IBPS
Examinations
Banking Awareness tips for recruitment
as clerks and officers in banks
e-book
PART: 01
Prepared by:
A. Gauri Sankar, 39/G/1/ Ayya Flats,
Dhandeeswaram Nagar, Second Cross Street, Sixth Main Road, Velachery, Chennai
600042
BULLET POINTS - PART: 001
Reserve Bank of India
01. Central
bank is a bank which acts as a banker to the government; has monopoly of
note issue and controls the entire banking system
02. RBI is the central bank in India
03. RBI was established by an act of Parliament in 1934
04. The initial share capital for RBI was Rs. 5 crores
05. RBI was nationalized under (transfer of public ownership) act 1948
06. Its affairs are regulated by central board of directors
07. It has four regional centres at Mumbai, Kolkatta, Chennai and Delhi
08. The central office of the bank is at Mumbai
09. RBI is note issuing authority; banker, agent and financial adviser
to the government; custodian of cash reserves of banks; custodian of nation’s
reserves of foreign exchange; lender of the last resort; controller of credit
etc.
10. Currency
notes other than one rupee notes are issued by RBI
11. RBI has credit control – regulation of cash reserves of commercial
banks, regulating the flow of credit, qualitative control and open market
operations
12. Handles all government transactions
13. It is a banker’s bank
14. It maintains the exchange rate for the Indian rupee; hold the
country’s reserves in foreign currencies and administration of the exchange
management regulations
Scheduled commercial banks
15. They are included in the second schedule to the RBI act, 1934
16. They can avail facilities from RBI – accommodation in the form of
refinance and loans and advances; remittance facility at concessive rates as
also grant of authorized dealer’s license to handle foreign exchange business.
17. Have paid up capital and reserves – aggregate value of not less
than Rs. 5 lakhs.
18. It can be a state cooperative bank or company registered under the
companies act
19. Scheduled commercial banks are – State Bank of India and
associates, nationalized banks, private sector banks, regional rural banks,
urban cooperative banks, state cooperative banks
20. Scheduled Commercial Banks to maintain CRR up to 3 percent of their
demand and time liabilities which can go
upto a maximum of 15 percent
Public sector banks
21. State Bank of India and associate banks
22. Nationalized banks – 20
23. Banks were nationalized on 19.07.1969
- fourteen banks
24. Nationalised banks are: Central Bank of
India, Bank of India, Bank of Baroda, Allahabad Bank, Union Bank of India,
United Commercial Bank, Indian Overseas Bank, Indian Bank, Canara Bank,
Syndicate Bank, Punjab National Bank, United Bank of India, Dena Bank, Bank of
Maharashtra, Andhra Bank, Corporation Bank, Oriental Bank of Commerce, Punjab
and Sind Bank and Vijaya Bank. (19) and Industrial Development Bank of India =
20
Development banks
25. Industrial Finance Corporation of India is a development bank
26. Its operations are project finance, financial services and
corporate advisory services
27. Industrial Investment Bank of India was set up in 1971 for
rehabilitation of sick industrial companies.
28. Reconstituted as Industrial Reconstruction Bank of India in 1985 under
the IRBI act, 1984
29. IRBI was incorporated in March, 1997 as Industrial Investment Bank of
India Limited under the companies act, 1956
30. SIDBI was set up in 1990 under an act of parliament (SIDBI) act 1989 as
a wholly owned subsidiary of IDBI
31. It is the principal financial institution for promoting and financing
development of industry in the small scale sector
32. 14 banks were nationalized on 19th July 1969
New Private sector banks
33. New private sector banks were formed as per RBI guidelines 1993
34. They were registered under companies act 1956
35. They were included in second schedule to the RBI act, 1934
36. The minimum paid up capital of a new bank shall be Rs. 100 crores
37. Priority sector lending norms should be adopted by these banks
38. The banks are governed by the provisions of the RBI act, 1934, the
Banking regulation act, 1949 and other relevant statutes.
39. They are not allowed to set up a subsidiary or mutual fund for at
least three years after their establishment
Regional Rural banks
40. Regional Rural banks were established on 2.10.1975
41. To develop rural economy by providing credit and other facilities for
the purpose of development of agriculture, trade, commerce, industry and other
productive activities in rural areas, particularly to the small and marginal
farmers, agricultural laborers, artisans and small entrepreneurs
42. They are scheduled commercial banks
43. Included in second schedule to RBI act, 1934
44. The gross NPAs of regional rural banks should not be more than 10
percent.
45. The banks should comply with the IRDA regulations for acting as a
corporate agent
46. The authorized capital of a regional rural bank is Rs. 5 crore and
issued/paid up capital minimum of Rs. 25 lakhs and maximum of Rs. 100 lakhs
47. The prescribed minimum level of share holding should be 51
percent for sponsor institutions
Local Area banks
48. Local area banks were established on 24.08.1996
49. They were set up in the private sector to cater to credit needs of the
local people and to provide efficient and competitive financial intermediation
services in their area of operation
50. They are required to observe the priority sector lending target of 40
percent of net bank credit, as applicable to other domestic banks, out of which
25 percent shall be given to weaker sections
51. They were registered as public limited companies as per Companies
act, 1956.
52. They got licence as per Banking regulation act 1949
53. Included in the second schedule to RBI act, 1934
54. They have the minimum paid up capital of Rs. 5 crore
55. Promoters’ contribution to be Rs 2 crores.
56. They can be promoted by individuals, corporate entities, trusts and
societies
57. The area of operation of local area bank shall be a maximum of three
geographically contiguous districts.
58. To comply with the provisions of the Banking Regulation act, 1949, RBI
act, 1934 and other statutes
59. They are subject to prudential norms, accounting policies and other
policies laid down by RBI
Non Banking Finance Companies
60. NBFCs consist of eight categories – each one of them conducting a
particular business activity
61. Equipment leasing company undertakes equipment leasing or the
financing of such activity
62. Hire purchase finance company is engaged in hire purchase transaction
or the financing of such transactions
63. Loan company provides finance by making loans or advances or otherwise
for any activity other than its own.
64. The main business of any investment company is the acquisition of
securities and trading in such securities to earn a profit
65. Mutual Benefit Financial Company are the companies which are notified
by the Central Government under section 620 A of the companies act 1956
66. Miscellaneous non banking company – the principal business of such
company is managing, conducting or supervising as a promoter, foreman or agent
of any transaction or arrangement by which the company enters into an agreement
67. Housing finance company – acquisition of construction of houses
including the acquisition or development of plots of land
68. Residuary non banking company – receives deposits under any scheme or
arrangement by whatever name called in one lump sum or in installments by way
of contributions or subscriptions or by sale of units or certificates or other
instruments or in any manner.
69. Effective 4.3.2003, NBFCs are not allowed to offer more than 11
percent per annum interest on public deposit
70. No official agency guarantees or undertakes the repayment of deposits
or interest
71. NBFC deposits are uninsured and not backed by security
72. They are not allowed to offer more than 2 percent brokerage
73. They are not allowed to offer gifts or incentives
74. All depositors must be issued proper receipts for deposits
75. NBFCs having track record of less than 2 years is not eligible to
accept public deposits
76. NBFCs seeking public deposit should be a profit making company
Life Insurance corporation of India
77. LIC was established in 1956 as wholly owned corporation of the
Government of India
78. LIC came into being from 1.9.1956
79. To spread life insurance across the country, particularly in the rural
areas and to the socially and economically backward classes.
80. Besides insurance business, LIC in pursuance of Government of India
guidelines invests a major portion of its funds in central and state government
securities and other approved securities including special deposits with
Government of India.
81. Extends assistance to develop infrastructure facilities like housing,
rural electrification, water supply and sewerage and provides financial
assistance to the corporate sector by way of term loans, underwriting off and
direct subscription to shares and
debentures.
82. It also provides resource support to financial institutions through
subscription to their shares/bonds and by way of term loans.
83. UTI - the largest mutual fund
organization in India was set up in 1964 by an act of parliament.
84. Established to fulfill the objectives of mobilizing of retail savings,
investing them in the capital market and passing on the benefits accrued from
the acquisition, holding, management and disposal of securities to the small
investors.
85. General Insurance Corporation of India was formed and registered on
January, 1973 under the insurance act 1938 in accordance with the provisions of
the General Insurance Business (Nationalization) act, 1972
86. The New India Assurance Company Limited; The United India Insurance
Company Limited, The Oriental Insurance Company Limited and National Insurance
Company Limited are government owned insurance companies doing general
insurance business
87. Need based insurance companies to meet the diverse and emerging needs
of various segments of society and provides financial assistance to industrial
projects by way of term loans, short term loans and direct subscription to
shares/debentures of new and existing industrial enterprise.
National Bank for agriculture and Rural Development
88. NABARD was established in 1982 under an act of parliament
89. It is the apex development bank for promotion and development bank for
promotion and development of agriculture, small scale industries, cottage and
village industries, handicrafts and other rural crafts and other allied
economic activities in rural areas
90. It serves as an apex financing agency for the institutions providing
investment and production credit for promoting the various developmental
activities in rural areas
91. Takes measures towards institution building for improving absorptive
capacity of the credit delivery system, including monitoring, formulation of
rehabilitation schemes, restricting of credit institutions, training of
personnel etc.
92. Coordinates the rural financing activities of all institutions engaged
in developmental work at the field level and maintains liaison with Government
of India, state governments, RBI and other national level institutions
concerned with policy formulation
Export and Import Bank of India
93. Export and Import Bank of India
- EXIM bank was established in 1982
94. Public sector financial institution created by an act of Parliament
vide - the Export and Import Bank of
India act 1981.
95. Principal financial institution for – financing, facilitating and
promoting India’s foreign trade
96. They provide Indian exporters with investment loans, export product
development loans, loans for export marketing, pre shipment credit, suppliers
credit for exports or projects and advisory services.
97. Equity finance available for acquiring of setting up companies abroad
for manufacturing, marketing, trading etc.
98. It offers buyers credit and lines of credit to foreign governments and
banks
99. It has facilities to provide advance information and business advisory
services to Indian exporters in respect of multilaterally funded projects
overseas.
100. It offers
advisory and information services to exporters and sponsors
BULLET POINTS - PART: 002
COMPUTER TERMINOLOGY
01. Access: To
store or retrieve data
02. Add-on: Circuits,
systems, or hardware devices that can be attached to a computer to increase its
memory or improve its performance
03. Application:
A system, such as a payroll, that has been defined to be suitable for
electronic data processing techniques
04. Archived file:
A file that has been transferred to a lower level in the memory hierarchy,
usually from magnetic disc to magnetic tape, may be as a result of operations
of appropriate resource management
05. Array:
A group of two or more logically related elements identified by a single name;
generally stored in consecutive storage locations in main memory
06. Audit trail:
A permanent record of every transaction taken by a computer system, indicating
for example, when users log in and out, what transaction they perform, when
files are accessed and the type of access. Examination of this record provides
a way of observing patterns of security violation and/or serves as a deterrent
to violations
07. Availability: The
ratio of time a device is operating correctly to the total scheduled time for
operating
08. Back office operations: Operation that does not involve direct interaction with
customers
09. Back up: A resource that is, or can be used as a substitute when a
primary resource fails or when a file has been corrupted
10. Bar code: A
printed machine readable code that consists of parallel bars of varied width
and spacing. The application most commonly observed is the coding on food and
goods that is read at the checkout and translated into a line of print on the
bill showing product and cost
11. Batch processing: A method of organizing work for a computer system, designed to
reduce overheads by grouping together similar jobs
12. Bit:
Contraction of binary digit
13. Bug:
An error or mistake in a programme
14. Byte: A
group of consecutive bits forming a unit of storage in the computer and used to
represent one alphanumeric character; a byte usually consists of 8 bits but may
contain more a fewer bits depending on the model of computer
15. Character:
An alphabetic letter, a digit or a special symbol
16. Chip:
A small section of a single crystal of semiconductor usually silicon, that
forms the substrate upon which is fabricated a single semiconductor device or all
the individual devices comprising an integrated circuit
17. Configuration:
The particular hardware elements and their interconnection in a computer system
for a particular period of operation
18. Debug:
To trace and correct errors in programming code or hardware malfunctions in a
computer system
19. Downtime:
The percentage of time that a computer system is not available for use
20. Dummy:
An artificial instruction, address etc. used only to fulfill specification in a
programme but not actually performing a function
21. Duplex channel:
A communication channel that allows data to be transmitted in both directions
simultaneously
22, Encoder:
A small table-top electronic machine which is a combination of electronic
typewriter and calculator – functions: encode numeric data in the MICR in
desired font; print a listing of amounts of all instructions with batch/grand
totals; zero-proofing place clearing endorsement, stamp on the reverse of
instruments
23. Image:
A copy in memory of data that exists elsewhere
24. Interface:
A common boundary between two systems, devices or programmes
25. Lock:
A key or other group of characters that allows access to specified storage
locations or software systems
26. Log-in:
To enter the necessary information like personal identification number – PIN
and/or password to begin a session on a terminal
27. Menu:
The list of options may be displayed with a sign code opposite each. The
selection may then be made by keying the single code. The method provides simple
way of guiding a user through a complex situation by presenting a sequence of
simpler decisions
28. Main memory:
Storage located in the computer for programmes, along with their data, while
they are being executed
29. MICR:
Abbreviation for magnetic ink character recognition. A process in which data
printed in ink containing ferromagnetic particles is read by magnetic read
heads
30. Modem:
Acronym for modulator demodulator – a device that converts digital data output
from another device into analog data that can be transmitted over communication
lines or vice versa.
31. OCR: Abbreviation
for Optical Character Recognition
32.Output device:
A device that can provide for only the output of data, such as a printer or
card punch
33.Password:
A group of characters by which a user is uniquely identified, when logging on
to a terminal or when submitting a programme for execution
34. Real Time:
The time that passes on an ordinary clock
35. Scan:
To examine sequentially all the records in a file in order to find those whose
keys meet a specified criterion
36. Soft Copy: Output
that is displayed on the screen of a video display unit
37. SWIFT:
Society for Worldwide Inter-bank Financial Telecommunication
38. VDU:
Abbreviation for Visual Display Unit
39. Bandwidth:
How much stuff you can send through a connection. Usually measured in bits per
second
40.Beta:
Preliminary or testing stage of a software or hardware product: “a beta
version”; “beta software”
41. BIOS:
Stands for Basic Input/Output system: The BIOS is responsible for booting the
computer by providing a basic set of instructions
42. Binary:
This is a basic system of numbering using ones and zeros
43. Blue tooth:
Radio technology that connects electronic devices without using a cable. Data
and voice can be exchanged at ranges of up to 10 meters without the need for
devices to be lined up together
44. Boot disk:
A diskette from which you can boot your computer
45. Buffer:
A place, especially in RAM, for the temporary storage of data for the purpose
of speeding up an operation such as printing or disk access
46. Browser:
It is a software used for viewing pages on the web
47. Bus:
A collection of wires through which data is transmitted from one part of a
computer to another
48. Catche:
A special block of fast memory used for temporary storage of data for quick
retrieval
49. CD-ROM:
Compact Disc Read Only Memory – an optical storage medium that can hold about
700 MB of data and is accessed with lasers
50. CGA:
Stands for Color Graphics Adapter: CGA allowed a maximum of four colours at a
resolution of 320 x 200 or two colours at 640 x 200.
51. Clock Speed:
The clock speed is the frequency which determines how fast devices that are
connected to the system bus operate. The speed is measured in millions of
cycles per second
52. Clustering: A
technique in which two or more servers are interconnected and can access a
common storage pool
53. CMOS:
Abbreviation of complementary metal oxide semiconductor. Pronounced seemoss; CMOS
is widely used type of semiconductor
54. COBOL:
Common Business Oriented Language
55. CPU:
Central Processing Unit – It interprets and carries out instructions, performs
numeric computations, and controls the peripherals connected to it
56. Data bus:
A group of parallel conductors found on the motherboard that is used by the CPU
to send and receive data from all the devices in the computer.
57. Data mining:
Sorting through data to identify patterns and establish relationships
58. DDR:
Stands for “Double Data Rate”
59. Decoder:
A circuit or device that restores a coded signal to its original form based on
knowledge of the process used to code the signal
60. Decryption:
It is the process of converting encrypted data back into its original form, so
that it can be understood
61. Dedicated line:
It is a phone line meant specifically for one thing, like being attached to a
computer
62. Demodulation:
It is the process of converting analog information into digital information
63. DLL:
Dynamic Link Library
64. DNS:
Domain Name Server – it is the system used on the internet for maping names to
the actual numerical addresses of machines on the Internet
65. DOS: Disc
Operating System
66. Domain name: A
name that identifies one or more IP addresses
67. Driver:
A program that controls a device. Every device, whether it can be a printer,
disk drive, or keyboard must have one driver program
68. EBCDIC:
Extended Binary Coded Decimal Interchange Code
69. Email:
Stands for electronic mail. It is a system of relaying messages across the
Internet from one internet user to another
70. Encryption:
It is the process of converting data into “unreadable code” so that
unauthorized people cannot understand the contents
71. Ethernet:
A networking system that enables high speed data communication over coaxial
cables
72. Executable file:
A file in a format that the computer can directly execute
73. FAQ:
Frequently asked questions
74. GUI:
Graphical User Interface
75. FTP:
File transfer protocol
76. HTML:
Hyper Text Markup Language
77. HTTP:
Stands for Hyper Text Transport Protocol
78. Icon:
A small video display that acts as an activation link when clicked on
79. ISP:
Internet service provider
80. ISDN:
Integrated Services Digital Network
81. Java:
A high level programming language developed by Sun Microsystems
82. LAN:
a computer network that spans a relatively small area
82. LCD:
Abbreviation of liquid crystal display, a type of display used in digital
watches and many portable computers
83. Linux:
A version of UNIX that runs on a variety of hardware platforms. It is open
source software, which is freely available
84. Kilobyte:
This is about thousand bytes of space. It is two to the 10th power
of 1024 bytes
85. MPEG:
Motion Picture Experts Group
86. Peer to Peer:
A type of network in which each workstation has equivalent capabilities and
responsibilities
87. Pen drive:
A small device that can be used to easily transfer files between USB-compatible
systems
88. Processor:
A processor is a device that processes programmed instructions and performs
tasks
89. RAM:
Random Access Memory
90. ROM:
Read Only Memory
91. Serial Port:
A port or interface that can be used for serial communication, in which only 1
bit is transmitted at a time
92. SMTP:
Simple Mail Transfer Protocol
93. Spam:
This is to transmit unwanted messages, usually over email, to a great many
people
94. SLIP:
Serial Line Interface Protocol
95. Switch:
In networks, a device that filters and forwards packets between LAN segments.
LANs that use switches to join segments are called switched LANs or, in the
case of Ethernet networks, switched Ethernet LANs
96. WWW:
World Wide Web
97. Virus:
A program or piece of code that is loaded into the computer without the
knowledge of the computer user and runs against the wishes of the user
98. WAN:
Wide Area Network
99. Weblog:
This is publicly accessible personal journal for an individual. Similar to a
personal diary, but shared over the web. The activity of updating a
blog is “blogging” and someone who keeps a blog is called as a “blogger”
100.ZIP: Stands for Zone Information Protocol. This is an
application that allows for the compression of application files
BULLET POINTS - PART: 003
01. EXIM bank operates various lending programs for promotion
of exports of engineering and capital goods and related services from India
02. EXIM - Direct financial assistance to exporters of plant,
equipment, machinery and related services in the form of medium term credit
03. EXIM -Overseas investment finance to Indian
promoters of overseas joint ventures to support their equity investments.
04. EXIM - Overseas buyers’ credit to foreign importers for import of
Indian capital goods and related services
05. National Housing bank was established on 9.7.1988
06. Vide National housing bank act, 1987 to function as a principal agency
to promote housing finance institutions and to provide financial and other
support to such institutions.
07. NHB – issues directions to housing finance institutions to ensure
their growth on sound lines
08. Make loans and advances and render any other form of financial
assistance to scheduled banks and housing finance institutions or to any
authority established by or under any central, state or provincial act and
engaged in slum improvement
09. Formulate schemes for the purpose of mobilization of resources and
extension of credit for housing.
