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BANKING AWARENESS & FINANCIAL TERMS

Basics of Banking RBI & Its Functions Technology in Banks Important Financial Terms Financial Inclusion Multiple Choice Questions

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What is Bank ?? Bank is nothing but a type of financial institution which deals with deposits and advances and other related services. It actually deposits money from the customer and on the basis of that it lends money to the genuine customer. What is Banks Profit ?? Bank gives less interest on Deposit (customers money in the account) and charges more interest on Loans. The difference between the two interests is called as Bank Profit. Head offices of all nationalized banks. NEW DELHI: PNB, OBC, PUNJAB & SIND BANK. MUMBAI: BOI, CBI, DENA, UBI, BOB. KOLKATTA: UCO, ALLAHABAD, UNITED BANK OF INDIA. CHENNAI: IOB, INDIAN BANK. BANGALORE: CANARA, VIJAYA. PUNE: BANK OF MAHARASHTRA HYDERABAD: ANDHRA BANK. Punch lines of all banks: BANK PUNCH LINE OR TAG LINE Bank of Baroda Indias International Bank. Allahabad Bank Tradition of Trust. Bank of Baroda Indias International Bank. Bank of India Relationship beyond Banking OBC Bank Where every individual is committed. Dena Bank Trusted Family Bank. Indian Bank Taking banking technology to common bank. SBI Pure banking and nothing else / With you all the way. UCO Honors your trust ICICI Hum Hain Na HDFC We understand your world VIJAYA Bank A friend you can bank upon Central bank of Build a better life around us India Syndicate Bank A faithful and friendly financial partner PNB A Name you can Bank Upon UBI The Bank that begins with U. Indian Overseas Good people to grow with Bank Public Sector Banks in India: Allahabad Bank, Andhra Bank, Bank of Baroda, Bank of India, Bank of Maharastra, Canara Bank, Central Bank of India, Corporation Bank, Dena Bank, IDBI Bank, Indian Bank Indian Overseas Bank, Oriental Bank of Commerce, Punjab & Sind Bank, Punjab National Bank, Syndicate Bank, UCO Bank Union Bank of India, United Bank of India, Vijaya Bank State Bank of India and its Associates: 1. State Bank of Bikaner & Jaipur 2. State Bank of Hyderabad 3. State Bank of Mysore 4. State Bank of Travancore 5. State Bank of Patiala.
Note: State Bank of Indore and State Bank of Saurashtra has been merged.

over 16000 branches, has the largest banking branch network in India. 2. Bank of Baroda has largest number of branches in foreign country. 3. SBI has largest ATM network. 4. 27 banks are nationalized till now.

Private Banks in India Bank of Punjab, Bank of Rajasthan, Catholic Syrian Bank Centurion Bank, City Union Bank, Dhanalakshmi Bank Development Credit Bank, Federal Bank, HDFC Bank ICICI Bank, Indusland Bank, ING Vysya Bank, Jammu & Kashmir Bank, Karnataka Bank, Karur Vysya Bank, Laxmi Vilas Bank, South Indian Bank, United Western Bank, AXIS Bank (earlier known as UTI).
Note: Among them ICICI is one of the largest private sector lender/bank.

Types of Banks Central Bank Specialized Banks Commercial Banks Development Banks Co-operative Banks Central Bank:
As it name signifies a bank which manages and regulating the Banking System of a particular country. It provides guidance to other banks whenever they face any problem (that is why central bank is also called as a bankers bank) and maintains the deposit accounts of all other banks. Central Banks of different countries: Reserve Bank of India (INDIA), Federal Reserve System (USA), Swiss National Bank (SWITZERLAND), Reserve Bank of Australia (AUSTRALIA), State Bank of Pakistan (PAKISTAN).

Specialized Banks: Those banks which are meant for Special Purposes. For examples: NABARD, EXIM bank, SIDBI, IDBI. NABARD: NAtional Bank for Agriculture and Rural Development. This bank is meant for financing the Agriculture as well as Rural sector. It actually promotes the research in Agriculture and Rural Development. EXIM bank: Export Import Bank of India. This bank gives loans to exporters and importers and also provides valuable information about the international market. If you want to set up a business for exporting products abroad or importing products from foreign countries for sale in our country, EXIM bank can provide you the required support and assistance. SIDBI: Small Industries Development Bank of India. This bank provides loans to set up the small scale business Unit / Industry. SIDBI also finance, promote and develop small scale industries. Whereas IDBI (Industrial Development Bank of India) gives loans to big Industries. Commercial Banks: Normal banks are called as commercial banks, their main function is to accept deposits from the customer and on the basis of that they grant loans. (Loans could be Short term, Medium term and Long term loans.) Commercial Banks further classified into three types. (a) Public Sector Banks
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Points to remember: 1. Among them SBI is the Largest public sector bank as well as one of the Oldest bank in India, The State Bank Group, with

(b) Private Sector Banks (c) Foreign Banks (a) Public Sector Banks (PSB): Government Banks are called as PSB. Since their majority of stakes is held by the Government of India. (For examples: Allahabad Bank, Andhra Bank, Bank of Baroda, Bank of India, Bank of Maharastra, Canara Bank, Central Bank of India etc. (b) Private Sector Banks: In these banks majority of stakes are held by the Individual or Group of persons. (For examples: Bank of Punjab, Bank of Rajasthan, Catholic Syrian Bank, Centurion Bank etc. (c) Foreign Banks: These banks have their headquarter in foreign country but they operate their branches in India. For e.g. HSBC, Standard and Chartered Bank, ABN Amro Bank.

3. Banking activities involves issuance of DD, accepting cheques, daily transactions etc. 4. Whenever bank grant loan, their process of recovery is flexible. 5. Banks accepts tangible and personal security against the loans. 6. Interest rate charged by the banks on loans is decided by RBI. 7. Banks generally give loans to all section of society. (i.e poor people, business class and corporate sector.)

Money lenders doesnt involves in such activities.

Development Banks:
Such banks are specially meant for giving loans to business sector for the purchase of latest machinery and equipments. Examples: SFCs (State Financial Corporation of India) and IFCI (Indian Finance Corporation of India).

Incase of Money lenders the process of recovery is rigid and strict.(i.e fixed date and time) In this case money lenders mostly accept jewellery or gold or land as a security for giving loans. Rate of interest is decided by the money lender and in most of the cases it is usually very high. Money lenders only give loans to agriculturist and poor people.

Co-operative Banks:
These banks are nothing but an association of members who group together for Self-Help and Mutual-Help. Their way of working is same as commercial Banks. But they are quite different. Co operative Banks in India are registered under the Co-operative Societies Act, 1965. The cooperative bank is regulated by the RBI.
Note: Co-operative banks cannot open their branches in Foreign Countries while commercial banks can do this.

How many types of Accounts are present in a Bank in India?? 1. Saving Bank account 2. Current Account 3. Fixed Deposit Account
1.

2.

Cooperative banks V/S Commercial Banks CO-OPERATIVE BANKS

1. Co operative Banks in India are registered under the Cooperative Societies Act, 1965 2. Co-operative banks cannot open their branches in Foreign Countries 3. Cooperative banks are not nationalized. 4. Co-operative banks in India do not operate mutual funds. 5. The Co-operative Banks generally provide a little higher rate of interest on deposits as compared to commercial banks.

COMMERCIAL BANKS Commercial Banks are required to be registered under Banking Regulation Act, 1949. Commercial banks can open their branches in Foreign Countries. At present 27 banks are nationalized in India. Commercial Banks in India do operate mutual funds. The Commercial Banks provide a lesser rate of interest as compared to cooperative banks.

3.

Saving Bank Account: These accounts are maintained by individuals/ salaried peoples. Such account offers interest on customer deposit. The interest on these accounts is regulated by Reserve Bank of India. No Overdraft is allowed on such accounts. Current Account: These accounts are used mainly by businessmen and are not generally used for the purpose of investment. These deposits are the most liquid deposits and there are no limits for number of transactions or the amount of transactions in a day. No interest is paid by banks on these accounts. One of the prominent advantage of such account is that Overdraft is allowed. Fixed Deposit Account: also known as term deposit account. All Banks offer fixed deposits schemes with a wide range of tenures for periods from 7 days to 10 years. The term "fixed" in Fixed Deposits (FD) denotes the period of maturity or tenor.

CURRENT ACCOUNT V/S SAVING ACCOUNT CURRENT ACCOUNT

1. Mostly preferred by the business persons. 2. Overdraft facility is available. 3. No interest rate is paid by the bank on such account. 4. Deposit and withdrawal of money can be made frequently. 5. Bank takes Service charges for such account.

