic Engineering and Biotechnology (ICGEB) for clinical development Cissampelos pariera (Cipa), India’s first vaccine (drug) for the treatment of dengue.
‘Indian Oil Corp’ and ‘GAR’ (September 22, 2016)	Air Indian Oil Corporation Limited and GAIL (India) Limited had signed an MoU with Dhamra LNG Terminal Private Limited (DLTPL) for taking equity in the 5 MMTPA capacity LNG Receiving, Storage and Regasification Terminal being set-up at Dhamra Port, Odisha.
‘Gionee’ and ‘Haryana Government’ (September 13, 2016)	Air Gionee mobile phones signed an MoU with the Haryana State government to set-up its phone manufacturing hub in Haryana with an initial investment of ₹ 500 crore. The Gionee is a Chinese smartphone manufacturer based in Shenzhen, Guangdong. Founded in 2002.
‘LG Electronics Inc’ and ‘Amazon.com’ (September 2, 2016)	South Korea’s LG Electronics Inc tied-up with Amazon.com Inc on smart-home services. This tie-up will help enabling the services of Amazon such as the Alexa virtual assistant on some of the electronics maker’s devices.
Accenture and Redcore (August 24, 2016)	Chicago based global professional services company Accenture is set to acquire Australia based security company Redcore. The Australian firm Redcore develops holistic authentication, authorisation and administration services across a range of cloud, web, mobile and adaptive access management technologies.
BSNL and Microsoft India (August 22, 2016)	State run PSU Bharat Sanchar Nigam Limited (BSNL) and Tech giant Microsoft India signed a MoU to provide telecom & IT solutions for big businesses to leverage the domain capability and strategic position in the Industry to garner more business.
Jawaharlal Nehru Port Trust and SBI (August 22, 2016)	Mumbai based container port, Jawaharlal Nehru Port has signed an agreement with State Bank of India and Development Bank of Singapore for External Commercial Borrowing to the tune of USD 400 Million under External Commercial Borrowings (ECB). Its the first Major Port to finalise the terms of ECB.
Federal Bank and MMTC (August 17, 2016)	Kerala based private sector lender,Federal Bank has tied up with MMTC for distribution of Indian Gold Coins (IGC), the first-ever national gold offering by the government. It is noted that Federal Bank has become the first private sector bank to start distributing gold coins made by government controlled Metals and Minerals Trading Corporation of India.
Reliance Brands and Scotch (August 17, 2016)	Reliance Brands, a part of Reliance Industries announced a long-term master & Soda franchise agreement with Amsterdam based fashion brand Scotch & Soda. Under this agreement, Reliance Brands will set-up Scotch & Soda stores in all major cities in India by 2017.
Kotak Mahindra Bank and (August 11, 2016)	Mumbai based private sector lender Kodak Mahindra Bank has tied up with the Flipkart e-commerce market place Flipkart by expanding the bank’s in app shop, mStorewhich was used to book air tickets, hotels and bus tickets.
Alibaba & Ant Financial Services and AXA Insurance (August 3, 2016)	Alibaba and Ant Financial Services made an agreement with AXA insurance to engage in a global strategic partnership to explore opportunities to distribute AXA insurance products and services through Alibaba’s global e-commerce platform.
Bank of Baroda and Fisdom (Agust 2,2016)	Bank of Baroda has tied up with a fintech start-up Fisdom for personal wealth (August 2, 2016) management services. Besides, the bank has entered into pact with six other fintech companies, proficient in different areas. These are Credit Mantri, FundsTiger, Probe42, Power2SME, IndiaLends and KredX.
‘NDMC’ and ‘NEERI’ (July 21, 2016)	The New Delhi Municipal Council (NDMC) signed a Memorandum of Understandings (MoU) with National Environmental Engineering Research Institute (NEERI) to develop about 12 Sewage Treatment Plants (STP). This project will definitely going to help to increase the green cover in NDMC areas and curb dust pollution.
‘SBF and ‘IIT-Bombay’ (July 12, 2016)	State Bank of India (SBI) signed a MoU with the Indian Institute of Technology Society for Innovation and Entrepreneurship (SINE). The MoU was signed to promote innovation by startups in the financial sector.
‘Bihar’ and ‘Bangkok Firm’ (July 11, 2016)	Bihar government signed a MoU with Bangkok-based Asian Disaster Preparedness Centre (ADPC) to implement the Roadmap for Disaster Risk Reduction in Bihar (2015-30). The move will help reduce disaster risk management in the State.

Mergers/Acquisitions
Company Involved	Related Facts
Allahabad Bank and AllBank Finance (December 23, 2016)	Public sector Allahabad Bank has merged its wholly owned subsidiary AllBank Finance (ABFL) with itself. AllBank Finance is the merchant banking arm of Allahabad Bank and also holds license for debenture trusteeship.
Strides Shasun to acquire Perrigo API India (December 7, 2016)	Bengaluru-based Strides Shasun Limited has announced to acquire the US-based Perrigo’s APIs manufacturing facility in Ambernath, Maharashtra. With this acquisition, both the companies joined together to handle multipurpose small batch productions and accelerates our time to market.
‘Adani Ports’ to acquire ‘Australia’s APB ’ (September 19, 2016)	Adani Ports and Special Economic Zone (APSEZ) arm APO acquire the Australian firm APB from Glencore Coal Queensland Pty Limited for Australian $ 19.25 million. This terminal was acquired by the Adani Group by way of a 99 year lease from the Queensland government on June 1,2011.
Reliance Communications’ and ‘Aircel’ (September 14,2016)	Anil Ambani-led Reliance Communications (RCom) has signed a deal with Maxis Communications Berhad (MCB) for merger of wireless businesses of Aircel Limited with itself. The merger is considered as the largest-ever consolidation in the Indian telecom sector. The merged entity will be country’s fourth-largest phone company in terms of customers and revenue.
‘HP to acquire ‘Samsung Printer Business’ (September 11, 2016)	HP Inc agreed to buy Samsung Electronics Company’s printer business for $ 1.05 billion. This transaction is expected to close within 12 months.
‘Sony Pictures’acquired ‘Sony Pictures’acquired (August 31, 2016)	Sony Pictures Networks India on August 31, 2016 announced the acquisition of ‘Sports sports broadcasting business of Zee Entertainment for $ 385 million in an all-cash deal. Zee’s TEN Sports channels being acquired include TEN 1, TEN 1 HD, TEN 2, TEN 3, TEN Golf HD, TEN Cricket, TEN Sports. These channels operate in several countries including the Indian sub-continent, Maldives, Singapore, Hong Kong, Middle East, Caribbean.
Tata Auto Comp and TitanX (August 16, 2016)	The Pune based Tata AutoComp Systems, the Tata group promoted auto component firm, is set to acquire TitanX, a global engine-cooling solutions firm that caters to commercial vehicle manufacturers. It is noted that TitanX has the latest technology in engine cooling solutions for commercial vehicles, which will help enhance our offering to our customers in commercial vehicle segment outside India.
Aditya Birla Nuvo and Grasim (August 12, 2016)	Aditya Birla Nuvo Limited tanked close to 24.63% during intraday trade as analysts and minority investors disapproved of its proposed merger with Grasim Industries Limited. The first step involves merging AB Nuvo with Grasim following which the financial services business of AB Nuvo will come into Aditya Birla Financial Services (ABFSL).
Intel and Nervana Systems (August 11, 2016)	American technology major Intel Corporation has announced that it has acquired California based deep learning start-up Nervana systems. Nervana systems run by an Indiem origin entrepreneur, it provides a full stack software as a service platform called Nervana cloud to create their own custom deep learning solutions.
ICICI and Apollo India (August 2, 2016)	India’s largest private banking lendor, ICICI banks teamsup with USA based Apollo India Credit Opportunity Management LLC to launch an asset reconstruction company (ARC). This tie-up is mainly emphasising on the establishment of the ARC, which will acquire debt from lenders as well as equity stakes in companies.
‘Myntra’acquired ‘Cubeit’ (July 12, 2016)	e-Fashion store Myntra Designs Private Limited has acquired Bangalore-based Cubeit to gain access to its employees also to expand Myntra’s technology team. However, the financial details of the acquisition weren’t disclosed. Myntra acquired Bangalore-based app development company Native 5 last year. In 2013, the company also acquired San Francisco-based startup Fitiquette.

Personalities in News
Person	Related Facts
Viral V. Acharya (December 28, 2016	The Appointments Committee of Cabinet appointed Viral V. Acharya as the Deputy Governor of the Reserve Bank of India (RBI). He has been appointed for a term of three years. The post has been vacant since the former Deputy Governor Urjit Patel was made the RBI governor in September, 2016
Nusli Wadia (December 25, 2016)	Shareholders of Tata Motors have voted to remove independent director Nusli Wadia from he Board of Directors. In the extraordinary general meeting of shareholders held 71.20% of the votes polled voted in favour of a resolution moved by promoter Tata Sons.
VK Sharma (December 14, 2016)	VK Sharma, the acting Chief of Life Insurance Corporation of India, appointed the new Chairman and Managing Director of the nation’s biggest insurer and investor, for five years. He succeeded SK Roy, who quit abruptly a few months ago following a departmental inquiry set-up to probe alleged misconduct in relation to investments by the insurer.
Cyrus Mistry (December 11, 2016)	Tata Industries removed Cyrus Mistry as a Director after a shareholder vote. A subsidiary of Tata Sons, the unlisted Tata Industries promotes the group’s entry into new businesses and invests in operating companies to push growth. He has been Managing Director (MD) of Shapoorji Pallonji & Company, which is part of the Shapoorji Pallonji Group. He joined the board of Tata Sons on September 1, 2006, a year after his father retired from it.
Pankaj Patel (November 23, 2016)	Pankaj R. Patel, Chairman & Managing Director of Cadila Healthcare Limited (Zydus Cadila), elected as the new President of the FICCI for the year 2017. He replaced Harshavardhan Neotia, Chairman of Ambuja Group, during the FICCI AGM to be held on December 16 and 17, 2016 in New Delhi.
Sushil Chandra (November 1, 2016)	Senior Indian Revenue Service officer Sushil Chandra has took over as CBDT Chief. CBDT is the apex policy making body for the Income Tax department. Sushil Chandra is a 1980-batch IRS officer. He has replaced Rani Singh Nair. The CBDT is headed by a chairman and can have a maximum of six members.
Ashok Chawla (October 31, 2016)	Former Competition Commission of India (CCI) Chairman Ashok Chawla took charge as Non-Executive Chairman of Yes Bank, the private lender said in a stock exchange filing. Chawla, who has also served as Union Finance Secretary, took over after incumbent Radha Singh ended her tenure as the bank’s Director on October 29, 2016.
Ajay Kumar Bhalla (October 14, 2016)	Senior IAS officer Ajay Kumar Bhalla was appointed as the Director General of Foreign Trade (DGFT). He is a 1984-batch IAS officer of Assam-Meghalaya cadre, is presently Additional Secretary in the Commerce Ministry. He has been appointed to the post in place of Anup Wadhawan, who has been appointed as Additional Secretary in the Commerce Ministry.
Sushil Muhnot (September 26, 2016)	In a rare instance, the government removed Sushil Muhnot as Chairman and Managing Director (CMD) of Bank of Maharashtra, four days ahead of his scheduled retirement. Muhnot was to retire on September 30, 2016. The government has appointed RP Marathe, Executive Director at Bank of India, MD and CEO of Bank of Maharashtra with immediate effect.
Mukund Chaudhari (September 3, 2016)	Mukunk Chaudhari has appointed as the Chairman and Managing Director (CMD) of MOIL Limited. MOIL Limited formerly Manganese Ore India Limited, is a miniratna State-owned manganese-ore mining company headquartered in Nagpur, India.
Anand Krishnamurthy (August 22, 2016)	Anand Krishnamurthy, Managing Director and Chief Executive of Catholic Syrian Bank, has resigned (within a year after taking over the posts). Before taking over in July, 2015, Krishnamurthy had been associated with the bank for the past one year and was previously responsible for corporate banking, SME business, and integrated treasury operations as head of wholesale banking and treasury.
Urjit Patel (August 20, 2016)	Urjit Patel was named as the 24th Governor of RBI. Dr. Patel joined the International Monetary Fund in 1990 worked on the USA, India, Bahamas and Myanmar desks at IMF till 1995. He became a Consultant to the government of India in the Ministry of Finance, Department of Economic Affairs a position he held from 1998 to 2001.
Sunil Bharti Mittal (August 20, 2016)	Sunil Bharti Mittal has been re-appointed as the Chairman of telecom giant Bharti Airtel for another five year, with effect from October 1, 2016. Sunil Bharti Mittal is an Indian entrepreneur, philanthropist and the Founder and Chairman of Bharti Enterprises.
Umang Vohra (August 11, 2016)	Umang Vohra has appointed as MD and Global CEO of Cipla Limited. Vohra is currently Chief Operating Officer and will take over from Subhanu Saxena, who is leaving the Pharmaceutical giant. Cipla had hired Vohra from Dr. Reddy’s Laboratories (DRL) in September, 2015 as Chief financial and strategy officer.
Dinesh Kumar Khara (August 9, 2016)	Dinesh Kumar Khara appointed as Managing Director of SBI. He is presently working as Managing Director and Chief Executive Officer of State Bank of India Funds Management Private Limited. The ACC has appointed Khara for a period of three yeaurs, extendable by two years after review of his performance.
Rajesh Mokashi (August 6, 2016)	The Board of Directors of Credit Analysis and Research Limited (CARE Ratings) appointed Rajesh Mokashi as the Managing Director & CEO of the company. He has been with the company since inception in 1993 has over 30 years experience and worked with Otis Elevator Company India Limited, DSP Financial Consultants and Kotak Mahindra Finance Limited before joining CARE.
VinodRai (August 1, 2016)	Former CAG of India Vinod Rai has stepped down from private sector lender IDFC Bank’s Board. The decision is to avoid conflict of interest as Rai is also the Chairman of BBB which will not only select board members of public sector banks but will also devise strategies for them.
Anant MaheshMiari (August 1, 2016)	Anant Maheshwari was named as the President of Microsoft. Maheshwari will take the responsibility of Bhaskar Pramanik, who will retire in March, 2017. As a President, Maheshwari will be seen handling all the responsibilities, including Microsoft’s product, service, and support offerings across India.
Dilip Rath (August 1, 2016)	Dilip Rath has appointed as the Chairman of National Dairy Development Board (NDDB). The government of India gave him the additional charge of the post until the appointment of a regular incumbent.
Rani Singh Nair (August 1, 2016)	Rani Singh Nair has became Chairperson of Central Board of Direct Taxes (CBDT). Nair’s predecessor Atuleshjindal, who was appointed CBDT Chief in February, 2016, retired on July 31, 2016. CBDT is a statutory authority functioning under the Central Board of Revenue Act, 1963.
Aditya Puri (July 10, 2016	The Chief Executive Officer and Managing Director of the second largest private sector lender HDFC Bank Aditya Puri ranked as the best banking CEO in Asia by the investor community.
Sudarshan Sen (July 4, 2016)	The RBI appointed Sudarshan Sen as the Executive Director of Apex Bank. He will look after Department of Banking Regulation, Department of Cooperative Bank Regulation and Department of Non-Banking Regulation.
NS Vishwanathan (June 28, 2016)	NS Vishwanathan was appointed Deputy Governor of the RBI, replacing HR Khan. Vishwanathan, currently Executive Director at the Central bank, was chosen by a search committee headed by Cabinet Secretary. This is the first appointment done through this high level panel.
SKRoy (June 23, 2016)	Chairman of LIC SK Roy has resigned from his post. He was appointed as the LIC’s Chairman on June 29, 2013 for a five year term. SK Roy joined LIC in 1981 as direct recruit officer. According to sources, Roy has officially tendered his resignation and the Fjpance Ministry will send it to the Appointments Committee of the Cabinet for acceptance.
Gunit Chadha (June 14, 2016)	Gunit Chadha resigned from the post of CEO of Deutsche Bank Asia Pacific Region. His successor will be announced in due course of time. Under his leadership, Deutsche Bank had started its investment banking, retail banking and institutional broking business in India. Prior to Deutsche Bank, he was CEO of IDBI Bank Limited.
RatanP. Watal (May 20, 2016	Former Finance Secretary, Ratan P. Watal appointed as the Principal Adviser for social sector in NITI Aayog. He has been appointed to the post for three years, after an order issued by Department of Personnel and Training.