10. Banks can accept both demand and time deposits from the public
11. Interest payable on savings bank accounts is not regulated by Reserve
Bank of India
12. RBI is the sole authority to issue and manage currency in India
13. Accounts are allowed to be operated by cheques in respect of both
savings bank accounts and current accounts
14. Normally no interest is paid on current deposit accounts
15. The usual deposit schemes of the banks are current accounts,
savings bank accounts and term deposit accounts
16. Fixed deposits and recurring deposits are repayable after an agreed
period
17. Financial inclusion means provision of financial services namely, payments,
remittances, savings, loans and insurance at affordable cost to persons not yet
given the same
18. Sale of insurance policy to a depositor is known as cross selling
by banks
19. When a bank returns a cheque unpaid, it is called as dishonor of
the cheque
20. Mortgage is a security on immovable property for a deposit received
by a bank
21. Accounts in which shares of various companies are traded in
electronic form is called as demat accounts
22. NABARD has sought an emergency fund of Rs. 1000 crore from banks to
tackle acute liquidity crisis, which is coming in the way to give loans to
micro borrowers
23. Distribution of insurance products and insurance policies by the banks
as corporate agencies is known as bankassurance
24. The term L denote “Liquidity” in term “LAF” as referred every now and
then in relation to monetary policy of RBI – liquidity
25. The full form of FINO – a term frequently used in newspapers is called
as – Financial Information Network and Operation Limited
26. The rate of inflation increases when the purchasing power of money
decreases
27. Interest on savings bank account is now calculated by banks on
daily product basis
28. A centralized data base with online connectivity to branches through
internet as well as ATM network which has been adopted by almost all major
banks of the country is known as core banking
29. Treasury bills, commercial paper, certificate of deposit, shares and
bonds are called as money market instruments
30. Repurchase agreement is not money market instrument
31. With a view to facilitate payment of balance in the deposit account to
the person named by the depositor without any hassles in the event of death of
the account holder, the following facility has been introduced for bank
accounts in our country – nomination
32. Banks in our country normally publicize that additional interest rate
is allowed on retail domestic term deposits of – senior citizens
33. CRR – cash reserve ratio
34. SLR – statutory reserve ratio
35. EXIM bank – export and import bank of India
36. NABARD – National Bank for Agriculture and Rural development
37. SIDBI – small industries development bank of India
38. EDP – entrepreneurship development programme
39. SMERA – SME rating agency of India Limited
40. NBFC – Non banking finance companies
41. NEFT – National electronic funds transfer
42. RTGS – real time gross settlement
43. Narrow banking is a system of banking under which a bank places its
funds only in 100 percent risk free assets with maturity matching for its
liabilities.
44. NPA – non performing assets
45. CAR means capital adequacy ratio
46. KYC means know your customer guidelines
47. IPO – Initial public offer
48. QIB – qualified institutional buyers
49. SEBI – securities and exchange board of India
50. MICR – magnetic ink character recognition
51. NSE – national stock exchange
52. BCSBI – Banking codes and standards board of India
53. FEDAI – Foreign exchange dealers association of India
54. ALCO – asset liability committee
55. ALM – asset liability management
56. FCNR – foreign currency non resident deposit accounts
57. CDRS – Corporate debt restructuring
58. IDRBT – Institute for development and research of banking technology
59. YTM – yield to maturity
60. IRDA – Insurance Regulatory and Development Authority of India
BULLET POINTS - PART: 004
COMPUTER AWARENSS
01. To charge a selected text to all capital letters, click the change
case button and then click – caps lock
02. A person who used his or her expertise to gain access to other
people’s computers to get information illegally or do damage is a – hacker
03. Where you are likely to find an embedded operating system? – on a desktop operating system
04. Reusable optical storage will typically have the acronym – RW
05. An online discussion group that allows direct live communication is
known as – chat group
06. Codes consisting of lines of varying widths or lengths that are
computer readable are known as – a
magnetic tape
07. A web site’s main page is called as – home page
08. Which of the following is a program that uses a variety of different
approaches to identify and eliminate spam? – any spam program
09. To access properties of an object, the mouse technique to use is – right clicking
10. Computers use the _____ number system to store data and perform
calculations – binary
11. Phishing trips are attempts by individuals to obtain confidential
information from you to falsifying their identity
12. Sharing copyrighted files without permission breaks copyright laws
13. The following can be used to select the entire document – Ctrol +A
14. The system unit – is the container that houses electronic components
15. The simultaneous processing of two or more programs by multiple
processors is – multiprocessing
16. A disk’s content that is recorded at the time of manufacture and that
cannot be changed or erased by the user is – read only
17. The permanent memory built into the computer is called – ROM
18. The default view in excel is normal
19. System software – helps the
computer manage internal resources
20. In word, you can force a page break – by positioning your cursor at
the appropriate place and pressing ctrol
– enter
21. Grouping and processing all of a firm’s transactions at one time is
called – batch processing
22. Help menu is available at which button – start
23. The personal files and folders can be kept at – my documents
24. Help menu is available at which button – start
25. A central computer that holds collections of data and programs for
many PCs, workstations and other computers is a server
26. When you save to this, your data will remain intact even when the
computer is turned off – secondary
storage device
27. The drafts folder retains copies of messages that you have started but
are not yet ready to send
28. You can refine a search by providing more information and the search
engine can use to select a smaller more useful set of results
29. The contents of memory are lost when the computer turns off
30. The tab row enables you to simultaneously keep multiple web pages open
in one browser window
31. A DVD is an example of an optical disc
32. The basic unit of a worksheet into which you enter data in excel is
called a – cell
33. Formatting is the process of dividing the disk into tracks and sectors
34. Which ports connect special types of music instruments in sound cards
? – MIDI
35. The process of transferring the files from a computer on the internet
to your computer is called – downloading
36. Computer and communication technologies such as communication links to
the internet that provides help and understanding is the end user is known as –
FTB
37. Which of the following is contained on chips connected to the system
board and is a holding area for data instructions and information? – memory
38. To reload a web page, press the button – refresh
39. Mobile commerce is best described as – buying and selling goods/services through wireless handheld devices
40. Video processors consist of CPU and memory which store and process
images
41. The main circuit board of the system unit is the control unit
42. Installation is the process of copying software programs from
secondary storage media to the hard disk.
43. Nanosecond is billionth of a second
44. When the pointer is positioned on a hyperlink, it is shaped like a
hand
45. The computer abbreviation – KB usually means – kilo byte
46. Connection or link to other documents of web pages that contain
related information is called – hyperlink
47. An animation is a special visual and audio effect applied in Power
Point to text or content
48. The following is a programming language for creating special programs
like apples – Java
49. The piece of hardware that converts the computer’s digital signal to
an analog signal that can travel over telephone lines is called - a enterprise
50. Personal computers can be connected together to form a network
BULLET POINTS - PART: 005
01. The bank
branches which can undertake foreign exchange business directly are known as
approved dealers in foreign exchange
02. Insurance
cover for bank deposits in the country is provided by DICGC
03. Deposit
Insurance and Credit Guarantee Corporation of India Limited is called as DICGC
04. The
financial literacy includes the following namely; how to invest the funds; how
to use the limited funds carefully; how to minimize the risks and how to
reinvest the money earned
05. The loans
of very small amounts given to low income group is called as – Micro credit
06. When a
banker talks about CDR, CDR is meant – Corporate
Debt Restructuring.
07. ALM is
called as Asset Liability Management
08. Cash
Reserve Ratio and Statutory Liquidity Ratio are terms most closely related to
the following industries/markets – Banking industry
09. CRR and SLR
are not related to capital market, commodities market, money market and mutual
fund industry
10. The letter
“L” available in the term LAF commonly used in financial/economic news is
called as– Liquidity
11. LAF means
liquidity adjustment facility
12. The banking
ombudsman resolves the complaints of the customers in regard to services
provided by the banks
13. Public
sector bank, foreign bank, private sector bank and regional rural bank are
classified as commercial banks
14. Urban
cooperative bank is not a commercial bank
15. SEBI means Securities and Exchange Board of India.
16. Money laundering means – the process of conversion of money obtained
illegally to appear to have originated from legitimate sources
17. Monetary policy as an arm of the economic policy is administered by –
Reserve Bank of India
18. The following is not a primary function of a bank – Facilitating
import of goods
19. The following are the functions of banks – accepting deposits;
granting loans; collecting cheques; issuing drafts; selling gold/silver coins
20. The following represent the correct meaning of Repo rate – Rate for
borrowing rupees by banks from RBI
21. The reserves which can act as a liquidity buffer for commercial banks
during crisis times are CRR and SLR
22. Savings bank accounts are opened by individuals for savings purposes
23. A customer drawing a cheque on a bank has the right to stop payment of
the cheque before it is paid
24. The following are the functions of a commercial bank namely; providing
project finance; settlement of payments on behalf of the customers; issuing
credit and debit cards to the customers and providing services such as locker
facilities and remittances
25. Commercial banks do not undertake the following functions: deciding
policy rates like CRR, SLR and repo rates
26. Reserve Bank of India undertakes the following rates: CRR; SLR and
repo rates
27. The conversion of money which is illegally obtained is called as – money laundering
28. For purchase of white goods, the following loan is granted by the
banks – consumer durables loan
29. A cheque which has completed the stipulated validity period of the
cheque is called as – stale cheque
(The validity period is 3 months as at present)
30. Ganesh has been nominated in the savings bank account of Vijaya and
Ganesh requests the bank authorities to allow him to operate Vijaya’s account
as she is found to be unwell. What will the bank do? – As nomination will come
into effect only after the death of the depositor, the bank will not permit
31. The following is a measure taken by RBI in order to control inflation
in the country – raising of Repo and
Reverse Repo rates.
32. What do you understand by the term called as mortgage ?– Making the
security of immovable property available as a cover for a home loan availed by
the borrower
33. The following constitutes the largest percentage of retail loans in
the country – Home loans
34. The credit risk to the bank is high from which of these cards – Credit cards
35. Depreciation of an asset does not occur on account of the following
namely; fire in the unit; theft; labour trouble; wear and tear;
36. The following are the sources of finance for any commercial bank –
capital, borrowings from RBI, deposits and cash reserves with RBI
37. Call money borrowings – is not the source of finance for any
commercial bank
38. The rate at which the domestic currency can be converted into foreign
currency and vice versa is known as the – exchange
rate
39. ARCIL – is the asset
reconstruction company
40. IRDA – Insurance Regulatory Development Authority
41. BCSBI – Banking Codes and Standards Board of India
42. CIBIL – Credit Information Bureau of India Limited
43. Exchange rate is the term used in the field of economics
44. The non performing assets of any bank are called as – sub standard
assets, doubtful assets and loss assets
45. The performing assets of any bank are called as – standard assets
46. The crossing on a cheque can be cancelled by the drawer of the cheque
under his full signature
47. Banks can accept both demand and time deposits from the public
48. Interest payable on savings bank is not regulated by RBI
49. The usual deposit accounts of the banks are – current accounts,
savings accounts and term deposit accounts
50. The fixed deposits, reinvestment deposits and recurring deposits are
repayable after an agreed period.
BULLET POINTS - PART: 006
01. Accounts
are allowed to be operated by cheques in respect of current and savings
accounts
02. Interest is
not paid in current accounts
03. Mortgage is
a security on immovable property for loan given by the bank
04. Financial
inclusion means provision of – financial services namely; payments,
remittances, savings, loans and insurance at affordable cost to persons not yet
given the same
05. When a bank
returns a cheque unpaid, it is called as – dishonor of the cheque
06. Demat
accounts are accounts in which the shares of various companies are traded in
electronic form
07. NEFT means
– National Electronic Funds Transfer
08. No upper
limit has been prescribed for RTGS
09. RTGS means
– Real Time Gross Settlement
10. Distribution
of insurance products and insurance policies by banks as corporate agents is
known as – bankassurance
11. Interest on
savings bank account is now calculated by the banks on daily product basis
12. Government
of India is the largest shareholder (in percentage shareholding) of a
nationalized bank
13. Banks in
the country normally publicise that
additional interest rate is allowed in retail domestic term deposits held by– senior citizens
14. A centralized database with online connectivity to branches, internet
as well as ATM network which has been adopted by almost all major banks of the
country is known as – core banking
15. Commercial paper is not considered as the money market instrument
16. With a view to facilitate payment of balance in the deposit account to
the person named by the depositor without any hassles in the event of death of
the account holder, the following facility was introduced for bank accounts in
the country – Nomination
17. ATM cards are issued to a person who maintains any of the following
accounts namely – savings bank accounts
and current accounts
18. ATM is a computer which is dedicated to perform certain specific jobs
only
19. ATM is a user friendly machine and the customer does not require any
training for using it
20. ATM is totally menu driven which displays instructions to the customer
step by step for operating the same
21. A working croup on cheque truncation and E-cheques was constituted by
RBI under the chairmanship of Dr. R.B. Barman and major recommendations of
group include – the physical cheque will be truncated within the presenting
bank; settlement will be generated on the basis of current MICR code line data
and electronic images will be used for payment processing
22. RTGS benefits the customer and the bank
23. RTGS means a payment system in which – both processing and final settlement of funds transfer instructions can
take place continuously
24. RBI in regard to RTGS has decided that – RTGS would be accessible to
all retail customers and there would be no floor ceiling for routing the
transactions through RTGS and settlement of transactions.
25. State Bank of India is considered to be the first bank to launch a
mutual fund
26. In commercial paper the following parties can invest – individuals,
banking companies and corporate bodies registered or incorporated in the county
and unincorporated bodies, Non Resident Indians and foreign Institutional Investors.
27. The commercial paper may be issued in multiples of Rs. 5 lakhs subject
to the minimum size of an issue to a single investor being – Rs. 5 lakhs
28. Commercial paper may be issued for period ranging from seven days to
one year
29. Commercial paper is essentially – unsecured money market instrument
30. Social control was imposed on commercial banks effective from – 1st February, 1969
31. Fourteen major Indian banks having deposits of more than Rs. 50 crores
were nationalized on 19.07.1969
32. With effect from 19.07.1969, the fourteen major Indian banks were
nationalized by the Government of India under – the banking companies
(acquisition and transfer of undertakings) act 1970
33. Effective from 15.04.1980,
six banks with demand and time liabilities exceeding Rs. 200 crores were
nationalized
34. In the wake of Narasimhan committee recommendations the banks which
entered into the capital markets – State
Bank of India, Oriental Bank of Commerce and Bank of India.
35. In the wake of Narasimhan Committee recommendations, the financial
sector reforms were implemented by the government of India
36. Financial sector reforms aim towards introduction of capital adequacy
norms, based upon capital to risk weighted asset ratios; prudential norms
relating to classification of assets, income recognition and provisioning;
setting up of a strong supervisory and surveillance mechanism for the banking
system and financial sector through the Board for financial supervision in RBI
37. According to Hilton Young Commission, the RBI act, 1934 was enacted
38. The Banking Commission was appointed by the Government of India in
January, 1969 under the chairmanship of R.G. Saraiya
39. In order to study the functioning of Public Sector banks, James Raj
Committee was appointed
40. Kamath working group was appointed to study the problems arising out
of the adoption of multi agency in agricultural banking
41. The banking laws committee was headed by – P.V. Rajamannar
42. The National Credit Council which symbolized the role of credit
planning in development was set up in the year – 1968
43. During the year-1966, RBI set up the All India Rural Credit Review
Committee in order to – reassess the developments that have taken place in the
field of rural credit since 1954, that is subsequent to submission of the
report of the All India Rural Credit
Survey Commission
44. Talwar committee submitted its report in the year 1977
45. Talwar committee was appointed by Government of India to – submit
recommendations on customer service on banks
46. In order to review the existing system of inspection of banks by RBI, Pendarkar working group was appointed
47. Under the chairmanship of H.N. Sinor, the working group to examine
various issues concerning the deposit rates including floating rate of interest
on fixed deposits was constituted by RBI
48. RBI had constituted the working group on flow of credit to SSI sector
under the chairmainship of A.S. Ganguly
49. The Joint stock banking system started in the late 18th
century/early 19th century
50. The Bank of Bengal got its charter in 1809
BULLET POINTS - PART: 007
01. The first
bank in India was set up on modern lines in 1770 by an agency house
02. Bombay
stock exchange was made functional as early as 1870
03. The first
life insurance company in the country – Oriental Life Insurance company
04. Oriental
Life insurance company was established in 1818
05. First
General (non life) Insurance company was set up in 1850
06. There were
566 private commercial banks in the country with 4151 branches in 1951
07. There are 32 foreign banks in the country
08. Foreign banks have around 310 branches all over the country
09. The Unit trust of India came into existence in 1964
10. Export Risk Insurance Corporation was set up in July 1957
11. Export Risk Insurance Corporation was converted as ECGC in January
1964
12. ECGC – Export Credit Guarantee Corporation
13. The deposit insurance corporation was set up in 1962
14. The fourteen banks which were nationalized on 19.7.1969 were – Central
Bank of India; Bank of Maharashtra; Dena Bank; Punjab National Bank; Syndicate
Bank; Canara Bank; Indian Bank; Indian Overseas Bank; Bank of Baroda; Union
Bank; Allahabad Bank; United Bank of India; United Commercial Bank and Bank of
India
15. Six banks were nationalized during the second stage on 15.4.1980
16. Regional Rural Banks were set up in 1975
17. NABARD was established in 1982
18. NABARD – National Bank for Agriculture and Rural Development
19. Securities and Exchange Board of India was established in 1988
20. Licensing for new private sector banks was issued in 1993
21. Indian financial system is composed of three components – financial
assets, financial markets and financial intermediaries or institutions
22. Financial assets are classified into primary or direct securities and
secondary or indirect securities
23. Financial markets can be classified into money market and capital
market
24. Financial intermediaries can be classified into organized and
unorganized
25. Organized financial intermediaries can be classified into banking
institutions and non banking financial institutions
26. Primary securities are those securities which represent financial
claims against real sectors
27. Real sectors represent bills, bonds, shares, book debts etc.
28. National savings certificates, infrastructure bonds, Indira Vikas
Patras, Krishi Vikas Patra etc. are examples of financial assets
29. Money market is the center of dealings mainly of short term character
in monetary assets
30. The capital market deals in long term funds, both debt and equity
31. Financial instruments of the capital market are classified into the
following two categories namely; government or gilt edged securities and
corporate securities
32. The main financial instruments of corporate sector are – shares,
debentures, public deposits and loan from institutions
33. Banking commission was established in 1972
34. Capital market is a market which deals in long term funds
35. Regional Rural Banks fall within supervisory purview of RBI
36. IRDA is the regulatory authority for all insurance companies in the
country including LIC of India
37. IRDA has its headquarters at Hyderabad
38. Mutual funds fall within the supervisory purview of SEBI
39. Export and Import Bank of India does not fall within the purview of
development banks
40. State Bank of India was formulated as per SBI act 1955
41. ICICI Bank Limited is the first Universal Bank established in the
country
42. New Bank of India merged with Punjab National Bank
43. The central monetary authority of the country is Reserve Bank of India
44. Scheduled commercial banks are banks which have been included in the
second schedule of RBI act, 1934; registered under companies act and got
licence as per Banking Regulations act 1949
45. When the banks entertain in dealing with insurance business, it is
called as bankassurance
46. Universal banking is the roof under which various banking products are
available
47. When the repayment period of any loan is upto 36 months, the loan is
called as short term loan
48. When the repayment period is between 37 to 84 months, such loans are
called as medium term loans
49. When the repayment period is more than 84 months, they are called as
long term loans
50. In the case of Regional Rural Banks, the contribution structure
between Government of India, State Government and Sponsoring banks are in the
ratio of 50:15:35
BULLET POINTS - PART: 008
01. Laxmi Commercial Bank merged with Canara
Bank
02. CAMEL
denotes – capital adequacy, asset quality, management, efficiency and liquidity
03. Banks are
subject to operational risk, credit risk, market risk, liquidity risk
04. When the
ATM machine installed in the bank is out of order, it is called as operational
risk
05. When the
computers are not functioning, it is called as operational risk
06. When the
loans are not repaid in time, it is called as credit risk
07. When the
banks products fail to survive in the market, it is called market risk
08. When the
banks are not able to pay the amount to the depositors, it is called as
liquidity risk
09. IFSC code
denotes the branch code of any bank
10. IFSC code
consists of eleven digits
11. Tissue
culture denotes propagation of cells
12. Aqua
culture denotes shrimp farming and fish production
13. Horticulture
means fruit production
14. Sericulture means silk production
15. Pisciculture means fish farming
16. Apiculture means honeybee rearing
17. Sylvi culture means cultivation of fodder crops
18. Moriculture means cultivation of mulberry
19. Olericulture means vegetable cultivation
20. Increase in agriculture production is called as green revolution
21. When the activity relates to milk production, it is called as white
revolution
22. When the activity relates to meat production, it is called as red
revolution
23. When the activity relates to cocoa production, it is called as brown
revolution
24. When the activity relates to rubber production, it is called as black
revolution
25. When the activity relates to fish farming, it is called as blue
revolution
26. When the activity relates to cultivation of oil seeds and pulse
production, it is called as yellow revolution
27. When the activity relates to flower production, it is called as
rainbow revolution
28. Marginal farmer is one who has irrigated lands less than 1.25 acres or
non irrigated lands less than 2.5 acres
29. Small farmer is one who has irrigated lands less than 2.50 acres or
non irrigated lands less than 5.00 acres
30. Agricultural laborer is one whose 50 percent of income is from
agriculture
31. The old private sector banks in the country are: City Union Bank,
Tamilnadu Mercantile Bank, SBI commercial Bank, Catholic Syrian Bank,
Dhanalakshmi Bank, Federal Bank, Jammu and Kashmir Bank, Karnataka Bank, Karur
Vysya Bank, Lakshmi Vilas Bank, Nainital Bank, Ratnakar Bank, South Indian Bank
Limited, ING Vysya Bank Limited
32. The new private sector banks in the country are: Axis Bank,
Development credit bank, HDFC Bank, ICICI Bank, Indus Ind Bank, Kotak Mahindra
Bank, Yes Bank
33. The subsidiaries of State Bank of India are; State Bank of Patiala;
State Bank of Hyderabad; State Bank of Travancore; State Bank of Bikaneer and
Jaipur and State Bank of Mysore.