SAVING ACCOUNT
Mostly preferred by the individual and salaried people. Overdraft is not allowed. Interest is deposits. available on

Banks V/S Moneylenders BANKS 1. Banks are financial institutions which are controlled by Central Bank-RBI 2. Banks usually requires lot of paper work (voter id, resident proof etc.) for granting loans. MONEYLENDERS Money lenders are nothing but an individual person or group of persons.(e.g Saahukaar) Money lenders require less documentation for granting loans.

No frequent withdrawals are permitted. Service charges payable. are not

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SHORT NOTES: NABARD NABARD stands for National Bank for Agriculture and Rural Development. It was established in 1982, seventh five year plan on the recommendation of Shivraman Committee. Establishment: 12th of July 1982. Headquarters: Mumbai, Maharashtra. Purpose: Specially meant for providing credit to agriculture sector. 1. It is an apex institution handling matters concerning policy, planning and operations in the field of credit for agriculture and for other economic and developmental activities in rural areas. 2. NABARD is responsible for regulating and supervising the functions of Co-operative banks and RRBs. 3. Promoting research in Agriculture and Rural Development. RRBs: Regional Rural Banks As it name signifies RRBs are specially meant for rural areas. Capital share being 50% by the central government, 15% by the state government and 35% by the scheduled bank. MFI: Micro Finance Institutions Micro Finance means providing credit/loan (micro credit) to the weaker section of the society. A microfinance institution (MFI) is an organization that provides financial services to the poor.

We have FEMA Act, Foreign Exchange Management Act to curb Hawala transactions. Hawala is a form of Money Laundering. Most of the countries treat hawala as an illegal way of money transfer. Yet, as good number of hawala transactions is between close relatives or friends, it not easy to ban. In contrast, money laundering is always illegal. Money laundering is all about converting illegal money to legal money.

EMI: Equated Monthly Installment. It is nothing but a repayment of the loan amount taken. A loan amount could be a home loan, car loan or personal loan. The monthly payment is in the form of post dated cheques drawn in favour of lender. EMI is directly proportional to the loan amount taken and inversely proportional to time period. That is if loan amount increases the EMI amount increases too and if time period increases the EMI amount decreases. Balance sheet Balance sheet is a statement showing the assets and liabilities of a business at a certain date. Balance sheet helps in estimating the real financial situation of a firm. Non Banking Financial Companies (NBFCs): NBFC is a company which is registered under Companies Act, 1956 whose main function is to provide loans. NBFC cannot accept deposit as well as cannot issue demand draft like other commercial banks. What is Money Laundering ?? Roughly we can say that conversion of Black Money (illegal money) into white money (legal money) is called Money Laundering. Black Money is that money which is earned through illegal sources like Illegal arms sales, smuggling, the activities of organized crime, drug trafficking etc. In India we have PMLA Act 2002 to combat with Money Laundering. PMLA stands for Prevention of Money Laundering Act. What is Hawala Transaction ??? Illegal transfer of money from one country to another. Hawala is actually an illegal form of Remittance Mechanism between borders. This method often involves different currencies. The striking feature of a hawala transaction is that, it does not involve physical movement of cash, nor digital money. It happen based on trust between the hawala agents in different locations.

Why would people use Hawala? People prefer Hawala as it provides better benefits than a traditional transfer. 1. Fast and Convenient - The delivery happens in one or two days maximum. You dont need to provide id proof of anything to make the transfer. 2. Low Commission Rate. 3. Higher Exchange rates - As there is no physical movement of cash the brokers are able to provide better exchange rates than the official exchange rate. 4. No traceability - As this is a very informal method of money transfer government cannot actually regulate the transactions. 5. Reliable - International money transfer system working is really complex with the correspondent banks. It is a real headache to track the money in case of some mistake. For a Hawala transaction there is no physical transfer of money, unlike a bank transfer where the money transfer status is in transit. _______________________________________

BANKING
RBI:
The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the RBI Act, 1934.RBI is nationalized in 1949 and it is fully owned by the Government of India. RBI was established on the recommendation of Hilton Young Commission. Headquarters: Mumbai Governor: Dr. D Subbarao (22nd Governor of RBI). Earlier Governor (21st Governor): Dr. Yaga Venugopal Reddy Deputy Governors: Harun Rashid Khan*, K.C.Chakrabarty, Subir Gokarn and Anand Sinha.
*Shyamala Gopinath recently resigned.

Dr. D. Subbarao, 22ND Governor of Reserve bank of India.

Deputy Governors of RBI. (All are arrange in order of their names)

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RBI MONETARY POLICY: The Monetary Policy is the policy statement, traditionally announced twice a year, through which the Reserve Bank of India seeks to ensure price stability for the economy. RBI reviews its monetary policy 3 times in a year at regular intervals. The purpose is being that to check the inflation (to ensure that inflation does not cross the limit). To ensures that banks have enough liquidity as well as to ensure that the cost of fund does not reach at very high level. All the following rates are comes under RBI monetary policy.
Bank Rate 6.0% Repo Rate 8.5 % Reverse Repo Rate 7.5 % Cash Reserve Ratio (CRR) 6.0% Statutory Liquidity Ratio (SLR) 24.0% Note: Recently monetary policy reviewed due to which policy rates (repo and reverse repo) increases by 25 basis points. RBI doesnt decides PLR, BPLR, SUB PLR, DEPOSIT RATES, BASE RATES. (These all are decided by commercial banks)

CASH RESERVE RATIO: CRR refers to a portion of deposits (as cash) which banks have to keep/maintain with the RBI. Higher the CRR lower will be the capacity of bank to create credit. It is a tool used by RBI to control liquidity (to inject or suck out the liquidity in the market) in the banking system. STATUTORY LIQUIDITY RATIO: SLR means minimum percentage of deposits that the bank has to maintain in the form of gold and cash. It regulates the credit growth in India. BANK RATE: BR is the rate at which central bank (RBI) lends money to other banks or financial institutions. If the bank rate goes up, long-term interest rates also tend to move up, and vice-versa. Any changes in Bank Rate by central bank is an indication that banks should also increase deposit rates as well as Prime Lending Rate. PRIME LENDING RATE: PLR is the rate at which commercial banks give loan to its prime customers (most credit-worthy customers).

Basis points (bps): A basis point is a unit equal to 1/100th of a percentage point. i.e. 1 bps = 0.01%. Basis points are often used to measure changes in or differences between yields on fixed income securities, since these often change by very small amounts. DEFINE Liquidity: It refers to how quickly and cheaply an asset can be converted into cash. Money (in the form of cash) is the most liquid asset. RBI FUNCTIONS: 1. Issue of Currency Notes. 2. Control the Monetary Policy. 3. Regulator and Supervisor of the financial system. 4. Banker to other Banks. 5. Banker to the Government. 6. Granting License to banks. 7. Control over NBFIs (Non Banking Financial Institutions) 8. Manager of Foreign Exchange of India. (also known as FOREX) RBI ACT, 1934: This is for establishment of RBI. Banking Regulation Act, 1949: RBI issues directives and guidelines to all commercial banks. PMLA, Prevention of Money Laundering Act 2002: To combat with Money Laundering. DICGC Act, 1961: Deposit Insurance and Credit Guarantee Corporation Act. REPO RATE: Also called Repurchase Rate, the rate at which the RBI lends money to the banks or in other words we can say that Repo rate is the discounting rate at which central bank borrows security from commercial bank. Repo means repurchase agreement between RBI & commercial bank. Also known as short term lending rate. REVESE REPO RATE: Exactly vice versa of above rate, when banks lends some money to RBI or Reverse repo is the rediscounting rate at which commercial bank borrows discounted security from central bank i.e. RBI. Also known as short term borrowing rate.

Central Banks of different Countries.

Our Central Bank is RBI. Nepals Central Bank is Nepal Rastra Bank. Bhutans Central Bank is Royal Monetary Authority of Bhutan. Srilankas Central Bank is Central Bank of Sri Lanka. USA Central Bank is Federal Reserve System. Pakistan Central Bank: State bank of Pakistan. NOTE: 1. RBI is our central and one of the most powerful bank in our country as well as it has sole right to issue the banking license to all commercial banks. (Whether the bank is Government or Private.) 2. Code of banks commitment to micro and small enterprises is prepared by RBI. 3. Policy rates of RBI are Repo Rate, Reverse Repo, Bank Rate, and MSF whereas Reserve ratios of RBI are CRR and SLR.

IMPORTANT FINANCIAL TERMS:

LAF: Liquidity Adjustment Facility is a tool used in monetary policy that allows banks to borrow money through repurchase agreements. Liquidity Adjustment Facility (LAF) is operated by RBI through REPOs and Reverse REPOs in order to set a corridor for money market interest rates. APR: It stands for Annual Percentage Rate. APR is a percentage that is calculated on the basis of the amount financed, the finance charges, and the term of the loan. ABS: Asset-Backed Securities it means a type of security that is backed by a pool of bank loans, leases, and other assets. EPS: Earnings per Share means the amount of annual earnings available to common stockholders as stated on a per share basis. CHAPS: Clearing H ouse Automated Payment System its a type of electronic bank to bank payment system that guarantees same day payment. IPO: Initial Public Offerings is defined as the event where the company sells its shares to the public for the first time. (or the first sale of stock by a private company to the public.)

