vidya guru banking notes

7/29/2019 Vidya Guru Banking Notes

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BANKING AWARENESS

&

FINANCIAL TERMS

Basics of BankingRBI & Its Functions

Technology in BanksImportant Financial TermsFinancial InclusionMultiple Choice Questions


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What is Bank ??Bank is nothing but a type of financial institution which deals

with deposits and advances and other related services. It actually

deposits money from the customer and on the basis of that it lends

money to the genuine customer.

What is Banks Profit ??Bank gives less interest on Deposit (customers money in

the account) and charges more interest on Loans. The

difference between the two interests is called as Bank Profit.

Head offices of all nationalized banks.

NEW DELHI: PNB, OBC, PUNJAB & SIND BANK.MUMBAI: BOI, CBI, DENA, UBI, BOB.

KOLKATTA: UCO, ALLAHABAD, UNITED BANK OF

INDIA.

CHENNAI: IOB, INDIAN BANK.

BANGALORE: CANARA, VIJAYA.

PUNE: BANK OF MAHARASHTRA

HYDERABAD: ANDHRA BANK.

Punch lines of all banks:BANK PUNCH LINE OR TAG LINE

Bank of Baroda Indias International Bank.

Allahabad Bank Tradition of Trust.

Bank of Baroda Indias International Bank.

Bank of India Relationship beyond BankingOBC Bank Where every individual is committed.

Dena Bank Trusted Family Bank.

Indian Bank Taking banking technology to common

bank.

SBI Pure banking and nothing else / With

you all the way.

UCO Honors your trust

ICICI Hum Hain Na

HDFC We understand your world

VIJAYA Bank A friend you can bank upon

Central bank of

India

Build a better life around us

Syndicate Bank A faithful and friendly financial partner

PNB A Name you can Bank Upon

UBI The Bank that begins with U.

Indian Overseas

Bank

Good people to grow with

Public Sector Banks in India:

Allahabad Bank, Andhra Bank, Bank of Baroda, Bank of

India, Bank of Maharastra, Canara Bank, Central Bank of

India, Corporation Bank, Dena Bank, IDBI Bank, Indian Bank

Indian Overseas Bank, Oriental Bank of Commerce, Punjab &

Sind Bank, Punjab National Bank, Syndicate Bank, UCO Bank

Union Bank of India, United Bank of India, Vijaya Bank

State Bank of India and its Associates:1. State Bank of Bikaner & Jaipur

2. State Bank of Hyderabad

3. State Bank of Mysore

4. State Bank of Travancore

5. State Bank of Patiala.

Note: State Bank of Indore and State Bank of Saurashtra has beenmerged.

Points to remember:1. Among them SBI is the Largest public sector bank as well as

one of the Oldest bank in India, The State Bank Group, with

over16000branches, has the largest banking branch network

in India.

2. Bank of Baroda has largest number of branches in foreign

country.

3. SBI has largest ATM network.

4. 27 banks are nationalized till now.

Private Banks in IndiaBank of Punjab, Bank of Rajasthan, Catholic Syrian Bank

Centurion Bank, City Union Bank, Dhanalakshmi Bank

Development Credit Bank, Federal Bank, HDFC Bank

ICICI Bank, Indusland Bank, ING Vysya Bank, Jammu &

Kashmir Bank, Karnataka Bank, Karur Vysya Bank, Laxmi VilasBank, South Indian Bank, United Western Bank, AXIS Bank

(earlier known as UTI).

Note: Among them ICICI is one of the largest private sectorlender/bank.

Types of Banks Central Bank Specialized Banks Commercial Banks Development Banks Co-operative Banks Central Bank:

As it name signifies a bank which manages and regulating the

Banking System of a particular country.

It provides guidance to other banks whenever they face any

problem (that is why central bank is also called as a bankers

bank) and maintains the deposit accounts of all other banks.

Central Banks of different countries: Reserve Bank of India

(INDIA), Federal Reserve System (USA),

Swiss National Bank (SWITZERLAND), Reserve Bank of

Australia (AUSTRALIA), State Bank of Pakistan

(PAKISTAN).

Specialized Banks:Those banks which are meant for Special Purposes. For

examples: NABARD, EXIMbank, SIDBI, IDBI.

NABARD: NAtional Bank for Agriculture and RuralDevelopment. This bank is meant for financing the

Agriculture as well as Rural sector. It actually promotes the

research in Agriculture and Rural Development.

EXIM bank: Export Import Bank of India.This bank gives loans to exporters and importers and also

provides valuable information about the international market.

If you want to set up a business for exporting products abroad

or importing products from foreign countries for sale in our

country, EXIM bank can provide you the required support

and assistance.

SIDBI: Small Industries Development Bank ofIndia.This bank provides loans to set up the small scale business

Unit / Industry. SIDBI also finance, promote and develop

small scale industries. Whereas IDBI (Industrial

Development Bank ofIndia) gives loans to big Industries.

Commercial Banks:Normal banks are called as commercial banks, their main

function is to accept deposits from the customer and on the

basis of that they grant loans. (Loans could be Short term,

Medium term and Long term loans.)

Commercial Banks further classified into three types.

(a) Public Sector Banks


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(b) Private Sector Banks(c) Foreign Banks

(a) Public Sector Banks (PSB): Government Banks are calledas PSB. Since their majority of stakes is held by the

Government of India. (For examples: Allahabad Bank, Andhra

Bank, Bank of Baroda, Bank of India, Bank of Maharastra,

Canara Bank, Central Bank of India etc.

(b) Private Sector Banks: In these banks majority of stakes

are held by the Individual or Group of persons.

(For examples: Bank of Punjab, Bank of Rajasthan, Catholic

Syrian Bank, Centurion Bank etc.

(c) Foreign Banks: These banks have their headquarter in

foreign country but they operate their branches in India. For e.g.

HSBC, Standard and Chartered Bank, ABN Amro Bank.

Development Banks:Such banks are specially meant for giving loans to business

sector for the purchase of latest machinery and equipments.

Examples: SFCs (State Financial Corporation of India) and

IFCI (Indian Finance Corporation ofIndia).

Co-operative Banks:These banks are nothing but an association of members who

group together for Self-Help and Mutual-Help. Their way of

working is same as commercial Banks. But they are quitedifferent. Co operative Banks in India are registered under the

Co-operative Societies Act, 1965. The cooperative bank is

regulated by the RBI.

Note: Co-operative banks cannot open their branches in ForeignCountries while commercial banks can do this.

Cooperative banks V/S Commercial Banks

CO-OPERATIVE BANKS COMMERCIAL

BANKS

1. Co operative Banks in India

are registered under the Co-

operative Societies Act, 1965

Commercial Banks are

required to be registered

under Banking

Regulation Act, 1949.

2. Co-operative banks cannot

open their branches in

Foreign Countries

Commercial banks can

open their branches in

Foreign Countries.

3. Cooperative banks are not

nationalized.

At present 27 banks are

nationalized in India.

4. Co-operative banks in India

do not operate mutual funds.

Commercial Banks in

India do operate mutual

funds.

5. The Co-operative Banks

generally provide a little

higher rate of interest on

deposits as compared to

commercial banks.

The Commercial Banks

provide a lesser rate of

interest as compared to co-

operative banks.

Banks V/S Moneylenders

BANKS MONEYLENDERS

1. Banks are financial

institutions which are

controlled by Central

Bank-RBI

Money lenders are nothing

but an individual person or

group of persons.(e.g

Saahukaar)

2. Banks usually requires

lot of paper work (voter

id, resident proof etc.)

for granting loans.

Money lenders require less

documentation for granting

loans.

3. Banking activities inv-

olves issuance of DD,

accepting cheques, daily

transactions etc.

Money lenders doesnt

involves in such activities.

4. Whenever bank grant

loan, their process of

recovery is flexible.

Incase of Money lenders the

process of recovery is rigid

and strict.(i.efixed date and

time)

5. Banks accepts tangible

and personal security

against the loans.

In this case money lenders

mostly accept jewellery or

gold or land as a security for

giving loans.