34.
Oriental Bank of Commerce has taken over Global Trust Bank
35. For
charging interest on loans/advances from July 2010, RBI introduced the
following system namely; Base lending rate system in the place of Benchmark
Prime Lending Rate system
36. Money
laundering refers to conversion of money which is legally obtained
37. The account
in which trading of shares in their electronic form is called as DEMAT account
38. Reserve
Bank of India issues all the currency notes except one rupee note
39. RBI does
not transact the business of the following state government namely – Jammu and
Kashmir
40. The first Indian
bank to open a branch outside India in London in 1946 is Bank of India
41. NRI
deposits are called as hot money
42. Euro Bond
is an instrument issued in a country other than the country of the currency of
the bond
43. National
Income Estimates in India are prepared by Central Statistics Commission
44. Full
convertibility of a rupee means determination of rate of exchange between rupee
and foreign currencies freely by the market forces of demand and supply
45. RBI has
prescribed that all scheduled commercial banks should maintain their SLRs in
dated securities notified by RBI; treasury bills of Government of India and
State Development Loans
46. The
following category of banks were mooted with a view to providing an
Institutional mechanism for promoting rural and semi urban savings as well as
for the provision of credit for viable economic activities in local areas –
Local area banks in the private sector
47. LAB means
local area banks
48. The first
Private bank in India to receive an in principle approval from Reserve Bank of
India was Housing Development Finance Corporation Limited
49. The actual
return of an investor is reduced sometimes as the prices of the commodities go
up all of a sudden. In financial sector, this type of phenomenon is known as –
market risk
50. Rashtriya
Swastiya Bima Yojana started rolling from 1.4.2008
BULLET POINTS- PART: 009
01. Banking
regulation act, 1949 does not at all apply to – primary agricultural credit
societies and cooperative land mortgage banks
02. As per the
provisions of section 12 of the Banking Regulations act, 1949, the minimum
ratio between the authorized, subscribed and paid up capital of a banking
company should be 4:2:1
03. Under the
provisions of section 35(b) (ii) of the Banking Regulation Act, 1949,
inspection of branches of Indian banks situated abroad is to be carried out by
– RBI
04. The first
public sector bank to issue capital to public is – Oriental Bank of Commerce
05. The New
Private Sector Banks have been authorized to be set up under the new
liberalization policy and the minimum paid up capital should be – Rs. 200 Crore
06. The Banking
Companies act, 1949 was enacted to consolidate and amend the law relating to
banking companies with effect from 1.3.1966 and the name of the act has been
changed to – The banking regulation act
07. The
management of SEBI consists of – chairman and five members
08. The
following is the reason for the success of mutual fund – mutual fund scheme
offers to every investor security, steady growth, regular income and easy
liquidity; a small investor gets the professional expertise of the fund
managers of the mutual fund and it carries tax breaks and this benefit is
passed on to the investor
09. The
individual investor can claim tax exemption for both principal amount and
income from these units under – Sec 80 E of the information technology act
10. The main
objectives of special electronic fund transfer scheme – SEFT – it is safe;
secure and same day electronic interbank transfer of funds across the country
11. Treasury
bill is – negotiable security
12. RBI
functions as the agent of the central government issues – treasury bills
13. The
treasury bills are issued at a – discount
14. NABARD
extends refinance to – State Land Development Banks, State Cooperative Banks;
Regional Rural Banks and Commercial Banks and other financial institutions
approved by RBI
15. Automatic
refinance scheme is available to the persons financed under – the scheme of
setting up of agriclinic and agribusiness centers; rural non farm sector
(investment credit) upto Rs. 15 lakhs and composite loan scheme
16. The objectives and functions of IDBI include – to provide technical
and administrative assistance for promotion or expansion of industry; to
undertake market and investment research and survey technical and economic
studies in connection with development of industry and to act as lender of last
resort and to finance projects that are in conformity with national priorities
17. For availing refinance from IDBI – the industrial unit should not be
SSI; promoter’s contribution should be 25% of project cost and debt equity
ratio should not be more than 2:1
18. Central Cooperative Banks – serve as the connecting links between
State Cooperative Banks and Primary Credit Societies; finance the primary
credit societies which balance the excess and deficiency in their resources but
do little commercial banking and are closer to the primary societies than an
apex bank
19. The primary function of a central cooperative bank is – to mobilize
the resources in the district for financing its members; to channelize the flow
of funds from the state cooperative banks and to mobilize deposit from state
government
20. Diversification refers to entering into attractive opportunities.
21. Diversification means the activities outside the existing businesses
of the firm
22. The various types of diversification generally observed by the
business – concentric diversification, horizontal diversification and
conglomerate diversification
23. The world over most of the supervisory authorities have adopted the
following as the basis of assessment of capital adequacy – risk assets ratio
system
24. The committee on Banking and Regulations and Supervisory practices
which released the agreed frame work on international convergence of capital
measures and capital standards in July, 1988 is popularly known as – Basle
committee
25. Basle committee adopted weighted risk assets approach which assigns
weights to – on balance sheet exposure of a bank and off balance sheet exposure
of a bank
26. CBS – Core Banking Solution
27. The benefits of Core Banking Solutions – benefit of not carrying the
cash from one place to another; depositing money anywhere in the country where
the bank is present and instant updating of the accounts
28. Network can be defined as – a system of communication between various
computers used by different users.
29. Retail banking refers to provision of the basic services of a bank to
the individuals
30. The following are categorized under retail banking – personal loans to
individuals; vehicle loans; home loans and credit cards
31. The reduction in the SLR by RBI – will augment the resources of
scheduled commercial banks
32. Under sections 20, 21 and 21A of the RBI act, 1934, RBI manages the
public debt and issues new loans on behalf of the central and state governments
33. Social control of banks was introduced during the year – 1967
34. The following form the part of general insurance – fire, burglary,
theft, marine, household, vehicles etc
35. FDMA means – Frequency Division Multiple Access
36. Full form of ERNET – Educational and Research Network
37. Application of VSAT in bank is – inter branch reconciliation; funds
and securities movement; payment system and monitoring and MIS reporting
38. The various facilities offered by banks through tele banking – balance
enquiry; enquiry about collection or specific credit/debit transactions;
transfer of funds and request for statement of accounts etc.
39. Home banking refers to – how banking is an extended version of tele banking;
in home banking the customer is able to access his bank account from his home
for availing a variety of services which is made available and home banking is
availed through the customer’s personal computer attached to a telephone line
and modem.
40. For availing home banking facility, a client should have the following
– personal computer, modem and telephone line
41. The functions of IRDA – it has the power to specify the code of
conduct for surveyors and loss assessors; it has power to regulate investment
of funds by insurance companies; it has power to supervise the functioning of
tariff advisory committee and it has the duty to regulate, promote and ensure
orderly growth of the insurance and re-insurance business in the country
42. The compelling reasons for bank nationalization are – concentration of
which and economic power in the hands of industrialists and businessmen; branch
expansion was confined to urban areas and rural areas were being neglected;
sectors like agriculture, small scale industries and the other deserving
sectors were outside the purview of bank lending operations and various
malpractices indulged in by banks under private ownership
43. Regional Rural Banks are allowed to pay half per cent additional
interest on savings accounts and time deposits less than three years
44. The regulatory authority for Regional Rural Banks is RBI and NABARD
45. Bank rate means the standard rate at which the RBI is prepared to buy
or rediscount bills of exchange and
other commercial paper eligible for purchase under the RBI act 1934
46. When RBI desires to restrict expansion of credit it raises the bank
rate
47. In periods of depression, when the Reserve Bank of India desires to
encourage the banking system to create more credit, it reduces the bank rate
48. Sub section 12 AB of system 17 of the RBI act, 1934 defines the term:
Repo
49. Repo is an instrument for borrowing the funds by selling securities of
the central government or a state government or of such securities of a local
authority as may be specified in this behalf by the central government or
foreign securities, with an agreement to repurchase the said securities on a
mutually agreed future date at an agreed price which includes interest for the
funds borrowed
50. Sub section 12AB of section 17 of the RBI act 1934 defines the term –
Reverse repo rate
BULLET POINTS - PART: 010
01. Financial
instruments of the capital market are classified into the following two
categories namely; government or gilt edged securities and corporate securities.
02. The
financial instruments of corporate sector are: shares, debentures, public
deposits and loans from institutions.
03. Financial
intermediaries are those institutions which collect savings from those who save
and make it available to the investors for their use.
04. The
financial intermediaries or institutions are mainly classified into two
categories namely; institutional or organized; non institutional or
unorganized.
05. Institutional
or organized are mainly divided into two parts namely; banking institutions and
non banking financial intermediaries.
06. The
financial regulatory authorities in India are: Reserve Bank of India,
Securities and Exchange Board of India and Insurance Regulatory and Development
authority.
07. SEBI –
securities and exchange board of India
08. IRDA –
Insurance Regulatory and Development Authority
09. IRDA was
established in 1990
10. IRDA has
its headquarters at Hyderabad
11. The
financial institutions perform a number of functions: promoting savings,
mobilizing savings and allocate it among different users and facilitating
capital formation, production and economic development
12. The
financial markets in the country can be divided into money markets and capital
markets
13. Money
market refers to that market wherein short term monetary assets are bought and
sold
14. Financial
institutions can be either in the organized sector or unorganized sector
15. RBI,
Commercial Banks, Cooperative Banks are in organized sector
16. Indigenous
banks, money lenders, chit funds etc are in the unorganized sector.
17. Financial
instruments include bills, treasury bills, promissory notes, hundies,
certificate of deposits etc.
18. The
important terms which relate to money market are: money market, call money,
notice money, term money, held till maturity, yield to maturity, coupon rate,
treasury operations and gild edged security
19. Under call
money market, funds are transacted on overnight basis and under notice money,
market funds are transacted for the period between 2 days and 14 days.
20. The
participants in call/notice money market currently include banks, primary
dealers, development finance institutions, insurance companies and select
mutual funds.
21. Treasury
bills are money market instruments used to finance the short term requirements
of the Government of India.
22. There are
different types of treasury bills based on the maturity period and utility of
the issuances like, ad-hoc treasury bills, 3 months, 6 months and 12 months
treasury bills
23. Treasury
bills etc. in India at present are issued for the following periods namely; 91
days, 182 days and 364 days
24. Call money
is an amount borrowed or lent on demand for very short period
25. When the
period of call money is more than one day; however, lesser than 14 days, it is
called as notice money
26. Certificate
of deposit is a negotiable promissory note, secure and short term of up to a
year in nature.
27. Commercial
paper is freely negotiable by endorsement and delivery.
28. An inter
corporate deposit or ICD is an unsecured
loan extended by the corporate to another.
29. Ready
forward contracts are transactions in which two parties agree to sell and
repurchase the same security.
30. Bills of
exchange are negotiable instruments drawn by the seller or drawer of the goods
on the buyer or drawee of the goods for the value of the goods delivered.
31. Pass
through certificate is an instrument with cash flows derived from the cash flow
of another underlying instrument or loan.
32. Pass
through certificates have two to three year maturity because the issuance stamp
duty rate makes shorter duration PTCs unviable.
33. A bill
market is the market which deals in short term bills.
34. The bills
may be of two types i) bills of exchange or commercial bills and ii) finance
bills or treasury bills.
35. Bill market
scheme was introduced by Reserve Bank of India in 1952.
36. New Bill
market scheme was introduced by RBI in 1970.
37. The gilt
edged market refers to the market for government and semi government
securities, backed by RBI.
38. The
industrial securities market refers to the market which deals in equities and
debentures of the corporate.
39. Industrial
securities market is divided into primary market and secondary market.
40. Securities
and Exchange Board of India was established during the year - 1988
41. In India, there are 23 stock exchanges
42. Securities and Exchange Board of India got its legal status in 1992.
43. CRISIL – Credit Rating Information Services of India – was established
in 1988
44. ICRA – Investment Information and Credit Rating Agency of India
Limited – was established on 1991
45. CARE – Credit Analysis and Research Limited – was established in 1991
46. IEPF – Investors Education and Protection Fund was set up by SEBI in
2001
47. NSE has introduced the derivatives trading in the equities in
November, 2001
48. IRDA – Insurance Regulatory and Development Authority was set up in
2000
49. CCIL – Clearing Corporation of India Limited
50. OTCEI – Over the counter exchange of India – was incorporated in 1990
under the companies act 1956
BULLET POINTS - PART: 011
BANKING TERMS - ABBREVIATIONS
01. ISCI –
International Standard Industrial Classification
02. KCC – Kisan Credit Card
03. KVIC – Khadi and Village Industries Corporation
04. KYC – Know your customer
05. LAMPS – Large Sized Adivasi Multipurpose societies
06. LERMS – Liberalised Exchange Rate Management System
07. LIC – Life Insurance Corporation of India
08. MCA – Ministry of Company affairs
09. MIS – Management Information System
10. MICR – Magnetic Ink Character Recognition
11. NABARD – National Bank for Agriculture and Rural Development
12. NBFC – Non Banking Finance Companies
13. NEFT – National Electronic Funds Transfer
14. NPA – Non Performing assets
15. NRE – Non Resident External account
16. NRI – Non Resident Indian
17. NSE – National Stock Exchange
18. OLTAS – Online tax accounting system
19. OMO – Open market operations
20. PACS – Primary Agricultural Credit Societies
21. PDO – Public Debt Office
22. PIN – Personal Identification Number
23. QIB – Qualified Institutional Buyers
24. RBI – Reserve Bank of India
25. RDBMS – Relational Database Management System
26. REC – Rural Electrification Corporation
27. RFC – Resident Foreign Currency
28. RIDF – Rural Infrastructure Development Fund
29. RRB – Regional Rural Bank
30. RTGS – Real Time Gross Settlement
31. RWA – Risk Weighted Assets
32. SBI – State Bank of India
33. SCB – Scheduled Commercial Bank
34. SDR – Special Drawing Rights
35. SEBI – Securities and Exchange Board of India
36. SFMS - Structured Financial Messaging Services
37. SHG – Self Help Group
38. SIDBI – Small Industries Development Bank of India
39. SIDC – State Industrial Development Corporation
40. SJSRY –Swarna Jayanthi Shahari Rozgar Yojana
41. SLR – Statutory Liquidity Ratio
42. SLRS – Scheme for Liberation and Rehabilitation of Scavangers
43. SMERA – SME rating agency of India Limited
44. SSI – Small Scale Industries
45. SME – Small and Medium Industries
46. SSSBE – Small Scale Service and Business Enterprises
47. UTI – Unit Trust of India
48. WPI – Wholesale Price Index
49. YTM – Yield to maturity
50. LAB – Local Area Banks
BULLET POINTS: PART: 012
BANKING TERMS - ABBREVIATIONS
01. ALM – Asset
Liability Management
02. ANBC –
Adjusted Net Bank Credit
03. ASBA –
Applications supported Bank accounts
04. BOE – Bill
of Exchange
05. CASA –
Current and savings accounts
06. CBLO –
Collateralised Bank Lending Obligations
07. CIBIL –
Credit Information Bureau of India Limited
08. DPG –
Deferred Payment Guarantee
09. DPN –
Demand Promissory Note
10. DRAT – Debt
Recovery Appellate tribunal
11. DRI –
Differential Rate of Interest
12. DSCR – Debt
Service Coverage Ratio
13. EDI –
Electronic Data Interchange
14. EMI –
Equated Monthly Instalments
15. EPS –
Earnings Per Share
16. ESOP –
Employee Stock Options
17. FEDAI –
Foreign Exchange Dealers Association of India
18. FFMC – Full
Fledged Money Changers
19. FOB – Free
on Board
20. LIBOR –
London Inter Bank Operations Rate
21. MIBOR –
Mumbai Inter Bank Operations Rate
22. MOU –
Memorandum of Understanding
23. MCA –
Ministry of Company Affairs
24. NPV – Net
Present Value
25. OCB –
Overseas Corporate Bodies
26. POA – Power of Attorney
27. RKBY – Rashtriya Krishi Bima Yojana
28. SEBI – Securities and Exchange Board of India
29. LAF – Liquidity Adjustment Facility
30. IDBI – Industrial Development Bank of India
31. BCSBI – Banking Codes and Standards Board of India
32. IRDA – Insurance Regulatory Development Authority
33. DICGC – Deposit Insurance and Credit Guarantee Corporation
34. SPV – Special Purpose Vehicle
35. CRISIL – Credit Rating Information Services of India Limited
36. ICRA – Investment Information and Credit Rating Agency of India
Limited
37. CARE – Credit Analysis and Research Limited
38. MCX – Multi Commodity Exchange
39. CCIL – Clearing Corporation of India Limited
40. OTCEI – Over the Counter Exchange of India
41. EFT – Electronic Funds Transfer
42. ARF – Asset Reconstruction Fund
43. MSS – Market Stabilisation Scheme
44. CRAR – Capital to Risk Assets Ratio
45. FSDC – Financial Stability and Development Council
46. SCARDB – State Cooperative Agriculture and Rural Development Banks
47. LERMS – Liberalised Exchange Rate Management System
48. BOT – Balance of Trade
49. CAC – Capital account convertibility
50. NDS – Negotiated Dealing System
BULLET POINTS - PART: 013
BANKS – PUNCHLINES
01. Allahabad
Bank – A tradition of trust
02. Andhra Bank
– For all your needs
03. Bank of
Baroda – India’s International Bank
04. Bank of
Maharashtra – One family one bank
05. Bank of
India – Relationship beyond banking
06. Canara Bank
– Together we can
07. Central
Bank Of India – Build a better life around us
08. Corporation Bank – Prosperity for all
09. Dena Bank – Trusted Family Bank
10. Indian Bank – Your tech friendly Bank
11. Indian Overseas Bank – Good people to grow with
12. Oriental Bank of Commerce – Where every individual is committed
13. Punjab National Bank – The name you can bank upon
14. Punjab and Sind Bank – To strive to achieve excellence in customer
service
15. Syndicate Bank – Faithful and friendly
16. United Commercial Bank – Honours your trust
17. Union Bank of India – Good people to bank with
18. United Bank of India – The bank that begins with “U”
19. Vijaya Bank – A friend you can bank on
20. State Bank of India – With you all the way
21. State Bank of Hyderabad – Modern Innovative dependable
22. State Bank of Mysore – Working for a better tomorrow
23. State Bank of Patiala – Blending modernity with tradition
24. State Bank of Travancore – Since 1945 – a long tradition of trust
25. ICICI Bank – Hum Hai Na
26. IDBI Bank – Banking for all
27. HSBC bank – World’s local bank
28. HDFC Bank – We understand your world
29. Bank of Rajasthan – Together we prosper
30. Federal Bank – Your perfect Banking partner
31. Yes Bank – Experience our expertise
32. Jammu and Kashmir Bank – Serving to empower
33. Lakshmi Vilas Bank Limited – The changing face of prosperity
34. Karur Vysya Bank – Smart way to Bank
35. Deutshe Bank – A passion to perform
36. South Indian Bank Limited – Experience Next Generation Banking
Important Foreign Banks in India
37. Standard and Chartered Bank – United Kingdom
38. HSBC – United Kingdom
39. Royal Bank of Scotland – United Kingdom
40. Barclays Bank – United Kingdom
41. Citi Bank – United States of America
42. Citi Bank – USA
43. JP Morgan chase bank – USA
44. Bank of America – USA
45. ABN AMRO Bank – The Netherlands
46. ABU Dhabi Commercial Bank – UAE
47. Bank of Ceylon – Sri Lanka
48. BNP Paribas Bank – France
49. Societe Generale – France
50. China Trust Commercial Bank – Taiwan
51. Deutsche Bank – Germany
52. Scotta Bank – Canada
53. DBS Bank – Singapore
BULLET POINTS- PART: 014
01. The administrative heads of the department heads are responsible for compliance
of Official Language Policy of Government of India
02. MS word is an application software
03. The
locker holder is sick and as such he gives an authority in favor of the minor
son to operate the locker and in this case, the bank can allow the minor to
operate the locker
04. A – a
minor endorses a cheque in favour of B. In the case of dishonour, A - cannot be held liable- as when
a minor endorses a cheque all parties are liable except the minor
05. You
come across a cheque on which neither the words bearer nor order are written. You
will make the payment of this cheque by treating it as an order cheque
06. Debt Service Coverage Ratio denotes solvency position of the firm
07. Shroff committee had recommended that companies entering into merger
and acquisition transactions, making preferential allotment of shares to
related parties and proposing buyback of shares must appoint registered
valuer for independent valuation of shares and assets
08. Debt equity ratio denotes the solvency position of the firm
09. The accountholder is the drawer of the cheque
10. Not
negotiable crossing means that the holder in due course will not get the
better title
11. Account opening form is a very important document because it forms the
basis of contract between the bank and the customer and it contains the
offer of the customer to enter into a contract with the bank
12. The
following are not abound on a negotiable instrument as drawer, acceptor or
endorser –a lunatic, an alien enemy and an insolvent
13. An
order cheque is transferable only by endorsement and delivery
14. The term – “allonge” refers to a plain sheet appended to a
negotiable instrument for the purpose
of making endorsement thereon
15. The following endorsements are invalid – endorsement after maturity
of the instrument, partial endorsement, endorsement on a discharged instrument
and endorsement in the case of negotiation
16. “Account
Payee” crossing is not mentioned in the Negotiable Instruments Act – 1881
17. The “protest” is the formal notarial certificate attesting the
dishonour of the bill, and based upon the noting.
