IBPS, RRB PO Interview Capsule by AffairsCloud PDF

IBPS/RRB PO Interview
Capsule
Dear AC Aspirants,
This interview is meant to observe the attitude, confidence level and

communication skills of the candidate. The strategy that the candidate follows to
answer the questions lets the panel members decide the suitability of the
candidate for the bank.
Here we are presenting to you all Interview Capsule for IBPS/RRB PO. This
capsule includes all what you need to face an Interview. Go through this capsule
thoroughly as it will be really helpful for interview. We covered everything from
personal questions to each and every banking concept.
“The future belongs to those who believe in the beauty of their dreams.
Always insist on yourself never imitate.”
All the best for IBPS/RRB PO Interview with regards from AC team
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Interview Capsule – IBPS/RRB PO
Table of Contents
How to face Bank Interview................................................................................................................................... 3

Banking Notes............................................................................................................................................................. 6
Current Banking & Finance News(June-Dec 2016) ..................................................................................... 35
Questions Asked in Previous Interviews ........................................................................................................ 53
Interview Experiences ........................................................................................................................................... 56
3 Rules For Overcoming Interview Jitters

1. Strike A Power Pose For Two Minutes
Rather than hunching up and making yourself small in the waiting room chair as you scramble to soak up
last minute notes or practice one final interview question, what you should actually find a private place to do
what we call a power pose.
2. Repeat A Positive Affirmation
Repeating a positive affirmation can reduce production of cortisol and stress hormones by almost 50%, slow
the mind, lower your blood pressure and heart rate and make you feel confident and powerful.
3. Read Over Nice Things People Have Said About You
Thinking back to a time when you were successful and confident is a great way to recreate that confidence
right before an interview. A quick and easy way to do this is to print out and compile anything nice that
someone has said about you.
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How to face Bank Interview

In a Bank PO interview, the aim of the interviewers is to assess your personality, your attitude and your
ability to handle the pressure. Before you go for an interview you need to prepare yourself well. This is
because in the process of an interview every aspect of yours will be analysed. Whatever you have to say
about yourself will be evaluated minutely.
Please remember that interviewers are well known about your knowledge on the basis of your written
marks, they only want to know your behaviour, attitude and approach.
So be cool and present yourself in a positive and polite manner. Be confident about what you saying.
Things to be kept in your mind:
1. About banks Date of Establishment, HO Place, Date of Nationalisation (if nationalized), Name
of bank before nationalization (if any), Paid-up Capital and worth of the bank, Number of
branches in India and abroad etc. Basically you have to know history, services, products,
achievement, management (name of CMD) etc of banks
2. International and national information on banking industry.
3. Brief information of Banking Regulation Act, RBI Act , Negotiable Instrument Act, Basic
Banking Knowledge: Banking, Banking Business, Debit and Credit, Types of Banks, Banking
Terms, Banking Reforms in India, Computerisation in India, Types of Accounts, Customer,
Currencies, Foreign Exchange, Types of loan accounts, Banking Technology and its
implementation, Banking Innovative Products, Third Party Products etc.
4. Keep updated. Most of the questions that the panel members ask are from the current affairs
especially from the banking sector.
5. Do not rush while speaking. Speak in calm and composed manner so that you may not utter
something inappropriate which you may regret later. Also remember to speak in a polite and
respectful manner.
6. Do not rush while speaking. Speak in calm and composed manner so that you may not utter
something inappropriate which you may regret later. Also remember to speak in a polite and
respectful manner.
7. Be prepared for situation based questions related to personal life and resolving critical issues.
Brush up your communication skills
8. Dress up: For interview clean and sober dress wearing expected. Both men and women should
wear clean and wrinkle free sober suits. Women should not wear any floral dresses. It should
be simple and sober. Nothing fancy or dress who looks party wear.
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Personal Questions:
Tell us something about yourself

Good morning to sir/mam and all the panel members.
My name is XYZ. I was born and brought up in ABC. I did my schooling from ___. I have completed my
graduation in ____from ____. I like to be disciplined in all walks of life. I like speaking in a polite manner
which at times makes a good impression on others. I am always ready to listen to others and easy to get
along with them. I coordinated the events in my college fest so you can also think me of as a good leader.
My role model is _________ who is ______ (you can also add achievements here). My strength is I can
easily adopt things in life and my weakness is sometimes I end up a little bit of overdoing to complete my
work and i hate procrastination.
Why do you want to join Banking Sector?

Answer: I am always fascinated towards the banking industry specially the role a banker plays as they reach
to the public directly. Moreover banking is one of the most reputed and fastest growing sector in India which
gives immense career growth opportunity to an individual, respect in society and job security. Being a
banker I can fulfil my own dreams as well as I can give the best in me to the bank by providing appropriate
services to the customers.
What is a Bank?
Attention: Don’t mug up from books or sites try to answer it in your style.
e.g. Banking is one of the most essential part in one’s life as it deals with cash and cash transactions.
Financial needs are equally important in life for enjoying a comfortable economic status. So it plays a vital
role for all of us.
How do you see yourself flourish in Banking Sector after 5 Years?

They are not looking to hear about your personal aspirations e.g. what you want to be and what you will do
in upcoming 5 years. They want to know if you are willing to stick around the company and grow
professionally and solve their problems or not. Tell them you see yourself in the role of Manager in MMG
Scale-II. Be sure about the responsibilities of Manager MMG Scale-II. While answering you should express
that you plan on staying at the Bank for a long time. Demonstrate some of you key strengths and how you
plan on enhancing those strengths through employment with that particular bank.
Answer like this
Sir, I share some of the same values which this corporation is looking in Probationary Officers like customer
orientation skills, multitasking ability and ready to accept challenges. I would like to take these values to a
superior level. I’ve been preparing for this position and excited about the opportunity to work with the bank.
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Why did you leave your previous job?

Attention: Speaking anything negative about your past employers would cast back badly on you. So, don’t
slander anyone.
Answer like this
I am thankful to my previous organisation, gave me an opportunity to work with them. I have learned a lot
of things how to work under pressure with confidence and how to make relationship with co-workers
professionally. Now I'm looking for better opportunity to enhance my skills and ability along with company
growth.
How will you add value to our organization?

The interviewer is hoping you might be the solution to their problems. List your main skills and how these
will be directly applicable if you get the job. Recheck the same question as, "What your strengths are and
what our company strengths are?
If there is something common, cite that as synergy. If there is nothing common, mention that you bring new
set of strengths to the table.
Do you have any achievement?

Some very respectable and admirable interviewers appreciate it if you honestly say that you haven't achieved
anything considerable yet and that you are all set to go out and prove yourself and that the concerned
company will provide you a platform for it. Most of the interviewers will expect you to impress them. So it
is always better to have a decent answer ready and prepared.
For example, you might have been part of a team that had organized a college fest for example or a
technical symposium for your department. For all I know, you might have just signed up for that to get out
of classes and sit in the canteen but you can make up a believable crisis situation and a way out and narrate it
to them. There are many more such options. Just sit down and let your creativity flow.
Why should we select you?

This question is a great opportunity to sell yourself and your accomplishments. The answer varies if you're a
fresh graduate as opposed to a senior professional. Regardless you should include
1. How you have the required skills/experience
2. Why you're a good fit: Employers like to know that you've taken the time to understand their
organisation. So take this time to co-relate things you've done in the past with the things the company is
trying to achieve.
3. You get things done: This is the most important ability an employer is looking for. The ability to get
things done, no matter the obstacles. Give some examples from the past.
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Answer like this - As I am a fresher, I have theoretical knowledge but I can do hard work for my
organization and I will put all my efforts for the good progress of organization. Being punctual and sincere, I
can finish the work given to me on time and try my best to fulfil all needs of company from me.
Do you have any questions?

If you have any genuine questions, you can ask. Otherwise, just say “thank you” and leave. You can ask
about the job challenges while emphasizing that you like to be motivated by well-focused daily work
challenges, multi-tasking and even pressure.
Banking Notes
What is a Bank?
Suppose you have got Rs.1,000 you don’t need for or say for a year and want to earn income from the
money until then or you want to buy a house and need to borrow Rs.100,000 and pay it back over 20
years.
• It would be difficult for someone acting alone to find either a potential borrower who needs
exactly Rs.1,000 for a year or a lender who can spare Rs.100,000 for 20 years. That’s where
banks come in.
“Bank is a financial institution that undertakes the banking activity i.e. it accepts deposits and then
lends the same to earn certain profit.”
Now-a-days, banking sector acts as the backbone of modern business. Development of any country
mainly depends upon the banking system.
How do the Banks work?

The primary function of banks is to put their account holders' money to use by lending it out to others
who can then use it. When you deposit your money in the bank, your money goes into a big pool of
money along with everyone else's, and your account is credited with the amount of your deposit.
How banks create money?