6. Interest rate charged bythe banks on loans is

decided by RBI.

Rate of interest is decided bythe money lender and in most

of the cases it is usually very

high.

7. Banks generally give

loans to all section of

society. (i.e poor people,

business class and

corporate sector.)

Money lenders only give

loans to agriculturist and poor

people.

How many types of Accounts are present in a Bank in

India??1. Saving Bank account2. Current Account3. Fixed Deposit Account

1. Saving Bank Account: These accounts are maintained byindividuals/ salaried peoples. Such account offers interest

on customer deposit. The interest on these accounts is

regulated by Reserve Bank of India. No Overdraft is

allowed on such accounts.

2. Current Account: These accounts are used mainly bybusinessmen and are not generally used for the purpose of

investment. These deposits are the most liquid deposits and

there are no limits for number of transactions or the amount

of transactions in a day. No interest is paid by banks on

these accounts. One of the prominent advantage of such

account is that Overdraft is allowed.3. Fixed Deposit Account: also known as term deposit

account. All Banks offer fixed deposits schemes with a

wide range of tenures for periods from 7 days to 10 years.The term "fixed" in Fixed Deposits (FD) denotes the period

of maturity or tenor.

CURRENT ACCOUNT V/S SAVING ACCOUNT

CURRENT ACCOUNT SAVING ACCOUNT

1. Mostly preferred by the

business persons.

Mostly preferred by the

individual and salaried

people.

2. Overdraft facility is available. Overdraft is not allowed.

3. No interest rate is paid by the

bank on such account.

Interest is available on

deposits.

4. Deposit and withdrawal of

money can be made

frequently.

No frequent withdrawals are

permitted.

5. Bank takes Service charges

for such account.

Service charges are not

payable.


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FPO: Follow on Public Offerings: An issuing of shares to

investors by a public company that is already listed on an

exchange. An FPO is essentially a stock issue of supplementary

shares made by a company that is already publicly listed and has

gone through the IPO process.

Difference: IPO is for the companies which have not listed on anexchange and FPO is for the companies which have already listed

on exchange but want to raise funds by issuing some more equity

shares.

RTGS: Real Time Gross Settlement systems is a funds transfer

systems where transfer of money or securities takes place from

one bank to another on a real time. (Real time means withinfraction of seconds.)

The minimum amount to be transferred through RTGS is 2 lakh.Processing Charges/Service Charges for RTGS transactions vary

from bank to bank.

NEFT: National Electronic Fund Transfer. This is a method used

for transferring funds across banks in a secure manner. It usually

takes 1-2 working days for the transfer to happen. NEFT is an

electronic fund transfer system that operates on a Deferred Net

Settlement (DNS) basis which settles transactions in batches.

(Note: RTGS is much faster than NEFT.)

CAR: Capital Adequacy Ratio, Its a measure of a banks capital.

Also known as Capital to Risk Weighted Assets Ratio

(CRAR). This ratio is used to protect depositors and promote thestability and efficiency of financial systems around the world. It is

decided by RBI (Note that12% is for commercial banks and15%is for NBFCs).

NPA: Non Performing Asset it means once the borrower has

failed to make interest or principal payments for 90 days the loan

is considered to be a non-performing asset. Presently it is 2.39%.

IMPS: InterbankMobile Payment Service

It is an instant interbank electronic fund transfer service through

mobile phones.

Both the customers must have MMID (Mobile Money Identifier

Number) number. For this service we dont need any GPS

enabled cell phones.

BCBS: Basel Committee on Banking Supervision is an institution

created by the central bank Governors of the Group of Ten

nations.

RSI:Relative Strength Index

IFSC code: Indian Financial System Code.

The code consists of 11 Characters for identifying the bank and

branch where the account in actually held. The IFSC code is

used both by the RTGS and NEFT transfer systems.

MSME and SME: Micro Small and Medium Enterprises and

SME stands forSmall and Medium Enterprises. This is a part of

Government to drive and encourage small manufacturers to enjoy

facilities from Banks at a concession rates.

LIBOR: London InterBank Offered Rate. An interest rate at

which banks can borrow funds, in marketable size, from other

banks in the London interbank market.

LIBID: London Interbank Bid Rate. The average interest rate

which major London banks borrow Eurocurrency deposits from

other banks.

ECGC: Export Credit Guarantee Corporation of India. This

organization provides risk as well as insurance cover to the Indian

exporters.

SWIFT: Society for Worldwide Interbank Financial

Telecommunication. It operates a worldwide financial messaging

network which exchanges messages between banks and other

financial institutions.

STRIPS: Separate Trading for Registered Interest & Principal

Securities.

CIBIL: Credit Information Bureau of India Limited. CIBIL is

Indias first credit information bureau. Whenever a person apply

for new Loans or Credit Card to a Financial Institution, they

generate the CIBIL report of the said person or concern to judge

the credit worthiness of the person and also to verify existing trackrecord. CIBIL actually maintains the borrowers history.

CRISIL: Credit Rating Information Services of India Limited.

Crisil is a global analytical company providing ratings, research,

and risk and policy advisory services.

AMFI: Association ofMutual Funds ofIndia, AMFI is an apex

body of all Asset Management Companies (AMC) which has been

registered with SEBI.

(Note: AMFI is nota mutual funds regulator)

FCCB: Foreign Currency Convertible Bond. A type of

convertible bond issued in a currency different than the issuer's

domestic currency.

CAC: Capital Account Convertibility. It is the freedom to convert

local financial assets into foreign financial assets and vice versa.

This means that capital account convertibility allows anyone to

freely move from local currency into foreign currency and back.

or in other words transfer of money from current account tocapital account. (Note: CAC is under Tarapore Committee.)

BANCASSURANCE:

Is the term used to describe the partnership or relationship

between a bank and an insurance company whereby the insurance

company uses the bank sales channel in order to sell insurance

products.

Balloon Payment: Is a specific type of mortgage payment, and is

named "balloon payment" because of the structure of the paymentschedule. For balloon payments, the first several years of

payments are smaller and are used to reduce the total debt

remaining in the loan. Once the small payment term has passed

(which can vary, but is commonly 5 years), the remainder of the

debt is due - this final payment is the one known as the "balloon"

payment, because it is larger than all of the previous payments.

CPSS: Committee on Payment and Settlement Systems

FCNR Accounts: Foreign Currency Non-Resident accounts are

the ones that are maintained by the NRIs in foreign currencies like

USD, DM, and GBP etc.

M3 in banking: Its a measure of money supply. It is the total

amount of money available in an economy at a particular point intime.

OMO: Open Market Operations.

The buying and selling of government securities in the open

market in order to expand or contract the amount of money in the

banking system. Open market operations are the principal tools of

monetary policy. RBI uses this tool in order to regulate the

liquidity in economy.

Umbrella Fund: A type of collective investment scheme. A

collective fund containing several sub-funds, each of which

invests in a different market or country.


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ECS: Electronic Clearing Facility is a type of direct debit.

Tobin tax: Suggested by Nobel Laureate economist James Tobin,

was originally defined as a tax on all spot conversions of one

currency into another.

Z score is a term widely used in banking field.

POS: Point OfSale,

Also known as Point of purchase, a place where sales are made

also sales and payment information are collected electronically,

including the dollar amount of the sale, the date and place of the

transaction, and the consumer's account number.

LGD: Loss Given Default, Institutions such as banks will

determine their credit losses through an analysis of the actual loan

defaults.

Junk Bonds: Junk bonds are issued generally by smaller or

relatively less well known firms to finance their operations, or by

large and well known firms to fund leveraged buyouts. These

bonds are frequently unsecured or partially secured, and they pay

higher interest rates: 3 to 4 percentage points higher than the

interest rate on blue chip corporate bonds of comparable maturity

period.

ARM: Adjustable Rate Mortgage is basically a type of loan where

the rate of index is calculated on the basis of the previouslyselected index rate.

ABO: Accumulated Benefit Obligation, ABO is measure of

liability of pension plan of an organization and is calculated when

pension plan is terminated.