18. Service Area Approach is a result of recommendation of committees headed
by P D Ojha
19. A person who owns unirrigated land of 3 acres will be classified as
a small farmer
20. A foreign traveller encashes travellers cheques for $1000 at Rs.
47.25. It is a purchase transaction
21. A restricted letter of credit is one in which the negotiation is
restricted to a specific bank
22. Red Clause letter of credit is one which authorizes release of
preshipment finance to the beneficiary
23. Limited company means – limited liability clause
in memorandum of association.
24. Garnishee Order is issued under Rule 46 of Order XXI of the
schedule to the code of Civil Procedure
- 1908
25. A contract of guarantee is defined as – a contract to perform or
discharge the liability of the principal debtor in the case of his default
26. To be a valid acceptance, the
drawee shall affix his signature with or without the words – ‘Accepted”
27. A Government Company means 51% of the paid up share capital is held
by State Government and/or Central Government
28. If the registrar of DRT refuses to file the suit due to discrepancies
in copybook, the bank can file the appeal before presiding
officer of DRT within 15 days
29. Lok adalats are constituted under Legal Services Authorities act
30. Stamp duty earned by the government on demand promissory note goes
to the state government
31. When the bill becomes due for payment – it is the starting point of
limitation on a bill of exchange payable at a fixed time after date
32. Cash Reserve Ratio is maintained by the banks by keeping cash
balance with Reserve Bank of India
33. Nomination facility can be allowed in the following cases – deposit
account of individuals, articles kept in safe custody and lockers
34. A
certificate of deposit is an usance promissory note
35. Subordinated
debt is an element of tier II capital
36. Accumulated loss will be deducted from tier I capital
37. Vaghul Committee had recommended the introduction of Certificate of
Deposits
38. The basic nature of a Commercial Paper is – it is usance promissory
note
39. “A pass through certificate” - PTC
can be of the following nature in securitization transactions – with recourse
and without recourse
40. Global depository receipt is listed on Stock Exchange outside USA
41. Current Ratio denotes liquidity
42. Simultaneous Sale and Purchase of a share to take the benefit of the
variation in prices in two different
markets is called – Arbitrage
43. Current Ratio denotes – liquidity
44. Debt Recovery Tribunals have been created by the Government as a
result of the recommendations of Narasimhan Committee
45. When a bill matures on a public holiday, the maturity date of the
bill falls on the next preceding business day
46. A negotiable instrument can always
be negotiated until it has been paid up or satisfied
47. In the case of dishonor of a foreign bill, protest is compulsory
when it is required by the law of the place where it is drawn
48. An engineer is financed for the purchase of a car. The same can be
classified as Non priority sector
49. Under drip irrigation system water is used very economically and
supplied drop by drop to the roof zone of crop
50. “Yellow
Revolution” is in connection with growing of fruits specially banana
51. The economic life of a tractor is
- 10 years
52. The natural guardian of a married minor girl is her husband
53. The minimum number of share holders in a Private Limited Company – two
members
54. To open an “Administrator account” the bank requires letter of
administration
55. Karta has the absolute authority to appoint any person as an agent
and the agent need not to be a family member
56. Garnishee Order – is the court order obtained by judgment creditor attaching
funds with Bank of judgment debtor
57. Indemnity
means to make good the loss to the promise/indemnity holder
58. A bearer who takes a bearer cheque bonafide and for value will be a
holder in due course
59. Mortgage is defined in – Section 58 of transfer of property act –
1882
60. A banker can exercise the right of set-off only in respect of debts
due and determined
61. Banks are restricted to advance against its own shares – as per
“Banking Regulation Act”
62. The recovery of dues after issuance of recovery certificate by
Presiding Officer of DRT can be made through – Recovery Officer of DRT
63. The roles of Lok Adalat – to arrive at compromise or settlement;
issue final judgment and to give the consented decree
64. The remedy under Section 138 of Negotiable Instruments Act is available – when the cheque is
presented to paying banker within a period of six months or within the period
of its validity whichever is earlier
65. In case a document travels from higher stamp area to lower stamp area,
additional stamps are not required to be affixed
66. The purpose of maintaining a “documents execution register” is that it
is a prima facie evidence of execution of documents
67. One rupee note bears the signature of the Secretary, Ministry of Finance
68. Nomination facility is not allowed in joint safe custody accounts
69. Free capital is a part of tier I capital
70. Kumar Mangalam Birla is the architect of SEBI’s Corporate
Governance Code
71. Malhotra Committee had suggested to establish an “Insurance
Regulatory Authority”
72. The minimum denomination for a Commercial Paper is Rs.5.00 lakhs
73. The maximum period for which a Certificate of Deposit can be issued –
not more than 12 months
74. Capitalisation of reserves leads to issue of bonus shares
75. 1,2,3,4,5,6,7,8,9 – numerals are called International form of
Indian numerical
76. Key-board is an input device
77. MS -
DOS is a system software
78. Dear money policy is meant to control inflation
79. Since
an illiterate borrower cannot sign acknowledgment of debt, he affixes his thumb
impression on it. The limitation period will be extended by this action
80. Section 45 Z of Banking Regulation Act relates to handing over of
original paid cheques to the corporate customer
81. As per the Prompt Corrective Action scheme, RBI can initiate certain
structured actions in respect of the banks which have hit the trigger points
in terms of CRAR, Non performing advances and Return on advances
82. Under Know Your Customer guidelines, the identification and reporting
of suspicious transactions are to be done on quarterly basis to Audit
Committee of the board of directors
83. To prevent slippage of accounts to NPA category, RBI has designed
broad framework detailing preventive and corrective measures. One of the
measures is the introduction of new asset category between “standard” and “sub
standard”. This new category is called Special mention accounts
84. While
opening accounts of Executors and Trustees to the estate of a deceased person, bank
should scrutinize the trust deed, order of charity commissioner and probate
85. Stamp duty on which of the following documents does not vary from
state to state – Mortgage agreements, hypothecation agreements, guarantee
agreements and bills of exchange.
86. If no time for payment is specified in a promissory note or bill of
exchange, such an instrument is considered as – instrument payable on demand
87. Acceptance
is not required in the case of promissory note and demand bill of exchange
88. To open
an executor account the bank should insist on probate
89. The following do not fall within the implied powers of a partner under
section 19(2) of the Partnership act, 1932 – opening a banking account on
behalf of the firm in his own name, compromising or relinquishing any claim or
portion of a claim by the firm and withdrawing suit or proceedings filed on
behalf of the firm
90. In a balance sheet, profit is shown under liabilities side
91. The term – preshipment advances is used to describe advances
granted to exporters for the purpose of manufacturing, processing, packaging
etc. or simply procuring goods meant for export
92. In an account of a minor operated by the guardian, after the death of
the guardian, the balance cannot be paid to the minor even though he has
completed the age of 10 years
93. On the death of a partner, the firm having credit balance stands
dissolved and to wind up the affairs of the firm the surviving partners are
allowed to jointly operate the account and if it decides to continue after
registering the Municipal Death certificate recording fresh mandate for
operation, the existing account can be continued and operation allowed
94. Opening a banking account on behalf of the firm in his own name,
compromising or relinquishing any claim or portion of the claim by the firm,
withdrawing suit or processing filed on behalf of the firm do not fall within
the implied powers of a partner under Section 19(2) of the Partnership act –
1932.
95. Garnishee order attaches debts due or accruing due. This means
deposits payable on demand and payable at a future date
96. Parties to a guarantee are Principal debtor, surety and creditor
97. A cheque may be crossed by drawer or holder
98. The purpose of mortgage is to possess the ownership of others
property
99. A banker can set-off the amount held in the time deposit account of
customer against the debit balance of the same customer in overdraft account
only after maturity of the fixed deposit
100. Civil Procedure code provides the provision exemption for arrest in
execution of a decree for money under Section 56
::::::::::::::
BULLET POINTS: PART: 015
01. Money
laundering prevention act 2002 became effective since 1.7.2005
02. Cooperative
Bank organization in India has three tier set up – Primary credit society;
district cooperative bank and state cooperative bank
03. The foreign
direct investment limit in private sector bank is 74%
04. RBI has
partial control on – cooperative bank
05. The committee
which has proposed National Rural Bank is – N. Janardhan Reddy committee
06. The
organization whose functions has been taken over by NABARD from RBI are –
Agricultural Refinance and Development Corporation; National Agricultural
Credit Fund (long term operation) and National Agricultural credit fund
(stabilization)
07. The first modern bank in India – Presidency Bank and it was
established during 1806
08. International Monetary Fund was established on 27.12.1945
09. International Monetary Fund has its headquarters at Washington DC
10. World Bank was established during the year 1944 and it has its head
office at Washington DC
11. World Bank is a group of International Bank for Reconstruction and
Development; International Development Agency; Multi lateral Investment of
Guarantee Agency and International Centre of Settlement Investment Dispute
12. IBRD – International Bank for Reconstruction and Development was
established in 1945
13. IDA – International Development Association was established in 1960
14. IFC was established in 1956
15. ICSID – International Centre for Settlement and Industrial Disputes
was established in 1966
16. MIGA – The Multilateral Investment Guarantee Agency was established in
1988
17. Asian Development Bank was established in December, 1966
18. Asian Development Bank has its head office at Manila
19. World Trade Organization – WTO was established during the year, 1995
and it has head office at Geneva
20. OPEC – Organization of the Petroleum Exporting Countries was
established in 1960
21. Association of South East Asian Nations was established on 8.8.1967
and it has head office at Jakarta
22. Imperial Bank was established during the year, 1921
23. Reserve Bank of India was established in 1.4.1935
24. RBI was nationalized on 1.1.1949
25. Industrial Finance Corporation of India was established during year,
1948
26. ICICI was established during January, 1955
27. Unit Trust of India was established on 1.2.1964
28. Industrial Development Bank of India was established during July, 1964
29. NABARD was established on 12.7.1982
30. IRBI – Industrial Reconstruction Bank of India was established on
20.3.1985
31. IRBI has been renamed as IIBIL since 6.3.1997
32. SIDBI was established during 1990
33. SIDBI – Small Industries Development Bank of India
34. ICICI – Industrial Credit and Investment Corporation of India
35. EXIM Bank was established on 1.1.1982
36. National Housing Bank was established during July, 1988
37. Life Insurance corporation of India was established during September,
1956
38. General Insurance Corporation was established during November, 1972
39. Regional Rural Banks were established during 2.2.1975
40. Risk Capital and technology Finance Corporation Limited was established during March 1975
41. Technology Development Information Company of India Limited was
established during the year 1989
42. Infrastructure Leasing and Financial Services Limited during the year,
1988
43. Housing Development Finance Corporation Limited was established during
the year, 1977
44. State Bank of India was established during the year, 1955
45. Securities and Exchange Board of India was established during the
year, 1988
46. Asian Development Bank – ADB established during the year 1966 has its
head office at Manila – Phillipines
47. Asian Pacific Economic Cooperation – APEC established during the year,
1989 has its headquarters at Singapore
48. Shanghai Cooperation Organization – SCO established during the year,
1966 has its headquarters at Beijing – China
49. African Union established during the year, 2001 has its head office at
Addis Ababa – Ethiopia
50. European Union established during the year, 1991 has its headquarters
at Brussels (Belgium)
51. Caribbean Development Bank – CDB established during the year, 1969 has
its headquarters at St. Michael – Barbados
BULLET POINTS - PART: 016
01. Shiksha Sahyog Yojana – SSY was
launched during the year 2001-2002 with an objective to provide education for
children living below poverty line
02. Sampoorna Gramin Rojgar Yojana -
SJRY was launched during the year, 2001 for providing employment and food
security
03. Jai Prakash Rojgar Guarantee Yojana- JPRGY was launched during the year 2002-2003
to provide employment guarantee to unemployed in the most backward districts in
the country
04. National Food for work programme –
NFFWP was launched during the year 2004 – to intensify the generation of
supplementary wage employment
05. Bharat Nirman Programme - BNP was
launched during the year 2005 – for the development of rural infrastructure
including six components: irrigation, water supply, housing, road, telephone
and electricity
06. National Rural Health Mission - NRHM was launched during the year 2005 to
provide accessible, affordable and accountable quality health services to the
poorest households in the remotest rural regions
07. Jawaharlal Nehru National Urban Renewal Mission was launched during the
year, 2005-2006 to assist cities and towns in taking up housing and
infrastructural facilities to the urban poor
08. National Rural Employment Guarantee Act –
NREGA was launched during the year, 2006 to provide at least 100 days wage
employment in rural areas
09. Ujjwala scheme was
launched during
the year, 2007 for the prevention of trafficking and rescue, rehabilitation
and reintegration of victims of trafficking for commercial sexual exploitation
10. Aam Aadmi Bhima Yojana – AABY was launched during the year, 2007 – to provide insurance to
the head of the family of rural landless households in the country against
death and disability
11. Rashtriya Swasthiya Bima
Yojana – RSBY was launched during the year, 2007. As
per the scheme the workers and their family members in the unorganized sector,
living below poverty line will be covered for health care, smart cards to be issued
to the beneficiaries to enable cash less transaction – the total sum assured is
Rs. 30000 per family per annum. Central and state share is 75:25
12. Indira Gandhi National Old
Age Pension Scheme – IGNOAPS was launched during the year, 2007 to
provide monthly pension of Rs. 200 to those people living below poverty line,
who has crossed 65 years of age
13. Unorganised workers social security act was launched during the year
2008 to provide social security to the poor workers and their families working
in un-organised sector
14. Indira Gandhi National
Widow Pension Scheme and Indira Gandhi National Disability Pension
Scheme were launched during the year, 2009 to provide pension of Rs. 200 to
widows between the age group 40-64 years and disability pension scheme aims to
provide pension to severely disabled persons.
15. Pradhana Mantri Adarsh
Gram Yojana was launched during the year, 2009 – with the
main objective for integrated development of 1000 villages having population of
scheduled castes above 50%
16. Sarva Siksha Abyan was launched during the year 2010-2011 to provide scholarship for
SC/ST students of classes IX and X
17. MGNREGA was launched during the year 2011 – to increase the remuneration of
Anganwadee workers from Rs. 1500 to 3000 per month and for Anganwadee helpers
from Rs. 750 to Rs. 1500 per month
18. BSE – is
situated at Mumbai
19. NSE – National Stock Exchange was
incorporated in 1992
20. NSE was
incorporated by Industrial Development Bank of India, Industrial Credit and
Investment Corporation of India, Industrial Finance Corporation of India, all
insurance corporations, selected commercial banks and others.
21. NSE
provides exposure to investors in two types of markets namely; wholesale debt
market and capital market
22. Capital market
is the market for long term funds
23. A savings
bank is a financial institution whose primary purpose is to accept savings
deposits
24. A
commercial bank is an institution which accepts deposits, makes business loans
and offers related services.
25. Development
Banks are those financial institutions engaged in the promotion and development
of industry, agriculture and other key sectors
26. Development
banks are IFCI; ICICI and IDBI
27. IFCI –
Industrial Finance Corporation of India
28. ICICI –
Industrial Credit and Investment Corporation of India
29. IDBI –
Industrial Development Bank of India
30. Cooperative
Banks are registered under the Cooperative Societies act, 1912
31. The
following are the functions of exchange banks – remitting money from one country
to another country, discounting of foreign bills, buying and selling gold and
silver and helping import and export trade
32. The
functions of banks can be classified into three parts namely; primary
functions, secondary functions and social/development functions
33. The primary
functions are – accepting deposits and advancing loans
34. The
different types of deposit accounts are: Term deposits namely – Fixed deposit,
Reinvestment deposit and Recurring deposit; current account; savings deposit
and demat account
35. The
different types of loans are – cash credit, overdraft, loans and advances,
discounting of the bill of exchange and investment in government securities
36. The secondary functions can be classified into agency or
representative functions, general utility services and social/developmental
functions
37. Agency or representative functions include – collection and payment of
various items; purchase and sale of securities; trustee and executor services;
remitting money; purchase and sale of foreign exchange; letter of references
and other agency functions
38. General utility services include – locker facilities, business
information and statistics; help in transportation of goods; acting as a
referee; issuing letters of credit; acting as underwriters; issuing of
travelers cheques and credit cards; issuing gift cheques, dealing in foreign
exchange and merchant banking services.
39. The social development functions include – capital formation,
inducement to innovations, impact on the rate of interest, role in the
development of rural sector and helpful in pushing up the demand
40. E-banking is also called as virtual banking
41. The popular services which are covered under e-banking are: automated
teller machine, debit card, electronic funds transfer, mobile banking,
telephone banking, credit card, smart card, cheques truncation payment and
internet banking
42. Securities and Exchange Board of India – SEBI was established in 1992
43. Control of capital issues was the regulatory authority before SEBI
came into existence
44. SEBI has to be responsive to three groups namely; the issues of
securities; the investors and the market intermediaries
45. PMAC – Primary Market Advisory Committee
46. SMAC – Secondary market advisory committee
47. SCODA – SEBI committee on disclosures and accounting standards
48. SIDBI – Small Industries Development Bank of India – SEBI was
established in 1989
49. IRBI – Industrial Reconstruction Bank of India has been reconstituted
into a full fledged all purpose development bank on 27.03.1997 under the
companies act and it is now known as Industrial Investment Bank of India
Limited.