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FPO: Follow on Public O fferings: An issuing of shares to investors by a public company that is already listed on an exchange. An FPO is essentially a stock issue of supplementary shares made by a company that is already publicly listed and has gone through the IPO process. Difference: IPO is for the companies which have not listed on an exchange and FPO is for the companies which have already listed on exchange but want to raise funds by issuing some more equity shares. RTGS: Real Time Gross Settlement systems is a funds transfer systems where transfer of money or securities takes place from one bank to another on a real time. (Real time means within fraction of seconds.) The minimum amount to be transferred through RTGS is 2 lakh. Processing Charges/Service Charges for RTGS transactions vary from bank to bank. NEFT: National Electronic Fund Transfer. This is a method used for transferring funds across banks in a secure manner. It usually takes 1-2 working days for the transfer to happen. NEFT is an electronic fund transfer system that operates on a Deferred Net Settlement (DNS) basis which settles transactions in batches. (Note: RTGS is much faster than NEFT.) CAR: Capital Adequacy Ratio, Its a measure of a banks capital. Also known as Capital to Risk Weighted Assets Ratio (CRAR). This ratio is used to protect depositors and promote the stability and efficiency of financial systems around the world. It is decided by RBI (Note that 12% is for commercial banks and 15% is for NBFCs). NPA: Non Performing Asset it means once the borrower has failed to make interest or principal payments for 90 days the loan is considered to be a non-performing asset. Presently it is 2.39%. IMPS: Inter bank Mobile Payment Service It is an instant interbank electronic fund transfer service through mobile phones. Both the customers must have MMID (Mobile Money Identifier Number) number. For this service we dont need any GPS enabled cell phones. BCBS: Basel Committee on Banking Supervision is an institution created by the central bank Governors of the Group of Ten nations. RSI: Relative Strength Index IFSC code: Indian Financial System Code. The code consists of 11 Characters for identifying the bank and branch where the account in actually held. The IFSC code is used both by the RTGS and NEFT transfer systems. MSME and SME: Micro Small and Medium Enterprises and SME stands for Small and Medium Enterprises. This is a part of Government to drive and encourage small manufacturers to enjoy facilities from Banks at a concession rates. LIBOR: London InterBank Offered Rate. An interest rate at which banks can borrow funds, in marketable size, from other banks in the London interbank market. LIBID: London Interbank Bid Rate. The average interest rate which major London banks borrow Eurocurrency deposits from other banks. ECGC: Export Credit Guarantee Corporation of India. This organization provides risk as well as insurance cover to the Indian exporters.

SWIFT: Society for Worldwide Interbank Financial Telecommunication. It operates a worldwide financial messaging network which exchanges messages between banks and other financial institutions. STRIPS: Separate Trading for Registered Interest & Principal Securities. CIBIL: Credit Information Bureau of India Limited. CIBIL is Indias first credit information bureau. Whenever a person apply for new Loans or Credit Card to a Financial Institution, they generate the CIBIL report of the said person or concern to judge the credit worthiness of the person and also to verify existing track record. CIBIL actually maintains the borrowers history. CRISIL: Credit Rating Information Services of India Limited. Crisil is a global analytical company providing ratings, research, and risk and policy advisory services. AMFI: Association of Mutual Funds of India, AMFI is an apex body of all Asset Management Companies (AMC) which has been registered with SEBI. (Note: AMFI is not a mutual funds regulator) FCCB: Foreign Currency Convertible Bond. A type of convertible bond issued in a currency different than the issuer's domestic currency. CAC: Capital Account Convertibility. It is the freedom to convert local financial assets into foreign financial assets and vice versa. This means that capital account convertibility allows anyone to freely move from local currency into foreign currency and back. or in other words transfer of money from current account to capital account. (Note: CAC is under Tarapore Committee.) BANCASSURANCE: Is the term used to describe the partnership or relationship between a bank and an insurance company whereby the insurance company uses the bank sales channel in order to sell insurance products. Balloon Payment: Is a specific type of mortgage payment, and is named "balloon payment" because of the structure of the payment schedule. For balloon payments, the first several years of payments are smaller and are used to reduce the total debt remaining in the loan. Once the small payment term has passed (which can vary, but is commonly 5 years), the remainder of the debt is due - this final payment is the one known as the "balloon" payment, because it is larger than all of the previous payments. CPSS: Committee on Payment and Settlement Systems FCNR Accounts: Foreign Currency Non- Resident accounts are the ones that are maintained by the NRIs in foreign currencies like USD, DM, and GBP etc. M3 in banking: Its a measure of money supply. It is the total amount of money available in an economy at a particular point in time. OMO: Open Market Operations. The buying and selling of government securities in the open market in order to expand or contract the amount of money in the banking system. Open market operations are the principal tools of monetary policy. RBI uses this tool in order to regulate the liquidity in economy. Umbrella Fund: A type of collective investment scheme. A collective fund containing several sub-funds, each of which invests in a different market or country.
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ECS: Electronic Clearing Facility is a type of direct debit. Tobin tax: Suggested by Nobel Laureate economist James Tobin, was originally defined as a tax on all spot conversions of one currency into another. Z score is a term widely used in banking field. POS: Point Of Sale, Also known as Point of purchase, a place where sales are made also sales and payment information are collected electronically, including the dollar amount of the sale, the date and place of the transaction, and the consumer's account number. LGD: Loss Given Default, Institutions such as banks will determine their credit losses through an analysis of the actual loan defaults. Junk Bonds: Junk bonds are issued generally by smaller or relatively less well known firms to finance their operations, or by large and well known firms to fund leveraged buyouts. These bonds are frequently unsecured or partially secured, and they pay higher interest rates: 3 to 4 percentage points higher than the interest rate on blue chip corporate bonds of comparable maturity period. ARM: Adjustable Rate Mortgage is basically a type of loan where the rate of index is calculated on the basis of the previously selected index rate. ABO: Accumulated Benefit Obligation, ABO is measure of liability of pension plan of an organization and is calculated when pension plan is terminated. Absorption: A term related to real estate, it is a process of renting a real estate property which is newly built or recently approved. AAA: A type of grade that is used to rate a particular bond. It is the highest rated bond that gives maximum returns at the time of maturity. DSCR: Debt Service Coverage Ratio, DSCR is a financial ratio that measures the company's ability to pay their debts. FSDC: Financial Stability and Development Council, Indias apex body of financial sector. ITPO: India Trade Promotion Organization is the nodal agency of the Government of India for promoting the countrys external trade. FLCC: Financial Literacy and Counseling Centers. ANBC: Adjusted Net Bank Credit is Net Bank Credit added to investments made by banks in non-SLR bonds. Priority sector lending: Some areas or fields in a country depending on its economic condition or government interest are prioritized and are called priority sectors i.e. Industry, Agriculture. PSL is 40% of ANBC. M0, M1, M2 AND M3: These terms are nothing but money supply in banking field. BIFR: Bureau of Industrial and Financial Reconstruction. FRBM Act 2003: Fiscal Responsibility and Budget Management act was enacted by the Parliament of India to institutionalize financial discipline, reduce India's fiscal deficit, improve

macroeconomic management and the overall management of the public funds by moving towards a balanced budget. The main objectives of FRBM Act are:1. To reduce fiscal deficit. 2. To adopt prudent debt management. 3. To generate revenue surplus. Gold Standard: A monetary system in which a countrys government allows its currency unit to be freely converted into fixed amounts of gold and vice versa. Flat Money: Flat money is a legal tender for settling debts. It is a paper money that is not convertible and is declared by government to be legal tender for the settlement of all debts. BCSBI: The Banking Codes and Standards Board of India is a society registered under the Societies Registration Act, 1860 and functions as an autonomous body, to monitor and assess the compliance with codes and minimum standards of service to individual customers to which the banks agree to. OLTAS: On-Line Tax Accounting System. EASIEST: Electronic Accounting System in Excise and Service Tax. SOFA: Status of Forces Agreement, SOFA is an agreement between a host country and a foreign nation stationing forces in that country. CALL MONEY: Money loaned by a bank that must be repaid on demand. Unlike a term loan, which has a set maturity and payment schedule, call money does not have to follow a fixed schedule. Brokerages use call money as a short-term source of funding to cover margin accounts or the purchase of securities. The funds can be obtained quickly. Scheduled bank: Scheduled Banks in India constitute those banks which have been included in the Second Schedule of RBI Act, 1934 as well as their market capitalization is more than Rs.5 lakhs. RBI in turn includes only those banks in this schedule which satisfy the criteria laid down vide section 42 (6) (a) of the Act. FEDAI: Foreign Exchange Dealers Association of India. An association of banks specializing in the foreign exchange activities in India. PPF: Public Provident Fund The Public Provident Fund Scheme is a statutory scheme of the Central Government of India. The Scheme is for 15 years. The minimum deposit is 500/- and maximum is Rs. 70,000/- in a financial year. Certain are the advantages of PPF account. (a) Best for long term investment. (b) PPF account can be opened either in Post Office or in a Bank. (c) The interest on deposits is totally tax free. DEFINE RECAPITALIZATION??? A change in a companys capital structure, Recapitalization is often undertaken with the aim of making the company's capital structure more stable, and sometimes to boost the company's stock price (for example, by issuing bonds and buying stock). SEPA: Single Euro Payment Area. GAAP: Generally Accepted Accounting Principles, The common set of accounting principles, standards and procedures that companies use to compile their financial statements.