Absorption: A term related to real estate, it is a process of renting

a real estate property which is newly built or recently approved.

AAA: A type of grade that is used to rate a particularbond. It is

the highest rated bond that gives maximum returns at the time of

maturity.

DSCR: Debt Service Coverage Ratio, DSCR is a financial ratio

that measures the company's ability to pay their debts.

FSDC: Financial Stability and Development Council, Indias apex

body of financial sector.

ITPO: India Trade Promotion Organization is the nodal agency

of the Government of India for promoting the countrys external

trade.

FLCC: Financial Literacy and Counseling Centers.

ANBC: Adjusted Net Bank Credit is Net Bank Credit added to

investments made by banks in non-SLR bonds.

Priority sector lending: Some areas or fields in a country

depending on its economic condition or government interest areprioritized and are called priority sectors i.e.Industry,Agriculture.

PSL is 40% of ANBC.

M0, M1, M2 AND M3: These terms are nothing but money

supply in banking field.

BIFR: Bureau ofIndustrial and Financial Reconstruction.

FRBM Act 2003: Fiscal Responsibility and Budget Management

act was enacted by the Parliament of India to institutionalize

financial discipline, reduce India's fiscal deficit, improve

macroeconomic management and the overall management of the

public funds by moving towards a balanced budget.

The main objectives ofFRBM Act are:-

1. To reduce fiscal deficit.2. To adopt prudent debt management.3. To generate revenue surplus.

Gold Standard: A monetary system in which a countrys

government allows its currency unit to be freely converted into

fixed amounts of gold and vice versa.

Flat Money: Flat money is a legal tender for settling debts. It is a

paper money that is not convertible and is declared by governmentto be legal tender for the settlement of all debts.

BCSBI: The Banking Codes and Standards Board of India is a

society registered under the Societies Registration Act, 1860 and

functions as an autonomous body, to monitor and assess the

compliance with codes and minimum standards of service to

individual customers to which the banks agree to.

OLTAS: On-Line Tax Accounting System.

EASIEST: Electronic Accounting System in Excise and Service

Tax.

SOFA: Status of Forces Agreement, SOFA is an agreement

between a host country and a foreign nation stationing forces inthat country.

CALL MONEY: Money loaned by a bank that must be repaid on

demand. Unlike a term loan, which has a set maturity and payment

schedule, call money does not have to follow a fixed schedule.

Brokerages use call money as a short-term source of funding to

cover margin accounts or the purchase of securities. The funds can

be obtained quickly.

Scheduled bank: Scheduled Banks in India constitute those banks

which have been included in the Second Schedule of RBI Act,

1934 as well as their market capitalization is more than Rs.5lakhs. RBI in turn includes only those banks in this schedulewhich satisfy the criteria laid down vide section 42 (6) (a) of the

Act.

FEDAI: Foreign Exchange Dealers Association of India. An

association of banks specializing in the foreign exchange activities

in India.

PPF: Public Provident Fund

The Public Provident Fund Scheme is a statutory scheme of the

Central Government of India. The Scheme is for 15 years. Theminimum deposit is 500/- and maximum is Rs. 70,000/- in a

financial year. Certain are the advantages of PPF account.

(a) Best for long term investment.(b) PPF account can be opened either in Post Office or in a

Bank.

(c) The interest on deposits is totally tax free.

DEFINE RECAPITALIZATION???

A change in a companys capital structure, Recapitalization is

often undertaken with the aim of making the company's capital

structure more stable, and sometimes to boost the company's stock

price (for example, by issuing bonds and buying stock).

SEPA: Single Euro Payment Area.

GAAP: Generally Accepted Accounting Principles, The common

set of accounting principles, standards and procedures that

companies use to compile their financial statements.


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Indian Depository Receipt: Foreign companies issue their shares

and in return they get the depository receipt from the National

Security Depositary in return of investing in India.

Hot Money: Money that is moved by its owner quickly from one

form of investment to another, as to take advantage of changing

international exchange rates or gain high short-term returns on

investments.

NMCEX: National Multi-Commodity Exchange.

PE RATIO: Price to Earnings Ratio, a measure of how much

investors are willing to pay for each dollar of a companysreported profits.

CASA: Current Account, Savings Account.

CAMELS: CAMELS is a type of Bank Rating System. (C)

stands for Capital Adequacy, (A) forAsset Quality, (M) for

Management ,(E) forEarnings, (L) forLiquidity and (S) for

Sensitivity to Market Risk.

OSMOS: Off-site Monitoring and Surveillance System.

Free Market: A market economy based on supply and demand

with little orno government control.

Retail Banking: It is mass-market banking in which individualcustomers use local branches of larger commercial banks.

Eurobond: A bond issued in a currency other than the currency of

the country or market in which it is issued.

PPP: Purchasing Power Parity is an economic technique used

when attempting to determine the relative values of two

currencies.

FEMA Act: Foreign Exchange Management Act, it is useful in

controlling HAWALA.

Hawala Transaction: Its a process in which large amount of

black money is converted into white.

Teaser Loans: Its a type of home loans in which the interest rates

is firstly low and then gradually goes high. Teaser loans are also

called Terraced loan.

ECB: External Commercial Borrowings: Taking loan from

another country. Limit of ECB is $500 million, this is themaximum limit a company can get it.

CBS:Core Banking Solution, all the banks are connected through

internet, that means we can do transaction from any bank and

anywhere.(e.g. deposit cash in PNB, Delhi branch and

withdrawing cash from PNB, Gujarat)

CRAR: For RRBs it is more than 9% (funds allotted 500 cr.) and

for commercial banks it is greater than 8% (6000 cr. Reliefpackage).

NBFCs: It has 11.2% composition out of the total financial

institutions in India.

IIFCL: India Infrastructure Finance Company Limited, it gives

guarantee to infra bonds.

IFPRI:International Food Policy Research Institute, it identifies

and analyzes policies for meeting the food needs of the developing

world.

Currency swap: Itis a foreign-exchange agreement between two

parties to exchange aspects (namely the principal and/or interest

payments) of a loan in one currency for equivalent aspects of an

equal in net present value loan in another currency.Currency swap

is an instrument to manage cash flows in different currency.

WPI: Wholesale Price Index is an index of the prices paid by

retail stores for the products they would ultimately resell to

consumers. New series is 2004-2005. (The new series has been

prepared by shifting the base year from 1993-94 to 2004-05).Inflation in India is measured on WPI index.

MAT: Minimum Alternate Tax is the minimum tax to be paid bya company even though the company is not making any profit.

Minimum Alternate Tax (MAT) proposed in the budget 2011-12 is

18.5%.

Future Trading: Its a future contract/agreement between the

buyers and sellers to buy and sell the underlying assets in the

future at a predeterminedprice.

Reverse Mortgage: Its a scheme for senior citizen.

Basel 2nd

norms: BCBS has kept some restrictions on bank for the

maintenance of minimum capital with them to ensure level

playing field. Basel-II has got three pillars:

Pillar1- Minimum capital requirement based on the risk profile of

bank.Pillar 2- Supervisory review of banks by RBI if they go for

internal ranking.

Pillar3- Market discipline.

Microfinance Institutions: Those institutions which provides

financial services to low-income clients. Microfinance is a broad

category of services, which includes microcredit. Microcredit is

provision of credit services to poor clients.

NPCI: National Payments Corporation of India.

DWBIS:Data Warehousingand Business Intelligence System, a

type of system which is launched by SEBI. The primary objective

of DWBIS is to enhance the capability of the investigation and

surveillance functions of SEBI.

TRIPS: Trade Related Intellectual Property Rights, is an

international agreement administered by the World Trade

Organization (WTO) that sets down minimum standards for many

forms of intellectual property (IP) regulation as applied to

nationals of other WTO Members.

TRIMs: Trade Related Investment Measures. A type of

agreement in WTO.

SDR: Special Drawing Rights, SDR is a type of monetary reserve

currency, created by the International Monetary Fund. SDR

can be defined as defined as a "basket of national currencies".