50. National Housing Bank was established in July 1988 under National
Housing Bank act 1987
BULLET POINTS - PART: 017
01. In the
case of a bearer cheque, the
identity is not necessary
02. When an order cheque is endorsed in blank, it becomes payable to bearer and
transferable by mere delivery
03. A cheque crossed “Not Negotiable”
is still transferable
04. As per section 138 of Negotiable Instruments Act, there is a provision
of penalty when the cheque issued in
discharge of a liability is dishonoured
due to insufficient funds in the account and if the cheque has been
presented to the bank within a period of six months and is not honoured due to
insufficient funds
05. A fixed
deposit receipt cannot be endorsed
06. A cheque is presented in an account but there is no sufficient balance
to meet the same. The cheque will be returned with the remarks –
insufficient funds
07. The cheque on behalf of a partnership firm can be stopped for
payment by any partner whether authorized to operate the account or not
08. The marginal farmer is one who possesses agriculture land up to
1.25 acres of irrigated or 2.5 acres of non-irrigated land
09. Registration of charge is not required in the case of pledge, lien,
set-off and appropriation
10. Loans for construction of godown for own use of farmers is not part
of indirect finance to agriculture
11. Olericulture is cultivation of vegetables
12. Agriculture labourer is a labourer whose income from agriculture is
more than 50%
13. Nostro account is an account of Indian Bank with a Foreign Bank in
foreign currency
14. Resident
Foreign Currency (RFC) account scheme is available for Home Returned NRI
15. Under packing credit limit, the extent of finance is computed on
the basis of FOB
16. Forfaiting refers to discounting of export bill without recourse to
the seller
17. In an overdraft account, when the death notice of partner is received the
bank should stop the operations to avoid application of Clayton’s case
18. A company is not dissolved by lunacy of a director or bankruptcy of
a director or death of a director
19. In the case of insolvency, the banker’s obligation to honour
customers’ cheques comes to an end when the customer is adjudged insolvent
20. A lien is the right to retain goods or securities belonging to a
debtor until he has discharged a debt due to the retainer thereof
21. The shareholders of a Private Limited Co cannot transfer the shares
to other public
22. The rule in Clayton’s case applies in the case of running accounts
having debit balances
23. The term banking has been defined by Banking Regulation act – 1949
24. Bills drawn in respect of goods delivered by parties to various Government/Semi
Government departments are known as supply bills
25. Goiporia committee has made the recommendation – Commencement of
employee working hours should be 15 minutes before commencement of business
hours
26. Banking companies are registered under – Banking Regulation act
27. Bipartite settlements are registered under Industrial Disputes Act
28. Financial products, whose prices are derived from the price of the
underlying currency, interest rate, stocks etc. are called – securitization
29. Revaluation reserves is a part of subsidiary capital/tier II
capital
30. Y V Reddy – committee had revised
the concept of liquidity and monetary aggregates
31. Verma
Committee was appointed to examine
the restructuring of weak banks
32. The
process through which any member-owned organization becomes a shareholder-owned
company is called demutualization
33. Official Language deals with the following articles of constitution – 343
to 351
34. Hindi was declared as the official language of the union on 14-09-1949
35. The system of electronic funds transfer was suggested by the committee
headed by – B D Shah
36. INFINET is – RBI’s VSAT
based communication system
37. The negotiable instruments act is applicable in the entire part of
the country
38. If the cheque is drawn in favour of “Mother God” or order, the
cheque is to be returned since drawn on fictitious name
39. A cheque payable to Rohit is endorsed as follows – Pay to “Kabil on
his marriage”. This endorsement is conditional endorsement
40. The
cheque crossed – account payee drawn in favour of Mr Brij Nand is presented by
Ramana Nand in his account and in this case the bank should not make the
payment
41. The following are not negotiable instruments – airway bill, a
currency note, a letter of credit and lorry receipt
42. Under section 25 of Negotiable Instruments Act, public holidays are
declared by – the state government by notification in the official gazette
43. Conversion means – not crediting the amount in the account of true
owner
44. By “General Crossing” we mean two transverse parallel lines on a
cheque
45. Forward exchange contract is an agreement where the foreign
exchange is delivered at predetermined future date at a contracted date
46. Unless otherwise specified in the letter of credit, the insurance
amount should be expressed in the currency of the letter of credit
47. On the death of the partner, bank opens a new account to rule-of
the existing account to avoid application of Clayton’s case
48. Executor – in banking means a person named by the deceased in his
will and for which probate is obtained
49. The partnership firm doing the banking business cannot have more than
10 partners, and other business not more than 20 partners otherwise it will
become illegal association. It is provided in Companies act
50. Prospectus
is an invitation to the public to subscribe shares or debentures or deposits
51. According to the rule in Clayton’s case, the money paid in by a
customer has to be applied towards adjustment in overdraft account in order
of time in which the debits were incurred
52. Banking company is prohibited for undertaking business like trading of
goods etc under – Banking Regulation act 1949
53. In the case of return of cheque for availing remedy under section 138 of Negotiable Instruments act, the
holder will have to give notice to the drawer within 30 days of return of
cheque
54. When a firm has branches at different places and wishes to avail the
loan at all stations, the documents will be executed at its Head Office and
sub limits will be allocated to branches at different places
55. In case of any doubt about stamp duty, clarification can be sought
from State Stamp Authority and Controller of stamp duty
56. Banks were nationalized under – Banking Company (Acquisition and
transfer of undertaking) act-1970
57. When an account shows debit balance, the banker is a creditor and
when the account shows credit balance, the banker is the debtor
58. Partnership firms cannot do the business of banking and it is
provided under the banking regulation act
59. The concept of authorized deduction and illegal deduction is mentioned
in the act – Payment of wages act
60. The process of replacing paper securities into electronic holding of
shares is known as – dematerialization
61. Official Language policy came into force from 16.01.1950
62. The Central Processing Unit – CPU- consists of control unit and
arithmetic logic unit
63. When the price of a dollar is raised from Rs. 48 to Rs. 55, the exporter will be benefited in terms of
rupee
64. A cheque is the mandate of the accountholder
65. When a cheque without a date is presented for payment, the banker
should return the cheque
66. In a cheque the name of the banker had been written with or without
the words – “Not negotiable” – In this case, it is called as a
special crossing
67. For negotiating a negotiable instrument there are no limits
68. A bearer cheque is transferable only by delivery
69. A bill drawn in Paris and drawn in favour of a trader in Mumbai and
payable in Chennai is called a foreign bill
70. The Negotiable Instruments Act provides protection to the collecting
banker in respect of Conversion
71. Crossing of a cheque denotes that it should be paid to a banker
only
72. By noting, it is meant that
the fact of dishonour has been recorded by the notary public on a dishonoured
bill or/and on a plain paper attached to the bill
73. Sericulture is classified under – direct agriculture advance
74. Mahima relates to refinance by NABARD to banks for onlending to agencies for marketing of non farm
products of rural women
75. Foreign exchange transactions are viewed always from the angle of
the bank
76. The responsibility of managing the foreign exchange resources lies
with – Reserve Bank of India
77. EXIM policy is announced by the Ministry of Commerce
78. In a
Free on Board contract, freight and insurance will be borne by the importer
79. If a
letter of credit is slient about the revocability, then the letter of credit
is irrevocable
80. Crystalisation of sight export bills purchased/negotiated will be done
on the expiry of transit period plus 30 days
81. A transferable letter of credit can be transferred only once
82. Natural guardian under Hindu Minority and guardianship act, 1956 will
be – his father and after him the mother
83. For banking transactions, an administrator is one who is appointed by
the court if the deceased has died intestate
84. Banker’s lien is an implied pledge
85. A contract of insurance is a contract of indemnity
86. Acceptance of an usance bill will be made on the face of the bill
87. The right of set-off can be exercised by the banker only when the
relationship between the customer and the banker is that of debtor and creditor
88. Bank must create reserve fund and 25% of the profits should be
transferred to this fund before any dividend declared is contained in Banking
Regulation act
89. Limitation
period for availing the remedy under Section 138 of Negotiable Instruments Act
is one month from the date of cause of action
90. In case the amount of loan to a company is decreased or increased, the
memorandum of modification or charge is submitted to the Registrar of companies
91. The rate of revenue stamp is the same throughout India except in
Jammu and Kashmir
92. When articles are kept in safe custody, the relationship between
banker and customer is that of bailee
and bailor
93. In the case of minor’s joint account with the guardian and when the
minor attains majority, the guardian should not be allowed to operate the
account
94. Wages of employees are settled under Minimum wages act
95. CB Bhave committee has looked into ways to reduce cost of demat
operations and the said companies should bear a substantial part of
dematerialization costs
96. Basle committee relates to Capital Adequacy
97. In Camel’s rating – E stands for earnings
98. The revised definition of a sick SSI unit has been given by Kohli
committee
99. Greenshoe option is retaining the full/part of equity subscribed by
investing public over and above that issued
100.Hindi is accepted as an official language of the union under
Devanagiri script
:::::::::::::::::::::
BULLET POINTS - PART: 018
01. RBI was
established during the year, 1935
02. RBI act
was enacted during 1934
03. RBI has
three main functions namely; traditional functions, development functions and
regulatory functions
04. The
traditional functions consist of issue of currency, forex management and
miscellaneous functions.
05. The
miscellaneous functions include export assistance, clearing house functions,
change of currency, transfer of currency, publication of statistics and other
information, training in banking
06. The
development functions mainly consist of agriculture development, promotion of industrial
finance, promotion of export through refinance, development of bill market and
development of banking system
07. The
regulatory functions mainly consist of qualitative credit control, bank rate,
differential rate of interest, open market operations, CRR, SLR, direct action,
credit authorization scheme and moral persuasion
08. The
financial system comprises of– financial markets, financial assets and
financial intermediaries and institutions
09. Financial
markets are classified into money market and capital market
10. The
capital market consists of the following financial instruments namely;
government or gilt edged securities, corporate securities, shares, debentures,
public deposits and loan from institutions
11. The
financial regulatory authorities in India consist of RBI, SEBI and IRDA
12. The
money market terms are: money market, call money, notice money, term money,
held till maturity, yield to maturity, coupon rate, treasury operations and
gilt edged securities
13. The
financial instruments consist of bills, treasury bills, promissory notes,
hundies, certificate of deposits and commercial papers.
14. Stock
exchanges are available in important cities in the country
15. Mumbai
stock exchange – Mumbai
16. National
stock exchange – Mumbai
17. Ahmedabad
stock exchange – Ahmedabad
18. Bangalore
stock exchange – Bangalore
19. Bhubaneswar
stock exchange – Bhubaneswar
20. Kolkatta
stock exchange – Kolkatta
21. Cochin
stock exchange – Cochin
22. Coimbatore
stock exchange – Coimbatore
23. Delhi
stock exchange – Delhi
24. Guwahati
stock exchange – Guwahati
25. Hyderabad
stock exchange - Hyderabad
26. Jaipur
stock exchange – Jaipur
27. Ludhina
stock exchange – Ludhiana
28. Madhya
Pradesh stock exchange – Indore
29. Chennai
stock exchange – Chennai
30. Magadh
stock exchange – Patna
31. Mangalore
stock exchange – Mangalore
32. Meerut
shah stock exchange – Meerut
33. OTC
Exchange of India – Mumbai
34. Pune
stock exchange – Pune
35. Capital
stock exchange of India – Trivandrum
36. Uttar
Pradesh stock exchange – Kanpur
37. Vadodara
stock exchange – Vadodara
38. There
are different types of banks namely; savings bank, commercial bank, Industrial
bank, development bank, Land development bank, indigenous bank, central bank,
cooperative bank, exchange bank, consumer bank
39. Banks
have the following functions namely; primary functions, secondary functions and
social development functions
40. The
primary functions consist of accepting deposits namely; fixed deposit, savings
bank, current account, recurring deposit, demat account
41. The
primary functions consist of granting different categories of loans namely;
cash credit, overdraft, loans and advances, discounting of bill of exchange,
investment in government securities
42. The
secondary functions can be classified into agency or representative functions
and general utility services
43. The
agency or representative functions consist of – collection and payment of
various items; purchase and sale of securities; trustee and executor business;
remitting money; purchase and sale of foreign exchange; issue of letter of
references and other agency functions
44. The
general utility services consist of locker facilities, business information,
help in transportation of goods, acting as a referee, issuing of letters of
credit, acting as underwriters, issue of traveler cheques, issue of gift
cheques and dealing in merchant banking
45. The
social development functions consist of capital formation, inducement to
innovations, impact on the rate of interest, role on the development of rural
sector and helpful in pushing up the
demand
46. The
popular services covered under e-banking are; automated teller machine, debit
card, credit card, smart card, EFT, cheque truncation payment, mobile banking,
internet banking and telephone banking
47. The
services of e-banking include bill payment service, funds transfer, credit card
customers, railway pass, investing through internet banking, recharging prepaid
mobile connections, shopping, RTGS funds transfer and online payment of taxes
48. The
Narasimhan committee report I pertains to 1991 consisting of reduction in
SLR/CRR; phasing out of directed credit program; interest rate determination;
structured reorganization of the banking sector, establishment of ARF tribunal,
removal of dual control and banking autonomy
49. The
second Narasimhan committee report pertains to the year, 1998 consisting of
strengthening of banks in India, narrow banking, Capital adequacy ratio, bank
ownership and review of banking laws
50. The
cooperative banking structure consists of five categories namely; primary
agricultural credit society; district central cooperative banks; state
cooperative banks or apex banks, Land Development Banks, SCARDB and Primary
Urban Cooperative banks
BULLET POINTS - PART: 019
01. The following
are covered in negotiable instruments act: promissory note, bill of exchange,
cheque, exchequer bill, circular note, dividend warrant, share warrant, bearer
debenture, bank note, bank draft
02. The
following are not negotiable instruments: money order, postal order, deposit
receipt and share certificate
03. The
following are semi negotiable instruments: bill of lading, dock warrant,
carriers’ receipt, letters of credit, railway receipt and wharefinger’s
certificate
04. The bill
of exchange consists of three parties namely; drawer, drawee and payee
05. There
are four categories of cheques namely; open cheque, crossed cheque, bearer
cheque and order cheque.
06. Open
cheque is un crossed cheque or is called as blank cheque
07. Two
parallel transverse lines on the face of the cheque denotes crossing of the
cheque
08. When the
name of any bank is written between the two transverse lines, it is called as
special crossing
09. Normally
all cheques are bearer cheques. It means that it can be payable to the payee or
to the bearer of the cheque
10. By
striking the words “bearer” in the cheque, the cheque can be made payable to
order
11. Cheques
can also be categorized into ante dated cheque, stale cheque, mutilated cheque
and post dated cheque
12. When the
cheque is out of date, it is said to be a stale one
13. When the
cheque contains unwanted words or figures in the chque and some portion of the
cheque is found missing, it is said to be mutilated
14. Post
dated cheques are cheques where the date of the cheque is found to be the
future date
15. The
following are the varieties of hundies namely; darshani hundi, mitti hundi or
muddati hundi, nam-jog hundi, furman jog hundi, dhani jog hundi, shah jog
hundi, jokhim hundi, jawabi hundi, khaka hundi and khoti hundi
16. Dharshani
hundi is payable immediately on demand
17. Mitti
hundi is payable after the expiry of some period
18. Nam jog
hundi is payable only to person named in the hundi
19. Furman
jog hundi is payable to person the named in the hundi or any other person
20. Dhani
jog hundi is payable to holder or bearer
21. Shah jog
hundi is payable to shahs in the area
22. Johim
hundi consists of conditions
23. Jawabi
hundi invites acknowledgment from the person on acceptance
24. Khaka
hundi is one which has been paid already
25. Khoti
hundi is a defective hundi
26. In the
case of deposit, the customer is creditor and the banker is debtor
27. In the
case of overdraft account, the banker is creditor and the customer is debtor
28. A person
who makes deposit with the bank is called as the depositor
29. A person
who avails loan from the bank is called as the borrower
30. When any
loan is backed by any immovable security like land, house, factory, it is said
to be under mortgage
31. The
person who mortgages the security is called as the mortgagor and the banker is
called as the mortgagee
32. When any
loan is backed by any movable security like auto, truck, computer etc. it is
said to be under hypothecation
33. The
person who hypothecates the security is called as the hypothecator and the
banker is called as the hypothecatee
34. When a
person avails any loan against the security of LIC policy, it is said to be
under assignment
35. When a
person offers a fixed deposit as security for a loan, it is treated as pledge
36. The
customer who pledges the deposit is called as pledgor
37. The
banker on whom the deposit is pledged is called as the pledge
38. In the
case of locker, the customer is lessee and the banker is called as lessor
39. In the
case of safe custody receipt, the customer is called as bailor and the banker
is called as the bailee
40. The
different types of customers are – individuals and others
41. The
individuals can be single individuals, joint individuals, minors, married
woman, pardanashin woman, illiterate person and lunatic
42. In the
case of hindu undivided family, the senior most male member is called as the
karta
43. The
business accounts can be opened by partnership firm, trustees, societies,
charitable institutions and clubs
44. The
person named in the will to receive the properties in the will is called as
executor
45. In the
absence of will, the person who is appointed by the court to receive the money
is called as the administrator
46. Proprietorship
firm is an account managed by a single individual called as proprietor
47. Companies
can be divided into private limited company and public limited company
48. When the
bank in India opens an account with a bank in a foreign country it is called as
nostro account
49. When the
bank in a foreign country opens an account with a bank in India, it is called
as vostro account
50. When a bank in one foreign country opens an account with another
bank in another country it is called as Loro account
BULLET POINTS - PART: 020
01. When a
company wants to open an account with a bank, they have to produce the
following namely; memorandum of association, articles of association,
certificate of incorporation, board resolution and certificate of commencement
of business
02. Banks
are subjected to the following risks namely; credit risk, liquidity risk,
operations risk and market risk
03. Account
to KYC guidelines, customers are classified into low risk customers, medium
risk customers and high risk customers
04. Low risk
clients are – salaried customers, government departments, government owned
companies, regulatory and statutory bodies
05. Medium
risk clients are – High net worth individuals, Non Resident individuals, blind
people and pardanashin women
06. High
risk clients are – trusts, charities, NGOs receiving donations, sleeping
partners, persons who are covered under foreign contribution act, politically
exposed persons of foreign origin, non face to face customers, high net worth
NRI clients and bullion dealers and jewelers
07. Agriculture
advances can be classified into direct agriculture and indirect agriculture
08. The
following are considered to be the direct agriculture activities namely;
finance to individual farmers, self help groups and joint liability groups who
avail loan for agricultural purpose, crop production, investment loans, pre
harvest and post harvest activity related loans
09. Indirect
finance comprises of 2/3 rd loans to corporate, partnership firms, agro clinics
and agribusiness centre, credit to fertilizers and pesticide and seed dealers,
drip irrigation activities and sprinkler activities
10. Priority
sector loans consist of retail trade, small business, professional and self
employed, agriculture, small scale industries, self help groups, DRI loans,
SC/ST beneficiaries
11. The
following are considered to be weaker sections as per RBI guidelines – small
business, marginal farmers, artisans/village and cottage industries for whom
loans were granted up to Rs. 50000; SGSY beneficiaries, SC/ST beneficiaries,
DIR, SJSRY beneficiaries, self help groups and minority community beneficiaries
12. In the
case of deposits, father and mother are called as natural guardians
13. Savings
bank account is termed as mother of deposits
14. The
following security provisions are available in a currency note namely; security
thread, latest image, micro letterings, identification mark, intaglio printing,
fluorescence, optically variable ink
15. The
different categories of cooperative banks in the country are – primary
agricultural credit societies, district central cooperative banks, state
cooperative banks or apex banks, land development banks, SCARDB and primary
urban cooperative banks
16. The
rights of customers are – right to line, right to set off, right to
appropriation, right to charge interest, commission and service charges
17. Lien is
classified into particular lien and general lien
18. Different
types of NBFC companies are – equipment leasing, hire purchase company, loan
company, asset finance company, residuary non banking company, mutual benefit
financial company, mutual benefit company and miscellaneous non banking company
19. The
following private insurance companies are available in the country namely; HDFC
standard life insurance co limited, MAX New York Life Insurance Co. Limited,
ING Vysya Life Insurance Co Private Limited, ICICI prudential life insurance co
limited, Kotak Mahindra life insurance co limited, Iffko Tokyo General
Insurance co limited, Metlife India Insurance co limited, SBI life insurance co
limited.