Here are the ways in which banks make money
1) Loans: Lending loans to borrowers from the public is a major way for commercial banks to earn money.
These could be personal loan, home loan, car loan and other type of mortgages. Banks generally restrict the
amount of withdrawals to remain solvent, especially for forwarding loans. This ensures that the money
remains within the bank. The amount is lent to a person at a higher interest rate for a fixed period of time. As
the loan amount starts getting recovered, the bank pays a portion of the interest value to other depositors and
keeps the remaining as its earning.
2) Credit Cards: Credit cards are unsecured loans extended by a commercial bank with the sole intention of
earning heavy interest. Availing a credit card, limited or unlimited value, gives the person access to
immediate funds and the person is charged premium fees by the bank for extending this facility.
3) Public Deposits: Money kept by the public in savings and checking accounts is the largest source of
funds for commercial banks. The amount accountholders entrust the bank with safekeeping earns them a
very basic interest amount. These deposits are pooled together and loaned out to other individuals or
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invested elsewhere. The banks earn interest money and share the basic percentage with the savings or
checking account holder.
4) Service Fees: Commercial banks levy service fees on its customers and even though the service fees are
marginal, it forms a large chunk of commercial bank earning medium. Commercial banks charge service
fees for ATM’s, overdrafts, operating a simple savings account, issuing debit cards, renewing debit
cards, accessing internet banking and mobile banking, issuing checks, maintaining bank lockers and
more. These fees are unavoidable since every commercial bank charges them.
● Intermediary: Banks act as an intermediary between depositors (who lend money to the bank)
and borrowers(to whom the bank lends money). The amount banks pay for deposits and the
income they receive on their loans are both called interest.
Accounts can be opened in two ways: Going to a bank branch or though Business Correspondents (BCs).
Business correspondents are the individuals or any other entities just like insurance agents and reach the
people in far flung or remote areas which are unbanked areas. They are called bank representatives. They
help the people in any banking activity like opening accounts, depositing money, withdrawing money, give
away loan, or any other transaction.
Sometimes opening a bank branch in village or remote areas is not feasible, so a BC model was initiated by
RBI.
Functions of Banks
Assets Vs. Liabilities

Assets are the ones which are useful or valuable things a person/organization has like goods, property,
vehicles, equipment, machinery, etc. If we talk about bank’s assets: They are those which the bank has and
can be readily converted to cash whenever bank requires money.
Liabilities are the ones for which an amount of money is owed like in a company the salaries of employees
are to be given, etc. If we talk about bank’s liabilities: They are those which the bank has from the customer
deposits and borrowed money for bank’s purpose.
Letter of credit Vs. Bank Guarantee
These are given by buyers to their sellers both in India and outside India. When products are imported from
a foreign company, how the company will assure that they will get the payment in time ans full amount? So
the solution is Letter of credit and Bank Guarantee
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A letter of credit is a letter issued by bank which guarantees buyer’s payment on time and in correct
amount up to the time the services will be delivered to the buyer.
Unlike in letter of credit, in a bank guarantee the payment is done only when the buyer is not able to pay
the required amount of money to the seller.
So the difference between the two is that if you give letter of credit to seller, that will ensure that bank will
pay on your behalf up to the day the services are being provided to you by the seller and if you give bank
guarantee to seller, that will ensure that bank will pay on your behalf if you are not able to pay the amount.
Insolvency Vs Bankruptcy
When a person/organization is unable to pay their debts when they become due and payable, it is called
insolvency.
When a person/organization is unable to pay their debts when they become due and payable and is also
declared as bankrupt by court, it is called bankruptcy.
All bankrupts will be called insolvent, but not vice-versa.
FDI Vs FII
Foreign Direct Investment (FDI) as the name suggests is investing directly in another country. A foreign
company which is based in some other country like France invests in India either by setting up a wholly
owned subsidiary or getting into a joint venture with some company based in India and then conducts its
business in India.
Examples: IBM India, Maruti Suzuki, SBI life insurance, etc
Foreign Institutional Investor (FII) is similar to FDI in a way that this is also direct investment but
investment in only financial assets such as stocks, bonds etc. of a company located in another country.
Example: Any foreign company invests in the shares of Infosys (based in India).
Dormant account Vs. Frozen account

The account which has not been used for 24 months (2 years) by its operator is termed as dormant account
while the account in which all the activities have been stopped by the bank is a freezed account.
The dormant accounts can be made as operative as per bank policy. According to RBI guidelines, banks
cannot charge any money to make dormant or inoperative accounts as operative. The interest on amount of
money in saving accounts will be credited in account in case of inoperative account also.
Freezing of account means the transactions in such account cannot be performed until further notice. The
payments will be stopped in such accounts and even cheques drawn before freezing are also not allowed to
be encashed by anyone. Only RBI, SEBI, Income-tax authorities, and court can give orders to freeze account
and not the respective banks.
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Cross selling Vs. Up Selling

Cross selling means selling of products/services to an already existing customer. And then if we talk about
banks, when they sell any extra banking products/services to their customer along with the product the
customer wants. Like selling a credit card and internet banking to a savings or current account customer,
selling their any bancassurance products, etc.
Unlike cross selling, up selling means encouraging customers to purchase a higher-end product or we can
say a more costly product than the customer has asked for. Like the customer asks for a credit card with
overdraft facility of Rs 10,000 but the banking representative tells him benefits of having the card with more
facilities, etc.
Consortium Financing Vs. Multiple Banking

There are cases in which big businesses require large finances which it cannot get from single lender. In
Consortium financing, several banks (or financial institutions) finance a single borrower. In this case there
is a common documentation, joint supervision and follow-up exercises between all banks/financial
institutions. So the participating banks form a new consortium bank. The whole loan amount is divided
among those banks forming consortium, so the risk also gets divided.
The bank which takes the higher risk (by giving the highest amount of loan) will act as a leader and thus it
acts as an intermediary between the consortium and the borrower.
Multiple banking is an arrangement where a borrower takes loan amount from several banks. In this case
no bank knows that his borrower has taken loan from other banks too. There is no contractual relationship
between various banks like that in consortium banking and each bank holds its individual security and own
credit rates.
Moratorium period Vs. Grace period

When we take a loan from bank, we do not have to start paying the EMIs immediately. The bank gives some
time before start paying EMIs which are generally paid on a monthly basis. This time before start of paying
EMIs is called Moratorium period.
Unlike moratorium period, during the grace period, interest is not charged. Actually it is a period of time
after a payment becomes due. Example: Grace period is given for paying off the overdraft value of credit
card. If the money is not paid back within the grace period, interest rate is charged according to the lending
institution policy.
NRO Account Vs. NRE Account Vs. FCNR Account
NRO Account: Non Resident Ordinary (NRO) account is a Savings Account or Current Account or Fixed
Deposit Account or Recurring Deposit account opened by NRIs and PIOs. It is a rupee denominated account
i.e. the amount in the account is maintained in Indian Rupees.
NRE Account: Non Resident External (NRE) account is a rupee denominated account which can be
Savings Account or Current Account or Fixed Deposit Account or Recurring Deposit account opened by
NRIs and PIOs.
FCNR Account: Foreign Currency Non Resident (FCNR) account is a term deposit account that can be
maintained by NRIs and PIOs in foreign currency. So this means it is not a savings account. Authorized
dealer banks in India can allow deposits in any of the permitted currency (currency freely convertible).
Cheque Vs. Demand Draft

A cheque is bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on
demand and cheque also includes the electronic image of a truncated cheque and a cheque in the electronic
form.
Also known as DD, it is kind of a pre-paid negotiable instrument that is used to direct payments from one
bank to another bank or one of its own branches to pay a certain sum to the specified party.
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Types of Cheques:
Order Cheque: A cheque which is payable to a particular person on his order is called an order cheque.
This is a cheque whereby the printed word Bearer on the cheque is cancelled. The cancellation of the word
Bearer automatically makes the cheque an order cheque.
Bearer Cheque: A cheque which is payable to a person whosoever bears, is called bearer cheque. The
cheque sometimes can be made payable to “Cash” or bearer or made payable to a specific name.
Stale Cheque: Check presented at the paying bank after a certain period typically six months of its payment
date. A stale check is not an invalid check, but it may be deemed an ‘irregular’ bill of exchange. A bank may
refuse to honor it unless its drawer reconfirms it payment either by inserting a new payment date or by
issuing a new check. Also called stale dated check.
Multilated Cheque: If a cheque is torn into two or more pieces such cheque is Mutilated Cheque. If it
presented for payment, such a cheque the bank will not make payment against such a cheque without getting
confirmation of the drawer. In case, if a cheque is torn at the corners and no material fact is erased or
cancelled, the bank may make payment against such a cheque.
Post Dated Cheque: If a cheque bears a date later than the date of issue, it is termed as post dated cheque.
Any check or draft that has a future date written upon it by the user. The amount of the check will not be
drawn from the account until the date written on the check. For example, a check written on the 14th of the
month but dated for the 28th will not be cashed for another two weeks.
Open Cheque: A cheque that is not a crossed cheque. The person whose name appears on the cheque can
write the name of another person on it, and the money will be paid to them. An open cheque is a cheque that
is not crossed on the left corner and payable at the drawee bank on presentation of the cheque.
Crossed Cheque: A crossed cheque is one which has two short parallel lines marked across its face. A
cheque which carries too parallel transverse lines across the face of the cheque with or without the words “I
and co”, is said to be crossed. Crossed cheques are of two types. By simply crossing a cheque or with the
words ” & Co”, by the payer, the payee can either deposit it in his/her account or endorse it in favour of
another person on the reverse. This practice is nowadays not accepted by the banks.
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Cheque Truncation System (CTS)

Truncation is the process of stopping the flow of the physical cheque issued by a drawer at some point by
the presenting bank en-route to the paying bank branch. In its place an electronic image of the cheque is
transmitted to the paying branch through the clearing house, along with relevant information like data on the
MICR band, date of presentation, presenting bank, etc.
This means that with this system, physical cheques will not move for clearing at different banks. This
enables the outstation cheques to get cleared in a single day and also the associated cost with the movement
of physical cheques gets eliminated.
If a customer wants to see the physical cheque, he can request it to the bank. To meet legal requirements, the
presenting banks which truncate the cheques need to preserve the physical instruments for a period of 10
years.
Negotiable Instruments
Negotiable instrument is a document which guarantees the payment of a specific amount of money, either on
demand, or at a set time, with the payer named on the document. A negotiable instrument can be transferred
from one person to another.
According to Section 13 of the Negotiable Instruments Act, 1881, “A Negotiable Instrument means a
promissory note, bill of exchange or cheque payable either to order or to bearer.”
Know your customer(KYC)