These national currencies are Euro, US dollar, British pound, and

Japanese yen. Special Drawing Rights can be used to settle tradebalances between countries and to repay the IMF.American dollar

gets highest weightage.

LTD: Loan-To-Deposit Ratio, A ratio used for assessing a banks

liquidity by dividing the banks total loans by its total deposits. If

the ratio is too high, it means that banks might not have enough

liquidity to cover any fund requirements; if the ratio is too low,

banks may not be earning as much as they could be.

CAD: Current Account Deficit, it means when a country's total

imports of goods, services and transfers is greater than the

country's total export of goods, services and transfers.


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EPFO:Employees Provident Fund Organization, It administers a

compulsory contributory Provident fund, pension and an insurance

scheme for Indian Work force.

LERMS:Liberalized Exchange Rate Management System

FRP:Fair and Remunerative Price, a term is related to sugarcane.

FRP is the minimum price that a sugarcane farmer is legally

guaranteed. However sugar Mills Company gives more than FRP

price.

STCI: Securities Trading Corporation ofIndia Limited was

promoted by Reserve Bank of India (RBI) in 1994 along withPublic Sector Banks and All-India Financial Institutions with the

objective of developing an active, deep & vibrant secondary debt

market.

IRR: Internal Rate of Return; is a rate of return used in capital

budgeting to measure and compare the profitability of

investments.

CMIE:Centre forMonitoring Indian Economy; is India's premier

economic research organization. It provides information solutions

in the form of databases and research reports. CMIE has built the

largest database on the Indian economy and companies.

TIEA:Tax Information Exchange Agreement; TIEA allows

countries to check tax evasion and money laundering. RecentlyIndia has signed TIEA with Cayman Islands.

Contingency Fund: Its a fund for emergencies or unexpected

outflows, mainly economic crises. A type of reserve fund which is

used to handle unexpected debts that are outside the range of the

usual operating budget.

FII: Foreign Institutional Investment, The term is used

most commonly in India to refer to outside companies investing in

the financial markets of India. International institutional investors

must register with the Securities and Exchange Board of India

to participate in the market.

P-NOTES: P means participatory notes.

MSF:

Marginal Standing Facility, Under this scheme, Banks will be able

to borrow upto 1% of their respective Net Demand and Time

Liabilities". The rate of interest on the amount accessed from this

facility will be 100 basis points (i.e. 1%) above the repo rate. This

scheme is likely to reduce volatility in the overnight rates and

improve monetary transmission. Presently MSF is 9.5%.

BANKING OMBUDSMAN:The banking ombudsman scheme is an efficient and cost-

effective forum, which has been formed to resolve complaints

registered by the customers in case of any services provided by

the bank.

1. The central bank of India (RBI) has introduced this scheme,

Under Section 35A ofbanking regulation Act, 1949.

2. Presently, we have 15banking ombudsmen.

3. The Banking Ombudsman does not charge any fee for filing

and resolving customers complaints.

4. The Banking Ombudsman is a senior official appointed by

the Reserve Bank of India to redress customer complaints

against deficiency in certain banking services.

5. A customer can approach the banking ombudsman if he does

not get satisfactory response to his grievance from the bank

within 30 days.

FIU: Financial Intelligence Unit set by the Government of

India on 18 November 2004 as the central national agency

responsible for receiving, processing, analyzing and

disseminating information relating to suspect financial

transactions.

SEBI:Securities and Exchange Board ofIndia.

SEBI is the primary governing/regulatory body for the securities

market in India. All transactions in the securities market in India

are governed & regulated by SEBI. Its main function:

1. New Issues (Initial Public Offering or IPO)

2. Listing agreement of companies with Stock Exchanges

3. Trading Mechanisms4. Investor Protection

5. Corporate disclosure by listed companies etc.

Note: SEBI is also known as Capital regulator orMutual fundsregulatororMarket regulator. SEBI is also created investors

protection fund and SEBI is the only organization whichregulate the credit rating agencies in India. (CRISIL AND

CIBIL)

FINANCIAL REGULATORS IN INDIA: RBI, SEBI, FMCI

(Forward Market Commission of India), IRDA etc.

ASBA: Application Supported by Blocked Amount: is a process

developed by the SEBI for applying to IPO. In ASBA, an IPO

applicant's account doesnt get debited until shares are allotted tohim.

DEPB Scheme: Duty Entitlement Pass Book, It is a scheme

which is offered by the Indian government to encourage exports

from the country. DEPB means Duty Entitlement Pass Book to

neutralize the incidence of basic and special customs duty on

import content of export product.

LLP: Limited Liability Partnership, is a partnership in which

some or all partners (depending on the jurisdiction) have limited

liability.

Balance sheet: A financial statement that summarizes a

companys assets, liabilities and shareholders equity at a specific

point in time.

TAN:Tax Account Number, is a unique 10 digit alphanumeric

code allotted by the Income Tax Department to all those persons

who are required to deduct tax at the source of income.

PAN:Permanent Account Number, as per section 139A of the

Act obtaining PAN is a must for the following persons:-

1.Any person whose total income or the total income of anyother person in respect of which he is assessable under the

Act exceeds the maximum amount which is not chargeable to

tax.

2.Any person who is carrying on any business or professionwhose total sales, turnover or gross receipts are or is likely to

exceed Rs. 5 lacs in any previous year.

3.Any person who is required to furnish a return of incomeunder section 139(4) of the Act.

JLG: Joint Liability Group, when two or more persons are both

responsible for a debt, claim or judgment.

REER:Real Effective Exchange Rate.

NEER:Nominal Effective Exchange Rate.

Contingent Liability: A liability that a company may have to

pay, but only if a certain future event occurs.


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IRR: Internal Rate of Return, is a rate of return used in capital

budgeting to measure and compare the profitability of

investments.

Bank Rate V/S Repo RateBank rate and Repo Rate are both decided by RBI.

Repo Rate is a short term lending rate, it is actually a repurchase

agreement between RBI and commercial banks. Here is need of

securities submission.

Bank rate is forlong term basis. In bank rate, there is no need of

security submission.

RBI does not maintain savings accounts of individuals but itdoes offer loans and advances to individuals and cooperates.

The interest rate which the RBI charges on these loans and

advances is called the Bank Rate.

RBI also lends to the commercial banks all public and private.

This is a loan to other commercial banks. The interest charged by

RBI to re-pay this loan on the commercial banks is called Repo

Rate.

Base Rate: A minimum rate that a bank is allowed to charge from

the customer. Base Rate differs from bank to bank. It is actually a

minimum rate below which the bank cannot give loan to anycustomer. Earlier Base rate was called as BPLR (Base PrimeLending Rate).

CAR: Capital Adequacy Ratio

Capital Adequacy measures the strength of the bank. Capital

Adequacy Ratio is also known as Capital Risk Weighted Assets

Ratio.

Percentage ratio of a financial institutions primary capital to its

assets (loans and investments), used as a measure of its financial

strength and stability.

12% is for Commercial Banks.

15% is for NBFCs.This ratio is used to protect depositors and promote the stability

and efficiency of financial systems around the world.

__________________________________________________________________________________________

SOME BASICS:Comparison between Cheque and Demand Draft.

CHEQUE DD

1. Cheque will be issued by an account holder. DD can be issued by a banker only.

2. Cheque could be dishonoured or bounced. Not possible in case of DD. Draft thus provides full

(100%) security to the beneficiary.

3. No Commission. We have to pay commission to bank.

4. To Issue cheque to others, you should maintain bank

account.

Not necessary.

5. Cheque booklet exists. Not possible in case of DD.

Comparison between Banks and Non Banking Financial Companies (NBFCs)

BANKS NBFC

1. Banks are incorporated (formed) under BankingRegulation act 1949.

NBFC are incorporated under Company act of1956.

2. Banks can accept deposit from general public. NBFC dont do so.

3. Banks can issue cheques drawn on itself. NBFC cannot do this.

Note: Main purpose ofNBFCis to provide loans to weaker section of the society.

BASICS OF CHEQUE: A bank cheque is a type of negotiable instrument which is payable on demand.