20. The
specific principles of insurance business are – utmost good faith, insurable
interest, indemnity, proximate cause and subrogation
21. The
various products of Life Insurance corporation of India are – Term Insurance,
whole life, endowment plans, money back, children’s assurance plan and unit
linked insurance plan
22. PMAC –
Primary market advisory committee
23. SMAC –
Secondary Market advisory committee
24. SCODA –
SEBI committee on disclosures and accounting standards
25. TDICI –
Technology development and Information company of India Limited
26. CFC –
Credit capital finance corporation
27. VCF –
venture capital fund
28. GVCFL –
Gujarat venture finance company limited
29. GIIC –
Gujarat Industrial Investment Corporation Limited
30. RCTFC –
Risk capital and technology finance corporation Limited
31. RNBC –
Residuary non banking company
32. MBC –
Mutual benefit company
33. MNBC –
miscellaneous non banking company
34. ARWIND –
Assistance to rural women in non farm development
35. NABCONS
– NABARD consultancy services
36. STCC –
short term rural cooperative society
37. FSDC –
financial stability and development council
38. PCR –
Partial rupee convertibility
39. CAC –
Capital account convertibility
40. GST –
goods and services tax has been replaced by VAT
41. Investor
protection fund was established by BSE
42. FRBM –
Fiscal responsibility and budget management
43. Yuan is
the currency of China
44. Credit
cards and debit cards are called as plastic money
45. IFRS –
International finance reporting standards
46. The
different types of credit are cash credit, micro credit, simple overdraft, no
frill loans and rural credit
47. IPR –
Intellectual property rights
48. State
Bank of Indore was merged with State Bank of India
49. Banking
services fall under service sector
50. Laxmi
commercial Bank merged with Canara Bank
BULLET POINTS - PART: 021
01. The
first private bank in India to receive an in principle approval from Reserve
Bank of India was Housing Development Finance Corporation
02. The
actual return of an investor is reduced sometimes as the prices of the
commodities go up all of a sudden. In financial sector this type of phenomenon
is known as market risk
03. The Narasimhan committee for financial sector
reforms suggested reduction in statutory liquidity ratio and cash reserve ratio
04. The Global enabling trade report is released
by world economic forum
05. Coins are minted at Mumbai, Hyderabad, Noida
and Kolkatta
06. The set of directive principles issued by the
central bank of a country or the process adopted by it to control the supply of
money, availability of money, cost of money and rate of interest, etc in order
to bring stability and growth of the economy are commonly known as – monetary
policy of the central bank of the country
07. Deciding policy rates like cash reserve
ratio, repo rate and statutory liquidity ratio are not the functions of a
commercial bank
08. Banks do not issue pan cards
09. Petro dollar means – money owned by oil rich
countries invested in United States of America
10. Banking regulation act was framed specially
to deal more effectively with the problem of non- performing assets in banking
system
11. The new capital adequacy framework prescribed
for the banks is commonly known as basel accord
12. PFRDA stands for – Pension Fund Regulatory
and Development Authority
13. Indian Bank Association recently prepared a
charter of the banking codes and services
14. SEBI is called as Securities and Exchange
Board of India
15. SEBI has asked all foreign funds to come
forward and register themselves as foreign institutional investors prior to any
investment in India
16. PMGSY – Pradhan Mantri Gram Sadak Yojana
17. PMGSY was launched in 2000
18. As compared to traditional budgeting,
the performance and programme budgeting
system stresses more an outcome and less on expenditure allocation
19. Regional Rural Banks are empowered to
transact the business of banking as defined under Banking Regulation act 1949
20. According to the Securities and Insurance
Laws (Amendment) Bill 2010, RBI Governor will be the vice chairman of joint
commission to resolve differences amongst the financial regulators
21. Adjustment credit is used in the field of
finance and banking
22. Increase in interest rates is found to be the
best option when RBI wants to block/hinder capital outflows and contain
currency depreciation.
23. Globalisation means – the growth of a single
united world market
24. The inflationary impact of the inflow of
foreign capital in India is neutralized by RBI by sale of securities in the
open market
25. The main function of International Monetary
Fund is to help to solve balance of payment problems at member countries
26. Bank of Baroda is having the largest number
of branches in foreign countries
27. The documents which are considered as
officially valid document to satisfy KYC guidelines for opening one bank
account – pass port, PAN card, aadhar number issued by Unique Identification
Authority of India
28. The standard of living in a country is
represented by its per capita income
29. Phishing means – fraudulent way of acquiring
PIN and bank passwords using email
30. State Bank of Mysore merged with State Bank
of India during 2010
31. Prudential ICICI Mutual fund has been renamed
as ICICI Prudential Mutual Fund
32. Government of India is in the process of the
establishment of SROs for various market participants in the capital market
33. SRO means Small Regulatory Organisation
34. Micro credit or micro finance is novel
approach to banking with the poor. In the approach bank credit is extended to
the poor through self help groups
35. Reserve Bank of India prepares the balance of
payments accounts in the country
36. An over valued currency in the foreign
exchange market will have the following impacts in the country namely – make
imports cheaper and exports costlier
37. When a large number of investors in a country
transfer investments elsewhere because of disturbed economic conditions, it is
called as flight of capital
38. Government of India promulgated Banking
Companies (acquisition and transfer of undertaking) ordinance to acquire 14
commercial banks on 19.7.1969
39. On the current account balances maintained by
the Regional Rural Banks with them, the commercial banks may pay interest at
such rates as may be mutually agreed to
40. Bank rate signals the Reserve Bank of India’s
long term outlook on interest rates
41. In deposit accounts KYC (Know Your Customer)
has been implemented in 2002 as per the directive of RBI
42. FRBM – Fiscal Responsibility and Budget
Management
43. As national initiative which allows pregnant
women to undergo delivery free of cost in government health institutions was
recently launched and the name of the scheme is Janani Shishu Suraksha Yojana
44. The following assets are considered as near
money – bonds, time deposits, equity shares and travellers’ cheques
45. Employer’s contribution to contributory
provident fund to employees is a transfer payment
46. Indian Depository Receipt is known as IDR
47. IDR is an instrument in the form of
depository receipt created by an Indian depository against underlying equity
shares of the issuing company
48. Mid day meal scheme has been launched by the
Ministry of Food and Civil Supplies of Government of India
49. NABARD is the apex institution which handles
refinance for agriculture and rural development in the country
50. ULIP stands for Universal Loan and Investment
Plan
BULLET POINTS - PART: 022
01. The most effective channel other than traditional branch channel to
achieve the aim of providing banking services to the people in rural and remote
areas – putting biometric ATMs
02. Land Development Banks form part of the cooperative credit structure
03. KYC guideline is basically an anti money laundering exercise
04. Bharat Nirman Yojana is not welfare scheme launched by the Government
of India
05. The following cannot be considered as a value added service offered by
any bank – free cheque books
06. The minimum number of women required for formation of women groups
under Development of Women and Children (DWCRA) program is 10
07. Dirham is the currency of UAE
08. The land development bank secure short term accommodation from – state
governments, commercial banks and state cooperative banks
09. GNP stands for gross national product
10. FINO means Financial Investment Network and Operations
11. Nationalisation of banks in the country took place under two phases –
the first phase on 19.7.1969 for fourteen banks and on 15.4.1980 in the second
phase for six banks
12. Industrial Exit policy means allowing the business units to close down
13. The following is not the feature of Real Time Gross Settlement – RTGS
– settlement of funds in revocables
14. The 2011 census is the 15th census
15. Sub Prime refers to lending done by financing institutions including
the banks to customers not meeting with normally required credit appraisal
standards
16. National Rural Employment Guarantee Scheme is associated with Mahatma
Gandhi
17. Currency is one among several terms used in banking
18. Standard and Poor is a credit rating agency
19. RBI is the banker of the banks and it is also called as the central
bank of the country
20. The first bank in the country to implement reverse mortgage in the
country is Punjab National Bank
21. Reverse mortgage scheme is beneficial for senior citizens for availing
loan against immovable properties
22. State Bank of India has been appointed for refunding income tax to tax
payers
23. Inflation has become a major area of concern in the country these days
and Government of India and Reserve Bank of India normally take to control the
same the following measures namely – system of dual prices; increase in supply
of food grains and control on credit and liquidity in market
24. Government of India these days is very keen about the credit to the
rural people and the product launched by the banks to provide loan/credit to
the farmers quickly – Kisan Credit Cards
25. SEBI was established during the year 1988
26. SEBI was made a fully autonomous body in 1992
27. SEBI regulates the securities market and protect the interests of the
investors in securities
28. The short and medium term cooperative credit structure in the country
federal in character consists of three tiers viz: the State Cooperative banks
at the state level; the central cooperative banks at the district level and
primary cooperative credit societies at the village level.
29. Mutual funds are regulated by – SEBI – Securities and Exchange Board
of India
30. Raghuram Rajan Committee had submitted recommendations on financial
inclusion
31. The main function of the International Monetary Fund is to help solve
balance of payments problem of member countries
32. NABARD is limited to the needs of agriculture and rural finance
33. SEBI is the regulator of the credit rating agencies in the country
34. The terms which are associated with banking operations are – repo
rate, prime lending rate and corporate finance
35. Joint Liability Groups replicate the self help groups
36. UTI bank has officially changed its name to Axis Bank Limited
37. A hot money or the refugee capital is one which is transferred from
one centre to another for greater safety
38. RBI has asked all the banks in the country to form customer service
panels at branch levels
39. Indra Awas Yojana is one of the most successful programs under Bharat
Nirman
40. SARFAESI act was framed specially to deal more effectively with the
problem of non performing assets in the banking system
41. Operation market operations of Reserve Bank of India refer to trading
in securities
42. SEBI has introduced a new tool named Data Warehousing and Business
Intelligence System (DWBIS) for speedy analysis of data and identification of
violations
43. EXIM bank is a term lending institution
44. Central Cooperative Banks occupy a crucial importance in the
cooperative credit structure
45. Central Cooperative Banks form an important link between the State
cooperative bank at the apex and the primary agricultural credit societies at
the base
46. Central cooperative Banks are closer to the primary societies than an
apex bank could be
47. In context with the business and banking, CRAR means Capital to Risk
Asset Ratio
48. Rangarajan committee is the first committee that gave its
recommendations relating to mechanization of banking system
49. The definition of banking has been given in Negotiable Instruments Act
1881
50. Employer’s contribution to contributory provident fund of employees is
a transfer payment
BULLET POINTS - PART: 023
QUESTIONS AND ANSWERS MODEL
51. What are the functions of
any bank? – The bank accepts deposits from the public and
lends loans to the public. Acceptance of deposits and lending loans are called
as the primary functions. The secondary functions are – selling gold coins,
selling insurance products and selling mutual fund products. Apart from the
above, the banks open demat accounts also.
52. What do you know by demand
deposits? – Current account and savings accounts are
called as demand deposits. Current account is opened for business purpose
carrying no interest and savings deposit is opened for the purpose of saving
the money and it carries interest. The interest is at present decided by
respective banks.
53. What do you know by KYC
guidelines? – KYC means Know your customer guidelines.
According to KYC, the bank demands address proof and identity proof from the
public when they open accounts with the bank. For address proof, copes of
ration card, voter ID card, AATHAAR card, telephone bill etc. are obtained. For
identity proof, copies of identity card issued by the employers, voter ID card,
driving licence, AATHAAR card etc. are obtained by the bankers.
54. What do you know by term
deposits? – Fixed deposits, recurring deposits and
reinvestment deposits are called as term deposits since these deposits are
opened for specific period. The minimum period for which the term deposit is
opened – 7 days and the maximum period: 10 years. Interest is paid according to
the period of deposit. Interest is decided by the respective banks only.
55. What do you know by fixed
deposit? – Fixed deposits are opened for a minimum period
of seven days and maximum period of ten years. Interest is paid according to
the period of deposit. In this scheme, a lump sum amount is deposited for a
fixed period and interest earned is obtained from the bank on quarterly basis.
In case the customer demands, interest is paid by the bank on monthly or fortnightly basis.
56. What do you mean by
recurring deposit? – According to this scheme, the customer can
remit monthly or quarterly a fixed
amount for a fixed period. For example, an amount of Rs. 1000/- can be
deposited for 60 months and interest is paid to the depositor according to the
period of deposit along with the principal amount on maturity of deposit.
57. What do you know by
reinvestment deposit? – Reinvestment scheme is nothing but fixed
deposit. Instead of getting the interest on fixed amount on monthly or
quarterly basis, the customer can get
the interest on maturity along with principal amount. Since interest is
reinvested, the customer is eligible to get interest for interest also.
58. What do you know by PAN
number? – PAN number is required for IT purposes and
when more than Rs. 50000/- is invested in time deposit accounts or remitted in
current or savings deposit accounts, the customer has to mention the PAN number
in the remittance slips.
59. Whether deposits can be
opened in the name of minor? – Yes,
deposits can be opened in the name of minors. The accounts are opened in the
name of minor duly represented by father and mother and they are called as
natural guardians. When the minor is a student and aged more than ten years, he
can operate the account himself. For this purpose, he should produce a
certificate from the headmaster or principal of the school where he is
studying.
60. Whether minor is eligible
for loans – Loans should not be granted to minors as per law
and as per law the loans granted to the minors cannot be demanded by legally.
61. What do you know by PIN
number? – PIN number is a four digit number used when
the customer operates automated teller machines. The PIN number consists of
four digits and instead of PIN number, thumb impressions are recorded in
biometric ATMs
62. What do you know by bank
nationalization? – As much as fourteen banks owned by private
entrepreneurs were nationalized on 19.7.1969 so that they can meet social
obligations. During the second phase, six banks were nationalized on 15.4.1980.
New Bank of India got merged with Punjab National Bank and as at present there
are twenty public sector banks including IDBI bank.
63. What do you know by
foreign bank? – Foreign banks have their headquarters in a
foreign country; however, they have branches in India as permitted by Reserve
Bank of India.
64. What do you know private
sector banks? – At present there are fourteen old private
sector banks in our country and seven new private sector banks namely; Axis
bank Limited, Development Credit Bank Limited, HDFC Bank Limited, ICICI Bank
Limited, Indus Ind bank Limited, Kotak Mahindra Bank Limited and Yes bank
Limited. According to the revised norms fixed by Reserve Bank of India, the new
private sector banks should have a minimum capital base of Rs. 200 crore.
65. What do you know by
central bank? Central bank is the bank which governs other
banks in the country. In our country RBI is the central bank. It has its
headquarters at Mumbai and the following are the functions of RBI namely –
currency note issue, banker to the banks, financial adviser to the government,
custodian of cash reserves of banks, lender of the last resort and controller
of credits etc.
66. What do you know by issue
of currency notes in the country? In our
country, up to one rupee note and coins, Government of India undertakes to
issue and currency notes coins valuing more than one rupee are issued by
Reserve Bank of India.
67. What do you know by
scheduled commercial banks? – The public sector
banks, SBI and its subsidiaries, all private sector banks, foreign banks and
Regional Rural Banks are called as scheduled commercial banks. They should have
been included in the second schedule of RBI act 1934; got licence for
conducting banking business as per Banking Regulation act, 1949 and should have
been incorporated either as per companies act or cooperative act.
68. What do you know by
commercial banks? – Commercial banks are banks which function for
profit and the following banks are included under the category of commercial
banks by RBI – State Bank and its subsidiaries, all nationalized banks
including IDBI bank, all private sector banks and foreign banks. The
cooperative banks and regional rural banks are not treated as commercial banks.
69. What do you know by cheque
book? Cheque books are issued when the customer is
having current account, savings deposit account or overdraft account. Cheque
books are issued for the purpose of withdrawal of money from the account.
Cheques are not issued in the case of term deposits namely; fixed deposit,
reinvestment deposit and recurring deposit. In the case of term deposits, the
customers are issued with deposit receipts mentioning therein the details of
deposits.
70. What do you know by
minimum balance? – When a customer is maintaining current account
and savings account, he should maintain minimum balance in the account. The
minimum balance is prescribed by the respective banks. When the amount falls
below the minimum balance during any day, penal charges are levied in the
account.
71. What do you know by
automated teller machines? – Automated Teller
Machines are used for the purpose of allowing the customer to withdraw money
twenty four hours a day using ATMs. The following services are available
through automated teller machines namely – cash withdrawal, balance enquiry,
mini statement up to last ten entries, pin number change, mobile recharge,
e-ticketing, transfer of funds etc.
72. What do you know by TDS? TDS is called as tax deducted at source. When a customer having a
fixed deposit account or reinvestment deposit account earns interest amount
more than Rs. 10000/- tax is deducted at source from the account according to
income tax laws prevalent in the country.
73. What do you know by core
banking solution? According to core banking solutions, all
branches of the bank are interconnected through a common server and a customer
can transact the business in his account from anywhere in the country.
74. What do you know by real
time gross settlement? _ According to RTGS, a
customer can send money more than Rs. 200000/- from his account to any other
account of another person having his account with the branch of the same bank
or any other bank. For example, a customer having an account with Canara Bank,
Kellys branch at Chennai can transfer the amount to the account of his father
with State Bank of India, Canning Street, Kolkatta. Banks charge normal service
charges for the remittance facility.
75. What do you know by either
or survivor? – When more than one individual opens an account it
is called as a joint account. Since the account is opened jointly by more than
one person, the account holders should specify the conditions for operation of
the account to the banker. In the case of E or S account, anyone of the customers
can operate the account individually. In the case of joint accounts, all
accountholders should operate the accounts jointly.
76. What do you know safe
deposit locker? – It is a facility provided by the bank for
safekeeping the valuable articles. Lockers are available in different sizes and
according to the size of the locker, charges are collected for the lockers. The
lockers are operated by the locker holder and the banker and for this purpose,
the customer is given one key pertaining to the locker and the banker is having the master key for
the entire unit.
77. What do you know by
nomination facility in the account? Nomination
facility is available for deposit
accounts namely; current account, savings account, fixed deposit, reinvestment
deposit account and recurring deposit account. The customer nominates a person
for the account to receive money on the death of the depositor.
78. What do you know by safe
custody service? – According to the scheme for safe custody service,
customers can safe keep their valuables with the banker for nominal service
charges. The valuables are kept in sealed packets or bundles and handed over to
the banker and the banker on receipt of the packet or bundle, furnishes a
receipt and when the customer is in need of the packet or bundle, he has to
produce the receipt to the banker.
79. What do you know by
proprietorship account? When a customer maintains
an account in his personal name, it is called as individual account and when he
opens an account in the name of a firm owned by him, it is called as
proprietorship account. For example, Balaji conducting a printing press can
open an account in the name of Balaji Printing services and this is a
proprietorship account opened for business purposes and Balaji is called as proprietor.
80. What do you know by
partnership account? When more than one person joins together to
conduct a business, it is called as a partnership firm and the partners invest
the capital either equally or according to the terms as agreed between the
partners. The rules and regulations of the business are recorded in partnership
deed. The partnership deed can be registered or non registered.
81. What do you mean by
crossing of the cheque? – When two parallel
transverse lines are drawn on the face of the cheque, it is called as crossing.
When two simple transverse lines are drawn, it is called as general crossing
and when the name of a banker is mentioned between the two parallel lines, it
is called as special crossing.
82. What is the purpose of
crossing of the cheque? – Cheques are crossed so
that they should be encashed through
accounts only. This is to avoid fraudulent encashment of the cheques by
miscreants.
83. What do you know by order
cheque? Normally the cheques are payable to the person
mentioned in the cheque or to the bearer. In the case of uncrossed bearer
cheque, the person named in the cheque or any bearer can get payment of the
cheque from the bank counter. When the words,
“bearer” are cancelled, the
cheque is treated as order cheque and for encashing an order cheque, the customer
has to prove his identity to the banker.
84. What do you know by
shares? – For the purpose of building fixed capital, joint
stock companies are authorized to issue shares to the public. Shares can be
issued in the form of ordinary shares or preference shares. Ordinary
shareholders are entitled to vote during the annual general body meeting and
they do not have any predetermined dividend amounts and in the case of
preference shareholders, they are paid dividend according to predetermined
rates.
85. What do you know by
Debentures ?: It is a sort of loan document. Those who advance
loans to the company are called as debenture holders. Normally debentures are
issued through initial public offer as in the case of shares. Predetermined
rate of interest is paid to the debenture holder, whether the corporation earns
profit or suffers loss.
86. What do you know by SEBI? It is the principal regulator in the capital market in the country –
both the primary and secondary segments. It has also been conferred with the
powers to regulate the mutual funds and venture capital funds in the country.
87. What do you know by call
money? It is an important segment of the Indian Money
Market. Under call money market, funds are transacted on overnight basis and
under notice money market, funds are transacted for the period between 2 days
and 14 days. Banks borrow in this market, in order to fill the gaps or
temporary mismatches in funds; to meet the cash reserve ratio and statutory
liquidity ratio and to meet sudden the demand
for funds arising out of large outflows. Banks, primary dealers,
development finance institutions, insurance companies and select mutual funds
are participants in this market.
88. What do you mean by
Treasury bill?: They are money market instruments to finance the
short term requirements of the Government of India. There are different types
of treasury bills based on the maturity period and utility of the issuance
like, adhoc treasury bills, three months, six months and 12 months treasury
bills etc.
89. What do you know by call
money? – Call or notice money is an amount borrowed or
lent on demand for a very short period. If the period is greater than one day
and up to 14 days, it is called as notice money; otherwise the amount is known
as call money. Cooperative banks, commercial banks and primary dealers are
allowed to borrow and lend in this market for adjusting their cash reserve
requirements.
90. What do you know by
certificate of deposits? – It is a negotiable short
term promissory note in nature. It is issued at a discount to the face value,
the discount rate being negotiated between the issuer and the investor.
91. What do you know by
commercial paper? – Commercial papers are negotiable short term
unsecured promissory notes with fixed maturities, issued by well rated
organizations. These are generally sold on discount basis. Organisations can
issue commercial papers either directly or through banks or merchant banks
called as dealers.
92. What do you know by
primary market? – Primary market deals with new securities – it
can be otherwise called as new shares issued to the public. The new offerings
by the companies are made through an initial public offer or rights issue of
shares to the existing shareholders
93. What do you know by secondary
market/stock market? – It is the market for buying and selling
securities of the existing companies. Under this scheme, securities are traded
and being initially offered to the public in the primary market and/or listed
on the stock exchange. The secondary market dealings are done through the share
brokers in the stock markets situated in various cities in the country.