Union Budget 2017-18

The Union Finance Minister Arun Jaitley on February 1, 2017 presented the Union Budget 2017-18 in the Parliament. First time Union Budget presented on first day of February. The Union Budget 2017-18 is also unique in the sense that it is the first budget after introduction of 3 key changes to the budget process viz., merging of the Railway Budget with the General Budget, Doing away with the classification of plan and non-plan expenditure and most importantly advancing the budget presentation date by one month.

Highlights of the Budget Fiscal Roadmap

• Budget proposal divided into 10 distinct themes— Farmers; rural population; energising youth; poor and underprivileged; infrastructure; financial sector; digital economy; public service; prudent fiscal management; and tax administration.
• Total expenditure—₹ 2147000 crore and abolition of plan, non-plan expenditure, focus on capital expenditure.
• Fiscal deficit for the financial year 2017-18 pegged at 3.2% of GDP and Revenue deficit for 2017-18 at 1.9%.
• Defence expenditure, excluding pension—₹ 274114 crore
• Expenditure in science and technology—₹ 37435 crore

Banking and Taxation

• No cash transactions above ₹ 3 lakh and Political funding— Maximum amount of cash donation that can be received is ₹ 2000.
• MAT not to be abolished at present; to allow carry-forward for 15 years.
• Income Tax rate cut to 5% for individuals having income between ₹ 2.5 lakh to ₹ 5 lakh.
• Two new schemes to introduced to promote BHIM App—referal bonus for users and cash back for traders.
• Payment regulatory board to be set-up in the RBI to regulate electronic payments, replacing Board for Regulation and Supervision in Payments and Settlements System.
• Actual revenue loss on tax proposals ₹ 22700 crore; gain from additional resource mobilisation is ₹ 2700 crore.

Agriculture

• Farmer credit fixed at record level of ₹ 10 trillion; will ensure adequate flow to underserved areas.
• Soil Health Cards Government to set-up mini-labs in Krishi Vigyan Kendras.
• Long-term irrigation fund in NABARD— corpus at ₹ 40000 crore. Dedicated micro- irrigation fund with ₹ 5000 crore corpus.
• MGNREGA : ₹ 48000 crore has been allocated; participation of women now at 55%; using space technology in a big way.
• Coverage of Fasal Bima Yojana to go up from 30% of cropped area to 40% in 2017-18 and 50% next year.

Health and Women

• Two new AIIMS to be set-up each in Jharkhand and Gujarat. Elimination of Tuberculosis (TB) by 2025 targeted.
• ₹ 500 crore allocated to set-up Mahila Shakti Kendras; Allocation raised from ₹ 1.56 lakh crore to ₹ 1.84 lakh crore for women & child welfare.

Railways

• Capital and development expenditure pegged at ₹ 1.31 lakh crore for railways in financial year 2017-18 from the budget.
• No Service charge while booking tickets with IRCTC.
• ₹ 1 lakh crore (₹ 1 trillion) corpus for railway safety fund over five years.
• Five hundred stations will be differently abled by providing lifts and escalators.
• Passenger safety—Safety fund corpus set-up; unmanned level crossings to be eliminated by the year 2020.
• Railway lines of 3500 km to be commissioned.
• To introduce Coach Mitra facility; by 2019, biotoilets for all coaches.

Miscellaneous

• Prime Minister Gram Sadak Yojana : ₹ 19000 crore allocated; along with States, ? 27000 crore will be spent in financial year 2017-18.
• Pradhan Mantri Awas Yojana has allocated ₹ 23000 crore.
• National testing agency to be established for all entrance exams, freeing up CBSE, AICTE and other bodies.
• Propose to leverage information technology with launch of SWAYAM platform for virtual learning.
• Model Shops and Establishment Bill to open up additional opportunities for employment of women.
• For senior citizens, aadhaar-based health cards will be issued.
• Pradhan Mantri Kaushal Kendras will be extended to 600 districts; 100 International skill centres to be opened to help people get jobs abroad.
• Digi Gaon will be launched to promote tele-medicine and education.
• Trade Infrastructure Export Scheme to be launched in 2017-18; total allocation for infrastructure at record ₹ 3.96 lakh crore.
• Aadhaar Pay to be launched 20 lakh Aadhaar-based PoS by September, 2017.

Economic Survey 2016-17      

The Economic Survey 2016-17, tabled in the Parliament by Finance Minister Arun Jaitley on January 31, 2017, underlined the need for more reforms.

Highlights of Econmic Survey Growth

• GDP growth rate at constant market prices for the current year 2016-17 is placed at 7.1%.
• The federal statistics office’s estimate of 7.1% growth for 2016-17 likely to be revised downwards.

Fiscal Deficit

• The CAD narrowed in the first half (H1) of 2016-17 to 0.3% of GDP from 1.5% in H1 of 2015-16 and 1.1% in 2015-16 full year.
• Trade deficit declined to $ 76.5 billion in 2016-17 as compared to $ 100.1 billion in the corresponding period of the previous year.

Monetary Policy

• Sharp rise in prices in 2017-18 may cap monetary easing headroom.
• Market interest rates seen lower in 2017-18 due to demonetisation.
• The government debt to GDP ratio in 2016 seen at 68.5% down from 69.1% in 2015.

Demonetisation

• Demonetisation to affect growth rate by 0.25-0.5%, but to have long-term benefits.
• Remonetisation will ensure that the cash squeeze is eliminated by April, 2017.

Banks

• Suggests setting-up of public sector asset rehabilitation agency to take charge of large bad loans in banks.
• The central agency with government backing could overcome coordination and political issues on bad loans.

Taxation

• Income tax rates and real estate stamp duties could be reduced.
• Time table for reducing corporate tax rate could be accelerated.

Universal Basic Income

• The UBI proposal a powerful idea, but not ready for implementation.
• The UBI an alternative to plethora of State subsidies for poverty alleviation.

Banking Awareness Study Material – Glossary

Banking Awareness Study MaterialComputer AwarenessMarketing Aptitude

Acceptance
(or banker’s acceptance) It is a signed instrument of acknowledgement that indicates the approval and acceptance of all terms and conditions of any agreement on behalf of the banker. It is used in context of financial agreements and contracts.

Accepting House
An organisation specialises in two prominent functions i.e. facilitating the different negotiable instruments and merchant banking.

Account Balance
The total amount of money in a particular bank account, alongwith the debit and credit amounts, the net amount, is also termed as the account balance.

Account Reconciliation
It is a process with the help of which the account balance can be easily verified. Account reconciliation is usually done at the end of a week, month, financial year or at the end of any financial period. It is usually done with the help of receipts, ATM notes, bank statements records transactions, etc.

Account Statement
A financial record that indicates the transactions and its effect on an account (usually bank account), in terms of debits and credits.

Accretion
It is the process where the price of a bond that has been bought at a discount is changed to the par value of the bond. It is also defined as a change in the price of a bond that has been bought at a discount to the par value of the bond.

Accrual Basis
This is the process of accumulation of interest or money. The accrual basis is calculated by assuming that every month has 30 days. Accrual basis is often used as the common parameter for the calculation of interests and returns.

Accrual Bond
This is a bond that has a tendency to pay the investors, an above the market rate. It is also known as range bond.

Accrued Interest
An interest accumulated on an investment, but is not yet paid. Some banking books prefer to call it as the interest that is earned, but not yet paid.

Automated Clearing House
It operates on a national level and helps banks and financial institutions in the clearance of balances and negotiable instruments that are used at a personalised as well as a mercantile mode of transactions.

Administered Rates
Rates of interest which can be changed contractually by lender. In some cases, these rates can also be changed by the depositor and also the payee.

Allotment Letter
It is a letter addressed to a subscriber to an issue of shares informing him of the number of share that he has been allotted and where payment was not made with the application, the amount due.

American Depository Receipt
(ADR) ADRs are depository receipts which are equal to a specific number of shares of a corporate stock that has been issued in a foreign country. American depository receipts are traded only in the United States of America.

Amortisation of Loans
The process of liquidation of loans or securities with the help of periodic reductions. The principal amount of the loan is amortised periodically by the method of payments in installments.

Amortisation Period
The amortisation period is basically considered in order to calculate the rate of interest, timeline of installments and also the appropriate amount of all the installments. The term amortisation period is also used in the field of accountancy; however, in a different context.

Amortising Swap
It is a swap in the rate of interest that has a declining notional principal.

Annuities
They are contracts that guarantee income or return, in exchange for a huge sum of money that is deposited, either at the same time or is paid with the help of periodic payments. Some of the common types of annuities include the deferred, fixed, immediate or variable variants.

Arbitrage
It is the simultaneous purchase and sale of two identical commodities or instruments. This simultaneous sale and purchase is done in order to take advantage of the price variations in two different markets.

Asset
Any business resource, both tangible and intangible, acquired at monetary cost and which is expected to be of benefit to the business for a period of time, such as buildings, machinery etc. Intangibles include goodwill etc.

Asset Backed Security
(ABS) A security that is backed with the help of some kind of valuable assets, is known as an asset backed security. Sometimes, ABS is also referred to as the monthly rate of repayment of a secured loan.

Asset and Liability Management
This is the co-ordinated management of all the financial risks inherent in the business conducted by financial institutions. In real practice, asset and liability management aims at minimisation of loss and maximisation of profit.

Assignment
It is the transfer of any contractual agreement between two or more parties. The party that assigns the contract is the assignor and the party who receives the assignment is the assignee.

Attrition Analysis
It is basically carried out for the purpose of reformation of the assets and liabilities in a balance sheet.

Automatic stay
This is an injunction that automatically becomes effective, after any person or organisation files for bankrupty. The automatic stay basically precludes the creditors from taking the debtor or the property of the debtor.

Autarky
A situation when a country does not no foreign trade.

Average Cost
It is a strategy of gradually buying more and more securities in a declining market or selling in a rising market in order to level out/rationalise the purchase or sale price.

Acquirer
They are banks and financial institutions that collaborate with businesses to accept credit/debit card payments.

Active Account
A bank account in which there are regular transactions. A bank account that is not dormant or inoperative or under an attachment order of the court or enforcement authorities.

Additional Card holder
Another member added to an existing card thus extending its usage is called an additional card holder. The responsibility to repay the monthly outstanding balance rests with the original (principal) card holder.

Affinity Card
Credit cards linked to special organisations like sports clubs, exclusive clubs and charities. Affinity credit cards can also help raise funds, when a part of income from every transaction goes toward the benefit of relevant organisation.

Automatic Funds
Transfer An arrangement that moves funds from one account to another automatically on a pre-arranged schedule e.g. every per day or once a month.

Automatic Payment
An arrangement that authorises payments to be deducted automatically from a bank account (usually a savings/current account) to pay bills (such as insurance payments, rent, mortgage or loan payments). Payments are usually scheduled to be made on a certain day of the month.

Available Credit
It is your credit limit minus your current balance. It is the unused portion of your credit line.

Bad Debt
A debt which is irrecoverable and is therefore written off as a loss in the accounts of a company/bank etc.

Badla
It is a method of carrying forward of transactions from one settlement period to another without effecting delivery.

Balance Transfer
It is the repayment of a debt with the help of another source of credit. In some cases, balance transfer also refers to transfer of funds from one account to another.

Bank
It is an establishment that helps individuals and organisations in the issuing, lending, borrowing and safeguarding functions of money.

Bank Account
A bank account is an account held by a person with a bank, with the help of which the account holder can deposit, safeguard his money, earn interest and also make cheque payments.

Bank Debt
A bank debt is basically any debt that is owed to a bank, by any kind of consumer, organisation or corporation. The debt may be anything from a bank loan to a credit card debt or an overdraft that has been used.

Bankrupty
It refers to economic insolvency, wherein the person’s assets are liquidated, to pay off all liabilities with the help of a bankrupty trustee or a^court of law.

Bid and Offer
Bid is a price of share on which a prospective buyer is prepared to pay for a particular scrip. Offer is the price at which a share is offered for sale.

Bill
It is a document which gives evidence of indebtedness of one party to another.

Billing Statement
It is a summary of all transactions, payments, purchases, finance charges and fees that take place through a credit account during a billing cycle.

Black Market
A market in which goods are sold at prices that violate some legally imposed pricing restrictions.

Blue Chip
It is a first class equity share, the purchase of which (the hose is) entails little risk even in economic recessions (Depression).

Bond
It is a certificate that represents an interest bearing debt, where the issuer is required to pay a sum of money periodically till maturity and then receive back the accumulated amount.

Borrower
This is the party that uses any kind of credit facility and thus, becomes obliged to repay the principal amount and interest on the borrowed amount.

Bounced Cheque
It is nothing but an ordinary bank cheque that any bank can refuse to encash or pay because of the fact that there are no sufficient finances in the bank account of the originator or drawer of the cheque.

Boom
It denotes increasing activity in a market arising out of greater demand.

Bridge Financing
Also known as gap financing, bridge financing is a loan where the time and cash flow between a short term loan and a long term loan is filled up.

Bridge Loan
This loan also known as a swing loan, is basically a real estate loan or a home loan, where the current residence/real estate is pledged by the borrower as a collateral in order to purchase a new residence.

Bullion
It means gold silver or other precious metal in bulk, i.e. in the form of ingots or bars rather than in coin. A bullion market is a gold market.

Banker’s Cheque
A cheque issued by a branch of a bank against consideration received. Banker’s cheque are valid for a certain period as indicated on the face of the cheque, (also called Pay Order).

Business Credit Card
A reward credit card, that comes with special features and rewards for corporate users. Business credit card builds credit history for the associated business. They are a good way to separate business expenses from personal ones.

Cap
It is a limit that regulates the increase in the rate of interest and installments of an adjustable rate mortgage.

Capital
This means the total net worth of any business establishment, organisation or corporation or the total amount invested for financial returns.

Capital Accumulation
It is increase in a country’s stock of real capital (i.e. net investment in fixed assets).

Capital Allowances
They are reductions in tax liability which are related to a firm’s capital expenditure. In most countries expenditure on new capital assets is encouraged by various kinds of allowances and annual depreciation is recognised as an expense of the business in calculating tax liability.

Capital Employed
A sets (i.e. fixed plus current assets minus current liabilities), but more usually bank loan and overdrafts are included and other adjustments made for purposes of calculating the return on Net employed such as the exclusion of intangible assets and the revaluation of trade investments at market prices.

Capital Expenditure
It is the purchase of fixed assets (e.g. plant and equipment), expenditure on trade investments or acquisitions of other businesses and expenditure on current assets (e.g. stocks). It differs from capital formation.

Capital Formation
It is the net investment in fixed assets, i.e. additions to the stock of real capital.

Capital Gains
It is a realised increase in the value of a capital asset. It arises when a share is sold for more than the price at which it was purchased. Strictly speaking, the term refers to capital appreciation outside the normal courses of business.

Capital Loss
It is a reduction in the money value of an asset. It is the opposite of capital gain.

Capital Stock
It refers to the total amount of physical capital in the economy or less commonly, in a firm or industry.

Capital Budget
It comprises capital receipt and payments and also incorporates transactions in the public account. Capital Receipt These are loans raised by the government from the public, which are called market loans, borrowings by the government from the Reserve Bank of India and other parties.

Carry Forward Trading
It has evolved a response to local needs in India and it refers to the trading in which the settlement is postponed to the next account period on payment of contango charges (Vyaj badla) in which the buyer pays interest on borrowed funds or the backwardation charges (undha badla). In which the short seller pays a charge for borrowing securities.

Cash
Bills and coins, cheques and other negotiable instruments, that are acceptable at banks and are considered to be liquid assets are collectively known as cash.

Cash Advance Fee
This is basically charged when a person uses a credit card to obtain cash. In most cases, it is charged as a percentage of the cash advance.

Cash Reserve
This is the total amount of cash that is present in the bank account and can also be withdrawn immediately.

Cash Ratio
It is the ratio of a bank’s cash holdings to its  total deposit liabilities. For an individual firm, it is the proportion of its current liabilities that are accounted for by cash in hand, including bank deposits and sometimes payments due from customers.

Capital Inflow
Arises when overseas residents buy assets he domestic economy or domestic residents sell foreign assets.

Capital Outflow
Arises when overseas residents sell assets in the domestic economy or domestic residents buy foreign assets.

Capital Widening
Increasing the quantity of capital without changing the proportions in which the factors of production are used.

Certificate of Deposit
This is a certificate of savings deposit that promises the depositor the sum back along with appropriate interest.