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MICR: Magnetic InkCharacterRecognition. A 9 digit code which actually shows that whether the cheque is real or fake.

IFSC: A 11 digit code in which first 4 digit represents the entity, 5th

digit is by default zero and the last six digits shows the branch code.Note: RTGS & NEFT uses IFSC code.

UTR Number:Unique Transaction Reference number. A unique number which is generated for every transaction in RTGS system. UTR is a

16 digit Alpha-Numeric code, the first 4 digits is a Bank Code in alphabets, 5th one is the message code, 6th & 7th mentions

the year, 8-10th mentions Date and the last 6 digits mentions days serial no. of the message.

CBS: Core Banking Solution, all the banks are connected through internet, that means we can do transaction from any bank and

anywhere.(e.g. deposit cash in PNB, Delhi branch and withdrawing cash from PNB, Gujarat)

FINANCIAL INCLUSIONRoughly we can say that including each and every Indian citizen financially.

We can observe that about 40% of the total population doesnt have a bank account, so main aim of this scheme is to provide banking services

to the unbanked areas. (Mainly in rural areas)

Financial Inclusion is a central government scheme which comes underMinistry of Finance.

Issuing Authority: RBI

Significance of Financial Inclusion:

1. Extension of Banking Services (Growth of the organization).2. Providing loan to Genuine Customers.3. Kisaan Credit Card Scheme (KCC): Specially made for agriculture purposes. It aims to provide credit facilities to farmers (especially

for cultivation of crops), KCC were started by the Government of India, RBI and NABARD. The card is valid for 3 years and subject to

annual renewals.

4. Providing credit to low income groups.5. Banks which provides KCC are as follows:Allahabad , Canara Bank, Corporation Bank, SBI- Kisan Credit Card (KCC)

Andhra Bank- AB Kisan Green Card

Bank of Baroda - BKCC

Bank of India - Kisan Samadhan Card

Dena Bank- Kisan Gold Credit Card

Oriental Bank of Commerce -Oriental Green Card (OGC)

Punjab National bank- PNB Krishi Card

Syndicate Bank-SKCC

Vijaya Bank-Vijaya Kisan Card

Financial Inclusion is also known as SWABHIMAAN.

KISAAN CREDIT CARD SCHEME:A Special credit card which is issued to the farmers, for their short-term credit needs for cultivation of crops.

Significance:

No need to apply for a loan for every crop. Assured availability of credit at any time enabling reduced interest burden for the farmer. Helps buy seeds, fertilizers at farmers convenience and choice Helps buy on cash-avail discount from dealers Credit facility for 3 years no need for seasonal appraisal Maximum credit limit based on agriculture income Any number of withdrawals subject to credit limit Repayment only after harvest. Rate of interest as applicable to agriculture advance Security, margin and documentation norms as applicable to agricultural advance


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PULKIT JAWAL

SWABHIMAAN: A scheme of Financial Inclusion.


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RBI OFFICES IN INDIA

MULTIPLE CHOICE QUESTIONS

1. Normally commercial banks accept Fixed Deposit for how

many years.

(a) Only 1 year (b) Only 2 years

(c) Only 3 years (d) Only 5 years (e) None

2. NABARD was established in 1982, on the recommendation of

_______________Committee

(a) Shivraman (b) VK Shunglu

(c) Malegam (d) Magjitha

(e) BK Chaturvedi

3. A Special credit card which is issued to the farmers, for their

short-term credit needs for cultivation of crops.

(a) Kisaan Loan Card (b) Kisaan Utility Card

(c) Kisaan Agriculture Card (d) Kisaan Card

(e) Kisaan Credit Card

4. Which country lended more money to the other countries than

the World Bank.

(a) USA (b) CHINA

(c) RUSSIA (d) UK (e) None

5. Another name of World Bank is

(a) IMF (b) IBRD

(c) RBI (d) ADB (e) None

6. Which of these organizations is also called as Brettonwood

Organizations.

(a) World Bank (b) IMF

(c) UNIDO (d) Both (a) & (b) (e) United Nation

7. RBI establish on which date.

(a) 1st

of April 1925 (b) 1st

of April 1935

(c) 1st

of April 1945 (d) 1st

of April 1955

(e) 1st

of April 1965

8. Financial Inclusion Scheme is comes under which Ministry.(a) Ministry of Health.

(b) Ministry of Commerce.

(c) Ministry of Consumer Affairs

(d) Ministry of Finance.

(e) Ministry of External Affairs.

9. In PMLA Act, 2002 what does M stands for

(a) Maximum (b) Market

(c) Mutual (d) Mobile (e) None

10. Spot the wrong statement.


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PULKIT JAWAL

(a) RBI has a sole right to issue the Banking License to any financial

institution.

(b) RBI Governor Dr. Duvvuri Subbarao is an Indian economist,

central banker, and civil servant. He is the 22nd

Governor of

Reserve Bank of India.

(c) RBI also controls the Non Banking Financial Companies.

(d) Harun Rashid Khan recently appointed as a Deputy Governor of

RBI in place of Anand Sinha.

(e) All are true.

11. Where is the Headquarters of Kotak Mahindra Bank.

(a) Delhi (b) Karnataka

(c) Kanpur (d) Tamil Nadu (e) None

12. Which one of the following is the private sector bank.

(a) IDBI (b) Bank of Maharashtra

(c) Bank of Rajasthan (d) Bank of Baroda

(e) SIDBI

13. Which one of the following is not an Associate Bank of SBI.

(a) State Bank of Bikaner (b) State Bank of Hyderabad

(c) State Bank of Mysore (d) State Bank of Patiala

(e) State Bank of Indore.

14. Which insurance company is one of the largest insurance

company in our country.

(a) ICICI Lombard Insurance

(b) United India Insurance Company Ltd(c) Met Life Insurance (d) Max New York life insurance

(e) LIC

15. Which Government Bank has largest ATM network in India.(a) RBI (b) ICICI

(c) SBI (d) PNB (e) CANARA

16. How many banks are nationalized till Now.

(a) 24 banks (b) 25 banks

(c) 26 banks (d) 27 banks (e) None

17. If any private company wants to starts the Banking

operations in our country, then who is the banking licenseissuing authority.

(a) IBA (b) IBPS(c) World Bank (d) SBI (e) None

18. Which one is not decided by RBI.

(a) CAR (b) CRR

(c) Base Rate (d) Bank Rate (e) Policy Rates

19. In RTGS what does T stands for

(a) Transaction (b) Transfer

(c) Tax (d) Transcription (e) None

20. Which statement is wrong about RTGS system.

(a) Transactions take place in a real time.

(b) Works on DNS (Deferred Net Settlement).

(c) Minimum amount to be transferred is Rs. 2 lakhs.

(d) Processing Charges/Service Charges for RTGS transactions varyfrom bank to bank.

(e) One of the safest mode of transactions when bulk amount of

money is to be transferred.

21. Recently Banks launched a service in which we can transfer

the money through mobile phones, the service is called as(a) MMTF (Mobile Money Transfer Facility)

(b) MTMT (Mobile To Mobile Transfer)

(c) MTMMT (Mobile To Mobile Money Transfer)

(d) IBMPS (Internet Banking Mobile Payment Service)

(e) IMPS (Inter Bank Mobile Payment Service)

22. IBPS recently conducts Common Written Examination,

IBPS Stands for

(a) Institute of Banking Person Selector.

(b) International Banking Personnel Selection.

(c) Indian Banking Personnel Selection.

(d) Institute of Banking Personnel Selection.

(e) Inter Bank Payment System.

23. How many languages are there in a 500 rupee note?

(a) 11 (b) 12 (c) 13 (d) 15 (e) 17

24. Whose signature is present on the One Rupee note?

(a) RBI Governor (b) Deputy Governor(c) Finance Secretary (d) Finance Minister

(e) Prime Minister

25. A special feature in intaglio has been introduced on the left

of the watermark window on all notes except Rs.10/- note.