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Indian Depository Receipt: Foreign companies issue their shares and in return they get the depository receipt from the National Security Depositary in return of investing in India. Hot Money: Money that is moved by its owner quickly from one form of investment to another, as to take advantage of changing international exchange rates or gain high short-term returns on investments. NMCEX: National Multi-Commodity Exchange. PE RATIO: Price to Earnings Ratio, a measure of how much investors are willing to pay for each dollar of a companys reported profits. CASA: Current Account, Savings Account. CAMELS: CAMELS is a type of Bank Rating System. (C) stands for Capital Adequacy, (A) for Asset Quality, (M) for Management ,(E) for Earnings, (L) for Liquidity and (S) for Sensitivity to Market Risk. OSMOS: Off-site Monitoring and Surveillance System. Free Market: A market economy based on supply and demand with little or no government control. Retail Banking: It is mass-market banking in which individual customers use local branches of larger commercial banks. Eurobond: A bond issued in a currency other than the currency of the country or market in which it is issued. PPP: Purchasing Power Parity is an economic technique used when attempting to determine the relative values of two currencies. FEMA Act: Foreign Exchange Management Act, it is useful in controlling HAWALA. Hawala Transaction: Its a process in which large amount of black money is converted into white. Teaser Loans: Its a type of home loans in which the interest rates is firstly low and then gradually goes high. Teaser loans are also called Terraced loan. ECB: External Commercial Borrowings: Taking loan from another country. Limit of ECB is $500 million, this is the maximum limit a company can get it. CBS: Core Banking Solution, all the banks are connected through internet, that means we can do transaction from any bank and anywhere.(e.g. deposit cash in PNB, Delhi branch and withdrawing cash from PNB, Gujarat) CRAR: For RRBs it is more than 9% (funds allotted 500 cr.) and for commercial banks it is greater than 8% (6000 cr. Relief package). NBFCs: It has 11.2% composition out of the total financial institutions in India. IIFCL: India Infrastructure Finance Company Limited, it gives guarantee to infra bonds. IFPRI: International Food Policy Research Institute, it identifies and analyzes policies for meeting the food needs of the developing world.

Currency swap: It is a foreign-exchange agreement between two parties to exchange aspects (namely the principal and/or interest payments) of a loan in one currency for equivalent aspects of an equal in net present value loan in another currency. Currency swap is an instrument to manage cash flows in different currency. WPI: Wholesale Price Index is an index of the prices paid by retail stores for the products they would ultimately resell to consumers. New series is 2004-2005. (The new series has been prepared by shifting the base year from 1993-94 to 2004-05). Inflation in India is measured on WPI index. MAT: Minimum Alternate Tax is the minimum tax to be paid by a company even though the company is not making any profit. Minimum Alternate Tax (MAT) proposed in the budget 2011-12 is 18.5%. Future Trading: Its a future contract/agreement between the buyers and sellers to buy and sell the underlying assets in the future at a predetermined price. Reverse Mortgage: Its a scheme for senior citizen. Basel 2nd norms: BCBS has kept some restrictions on bank for the maintenance of minimum capital with them to ensure level playing field. Basel-II has got three pillars: Pillar 1- Minimum capital requirement based on the risk profile of bank. Pillar 2- Supervisory review of banks by RBI if they go for internal ranking. Pillar 3- Market discipline. Microfinance Institutions: Those institutions which provides financial services to low-income clients. Microfinance is a broad category of services, which includes microcredit. Microcredit is provision of credit services to poor clients. NPCI: National Payments Corporation of India. DWBIS: Data Warehousing and Business Intelligence System, a type of system which is launched by SEBI. The primary objective of DWBIS is to enhance the capability of the investigation and surveillance functions of SEBI. TRIPS: Trade Related Intellectual Property Rights, is an international agreement administered by the World Trade Organization (WTO) that sets down minimum standards for many forms of intellectual property (IP) regulation as applied to nationals of other WTO Members. TRIMs: Trade Related Investment Measures. A type of agreement in WTO. SDR: Special Drawing Rights, SDR is a type of monetary reserve currency, created by the International Monetary Fund. SDR can be defined as defined as a "basket of national currencies". These national currencies are Euro, US dollar, British pound, and Japanese yen. Special Drawing Rights can be used to settle trade balances between countries and to repay the IMF. American dollar gets highest weightage. LTD: Loan-To- Deposit Ratio, A ratio used for assessing a banks liquidity by dividing the banks total loans by its total deposits. If the ratio is too high, it means that banks might not have enough liquidity to cover any fund requirements; if the ratio is too low, banks may not be earning as much as they could be. CAD: Current Account Deficit, it means when a country's total imports of goods, services and transfers is greater than the country's total export of goods, services and transfers.
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EPFO: Employees Provident Fund Organization, It administers a compulsory contributory Provident fund, pension and an insurance scheme for Indian Work force. LERMS: Liberalized Exchange Rate Management System FRP: Fair and Remunerative Price, a term is related to sugarcane. FRP is the minimum price that a sugarcane farmer is legally guaranteed. However sugar Mills Company gives more than FRP price. STCI: Securities Trading Corporation of India Limited was promoted by Reserve Bank of India (RBI) in 1994 along with Public Sector Banks and All-India Financial Institutions with the objective of developing an active, deep & vibrant secondary debt market. IRR: Internal Rate of Return; is a rate of return used in capital budgeting to measure and compare the profitability of investments. CMIE: Centre for Monitoring Indian Economy; is India's premier economic research organization. It provides information solutions in the form of databases and research reports. CMIE has built the largest database on the Indian economy and companies. TIEA: Tax Information Exchange Agreement; TIEA allows countries to check tax evasion and money laundering. Recently India has signed TIEA with Cayman Islands. Contingency Fund: Its a fund for emergencies or unexpected outflows, mainly economic crises. A type of reserve fund which is used to handle unexpected debts that are outside the range of the usual operating budget. FII: Foreign Institutional Investment, The term is used most commonly in India to refer to outside companies investing in the financial markets of India. International institutional investors must register with the Securities and Exchange Board of India to participate in the market. P-NOTES: P means participatory notes. MSF: Marginal Standing Facility, Under this scheme, Banks will be able to borrow upto 1% of their respective Net Demand and Time Liabilities". The rate of interest on the amount accessed from this facility will be 100 basis points (i.e. 1%) above the repo rate. This scheme is likely to reduce volatility in the overnight rates and improve monetary transmission. Presently MSF is 9.5%.

FIU: Financial Intelligence Unit set by the Government of India on 18 November 2004 as the central national agency responsible for receiving, processing, analyzing and disseminating information relating to suspect financial transactions.
SEBI: Securities and Exchange Board of India. SEBI is the primary governing/regulatory body for the securities market in India. All transactions in the securities market in India are governed & regulated by SEBI. Its main function: 1. New Issues (Initial Public Offering or IPO) 2. Listing agreement of companies with Stock Exchanges 3. Trading Mechanisms 4. Investor Protection 5. Corporate disclosure by listed companies etc.
Note: SEBI is also known as Capital regulator or Mutual funds regulator or Market regulator. SEBI is also created investors protection fund and SEBI is the only organization which regulate the credit rating agencies in India. (CRISIL AND CIBIL)

FINANCIAL REGULATORS IN INDIA: RBI, SEBI, FMCI (Forward Market Commission of India), IRDA etc. ASBA: Application Supported by Blocked Amount: is a process developed by the SEBI for applying to IPO. In ASBA, an IPO applicant's account doesnt get debited until shares are allotted to him. DEPB Scheme: Duty Entitlement Pass Book, It is a scheme which is offered by the Indian government to encourage exports from the country. DEPB means Duty Entitlement Pass Book to neutralize the incidence of basic and special customs duty on import content of export product. LLP: Limited Liability Partnership, is a partnership in which some or all partners (depending on the jurisdiction) have limited liability. Balance sheet: A financial statement that summarizes a companys assets, liabilities and shareholders equity at a specific point in time. TAN: Tax Account Number, is a unique 10 digit alphanumeric code allotted by the Income Tax Department to all those persons who are required to deduct tax at the source of income. PAN: Permanent Account Number, as per section 139A of the Act obtaining PAN is a must for the following persons:1. Any person whose total income or the total income of any other person in respect of which he is assessable under the Act exceeds the maximum amount which is not chargeable to tax. 2. Any person who is carrying on any business or profession whose total sales, turnover or gross receipts are or is likely to exceed Rs. 5 lacs in any previous year. 3. Any person who is required to furnish a return of income under section 139(4) of the Act. JLG: Joint Liability Group, when two or more persons are both responsible for a debt, claim or judgment. REER: Real Effective Exchange Rate. NEER: Nominal Effective Exchange Rate. Contingent Liability: A liability that a company may have to pay, but only if a certain future event occurs.