It is a process by which banks obtain information about the identity and address of the customers. It
helps to ensure that services of the banks are not misused. It is to be completed by the banks while
opening accounts and also periodically update the same.
Requirements for opening a bank account:

● Proof of identity
● Proof of address
Proof of identity: Six documents as Officially Valid Documents (OVDs) for the purpose of producing
proof of identity. These six documents are
● Passport
● Driving Licence
● Voters’ Identity Card
● PAN Card
● Aadhaar Card issued by UIDAI
● NREGA Card
One need to submit any one of these documents as proof of identity. If these documents also contain
one’s address details, then it would be accepted as proof of address. If the document submitted by person
for proof of identity does not contain address details, then he/she will have to submit another officially
valid document which contains address details.
*If one does not have any of the documents listed above to show my ‘proof of identity’
He/She can still open a bank account known as Small Account by submitting recent photograph and
putting signature or thumb impression in the presence of the bank official.
*Difference between small accounts and other accounts

Small Accounts have certain limitations such as:
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● balance should not exceed Rs.50,000

● total credits in one year should not exceed Rs.1,00,000
● total withdrawal and transfers should not exceed Rs.10,000 in a month.
● Foreign remittances cannot be credited to such accounts.
Small accounts remain operational for a period of twelve months and thereafter, for a further period of
twelve months, if the holder of such an account provides evidence to the bank of having applied for any
of the officially valid documents within twelve months of the opening of such account. The bank will
review such account after twenty four months to see if it requires such relaxation.
What is e-KYC?
e-KYC refers to electronic KYC. e-KYC is possible only for those who have Aadhaar numbers.
How does it work?
While using e-KYC service, you have to authorise the Unique Identification Authority of India (UIDAI)
to release your identity/address through biometric authentication to the bank branches/business
correspondent(BC). The UIDAI then transfers your data comprising name, age, gender, and
photograph of the individual, electronically to the bank/BC. Information thus provided through e-KYC
process is permitted to be treated as an Officially Valid Document under PML Rules and is a valid
process for KYC verification.
All about RBI

Reserve Bank of India regulates the entire banking system of the nation, has the job of ensuring monetary
stability for us, is responsible for printing our currency notes, operates the country’s credit and currency
system, and does a lot more from its position at the top of the banking system pyramid. RBI was
originally privately owned but is now owned wholly by the Indian government. Set up on April 1, 1935
under the Reserve Bank of India Act, RBI’s central office was initially in Kolkata but moved to
Mumbai in 1937.
But you probably already knew all of this. What you most likely do not know are these 10 lesser
discussed, and quite interesting facts about the RBI. Dig in to be the next RBI knowledge expert.
1. The RBI logo was inspired from the East India Company Double Mohur.
2. Formed on April 1, 1935 as a private entity, but is a government entity now. Nationalization of the central
bank did not happen till 1949.
3. The financial year of RBI is from 1 July to 30 June.
4. The first woman to become the deputy governor of RBI is K. J. Udeshi.
5. RBI demonetized notes in the denominations of Rs. 5,000 and Rs. 10,000 in 1938. They were
reintroduced in 1954 and again demonetized in 1978. RBI can print these notes according to the RBI act of
1934.
6. RBI was also the central bank for two other countries. It played the role of Central Bank of Pakistan till
June 1948 and the Central Bank of Burma ( Myanmar) till April 1947.
7. The bank was established on the recommendation of the Hilton Young Commission.
8. Manmohan Singh is the only Prime Minister to have also served as the Governor of RBI.
9. The first Indian to hold the position of the Governor of RBI was Mr. C.D. Deshmukh. He was the third
governor of RBI.
10. RBI runs a Monetary Museum in the premises of the Mumbai head office.
Wholly owned subsidiaries of RBI:

4 subsidiaries as: Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL), DICGC,
NABARD, and National Housing Bank.
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BRBNMPL: It was established with a view to produce bank notes in India and enable RBI to bridge the gap
between the supply and demand for bank notes in the country.
The company manages 2 Presses: Mysore in Karnataka and Salboni in West Bengal.
Objectives of RBI:
● Regulating the issue of currency in India

● keeping the foreign exchange reserves of the country
● establishing the monetary stability in the country
● developing the financial structure of the country on sound lines consistent with the national socio-
economic objectives and policies.
Major functions of RBI
1. Monetary Authority of India

RBI works as the monetary authority of India and there by operates the monetary policy. Monetary
policy is used for the control of money supply in the economy with objective to maintain economic and
financial stability and ensure adequate financial resources for the purpose of development.
2. Issuer of Currency
Reserve Bank of India has the sole right to issue Banknotes of all denominations.
*Key points:
● First paper notes were issued by the private banks such as Bank of Hindustan and the presidency
banks during late 18th century.
● Currently, paper currency notes in India are issued in the denomination of Rs. 5, Rs.10, Rs.20,
Rs.50, Rs.100, Rs.500 and Rs.1,000. RBI can issue any note of any denomination but not
exceeding Rs. 10,000. The notes denomination is notified by Government and RBI acts
accordingly.
● RBI follows a minimum reserve system in the note issue. Initially, it used to keep 40 per cent of
gold reserves in its total assets. But, since 1957, it has to maintain only Rs. 200 crores of gold and
foreign exchange reserves, of which gold reserves should be of the value of Rs. 115 crores.
● Currency chests are storehouses where banknotes and rupee coins are stocked on behalf of the
Reserve Bank.
● The amount of a banknote is written on it in 17 languages out of 22 official languages of India.
3. RBI as Banker of Banks

The other banks keep their current accounts with RBI and RBI helps them in maintaining statutory
reserves with itself.
4. Management of foreign exchange reserves

RBI manages the Foreign Exchange Management Act, 1999 to facilitate external trade and payment and
promote orderly development and maintenance of foreign exchange market in India.
5. RBI as a regulator and supervisor of financial system

It is the most important function of RBI. It not only regulates and supervises the Indian Banks but also
Foreign Banks, Regional Rural Banks, Local Area Banks, Cooperative Banks, Financial Institutions
including Development Financial Institutions (DFIs) and Non-Banking Financial Companies.
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6. RBI as Banker and Debt Manager to the Government

Central Government entrusts the Reserve Bank with all its money, remittance, exchange and banking
transactions in India and the management of its public debt. Moreover, Government also deposits its cash
balances with RBI.
7. Developmental & Promotional roles

By encouraging the commercial banks to expand their branches in the semi-urban and rural areas, the
Reserve Bank helps to reduce the dependence of the people in these areas on the defective unorganised
sector of indigenous bankers and money lenders and to develop the banking habits of the people.
What is Nationalization?
Nationalization is a process whereby a national government or State takes over the private industry,
organisation or assets into public ownership by an Act or ordinance or some other kind of orders. This
strategy has been frequently adopted by socialist governments for transition from capitalism to socialism.
In India since independence following major nationalizations have taken place
● 1770 : First bank Bank of Hindustan.
● 1949 : RBI was nationalized (RBI was state owned at the time of Indian independence).
● 1955 : Control of Imperial Bank of India was acquired by RBI
● 1969 : 14 Indian private banks were nationalised
● 1972 : 106 insurance companies were nationalised into four insurance companies
● 1980 : 6 more Indian private banks were nationalised
● 1993: New Bank of India Merged into Punjab National Bank
Story behind Nationalization in the 1960s

Banks in India except the State Bank of India (SBI), continued to be owned and operated by private
persons.
By the 1960s, the Indian banking industry had become an important tool to facilitate the development of the
Indian economy. At the same time, it had emerged as a large employer and a debate had followed the
nationalization of the banking industry. Indira Gandhi, the then Prime Minister of India expressed the
intention of the Government of India in the annual conference of the All India Congress Meeting in a
paper entitled "Stray thoughts on Bank Nationalization."
Government of India issued an ordinance (Banking Companies Ordinance,1969) and nationalised the 14
largest commercial banks with effect from 19 July 1969.
Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it received
the presidential approval on 9 August 1969.
The Indian banking sector is classified into scheduled banks and non-scheduled banks.
All banks which are included in the Second Schedule to the Reserve Bank of India Act, 1934 are
Scheduled Banks. These banks comprise Scheduled Commercial Banks and Scheduled Co-operative
Banks. Scheduled Co-operative Banks consist of Scheduled State Co-operative Banks and Scheduled Urban
Cooperative Banks.
Scheduled Commercial Banks in India are categorized into five different groups:
● State Bank of India and its Associates
● Nationalised Banks
● Private Sector Banks
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● Foreign Banks
● Regional Rural Banks
What are Public Sector Banks?