Central Bank
This is the governing authority of all the other banks in a country.

Chain Banks
Chain banks refer to separately incorporated banks brought under common control by a device by smaller banks of some of their cash reserves with bigger banking.

Cheap Money
Money which is available at low rate of interest is known as cheap money.

Closed Economy
A closed economy is one which does not have any external economic relationship.

Closing
Closing of an account is the final stage of any transaction where both the parties receive almost equal consideration from each other. The term ‘closing’ from ledger books where the two accounts are ‘closed down’ i.e. both debit and credit sides become equal.

Co-Borrower
A person who signs a promissory note as a guarantee that the loan would be repaid. Thus, the co-borrower plays the role of a guaranter and is equally responsible for the loan.

Consumer Credit
It is the credit and loan facility that is provided to the consumer for the purchase of goods and services. It cannot be unsecured of there is collateral. Most consumer credit is unsecured with the help of a collateral.

Common Market
An agreement among a group of countries to have free trade among themselves, a common set of barriers to trade with other countries and free movement of labour and capital among themselves.

Correspondent Banking
Under the correspondent banking system, banks are linked together through deposits by smaller banks of some of their cash reserves with bigger banks.

Consumer Good
A commodity bought by households for use of consumption.

Compound Interest
This is the interest that is ‘compounded’ on a sum of money that is deposited for a long time. The compound interest, unlike simple interest, is calculated by taking into consideration, the principal amount and the accumulated interest.

Consolidated Fund
It refers to sums standing to a particular account of exchequer (for which it is often used synonymously into which the proceeds of taxation are paid and from which government expenditure are made.

Conspicuous Consumption
It is the ostentatious personal expenditure which satisfies no physical need but rather a psychological need for the esteem of other. Goods may be purchased not for their practical use as status symbols.

Countervailing Duty
It is a special additional import duty imposed on a commodity to offset a reduction of its price as a result of an export subsidy in the country of origin.

Coupons
These are tokens for payment of interest attached to bearer securities.

Coupon rate
It is interest rate on a debt security, which the issuer promises to pay to holder periodical till maturity.

Convertibility
A currency is said to be convertible when it may be freely exchanged for another currency or gold.

Creditors
He is the one to whom an amount of money is due. A firm’s creditors are other firms, individuals and perhaps the government to which it owes money in return for goods supplied, services rendered and taxes for which it is liable.

Credit Creation
Power of commercial banks to expand deposits through expanding their loans and advances is known as credit creation.

Credit Transfer or Giro
In this system a bank or post office will transfer money from one account to another on receipt of written instructions.

Creditors Nation
The term is used for a country with a balance of payments surplus.

Credit Rating
The amount which a credit agency states a borrower is capable of repaying. Credit rating can be done for stocks, bonds or nations themselves. Some global credit rating agencies are Standard and Poor’s (S & P), Moody’s etc. CRISIL is the Indian agency rating bonds etc.

Creeping Inflation
Slow and persistent rise in general level of prices over a long period.

Cross Listing
It refers to listing of instruments of a company on the stock exchange abroad.

Credit Guarantee
It is a type of insurance against default provided by a credit guarantee association or other institution to a lending institution. Credit guarantees enable otherwise ‘sound’ borrowers who lack collateral security or are unable to obtain loans for other reasons, to obtain the credit they require through banks in the normal way.

Cum-Rights
The share is cum-rights when a potential purchaser is entitled to receive the current rights.

Current Yield
It is the annual interest on bond divided by the market price.

Currency
It refers to notes and coins that are the ‘current’ medium of exchange in a country.

Currency Appreciation
It is the increase in the exchanged rate of one currency in terms of other currencies. The term is usually applied to a currency with a floating rate of exchange; upward changes in fixed rate of exchange are called revaluations.

Currency Depreciation
It is the fall in the exchange rate , of one currency in terms of other currencies. The term is , usually applied to floating exchange rates. Downward changes in fixed rates of exchange are called devaluations.

Cyclical Unemployment
Unemployment in industrial market economies resulting from down showing of economic activity on account of deficient demand (insufficient to ensure Keynesian full employment).

Cancelled Cheque
A cheque that has been not paid and cancelled by the drawer-accountholder.

Capital Adequacy Ratio
It is the capital to assets ratio which banks are required to maintain against risks. It is also known as Capital to Risk (Weighted) Assets Ratio (CRAR).

Certificate of Deposit
(CD) It is a negotiable money market instrument and issued in dematerialised form or as a Usance Promissory Note against fund deposited at a bankor other eligible financial institution for a specified time period.

Credit Card Debt
The total unpaid balances on all of your credit cards (not to be confused with the minimum amount you owed each month).

Credit Criteria
Factors used by lenders to rate the credit worthiness or ability to repay debt. They may include income, amount of personal debt carried, number of accounts from other credit sources and credit history. A lender is free to use any credit-related information in approving or denying a credit application.

Current Account
An account used for commercial purpose. It attracts no rate of interest and is generally charged by the bank with maintenance charges. There is no limit to the number of transactions in this type of account.

Custodial Account
An account created for the benefit of a minor with an adult as the custodian.

Dear Money
The money available at exceptionally high rate of interest is called Dear money. It is the opposite of cheap money. A dear Money Policy involves keeping interest rates upto restrict the money supply.

Defensive Share
It is the share that cannot be bought or sold for some time period.

Deferred Shares
It refers to shares issued where ordinary shares have a fixed dividend and which entitle the holder to all profits after prior charges have been met.

Deficit
It is an excess of liabilities over assets or of an expenditure flow over an incorrect flow.

Deflation
It is a sustained reduction in the general level of prices. Deflation is often, though not inevitably, accompanied by declines in output and employment and is distinct from disinflation which means a reduction in the rate of inflation.

Deposit
It is money placed in an account at a bank and constituting a claim on the bank. The term bank deposit includes deposits on all types of account, including current accounts.

Deposit Account
It is a bank account in which deposits earn interest and withdrawals from which require notice.

Depression
It refers to a business cycle in which there is consistent decline of production, national income and employment level.

Devaluation
It is the reduction of the official rate at which one currency is exchanged for another.

Debt Deflation
A fall in aggregate demand that is associated with falling asset values, causing a negative wealth effect on consumption. It could also involve a decline in investment as investors wait for asset values to stop falling.

Debt Instruments
Any written documents that record the terms of a debt, often providing legal proof of the condition under which interest will be paid and the principal repaid.

Development Gap
The gap between less developed countries and developed countries.

Demand Deposit
This refers to savings and current account of the bank account that is used.

Demand Pull Inflation
A state of rising prices brought about by increase in aggregate demand in the face of short supply.

Dependency Burden
That proportion of the total population of a country falling in the ages of 0 to 15 and 64 +, which    is considered economically unproductive and therefore not counted in the labour     force.

Debt
Any amount that is owed by an individual, organisation or corporation to a bank.

Debit
It is a banking term that indicates the amount of money that is owed by a borrower. It also indicates the amount that is payable or the amount that has been deducted from an account. The origin of the term is from the concept of debit side of a ledger account.

Debt Settlement
It is a procedure wherein a person in debt negotiates the price with the lender of a loan, in order to reduce the instalments and the rate of repayment and ensure a fast and guaranteed repayment.

Debt Repayment
It is the total process repayment of a debt alongwith the interest. Sometimes, the consolidation that is provided is also included in debt  repayment.

Debt Recovery
This is the process that is initiated by the banks and lending institutions, by various procedures like debt settlement or selling of collaterals.

Debt Management
It is a process of managing debts and repaying creditors. Debt management is a very broad concept covering almost anything related to debts and their repayment.

Deposit Slip
It is a bill of itemised nature and depicts the amount of paper money, coins and the cheques that are being deposited into a bank account.

Depositor
The person who deposits money into a bank account is called a depositor.

Derivative
A derivative is a security with a price that is dependent upon or derived from one or more underlying assets. Its value is determined by fluctuations in the underlying asset. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes.

Depreciation
The degradation in the book and monetary value of a fixed asset as a result of wear and tear in the course of time.

Debt Consolidation Loan
This is a type of loan, where the bank or the lending institution provides the borrower with a loan that helps the borrower to pay off all his previous debts.

Direct Taxes
Taxes levied on persons that can vary with the status of the taxpayer, e.g. income tax.

Discount Rate
The difference between the current price of a bill and its maturity value expressed as an annualised interest rate.

Dividend
It is a part of the profit that is earned by a corporation or joint stock companies and is distributed amongst the shareholders.

Domestic Income
Income generated by the factors of production within the country from its own resources is called domestic income.

Dual Economy
The economy of the underdeveloped countries is dualistic in nature, i.e. it falls into two conspicuously distinct, but sharply contrasted divisions. There is a modern sector, ipostly in the urban areas where the social and economic organisation is of the advanced nature and there is traditional sector comprising the backward indigenous speaking and production organisation.

Dual Listing
When a company’s securities are listed on more than one exchange, then it is called dual listing.

Earnest Money Deposit
It is made by the buyer to the potential seller of a real estate, in the initial stages of negotiation of purchase.

Earned Income
Earnings such as salary or wages, income of working partners or proprietors and certain pensions and social security benefits are treated as earned income for tax purposes.

Economic Costs
By economic costs we meant those payments which must be received by resource owners in order to ensure that they will continue to supply them in the process of production.

Economic Profits
The difference between the revenues received from the sale of output and the full opportunity cost of the inputs used to make the output. The cost includes the opportunity cost of the owner’s capital. Also, called pure profits or simply profits.

E-Commerce
(Electronic Commerce) The conducting of business transactions via remote electronic means.

E-Cash
Also known as Electronic-cash and digital cash, E-cash is a technology where the banking organisations resort to the use of electronics, computers and other networks to execute transactions and transfer funds.

Economic Growth
Economic growth means a process of sustained increase in real national income of a country over a long period of time.

Effective Exchange Rate
An index number of the value of a nation’s currency relative to a weighted basket of other currencies. Whereas an exchange rate measures the rate of exchange of a currency for one other currency, changes in the effective exchange rate indicate movements in a single currency’s value against other currencies in general.

Electronic Filing
This is the method of filing of tax returns and tax forms on the internet.

Enterprise Zone
It is a designated zone in a depressed generally inner-urban area, in which firms located in the zone are given favorable taxation concessions and freedom from a number of planning constraints.

Encryption
It is a process that is used to ensure the privacy and security of a person’s confidential financial information. The actual process involves scrambling of the data of the person, in such a manner, so that only the person himself can see data.

Endorsement
It is basically the handing over of rights of a financial/legal document or a negotiable instrument to another person. The person who hands over his/her rights is known as the endorser and the person to whom the rights have been transferred, is known as the endorsee.

Equilibrium Price
The price at which demand for a commodity and its supply are exactly equal is called the equilibrium price. At equilibrium price excess demand and excess supply are both equal to zero.

Equity
It is the residual value of a company’s assets after all outside liabilities (other than to shareholders) have been allowed for. The equity in a company under liquidation is the property of holder of ordinary shares, hence these shares are popularly called equities.

Estate Duty
It is a tax payable on a person’s property at his death and before it passes into hands of others.

Euro Currency Market
Euro currency market, also known as Eurodollor market, is an international capital market which specialises in borrowing and lending of currencies outside the country issues.

Exchange
It exchange is a trade of property, assets, goods or services for consideration of any kind.

Exchange Rate
This is basically a rate, with the help of which one country’s currency can be exchanged with the currency of another country.

Expiration Date
This term indicates the invalidity of a financial document or instrument, after a specified period of time.

Extension Counter
Extension Counters provide the prescribed limited services. Banks are permitted to open Extension counters within the premises of big offices/factories, hospitals, military units, educational institution, etc.

Early Repayment Charge
(Prepayment charge) Charge that banks and financial institutions levy on borrowers when they prepay the loan amount before the end of loan tenure. Early repayment charge is also called prepayment penalty.

Electronic Clearing Service
(ECS) Credit An inter bank arrangement where by a customer can give instructions to his bank where he holds a current or savings account to pay the monthly instalments of payments due on loans/credit cards held with another bank.

Electronic Funds Transfer
(EFT) Any transfer of funds initiated by electronic means such as an electronic terminal, telephone, computer, ATM or magnetic tape.

Face Value
It is the original value of any security or negotiable instrument.

Factor Costs
It is the term used in the national accounts to described the valuations of output at market prices less taxes on expenditure plus subsidies.

Financial Instrument
It is anything that ranges from cash, deed, negotiable instrument or for that matter any written and authenticated evidence, that shows the existence of a transaction or agreement.

Financial Intermediary
It is basically a party or person who acts as a link between a provider who provides securities and the user who purchases the securities. Share broker and almost all the banks are the best examples of financial intermediaries.

Financial statement
This statement is a record of historical financial figures, reports and a record of assets, liabilities, capital, income and expenditure.

Fixed Income Investments
It refers to an investment that pays a fixed rate of return. This usually brings into question a fixed return from a fixed deposit or an investments in a debentures issued by a certain company or a bond issued by some government controlled institution.

Fixed Exchange Rate
An exchange rate that is held within a narrow band around some pre-announced par value by intervention of the country’s Central Bank in the foreign exchange market.

Fixtures
This term is used in the context of a real estate property, when assets like furniture are attached to the real estate and are also included in its book value. Banks, in many cases, are known to include fixtures in the value, if the real estate property has been pledged as a collateral.

Fixed Rate Mortgage
This is a home loan, for which the interest rate remains constant and fixed throughout the lifetime of loan.

Floatation
It means raising new capital by public subscriptions. A private company issuing share to the public for the first time is said to be going public.

Floating Capital
It refers to the capital which is not invested in fixed assets such as machinery, but in work in progress, wages paid, etc. It is synonymous with working capital.

Floating Charge
It is an assignment of the total assets of a company or individual as collateral security for a debt, as opposed to particular assets, when such an assignment is called a fixed charge.

Flexible Fund
A mutual fund or other pooled investment that may change its investment strategy as it sees fit, as opposed to sticking to one particular investment vehicle, company size, or asset allocation. If a fund is flexible in its strategy, this will usually be stated in the prospectus and/or other marketing material.

Foreign Bonds
These are bonds denominated in the currency of the foreign country where funds are sought to be raised. The issuer is borrower who desires to raise funds outside the domestic capital market.

Foreign Institutional Investor
An institution established or incorporated outside India which proposes to make investment in India in securities; provided that a domestic asset management company or domestic portfolio manager who manages funds raised or collected or brought from outside India for investment in India on behalf of a sub-account, shall be deemed to be a foreign institutional investor.

Foreign Investment It is the acquisition by government, institutions or individual in one country of assets another. Foreign investment is defines to cover both direct investment and portfolio investment and includes both public authorities and private firms and individuals.

Foreclosure
It is a standardised procedure where creditors like banks, are authorised to obtain the title of the real estate property that has been pledged as a collateral.

Foreign Currency Surcharge
It is levied by some banks and credit card companies, when a credit card or an ATM is used in a foreign country.

Funding
It is the process of converting short term debt by the sale of long term securities and using the funds received to pay off short term debt. Funding may be carried out by a company because its capital structure is inappropriate, i.e. to take advantage of the fact that long term capital is normally cheaper and less likely to be withdrawn than short term capital.

Fringe benefits tax
The fringe benefits tax (FBT) was the tax applied to most, although not all, fringe benefits in India. A new tax was imposed on employers by India’s Finance Act 2005 from the financial year commencing April 1, 2$05.

Gateway
An interface that links the internet shopper, the online merchant and banking systems in a secure environment. The gateway contains the bulk of the logic for handling processor business rules, processor time-outs and so on.

Group Banking
It is one where two or more separately incorporated banks are bought under the control of a holding company which may not be a banking company. The banks bought together may be unit banks or branch banks or both.

Government Bonds
It is also known as a government security, is basically any security that is held with the government and has the highest possible rate of interest.

Gross Investment
The total value of all investment goods produced in the economy during a stated period of time.

Gross Return on Capital
The market value of output minus all non-capital costs, the gross return is made up of depreciation, the pure return on capital, any risk premium and residual which is pure profit.

Gross Domestic Investment
(GDI) It consists of the outlays for additions to the fixed assets of both the private and public sectors plus the net value of inventory changes.

Gross Income
It is the total income of a person, organisation or corporation in one financial year, before making any deductions.

Gross Tuning
Use of monetary and fiscal policies to attempt to correct only large deviations from potential national income.