BANKING OMBUDSMAN: The banking ombudsman scheme is an efficient and costeffective forum, which has been formed to resolve complaints registered by the customers in case of any services provided by the bank. 1. The central bank of India (RBI) has introduced this scheme, Under Section 35A of banking regulation Act, 1949. 2. Presently, we have 15 banking ombudsmen. 3. The Banking Ombudsman does not charge any fee for filing and resolving customers complaints. 4. The Banking Ombudsman is a senior official appointed by the Reserve Bank of India to redress customer complaints against deficiency in certain banking services. 5. A customer can approach the banking ombudsman if he does not get satisfactory response to his grievance from the bank within 30 days.

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IRR: Internal Rate of Return, is a rate of return used in capital budgeting to measure and compare the profitability of investments. Bank Rate V/S Repo Rate Bank rate and Repo Rate are both decided by RBI. Repo Rate is a short term lending rate, it is actually a repurchase agreement between RBI and commercial banks. Here is need of securities submission. Bank rate is for long term basis. In bank rate, there is no need of security submission. RBI does not maintain savings accounts of individuals but it does offer loans and advances to individuals and cooperates. The interest rate which the RBI charges on these loans and advances is called the Bank Rate. RBI also lends to the commercial banks all public and private. This is a loan to other commercial banks. The interest charged by RBI to re-pay this loan on the commercial banks is called Repo Rate. Base Rate: A minimum rate that a bank is allowed to charge from the customer. Base Rate differs from bank to bank. It is actually a

minimum rate below which the bank cannot give loan to any customer. Earlier Base rate was called as BPLR (Base Prime Lending Rate). CAR: Capital Adequacy Ratio Capital Adequacy measures the strength of the bank. Capital Adequacy Ratio is also known as Capital Risk Weighted Assets Ratio. Percentage ratio of a financial institutions primary capital to its assets (loans and investments), used as a measure of its financial strength and stability. 12% is for Commercial Banks. 15% is for NBFCs. This ratio is used to protect depositors and promote the stability and efficiency of financial systems around the world.

__________________________________________________________________________________________
SOME BASICS:
Comparison between Cheque and Demand Draft. CHEQUE
1. Cheque will be issued by an account holder. 2. Cheque could be dishonoured or bounced. 3. No Commission. 4. To Issue cheque to others, you should maintain bank account. 5. Cheque booklet exists.

DD
DD can be issued by a banker only. Not possible in case of DD. Draft thus provides full (100%) security to the beneficiary. We have to pay commission to bank. Not necessary. Not possible in case of DD.

Comparison between Banks and Non Banking Financial Companies (NBFCs) BANKS
1. Banks are incorporated (formed) under Banking Regulation act 1949. 2. Banks can accept deposit from general public. 3. Banks can issue cheques drawn on itself.

NBFC
NBFC are incorporated under Company act of 1956. NBFC dont do so. NBFC cannot do this.

Note: Main purpose of NBFC is to provide loans to weaker section of the society. BASICS OF CHEQUE: A bank cheque is a type of negotiable instrument which is payable on demand.

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MICR: Magnetic Ink Character Recognition. A 9 digit code which actually shows that whether the cheque is real or fake. IFSC: A 11 digit code in which first 4 digit represents the entity, 5th digit is by default zero and the last six digits shows the branch code.
Note: RTGS & NEFT uses IFSC code.

UTR Number: Unique Transaction Reference number. A unique number which is generated for every transaction in RTGS system. UTR is a 16 digit Alpha-Numeric code, the first 4 digits is a Bank Code in alphabets, 5th one is the message code, 6th & 7th mentions the year, 8-10th mentions Date and the last 6 digits mentions days serial no. of the message. CBS: Core Banking Solution, all the banks are connected through internet, that means we can do transaction from any bank and anywhere.(e.g. deposit cash in PNB, Delhi branch and withdrawing cash from PNB, Gujarat)

FINANCIAL INCLUSION Roughly we can say that including each and every Indian citizen financially. We can observe that about 40% of the total population doesnt have a bank account, so main aim of this scheme is to provide banking services to the unbanked areas. (Mainly in rural areas) Financial Inclusion is a central government scheme which comes under Ministry of Finance. Issuing Authority: RBI
Significance of Financial Inclusion: 1. Extension of Banking Services (Growth of the organization). 2. Providing loan to Genuine Customers. 3. Kisaan Credit Card Scheme (KCC): Specially made for agriculture purposes. It aims to provide credit facilities to farmers (especially for cultivation of crops), KCC were started by the Government of India, RBI and NABARD. The card is valid for 3 years and subject to annual renewals. 4. Providing credit to low income groups. 5. Banks which provides KCC are as follows: Allahabad , Canara Bank, Corporation Bank, SBI- Kisan Credit Card (KCC) Andhra Bank - AB Kisan Green Card Bank of Baroda - BKCC Bank of India - Kisan Samadhan Card Dena Bank - Kisan Gold Credit Card Oriental Bank of Commerce -Oriental Green Card (OGC) Punjab National bank - PNB Krishi Card Syndicate Bank -SKCC Vijaya Bank -Vijaya Kisan Card Financial Inclusion is also known as SWABHIMAAN.

KISAAN CREDIT CARD SCHEME: A Special credit card which is issued to the farmers, for their short-term credit needs for cultivation of crops. Significance: No need to apply for a loan for every crop. Assured availability of credit at any time enabling reduced interest burden for the farmer. Helps buy seeds, fertilizers at farmers convenience and choice Helps buy on cash-avail discount from dealers Credit facility for 3 years no need for seasonal appraisal Maximum credit limit based on agriculture income Any number of withdrawals subject to credit limit Repayment only after harvest. Rate of interest as applicable to agriculture advance Security, margin and documentation norms as applicable to agricultural advance

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SWABHIMAAN: A scheme of Financial Inclusion.

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RBI OFFICES IN INDIA

MULTIPLE CHOICE QUESTIONS

1. Normally commercial banks accept Fixed Deposit for how many years. (a) Only 1 year (b) Only 2 years (c) Only 3 years (d) Only 5 years (e) None 2. NABARD was established in 1982, on the recommendation of _______________Committee (a) Shivraman (b) VK Shunglu (c) Malegam (d) Magjitha (e) BK Chaturvedi 3. A Special credit card which is issued to the farmers, for their short-term credit needs for cultivation of crops. (a) Kisaan Loan Card (b) Kisaan Utility Card (c) Kisaan Agriculture Card (d) Kisaan Card (e) Kisaan Credit Card 4. Which country lended more money to the other countries than the World Bank. (a) USA (b) CHINA (c) RUSSIA (d) UK (e) None

5. Another name of World Bank is (a) IMF (b) IBRD (c) RBI (d) ADB

(e) None

6. Which of these organizations is also called as Brettonwood Organizations. (a) World Bank (b) IMF (c) UNIDO (d) Both (a) & (b) (e) United Nation 7. RBI establish on which date. (b) 1st of April 1935 (a) 1st of April 1925 (d) 1st of April 1955 (c) 1st of April 1945 st (e) 1 of April 1965 8. Financial Inclusion Scheme is comes under which Ministry. (a) Ministry of Health. (b) Ministry of Commerce. (c) Ministry of Consumer Affairs (d) Ministry of Finance. (e) Ministry of External Affairs. 9. In PMLA Act, 2002 what does M stands for (a) Maximum (b) Market (c) Mutual (d) Mobile (e) None 10. Spot the wrong statement.