94. What do you know by the
term called as savings bank ? – It is a
financial institution whose primary purpose is to accept savings deposits. It
may also perform some other functions. These banks are much helpful for
salaried people and low income groups. The deposits collected from customers
are invested in bonds, securities etc.
95. What do you know by
commercial banks? – It is an institution which accepts deposits,
makes business loans and offers related services. The commercial banks also
allow for a variety of deposit accounts, such as checking, savings and time
deposits. Their main purpose is to make a profit. Commercial banks apart from
acceptance of deposits and lending loans provide services like collection of
cheques and bills of exchanges, remittance of money from one place to another
place etc.
96. What do you know by
industrial banks and development banks? – They are
development banks engaged in promotion and development of industry. SIDBI is a
development bank engaged in helping industries in getting loans from public
sector and other banks. NABARD caters to the needs of agriculture and National
Housing Bank is meant for helping housing development. EXIM bank helps for
import and export development in the country.
97. What do you know by
indigenous banks? – Indigenous banks mean money lenders and
sahukars. They collect deposits from the general public and grant loans to the
needy persons out of their own funds as well from deposits. They are much
popular in villages and small towns.
98. What are the different
types of loans provided by banks? – Cash
credits, overdrafts, loans and advances, discounting of the bill of exchange
and investment in government securities are various loan facilities provided by
any bank. Cash credits are loans granted against stock of goods. Overdrafts are
clean loans granted in current accounts. The other loans are housing loans,
educational loans, consumer loans, gold loans, other agricultural loans, industrial loans etc. .
99. What do you know by debit
card?- They are cards issued by the banks on current
and savings accounts. Using debit cards the customers can withdraw funds using
automated teller machines or they can purchase goods through point of sale
terminals situated at textile shops, petrol pumps, hotels and other outlets.
The card can be also used for purchasing e-tickets, air tickets and many more.
100. What do you know by credit
card? – Credit cards are post paid cards whereas the
debit cards on the other hand is a prepaid card with some stored value. Every
time, a person uses this card, the internet banking house gets money
transferred to its account from the bank of the buyer.
BULLET POINTS - PART: 024
NEWS IN BRIEF – NOVEMBER/DECEMBER, 2012
01. Smt Vijayalakshmi Iyer has been appointed as Chairman and Managing
Director of Bank of India
02. Mr. Malay Mukherjee has taken charge as Executive Director of Central
Bank of India
03. Mr. P.V. Ananthakrishnan has been appointed as the country head of
India’s operations at Singapore headquartered United Overseas Bank
04. Mr. G. Srinivasan has been appointed as Chairman and Managing Director
of New India Assurance Company Limited
05. Punjab National Bank tied up with Xpress Money for the purpose – PNB
Xpress Money Remit Card facilitates foreign inward remittances under Money
transfer Service Scheme to send and receive money overseas
06. ICICI Bank tied up with Vodafone India for – mobile money transfer and
payment services
07. Yes Bank tied up with Espend Prepaid solutions for – Prepaid cards can
be used to make purchases at point of sale and for online shopping across India
on the mastercard network
08. United Bank of India tied up with Calcutta Stock Exchange for –
U-connect, an integrated online platform for stock trading
09. Basix tied up with Royal Sundaram Alliance General Insurance and Aviva
Life Insurance for – for sale of insurance products in rural areas
10. Oriental Bank of Commerce tied up with Bajaj Auto - to provide finance for customers who intend
to buy the latter’s autorikshaws
11. Allahabad Bank tied up with Universal Sompo General Insurance – to
secure their agri loan product Kisan Credit Card
12. China Development Bank tied up with Lanco Infratech – for its upcoming
coal based power plants
13. State Bank of India tied up with Sohan Lal Commodity Management – to
provide post harvest credit and storage services to farmers
14. Mr Damodar Acharya has been appointed as the director on central board
of Reserve Bank of India
15. Shri T.M. Bhasin has been appointed as Deputy Chairman of Indian
Banks’ Association
16. Mr. S. Viswanathan has been appointed as the Managing Director of
State Bank of India
17. Smt S.A. Panse has been appointed as Chairperson and Managing Director
of Allahabad Bank
18. Mr. Satish Kumar Kalra has been appointed as the Executive Director of
Andhra Bank
19. Mr. Bhupinder Nayyar has been appointed as the Executive Director of
Oriental Bank of Commerce
20. Mr. Michael Corbat has been appointed as the CEO at Citigroup Inc
21. ICICI Bank tied up with Ecobank Transnational Incorported (Africa) –
to extend banking services across India and Africa
22. Uco Bank and Rewa Siddhi Gramin Bank tied up with Mahindra and
Mahindra – to extend vehicle finance
23. HDFC Bank tied up with IOC – to provide banking facilities in semi
urban and rural areas through the latter’s rural petrol pump outlets Kisan Seva
Kendras. Kisan Seva Kendras will act as HDFC Bank’s Business Correspondents
24. Karnataka Bank tied up with National Collateral Management Services
(NCMSL)- to assist industries, traders and farmers in financing their capital
requirements
Miscellaneous information
25. Shri D. Subba Rao is Governor of Reserve Bank of India
26. Shri G. Padmanabhan, Executive Director of Reserve Bank of India
27. Dr. K.C. Chakrabarty, Deputy Governor – Reserve Bank of India
28. Mr. Anand Sharma – Deputy Governor – Reserve Bank of India
29. Mr. H R. Khan – Deputy Governor – Reserve Bank of India
30. Dr. Subir Gokarn, Deputy Governor, Reserve Bank of India
31. Mr. Deepak Mohanty, Executive Director, Reserve Bank of India
BULLET POINTS - PART: 025
BANKING AWARENESS – ABBREVIATIONS
01. AADHAAR card denotes – Unique Identity Number
02. PSL – Priority sector lending
03. NBFC – Non Banking Financial Company
04. WPI – Wholesale price Index
05. CPI – Consumer Price Index
06. LAF – Liquidity adjustment facility
07. NDTL – Net Demand and Time Liabilities
08. UCB – Urban Cooperative Bank
09. ECS – Electronic clearing service
10. FSLRC – Financial Sector Legislative Reforms Commission
11. UCIC – Unique Customer Identification Code
12. AML – Anti Money Laundering
13. CFT – Combatting of financial terrorism
14. SME – Small and Medium Enterprises
15. CDR – Corporate Debt Restructuring
16. CDS –Credit Default Swaps
17. IRS – Interest Rate Swaps
18. QE3 –Quantitative Easing
19. FII – Foreign Institutional Investors
20. RRB – Regional Rural Banks
21. PDC – Post Dated Cheques
22. MSE – Micro and Small Enterprises
23. DCCO – Date of commencement of commercial operations
24. CRAR – Capital to Risk weighted assets ratio
25. IBL – Inter bank liability
26. GDS – Gold deposit scheme
27. CAD – Current account deficit
28. ECB – European Central Bank
29. MFIN – Micro Finance Institutions Network
30. IRDA – Insurance Regulatory Development Authority
31. CRMPG – Counterparty Risk Management Policy Group
32. HTM – Held to maturity
33. SLR – Statutory Liquidity Ratio
34. BC – Business correspondents
35. BF – Business facilitators
36. DSA – Direct selling agents
37. DMA – Direct marketing agents
38. DRA – Debt Recovery agents
39. ELA – Emergency Liquidity assistance
40. BOP – Balance of payments
41. APBS – AADHAAR payment bridge system
42. FDI – Foreign direct investment
43. M3 – Money supply
44. MSF – Marginal standing facility
45. FFA – Forward freight agreements
46. AD – Authorised dealer
47. BIS – Bank for international settlements
48. BR act – Banking Regulation act
49. MCX – Multi commodity exchange
50. PSB – Public sector banks
BULLET POINTS - PART: 026
01. The Unit Trust of India came into existence in 1964
02. Infrastructure bonds are termed as financial assets
03. National savings certificates, Indra Vikas Patras, Kisan Vikas Patras
are issued by Post office
04. Capital market is a market which deals with gilt edge securities
05. Regional Rural Banks fall within the supervisory purview of Reserve
Bank of India
06. IRDA is called as Insurance Regulatory Development Authority
07. IRDA with its headquarters at Hyderabad is the regulatory authority
for all insurance companies in India including the Life Insurance Corporation
of India
08. Mutual Funds fall within the supervisory purview of SEBI
09. SEBI means – Securities and Exchange Board of India
10. Export-Import Bank do not fall within the category of development
banks
11. Industrial Development Bank of India, Small Industries Development
Bank of India and Industrial Investment Bank of India, State Finance
Corporation are called as developments
12. The major financial instruments of corporate sector are shares,
debentures, public deposits and loan from institutions
13. Financial institutions promote savings, mobilize savings and allocate
savings among different users
14. The following are called primary securities – bills, bonds, shares and
book debts
15. New currency is not an example of primary security
16. Indian Financial System comprises of scheduled commercial banks, non
banking financial institutions, urban cooperative banks
17. The Bombay Stock Exchange was made functional as early as 1870
18. The Unit Trust of India came into existence in 1964
19. In July 1969, 14 commercial banks were nationalized
20. The government’s share in any nationalized bank is 51% or more
21. New Private banks are being given licences since 1993
22. The gilt edged market refers to the market for government securities
and semi government securities
23. First share market in India was established in Mumbai
24. Securities that have an original maturity that is greater than one
year are traded in capital markets
25. The best known capital market securities are stocks and bonds
26. Securities that have an original maturity that is greater than one
year are not traded in money markets
27. Stocks and bonds are not money market securities
28. The primary issuers of capital market securities include – the central
and local governments and corporations
29. The characteristic of a capital market instrument are – liquidity,
marketability, long maturity and liquidity premium
30. Treasury bill, negotiable certificate of deposit and commercial paper
are capital market instruments
31. Treasury bills are financial instruments initially sold by the
government to raise funds
32. Commercial Paper is a short term security issued by large and well
known companies to raise funds
33. A corporate convertible bond gives the holder the right to exchange
the bond for a specified number of the company’s common shares
34. Treasury bond is not a money market instrument
35. Money lent for 15 days or more in inter bank market is called as term
money
36. Money lent for one day is called as call money
37. Special interest rate on a fixed maturity security fixed at the time
of issue is called as coupon rate
38. Lending of scheduled commercial banks, on a fortnightly average basis,
should not exceed 25 percent of their capital fund
39. A short term credit investment created by a non financial firm and
guaranteed by a bank to make payment is called as bankers acceptance market
40. Money market securities are short term in nature having low risk and
very liquid
41. Money market instruments are characterized by the following namely –
they are usually sold in large denominations, have low default risk and mature
in one year or less
42. In the term repo, the term of the loan is greater than 30 days
43. All commercial banks do not deal for their customers in the secondary
market
44. Money markets are used extensively by businesses both to warehouse
surplus funds and to raise short term funds
45. The single most influential participant in the US money market is the
US treasury department
46. The money market in India consists of two sectors namely the organized
and the unorganized sectors.
47. Indigenous banks do not fall under unorganized sector
48. Money lent for one day in the money market is known as call money
49. Money lent for more than one day but less than 15 days in the money
market is known as notice money
50. Money lent for 15 days or more in inter-bank market is called as term
money
BULLET POINTS - PART: 027
01. Government security that is a claim on the government and is a secure
financial instrument which guarantees of both capital and interest is called as
gilt edged security
02. Insurance companies operate in the call money market as lenders
03. As per prudential norms of RBI, lending of scheduled commercial banks
on a fortnight average basis should not exceed 25 percent of their capital fund
04. The market for bankers acceptance which are out of trade transactions,
both domestic and foreign is called as bankers acceptance market
05. An unsecured loan extended by one corporate to another is called as
inter corporate deposits
06. Interest is calculated on actual/365 days basis in respect of the
following products namely; call money, notice money and term money
07. Interest is not calculated on actual/365 days basis in respect of the
following products namely; Government of India dated securities
08. An Institution which accepts deposits, makes business loans, and
offers related services is called as commercial bank
09. A bank which acts as a banker of other banks is called as central bank
10. The following are the functions of exchange banks – remitting money
from one country to another country, discounting of foreign bills, buying and
selling gold and silver and helping import and export trade
11. Consumer banks are usually found in United States of America and
Germany
12. A bank account in which a depositor can deposit his funds any number
of times he likes and can also withdraw the same any number of times he wishes
is called as current account
13. In Recurring deposit account, a specified amount is deposited every
month for a specific period, say 12, 24, 36 or 60 months
14. An Inter bank funds transfer system, where funds are transferred as
and when the transactions are triggered is called as real time gross settlement
15. Accepting deposits is the primary function of any bank
16. Collection and payment of cheques, rent, interest etc on behalf of
their customers is the secondary function of any bank
17. Buying, Selling and keeping in safe custody, the securities on behalf
of their customers are called as the secondary functions
18. Acting as trustees and executors of the property of their customers on
their advice – the secondary functions of the bank
19. Remitting money from one place to the other through bank drafts or
mail – the secondary functions of the bank
20. The operative guidelines for banks on mobile banking transactions in
India were issued in 2008
21. To use smart cards/debit cards/credit cards for the purchase of an
item or for payment of a service at a merchant’s store, the card has to be
swiped in a terminal known as point of sale terminal
22. The branding line of Bank of Baroda is
- India’s International Bank
23. The logo of Bank of Baroda is known as Baroda sun
24. Lot of banks in India these days are offering M-banking facility to
their customers. The full form of M in M-banking is Mobile
25. State cooperative banks do not form part of the scheduled banking
structure in India
26. Section 14 of Banking Regulations act, 1949 prohibits a banking
company from creating a charge upon any unpaid capital of the company
27. A bank is under a statutory obligation to honour the customer’s
cheques vide section 31 of the Negotiable Instruments act 1881
28. Nationalised banks have been permitted to offer their equity shares to
the public to the extent of 49 percent of their capital as per amendments made
in 1994 in – Banking companies (acquisition and transfer of undertakings) act,
1970
29. Five banks are at present associates of State Bank of India
30. At present there are twenty nationalized banks in the country
31. The number of foreign banks operating in India are – 32
32. BCSBI stands for Banking Codes and Standards Boards of India
33. The main function of a commercial bank can be segregated into –
payment system, financial intermediation and financial services
34. Reserve Bank of India prescribed that all scheduled commercial banks
should maintain their SLRs in dated securities noted by RBI; T-bills of
Government of India and State Development loans
35. In case a depositor wishes to withdraw his deposits prematurely, banks
charge a penalty and allow the same
36. The percentage of India’s population lives in rural areas – 65% to
less than 70%
37. In case a depositor is a sole proprietor and holds deposits in the
name of the proprietory concern as well as in the individual capacity, the
maximum insurance cover is available upto Rs. 100000.00
38. Banks give contracts to third parties in order to manage support
services like help desk support, credit card processing and call support
service
39. In case of FCNR – B scheme, the period for fixed deposits is – for
terms not less than one year and not more than five years
40. The past due debt collection policy of banks generally emphasizes on –
respect to customers, appropriate letter authorizing agents to collect
recovery, due notice to customers.