PSBs in India are banks where a majority stake i.e. more than 50% is held by a government. Thus at
present all the nationalised banks are Public Sector banks. In addition to these, IDBI Bank Ltd and SBI are
too Public Sector Bank (though not nationalised bank) as GoI has over 50% stake in these banks too.
What are Private Sector Banks?
Private Banks are banks that do not have any government stakes. Private Banks have gained quite a strong
foothold in the Indian banking industry over the last few years especially because of optimum use of
technology. The Private Banks are accountable for a share of 18.2 percent of the Indian banking industry.
IndusInd Bank was the first private bank in India and among the fastest growing Bank Private Banks in the
country.
Comparison between Private and Public Sector Banks
● Private sector banks introduced the concept of online banking in India. This was mostly because the
private banks were technologically well equipped.
● Private sector banks were using state of the art technology and fully computerized systems since the
time they entered the Indian market whereas the Public sector banks were not.
● However despite the technological challenges the public sector banks in India are still the
preferred destinations for many as they are considered as safer options for money deposit.
What are Foreign Banks?
A foreign bank is a bank with head office outside the country in which it is located. e.g. Standard
Chartered Bank.
What are Regional Rural Banks?
After nationalization, of banks in 1960 there were problems which made it difficult for commercial banks
even under government ownership to lend to farmers. Government set up Narasimham Working Group in
1975. On the basis of this committee’s recommendations, a Regional Rural Banks Ordinance was
promulgated in September 1975, which was replaced by the Regional Rural Banks Act 1976.
First RRB: Prathama Grameen Bank
The RRBs were owned by three entities with their respective shares as follows:
● Central Government → 50%
● State government → 15%
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● Sponsor bank → 35%
NABARD
NABARD is an apex development bank, established in 1982 by a Special Act of the Parliament, with a
mandate to uplift rural India by facilitating credit flow in agriculture, cottage and village industries,
handicrafts and small-scale industries. NABARD functions to promote sustainable rural development for
attaining prosperity of rural areas in India.
RBI has sold its own stake to the Government of India. Therefore, Government of India holds 99% stake in
NABARD.
● It has power to deal with all matters concerning policy, planning as well as operations in giving
credit for agriculture and other economic activities in the rural areas.
● A refinancing agency for those institutions that provide investment and production credit for
promoting the several developmental programs for rural development.
● Improving the absorptive capacity of the credit delivery system in India, including monitoring,
formulation of rehabilitation schemes, restructuring of credit institutions, and training of personnel.
● Co-ordinates the rural credit financing activities of all sorts of institutions engaged in developmental
work at the field level.
● Prepares rural credit plans, annually, for all districts in the country.
● Promotes research in rural banking, and the field of agriculture and rural development.
IDBI
Industrial Development Bank of India (IDBI) came into being on 1st July, 1964 as a Development Financial
Institutions under IDBI Act 1964.
*Key points:
● Regarded as a Public Financial Institution in terms of Companies Act. It continued as DFI till 2004
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when it was transferred into a Bank. To transform this into Bank Industrial Development Bank
● Act 2003 was passed.
● A new company under the name of Industrial Development Bank of India Ltd. was incorporated as a
Govt company under the Companies Act on 27th September, 2004, and thus now it came to be
known as IDBI Ltd wef 1st October 2004 but it also worked as a Bank in terms of the Repeal Act.
● W.e.f. 2nd April, 2005, IDBI Bank Ltd. was finally amalgamated with IDBI Ltd. and was known as
IDBI Ltd. It is a Public Sector Bank as GoI has above 70% shareholding in this Bank.
SIDBI
Small Industries Development Bank of India (SIDBI) was set up under an Act of Parliament in 1990.
Though it was a wholly owned subsidiary of Industrial Development Bank of India, presently the ownership
is held by 33 Government of India owned / controlled institutions.
Functions:
● To initiate steps for technological upgradation and modernisation of existing units.

● To expand the channels for marketing the products of SSI sector in domestic and international
markets.
● To promote employment oriented industries especially in semi-urban areas to create more
employment opportunities and thereby checking migration of people to urban areas.
IFCI
Government of India set up the Industrial Finance Corporation of India (IFCI) in 1948 under a special
Act. This is the first financial institution set up in India with the main object of making medium and long
term credit to industrial needs. It issue bonds and debentures in the open market, to borrow foreign
currency from the World Bank and other organisations, accept deposits from the public and also borrow
from the Reserve Bank.
Functions
● Grants loans and advances to industrial concerns.
● Granting of loans both in rupees and foreign currencies.
● Underwrites the issue of stocks, bonds, shares etc.
● Grant loans only to public limited companies and co-operatives but not to private limited companies
or partnership firms.
EXIM
Export-Import Bank (Exim bank) was set up in 1982 to take over the operations of international finance
wing of the IDBI and to provide financial assistance to exporters and importers.
The authorised capital of Exim bank is Rs. 200 crore and paid-up-capital is Rs. 100 crore wholly
subscribed by the Central Government.
Functions
● Provides direct financial assistance to exporters of plant, machinery and related service in the form
of medium-term credit.
● Provides rediscount of export bills for a period not exceeding 90 days against short-term usance
export bills discounted by commercial banks.
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● Gives overseas buyers credit to foreign importers for import of Indian capital goods and related
services.
● Developing and financing export oriented industries.
● Collecting and compiling the market and credit information about foreign trade.
NHB
National Housing Bank(NHB), a wholly owned subsidiary of Reserve Bank of India (RBI), was set up by
an Act of Parliament in 1987.
NHB is an apex financial institution for housing. It commenced its operations in 1988.
Objective:
● To promote housing finance institutions both at local and regional levels and to provide financial and
other support incidental to such institutions and for matters connected therewith
● NHB registers, regulates and supervises Housing Finance Company (HFCs), keeps surveillance
through On-site & Off-site Mechanisms and coordinates with other Regulators.
All About SEBI

Securities Exchange Board of India was set up in 1988 to regulate the functions of securities market. It
promotes orderly development in the stock market but initially it was not able to exercise complete
control over the stock market transactions. It was left as a watchdog to observe the activities but was found
ineffective in regulating and controlling them. So in 1992, SEBI was granted legal status.
Reason for establishment: With the growth in the dealings of stock markets many malpractices started in
stock markets such as price rigging, and delay in delivery of shares, violation of rules and regulations of
stock exchange. Due to these malpractices the customers started losing confidence in the stock exchange. So
government of India decided to set up an agency or regulatory body known as Securities Exchange Board of
India (SEBI).
Functions:
● Checks Price Rigging
● Prohibits Insider trading
● Prohibits fraudulent and Unfair Trade Practices
● Registers and regulates the working of stock brokers, sub-brokers,share transfer agents, trustees,
merchant bankers and all those who are associated with stock exchange in any manner.
● Registers and regulates the working of mutual funds etc.
● Regulates takeover of the companies
All about IMF & WORLD Bank

First of all history behind the establishment of these two institutions
World bank and IMF are called the "Bretton wood institutions". In July 1944 during the United Nations
Monetary and Financial conference in Bretton woods, New hampshire, representatives of 45 governments
agreed to set up the World bank (which came into existence during the conference) and IMF (which came
into existence in 1945).
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Reasons: Great Depression in the 1930s. Countries tried to protect their domestic economy by putting
barriers on foreign trade and devaluing their currency to gain market share in export markets. These led to
decline in world trade and living standards fell sharply. By 1940s it was clear that the world needed global
institutions for economic cooperation.
IMF(International Monetary Fund) World Bank
● Stability ● Growth
● Objective: To deal with all the issues ● Objective: To lessen poverty and
related to the financial sector and promote the long term development of
macroeconomics. the economy.
● IMF is about balancing the ● World Bank is for development

international financial system in both projects in the developing world.
rich and poor countries (Greece is a
recent recipient).
● You go to the IMF when you are so ● You go to the World Bank when you
messed up that your currency is want to build a dam or power plant or
dropping like crazy. IMF comes and a road.
usually fixes stuff along with advice.
● IMF is a fund. Meaning it has a pool of ● World Bank is a bank. Meaning it

money given to it by 188 member borrows money from investors around
countries in the past and lends out of the world and then lends to the poor
that fund. It doesn't usually borrow governments.
new money. ● IBRD(188)
● IDA(172)
Some of their projects in India(2015). e.g.
● Nai Manzil - Education and Skills
Training for Minorities
● Eastern Dedicated Freight Corridor-3
● National Cyclone Risk Mitigation
Project-II
World Bank is a much bigger institution and has two arms:

IBRD (International Bank for Reconstruction and Development): Charges a slightly higher
interest rate than it borrows and it is mainly for profitable commercial projects [such as roads and
dams].
IDA(International Development Association): This is a grant body. No interest and usually countries
are given long periods for repaying. The focus is on social projects such as immunization and education,
open only for the poorest nations.
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NBFC(Non-Banking Financial Company)

It is engaged in the business of loans and advances, acquisition of bonds/debentures/securities issued by
Government or local authority or other marketable securities, leasing, hire-purchase, insurance business, chit
business but does not include any institution whose principal business is that of agriculture activity,
industrial activity, purchase or sale of any goods or providing any services and sale or purchase of
immovable property.
Difference between Banks & NBFCs

● NBFC cannot accept demand deposits
● NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on
itself
● deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to
depositors of NBFCs, unlike in case of banks.
NBFCs but exempted from the requirement of registration