Gross Dividends
These are basically the total amount of dividends that are earned by an individual or corporation in a single accounting and tax year. It must be noted that capital gains are also included in gross dividends.

Grace Period
It is an interest free period that is to be given by a creditor to a debtor after the period of the loan gets over, before initiating the process of loss recovery. The grace period depends on the amount of the loan and also the credit score of the borrower.

Ground Rent
It is the amount of rent that a leaseholder pays periodically to the owner for using a piece of land.

Grant
It is any type of financial aid that is given by the government.

Guarantor
He is a creator of trust who takes the responsibility for the repayment of a loan.

Gum-Bonus
It is the situation when a potential purchaser is entitled to receive the current bonus.

Hard Currency
It refers to a currency traded in a foreign exchange market.

Hedge It is a strategy that is used to minimise the risk of a particular investment and maximise the returns of an investment. A ‘hedge’ strategy is most of the times, implemented with help of a hedge fund. This term has been written from banker’s point of view and may be interpreted differently in field of finance.

Hoarding
It is the term for the accumulation of (idle money) balances.

Holding Company
It refers to a company that controls one or more other companies, normally by holding a majority of the shares of these subsidiaries.

Hot Money
It refers to funds which flow into a country to take advantage of favourable rate of interest in that country. They improve the balance of payments and strengthen the exchange rate of the recipient country.

Holding Period
This is the time duration during which a capital asset is held/owned by an individual or corporation. The holding period is taken into consideration, while pledging the asset as a collateral.

Home Equity Debt
It is a debt, where the borrower’s house is pledged as a collateral.

Hypothecation
It is a charge that is created on movable asset as security for a debt. However, the ownership as well as possession of the asset is retained with the borrower.

Import Surcharge
It is a temporary increase in Import tariffs designed to correct a short term balance of payments deficit and to stabilise the exchange rate.

Imputed Cost or Implicit Cost
It is the cost attributed to using an asset which is owned by the user. It is the opportunity cost of not putting an asset to its best alternative use.

Incremental Capital Output Ratio
(ICOR) The amount of capital needed to raise output by one unit.

Index Number
It is a weighted average of a number of statistical observations of some economic attribute, as a percentage of a similar weighted average calculated for the attribute at an earlier or base, period.

Inter Bank Market
It is the money market in which banks borrow or lend among themselves for fixed periods either to accommodate short term liquidity problems or for lending on. The interest rate at which funds on loan are offered to first class banks is called the Inter Bank Offered Rate (IBOR) or in London, the London Inter Bank Offered Rate (LIBOR).

Inactive Money
It is the money which is not in circulation, i.e. not on deposit or invested in other financial asset or being used for transaction. Inactive money is also referred to as idle money or idle balances.

Installment Contract
It is a contract where the borrower, who is also the purchaser, pays a series of instalments that includes the interest of the principal amount.

Interest
It is a charge that is paid by any borrower or debtor for the use of money, which is calculated on the basis of the rate of interest, time period of the debt and the principal amount that was borrowed. Interest is, sometimes, also titled as the ‘cost of credit’.

Interest Rate
It is the percentage of principal amount that is paid as an interest for the use of money. Usually, the interest rate is decided by a country’s Central Bank, on the basis of the economic conditions.

Interchange Fee
The fee that your bank pays the consumer’s bank for each credit card transaction that is settled.

Joint and Several Liability
This is a legal term utilised to point that two or more entities are individually and collectively responsible.

Joint Stock Company
It is that form of business organisation in which the capital of the company is jointly held by a large number of people, who have purchased its shares. The joint stock companies are also known as corporated organisations or corporations.

Laissez Faire Policy
It is the policy of non­interference by the state in the working of economy. It may also be termed as least intervention policy.

Lease
A contract, through which the owner (lessor) of a certain property, allows another (lessee) to use the same for a specified period, in exchange for a value called the rent.

Letter of Credit
A document issued by a bank (on behalf of the buyer or the importer), stating its commitment to pay a third (seller or the exporter) a specific amount for the purchase of goods by its customer, who is the buyer. Letters of credit are mainly used in international trade transactions of huge amounts, wherein the customer and the supplier live in different countries.

Life Cap
The upper and lower limit for changes in the borrower’s interest rate over the term of his/her loan.

Listed Company
It is a company whose shares are listed on the main market of the stock exchange.

Listed Security
It is security listed and tradable on the stock exchange. Companies wishing to have their equity shares listed must comply with a number of requirements concerned with the disclosure of information. Besides, they must be registered.

Long Term Debt
An amount owed for a period exceeding 1 year, from the date of last balance sheet/accounting yr. Otherwise known as funded debts, long term debts refers to those loans, which become due after lyr from the last balance sheet/accounting year. Such debts can be a bank loan, bonds, mortgage, debenture or other obligations.

Ledger Folio
A set of 40 consecutive transactions in an account.

Legal Checks
(Scrutiny of Title Deeds) Before disbursal of a home loan or loan against any property, usually the bank conducts a legal check on the property being offered as collateral. It involves screening all the documents etc, related to the property. This is done to ensure that the property in question has a clear title.

Liability
It is the responsibility for a loan or credit account. The liabilities are resources (sources of funds), which the business mobilises to acquire assets for running income.

Maturity
The term maturity is used to indicate the end of investment period of any fixed investment or security. After maturity, investor is repaid the invested amount alongwith interest that has been accumulated.

Maturity Date
It is the date on which the investment or security attains maturity.

Master Card
An association of banks that governs the issuing and acquiring of Master Card, Credit Card Transactions and Maestro Debit Transactions.

Managed Currency
A currency is said to be managed if the exchange rate is not fixed by free market forces, i.e. if the government influences the rate by buying and selling its own money or by other means.

Masala bonds
 Masala bonds are bonds issued outside India but denominated in Indian Rupees, rather than the local currency. The term was used by IFC to evoke the culture and cuisine of India.Unlike dollar bonds where the borrower takes the currency risk, masala bond investors will bear the risk.

Merchant Banks
They are institutions that carry out a variety of financial services, including tire acceptance of bills of exchange, the issue and placing of land and securities, portfolio and unit trust management and some banking services.

Mixed Economy
It is a form of economic organisation, in which elements of capitalist economy and those of socialist economy are found mixed together.

Mixed Banking
The banking system, combines commercial banking with investment banking is known as mixed banking. It is now referred to as universal banking.

Mortgage
It is a legal agreement between the lender and borrower where real estate property is used as a collateral for the loan, in order to secure the payment of the debt. According to the Mortgage Agreement, the lender of the loan is authorised to confiscate the property, the moment the borrower stops paying the instalments. This agreement conveying conditional ownership of assets as a security for a loan becoming void when the debt is repaid.

Mortgage Refinance
This involves the replacement of current debt with another debt with more convenient terms and conditions.

Money Laundering
It is a process for conversion of money obtained illegally to appear to have originated from legitimate sources.

Mobile Branches
In terms of extant instructions, Mobile branches are allowed to be opened/operated only in Tier 3-6 Centres (i.e. up to centres with population of below 50000). They provide banking services at the doorstep.

Multicity Cheque
Cheque issued by a customer under a pre-approved arrangement with the bank whereby the bank agrees to pay them at designated centres and branches in the country.

Margin Amount
It is the difference between the total cost of a project and the sanctioned loan amount.

National Savings Certificates
(NSC) It is one of the most popular post office tax saving scheme. It is primarily used for small saving and income tax saving investments in India.

Near Money
It refers to an asset which like money acts as a store of value, but which is not immediately acceptable as a medium of exchange, e.g. a building society deposit.

Net Operating Loss
A total loss that is calculated for a tax year and is attributed to business or casualty losses.

Negative Amortisation
When the monthly payment is unable to cover the principal and the interest due, there is a slow increase in the mortgage debt. This situation is termed as negative amortisation.

Net Tangible Assets
It means fixed assets plus current assets minus intangible assets such as goodwill and minus current liabilities.

Non-liquid Asset
A possession or asset which cannot be changed into cash very easily is called non-liquid asset.

Non Performing Asset
A non performing asset (NPA) refers to a classification for loans on the books of financial institutions that are in default or are in arrears on scheduled payments of principal or interest.

Non Recourse Loan A loan
which is secured by collateral and for which borrower is not personally liable, is called a non recourse loan.

No Documentation Loan
When the applicant furnishes minimum information, giving only name, address, contact information for the employer and social security number for the application of the loan, it is called a no documentation loan.

Offline Debit Card
This refers to a card which is issued by a bank and has a VISA or Mastercard logo on it. It can be issued, either instead of or alongwith a ATM card.

Oligopoly
It is a type of market in which there is a relatively high degree of concentration, i.e. a small number of firms account for a large proportion of output, employment, etc.

Open Economy
An economy that has trad relationship with other countries is called an open economy. It exports and imports things as a normal part of its activity.

Optional Money
It is non-legal tender money, but it is generally accepted by the people as a medium of exchange.

Online Banking
The accessing of bank information, accounts and transactions with the help of a computer through the financial institution’s website on the internet, is called online banking. It is also called internet banking or e-banking.

Overdraft
It is a cheque or rather an amount of cheque, which is above the balance available in the account of the payer.

Overdraft Protection
A service which permits a verification account to be connected to other savings or line of credit for facilitation of protection against overdrafts is called overdraft protection.

Open End Credit
This means a line 9/ credit that can be used a number of times, upto a certain limit. Another name for this type of credit is charge account or revolving credit.

Origination Fee
The charges a lender or creditor levies for processing a loan. It includes cost of loan document preparation, verification of the credit history of the borrower and conducting an overall appraisal.

Ordinary Dividends
Dividends, which are a distribution of the profits of a company are called ordinary dividends.

Par Value
It is the price at which a share or other security is issued, i.e. the face value of the investment. A share is said to be standing above par if its quoted price on the stock exchange is greater than that at which the share was issued.

Payee
Payee is the person to whom the money is to be paid by the payer.

Payer
Payer is the person who pays the money to the payee.

Pending Transaction
A transaction that has not yet beden settled.

Permanent Income
Maximum amount that a person can consume per year into the indefinite     future without reducing his or her wealth.

Perpetuity
A bond that pays a fixed sum of money each year forever and has no redemption date. Sometime, called a consol.

Personal Disposable Income
The gross income of the personal sector less all direct taxes and national contribution.

Personal Income
Income earned by or paid to individuals, before deducting personal income taxes.

Personal Identification Number
A PIN is usually required when performing financial transactions using a debit or credit card. It is a secret code of numbers and alphabets given to customers to perform transactions through an automatic teller machine or an ATM.

Positional Goods Goods
that are necessarily scarce and whose security cannot be reduced by increased productivity e.g. gold.

Positive Economics
It is the economic propositions which can, at least in principle, be verified by observation of events or states of the real world that is, without reference to value judgements.

Point of Sale
(PoS) Point of sale terminal is where cash registers are replaced by computerised systems.

Premium
It is the difference, where positive, between the current price or value of a security or ‘ currency and its issue price or par value.

Privatisation
It is the sale of government owned equity in nationalised industries or other commercial enterprises to private investors, with or without the loss of government control in these organisations.

Private Company
It is a type of business organisation that permits a limited number of shareholders to enjoy limited liability and to be taxed as a company.

Previous Balance
It is a outstanding amount which appears on the credit card statement on date when it is generated.

Principal
It is basic amount which is invested to yield returns over a certain period of time at a given rate of interest.

Post Dated Cheques
(PDCs) Mode of Repayment A payment mode wherein the customer provides Post Dated Cheques (PDCs) for the repayment of the loan dues.

Pre-Approved Credit
Credit card or a line of credit that is approved based upon available data without further information supplied by the potential card member.

Pre-Closure
Closure of the loan account prior to the tenure fixed for the account.

Prime Rate
This is the rate on which each bank fixes its own prime lending rate for advances.

Promissory Note
This is a binding legal document that a borrower signs to obtain a loan.

Quick Ratio
It is also called as the acid test ratio. It measures the company’s liabilities and determines its assets to pay off its obligations.

Range Bonds
Bonds which cease the payments because the reference rate of the bond increases or decreases, as compared to pre-determined rate on a given index.

Rate Covenant
Rate covenant in a municipal bond determines the rates to be charged to buyers.

Real Exchange Rate
An index of the relative prices of domestic and for foreign goods.

Real Income
Real income is income expressed in terms of a general level of prices of a particular year taken as base.

Receipt
A hard copy, description of the transaction that occurred at the point of sale.

Recession
It is an imprecise term given to a sharp slow down in the rate of economic growth or a modest decline in economic activity, as distinct from a lump or depression, which is a more severe and prolonged downturn. Recessions are a feature of the trade cycle.

Regressive Tax
It is a tax which takes a decreasing proportion of income as income rises.

Reserve Currency
It is a currency which, government an international institutions are willing to hold in their Gold and Foreign Exchange Reserves and which finances a significant proportion of international trade.

Retrieval Request
A request to a merchant for documentation concerning a transaction, usually a cardholder dispute or suspicious sale or return. A retrieval request can lead to a charge back.

Refinance
This means clearing the current loan with the proceeds of a new one and using the same property for collateral.

Revolving Line of Credit
It is a rule followed by the lender, which binds him to allow a certain credit to the borrower.

Record Date
A date set by the issuer, on which an individual must own the shares, so as to be eligible to receive the dividend.

Reconveyance In banking terms, reconveyance is transfer of property to its real owner, once the loan or the mortgage is paid off.

Redemption Fee A commission or fee paid, when an agent or an individual sells an investment such as mutual funds or annuity.

Reference Asset An asset such as debt instrument which has a credit derivative is called as a reference asset.

Reference Rate
The basis of floating rate security is called as the reference rate.

Refunding
The act of paying back the amount or returning the funds is called as refunding.

Reinvestment Risk
The risk that arises from the fact that dividends or any yields may not be eligible for investment to earn the rate of interest is called as the reinvestment risk.

Relative Value
The liquidity, risk and return of one instrument in relation to another financial instrument is the relative value.

Repossession
Taking back of property by a seller or a lender from the buyer or the borrower due to default of payment.

Reserve Account
An account which is maintained by depositing undistributed parts of profit for future needs is called as a reserve account.

Reserve Requirements
Cash money or liquidity that member banks need to hold with the Central Bank.

Residual Value
The anticipated value that a company calculates to sell its asset at the end of its full life.

Recurring Billing
In recurring billing, the credit cardholder authorises a merchant or vendor to charge his credit card on a regular basis.

Repo Rate
It is basically the rate at which RBI lends to commercials banks for meeting the short term deficits. RBI varies repo rate from time to time, to achieve its monetary policy objectives.

Returned Cheque
When you do not have enough available funds in your account (including any overdraft protection transfer from another account) to cover a cheque, the bank may decide not to pay the cheque and to return it to the payee. A returned item fee may be charged to your account.

Revalidation
Duly authenticated extension of the validity period for negotiation/payment of cheque/draft or a negotiable instrument.

Reverse Mortgage
A financial product, which provides senior citizens with funds against their home equity. Senior citizens, can get a regular amount monthly, quarterly or as a lump sum. They can live in their homes for their lifetime and after that banks can recover the amount by selling the property or if the heirs of the property want, they can claim it by repaying the dues to the bank.

Revolving Credit
A credit agreement that allows consumers to pay all or part of the outstanding balance on a loan or credit card. As credit is paid off, it becomes available again to use for another purchase or cash advance.

Sales Tax
It is a tax levied as a proportion of the retail price of a commodity at the point of sale.

Saving Bank
It is a bank which accepts interest-bearing deposits of small amounts.

Saving Deposits
Those deposits on which the bank pays a certain percentage of interest to the depositors, but the bank place certain restrictions on withdrawal.

Secondary Bank
It is a financial institution which accepts deposits and makes loans, but which has relatively few branches and therefore, does not play a major role in the payments system as far as the general public is concerned.

Secured Loan
A loan which is backed by a pledging of real or personal property (collateral) by the borrower to the lender.

Security
Property or assets which are pledged to the lender by the borrower, as a guarantee for the repayment of a loan.

 

Seller Broker
A person who finds a buyer for the seller of a property and aids the latter in negotiation, in lieu of a commission.

Seller Carryback
A form of financing wherein the seller of a property finances the buyer, who finds it difficult to procure a loan or fails short of the amount needed to buy the property. In short, it is a part of the purchase amount which the seller offers to finance. This term is also known as carryback loan or seller’s second.