41. According to the risk diversification principle of bank lending,
diversification should be in terms of customer base, geographic location,
nature of location etc
42. The aspects which are outlined by the loan policy of a bank are –
rating standards, lending procedures, financial covenants etc.,
43. The paid up capital of non scheduled bank is less than Rs. 5 lakhs
44. Scheduled bank means a bank – which is included in the second schedule
to the RBI act, 1934
45. A foreign bank is one which is incorporated outside India
46. The Unit banking system is prevalent in United States of America
47. In terms of section 5(1) (e) of the Banking Regulations act, 1949, a
banking company means any company which transacts the business of banking in
India
48. Universal Banking is one which undertakes the functions of a
Development financial institution as well as a commercial bank
49. The commercial banking system in India consists of scheduled and non
scheduled banks
50. EBT – stands for Electronic Benefit Transfer
BULLET POINTS - PART: 028
01. RBI generally reviews the monetary policy every three months on a quarterly
basis
02. The rate at which Reserve Bank of India lends short term money to the
banks is called as repo rate
03. The Reserve Bank of India was nationalized on 1.1.1949
04. RBI functions are governed by RBI act 1934
05. RBI is not expected to perform the function of accepting deposits from
the general public
06. RBI functions as a banker to the government; accepts deposits from
commercial banks and issues currencies
07. RBI has its headquarters at Mumbai
08. The first Governor of the Reserve Bank of India from 01.04.1935 to 30.06.1937
was Sir Osborne Smith
09. The 22nd current Governor of Reserve Bank of India is Y V
Reddy
10. Prime lending rate is not decided by RBI
11. Prime lending rate is decided by the individual banks
12. RBI decides the following rates namely; Bank rate, repo rate, reverse
repo rate and cash reserve ratio
13. RBI was set up on the recommendations of Hilton Young commission
14. RBI formulates implements and monitors the monetary policy
15. The central banking institution in India is Reserve Bank of India
16. RBI had divested its stake in State Bank of India to IDBI bank
17. At present the RBI holds one percent of shareholding in National Bank
for Agriculture and Rural Development Bank – NABARD
18. The number of regional offices of RBI is 23
19. In India RBI prescribes the minimum SLR level for scheduled commercial
banks in India in specified assets as a percentage of bank’s net demand and
time liabilities
20. CRR refers to the share of liquid cash that rural banks have to
maintain with RBI of their net demand and time liabilities
21. The functions of RBI are – acts as the currency authority; controls
money supply and credit; manages foreign exchange and serves as a banker to the
government
22. The quantitative instruments of RBI are – bank rate policy, cash
reserve ratio and statutory liquidity ratio
23. The objective of monetary policy of RBI is to control inflation;
discourage hoarding of commodities and encourage flow of credit into neglected
sector
24. When RBI is lender of the last resort, it means that RBI advances
credit against eligible securities
25. When RBI acts as a banker to the government, its functions are –
keeping bank accounts of the government; carrying out government transactions
and advising the government on all financial and monetary matters
26. Government of India decides the quantity of coins to be minted
27. The method which is used currently in India to issue currency note –
minimum reserve system
28. An anna was equal to four paise
29. The first decimal issues of coins in 1950 in India consisted of 1,2,5
paise
30. RBI began production of notes in 1938, issuing Rs.2,5,10, 1000 notes.
Rs. 500 note was reintroduced again in 1987
31. Rs. 1000 note was reintroduced again in 2000
32. Coins which were struck in with the hand picture are available since
2010
33. Under Britton Woods system, as a member of International Monetary
Fund, India declared its par value of rupee in terms of gold
34. On September, 25, 1975, rupee was delinked from pound sterling and was
linked to basket of currencies
35. On March 1, 1992, RBI announced a new system of exchange rates known
as partial convertibility and liberalized exchange rate system
36. In India, the fixed fiduciary system of note issue was in force from
1816 to 1920
37. During 1992, India adopted partial convertibility of rupee
38. All banks are authorized to accept soiled notes across their counters
and pay the exchange value
39. Banks are expected to offer this service even to non customers
40. All public sector bank branches and currency chest branches of private
sector banks are authorized to adjudicate and pay value in respect of mutilated
notes
41. RBI has also authorized all commercial bank branches to treat certain
notes in two pieces as soiled notes and pay exchange value
42. At present there are over 4000 currency chests in the country
43. Indo_Greeks were the first rulers in India to issue coins which can be
definitely attributed to the kings
44. Section 22 of RBI act 1934 gives sole power to RBI to issue currency
notes
45. For issuing notes, RBI is required to hold the minimum reserves of Rs.
200 crore of which note less than Rs. 115 crore is to be held in gold
46. The decimal system of note and coin issue was started in the country
in 1957
47. The objectives of financial sector reforms in the country are –
creating an efficient, productive and profitable financial sector industry;
preparing the financial system for increasing international competition;
opening the external sector in a calibrated fashion; promoting the maintenance
of financial stability even in the face of domestic and external environments
48. The Narasimhan Committee-I was set in 1991
49. The Narasimhan Committee-I was set up to suggest some recommendations
for improvement in the efficiency and productivity of the financial institution
50. The Narasimhan Committee-II was set up to suggest some recommendations
for improvement in the banking reform process
BULLET POINTS - PART: 029
01. Narasimhan Committee 1991 has given the following recommendations
namely – reduction in SLR and CRR; phasing out directed credit program; the
determination of the interest rate should be on the grounds of market forces
such as the demand for and the supply of fund; the actual numbers of public
sector banks need to be reduced
02. According to narrow banking concept, weak banks will be allowed to
place their funds only in short term and risk free assets
03. The following are the recommendations of Narasimhan Committee report
1998 – reduction in CRR and SLR; deregulation of interest rate, fixing
prudential norms and capital adequacy norms
04. Basel I which was issued during 1988 focuses on the capital adequacy
of financial institutions
05. Capital to risk assets ratio CRAR of all the scheduled commercial
banks under Basel I framework improved to 13.6 percent by the end of March,
2010
06. In 1991, the statutory liquidity ratio was as high as 38.5%
07. Narasimhan committee recommended to reduce SLR and CRR to 25 % and
3.5% respectively
08. The following guidelines were issued by RBI in January 1993 for the
entry of private sector banks in the wake of Narasimhan Committee
recommendations – The new bank upon being granted licence under the banking
regulation act by RBI shall be registered as a public limited company under the
companies act, 1956; Its inclusion in the second schedule to the RBI act, 1934
shall be subject to RBI’s decision; Preference would be given to those banks
the headquarters of which are proposed to be located in the center which does
not have the headquarters of any other bank
09. The RBI has prescribed that new private sector bank – shall be subject
to prudential norms in regard to income recognition, asset classification and
provisioning, capital adequacy ratio etc; shall have to observe priority sector
lending targets as applicable to other domestic banks and will be required to
open rural and semi urban branches also as may be laid down by RBI
10. To create a strong and competitive banking system, reform measures
were initiated in early 1990s and the thrust of these reforms was on –
increasing the operation efficiency; developing technological supervision over
banks and developing technological and institutional infrastructure
11. Financial inclusion makes people to access financial markets
12. The following steps are taken for financial inclusion in the country –
the expansion of network of cooperative banks to provide credit to agriculture
and saving facilities in rural areas; nationalization of banks in 1969 and
expansion of branches; creation of an elaborate framework of priority sector
lending with mandated targets as 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
13. The following sections of people are covered under financial inclusion
– marginal farmers, landless labourers, self employed and unorganized sector
enterprises and urban dwellers
14. Mangalam village situated in the Union territory of Puducherry became
the first village in India where all households were provided with banking
facilities
15. The objectives of forming self help group is – to build mutual trust
and confidence between the bankers and the rural people; 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 and 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
16. The best alternative banking service to branch banking to be the part
of financial inclusion – establishment of small branches; setting up of
automated teller machines; issuing of ATM cards, giving credit cards and mobile
banking
17. National credit fund for women is the most prominent national level
micro finance apex organization providing micro credit services for women in
the country
18. Banks provide the lowest lending in the North-eastern part of India
19. No frills accounts are certainly an effort in the direction of
financial inclusion
20. The financial assistance or loans of Rs. 10000 by a bank to a small borrower will be called as
micro finance
21. The Rashtriya Mahila Kosh is working exclusively for poor women
22. SHG bank linkage programme was initially launched by NABARD
23. The recent initiatives for financial inclusion in India include – no
frill account for retail purpose; simplified KYC (Know your customer); credit
counseling centre facilities and extension of smart cards
24. Strong competition between numerous microcredit programs to reduce
interest rates is not innovation likely to explain the high repayment rates of
microcredit programs
25. Group lending using social sanctions instead of collateral foreclosure
is not a potential limit of group lending
26. Collaterals is not a mechanism that contributes to the success of
micro credits
27. The index of financial inclusion has been launched for the first time
in 2008 by ICRIER
28. Regional Rural banks were established in the country on the
recommendations of Narasimhan committee
29. Regional Rural banks were set up during 1975
30. The total authorized capital of Regional Rural Banks was originally
fixed at Rs. 1 crore which has since been raised to Rs. 5 crore
31. At present, the formula for subscription to Regional Rural Banks
capital has been fixed at – central government 60%; state government 20% and
sponsor bank 20%
32. Central Government’s contribution towards the capital of Regional
Rural Bank is made through NABARD
33. The sponsor bank helps and aids the Regional Rural Bank sponsored by
it by – subscribing to its share capital; training its personnel; providing
managerial and financial assistance during the first five years or extended
period
34. The sponsor banks are empowered to – monitor the progress of Regional
Rural Banks; to conduct inspection and internal audit; to suggest corrective
measures
35. As on March, 2011, the total number of Regional Rural Banks in the
country are – 82
36. Each of the Regional Rural Banks covers districts ranging from 3 to 25
37. The main resources of Regional Rural Banks are – share capital,
deposits from the public, borrowing from sponsor banks, refinance from NABARD
38. Regional Rural Banks are refinanced at 2 percent below the bank rate
39. Regional Rural Banks are owned by central government, state
government, sponsor bank and jointly by all of the above
40. With a view to improve the performance of the Regional Rural Banks and
giving more powers and flexibility to their boards in decision making RBI had
constituted task force on empowering the RRB boards for operational efficiency.
The task force was headed by – K.G. Karmakar.
41. The number of directors on the boards of Regional Rural Banks has been
raised to 15
42. Regional rural banks are classified under scheduled commercial banks
43. The paid up share capital of Regional Rural Bank is contributed by
state government only
44. Regional Rural Banks are empowered to transact the business of banking
as defined under Banking Regulation act, 1949
45. Regional Rural Banks are managed by the board of directors
46. The deposits with Regional Rural Banks are insured by DICGC
47. DICGC – Deposit Insurance and Credit Guarantee Corporation
48. For the purpose of Income tax act, 1961, the Regional Rural Banks are
treated as – cooperative banks
49. On the current account balances maintained by the Regional Rural Banks
with them, the commercial banks may pay interest as applicable to savings
accounts
50. By virtue of the amendment carried out by the Regional Rural Bank
(Amendment) act, 1987, the chairman of a Regional Rural Bank is to be appointed
by sponsor bank in consultation with NABARD
BULLET POINTS - PART: 030
101. What do you know by stale
cheque?- When the cheque becomes out of date and cannot
be encashed, it is termed as stale cheque. For example, the validity period of
any cheque is three months and when a cheque dated: 10.01.2012 is presented for
payment on 10.01.2013, it is considered as a stale cheque, since the cheque is
more than three months old.
102. What do you mean by post
dated cheque?- When the date of the cheque is beyond the date
on which the cheque is presented for payment, the cheque is considered to be
post dated. For example, when a cheque dated: 10.02.2013 is presented for
payment on 10.01.2013, it is considered to be a post dated cheque.
103. What do you know by
current chest? – Currency chests are operated by RBI so that
they can provide good quality currency notes to the public. However, RBI has
appointed commercial banks to open and monitor currency chests on behalf of
RBI. The cash kept in currency chests is considered to be kept in RBI and
104. What is meant by minimum
balance to be maintained in the accounts? In the
case of savings bank and current account deposits, the banks stipulates a
minimum balance to be maintained. The minimum balance varies from bank to bank
and when the balance in the account falls below the minimum balance then banks
debit the account with some penal charges. Some banks insist quarterly average
minimum balance to be maintained instead of regular minimum balance to be
maintained.
105. What do you mean by tax
deduction at source? TDS means tax deducted at source. Banks must
deduct tax from the interest paid on the fixed deposit when the interest paid
on fixed deposits to a customer exceeds Rs. 10000/- during the accounting year.
TDS is applicable to fixed deposits only and is applicable to savings bank
deposits.
106. What do you mean hindu
undivided family? – HUF means Hindu Univided family and it is the
legal entity duly recognized by the laws in India. The account of hindu
undivided family is operated by Karta and karta is the senior most male member
in the family. The remaining members in the family are called as coparceners.
Banks can open deposit accounts and also extend loan facilities to hindu
undivided family.
107. What do you know by MICR? – MICR means magnetic ink character recognition. Nowadays, the
cheques are issued in MICR formats in metropolitan centres namely; Mumbai,
Chennai, Kokatta, Bangalore etc. The micr code is readable by a reader sorter
computer which helps in quick sorting of the cheques towards immediate
adjustment of the amount to be received and paid by the banks in the clearing
house. MICR code consists of the following namely; the cheque number, name of
the city, name of the bank, name of the branch, account category etc. and banks
simply type the amount of the cheque in the MICR portion using scanners so that
the sorter reader is able to read the entire information in regard to the
cheque instantaneously.
108. What do you mean by cheque
truncation? – Under cheque truncation, the physical cheque
is replaced by the digital image of the cheque after scanning. Once the cheque
is truncated the physical cheque is cancelled and from the moment of truncation
only the digital image has life. The digital image of the cheque which contains
the digital signature of a bank officer as to its authenticity is processed by
all banks and payment is effected. Cheque truncation helps in quick processing
of the cheques drawn even on far away places since there is no necessity to
physically move the cheque from one place to another place.
109. What do you mean by ECS?- ECS means electronic
clearing service and this facility is used where a large number of small value
payments or receipts are to be made or received. ECS can be used for either
debit transactions or credit transactions. When a company wants to pay
dividends to large number of shareholders, they use ECS credit facility and by
debiting the company’s account, the shareholders accounts are credited with the
dividend amount instantaneously. Similarly when an accountholder can use ECS
debit facility towards effecting payment to telephone charges each month.
110. What do you mean by
bankassurance? Hitherto banks were dealing with acceptance of
deposits and lending loans to the customers apart from undertaking certain
ancillary services. Nowadays banks started selling insurance policies of
prominent insurance companies by having tie up arrangements with such companies
and banks earn commission for such transactions.
111. What do you mean by
Universal banking? – Universal banking is the concept under which
banks can provide various types of services namely; deposits, loans, safe
deposit lockers, safe custody services, dealing with mutual fund schemes,
selling insurance policies, selling gold coins, dealing with issue of shares
and debentures etc. Thus at present banks are becoming like a supermarket for
all kinds of financial products and such concept is called as universal
banking.
112. What do you mean by
Regional Rural Banks? – The Regional Rural Banks are relatively new
banking institutions which were added to the Indian banking scene since
October, 1975. The distinctive feature of a rural bank is that though it is a
separate body corporate with perpetual succession and common seal, it is very
closely linked with the commercial bank which has sponsored the proposal to
establish it.
113. What do you mean by
National Housing Bank?- National Housing Bank
was established under the National Housing Bank act, 1987 as an apex body and
the key function of National Housing Bank is the development of the housing
sector and it is a wholly owned subsidiary of Reserve Bank of India. National
Housing Bank undertakes the following activities namely; promotion and
development of housing finance companies; regulation and supervision of housing
finance companies and providing both direct finance and indirect finance to
housing sector.
114. What do you mean by
NABARD? – National Bank for agriculture and rural
development was set up in 1982 as an apex development bank in the field of
agricultural finance and rural development. NABARD is set up by the Government
for the purpose of facilitating credit flow for promotion and development
agriculture and integrated rural development. It covers supporting all other
allied economic activities in rural areas, promoting sustainable rural
development and ushering in prosperity in the rural areas
115. What do you mean by EXIM
Bank? – Export and Import Bank of India was set up
during the year, 1982 for the purpose of financing, promoting and facilitating
foreign trade in the country. It is wholly owned by the Government of India.
The bank apart from enhancing exports from the country, integrates the
country’s foreign trade and investment with the overall economic growth.
116. What do you mean by SIDBI? – SIDBI was established for the purpose of assisting and promoting
small scale industry. It was established on 2.4.1990. It is the principal
financial institution established for the promotion, financing and development
of industry in the small scale sector and to coordinate the functions of the
institutions engaged in the promotion and financing or developing industry in
the small scale sector.
117. What do you mean by NBFCs? – Non Banking Finance Companies provide finance for small ventures
but at the same time they are more customer oriented and operate at low volumes
compared to the banks. They also collect deposits from customers and offer
slightly higher interest rates on deposits compared to the banks.
118. What do you mean NEFT and
RTGS – The two options namely – national electronic
funds transfer and RTGS – real time gross settlement offered by Reserve Bank of
India allow electronic transfer of funds from the remitter who has an account
in one bank to the beneficiary who has account in any other bank/branch. The
transfer can be carried out using the internet banking facility. The minimum
amount that can be transferred by RTGS is Rs. 2.00 lakh and there is no such
limit for transfer through NEFT. It is settled in batches at times defined by
the Reserve Bank of India. RTGS transactions are settled continuously as and
when they are put through. The transfer of funds through NEFT and RTGS can also
be carried out by submitting the remittance form at the remitter’s bank branch.
119. What do you mean IFSC code? – IFSC means Indian financial system code. It is a eleven digit code
to identify the bank branch. IFSC code is used while transferring the funds
using RTGS and NEFT payments.
120. What do you mean by
financial inclusion? In spite of vast growth in the banking system,
a large number of poor people are still
not served by any bank. They are living outside the purview of any bank.
Financial inclusion is delivery of financial services at an affordable cost to
the vast population of disadvantaged/low incomes sections of the society
121. What do you mean No frill
accounts? No frill accounts are accounts with very low or
nil minimum balance as well as charges to be opened by the banks as targeted by
Reserve Bank of India. KYC norms are relaxed for opening no frill accounts so
that people living in rural and semi urban areas can open the accounts
conveniently. Overdrafts upto Rs. 25000.00 are allowed in the no frill accounts
122. What do you mean by narrow
banking? – It is the system of banking under which the
bank accepts deposits from the public and places the funds accepted in 100
percent risk free assets with maturity matching for its liabilities. The bank
takes no risk of lending at all.
123. Who are business
facilitators and business correspondents? – RBI has
permitted the banks to use the services of business facilitators and
correspondents with effect from 2006. The services of non governmental
officers, microfinance institutions and civil society organizations can be
utilized by the banks. They help the banks in identifying the borrowers
processing their applications etc. without involving in business transactions.
No approval of RBI is necessary. Correspondents will do all the above and will
also participate in business transactions in a small way.
124. What do you mean by non
performing assets? – Non performing assets means bad loans. When
the principal and interest in the account becomes overdue for more than 90
days, it is treated as non performing assets. Non performance assets are
classified into sub standard assets, doubtful assets and loss assets. Banks are
willing to keep the level of non performance accounts at the lowest.
125. What are the major risks
faced by banks according to Basel II norms? –
Banks are facing credit risk, market risk and operational risk. When the bank
lends an advance, it faces credit risk and sometimes the banks may not be able
to recover the loan amount from the borrowers. In the case of failure of any
bank product, the banks face market risk and operational risk occurs on account
of failure of systems available in the bank branches namely; staff unrest;
striking employees; computer failure; automated teller machines out of order
etc.
126. What do you mean by
merchant banking? – Merchant banking stands for provision of
various services to corporate clients by helping them to access capital market.
Merchant banks help the corporate customers to approach the capital market with
initial public offers for the purpose of collection of capital by way of
shares.
127. What do you mean by demat
accounts? Demat means dematerialization. During the early
days, shares and debentures certificates were issued in physical form in the
form of certificates. At present, they are issued in electronic form. It is the
process by which paper securities are converted to electronic form so that they
can be stored, sold and transferred easily.
128. What is a depository? – A depository holds the securities of the investors in electronic
form. In our country there are two depositories namely; NSDL – National
Securities Depositories Limited promoted by National Stock Exchange and CDSL –
Central Depository Services Limited promoted by Bombay Stock Exchange.
129. What do you know by
consortium financing? When a corporate is in need of huge finance –
say Rs. 200 crores and above, banks join together and extend the loan facilities
by sharing the loan amount between themselves. This reduces the risk for each
bank. The banks jointly process the application of the borrower and sanction
the advance and this is called consortium lending.
130. What do you mean by repo
rate? – It is the rate at which RBI lends short term
funds to the commercial banks against securities. In order to temporarily
expand the money supply, the central bank decreases repo rates enabling the
banks to swap the government securities for cash. Repo is the abbreviation of
Repurchase and to contract the money supply RBI increases the repo rates.
131. What do you mean reverse
repo ? – The reverse repo rate is the interest rate
that banks receive if they deposit money with the central bank. This reverse
repo rate is always lower than the repo rate. Increases or decreases in the
repo and reverse repo rate have an effect on the interest rate on banking
products such as loans, mortgages and savings.
132. What do you mean by CRR? – CRR means Cash Reserve Ratio and as per the stipulations by
Reserve Bank of India, all banks are in a position to maintain a certain
percentage of their deposits (technically called as net demand and time
liabilities) in their account with the RBI. CRR ranges from 5 percent to 15
percent. By increasing CRR by merely 0.25 percent, an amount of Rs. 15000
crores of liquid funds can be transferred from the commercial banks to the
coffers of RBI. When CRR is reduced, the liquid funds are transferred from RBI
to commercial banks.
133. What do you mean by SLR? – Statutory Liquidity Ratio refers to the stipulation by RBI that
approximately 25 percent of the banks deposits is to be kept in the form of
government securities, gold and cash. Primarily SLR refers to the amount
invested by the banks in Government of India securities. RBI has the right to
change the statutory liquidity ratio from time to time. On reduction of SLR,
the availability of funds for the banks moves up and banks tend to more loans
to the common public. In the case of increase in SLR, banks reduce bank lending.
134. What do you mean by PLR? –
Prime lending rate is the rate at which
commercial banks are willing to lend to their triple A rated No 1 borrowers.
The lending rates by the bank for other borrowers whose credit worthiness is
low will be more than prime lending rate. RBI has deregulated the lending rates
that are to be charged by the banks for advance above Rs. 2 lakhs.
135. What do you mean by BPLR? – It is the rate at which commercial banks must charge to all their
advances less than Rs. 2 lakhs.
136. Who is a non resident
Indian? – Non resident Indian is the person who is the
Indian citizen who is residing in abroad for more than 182 days and has gone
for abroad for the purposes namely; business, studies and employment.
137. What are the different
types of accounts that can be opened by Non Resident Indians? – Non resident ordinary account, Non resident External account, FCNR
account and RFC account.
138. What are the different
currencies in which FCNR accounts can be opened? – FCNR accounts can be opened in the following currencies namely; US
dollar, pound sterling, Euro, Australian dollar, Japanese Yen and Canadian
dollar. FCNR accounts can be opened for a minimum period of one year and
maximum period of three years
139. What are the traditional
functions of RBI? – The traditional functions of RBI are – issue
of currency, forex management, export assistance, clearing house functions,
change of currency, transfer of currency, publication of statistics and other
information and training in banking.
140. What are the developmental
functions of RBI? – The developmental functions of RBI are –
agriculture development, promotion of industrial finance, promotion of export
through refinance, development of bill market, development and regulation of
banking system.
141. What are the regulatory
functions of RBI? – The regulatory functions of RBI are –
qualitative credit control, bank rate, differential rate of interest, open
market operations, Maintenance of CRR and SLR, direct action, credit
authorization scheme and moral persuasion
142. What are the different
types of financial institutions in our country? – The various financial institutions in our country are – RBI –
Reserve Bank of India; SEBI – Securities and Exchange Board of India and IRDA –
Insurance Regulatory and Development Authority of India. RBI monitors the
various banks in the country; SEBI monitors and regulates capital markets and
IRDA monitors the functions of insurance companies.
143. What are the different
types of banks in our country? – In our
country the following banks are available – savings banks; commercial banks;
industrial banks; development banks; land development banks; indigenous banks;
central bank; cooperative banks; exchange banks and consumer banks
144. What are the different
types of secondary functions of any bank? – They
are agency or representative functions; general utility services and social
development functions.
145. What do you mean by agency
or representative functions of any bank? – They are
collection and payment of various items; purchase and sale of securities;
trustee and executor; remitting money; purchase and sale of financial exchange;
letter of references and other agency functions.
146. What are the general
utility services offered by the banks? – They
are locker facilities; business information; help in transportation of goods;
acting as a referee; issuing of letters of credit; acting as underwriters;
issue of traveler cheques; issue of gift cheques and dealing in merchant
banking activities
147. What are the social
development functions of a bank ? – They are
capital formation; inducement to innovations; impact on the rate of interest;
role on the development of rural sector; helping in pushing up the demand
148. Can you name some items
which are covered under negotiable instruments act? – They are promissory notes, bills of exchanges; cheques, exchequer
bills; circular notes; dividend warrants; share warrants; bearer debentures;
bank notes and bank drafts
149. What do you mean by
priority sector advance? – In order to boost
development of agriculture and industries, Government of India has stipulated
certain norms under which banks are in a position to allocate 40 percent of
their advances exclusively to certain categories of borrowers called as
priority sector advances. The following are classified into priority sector
advances namely – retail traders, small business, professional and self
employed; agriculture; small scale industries, self help groups, differential
rate of interest and SC/ST beneficiaries
150. What do you mean by weaker
sections? – The following categories are termed as weaker
sections namely – small business enterprises; marginal farmers;
artisans/village and cottage industries for whom loans are granted upto Rs.
50000.00; SGSY beneficiaries; SC/ST beneficiaries; DIR beneficiaries; SJSRY
beneficiaries; SLRS; self help groups and people belonging to minority
community.
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