This feature is in different shapes for various denominations

(Rs. 20-Vertical Rectangle, Rs.50-Square, Rs.100-Triangle,

Rs.500-Circle, Rs.1000-Diamond). What is the purpose of that

intaglio on the note.(a) It helps in the detection of genuine notes.

(b) It helps the Banks to identify the genuine notes.

(c) It helps the RBI to identify the genuine notes.

(d) It helps the visually impaired to identify the denomination.

(e) It is just present for the good look of the currency.

26. Many times we observe an alpha numeric IFSC code is

written on cheque. IFSC code stands for.

(a) International Format System Code

(b) International Function System Code

(c) International Forex System Code

(d) Indian Financial System Code

(e) Indian Format System Code

27. Recently HDFC merged with which bank.

(a) ICICI (b) AXIS (UTI)

(c) Karur Vysya Bank (d) Centurion Bank of Punjab

(e) Dhanalakshmi Bank

28. Which statement is wrong about IMPS.

(a) Its a mobile to mobile fund transactions facility.(b) For this facility we need a GPS enabled mobile phone.

(c) Both the sender and receiver must have account in the same

bank.

(d) Both the customers must have MMID (Mobile Money

Identifier Number) number.

(e) All are correct

29. RBI directed banks to resolve ATM transactions related

complaints in 7 working days. If commercial banks failed to

do so then bank has to pay Rs.________per day as

compensation.

(a) 50 (b) 100 (c) 200 (d) 225 (e) 300

30.Pure banking and nothing else/With you all the way are the Tag

Lines of which bank(a) ICICI (b) IDBI (c) PNB (d) Canara

(e) None

31. Which one of the following is not regulated and controlled by

RBI.

(a) IDBI (b) SBI

(c) Bank of Rajasthan (d) NABARD

(e) All are controlled by RBI.

32. D.D. Subbarao is the ________Governor of RBI.

(a) 20TH

(b) 21ST

(c) 22ND

(d) 23RD

(e) 24TH


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PULKIT JAWAL

33. Which one is not a Present Deputy Governor of Reserve

Bank of India.

(a) Harun Rashid Khan (b) Subir Gokarn

(c) K.C.Chakrabarty (d) Anand Sinha

(e) Shyamala Gopinath

34. Which organization maintains the Borrowers history in

India.

(a) CRISIL (b) CIBIL

(c) CARE (d) RBI (e) SBI

35. Which technique is sometimes also called as a type ofDirect

DebitFacility.(a) SMPS (b) RTGS(c) IMPS (d) UTR (e) ECS

36. Which organisation registered under the Companies Act,

1956 of India, engaged in the business of loans and advances,

acquisition of shares, stock, insurance business, or chit

business, but does not works like a Normal banks such as it

cannot issue cheques drawn on itself, cannot issue DDs.

(a) NABARD (b) NBFCs

(c) SEBI (d) ECGC (e) ITPO

37. A customer can approach the Banking Ombudsman if he

does not get satisfactory response to his grievance from the

bank within _____ days.

(a) 20 (b) 25 (c) 30 (d) 35 (e) 40

38. Which of the organization can also be called as a Mutual

Fund regulator.

(a) AMFI (b) SEBI

(c) CIBIL (d) CRISIL (e) ITPO

39.The Banking Ombudsman charge _____ Rs. fee for filing

and resolving customers complaints.(a) 50 (b) 75

(c) 100 (d) 110

(e) Does not charge any fee, it is absolutely free of cost.

40. What is the Peculiar thing about all these commercial banks:

Bank of India, Central Bank of India, DENA, Union Bank of

India, Bank of Baroda.(a) They are the Best Banks in our country.

(b) These banks are included in the top 100 list of Best Banks in the

world.

(c) These banks offers best services till now.

(d) They have common panel ofBoard of Director.

(e) Their Head Office situated in MUMBAI.

41. If any private company wants to starts the Banking

operations in our country, then who is the banking licenseissuing authority.

(a) IBA (b) IBPS

(c) World Bank (d) SBI (e) None

42.Which one is not decided by RBI.

(a) CAR (b) CRR(c) Base Rate (d) Bank Rate (e) Policy Rates

43. What is Liquidity.

(a) It means how cash is converted into gold.

(b) It means how cheaply and quickly an asset converted into cash.

(c) It means how cash is converted into a SDR (Special Drawing

Rights)

(d) It means how SDR is converted into cash.

(e) Not related to banking.

44. To combat with money laundering RBI uses which act.

(a) PMLA Act, 2002 (b) RBI Act, 1934

(c) DICGC Act, 1961 (d) Banking Regulation Act, 1949

(e) No such act is present.

45. The discounting rate at which Central bank (RBI) borrows

security from commercial bank is called

(a) Repo Rate (b) Reverse Repo

(c) Deposit Rate (d) Base Rate (e) None

46. Which one is a tool of Monetary policy of RBI.

(a) Base Rate (b) PLR

(c) CRR (d) BPLR (e) SDR

47. Who is the issuing authority of the scheme FinancialInclusion.

(a) Indian Bank Association (b) RBI

(c) IBPS (d) Commercial Banks

(e) Ministry of Rural Development

48. Which statement is wrong about SEBI (Securities and

Exchange Board of India).

(a) SEBI is a statutory body.

(b) SEBI is a capital regulator.

(c) SEBI is also called as a Mutual funds regulator.

(d) SEBI also regulates the credit rating agencies in India.

(e) None of them is wrong.

49. Which statement is wrong about RTGS system.

(a) Transactions take place in a real time.(b) Works on DNS (Deferred Net Settlement).

(c) Minimum amount to be transferred is Rs. 2 lakhs.

(d) Processing Charges/Service Charges for RTGS transactions vary

from bank to bank.

(e) One of the safest mode of transactions when bulk amount of

money is to be transferred.

50. The first sale of stock by a private company to the public is

known as(a) EPS (b) FPO

(c) IPO (d) Both (b) and (c) (e) None

51. Both RTGS and NEFT use.

(a) UTR Number.

(b) MICR Code.(c) IFSC Code.

(d) Both (a) & (b)

(e) None

52. Which statement is wrong aboutIMPS.

(a) Its a mobile to mobile fund transactions facility.

(b) For this facility we need a GPS enabled mobile phone.

(c) Both the sender and receiver must have account in the same bank

(d) Both the customers must have MMID (Mobile Money Identifier

Number) number.

(e) All are correct.

53. What is the role of MICR number, which is present on the

Cheque.

(a) MICR number is used to identify the genuineness of cheque.(b) MICR number is used to identify the bank branch.

(c) MICR number is nothing but a type of cheque number.

(d) Both (a) and (b)

(e) None

54. In SWIFT what does I stand for.

(a) Interbank (b) International

(c) Intercom (d) Indian (e) Infrastructure

55. What is Open Market Operations (OMO).

(a) Selling of shares in an open market.

(b) Selling of products in an open market.


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PULKIT JAWAL

(c) Buying and selling of government securities in the open market.

(d) Buying and selling of products in the whole sale market.

(e) None

56. Under which act RBI issues directives to the commercial

banks.

(a) PMLA Act, 2002 (b) RBI Act, 1934

(c) DICGC Act, 1961 (d) Banking Regulation Act, 1949

(e) No such act is present.

57. The insurance company uses the bank sales channel in order

to sell the products. The term used to describe is

(a) Scheduled banking (b) Scheduled Insurance(c) Bankinsuring (d) Bancassurance (e) None

58. Code of banks commitment to micro and small enterprises

is prepared by

(a) Any commercials bank (b) NABARD

(c) RBI (d) IBA (e) GRAMEEN BANK

59. OLTAS stands for

(a) On-Line Tax Asset Schedule.

(b) On-Line Tracking Asset Schedule.

(c) On-Line Tax Accounting Schedule.

(d) On-Line Tax Accessed System.

(e) On-Line Tax Accounting System.

60. Many times we heard the termHot money in financialnewspapers. What is Hot money.

(a) Money that is moved by its owner quickly from one form of

investment to another.

(b) Money which is illegally obtained and try to convert into white

money.