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(a) RBI has a sole right to issue the Banking License to any financial institution. (b) RBI Governor Dr. Duvvuri Subbarao is an Indian economist, central banker, and civil servant. He is the 22nd Governor of Reserve Bank of India. (c) RBI also controls the Non Banking Financial Companies. (d) Harun Rashid Khan recently appointed as a Deputy Governor of RBI in place of Anand Sinha. (e) All are true. 11. Where is the Headquarters of Kotak Mahindra Bank. (a) Delhi (b) Karnataka (c) Kanpur (d) Tamil Nadu (e) None 12. Which one of the following is the private sector bank. (a) IDBI (b) Bank of Maharashtra (c) Bank of Rajasthan (d) Bank of Baroda (e) SIDBI 13. Which one of the following is not an Associate Bank of SBI. (a) State Bank of Bikaner (b) State Bank of Hyderabad (c) State Bank of Mysore (d) State Bank of Patiala (e) State Bank of Indore. 14. Which insurance company is one of the largest insurance company in our country. (a) ICICI Lombard Insurance (b) United India Insurance Company Ltd (c) Met Life Insurance (d) Max New York life insurance (e) LIC 15. Which Government Bank has largest ATM network in India. (a) RBI (b) ICICI (c) SBI (d) PNB (e) CANARA 16. How many banks are nationalized till Now. (a) 24 banks (b) 25 banks (c) 26 banks (d) 27 banks (e) None 17. If any private company wants to starts the Banking operations in our country, then who is the banking license issuing authority. (a) IBA (b) IBPS (c) World Bank (d) SBI (e) None 18. Which one is not decided by RBI. (a) CAR (b) CRR (c) Base Rate (d) Bank Rate 19. In RTGS what does T stands for (a) Transaction (b) Transfer (c) Tax (d) Transcription

22. IBPS recently conducts Common Written Examination, IBPS Stands for (a) Institute of Banking Person Selector. (b) International Banking Personnel Selection. (c) Indian Banking Personnel Selection. (d) Institute of Banking Personnel Selection. (e) Inter Bank Payment System. 23. How many languages are there in a 500 rupee note? (a) 11 (b) 12 (c) 13 (d) 15 (e) 17 24. Whose signature is present on the One Rupee note? (a) RBI Governor (b) Deputy Governor (c) Finance Secretary (d) Finance Minister (e) Prime Minister 25. A special feature in intaglio has been introduced on the left of the watermark window on all notes except Rs.10/- note. This feature is in different shapes for various denominations (Rs. 20-Vertical Rectangle, Rs.50-Square, Rs.100-Triangle, Rs.500-Circle, Rs.1000-Diamond). What is the purpose of that intaglio on the note. (a) It helps in the detection of genuine notes. (b) It helps the Banks to identify the genuine notes. (c) It helps the RBI to identify the genuine notes. (d) It helps the visually impaired to identify the denomination. (e) It is just present for the good look of the currency. 26. Many times we observe an alpha numeric IFSC code is written on cheque. IFSC code stands for. (a) International Format System Code (b) International Function System Code (c) International Forex System Code (d) Indian Financial System Code (e) Indian Format System Code 27. Recently HDFC merged with which bank. (a) ICICI (b) AXIS (UTI) (c) Karur Vysya Bank (d) Centurion Bank of Punjab (e) Dhanalakshmi Bank 28. Which statement is wrong about IMPS. (a) Its a mobile to mobile fund transactions facility. (b) For this facility we need a GPS enabled mobile phone. (c) Both the sender and receiver must have account in the same bank. (d) Both the customers must have MMID (Mobile Money Identifier Number) number. (e) All are correct 29. RBI directed banks to resolve ATM transactions related complaints in 7 working days. If commercial banks failed to do so then bank has to pay Rs.________per day as compensation. (a) 50 (b) 100 (c) 200 (d) 225 (e) 300 30. Pure banking and nothing else /With you all the way are the Tag Lines of which bank (a) ICICI (b) IDBI (c) PNB (d) Canara (e) None 31. Which one of the following is not regulated and controlled by RBI. (a) IDBI (b) SBI (c) Bank of Rajasthan (d) NABARD (e) All are controlled by RBI. 32. D.D. Subbarao is the ________Governor of RBI. (b) 21ST (c) 22ND (d) 23RD (a) 20TH (e) 24TH

(e) Policy Rates

(e) None

20. Which statement is wrong about RTGS system. (a) Transactions take place in a real time. (b) Works on DNS (Deferred Net Settlement). (c) Minimum amount to be transferred is Rs. 2 lakhs. (d) Processing Charges/Service Charges for RTGS transactions vary from bank to bank. (e) One of the safest mode of transactions when bulk amount of money is to be transferred. 21. Recently Banks launched a service in which we can transfer the money through mobile phones, the service is called as (a) MMTF (Mobile Money Transfer Facility) (b) MTMT (Mobile To Mobile Transfer) (c) MTMMT (Mobile To Mobile Money Transfer) (d) IBMPS (Internet Banking Mobile Payment Service) (e) IMPS (Inter Bank Mobile Payment Service)

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33. Which one is not a Present Deputy Governor of Reserve Bank of India. (a) Harun Rashid Khan (b) Subir Gokarn (c) K.C.Chakrabarty (d) Anand Sinha (e) Shyamala Gopinath 34. Which organization maintains the Borrowers history in India. (a) CRISIL (b) CIBIL (c) CARE (d) RBI (e) SBI 35. Which technique is sometimes also called as a type of Direct Debit Facility. (a) SMPS (b) RTGS (c) IMPS (d) UTR (e) ECS 36. Which organisation registered under the Companies Act, 1956 of India, engaged in the business of loans and advances, acquisition of shares, stock, insurance business, or chit business, but does not works like a Normal banks such as it cannot issue cheques drawn on itself, cannot issue DDs. (a) NABARD (b) NBFCs (c) SEBI (d) ECGC (e) ITPO 37. A customer can approach the Banking Ombudsman if he does not get satisfactory response to his grievance from the bank within _____ days. (a) 20 (b) 25 (c) 30 (d) 35 (e) 40 38. Which of the organization can also be called as a Mutual Fund regulator. (a) AMFI (b) SEBI (c) CIBIL (d) CRISIL (e) ITPO 39. The Banking Ombudsman charge _____ Rs. fee for filing and resolving customers complaints. (a) 50 (b) 75 (c) 100 (d) 110 (e) Does not charge any fee, it is absolutely free of cost. 40. What is the Peculiar thing about all these commercial banks: Bank of India, Central Bank of India, DENA, Union Bank of India, Bank of Baroda. (a) They are the Best Banks in our country. (b) These banks are included in the top 100 list of Best Banks in the world. (c) These banks offers best services till now. (d) They have common panel of Board of Director. (e) Their Head Office situated in MUMBAI. 41. If any private company wants to starts the Banking operations in our country, then who is the banking license issuing authority. (a) IBA (b) IBPS (c) World Bank (d) SBI (e) None 42. Which one is not decided by RBI. (a) CAR (b) CRR (c) Base Rate (d) Bank Rate

(c) DICGC Act, 1961 (d) Banking Regulation Act, 1949 (e) No such act is present. 45. The discounting rate at which Central bank (RBI) borrows security from commercial bank is called (a) Repo Rate (b) Reverse Repo (c) Deposit Rate (d) Base Rate (e) None 46. Which one is a tool of Monetary policy of RBI. (a) Base Rate (b) PLR (c) CRR (d) BPLR (e) SDR 47. Who is the issuing authority of the scheme Financial Inclusion. (a) Indian Bank Association (b) RBI (c) IBPS (d) Commercial Banks (e) Ministry of Rural Development 48. Which statement is wrong about SEBI (Securities and Exchange Board of India). (a) SEBI is a statutory body. (b) SEBI is a capital regulator. (c) SEBI is also called as a Mutual funds regulator. (d) SEBI also regulates the credit rating agencies in India. (e) None of them is wrong. 49. Which statement is wrong about RTGS system. (a) Transactions take place in a real time. (b) Works on DNS (Deferred Net Settlement). (c) Minimum amount to be transferred is Rs. 2 lakhs. (d) Processing Charges/Service Charges for RTGS transactions vary from bank to bank. (e) One of the safest mode of transactions when bulk amount of money is to be transferred. 50. The first sale of stock by a private company to the public is known as (a) EPS (b) FPO (c) IPO (d) Both (b) and (c) (e) None 51. Both RTGS and NEFT use. (a) UTR Number. (b) MICR Code. (c) IFSC Code. (d) Both (a) & (b) (e) None 52. Which statement is wrong about IMPS. (a) Its a mobile to mobile fund transactions facility. (b) For this facility we need a GPS enabled mobile phone. (c) Both the sender and receiver must have account in the same bank (d) Both the customers must have MMID (Mobile Money Identifier Number) number. (e) All are correct. 53. What is the role of MICR number, which is present on the Cheque. (a) MICR number is used to identify the genuineness of cheque. (b) MICR number is used to identify the bank branch. (c) MICR number is nothing but a type of cheque number. (d) Both (a) and (b) (e) None 54. In SWIFT what does I stand for. (a) Interbank (b) International (c) Intercom (d) Indian