Soft Currency
It is a currency whose exchange rate is tending to fall because of persistent balance of  payments (BoP) deficits or because of the building up  of speculative selling of the currency in expectation of a change in its exchange rate.

Speculation
Taking a financial position that will yield profits if prices move in a particular direction in
future, but will yield losses if they move the other way.

Stagflation
It means inflation associated with static or declining output and employment.

Stock Broker
He is a member of the stock exchange, who buys and sells securities for clients, in return for a commission on the price of the shares.

Subsidy
It refers to government grants to suppliers of goods and services. A subsidy may be intended to keep prices down (i.e. to raise real incomes of buyers), to maintain incomes of producers (e g. farmers) or to maintain a service or employment.

Syndicated Loan
A very large loan extended by a group of small banks to a single borrower, especially corporate borrowers. In most cases of syndicated loans, there will be a lead bank which provides a part of the loan and syndicates the balance amount to other banks.

Standing Instruction
Signed instructions given by a customer to his/her bank to make regular transfer of funds for specified purposes and valid for the period indicated by the customer until the instruction is withdrawn.

Stop Payment
Stop payments are generally placed on lost or stolen cheques or on cheques related to disputed purchases. Banks usually levy charges for registering stop payment instructions.

Stored Value Card
This is a special type of credit card, which has a stored money value. Stored value card can be reloadable, in which case more money can be added to the stored value card and can be reused.

Tax
A compulsory payment to government, against which there is no quid pro quo.

Tax Break
A situation which is providing some relief from tax, In whole or part.

Tax Evasion
Illegal escape from tax payment; black market incomes result from tax evasion.

Tax Shifting
It refers to the phenomenon whereby those on whom taxes are leveid are able to pass the burden either partly or fully on to others.

Term Structure of Interest Rates
This phrase relates to the relationship between interest rates on bonds of different due dates, generally described in the form of a chart, often known as a ‘yield curve’.

Time Deposit
A kind of bank deposit which the investor is not able to withdraw before a time fixed when making the deposit.

Time Value

This is the sum of money that an option’s premium surpasses its intrinsic worth and is also called as ‘time premium’.

Total Revenue
It refers to the total money receipts of a firm from the sale of a certain given quantity of output.

Trading Currency
It is the currency in which international trade is invoiced.

Transfer Deed It is a legal document by which ownership of securities is transferred from the seller to the buyer.

Transfer Payments It refers to grants or other payments not made in return for a productive service, e.g. pensions, unemployment benefits and other forms of income support, including charitable donations by companies.

Travellers Cheque
They are issued through banks acting as sale agents or sold directly to the public. The purchaser pays for the cheque in advance and signs them twice once when ordering the cheque and once when cashing them.

Transaction Fee
A ‘per transaction’ charge incurred by merchants, who are on scale pricing. This is in addition to the percentage discount fees.

Unit Banking
Under the unit banking system, the banking operations are carried through single banking office rather than through a network of branches. Under this system, the area of operations as well as the size of the bank is smaller and far more limited.

Ultra-small Branch
It can function with minimum infrastructure such as CBS terminal linked to passbook printer and a safe for cash retention to be managed full time by bank’s staff. This may be treated as a regular branch or a satellite office.

Underwriter
Any investment or commercial financial firm or a securities house that works with an issuing entity for the purpose of selling a new issue.

Universal Life Insurance
A type of life insurance which blends term insurance protection with a savings element.

Visa
An association of banks that governs the issuing and acquiring of Visa card transactions.

Wholesale Banking
Banking which offers services to other corporate entities, large institutions and other financial institutions.

Withdrawals
Removing of funds from a bank account is called as making a withdrawal.

Without Recourse
A term which signifies that the buyer is responsible for non-performance of an asset or non-payment of an instrument, instead of the seller.

Working Capital
The difference between current assets and current liabilities.

Yield
The returns earned on a stock or bonds, as per the effective rate of interest on the effective date, is called as a yield in the banking terms.

Yield to Maturity
(YTM) The average annual yield that an investor receives because he holds it for life or till the maturity date, is called as the yield to maturity.

Zero Balance Account
A bank account which does not require any minimum balance is termed as a zero balance account.

Zero Coupon Yield Curve
It is also called as spot yield curve and is used to determine discount factors.

Zero Liability Protection
A bank guarantee, if your card is lost or stolen, you may not be responsible for unauthorised purchases made with your card if you report the theft promptly. The Zero Liability Protection Programme is free and automatically available on all bank consumer credit cards.

Zero Rated Bond
Bond that pays no interest but instead is sold at a deep .discount on its par value, or an interest paying bond that has been stripped of its coupon which is sold separately as a security in its own right.

 

 

Banking Awareness Study Material – practice Sets (1-5)

Banking Awareness Study MaterialComputer AwarenessMarketing Aptitude

Practice Set -1

1. Which initiatives did Union Government launch as part of skill India vision?

1. National Skill Development and Entrepreneurship Policy
2. National Skill Development Mission
3. Pradhan Mantri Kaushal Vikas Yojana
4. Skill Loan scheme
5. All of the above

2. Which of the following rates signals the RBI’s long term outlook on interest rates?

1. Repo rate
2. Reverse repo rate
3. Bank rate
4. SLR
5. CRR

3. Loans and advances in a bank, came under which of the following category?

1. Assets
2. Liabilities
3. Costs
4. All of these
5. None of these

4. A foreign bank is one

1. whose most of the branches are situated outside India
2. in which atleast 40% equity shares are held by non-resident Indians
3. which is incorporated outside India
4. All of the above
5. None of the above

5. Security features of the new ₹ 2000 and ₹ 500 notes is/are

1. Micro letters ‘RBI’ and ‘2000’
2. Guarantee cause on the right
3. Governor’s signature and RBI emblem on the right
4. All of the above
5. None of the above

6. Which of the following are the scheduled banks?

1. State Bank of Mauritius Limited
2. HDFC Bank Limited
3. ICICI Bank
4. None of these
5. All of these

7. Which of the following is not the part of the scheduled banking structure in India?

1. Money lenders
2. Public sector banks
3. Private sector banks
4. Regional rural banks
5. State co-operative banks

8. BCSBI stands for

1. Banking Codes and Standards Board of India
2. Banking Credit and Standards Board of India
3. Banking Codes and Service Board of India
4. Banking Credit and Service Board of India
5. None of the above

9. Many times, we read in newspapers that the RBI has revised certain rates/ratios under LAF. What is the full form of LAF?

1. Legal Adjustment Facility
2. Liquidity Adjustment Facility
3. Long term Achievement Facility
4. Legal Adjustment Formality
5. None of the above

10. Bank rate as fixed by RBI, means

1. rate of interest charged by banks from borrowers
2. rate of interest on bank deposits
3. rate of interest charged by RBI on its loans to banks
4. rate of interest on inter bank loans
5. None of the above

11. Which of the following statements is/are correct?

1. SEBI was established in 1988
2. It was made a fully autonomous body in 1992
3. It regulates the securities market and protect the interests of investors in securities
4. All of the above
5. None of the above

12. Scheduled bank means a bank

1. incorporated under the Companies Act, 1956
2. authorised to transact government business
3. governed by the Banking Regulation Act, 1949
4. included in the Second Schedule to the Reserve Bank of India Act, 1934
5. All of the above

13. Banks are authorised to sell third party products. Which are these products?

1. Mutual funds
2. Term deposits
3. Credit cards
4. Gift cheques
5. None of these

14. A company which pools money from investors and invests in stocks, bonds and shares is called

1. a bank
2. an insurance company
3. bank assurance
4. mutual fund
5. None of these

15. Which one of the following statements is correct about venture capital?

1. It is a short term investment and the returns are in the forms of interests
2. It is a high risk venture
3. Venture capital finances high-tech projects
4. 1 and 2
5. All of the above

16. Which one of the following methods is currently used in India to issue note?

1. Fixed Fiduciary System
2. Maximum Fiduciary System
3. Proportional Reserve System
4. Percentage Reserve System
5. Minimum Reserve System

17. A money deposited in a bank that cannot be withdrawn for a preset fixed period of time is known as a

1. term deposit
2. checking amount
3. saving bank deposit
4. no frills account
5. current deposit

18. Which of the following statements is/are correct?

1. MEIS was launched under Foreign Trade Policy of India (FTP) 2015-20.
2. MEIS is one of the two schemes introduced in FTP 2015-20, as a part of exports from India Scheme.
3. The Service Exports from India Scheme (SEIS) is one of the schemes of FTP 2015-20.
4. 1 and 3
5. All of the above

19. Which of following statements is/are correct regarding Gold Monetisation Scheme?

1. The monetisation scheme encourages individuals, households and temples to deposit gold jewellery or bars with banks or collection agents
2. The gold deposited would be later refined for domestic purpose and would help cut dependence on imports
3. Any medium term deposit will be allowed to be withdrawn after 3yr and any long term deposit after 5yr
4. 1 and 2
5. All of the above

20. ‘Unit Banking System’ is that system where an individual bank undertakes the banking business

1. through a single office
2. through a few branches operating within a limited area
3. through an independent office to its local community
4. All of these
5. None of these

21. ‘Branch Banking System’ is one under which

1. a large bank carries on banking business through a large network of branches spread all over the country
2. the bank’s huge financial resources enable it to carry on its activities on a large scale throughout the country
3. a bank is connected to one or more other banks in an area or outside of it.
4. All of the above
5. None of the above

22. Features of new ₹ 2000 note is/are

1. Swachh Bharat Logo with slogan
2. Motif of Mangalayan
3. Denominational numeral 2000 in Devnagari
4. All of the above
5. None of the above

23. The Reserve Bank directives require UCBs to setup an Audit Committee at the Board (ACB) level. The ACB should provide direction and observe the operations of the total audit function in the bank and should specially focus on the follow-up of

1. arrears in balancing of books at various branches
2. inter-branch adjustment accounts and unreconciled long outstanding entries in inter-branch accounts
3. frauds and all other major areas of housekeeping
4. All of the above
5. None of the above

24. Which of the following organisations provides credit history of the borrowers?

1. CIBIL
2. ARCIL
3. SEBI
4. RBI
5. CCIL

25. The Co-operative bank in India has a

1. two-tier system
2. three-tier system
3. four-tier system
4. five-tier system
5. two-tier system in some states and three-tier system in others

26. KYC means

1. know your customer very well
2. know your existing customer very well
3. know your prospective customer very well
4. satisfy yourselves about the customer’s identity and activities
5. All of the above

27. All Regional Rural Banks (RRBs) are required to maintain their entire Statutory Liquidity Ratio (SLR) in

1. government and other approved securities
2. current accounts with sponsor banks
3. time deposits with sponsor banks
4. gold holdings only
5. All of the above

28. Under the scheme of Co-operative Agricultural Credit developed in India, the state co-operative Bank has been considered such a vital link that

1. it has been given a status comparable to that of a scheduled bank
2. for certain purposes, the central financing agencies have been treated as its branches
3. Both 1 and 2
4. for certain purpose, it is treated as regulator ofSIDBI
5. None of the above

29. Central co-operative banks

1. occupy a crucial importance in the co-operative credit structure
2. form an important link between the State co- operative bank at the apex and the primary agricultural credit societies at the base
3. are closer to the primary societies than an Apex Bank could be one
4. None of the above
5. All of the above

30. Which of the following mobilise(s) the savings of the public to specifically invest in the industrial securities?

1. UTI
2. LIC
3. GIC
4. All of these
5. None of these

31. The State Co-operative Bank, being the Apex Bank at the state level

1. operates as a balancing centre for the movement of the resources in the entire state
2. acts as the custodian of the surplus resources and reserves of central co-operative banks and supplements them by attracting sizeable deposits and by obtaining loans from RBI
3. provides the link between the RBI and the money market on one hand and the entire co-operative credit structure, on the other
4. All of the above
5. None of the above

32. Which of the following is the Central Bank of the country?

1. RBI
2. SBI
3. RRB
4. NABARD
5. None of these

33. How many types of primary agricultural credit societies are there in our country?

1. Large-size societies which include Rural Banks, Agricultural Banks and credit unions
2. Service co-operative
3. Other small size societies
4. All of the above
5. None of the above

34. Which of the following co-operative banks is considered as the first co-operative bank in India?

1. Greater Bombay Co-operative Bank Limited
2. Abhyudaya Co-operative Bank Limited
3. Ahmedabad Mercantile Co-operative Bank Limited
4. Amanath Co-operative Bank Limited
5. Anyonya Co-operative Bank

35. Currently, banks claim they have achieved 100% CBS. What are they referring to?

1. It means all their branches are technology driven with core banking solutions
2. It suggests complete banking services
3. It is an indication of customised banking services
4. All of the above
5. None of the above

36. Savings account with zero balance can be opened for

1. persons of high net worth
2. employees of IT companies
3. weaker sections of society
4. women customers
5. None of the above

37. Which one of the following does not qualify as priority sector lending by commercial banks?

1. Software exports
2. Small business loans
3. Education loans
4. Small industries loan
5. None of these

38. Which of the following types of institutions operate in call money market only as lender?

1. Commercial banks
2. Primary dealers
3. Insurance companies
4. SBI
5. None of the above

39. A bank normally does not have to deal with an issue related to

1. payments and settlements system
2. contractual rights of creditors
3. intellectual property rights
4. cases of insolvency
5. None of the above

40. Which of the following types of accounts are known as ‘Demat accounts’?

1. Accounts which are zero balance accounts
2. Accounts which are opened to facilitate repayment of a loan taken from the bank. No other business can be conducted from there
3. Accounts in which shares of various companies are traded in electronic form
4. Accounts which are operated through internet banking facility
5. None of the above

41. The money market in India consists of two sectors namely the organised and the unorganised sector. Which of the following do not fall under unorganised sector?

1. RBI, commercial banks and SBI
2. LIC and GIC
3. Unit Trust of India
4. Indigenous banks
5. None of these

42. Which of the following rates is not decided by RBI?

1. Bank rate
2. Repo rate
3. Reverse Repo rate
4. Base rate
5. Cash Reserve Ratio

43. Choose the correct options among the following statements regarding Standup India Scheme.
I. The Union Cabinet chaired by Prime Minister Narendra Modi approved on 6th Jan, 2016 the ‘Standup India Scheme’
II. ‘Standup India Scheme’ promotes entrepreneurship among SC/ST and men entrepreneurs
III. The Scheme is intended to facilitate at least fifty such projects per bank branch, on an average one for each category of entrepreneur.
Codes

1. Only I
2. II and III
3. I and III
4. I, II and III
5. None of these

44. The Reserve Bank of India has given its ‘in-principle’ approval to Bharti Airtel’s payments bank venture. Choose the correct statements regarding this
I. The ‘in-principle’ approval was valid for 18 months.
II. During that time RBI had asked applicants to comply with the licensing norms.
III. Airtel M Commerce Services Limited (AMSL) is a subsidiary of Bharti Airtel.
Codes

1. Only I
2. II and III
3. I and III
4. I, II and III
5. None of these

45. Co-operative banks in India are registered under
I. Banking Laws (Co-operative Societies) Act, 1965.
II. Banking Regulations Act, 1949.
III. Companies Act, 1956.
Select the correct answer using the codes given below

1. Only I
2. I and II
3. II and III
4. I and III
5. All of these

46. Which of the following Indices has been launched by NSE?
I. Nifty Tata Group Index
II. Nifty Aditya Birla Group Index
III. Nifty Mahindra Group Index Codes

1. Iand II
2. II and III
3. I and III
4. I, II and III
5. None of these

47. The Narasimham Committee, 1991 has given which of the following major recommendations?
I. Reduction in the SLR and CRR.
II. Phasing out Directed Credit Programme.
III. The determination of interest rate should be on the grounds of market forces such as the demand for and the supply of
fund.
IV. The actual numbers of public sector banks need to be reduced.
V. Narrow banking concept where weak banks will be allowed to place their funds only in short term and risk free as.
Select the correct answer using the codes given below

1. I, II and V
2. I, III, IV and V
3. I, II, IB and V
4. II, III, IV and V
5. I, n, m and IV

48. Choose the correct statements.
I. Reserve Bank of India (RBI) permitted Cooperative Banks with Core Banking Solution (CBS).
II. RBI permitted Co-operative Banks to issue ATM cards/ATM-cum-debit cards
III. RBI bank should set up their own arrangment for issuing cards
Codes

1. Only II
2. I and II
3. I, II and III
4. I and III
5. None of these

49. The main function of commercial bank can be segregated into
I. payment system.
II. financial intermediation.
III. financial services.
Select the correct answer using the codes given below

1. I, II and III
2. I and in
3. I and II
4. II and III
5. None of these

50. Insurance Regulatory and Development Authority of India (IRDAI) has constituted three committees namely.
I. The life insurance committee
II. The general insurance committee
III. Reinsurance committee
IV. The IRDAI committee
Which of the statements given above is/are correct?