(c) Money which can be invested in business.

(d) Money which is obtained from the sales of white goods.

(e) None

61. CAMELS is a type of Bank Rating System. In CAMELS

what does C stands for.

(a) Common (b) Compensation

(c) Cancellation (d) Capitalization (e) Capital Adequacy

62. Define Eurobond.(a) A bond issued in a currency of the European countries.

(b) A bond issued in an Indian currency in European nations.

(c) A bond issued in Euro in our country.

(d) A bond issued in a currency other than the currency of the

country in which it is issued.

(e) None

63. Which act is useful in controlling HAWALA.

(a) PMLA Act. (b) RBI Act.

(c) DICGC Act. (d) Banking Regulation Act.

(e) FEMA Act.

64. Headquarter of Allahabad bank is situated in.

(a) Delhi (b) Kolkata

(c) Mumbai (d) Bangalore (e) Chennai

65. Many times we observe an alpha numeric IFSC code is

written on cheque. IFSC code stands for.(a) International Format System Code

(b) International Function System Code

(c) International Forex System Code

(d) Indian Financial System Code

(e) Indian Format System Code

66. Which statement is wrong statement IFSC code.

(a) IFSC code is an alpha numeric which is of 11 bit.

(b) In IFSC code the last six digits shows the branch code.

(c) IFSC code is uniquely identifies the bank branch.

(d) Beneficial in those cases where bulk amount is to be

transferred.(likeRTGS)

(e) None of them is wrong.

67. What is Contingency fund.

(a) Its a fund for emergencies or unexpected outflows, mainly

economic crises.

(b) Its a fund for child development, often release by the state

government.

(c) Its a fund released by the commercial banks, to help the

customers in emergency.

(d) Its a fund released by World Bank in order to support LDCs.(e) None

68. An agreement between the buyers and sellers to buy and sell

the assets in the future at a predetermined price is called

(a) Advanced Trading (b) Predetermine Trading

(c) Priority Trading (d) Future Trading

(e) None

69. A tax on all spot conversions of one currency into another is

called(a) Sales Tax (b) GST Tax

(c) Direct Tax (d) VAT tax (e) None

70. What does SEPA stands for in banking sector.

(a) Single Euro Payment Area(b) Single Euro Penalized Area

(c) State Environmental Policy Act

(d) System Evaluation Planning and Assessment

(e) Signaling and End Point Application

71. Which bank is a Private Sector bank.

(a) Bank of India (b) Bank of Baroda

(c) Bank of Rajasthan (d) Bank of Maharashtra

(e) IDBI Bank

72. Which bank is Nationalized Bank.

(a) AXIS (UTI) (b) HDFC

(c) YES (d) ING Vysya Bank (e) None

73. Recently HDFC merged with which bank.(a) ICICI (b) AXIS (UTI)

(c) Karur Vysya Bank (d) Centurion Bank of Punjab

(e) Dhanalakshmi Bank

74. RBI directed banks to resolve ATM transactions related

complaints in 7 seven working days. If commercial banks

failed to do so then bank has to pay Rs.________per day as

compensation.(a) 50 (b) 100 (c) 200 (d) 225 (e) 300

75. Which of the organization can also be called as a mutual

fund regulator.

(a) AMFI (b) SEBI


76. Which organization maintains the credit history of the

borrowers.(a) AMFI (b) SEBI


77. Which organization regulates the Credit Rating agencies in

India.(a) AMFI (b) SEBI

(c) CIBIL (d) CRISIL (e) RBI

78. Which organization regulates the Monetary policy in India.(a) AMFI (b) SEBI


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PULKIT JAWAL

(c) CIBIL (d) CRISIL (e) RBI

79. Scheme Financial Inclusion comes under which Ministry.

(a) Ministry of rural development

(b) Ministry of Finance

(c) Ministry of Home affairs.

(d) Ministry of Health and development

(e) Ministry of urban development

80. Tag line ofBank of Baroda is.(a) Pure Banking and Nothing Else

(b) Jeevan Ke Saath Bhi Jeeavan Ke Baad Bhi

(c) Tradition of Trust(d) With You All the Way (e) None

81. Which bank is not included in SBI Associates Group.

(a) State Bank of Bikaner & Jaipur.

(b) State Bank of Indore.

(c) State Bank of Hyderabad.

(d) State Bank of Mysore.

(e) State Bank of Tarvancore.

82. If at any place suppose RBI office is not present then who

will control the commercial banks at that place.

(a) SBI (b) RBI

(c) INDIAN BANK (d) NABARD

(e) SEBI.

83.Insurance companies like LIC, ICICI LOMBARD, and

UIICL are generally regulated by which organization.

(a) RBI (b) PFRDA

(c) IRDA (d) IBA (e) IBPS

84. NPA in banking sector means.

(a) Non Performing Asset. (b) Net Producing Asset.

(c) Net Performing Asset. (d) Not Promoting Asset.

(e) None

85. Minimum denomination coin is present in Indian market is(a) 1 Rs. (b) 2 Rs. (c) 5 Rs. (d) 10 Rs. (e) None

86. Many banks have launched CBS services. CBS means

(a) Common Banking Solutions.(b) Common Banking Settings.

(c) Core Banking Settlement.

(d) Common Base Solutions.

(e) None

87. USA central Bank is

(a) Federation of banks of America.

(b) Bank of America. (c) Federal Bank of America.

(d) Federal Reserve System. (e) USA American bank.

88. After how many months in a year RBI review its Monetary

policy.

(a) After every 2 months. (b) After every 3 months.

(c) After every 4 months. (d) After every 5 months.

(e) Not necessary, It depends on the Economic Situations.

89. In FIMMDA what does I stands for.

(a) Information (b) Index

(c) Income (d) Intelligence (e) Indigo

90.In TRIPS what does I stands for(a) Interest (b) Information

(c) Improvement (d) Infra (e) None

91. Which one is the biggest private sector lender.

(a) AXIS (b) HDFC

(c) ICICI (d) Bank of Rajasthan

(e) Kotak Mahindra Bank

92. RBI was established on the basis of which commission.

(a) Hilton Young Commission. (b) British Commission.

(c) Federal Commission. (d) Federation Commission.

(e) None.

93. Which one of the following person is never been a Governor

of RBI.

(a) Our Prime Minister. (b) Dr. C Rangarajan

(c) Bimal Jalan (d) Upendra Kumar Sinha

(e) Osborn Smith

94. Which organization is also called as a Mutual funds

regulator.

(a) AMFI (b) SEBI

(c) ECGC (d) CIBIL (e) ITPO

95. SME stands for(a) Small and Micro Enterprises.

(b) Sink and Medium Enterprises.

(c) State and Medium Economy.

(d) Small and Medium Economy.

(e) Small and Medium Enterprises.

96. Who is Mohmmad Yunus.

(a) Founder of Grameen Bank. (b) Founder of RBI.

(c) He is a PM of Bangladesh.(d) Founder of Indian Oversees Bank.

(e) He belongs to Pakistan.

97. Whose signature is present on Ten Rupees note.(a) Deputy Governor.

(b) Finance Secretary.

(c) President of India.

(d) Finance Minister

(e) None

98. ASBA stands for

(a) Application Supported By Blocked Account.

(b) Application Supported By Bank Assets.

(c) Allotment Supported By Blocked Amount.

(d) Application Supported By Blocked Amount(e) None

99.LAF stands for(a) Liquidity Adjustment Facility.

(b) Liquidity Account Facility.

(c) Liquidity Allotment Facility.

(d) Long Adjustment Facility.

(e) Long Account Facility.

100. CRISIL, MOODYS, STANDARD & POORS are

(a) Non Banking Financial Companies.

(b) Non Governmental Organization. (NGO)

(c) Credit Rating Agencies.

(d) Private Sector Banks.

(e) None

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PULKIT JAWAL

ANSWERS

1.Normally commercial banks accept Fixed Deposit for10 yearsmaximum. (Minimum will be 15 days)

2.NABARD (National Bank for Agriculture and RuralDevelopment) was established on the recommendation of

Shivraman Committee. It was established in 1982, During

Seventh five year plan. Establishment: 12th of July 1982.