● Housing Finance Companies
● Merchant Banking Companies
● Stock Exchanges
● Companies engaged in the business of stockbroking/sub-broking
● Venture Capital Fund Companies
● Nidhi Companies
● Insurance companies
● Chit Fund Companies
*Key point: There is no Ombudsman for hearing complaints against NBFCs. In respect of credit card
operations of an NBFC, which is a subsidiary of a bank if a complainant does not get satisfactory response
from the NBFC within a maximum period of thirty 30days from the date of lodging the complaint, the
customer will have the option to approach the Office of the concerned Banking Ombudsman for
redressal of his grievances.
Banking Ombudsman
The Banking Ombudsman is a senior official appointed by the Reserve Bank of India to redress customer
complaints against deficiency in certain banking services.
*Key points:
● One can file a complaint if the reply is not received from the bank within a period of one month
after the bank rejects the complaint or if the complainant is not satisfied with the reply given by the
bank.
● Compensation to be paid by the bank to the complainant is limited to the amount arising directly out
of the act or omission of the bank or Rs 10 lakhs, whichever is lower.
● Compensation not exceeding Rs 1 lakh to the complainant only in the case of complaints relating
to credit card operations for mental agony and harassment.
● If one is not satisfied with the decision passed by the Banking Ombudsman, one can approach the
appellate authority vested with a Deputy Governor of the RBI.
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Bharatiya Reserve Bank Note Mudran Private Ltd.
It was established with a view to produce bank notes in India and enable RBI to bridge the gap between the
supply and demand for bank notes in the country.
The company manages 2 Presses: Mysore in Karnataka and Salboni in West Bengal.
The machinery at Mysore Site has been supplied by Switzerland and that of Salboni by Japan.
Minting of coins
According to the Coinage Act, 1906, the Government of India has the sole right to mint coins. GOI supplies
the coins to Reserve Bank of India which then circulates the coins.
Coins are minted at the four India Government Mints at

• Mumbai, Maharashtra – established in 1929 by the British Government
• Alipore (Kolkata), West Bengal – established in 1929 by the British Government
• Saifabad and Cherlapally (Hyderabad), Telangana – established in 1903 by the Government of the
erstwhile Nizam of Hyderabad and was taken over by the Government of India in 1950 & started
minting since 1953.
• Noida, Uttar Pradesh - set up in 1986 and started minting ferritic stainless steel coins from 1988.
Each mint has its mark on the coin minted by it
Security Printing and Minting Corporation of India Limited (SPMCIL)
The work of SPMCIL includes manufacturing of security paper, minting of coins, printing of currency and
bank notes, non-judicial stamp papers, postage stamps, travel documents, etc.
Printing Presses:
There are 4 printing presses in the country which are
• Currency Note Press, Nashik Road
• Bank Note Press, Dewas
• India Security Press, Nashik
• Security Printing Press, Hyderabad
Paper Mill
The Security Paper Mill (SPM), Hoshangabad is responsible for manufacturing of different types of Security
Papers.
DICGC(Deposit Insurance and Credit Guarantee Corporation)
Aim: To bring financial stability to the banking system through deposit insurance, special for the benefit of
small depositors. So it is a deposit insurance provider for small depositors.
Banks insured by the DICGC

Commercial Banks: All commercial banks including branches of foreign banks functioning in India, local
area banks and regional rural banks
Cooperative Banks: All co-operative banks other than those from the State of Meghalaya and the Union
Territories of Chandigarh, Lakshadweep and Dadra and Nagar Haveli
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Primary cooperative societies are NOT insured by the DICGC.

Key points:
● Maximum deposit amount insured by the DICGC Each depositor in a bank is insured upto a
maximum of Rs.1,00,000
● If you have deposits with more than one bank, deposit insurance coverage limit is applied separately
to the deposits in each bank.
● Kinds of deposits insured: All deposit accounts including savings, fixed, current, recurring, except:
Deposits of the Foreign Governments Deposits of the Central and State Governments.
● Insurance cost is fetched by the bank which is insured. The DICGC charges 10 paise per Rs. 100 as
insurance premium.
Self Help Groups(SHG)
Self help groups refer to group of 15-20 people (generally women) , who pool or collect their resources
like money so as to help each other in times of need. Self help groups give loans to its members at a
general interest rate which is less than interest rate of moneylenders.Self help groups are also able to
take loans from bank when they have pooled good amount of money. Also SHG act as building groups
of village and provide platform to discuss village issues.
Women's Self-Help Groups (WSHGs)

Formed under the state government's Nava Jatan programme to address malnourished children. WSHGs
adopt malnourished children in their area and provide them food with the help of Anganwadi centres.
Cooperative Banks
Banks in India can be broadly classified under two heads — commercial banks and co-operative banks.
While commercial banks (nationalised banks, State Bank group, private sector banks, foreign banks and
regional rural banks) account for an overwhelming share of the banking business, co-operative banks also
play an important role.
The structure of cooperative network in India can be divided into 2 broad segments
● Urban Cooperative Banks
● Rural Cooperatives
Urban Cooperatives are scheduled and non-scheduled.

Banking activities of Urban Cooperative Banks are monitored by RBI. Registration and Management
activities are managed by Registrar of Cooperative Societies (RCS). These RCS operate in single-state and
Central RCS (CRCS) operate in multiple state.
Rural Cooperatives are short-term and long-term structures.

Short-term cooperative banks are three tiered operating in different states.
● State Cooperative Banks: Operate at the apex level in states
● District Central Cooperative Banks: Operate at the district levels
● Primary Agricultural Credit Societies: Operate at the village or grass-root level.
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Long-term structures
State Cooperative Agriculture and Rural Development Banks (SCARDS): Operate at state-level.
Primary Cooperative Agriculture and Rural Development Banks (PCARDBS): Operate at district/block
level.
Core points related to Monetary & Fiscal Policy
Both are complimentary to each other in balancing growth, unemployment and inflation.
Fiscal policy is by the government relates to the revenue and expenditure policies of the government and
also it is the use of government funds to influence the economy, like the annual budget and taxation.
Monetary policy is administered by the central bank of the nation with regard to money supply, interest
rates etc.
Following are the instruments of Monetary Policy in India.
Cash Reserve Ratio (CRR) It is the share of net demand and time liabilities (deposits) that banks must
maintain as cash balance with the Reserve Bank.
Now what are Demand and Time Liabilities?

Demand Liabilities
Current Deposits, Savings bank deposits, Margins held against letters of credit/guarantees, Balances in
overdue fixed deposits, Outstanding DDs, Unclaimed deposits, Credit balances in the Cash Credit account
and deposits held as security for advances which are payable on demand & Money at Call and Short Notice
from outside the Banking System (Liability to others).
Time Liabilities
Fixed deposits, cash certificates, cumulative and recurring deposits, time liabilities portion of savings bank
deposits, staff security deposits, margin held against letters of credit, if not payable on demand, & deposits
held as securities for advances which are not payable on demand and Gold deposits.
Effect of increase and decrease
Lower CRR means bank can give more money as loan--> lower interest rates--> cheap loan--> more people
take loan to start business or building house or buying car-->boost in economy. However, can also lead to
inflation, if people have more cash in their hands than the items available for purchase in the market.
Higher CRR: Bank can give less money as loan-->Higher interest rate-->it becomes expensive to start a
new factory, buy a new house / car/bike. This can curb inflation but may also lead to slowdown in economy
because people wait for the interest rates to go down before taking loans.
● With every cut in 25 basis points in CRR it would infuse the liquidity of Rs.16000 crore.
Statutory Liquidity Ratio (SLR): The share of net demand and time liabilities that banks must maintain in
safe and liquid assets, such as, government securities, cash and gold. Changes in SLR often influence the
availability of resources in the banking system for lending to the private sector.
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Refinance facilities: Sector-specific refinance facilities aim at achieving sector specific objectives through
provision of liquidity at a cost linked to the policy repo rate.
Liquidity Adjustment Facility (LAF): Consists of overnight and term repo/reverse repo auctions. Reserve
Bank has increased the proportion of liquidity injected in the LAF through term-repos.
Term Repos: Reserve Bank introduced term repos of different tenors, such as, 7/14/28 days to inject
liquidity over a period that is longer than overnight.
Aim: To help develop interbank money market which in turn can set market based benchmarks for pricing
of loans and deposits and through that improve transmission of monetary policy.
Marginal Standing Facility (MSF):
Scheduled commercial banks can borrow additional amount of overnight money from the Reserve Bank by
dipping into their SLR portfolio up to a limit (currently 2% of their NDTL) at a penal rate of interest
(currently 100 basis points above the repo rate).
This provides a safety valve against unanticipated liquidity shocks to the banking system. MSF rate and
reverse repo rate determine the corridor for the daily movement in short term money market interest rates.
Open Market Operations (OMOs): These include both, outright purchase/sale of government securities
for injection or absorption of liquidity
Bank Rate: Rate at which the Reserve Bank is ready to buy or rediscount bills of exchange or other
commercial papers. This rate has been aligned to the MSF rate and therefore changes automatically as and
when the MSF rate changes alongside policy repo rate changes.
Prime Lending Rate

The interest rate charged by banks to their largest, most secure, and most creditworthy customers on short-
term loans. This rate is used as a guide for computing interest rates for other borrowers. It is also called
prime rate.
Types of Accounts
Bank Accounts are classified into four different types. They are,
1) Current Account
2) Savings Account
3) Recurring Deposit Account
4) Fixed Deposit Account
1) Current account
● For business persons, firms, companies, public enterprises etc and are never used for the purpose
of investment or savings.
● 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 paid on amount held in the account, banks charges certain service charges, on such
accounts.
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● Do not have any fixed maturity as these are on continuous basis accounts.
2) Savings Account
● For saving purposes
● Any individual either single or jointly can open a savings account. Most of the salaried persons,
pensioners and students use Savings Account.
● Advantage of having Savings Account is Banks pay interest for the savings. The saving account
holder is allowed to withdraw money from the account as and when required.
● Rate of interest ranges between 4% to 6% per annum in India.
● There is no restriction on the number and amount of deposits. But withdrawals are subjected to
certain restrictions. Some banks recommend to maintain a minimum amount to keep it functioning.
3) Recurring deposit account or RD account is opened by those who want to save certain amount of
money regularly for a certain period of time and earn a higher interest rate.
● A fixed amount is deposited every month for a specified period and the total amount is repaid with
interest at the end of the particular fixed period.
● Period of deposit is minimum six months and maximum ten years.
● Interest rates vary for different plans based on the amount one saves and the period of time and also
on banks.
● No withdrawals are allowed from the RD account. However, the bank may allow to close the
account before the maturity period.
● Can be opened in single or joint names. Banks are also providing the Nomination facility to the
RD account holders.
4) Fixed Deposit Account(FD)