1. Only I
2. I and II
3. I, II and III
4.  II, III and IV
5. I, III and IV

Answer Key

Practice Set -2

1. Federal reserves is the financial organisation of

1. USA
2. Britain
3. France
4. Japan
5. Germany

2. Which of the following statements about the money market is/are true?

1. Not all commercial banks deal with their customers in the secondary market
2. Money markets are used extensively by businesses both to warehouse, surplus funds and to raise short term funds
3. The single most influential participant in the US money market is the US Treasury Department
4. 1 and 2
5. All of the above

3. Which of the following is not a public sector bank?

1. State of Hyderabad
2. Central Bank of India
3. Regional Rural Bank
4. HDFC Bank
5. None of the above

4. What does EMT indicate in the context of a bank loan?

1. Equal monetary incentive
2. Equated monthly installment
3. Exact monthly indicator
4. Exact mean index
5. None of the above

5. The main resources of RRB are

1. Share capital
2. Deposits from the public
3. Borrowing from sponsor banks,
4. Refinance from NABARD
5. All of the above

6. Which of the following is not a negotiable  instrument?

1. Promissory note
2. Bill of  exchange
3. Cheque
4. Bank draft
5. Share certificate

7. Axis Bank is a

1. public sector bank
2. private sector bank
3. co-operative bank
4. foreign bank
5. gramin bank

8. The primary issuers of capital market securities includes which of the following?

1. The Central Government
2. The Local Government
3. Corporations
4. Central and Local Governments and Corporations
5. Local Government and Corporations

9. A bond issued at a price less than its face value and payable on its due date at its face value bearing no Rate of Interest (Rol) is called

1. Preference Bond
2. Zero Coupon Bond
3. Convertible Bond
4. Perpetual Bond
5. Sovereign Bond

10. Choose the correct statements regarding Pradhan Mantri Jeevan Jyoti Yojana.

1. All savings bank account holders in the age 18 to 50 yr in participating banks will be entitled to join
2. Premium for PMJJY is ₹ 330 per annum
3. Risk Coverage of ₹ 2 lakh in case of death for any reason
4. All of the above
5. None of the above

11. Under Bretton Woods System, as a member of IMF, India declared its par value of rupee in terms of

1. British pound
2. US dollar
3. a basket of currency
4. gold
5. None of these

12. Which of the following is not an obligation of bank towards its customer?

1. Pay bills as per the instructions of the customer
2. Act as per the directions given by the customer
3. Submit periodical statements, i.e. informing customers about the state of the account
4. Not to set off three debt owed to him by a creditor from the credit balances held in other accounts of the borrower
5. Maintain secrecy of accounts

13. ‘National Institute of Bank Management’ is the institution meant for

1. All those given as options
2. providing management personnel to the banks
3. training of bank employees in banking
4. providing consultancy on best practices in bank management
5. recruitment of bank employees at all levels

14. Open market operations, one of the measures taken by RBI in order to control credit expansion in the economy, means

1. sale or purchase of government securities
2. issuance of different types of bonds
3. auction of gold
4. to make available direct finance to borrowers
5. None of the above

15. Which of the following could be considered as an initiative towards promotion of financial inclusion?

1. Opening of no frills accounts
2. Appointing business correspondents for servicing rural customers
3. Opening of bank branches in unbanked districts
4. All of the above
5. None of the above

16. Who decides on the quantity of coins to be minted?

1. The Government of India
2. RBI
3. SBI
4. All of the above
5. None of the above

17. Which of the following terms is used in the field of banking and finance?

1. Special drawing rights
2. Affirmative defence
3. Civil procedure
4. Informed consent
5. Question of fact

18. The most prominent national level micro finance apex organisation providing micro credit services for women in India is

1. National Credit Fund for women
2. Mahila Samridhi Kosh
3. Rural Women Self Help Group
4. All of the above
5. None of the above

19. Which of the following does not explain the high repayment rates of Micro Credit Programmes?

1. Promising larger and larger loans for borrowers in good standing
2. Public repayments
3. Strong competition between numerous Micro Credit Programmes to reduce interest rates
4. Starting repayments before investments are likely to have borne fruit
5. None of the above

20. SHG Bank Linkage Programme, initially launched by

1. RBI
2. NABARD
3. SBI
4. RRBs
5. Finance Ministry

21.Which of the following sections of people is not financially excluded?

1. Marginal farmers
2. Salaried persons
3. Landless labourers
4. Self employed and unorganised sector enterprises
5. Urban slum dwellers

22. Which of the following is a sovereign instrument with a fixed coupon (payable on a specified date or half yearly) issued by Reserve Bank for market borrowing programme of the government of India?

1. Fixed deposits
2. Dated government securities
3. Debentures
4. Bonds
5. Equity shares of PSBs

23. A bank which acts as a banker of other banks is called

1. saving bank
2. commercial bank
3. investment bank
4. development bank
5. central bank

24. Which of the following is incorrect about Non Banking Financial Companies (NBFCs)?

1. NBFC cannot accept demand deposits
2. NBFC is not a part of the payment and settlement system
3. NBFC can issue cheques drawn on itself
4. NBFCS are fast emerging segment of Indian financial system
5. None of the above

25. What is the full form of ‘NBFC’ as used in the financial sector?

1. New Banking Finance Company
2. National Banking and Finance Corporation
3. New Business Finance and Credit
4. Non-Business Fund Company
5. None of the above

26. The branding line of Bank of Baroda is

1. International Bank of India
2. India’s International Bank
3. India’s Multinational Bank
4. World’s Local Bank
5. None of the above

27. Choose the correct statements regarding Goods and Services Tax (GST).

1. GST is considered as great step towards transformation and transparency in tax regime
2. It will bring freedom from tax terrorism as it will be levied on consumption rather than production
3. GST will also benefit states which are considered backward states and also address the problem of imbalanced development
4. It will help to curtail black money as traders will be compelled to give proper bills
5. All of the above

28. Bank assurance is

1. an insurance scheme to insure bank deposits
2. an insurance scheme exclusively for the employees of banks
3. a composite financial service offering both banking and insurance products
4. a bank deposit scheme exclusively for employees of insurance companies
5. None of the above

29. Which of the following schemes is launched specifically for helping senior citizens to avail loan by mortgage of their residential property?

1. English Mortgage Scheme
2. Senior Capital Loan Scheme
3. Reverse Mortgage Loan Scheme
4. Senior Citizen Personal Loan Scheme
5. None of the above

30. The benefits of the ‘Deen Dayal Upadhyaya Gram Jyoti Yojana’ (DDUGJY) scheme are

1. All villages and households shall be electrified
2. Increase in agricultural yield
3. Improvement in Health, Education, Banking (ATM) services
4. Improvement in accessibility to radio, telephone, television, internet and mobile
5. All of the above

31. Banking Ombudsman Scheme is applicable to the business of

1. all scheduled commercial banks excluding RRBs
2. all scheduled commercial banks including RRBs
3. only public sector banks
4. all banking companies
5. all scheduled banks except private banks

32. Which of the following is not required for opening a bank account?

1. Identity proof
2. Address proof
3. Recent photographs
4. Domicile certificate
5. None of the above

33. Base rate is the rate below which no bank can allow their lending to anyone. Who sets up this ‘Base rate’ for banks?

1. Individual Banks’ Board
2. Ministry of Commerce
3. Ministry of Finance
4. RBI
5. Interest Rate Commission of India

34. The SBI proposed to merge which public sector bank with itself along with its 5 associate banks?

1. UCO Bank
2. Bharatiya Mahila Bank
3. Andhra Bank
4. Bank of Baroda
5. Union Bank of India

35. In context of business and banking, what is CRAR?

1. Capital to Risk Asset Ratio
2. Credit to Risk Asset Ratio
3. Credit to Risk Assessment Ratio
4. Capital to Risk Assessment Rate
5. Credit Rate Assessment Ratio

36. Which of the following is not a part of the scheduled banking structure in India?

1. State co-operative banks
2. Public sector banks
3. Private sector banks
4. Regional rural banks
5. Moneylenders

37. Which of the following is a retail banking product?

1. Home loans
2. Working capital finance
3. Corporate term loans
4. Infrastructure financing
5. Export credit

38. ‘UBIN’ drive has been started for Start ups to begin their new businesses without any delays. What does UBIN stands for?

1. Unidentified Business Identification Number
2. Unique Business Indication Number
3. Unique Business Identification Number
4. Unified Business Identification Number
5. Unicode Business Identification Number

39. Which of the following is not a banking related term?

1. Radiation
2. Outstanding amount
3. Benchmark prime lending rate
4. Explicit guarantee
5. None of the above

40. The Reserve Bank of India (RBI) has launched a website (sachet.rbi.org.in) to curb illegal and unauthorised pooling of funds by unscrupulous firms. Features of the Portal is/are
I. To facilitate filing, tracking of complaints relating to illegal and unauthorised pooling of funds by unscrupulous firms.
II. To provide information about whether any particular entity is registered with any regulator or is permitted to accept deposits.
III. To help enhance coordination among regulators and state government agencies to curb instances of unauthorised acceptance of deposits by unscrupulous entities.
Select the correct answer using the codes given below

1. Only I
2. I, II and III
3. II and III
4. Only III
5. I and II

41. Recent initiatives for financial inclusion in India include
I. ‘no frill’ account for retail purpose.
II. simplified KYC (Know Your Customer).
III. Credit Counselling Centre (CCC) facilities.
IV. extension of smart cards.
Select the correct answer using the codes given below

1. I and II
2.  II and III
3. III and IV
4. I and IV
5. All of these

42. The Enforcement of Security Interest and Recovery of Debts Laws Amgpdment Bill, 2016 seeks to amend which of the following laws?
I. Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002
II. Recovery of Debts due to Banks and Financial Institutions Act (RDDBFI), 1993
III. Depositories Act, 1996 and IV. Indian Stamp Act, 1899.
Select the correct answer using the codes given below

1.  I, III and IV
2. I, II, III and IV
3. II, m and IV
4. III and IV
5. I and II

43. Consider the following statements.
I. If the beneficiary of a cheque has lost the cheque, he can instruct the paying bank to stop payment of the cheque without waiting for the account holder’s instructions.
II. While outsourcing, the only consideration should be cost savings.
Which of the statements given above is/are correct?

1. Only I
2. Only II
3. Both I and II
4. Neither I nor II
5. Either I or II

44. As per the notification issued by the banks, the ‘third party ATM usage’ will now be restricted to certain withdrawals and limits only. What does it really mean?
I. The ATM card holders will not be able to withdraw from other banks’ ATMs under any circumstances.
II. Customers of one bank may be able to withdraw only a limited amount from other banks’ ATMs.
III. ATM card holders will have to pay a fee if they withdraw money from other banks’ ATMs frequently.
Select the correct answer using the codes given below

1. Only I
2. Only II
3. Only III
4. II and III
5. I and III

45. The objectives of forming SHG is/are
I. to build mutual trust and confidence between the bankers and the rural poor people.
II. to encourage banking activities, both on the thrift as well as credit sides, in a segment of the population that the formal financial institutions usually find difficult to cover.
III. to meet the needs of the poor by
combining the flexibility, sensitivity and responsiveness of the Informal Credit System with the strength of technical and administrative capabilities and financial resources of the formal credit institutions.
Select the correct answer using the codes given below

1. Only I
2. I and II
3. I and III
4. II and III
5. All of these

46. As reported in various newspapers, many banks have revised their interest rates on home loans, car loans and other such loans. Which of the following phenomenon prompted these banks to make such an upward revision in their interest rates ?
I. RBI has revised the CRR and other such rates upward, which has created a liquidity crunch in the market.
II. Stock markets in the country are showing very high fluctuations as visible through their indexes. As a result, banks have lost a huge amount of money in trading. Banks now want to recover that money by increasing their interest rates.
III. Banks are in need of a huge amount of money, as they have to give revised pay to all its employees.
Select the correct answer using the codes given below

1. Only I
2. Only II
3. Only m
4. All of the above
5. None of the above

47. What is difference between banks and NBFCs?
I. NBFCs business activities are akin to that of banks as they can lend and make investments; however there are a few differences between them.
II. NBFCs cannot accept demand deposites. They cannot issue cheques as they do not form part of the payment and settlement system.
III. Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in case of banks
Select the correct answer using the codes given below

1. Only I
2. I, II and III
3. II and III
4. Only III
5. I and II

48. Many times, we hear about the ‘Banking Ombudsman’. What is/are the major roles of same?
I. Banking Ombudsman is a quasi-judicial authority having powers to summon, the banks and the customers both in case of dispute.
II. The Banking Ombudsman are appointed by the President of India and are retired judges of the High or Supreme Courts.
III. The decisions/judgements given by the Banking Ombudsman cannot be taken to any court of justice as their decisions are last in case of bank related problems disputes.
Select the correct answer using the codes given below

1. Only I
2. Only II
3. Only III
4. All of these
5. None of these

49. The Reserve Bank of India keeps on changing various ratios/rates frequently. Why is this done?
I. To keep inflation under control.
II. To ensure that Indian rupee does not lose its market value.
III. To ensure that banks do not earn huge profits at the cost of public money. Select the correct answer using the codes given below

1. Only I
2. Only II
3. Only III
4. All of these
5. None of these

50. The legal relationship between a bank and its customer is a kind of
I. debtor and creditor.
II. principal and agent.
III. pledgor and pledgee.
IV. mortgagor and mortgagee.
Select the correct answer using the codes given below

1. I and III
2. I, III and IV
3. I, II, III and IV
4. I and II
5. I, II and III

Answer Key

Practice Set -3

1. What does EBT stands for?

1. Electronic Beleted Transfer
2. Electronic Beginners Transaction
3. Electronic Benefit Transfer
4. Electronic Beginning Transaction
5. None of the above

2. Core banking is one of the technological developments in banking system. Elements of core banking include

1. Making and servicing loans
2. Opening new accounts
3. Processing cash deposits and withdrawals
4. Processing payments and cheques
5. All of the above

3. Which of the following is not a method of credit control?

1. Cash reserve ratio
2. Open market operations
3. Credit deposit ratio
4. Bank rate policy
5. None of the above

4. In which year, did the Insurance Regulatory and Development Authority come into force?

1. 1999
2. 2000
3. 2001
4. 1991
5. 1993

5. Which of the following is not an essential requirement for the endorsement as per Negotiable Instrument Act, 1881?

1. It should be on the instrument
2. It should be made by the holder or the maker
3. Signatures should be in ink and not by pencil or rubber stamp
4. It should contain unconditional order
5. The endorser should sign the endorsement in the same style and with the same spellings as written in the instrument

6. The Central Government has extended the cover of Rashtriya Swasthya Bima Yojana (RSBY) to beedi workers and

1. carpenters
2. cobblers
3. school children
4. domestic workers
5. All of these

7. The merit of issuing notes with RBI can be seen is

1. uniformity
2. stability in currency
3. control of credit
4. All of these
5. None of these

8. The Goods and Service Tax (GST) is broadly divided into four slabs of

1. 4%, 8%, 15% and 25%
2. 5%, 12%, 18% and 28%
3. 4%, 12%, 16% and 30%
4. 6%, 10%, 18% and 30%
5. 8%, 12%, 16% and 25%

9. Which of the following is not a party of bill of exchange?

1. The drawer
2. The drawee
3. The payee
4. The endorser
5. None of these

10. Which of the following will set up core bank infrastructure for rural banks?

1. SIDBI
2. IBA
3. RBI
4. SBI
5. NABARD

11. Which of the following staterflents is correct about soiled/mutilated note?
I. All banks are authorised to accept soiled notes across their counters and pay the exchange value
II. All public sector bank branches and currency chest branches of private sector banks are authorised to adjudicate and pay value in respect of mutilated notes
III. The RBI has also authorised all commercial bank branches to treat certain notes in ‘two pieces’ as soiled notes and pay exchange value
Codes