(e) Policy Rates

43. What is Liquidity. (a) It means how cash is converted into gold. (b) It means how cheaply and quickly an asset converted into cash. (c) It means how cash is converted into a SDR (Special Drawing Rights) (d) It means how SDR is converted into cash. (e) Not related to banking. 44. To combat with money laundering RBI uses which act. (a) PMLA Act, 2002 (b) RBI Act, 1934

(e) Infrastructure

55. What is Open Market Operations (OMO). (a) Selling of shares in an open market. (b) Selling of products in an open market.
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(c) Buying and selling of government securities in the open market. (d) Buying and selling of products in the whole sale market. (e) None 56. Under which act RBI issues directives to the commercial banks. (a) PMLA Act, 2002 (b) RBI Act, 1934 (c) DICGC Act, 1961 (d) Banking Regulation Act, 1949 (e) No such act is present. 57. The insurance company uses the bank sales channel in order to sell the products. The term used to describe is (a) Scheduled banking (b) Scheduled Insurance (c) Bankinsuring (d) Bancassurance (e) None 58. Code of banks commitment to micro and small enterprises is prepared by (a) Any commercials bank (b) NABARD (c) RBI (d) IBA (e) GRAMEEN BANK 59. OLTAS stands for (a) On-Line Tax Asset Schedule. (b) On-Line Tracking Asset Schedule. (c) On-Line Tax Accounting Schedule. (d) On-Line Tax Accessed System. (e) On-Line Tax Accounting System. 60. Many times we heard the term Hot money in financial newspapers. What is Hot money. (a) Money that is moved by its owner quickly from one form of investment to another. (b) Money which is illegally obtained and try to convert into white money. (c) Money which can be invested in business. (d) Money which is obtained from the sales of white goods. (e) None 61. CAMELS is a type of Bank Rating System. In CAMELS what does C stands for. (a) Common (b) Compensation (c) Cancellation (d) Capitalization (e) Capital Adequacy 62. Define Eurobond. (a) A bond issued in a currency of the European countries. (b) A bond issued in an Indian currency in European nations. (c) A bond issued in Euro in our country. (d) A bond issued in a currency other than the currency of the country in which it is issued. (e) None 63. Which act is useful in controlling HAWALA. (a) PMLA Act. (b) RBI Act. (c) DICGC Act. (d) Banking Regulation Act. (e) FEMA Act. 64. Headquarter of Allahabad bank is situated in. (a) Delhi (b) Kolkata (c) Mumbai (d) Bangalore (e) Chennai 65. Many times we observe an alpha numeric IFSC code is written on cheque. IFSC code stands for. (a) International Format System Code (b) International Function System Code (c) International Forex System Code (d) Indian Financial System Code (e) Indian Format System Code 66. Which statement is wrong statement IFSC code. (a) IFSC code is an alpha numeric which is of 11 bit. (b) In IFSC code the last six digits shows the branch code.

(c) IFSC code is uniquely identifies the bank branch. (d) Beneficial in those cases where bulk amount is to be transferred.(like RTGS) (e) None of them is wrong. 67. What is Contingency fund. (a) Its a fund for emergencies or unexpected outflows, mainly economic crises. (b) Its a fund for child development, often release by the state government. (c) Its a fund released by the commercial banks, to help the customers in emergency. (d) Its a fund released by World Bank in order to support LDCs. (e) None 68. An agreement between the buyers and sellers to buy and sell the assets in the future at a predetermined price is called (a) Advanced Trading (b) Predetermine Trading (c) Priority Trading (d) Future Trading (e) None 69. A tax on all spot conversions of one currency into another is called (a) Sales Tax (b) GST Tax (c) Direct Tax (d) VAT tax (e) None 70. What does SEPA stands for in banking sector. (a) Single Euro Payment Area (b) Single Euro Penalized Area (c) State Environmental Policy Act (d) System Evaluation Planning and Assessment (e) Signaling and End Point Application 71. Which bank is a Private Sector bank. (a) Bank of India (b) Bank of Baroda (c) Bank of Rajasthan (d) Bank of Maharashtra (e) IDBI Bank 72. Which bank is Nationalized Bank. (a) AXIS (UTI) (b) HDFC (c) YES (d) ING Vysya Bank

(e) None

73. Recently HDFC merged with which bank. (a) ICICI (b) AXIS (UTI) (c) Karur Vysya Bank (d) Centurion Bank of Punjab (e) Dhanalakshmi Bank 74. RBI directed banks to resolve ATM transactions related complaints in 7 seven working days. If commercial banks failed to do so then bank has to pay Rs.________per day as compensation. (a) 50 (b) 100 (c) 200 (d) 225 (e) 300 75. Which of the organization can also be called as a mutual fund regulator. (a) AMFI (b) SEBI (c) CIBIL (d) CRISIL (e) ITPO 76. Which organization maintains the credit history of the borrowers. (a) AMFI (b) SEBI (c) CIBIL (d) CRISIL (e) ITPO 77. Which organization regulates the Credit Rating agencies in India. (a) AMFI (b) SEBI (c) CIBIL (d) CRISIL (e) RBI 78. Which organization regulates the Monetary policy in India. (a) AMFI (b) SEBI
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(c) CIBIL

(d) CRISIL

(e) RBI

(e) Kotak Mahindra Bank 92. RBI was established on the basis of which commission. (a) Hilton Young Commission. (b) British Commission. (c) Federal Commission. (d) Federation Commission. (e) None. 93. Which one of the following person is never been a Governor of RBI. (a) Our Prime Minister. (b) Dr. C Rangarajan (c) Bimal Jalan (d) Upendra Kumar Sinha (e) Osborn Smith 94. Which organization is also called as a Mutual funds regulator. (a) AMFI (b) SEBI (c) ECGC (d) CIBIL (e) ITPO 95. SME stands for (a) Small and Micro Enterprises. (b) Sink and Medium Enterprises. (c) State and Medium Economy. (d) Small and Medium Economy. (e) Small and Medium Enterprises. 96. Who is Mohmmad Yunus. (a) Founder of Grameen Bank. (b) Founder of RBI. (c) He is a PM of Bangladesh. (d) Founder of Indian Oversees Bank. (e) He belongs to Pakistan. 97. Whose signature is present on Ten Rupees note. (a) Deputy Governor. (b) Finance Secretary. (c) President of India. (d) Finance Minister (e) None 98. ASBA stands for (a) Application Supported By Blocked Account. (b) Application Supported By Bank Assets. (c) Allotment Supported By Blocked Amount. (d) Application Supported By Blocked Amount (e) None 99. LAF stands for (a) Liquidity Adjustment Facility. (b) Liquidity Account Facility. (c) Liquidity Allotment Facility. (d) Long Adjustment Facility. (e) Long Account Facility. 100. CRISIL, MOODYS, STANDARD & POORS are (a) Non Banking Financial Companies. (b) Non Governmental Organization. (NGO) (c) Credit Rating Agencies. (d) Private Sector Banks. (e) None

79. Scheme Financial Inclusion comes under which Ministry. (a) Ministry of rural development (b) Ministry of Finance (c) Ministry of Home affairs. (d) Ministry of Health and development (e) Ministry of urban development 80. Tag line of Bank of Baroda is. (a) Pure Banking and Nothing Else (b) Jeevan Ke Saath Bhi Jeeavan Ke Baad Bhi (c) Tradition of Trust (d) With You All the Way (e) None 81. Which bank is not included in SBI Associates Group. (a) State Bank of Bikaner & Jaipur. (b) State Bank of Indore. (c) State Bank of Hyderabad. (d) State Bank of Mysore. (e) State Bank of Tarvancore. 82. If at any place suppose RBI office is not present then who will control the commercial banks at that place. (a) SBI (b) RBI (c) INDIAN BANK (d) NABARD (e) SEBI. 83. Insurance companies like LIC, ICICI LOMBARD, and UIICL are generally regulated by which organization. (a) RBI (b) PFRDA (c) IRDA (d) IBA (e) IBPS 84. NPA in banking sector means. (a) Non Performing Asset. (b) Net Producing Asset. (c) Net Performing Asset. (d) Not Promoting Asset. (e) None 85. Minimum denomination coin is present in Indian market is (a) 1 Rs. (b) 2 Rs. (c) 5 Rs. (d) 10 Rs. (e) None 86. Many banks have launched CBS services. CBS means (a) Common Banking Solutions. (b) Common Banking Settings. (c) Core Banking Settlement. (d) Common Base Solutions. (e) None 87. USA central Bank is (a) Federation of banks of America. (b) Bank of America. (c) Federal Bank of America. (d) Federal Reserve System. (e) USA American bank. 88. After how many months in a year RBI review its Monetary policy. (a) After every 2 months. (b) After every 3 months. (c) After every 4 months. (d) After every 5 months. (e) Not necessary, It depends on the Economic Situations. 89. In FIMMDA what does I stands for. (a) Information (b) Index (c) Income (d) Intelligence 90. In TRIPS what does I stands for (a) Interest (b) Information (c) Improvement (d) Infra