A particular sum of money is deposited in a bank for specific period of time. In some other countries these
are known as "Term Deposits" or even called "Bond".
● It’s one time deposit and one time take away (withdraw) account. The money deposited in this
account can not be withdrawn before the expiry of period.
● In case of need, the depositor can ask for closing the fixed deposit prematurely by paying a
penalty(usually of 1%, but some banks either charge less or no penalty) The penalty amount
varies with banks.
● A high interest rate is paid on fixed deposits. The rate of interest paid for fixed deposit vary
according to amount, period and also from bank to bank.
Miscellaneous Deposits
CASA Deposits
● It refers to Current Account Saving Account Deposits.
● Low interest deposits for the Banks compared to other types of the deposits. So banks tend to
increase the CASA deposits and for this they offer various services such as salary accounts to
companies and encouraging merchants to open current accounts also use their cash-management
facilities.
● The Bank is High CASA ratio(CASA deposits as % of total deposits) are in a more comfortable
position than the Banks with low CASA ratios , which are more dependent on term deposits for their
funding, and are vulnerable to interest rate shocks in the economy, plus lower spread they earn.
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Term Deposits are of three kinds
1. Fixed deposits: A fixed rate of interest is paid at fixed, regular intervals.

2. Re-investment deposits: Interest is compounded quarterly and paid on maturity, along with the
principal amount of the deposit. In the Flexi Deposits amount in savings deposit accounts beyond a
fixed limit is automatically converted into term-deposits.
3. Recurring deposits: Fixed amount is deposited at regular intervals for a fixed term and the
repayment of principal and accumulated interest is made at the end of the term. These deposits are
usually targeted at persons who are salaried or receive other regular income. A Recurring Deposit
can usually be opened for any period from 6 months to 120 months.
Plastic Money
Different types of plastic money available in the market today. Be it credit cards, debit cards,charge cards,
co-branded cards. More and more Indians are using them as a convenient mode of payment.
Debit Card: Money you are spending is your own and is drawn from an account you have with the
bank/institution issuing you the debit card. No money in that account? No spendy.
Credit Card: Money you are spending is the bank’s and at the end of each month the bank/institution
will issue you bill letting you know how much of their money you've spent, how much in total you owe
them and how much they require you to pay this month. There is of course usually a limit to how much
of the bank's money they will allow you to use, if you have used all of those funds - no spendy.
Prepaid cards: A prepaid card works a bit like a gift card – you top it up with money, and you can only
spend up to that amount. Often used by travellers to carry holiday money, and by anyone without a
normal bank account – generally kids, teens and people with poor credit ratings.
Smart card: It contains an electronic chip which is used to store cash. This is most useful when you have to
pay for small purchases. For example bus fares and coffee. No identification, signature or payment
authorisation is required for using this card. The exact amount of purchase is deducted from the smart card
during payment and is collected by smart card reading machines. No change is given.
Co-branded cards are credit cards issued by card companies that have tied up with a popular brand for the
purpose of offering certain exclusive benefits to the consumer. For example, the Citi-Times card gives you
all the benefits of a Citibank credit card along with a special discount on Times Music cassettes, free entry to
Times Music events, etc.
Loans
Home Loan: Home loan as name suggest is the loan against buying property. Every individual currently
have dreams to have their own home.
Personal Loan: It is the loan granted to fulfill your expenses which ranges from buying some expensive
electronic gadgets to booking your air tickets. People used to use this facility for anything they can. They
forget that usually rate of interest on such loans will be higher than other types of loans. But still to have
something in advance end up them to borrower of such type of loans. Here we may find two types of loans
● Secured Loans-Where you provide some collateral as a safety against loans.
● Unsecured Loans-In such type of loans borrower collateral not required.
● Car Loan or Vehicle Loan: Used to meet your financial requirement when one is planning to have
his dream car or bike. It is usually a secured loan where collateral is your vehicle and in case of
default lender may recover it by taking back your vehicle. But some lenders offer unsecured loans
where your credit score matters more.
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● Education Loan: This is actually a handy tool for parents who not planned well for their kid’s
higher education.
Maximum Loan Available

Studies in India-Maximum Rs.10,00,000.
Studies abroad-Maximum Rs.20,00,000.
Security
Upto Rs.4,00,000: Parents need to be joint borrowers but security is not required.
Above Rs.4,00,000 and below Rs.7,50,000: Besides parents joint borrower condition, you need to bring
collateral security in the form of suitable third party guarantee will be taken. But if banks satisfied with
financial condition of the borrower then they may waive the condition of third party collateral.
Securities: Pledge, Hypothecation,Mortgage
Pledge is when the property is offered as collateral or security. It is a right to reserve a legal interest in
something. Example- a lot of banks and credit unions have what is called "cross collateral." So for instance,
if you have a vehicle loan with a bank and also have a checking account with the bank, there is an excellent
chance that you've signed a contract provision where you've "pledged" whatever funds you may have in your
checking account from time to time as additional security on the loan.
Hypothecation: It is used when you(borrower) have the actual possession of the asset, for which you have
taken the loan. Generally, this is charged against loans for movable assets, like car, bus, etc. (vehicle loans).
Here, the assets (bus, car, etc.) remain with you, and you are hypothecated to the bank for the loan granted.
In case you are unable to repay the loan amount, then the bank has the right to sell the asset (bus, car, etc.),
(which is possessed by you) and recover the total amount (with interest).
Mortgage: It is used when you (borrower) have the actual possession of the assets, for which you are
granted loan (e.g., house loan), or against which you are granted loan (e.g., house mortgaged). Mortgages
are generally those assets, which are permanently attached with Earth surface, like house, land, factory etc.
In case you are unable to repay the loan amount, the bank has the right to seize and sell the mortgage, and
recover the loan amount (with interest).
MICR
MICR stands for Magnetic Ink Character Recognition.
It is a technology which allows machines to read and process cheques enabling thousands of cheque
transactions in a short time.
MICR code is usually a nine digit code
First three digits: Represent the city code that is the city in which the bank branch is located. Next three
digits: Bank code
Last three digits: Bank branch code
e.g. For example, if you have an account with Axis Bank,New Delhi (Defence Colony) then its nine digit
MICR code will be 110211004 where:
110, the first three digits representing the city code for New Delhi;
211, the next three digits representing the bank code for Axis bank;
And 004, the last three digits representing the bank branch code for Defence Colony.
IFSC
IFSC(Indian Financial System Code)
The Payment Systems such as National Electronic Funds Transfer (NEFT), Real Time Gross Settlement
(RTGS) & Centralized Funds Management System (CFMS) used IFS Codes. IFSC developed by the
Reserve Bank of India.
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The code consists of 11 Characters:

First 4 characters represent the entity
Fifth position has been defaulted with a 0 (Zero) for future use
Last 6 characters denotes the branch identity
e.g ICIC0000438
SWIFT Code
It is a unique identification code for both financial and non-financial institutions approved by the
International Organization for Standardization (ISO). SWIFT Standards, a division of The Society for
Worldwide Interbank Financial Telecommunication (SWIFT), handles the registration of these codes.
SWIFT Codes are used when transferring money between banks, particularly for international wire transfers,
and also for the exchange of other messages between banks.
NEFT(National Electronic Fund Transfer) RTGS(Real Time Gross Settlement)
NEFT is a payment system facilitating one- Real Time: Instructions that are executed at
to-one funds transfer. the time they are received, rather than at some
later time.
Gross Settlement: Settlement of funds

transfer instructions occurs individually.
Minimum Amount: Rs.2 lakhs Minimum Amount: Rs.2 lakhs
Maximum Amount: No upper ceiling Maximum Amount: No upper ceiling
Timings:8 am to 7 pm(Monday through Timings:8.00 hours to 16.30 hours(Monday

Friday and also on Working Saturdays i.e. through Friday and also on Working Saturdays
Saturdays other than 2nd & 4th Saturdays).. i.e. Saturdays other than 2nd & 4th Saturdays).
Inward transactions: Free, no charges to be Inward Transactions: Free, no charge to be

levied from beneficiaries levied
Outward transactions: Outward Transactions:
- For transactions up to Rs 10,000 : not Rs 2 lakh to Rs 5 lakh - Not exceeding Rs 30
exceeding Rs 2.50 (+ Service Tax) per transaction;
-For transactions above Rs 10,000 up to Rs 1 Above Rs 5 lakh - not exceeding Rs 55
lakh: not exceeding Rs 5 (+ Service Tax) transactions;
-For transactions above Rs 1 lakh and up to Rs
2 lakhs: not exceeding Rs 15 (+ Service Tax)
-For transactions above Rs 2 lakhs: not
exceeding Rs 25 (+ Service Tax)
Maximum amount per transaction is limited to Rs.50,000/- for cash-based remittances and
remittances to Nepal
Immediate Payment Service (IMPS)

It is a tool through which one can transfer money instantly within banks across India through mobile,
internet and ATMs. Unlike NEFT and RTGS this facility is available 24x7x365. The IMPS facility is
provided by National Payments Corporation of India (NPCI).
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• Customer should do Mobile Banking Registration if he wants to transact through mobile. The
customer gets a unique Mobile Money Identifier (MMID) which is one of the inputs to start the
transaction. It is a 7 digit number issued by banks. Every mobile phone be it a basic phone or
smartphone is eligible for IMPS.
Unified Payments Interface (UPI)

This system is been developed for all retail payments in the country. It has been developed by National
Payments Corporation of India (NPCI) to make the transfer of money easy and simple. Like IMPS, this
facility is also available 24x7x365, then why this new system?
• There are variety of things need to be fulfilled while doing transactions through NEFT and RTGS
like going to bank, form filling, giving various details like account number, IFSC code, etc. IMPS is
somewhat better.
• But with UPI, you only need a smartphone with an app that has enabled UPI platform. Only one app
for all your accounts, be it be of any bank. You will be given a virtual ID and a mobile personal
identification number (MPIN) which are all required to do transactions using this new platform.
All about NPA

An asset (loan) including a leased asset, becomes non performing when it stops generating income for the
bank.
• Once the borrower has failed to make interest or principle payments for 90 days the loan is
considered to be a non-performing asset.
• If the status of NPAs in banks is not controlled, banks can become bankrupt.
Reasons for Occurrence of NPAs
● Normal banking operations

● Bad lending practices
● Incremental component due to internal bank management, like credit policy, terms of credit, etc.
● Competition banks are enormously selling unsecured loans
Result of NPAs
● Decrease profitability.
● Reduce capital assets and lending limits.
● Increase loan loss reserves.
How to reduce NPA?