1.  I and II
2. II and III
3. Only III
4. I, II and HI
5. I and III

12. The Reverse Mortgage Scheme is launched to give benefit to which of the following  groups of the society?

1. Government employees
2. Senior citizens
3. Unemployed youth
4. War widows
5. None of the above

13. What is the full form of IRR as used in banking/financial sector?

1. Internal Rate of Return
2. Internal Revaluation Reserve
3. Investment Reserve Ratio
4. Internal Risk Return
5. None of the above

14. Opening of maximum number of ATMs is an example of

1. indirect marketing
2. direct marketing
3. social marketing
4. All of the above
5. None of the above

15. Which among the following is related to bank risks?

1. Deposits
2. Bank funds
3. NPA
4. All of these
5. None of these

16. What do you understand by ‘Para Banking’ services?

1. Eligible financial services rendered by banks
2. Utility services provided by banks
3. Services provided through business  correspondents
4. Services provided to armed force personnel
5. None of the above

17. Banks are authorised to sell third party products. Which are these products?

1. Mutual funds
2. Term deposits
3. Debit cards
4.  Gift cheques
5. None of these

18. Why are interest rates charged by Micro Finance Institutions (MFIs) higher than lending rates of banks?

1. MFIs are not allowed to source deposits from public
2. Banks have the benefit of cheaper funds
3. MFIs borrow bulk of their funds from banks
4. MFIs borrow funds from banks at high cost and also their administrative expenses are more
5. None of the above

19. Which of the following is related to ‘restrictive crossing’?

1. Balance book
2. State Bank of India
3. A/c payee
4. Company
5. Two transverse parallel lines simply drawn across the face of the cheque

20. The Rashtriya Mahila Kosh (RMK) is working exclusively for

1. poor women
2. rural women
3. urban women
4. All of the above
5. None of the above

21. Telebanking service is based on

1. virtual banking
2. online banking
3. voice banking
4. core banking
5. None of the above

22. Which of the following is true?

1. NBFCs can accept deposits from the public
2. NBFCs cannot offer deposit schemes to the public
3. Deposits of NBFCs are insured with DICGC
4. NBFCs can accept deposits frbm public, if they are registered and permitted by RBI
5. None of the above

23. Which of the following is a prerequisites for transfer of a negotiable instrument?

1. Crossing
2. Acceptance
3. Noting with a notary
4. Blank endorsement
5. Mere delivery or endorsement and delivery

24. The Narasimham Committee II was setup to suggest some recommendations for improvement in the

1. efficiency and productivity of the financial institution
2. banking reform process
3. export of IT sector
4. fiscal reform process
5. None of the above

25. Which of the following steps is taken for financial inclusion in India?

1. The expansion of network of co-operative banks to provide credit to agriculture and saving facilities in rural areas
2. Nationalisation of banks in 1969 and expansion of branches
3. Creation of an elaborate framework of priority sector lending with mandated targets as a part of a strategy to meet the savings and credit needs of large sections of the Indian population, who had no access to institutional finance
4. All of the above
5. None of the above

26. What is not a potential limit of group lending?

1. Monitoring group members can be costly for borrowers
2. Group lending uses social sanctions instead of collateral foreclosure
3. Group lending brings added risks for borrowers, those of other members default
4. Exclusion of all group members after one of them default is too harsh a punishment
5. None of the above

27. Which of the following is the best alternative banking service to branch banking?

1. Establishment of small branches
2. Set up ATMs
3. Issuing of ATM cards
4. Giving credit cards
5. Mobile banking

28. A ULIP is a product offered by insurance companies that, unlike a pure insurance policy, gives investors both insurance and investment under a single integrated plan. What does ULIP stand for?

1. Unit Linked Insurance Plan
2. Unit Linked Industrial Plan
3. Unitary Linked Insurance Plan
4. Unit Leverage Insurance Plan
5. Unit Linked Insurance Principle

29. In case of a debt taken by a married woman, her husband will be liable for debt only if the debt is taken

1. with his consent or authority
2. for the supply of necessities of life to the wife, in case the husband defaults in supplying the same to her
3. Both 1 and 2
4. with his child authority
5. None of the above

30. Basel II norms are associated with which of the following aspects of banking industry?

1. Risk management
2. Manpower planning
3. Retirement benefits for the employees
4. Corporate governance
5. None of the above

31. From the given options, bring out the one which is not a function/power of Reserve Bank of India?

1. To assume the responsibility of meeting directly or indirectly all reasonable demands for accommodation
2. To hold cash reserves of the commercial banks and make available financial accommodation to them
3. To enjoy monopoly of the note issue
4. To assume responsibility of all banking operations of the government
5. To assume the responsibility of statistical analysis of data related to macro economy of India

32. Which of following institutions regulate non-banking financial companies?

1. RBI
2. SEBI
3. IRDA
4. Finance Ministry
5. None of these

33. The financial assistance or loans of ₹ 10000 by a bank to a small borrower will be called as

1. business finance
2. government finance
3. micro finance
4. small finance
5. KYC finance

34. Interest is calculated on actual 365 days basis, in respect of the following products, except

1. call money
2. notice money
3. term money
4. Gol dated securities
5. None of these

35. Banks have the lowest lending levels in the……… part of India.

1. Central
2. North-Eastern
3. Southern
4. Western
5. Northern

36. Co-operative development bank was set up by

1. NABARD
2. RBI
3. SBI
4. Central Government
5. None of these

37. Which of the following were the first rulers in India to issue coins which can be definitely attributed to the kings?

1. Shakas
2. Kushana
3. Indo-Greeks
4. Parthians
5. None of these

38. All venture Capital Funds must be registered with

1.  RBI
2. SEBI
3. Registrar of Companies
4. Either 1 or 2
5. None of the above

39. RBI has deregulated interest rate for savings accounts. What does it suggest?

1. Customers will get the benefit of higher interest rates
2. Banks will have the right to fix their interest rates independently
3. Each bank will have their respective interest rates without the need to adhere to fixed interest rate common to all banks
4. Banks will decide interest rates for individual customers according to their savings pattern
5. None of the above

40. Government security that is a claim on the government and is a secure financial instrument which guarantees of both capital and interest, is called

1. coupon security
2. gilt-edged security
3. corporate security
4. All of these
5. None of these

41. Kisan Credit Cards are an effective way of reaching out to the farmers by the banks. What assistance does the farmer receive in this way?

1. Credit facility for crops etc against an approved limit
2. Short term credit facility against value of his crops
3. Long term credit is provided against his land holdings
4. Loan is permissible against crops sold, but payment yet to be received by the farmer
5. None of the above

42. Which of the following is a characteristic of a capital market instrument?

1. Liquidity
2. Marketability
3. Long maturity
4. Liquidity premium
5. All of the above

43. Expand the term BCBS.

1. Bank’s Committee on Banking Supervision
2. Basel Committee on Banking Supervision
3. Bank’s Commission on Banking Supervision
4. Basel Commission on Banking Supervision
5. None of the above

44. Bank loan against property requires the asset to be free from encumbrances. What does it mean?

1. The asset to be free from any liability
2. The asset to be properly registered
3. The property to be fully constructed
4. The asset should not have multiple owners
5. None of the above

45. Which of the following is not considered as an instrument negotiable by custom or usage?

1. Delivery orders for goods
2. Railway receipts for goods
3. Hundi
4. Government promissory notes
5. Cheques

46. In bank’s parlance, credit risk in lending is

1. default of the banker to maintain CRR
2. default of the banker to maintain SLR
3. default of the banker to release credit to the customer
4. default of the customer to repay the loan
5. None of the above

47. One single statement that depicts the financial position of a bank and/or business enterprise at a given point time is called

1. Statement of Product Details
2. Reconciliation Statement
3. Balance Sheet
4. Quarterly Returns submitted to RBI
5. Trading and Manufacturing account

48. The gilt-edged market refers to the market for
I. government securities.
II. semi-government securities.
III. corporate securities.
Select the correct answer using the codes given below

1. Only I
2. I and II
3. II and III
4. I, II and III
5. Only

49. Banks need liquidity for which of the following objectives of banking?
I. To meet deposit withdrawal.
II. To fund loan demands.
III. To maintain public confidence.
Select the correct answer using the codes given below

1. Only I
2. Only II
3. Only III
4. I and II
5. II and III

50. At present NBFCs can sell/distribute mutual fund policies after RBI’s permission. But RBI will grant permission only if
I. the given NBFC has minimum 100 crores of funds
II. the given NBFC is making profit for last three years
III. the given NBFC has minimum NPA Choose the correct statements.

1. Only I
2. I and II
3. II and III
4. I, II and III
5. None of these

Answer key

 

 

 

Practice Set -4

1. For which of the following purposes, RBI has constituted a working group with Shri Deepak Mohanty as Chairman ?

1. Deregulation of primary markets
2. Deregulation of secondary markets
3. Deregulation of savings bank rates
4. Introduction of base rate
5. None of the above

2. For loans and advances granted by commercial banks to Small Road and Water Transport Operations Scheme (SRWTED), NABARD provides refinance under automatic refinance facility, subject to which of the following conditions?

1. Repayment of loan should not exceed 5 yr with moratorium of 6 months
2. Refinance amount is restricted to ₹ 15 lakh per borrower
3. The borrower should be from rural area and he should utilise the vehicle mainly for transportation of rural farm and non-farm products and inputs and passengers to/from marketing centres
4. All of the above
5. None of the above

3. Which of the following key reforms are not included in Indradhanush mission?

1. Bank Board Bureau
2. Capitalisation
3. Uniformity
4. Appointments
5. Empowerment

4. Under its Foreign Currency Pre-shipment Credit (FCPC), Exim Bank gives short term foreign currency finance to eligible exports for procurement of inputs and to commercial banks for on-lending to export customers; the terms of finance is/are

1. interest rate on finance is maximum 2% over LIBOR (London Inter Bank Offered Rate)
2. maximum period of finance is 180 days from the date of disbursement
3. for commercial banks, loans availed from Exim Bank are exempted from the requirement of Cash Reserve Ratio (CRR), Statutory Liquidity Requirement (SLR) and Incremental Credit Deposit Ratio requirements
4. All of the above
5. None of the above

5. A worldwide financial messaging network which exchanges messages between banks and financial institutions is known as

1. CHAPS
2. SWIFT
3. NEFT
4. SFMS
5. CHIPS

6. Tier-I capital would mean

1. paid up capital
2. statutory reserves and other disclosed free reserves
3. capital reserves representing surplus arising out of sale proceeds of assets
4. All of the above
5. None of the above

7. ‘Sub-Prime Lending’ which was the root cause for global melt down in banks, during 2008 means

1. bank finance for non-productive activities
2. bank finance not properly disclosed in its Balance Sheet
3. bank finance in violation to the directives of the Central Bank
4. bank finance to fictitious entities
5. bank finance who do not qualify for the best market interest rates

8. Factoring means

1. an easy way of raising capital from a factoring company by small business
2. selling of account receivables on a contract basis for cash payment to a factor before it is due
3. an arrangement for raising short term money against prepaid expenses
4. a method of discounting of long term bills
5. None of the above

9. Who are eligible to launch payments Bank?

1. Card Issuers
2. Metro railway
3. Promoter
4. Financial Institut
5. RRBs

10. Which of the following is not a programme/ agency of the Union Ministry of Finance?

1. Investor Education and Protection Governance (IEPG)
2. National Foundation for Corporate Governance (NFCG)
3. Serious Frauds Investigation Office (SFIO)
4. Investment Commission
5. Central Rural Sanitation Programme

11. Which is the card that looks like any other plastic card or an ATM card with Integrated Circuit (IC chip)?

1. Member card
2. Charge card
3. Credit card
4. Smart card
5. None of these

12. Tier-II capital consists of

1. undisclosed reserves and cumulative perpetual preference shares
2. general provisions, loss reserves and revaluation reserves
3. subordinated debt, hybrid debt capital instruments
4. All of the above
5. None of the above

13. As per guidelines of Reserve Bank of India, a new private sector bank

1. shall be subject to prudential norms in regard to income recognition, asset classification and provisioning, capital adequacy, etc
2. will have to observe priority sector lending targets as applicable to other domestic banks
3. will be required to open rural and semi-urban branches
4. All of the above
5. None of the above

14. For which one of the following loan products ‘teaser loans’ are offered by banks?

1. Educational loans
2. Commercial loans
3. Loans against security of gold
4. Retail trade loans
5. Home loans

15. Initial repayment holiday given to a borrower for repayment of loan is called as

1. subvention
2. moratorium
3. re-schedulement
4. amortisation
5. EMI

16. The Basic Committee has defined capital in two tiers (Tier-I and Tier-II). Tier-I capital is known as

1. net capital
2. gross capital
3. working capital
4. core capital
5. None of these

17. As per the existing policy, the Cash Reserve Ratio (CRR) of scheduled banks is fixed at a certain percentage of their ND1L. What is full form of NDTL ?

1. New Demand and Tenure Liabilities
2. Net Demand and Time Liabilities
3. National Deposits and Total Liquidity
4. Net Duration and Total Liquidity
5. New Deposits and Term Liquidity

18. A consortium of commercial banks has joined hands to float a new company which will collect data related to frauds and security risks. What is the name of the company?

1. Loss Data Consortium
2. Customer Service Corporation
3. Bank Net India Limited
4. Nu Tech Corporate Services Limited
5. None of the above

19. Zero balance account is generally allowed to be opened for

1. salaried class
2. businessmen
3. foreign customers
4. children
5. senior citizens

20. Which one of the following may be the consequence of buying forex in the market by the RBI?

1. It leads to inflation
2. It leads to control over inflation
3. It does not affect inflation
4. It results into deflation
5. None of the above

21. As per the new guidelines issued by SEBI, companies are required to list shares within how many days of the closure of the Initial Public Offers (IPOs)?

1. 60 days
2. 12 days
3. 30 days
4. 45 days
5. None of these

22. Almost all banks in our country have introduced………. facility for granting crop loans to farmers.

1. term loans
2. kisan credit cards
3. bank guarantee
4. foreign exchange
5. reverse mortgage

23. When a bank dishonours a cheque, it is called

1. settlement of the cheque
2. withdrawing of the cheque
3. nullifying of the cheque
4. truncation of the cheque
5. returning of the cheque unpaid

24. Primary Dealers (PDs) deal in……….. in both primary and secondary markets.

1. equities
2. debentures
3. corporate bonds
4. government securities
5. None of these

25. What are teaser loan rates charged by banks?

1. Fixed rate of interest charged by banks
2. Floating rate of interest charged by banks
3. Rate of interest in the initial period is less and goes up subsequently
4. Rate of interest in the initial period is more and it goes down subsequently
5. None of the above

26. In which one of the following states, India’s first Islamic Bank is proposed to be setup?

1. Kerala
2. Tamil Nadu
3. Odisha
4. Bihar
5. None of these

27. Assume that Reserve Bank of India reduces the bank rate by 1%, what will be its impact?

1. Less liquidity in the market
2. More liquidity in the market
3. No change in the liquidity in the market
4. Mobilisation of more deposits by commercial banks
5. None of the above

28. Which one is true in respect of bank marketing?

1. Bank marketing deals with providing services to satisfy customer’s financial needs and wants
2. Bank marketing has to discover/ascertain/anticipate the financial needs of the corporates
3. Bank marketing may be required to satisfy the corporates and institutions’ other related needs and wants
4. Bank marketing means competitive element, efficiency and effectiveness in the process
5. None of the above

29. ‘National Financial Switch’ has been setup to facilitate connectivity between the bank’s switches and their ATMs and inter bank payment gateway for authentication and routing the payment details of various e-commerce transactions. Which organisation has setup this switch?

1. IBRD
2. IDRBT
3. SBI
4. SIDBI
5. None of these

30. In the world of commodity exchanges, the concept of “A standard contract to buy or sell a specified commodity at a certain date in future and at a market driven price” is known as

1. future contract
2. forward contract
3. market contract
4. standard contract
5. None of the above

31. Who amongst the following has asked banks to adopt ‘Six Steps’ approach to prevent diversion of funds by the companies?

1. Company Registrar
2. SEBI
3. RBI
4. AMFI
5. All of these

32. Preshipment packing credit advances are generally given by banks to

1. farmers
2. retail traders
3. professionals
4. exporters
5. transport operators

33. Which committee has been constituted by the Reserve Bank of India (RBI) to study the regulatory issues relating to financial technology and digital banking in India?