--------------------------(e) Indigo

(e) None

91. Which one is the biggest private sector lender. (a) AXIS (b) HDFC (c) ICICI (d) Bank of Rajasthan
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ANSWERS
1. Normally commercial banks accept Fixed Deposit for 10 years maximum. (Minimum will be 15 days) 2. NABARD (National Bank for Agriculture and Rural Development) was established on the recommendation of Shivraman Committee. It was established in 1982, During Seventh five year plan. Establishment: 12th of July 1982. Purpose: Specially Headquarters: Mumbai, Maharashtra. meant for providing credit to agriculture sector. 3. Kisaan Credit Card: A Special credit card which is issued to the farmers, for their short-term credit needs for cultivation of crops. 4. China 5. Another name of World Bank is IBRD (International Bank for Reconstruction and Development) or IDA (International Development Association). 6. Both IMF & World Bank are Brettonwood Institution. 7. RBI established on 1ST of April 1935. 8. Ministry of Finance. 9. PMLA, Prevention of Money Laundering Act 2002: To combat with Money Laundering. 10. Harun Rashid Khan recently appointed as a Deputy Governor of RBI in place of Shyamala Gopinath Not Anand Sinha. 11. Mumbai. 12. Bank of Rajasthan. 13. State Bank of Indore has been Merged. 14. LIC: Life Insurance Corporation 15. SBI 16. 27 banks are Nationalized till now. 17. RBI has a sole right to issue the Banking License. 18. Base Rate is decided by Commercial Banks not RBI. 19. RTGS: Real Time Gross Settlement system is a funds transfer systems where transfer of money or securities takes place from one bank to another on a real time. (Real time means within fraction of seconds.) The minimum amount to be transferred through RTGS is 2 lakh. Processing Charges/Service Charges for RTGS transactions vary from bank to bank. 20. NEFT: National Electronic Fund Transfer. This is a method used for transferring funds across banks in a secure manner. It usually takes 1-2 working days for the transfer to happen. NEFT is an electronic fund transfer system that operates on a Deferred Net Settlement (DNS) basis which settles transactions in batches.( RTGS does not works on DNS) 21. IMPS: Inter bank Mobile Payment Service is an instant interbank electronic fund transfer service through mobile phones. Both the customers must have MMID (Mobile Money Identifier Number) number. For this service we dont need any GPS enabled cell phones. 22. IBPS: Institute of Banking Personnel Selection. Institute set up by the Banking Industry to cater to its selection needs recruitment, placement and promotion; and has been assessing talent for the past twenty - six years. 23. 15 languages. 24. Finance Secretary. 25. It helps the visually impaired to identify the denomination. 26. Indian Financial System Code. (IFSC: A 11 digit code in which first 4 digit represents the entity, 5th digit is by default zero and the last six digits shows the branch code) 27. Recently HDFC merged with Centurion Bank of Punjab. 28. Same as 21.

29. 100/30. SBI 31. All are controlled by RBI. (RBI is our central and one of the most powerful bank in our country as well as it has sole right to regulate all commercial banks. (Whether the bank is Government or Private.)) 32. 22ND governor: DD Subbarao, 21st : Y.V. Reddy 33. Shyamala Gopinath already resigned. 34. CIBIL: Credit Information Bureau of India Limited. CIBIL is Indias first credit information bureau. Whenever a person apply for new Loans or Credit Card to a Financial Institution, they generate the CIBIL report of the said person or concern to judge the credit worthiness of the person and also to verify existing track record. CIBIL actually maintains the borrowers history. 35. ECS: Electronic Clearing Service. 36. NBFCs: Non Banking Financial Company. 37. 30 days. 38. SEBI is also known as Capital regulator or Mutual funds regulator or Market regulator. SEBI is also created investors protection fund and SEBI is the only organization which regulate the credit rating agencies in India. (CRISIL And CIBIL) 39. The Banking Ombudsman scheme is an efficient and costeffective forum, which has been formed to resolve complaints registered by the customers in case of any services provided by the bank. 40. Their Head Office is situated in MUMBAI. 41. RBI has a sole right to Grant the license to the banks. So answer is none. 42. Base rate. RBI doesnt decide PLR, BPLR, SUB PLR, and DEPOSIT RATES. 43. It refers to how quickly and cheaply an asset can be converted into cash. Money (in the form of cash) is the most liquid asset. 44. Prevention of Money Laundering Act 2002: To combat with money laundering. 45. Also called Repurchase Rate, the rate at which the RBI lends money to the banks or in other words we can say that Repo rate is the discounting rate at which central bank borrows security from commercial bank. Repo means repurchase agreement between RBI & commercial bank. 46. CRR 47. RBI 48. None of them is wrong. 49. RTGS does not Works on DNS (Deferred Net Settlement). Real Time Gross Settlement systems are a funds transfer systems where transfer of money or securities takes place from one bank to another on a Real time. 50. IPO (Initial Public Offerings) 51. IFSC: Indian Financial System Code. 52. IMPS does not need any special type of cell phones (GPS enabled mobile phone). 53. MICR number is used to identify the genuineness of cheque. 54. Society for Worldwide Interbank Financial Telecommunication. It operates a worldwide financial messaging network which exchanges messages between banks and other financial institutions. 55. Open Market Operations. The buying and selling of government securities in the open market in order to expand or contract the amount of money in the banking system. 56. Banking Regulation Act, 1949 57. Bancassurance. 58. RBI 59. On-Line Tax Accounting System. 60. Money that is moved by its owner quickly from one form of investment to another.

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61. CAMELS is a type of Bank Rating System. (C) stands for Capital Adequacy, (A) for Asset Quality, (M) for Management ,(E) for Earnings, (L) for Liquidity and (S) for Sensitivity to Market Risk. 62. A bond issued in a currency other than the currency of the country in which it is issued. 63. FEMA Act. (Foreign Exchange Management Act) 64. Kolkata 65. Indian Financial System Code 66. All are correct 67. Its a fund for emergencies or unexpected outflows, mainly economic crises. 68. Future Trading 69. A tax on all spot conversions of one currency into another is called TOBIN TAX. 70. Single Euro Payment Area 71. Bank of Rajasthan 72. None 73. Centurion Bank of Punjab 74. 100 75. SEBI 76. CIBIL, Credit Information Bureau of India Limited. CIBIL is Indias first credit information bureau. Whenever a person apply for new Loans or Credit Card to a Financial Institution, they generate the CIBIL report of the said person or concern to judge the credit worthiness of the person and also to verify existing track record. CIBIL actually maintains the borrowers history. 77. SEBI 78. RBI 79. Ministry of Finance. 80. Indias International Bank 81. State Bank of Indore is already merged with SBI. 82. None, since RBI is apex bank of our country, so it controls all the banks. 83. Insurance companies in India are regulated by IRDA (Insurance Regulatory and Development Authority.) 84. Non Performing Asset. 85. None: 25paise. 86. None, CBS Stands for Core Banking Solutions. 87. Federal Reserve System. 88. Not necessary, It depends on the Economic Situations. 89. FIMMDA: Fixed Income Money Market Derivatives Association. 90. TRIPS: Trade Related Intellectual Property Rights. 91. ICICI. 92. Hilton Young Commission. 93. Upendra Kumar Sinha is a chairman of SEBI. 94. SEBI. 95. Small and Medium Enterprises. 96. Mohmmad Yunus is a Founder of Grameen Bank, and he belongs to Bangladesh. 97. None, Governor of RBI. 98. Application Supported By Blocked Amount. 99. Liquidity Adjustment Facility. 100. CRISIL, MOODYS, STANDARD & POORS are Credit Rating Agencies.

SHORT NOTE: KYC: Know Your Customer KYC Campaign is introduced by RBI. Purpose: The main purpose of KYC norms is to restrict Money Laundering and Terrorist Financing. In order to prevent identity theft, identity fraud, money laundering, terrorist financing, etc, the RBI had directed all banks and financial institutions to put in place a policy framework to know their customers before opening any account. This involves verifying customers identity and address. Mandatory details required under KYC norms: Address Proof Identity Proof Ration Card/Election Card Some banks may even ask for verification by an existing account holder. All of the above formalities are done in order to check all banking transactions and identify suspicious ones. Such transactions will be immediately reported to the banks head office and authorities and norms shall also be laid down for freezing of such accounts.

PULKIT JAWAL