Headquarters: Mumbai, Maharashtra. Purpose: Specially

meant for providing credit to agriculture sector.

3.Kisaan Credit Card: A Special credit card which is issued to thefarmers, for their short-term credit needs for cultivation of crops.

4.China5.Another name of World Bank is IBRD (International Bank for

Reconstruction and Development) or IDA (International

Development Association).

6.Both IMF & World Bank are Brettonwood Institution.7.RBI established on 1ST of April 1935.8.Ministry of Finance.9.PMLA, Prevention ofMoney Laundering Act 2002: To combat

with Money Laundering.

10. Harun Rashid Khan recently appointed as a DeputyGovernor of RBI in place of Shyamala GopinathNot Anand

Sinha.

11. Mumbai.12. Bank of Rajasthan.13. State Bank of Indore has been Merged.14. LIC: Life Insurance Corporation15. SBI16. 27 banks are Nationalized till now.17. RBI has a sole right to issue the Banking License.18. Base Rate is decided by Commercial Banks not RBI.19. RTGS: Real Time Gross Settlementsystem is a funds transfer


one bank to another on a real time. (Real time means within

fraction of seconds.) The minimum amount to be transferred

through RTGS is 2 lakh. Processing Charges/Service Charges

for RTGS transactions vary from bank to bank.

20.NEFT: National Electronic Fund Transfer. This is a methodused for transferring funds across banks in a secure manner. It

usually takes 1-2 working days for the transfer to happen. NEFT

is an electronic fund transfer system that operates on a Deferred

Net Settlement (DNS) basis which settles transactions in

batches.(RTGS does not works on DNS)

21. IMPS: Inter bank Mobile Payment Service is an instantinterbank electronic fund transfer service through mobile phones.

Both the customers must have MMID (Mobile Money Identifier

Number) number. For this service we dont need any GPS

enabled cell phones.

22. IBPS: Institute ofBanking Personnel Selection. Institute set upby the Banking Industry to cater to its selection needs -recruitment, placement and promotion; and has been assessing

talent for the past twenty - six years.

23. 15 languages.24. Finance Secretary.25. It helps the visually impaired to identify the denomination.26. Indian Financial System Code. (IFSC: A 11 digit code in

which first 4 digit represents the entity, 5th digit is by default

zero and the last six digits shows the branch code)

27. Recently HDFC merged with Centurion Bank of Punjab.28. Same as 21.

29. 100/-30. SBI31. All are controlled by RBI. (RBI is our central and one of the

most powerful bank in our country as well as it has sole right

to regulate all commercial banks. (Whether the bank is

Government or Private.))

32. 22ND governor: DD Subbarao, 21st : Y.V. Reddy33. Shyamala Gopinath already resigned.34. CIBIL: Credit Information Bureau ofIndia Limited. CIBIL is

Indias first credit information bureau. Whenever a person

apply for new Loans or Credit Card to a Financial Institution,

they generate the CIBIL report of the said person or concern tojudge the credit worthiness of the person and also to verify

existing track record. CIBIL actually maintains the borrowers

history.

35. ECS: Electronic Clearing Service.36.NBFCs: Non Banking Financial Company.37. 30 days.38. SEBI is also known as Capital regulator or Mutual funds

regulator orMarket regulator. SEBI is also created investors

protection fund and SEBI is the only organization which

regulate the credit rating agencies in India. (CRISIL And

CIBIL)

39. The Banking Ombudsman scheme is an efficient and cost-effective forum, which has been formed to resolve complaints

registered by the customers in case of any services provided bythe bank.

40. Their Head Office is situated in MUMBAI.41. RBI has a sole right to Grant the license to the banks. So

answer is none.

42. Base rate. RBI doesnt decide PLR, BPLR, SUB PLR, andDEPOSIT RATES.

43. It refers to how quickly and cheaply an asset can be convertedinto cash. Money (in the form of cash) is the most liquid asset.

44. Prevention of Money Laundering Act 2002: To combat withmoney laundering.

45. Also called Repurchase Rate, the rate at which the RBI lendsmoney to the banks or in other words we can say that Repo

rate is the discounting rate at which central bank borrows

security from commercial bank. Repo means repurchase

agreement between RBI & commercial bank.

46. CRR47. RBI48.None of them is wrong.49. RTGS does not Works on DNS (Deferred Net Settlement).

Real Time Gross Settlement systems are a funds transfer


one bank to another on a Real time.

50. IPO (Initial Public Offerings)51. IFSC: Indian Financial System Code.52. IMPS does not need any special type of cell phones (GPS

enabled mobile phone).

53. MICR number is used to identify the genuineness of cheque.54. Society for Worldwide Interbank Financial

Telecommunication. It operates a worldwide financialmessaging network which exchanges messages between banks

and other financial institutions.

55. Open Market Operations. The buying and selling ofgovernment securities in the open market in order to expand or

contract the amount of money in the banking system.

56. Banking Regulation Act, 194957. Bancassurance.58. RBI59. On-Line Tax Accounting System.60. Money that is moved by its owner quickly from one form of

investment to another.


20/20

61. CAMELS is a type of Bank Rating System. (C) stands forCapital Adequacy, (A) for Asset Quality, (M) for

Management ,(E) for Earnings, (L) for Liquidity and (S) for

Sensitivity to Market Risk.

62. A bond issued in a currency other than the currency of thecountry in which it is issued.

63. FEMA Act. (Foreign Exchange Management Act)64. Kolkata65. Indian Financial System Code66. All are correct67. Its a fund for emergencies or unexpected outflows, mainly

economic crises.

68. Future Trading69. A tax on all spot conversions of one currency into another iscalled TOBIN TAX.

70. Single Euro Payment Area71. Bank of Rajasthan72.None73. Centurion Bank of Punjab74. 10075. SEBI76. CIBIL, Credit Information Bureau of India Limited. CIBIL is

Indias first credit information bureau. Whenever a person

apply for new Loans or Credit Card to a Financial Institution,

they generate the CIBIL report of the said person or concern to

judge the credit worthiness of the person and also to verify

existing track record. CIBIL actually maintains the borrowers

history.

77. SEBI78. RBI79. Ministry of Finance.80. Indias International Bank81. State Bank ofIndore is already merged with SBI.82.None, since RBI is apex bank of our country, so it controls all

the banks.

83. Insurance companies in India are regulated by IRDA(Insurance Regulatory and Development Authority.)

84.Non Performing Asset.85.None: 25paise.86.None, CBS Stands for Core Banking Solutions.87. Federal Reserve System.88.Not necessary, It depends on the Economic Situations.89. FIMMDA: Fixed Income Money Market Derivatives

Association.

90. TRIPS: Trade Related Intellectual Property Rights.91. ICICI.92. Hilton Young Commission.93. Upendra Kumar Sinha is a chairman of SEBI.94. SEBI.95. Small and Medium Enterprises.96. Mohmmad Yunus is a Founder of Grameen Bank, and he

belongs to Bangladesh.

97.None, Governor of RBI.98. Application Supported By Blocked Amount.99. Liquidity Adjustment Facility.100.CRISIL, MOODYS, STANDARD & POORS are CreditRating Agencies.

SHORT NOTE:

KYC: Know YourCustomer

KYC Campaign is introduced by RBI.

Purpose: The main purpose of KYC norms is to restrict Money

Laundering and Terrorist Financing.

In order to prevent identity theft, identity fraud, money

laundering, terrorist financing, etc, the RBI had directed all banks

and financial institutions to put in place a policy framework to

know their customers before opening any account.

This involves verifying customers identity and address.

Mandatory details required under KYC norms:

Address Proof Identity Proof Ration Card/Election Card Some banks may even ask for verification by an

existing account holder.

All of the above formalities are done in order to check all banking

transactions and identify suspicious ones.

Such transactions will be immediately reported to the banks head

office and authorities and norms shall also be laid down for

freezing of such accounts.

vidya guru banking notes

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