1. Nachiket Mor committee
2. Sudarshan Sen committee
3. M V Nair committee
4. K S Krishnaswamy committee
5. None of the above

34. In cases where the loan is sanctioned by the bank against the borrower submitting the fake/forged documents and thus, playing fraud on the bank, such a loan is to be treated in the bank’s books as a…………. asset, even when there is recovery in the account as per the repayment schedule approved by the bank at the time of sanctioning the loan.

1. standard
2. sub-standard
3. doubtful
4. loss
5. None of these

35. Credit cards are known as

1. hard money
2. easy money
3. soft money
4. plastic money
5. real money

36. A loan granted for short term crops will be treated as NPA, if the installment of principal or interest thereon or both remain overdue for crop season(s).

1. one
2. two
3. three
4. four
5. None of these

37. What are major functions undertaken by merchant bankers ?

1. Issue management
2. Capital structuring/ restructuring
3. Market maker in capital market
4. All of the above
5. None of the above

38. In our country, a cheque remains valid for  payment for…… from the date of issue.

1. 3 months
2. 6 months
3. 9 months
4. 12 months
5. 18 months

39. The Forward Markets Commission is responsible for regulation of which type of trading in India?

1. Commodities future trading
2. Currency future trading
3. Equity future trading
4. Derivative future trading
5. All of the above

40. The Industrial Finance Corporation of India provides loans to

1. government companies which are in core sector (i.e. power generation, steel, coal and cement etc)
2. newly established industries in backward districts
3. industries in private sector
4. joint stock companies and cooperative societies engaged in the manufacturing and processing of goods
5. None of the above

41. The advantages of Local Area Network (LAN) to banks include

1. sharing of expensive resources by several users
2. availability of stored information to all users
3. sharing of processing load by computers in LAN as all the terminals are intelligent terminals
4. All of these
5. None of these

42. Basel II norms are associated with which of the following aspects of the banking industry?

1. Risk management
2. Manpower planning
3. Retirement benefits for the employees
4. Corporate governance
5. None of the above

43. A decreasing current ratio indicates

1. a stable liquidity
2. an increasing liquidity
3. a strained liquidity
4. satisfactory current solvency
5. None of the above

44. In the case of creation of registered mortgages, the mortgage deed should be presented for registration with Registrar of Assurances within……….. from the date of execution of the deed.

1. 1 month
2. 2 months
3. 3 months
4. 4 months
5. 7 months

45. Which of the following is not considered one among the loans under Retail banking?

1. Car loan
2. Housing loan
3. Personal loan
4. Education loan
5. Infrastructure loan

46. A lease

1. is a rental agreement between owner of a flat/house and the tenant, whereby the tenant pays specified amount on specified dates to the owner
2. is a legal contract between the owner of an asset and its user, containing many conditions including payment of a specified amount by the user to the owner for use of the asset
3. is mainly used for machinery
4. is one of the ways resorted by the companies
5. None of the above

47. Country’s largest lender State Bank launched a RuPay Platinum debit card. The card offers various benefits like

1. 5 per cent cash back on utility bills
2. complimentary airport lounge access
3. personal accident death
4. permanent total disability insurance cover of ₹ 2 lakh
5. All of the above

48. Which of the following is/are a/an indicator of the financial health of a country?
I. GDP
II. PPP
III. FDI in a year
Select the correct answer using the codes given below

1. Only I
2. Only II
3. Only III
4. All of these
5. None of these

49. Consider the following statements.
I. Kerala Gramin bank (KGB) is the largest regional rural bank in the country.
II. Headquarter of Kerala Gramin Bank (Founded-1976) is at Malappuram in Kerala, India.
III. Kerala Gramin Bank is jointly owned by Government of India, Government of Kerala and sponsored by Canara Bank. Which of the statement(s) given above is/ are correct?

1. I and II
2. II and in
3. I, II and III
4. I and III
5. Only III

50. On which one of the following issues can SEBI penalise any company in India ?
Violation of Banking Regulation Act.
Violation of foreign portfolio investment guidelines.
For violation of Negotiable Instrument Act.
Select the correct answer using the codes given below

1. Only I
2. I, II and III
3. I and II
4. II and III
5. All of these

Answer Key

Practice Set -5

1. The Monetary and Credit Policy of India is the responsibility of which of the following?

1. Planning Commission
2. Finance Ministry
3. RBI
4. National Advisory Council
5. None of the above

2. The Securitisation And Reconstruction of Financial Assets and Enforcement of Security Interests Act (SARFAESI Act) at present is not applicable to

1. public sector banks
2. financial institutes of the government
3. private banks
4. non-banking financial companies
5. small and co-operative banks

3. The rate of interest on Savings Bank Account is stipulated by

1. the concerned bank
2. RBI
3. Indian Banks Association
4. Government of India
5. Banking Codes and Standards Board of India

4. Which of the following acts was framed specially to deal more effectively with the problem of non performing assets in banking system?

1. Companies Act
2. Banking Regulation Act
3. Foreign Exchange Management Act
4. Industrial Dispute Act
5. SARFAESI Act

5. Which of the following does not come under the category of development banks?

1. Industrial Development Bank of India
2. Small Industries Development Bank of India
3. Industrial Investment Bank of India
4. State Finance Corporation
5. Export-Import Bank

6. Central Board of Direct Taxes (CBDT) has launched the E-Nivaran facility for online redressal of taxpayers grievances related to

1. Refunds
2. Income Tax Returns (ITRs)
3. Permanent Account Number (PAN)
4. Reduce harassment of the Public
5. All of the above

7. Which of the following is an effort in the direction of financial inclusion?

1. Internet banking
2. Anywhere banking
3. No frills accounts
4. Foreign currency accounts
5. All of the above

8. Which of the following statement is correct?

1. RBI is just like any ordinary commercial bank
2. RBI is responsible for the overall Monetary Policy
3. The Fiscal Policy of India is approved by RBI
4. RBI has Deputy Chairman Planning Commission on its board
5. None of the above

9. A Bill of Exchange in which a bank orders its branch or another bank, as the case may be, to pay a specified amount to a specified person or to the order of the specified person is called

1. cheque
2. bankdraft
3. promissory note
4. insurance
5. None of these

10. Which of the following products of a bank is specifically designed to provide financial help to children in their higher studies in India or in a foreign nation?

1. Personal loan
2. Corporate loan
3. Educational loan
4. Mortgage loan
5. None of these

11. Inflation in India is measured on which of the follow indexes/indicators?

1. Cost Of Living Index (COLI)
2. Consumer Price Index (CPI)
3. Gross Domestic Product (GDP)
4. Wholesale Price Index (WPI)
5. None of the above

12. Which of the following is a payment and settlement system used by the banks in India?

1. Liquidity adjustment facility
2. Real time gross settlement
3. Forward rate agreements
4. Central depository service
5. Negotiated dealing system

13. Which of the following is not an activity of merchant banking in India?

1. The management of the customers securities
2. The management of the portfolio
3. The managemnt of projects and counselling as well as appraisal
4. The management of underwriting of shares and debentures
5. None of the above

14. On the back side of ₹ 500 and ₹ 2000 note, an image of_____ and_____ , respectively have been placed.

1. Mangalayan, Taj Mahal
2. Lightning torch, Red fort
3. Red fort, Mangalayan
4. Lightning torch, National flag
5. None of the above

15. A Universal Bank may undertake multi­farious financial services under one roof, e.g.

1. receiving money on current or deposit accounts and lending of money for trade, industries, exports, agriculture, etc
2. mortgage financing, project financing, infrastructure lending, asset securitisation, leasing, factoring, etc
3. remittance of funds, custodial services, credit/ debit cards, collection of cheques/bills, etc
4. All of the above
5. None of the above

16. The Securities and Exchange Board of India (SEBI) recently imposed a restriction on money flow in equity through ‘P-Notes’. What is the full form of ‘P-Notes’?

1. Permanent Notes
2. Purchase Notes
3. Participatory Notes
4. Private Notes
5. None of the above

17. Which of the following is incorrect about the acceptance of deposits by the NBFCs?

1. They are allowed to accept/renew public deposits for a minimum period of 12 months and maximum period of 60 months
2. They cannot accept deposits repayable on demand
3. They should have minimum investment grade credit rating
4. Their deposits are not insured
5. The repayment of deposits by NBFCs is guaranteed by RBI

18. IFRS stands for

1. International Financial Reporting Standards
2. Indian Financial Rating Standards
3. International Financial Rating Standards
4. Indian Functional Reporting Standards
5. None of the above

19. Which of the following is the directive given to the Government of India in the Financial Stability Report submitted to it?

1. To focus on financial consistency
2. To reduce fiscal deficit
3. To ensure GDP growth
4. To reduce revenue deficit
5. None of the above

20. The rate of interest payable on a bank deposit is determined by

1. Indian Bank’s Association
2. the bank concerned
3. RBI
4. Finance Ministry
5. None of the above

21. What is meant by ‘underwriting’, the term frequently used in financial sector?

1. Undervaluation of the assets
2. The act of taking on a risk for a fee
3. Giving a guarantee that a loan will not become a bad loan
4. The act of permission to float an IPO
5. None of the above

22. Bridge loans refer to

1. loans granted to construction companies for construction of bridges
2. loans granted to PWD for construction of bridges over rivers
3. interim finance allowed by banks to their customers, pending disbursement of term
4. loans by financial institutions
5. loans granted to railway for construction of bridges
6. None of the above

23. According to the guidelines, the Reserve Bank of India will consider proposals for merger and amalgamation of urban co-operative banks when

1. the net worth of the acquired bank is positive and the acquirer bank assures to protect entire deposits of all the depositors of the acquired bank
2. the net worth of acquired bank is negative, but the acquirer bank on its own assures to protect deposits of all the depositors of the acquired bank
3. the net worth of the acquired bank is negative and the acquirer bank assures to protect the deposits of all the depositors with financial support from the State Government extended up front as a part of the process of merger
4. All of the above
5. None of the above

24. The Small Industries Development Bank of India (SIDBI) has been implementing special schemes for women viz;

1. Mahila Udayam Nidhi
2. Mahila Vikas Nidhi
3. Mahila Samridh Nidhi
4. Both 1 and 2
5. Both 2 and 3

25. Choose the false statement regarding NCDEX.

1. National Commodity and Derivatives Exchange (NCDEX) launched ‘Gold Now’ platform.
2. NCDEX will launch forward contracts for gold coins in 5 g, 10 g and 50 g denominations to be traded at the platform.
3. NCDEX is an online commodity exchange based in India.
4. NCDEX has an independent Board of Directors.
5. NCDEX is a private limited company

26. Net balance maintained in current account by co-operative banks with…….. are not treated as cash for the purpose of CRR/SLR.

1. State Bank of India
2. State Bank of Hyderabad
3. IDBI Bank Limited
4. Canara Bank
5. All of the above

27. An independent authority appointed by the RBI for resolution of complaints against deficiency in banking services, is known as

1. Chief Manager
2. Chief Vigilance Officer
3. No such authority is appointed
4. Banking Ombudsmen
5. Compliance Officer

28. A ‘Basic Savings Bank Deposit Account’ facility is available

1. to all individuals irrespective of their background
2. to all individuals from below poverty line families only
3. only to individuals from the SC/ST
4. only to individuals from minority communities
5. only to individuals from weaker sections of the society

29. Which one of the following is a capital market instrument?

1. A treasury bill
2. A negotiable certificate of deposit
3. Commercial paper
4. All of the above
5. None of the above

30. Which of the following schemes available in the financial markets is not meant for investment purposes?

1. National-savings certificates
2. Infrastructure bonds
3. Mutual funds
4. Letter of credit
5. All of the above

31. Land development banks provide long term credit for schemes of basic importance to agriculture as

1. minor irrigation purposes like wells, dug- cum-bore wells, tubewells, pump sets and irrigation tanks
2. mechanisation of agriculture i.e. loans for purposes of tractors, power tillers, threshers, etc
3. land reclamation, soil conservation, plantation of fruit orchards, dairy development schemes etc, involving heavy expenditure
4. Both 1 and 2
5. All of the above

32. The RBI is not expected to perform the function of

1. the banker to the government
2. accepting deposit from commercial banks
3. accepting deposits from general public
4. issuer of currency
5. None of the above

33. By virtue of the amendment carried out by the Regional Rural Bank (Amendment) Act, 1987, the Chairman of a Regional Rural Bank (RRB) is to be appointed by

1. Central Government
2. State Government
3. sponsor bank in consultation with NABARD
4. Reserve Bank of India
5. None of the above

34. How does a bank establish the identity of a customer?

1. By getting introduction of an existing customer
2. By following KYC norms
3. By taking AADHAR card copy
4. All of the above
5. None of the above

35. Basel I, which was issued in 1988, focuses on the

1. capital adequacy of financial institutions
2. improvement of the banking sector’s ability to deal with financial and economic stress
3. technology upgradation
4. training of banking staff
5. professionalism in banking

36. Capital market is a market which deals in

1. short term funds
2. long term funds
3. gilt-edge securities
4. All of the above
5. None of the above

37. The Minimum Permissible Investment in the Sovereign Gold Bonds 2015 is 2 g and the maximum buying limit is

1. 50 g
2. 250 g
3. 550 g
4. 150 g
5. 500 g

38. RBI stipulates a healthy mix of CASA in the business figures of banks. What does CASA denote?

1. Customer Analysis and Savings Pattern
2. Cost Appreciation and Selling Analysis
3. Current Account and Savings Account
4. Credit and Savings Aggregate
5. None of the above

39. Which among the following is an incorrect statement?

1. The Reserve Bank of India has the special powers to control and regulate the commercial banking system
2. A rise in the bank rate is a strong anti-deflationary monetary tool
3. Minimum Reserve requirements are fixed to ensure the liquidity and solvency of individual commercial banks
4. Reserve Ratio Requirement is a quicker method than Bank rate and Open Market Operations (OMO) for credit regulations
5. Rationing of credit is a powerful qualitative monetary tool

40. Quantitative instrument of RBI can be

1. Bank Rate Policy (BRP)
2. Cash Reserve Ratio (CRR)
3. Statutory Liquidity Ratio (SLR)
4. All of the above
5. None of the above

41. Which of the following acts govern the RBI functions?

1. RBI Act, 1934
2. Banking Regulation Act, 1949
3. Companies Act, 1956
4. Foreign Exchange Regulation Act, 1973
5. Foreign Exchange Management Act, 1999

42. The primary credit society

1. forms the base of the co-operative credit structure and its working depends to a large extent, on the soundness of the whole co-operative credit structure is the best agency to inculcate the habit of thrift, self-help and mutual help among its members
2. is engaged in securing for its members services of various kinds
4. All of these
5. None of these

43. Which of the following conditions are required to be fulfilled by a Regional Rural Bank (RRB) to be eligible for opening of new branches?

1. It should not have defaulted in maintenance of SLR and CRR during the last 2 yr
2. It should be making operational profits
3. Its net worth should show improvement and its net NPA ratio should not exceed 8%
4. Both 1 and 2
5. All of these

44.The formal beginning of the merchant banking services in India began in 1967, when the Reserve Bank of India provided license to the

1. State Bank of India
2. Oriental Bank of Commerce
3. Grindlays Bank
4. Federal Bank
5. None of the above

45. While discussing investments, there is a mention of short term government security. What is this type of investment known as?

1. Debenture
2.  Mutual fund
3. Treasury bill
4. Share
5. All of these

46. Which of the following is not a recommendation of the Narasimham Committee, 1991?

1. Reduction of CRR and SLR
2. Phasing out directed Credit Programme
3. Reduction of capital adequacy ratio
4. Establishment of ARF fund
5. Autonomy to public sector bank

47. The commercial banking system in India consists of

1. nationalised banks and private sector banks
2. scheduled and non-scheduled banks
3. regional rural banks, co-operative banks, land development banks
4. All of the above
5. None of the above

48. Under the Negotiable Instrument Act, 1881, an instrument which is incomplete in some respects, is called a/an

1. foreign instrument
2. inland instrument
3. inchoate instrument
4. ambiguous instrument
5. fictitious instrument

49. Which of the following is/are the major concept(s) visible in today’s banking industry in India?
I. Risk-based management
II. Growing competition
III.  initiatives
Select the correct answer using the codes given below

1. Only I
2. Only II
3. Only III
4. I and III
5. All of these

50. Which of the following are functions of the RBI?
I. Acts as the currency authority,
II. Controls money supply and credit.
II. Manages foreign exchange.
IV. Serves as a banker to the government. Select the correct answer using the codes given below

1. I and II
2. II and III
3. I, II and III
4. All of. these
5. None of these

Answer Key