SARFAESI ACT 2002
The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
(SARFAESI) empowers Banks to recover their non-performing assets without the intervention of the
Court.
3 alternatives
● Securitisation
● Asset Reconstruction
● Enforcement of Security without the intervention of the Court.
Applicable only for NPA loans with outstanding above Rs.1 lakh. NPA loan accounts where the amount is
less than 20% of the principal and interest are not eligible to be dealt with under this Act.
The Act empowers the Ban
● To issue demand notice to the defaulting borrower and guarantor, calling upon them to discharge
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their dues in full within 60 days from the date of the notice.
● To give notice to any person who has acquired any of the secured assets from the borrower to
surrender the same to the Bank.
● To ask any debtor of the borrower to pay any sum due or becoming due to the borrower.
● Any Security Interest created over Agricultural Land cannot be proceeded with.
If the borrower fails to comply with the notice, the Bank may take recourse to the following measures:
1.Take possession of the security
2. Sale or lease or assign the right over the security
3. Manage the same or appoint any person to manage the same
Lok Adalats: For the recovery of small loans. They cover NPA up to Rs. 5 lakhs, both suit filed and non-
suit filed are covered.
Compromise Settlement: It is applied to advances below Rs. 10 Crores.
Credit Information Bureau: Help banks by maintaining a data of an individual defaulter and provides this
information to all banks so that they may avoid lending to him/her.
Debt Recovery Tribunal(DRT): The debt recovery tribunal act was passed by Indian Parliament in 1993.
Objective: Facilitating the banks and financial institutions for speedy recovery of dues in cases where the
loan amount is Rs. 10 lakhs and above.
Balance Sheet
● A balance sheet is a snapshot of a business' financial position on one particular day.

● It provides a summary of what a business owns or is owed. It states what assets the business
owns and what liabilities it owes, at a particular date.
● The balance sheet is used to show how the business is being funded and how those funds are
being used.
Why it is called Balance Sheet?
Because there is a debit entry and a credit entry for everything, so the total value of the assets is always the
same value as the total of the liabilities.
Contents
● Fixed assets:: Long-term
● Current assets: Short-term
● Current liabilities: What the business owes and must repay in the short term
● Long-term liabilities: Owner's or shareholders' capital
Fixed assets
Tangible assets - e.g. buildings, land, machinery, computers, fixtures and fittings.
Intangible assets - e.g. goodwill, intellectual property rights (such as patents, trademarks and long-term
investments.
Current assets e.g. stock, work in progress, money owed by customers, cash in hand or at the bank, short-
term investments, pre-payments
Current liabilities
These are amounts owed to you and due within one year.
● money owed to suppliers
● short-term loans, overdrafts or other finance
● taxes due within the year
Long-term liabilities
Creditors due after one year: Amounts due to be repaid in loans or financing after one year, eg bank or
directors' loans, finance agreements
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Capital and reserves: Share capital and retained profits, after dividends (if your business is a limited
company), or proprietors capital invested in business (if you are an unincorporated business)
What does a balance sheet show?
● How solvent the business is
● How liquid its assets are - how much is in the form of cash or can
● Be easily converted into cash, i.e. stocks and shares
● How the business is financed
● How much capital is being used
Banks Board Bureau (BBB)

The main aim of Banks Board Bureau is to recommend appointment of directors in Public Sector Banks
(PSBs) and advice on ways of raising funds and dealing with issues of stressed assets. Besides this task, the
BBB will also be a link between the government and banks and will be engaged with banks to evolve
strategies for them.
The first chairman of Banks Board Bureau selected is Vinod Rai who is former CAG.
Demat account
Demat account is an account in which the shares and securities are held in dematerialized form i.e.
electronically without any physical papers held. To carry out transactions in the stock market, one should get
open a demat account. Multiple demat accounts can be opened. Demat accounts are held by a single person
i.e. no joint accounts can be operated.
Electronic Clearing System

ECS is used for faster payments and collections. It is used for either making bulk payment of amounts or for
bulk collection of amounts. The institutions who apply for ECS can initiate the process, no need to go to
bank branch again and again.
Two variants:
ECS Credit: ECS Credit is for making bulk payment of amounts. Under this scheme, a single account is
debited and then multiple accounts are credited. Example: A company has 50 employees and at the start of
month it gives salary to all the employees so instead of crediting each account separately, the company can
use the ECS Credit Scheme.
ECS Debit: ECS Debit is for bulk collection of amounts. Under this scheme, multiple accounts are debited
and then a single account is credited. Example: Many people go for insurance policies and they have
allowed the payment of their premiums from their account. Now it is possible that on a single day, many
customer accounts are to be debited to have the premium from them. Here ECS Debit scheme can be used.
Marginal Cost of funds based Lending Rate (MCLR)
MCLR got effective after April 1, 2016. How RBI decided to implement MCLR system?
Before 2010, there was Benchmark Prime Lending Rate (BPLR) system. Under this banks were allowed
to lend loans to their most trust worthy customers at a low rate. But this system was not transparent.
• After this, banks were advised by RBI to apply the system of base rate i.e. below this rate banks will
not be able to lend credits, except in the cases allowed by RBI. Different parameters were used.
These parameters include average cost of funds, marginal cost of funds or any other methodology
which seemed reasonable. But then banks used to change their methodology as when they wanted.
• Whenever the RBI cuts the repo rate, same has to be done by banks also in their base rates, but they
lower the base rate in small because most banks currently follow average cost of funds based
calculation for arriving at respective base rates. This is the main reason for changing the policy to
Marginal Cost of Funds based Lending Rates (MCLR).
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Marginal Cost of Funds: They are the funds which banks have to give to its customers and RBI instead of
investing them in other ways.
Para banking
Para banking activities are the activities carried out by the bank which are apart from its normal day-to-day
activities. Its not that bank can perform any activity other than daily activities, it can perform only those para
banking activities which are permitted by RBI.
Examples: insurance business, portfolio management services, to become pension fund managers, mutual
funds business, money market mutual funds, underwriting of bonds of PSUs, investment in venture capital
funds, etc.
Bancassurance
Bancassurance as the term suggests is Bank + Insurance. Bancassurance means selling insurance product
through banks. It is one of the para banking activity which the RBI has allowed the banks to take up. For
selling the insurance product, bank and insurance company come up in a partnership where the bank sells
the insurance company’s insurance products to its clients.
Some examples include:
SBI General Insurance Company Limited: joint venture between SBI and Insurance Australia Group (IAG).
SBI Life Insurance: joint venture life insurance company between SBI and BNP Paribas Cardiff of France.
E-Lobby
E-Lobby is a facility which is now provided by banks so that their customers can do their banking
transactions as per their convenience 24×7 i.e. without any time restriction. E-Lobby provides the facility on
bank holidays also.
• Self service facilities which can be done at banking e-lobbies include: ATM withdrawals, cash
deposits, card-to-card transfers, mobile phone top-ups, railway booking, passbook printing, NEFT,
opening of FD/RD accounts, SMS alerts, cheque drop box, bill payments, mini statements, etc.
Clean Note Policy of RBI

In order to increase the life of currency notes, Reserve Bank of India (RBI) issued Clean Note Policy in
2001.
According to the policy: The note packets should not be stapled, while the banding of packets should be
done with paper/polythene bands so that the life of the currency notes is increased.
Debt Consolidation
In simple words Debt Consolidation is going for another loan to pay the existing loan.
Technical definition says that Debt Consolidation is a form of debt refinancing that entails taking out one
loan to pay off many others. Refinancing means replacement of an existing debt to be paid with another one.
External Commercial Borrowing (ECB)

ECB refers to the loans taken from non-resident lenders i.e. the foreign companies to finance commercial
activities in India. ECBs cannot be used for investment in stock market or speculation in real estate. At some
times, borrowings from external companies can be cheaper than that borrowed within the country.
There are two ways in which ECB can be accessed in the country:
1.Automatic Route: Under this, the borrower is not to take any permission from RBI or GOI.
2.Approval Route: Under this, the borrower has to take approval from RBI or GOI.
Bharat Bill Payment System (BBPS)

With a need of bill payments system, various organizations decided to provide a single platform to make all
these payments. So an integrated bill payment system called BBPS was proposed for which the policy
guidelines were issued by the Reserve Bank of India on November 28, 2014.
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• National Payment Corporation (NPCI) had been identified to act as Bharat Bill Payment Central Unit
(BBPCU) which will be a single authorized entity for operating the BBPS.
• The biggest advantage is that the bill can be paid anywhere and anytime. The system will provide
multiple payment modes and instant confirmation of payment. Payments may be made through the
BBPS using cash, transfer cheques, and electronic modes. The BBPS outlets would include banks,
ATMs, business correspondents, kiosks etc.
Lead Bank Scheme

The Lead Bank Scheme was introduced in 1969 to provide lead roles to individual banks (both in public
sector and private sector) for the districts allotted to them.
• Commercial banks did not have adequate presence in rural areas and also lacked the required rural
orientation and so the rural areas were not able to enjoy the benefits of banking.
• So a bank (public or private) was given some area in which that bank had to play a lead role in
providing financial services to the people, making them aware about the banks and various benefits
of banks and also generating trust among people so that they deposit their money without any fear of
loss or fraud. So this bank was the lead bank of area.
Gold Monetisation Scheme

The Gold Monetisation Scheme enables individuals (households) and institutions to deposit their gold
holdings with the banks by earning interest. The deposit is treated as a term deposit in the form of gold. So
one can deposit his gold lying idle in bank lockers by earning interest at the same time.
Money laundering
It is an act of converting illegal money to legal money. A person who is found having money from illegal
sources can be made to go to prison, or any other liable punishment. So the persons or rather criminals try to
convert their illegal money to legal money so that their money appears clean which is known as money
laundering.
• The act related is Prevention of Money laundering Act 2002.
• A step to prevent money laundering is KYC (Know Your Customer) policy. The KYC helps to
ensure that banks’ services are not misused.
Priority Sector Lending (PSL)

Priority Sectors are those sectors in the economy which may not get timely and adequate credit. One of the
reasons of this is that many people in weaker sections wanting of loans do not have assets to keep as security
against credits.
As notified by RBI, categories under priority sector areAgriculture, Micro and Small Enterprises, Education,
Housing, Export Credit, Others.
Types of Pre-paid Wallet Instruments

Closed System Payment Instruments: These are pre-paid cards issued by a person/organization to
facilitate the purchase of goods and services from him/it. So they do not facilitate payments and settlement
for third party services like no bill payments, etc. One cannot withdraw cash from it and also they are not
reloadable with cash.
Examples: Gift vouchers issued by banks and NBFCs, Ola Money, etc.
Semi-Closed System Payment Instruments: These are pre-paid cards issued by a person/organization to
facilitate the purchase of goods and services from clearly identified merchants (third-party) which have a
specific contract with the issuer to accept the payment instruments along with him/it. They can be reloaded.
One cannot withdraw cash from it
Examples: Paytm wallet, MobiKwik, PayU, Airtel Money, etc.
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Open System Payment Instruments: These are payment instruments which can be used for purchase of
goods and services, including financial services like funds transfer at any card accepting merchant locations
(point of sale terminals) and also permit cash withdrawal at ATMs / Business Correspondents. These can be
reloadable or non-reloadable. They can only be issued by banks.
Example - Visa, MasterCard or Rupay card issued in India, Vodafone’s M-Pesa which is in alliance with
ICICI Ban, etc.
ULIP (Unit Linked Insurance Plan)
A ULIP is a product offered by insurance companies that, unlike a pure insurance policy, gives investors
both insurance and investment under a single integrated plan. So a ULIP is basically a combination of
insurance as well as investment.
How it works?
• Like a premium is paid for an insurance policy, same way a premium is paid under ULIP. The
difference lies in the part that a part of the premium paid is utilized to give insurance cover to the
policy holder and the remaining part is invested in various equity and debt schemes.
• Some of the ULIP providers are LIC of India, SBI Life, HDFC Life, ICICI Prudential, Kotak
Mahindra Life, etc.
Payments Bank
Payment Banks are banks which will reach their customers mainly through mobile phones rather than
traditional bank branches. They can be thought of as mobile wallets.
• They offer only current account and savings account in which deposit only up to Rs 1 lakh per
customer is permitted. The savings account will earn interest also like a normal savings bank account
does. Unlike a regular bank, they cannot lend money to people and cannot issue credit cards also.
However ATM or debit card can be issued.
Small Finance bank

Small Banks are physical banks whose aim is to provide basic banking products such as deposits and supply
of credit, but in a limited area of operation. Their work is to supply credit to small farmers, micro and small
industries, and other unorganised sector entities through high technology-low cost operations.
• They can accept any deposit (savings, current, fixed deposits, recurring deposits) like commercial banks.
Unlike payment banks, small finance banks will be allowed to lend money also. Their target is small
businesses and MSMEs.
• Capital Local Area Bank Limited, Jalandhar is the first to start its operations as small bank in the country.
Indradhanush plan
Finance minister Arun Jaitley launched a seven pronged plan called Indradhanush in August 2015. The
mission is also known as A2G for public sector banks.
• Mission of the plan: To revamp or improve the functioning of public sector banks. Indradhanush
mainly focuses on systemic changes in state-run lenders, including a fresh look at hiring, a
comprehensive plan to de-stress bloated lenders, capital infusion, accountability incentives with
higher rewards including stock options and cleaning up governance.
• The plan is called Indradhanush because it contains seven elements as: Appointments, Bank Board
Bureau, Capitalization, De-stressing, Empowerment, Framework of Accountability and Governance
Reforms.
CIBIL (Credit Information Bureau (India) Limited)

CIBIL is India’s first Credit Information Company (CIC) founded in August 2000. Whether it is to help loan
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providers manage their business or help consumers secure credit faster and at better terms, the use of
CIBIL’s products have led to a massive change in the way the credit life cycle is managed by both loan
providers and consumers.
Role of CIBIL to loan providers and consumers:
CIBIL collects the data from member institutions (banks and other lenders) and maintains records of a
customer’s (individual or any business) payments pertaining to loans and credit cards. This information is
then used to create Credit Information Reports (CIR) and credit scores. These credit scores and reports can
be used by the lenders to evaluate and approve loan applications.
NPCI (National Payments Corporation of India)

NPCI is an umbrella organization for all retail payments system in India. It was set up with the guidance and
support of the Reserve Bank of India (RBI) and Indian Banks’ Association (IBA).
Services provided by NPCI: National Financial Switch (NFS) ATM Network, Cheque Clearing System,
Immediate Payments Service (IMPS), Electronic Benefit Transfer, RuPay Card, Unified Payments Interface
(UPI).
For detailed banking notes follow the link: Banking and Finance
Current Banking & Finance News(June-Dec 2016)
State Bank of India secured $625 million from World Bank for Solar programme
State Bank of India has signed agreements with the World Bank for $625 million to support grid
connected rooftop solar programme in the Country
SBI Capital Markets was keen advisor for structuring and setting up the facility
RIL, SBI sign shareholder agreement for payments bank JV

i. Reliance Industries Limited went into partnership with banking major State Bank
ofIndia have signed the shareholder for the payment Bank.
ii. Upon this Agreement that was signed by RIL as promoter with a 70 per cent equity contribution and
SBI as joint venture with a 30 per cent equity contribution.
RBI to study Blockchain technology to curtail paper currency

i.India’s Central Bank “Reserve Bank of India mulling to set up a committee to study the use
of Blockchain technology”. It will be used to reduce the use of paper currency.
ii. The system’s database consists of blocks that hold time-stamped batches of valid transactions which is
seen as the main technical innovation of bitcoin.
India’s first SME Bank opened by HDFC Bank

i. HDFC bank launched a full-fledged digital banking service for small and medium enterprises (SME).
ii. This will help the customers to utilize a complete set of services on their choice at anytime and at
anywhere in India.
Cabinet approves increase in FDI limit in Axis Bank to 74%

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri NarendraModi, has
approved increased limits in foreign investment in Axis Bank from 62% to 74% of the total paid up share
capital of the Axis Bank on a fully commodity basis.
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NPCIL gets India’s first nuclear liability policy

i. India’s first insurance policy covering public liability to an atomic power plant operator has been issued
to Nuclear Power Corporation of India Limited(NPCIL)
ii. The total premium of such policy is Rs 100 crore for a risk cover of Rs 1,500 crore.
SIDBI partners with Yes Bank for loan guarantee under World Bank scheme.
SIDBI(Small Industries Development Bank of India) entered into a partnership with YES Bank to
guarantee 75% of loans of up to Rs 15 crore extended to energy efficiency projects under the WORLD
BANK initiative.
Credit of $290 million for Bihar’s JEEViKA II by World Bank

A USD 290-million credit agreement signed by Centre, Bihar government and World Bank to help
improve livelihood opportunities for poor rural households across 300 blocks and 32 districts of the eastern
state.
HDFC to become first issurer of Masala Bonds to overseas investors in order to raise Rs.3,000 crore
Housing Development Finance Corporation (HDFC) Ltd is planning to raise about Rs.3,000 crore by
issuing the first unrated Synthetic Indian Rupee (INR) Notes to overseas investors. It is the first Indian
public issuer of the Synthetic INR Notes. Our country’s largest private sector mortgage lender HDFC,
plans to raise Rs 3,000 crore through these synthetic bonds.
BRICS bank to issue $448 million of yuan green bonds

i. The New Development Bank (NDB) of the BRICS countries is set to issue green bonds in Chinese yuan to
raise funds for clean energy and infrastructure projects.
ii. The green bonds will be issued with a 5-year tenor and will be the first such issuance by a bank of its type
under guidelines issued by China’s central bank in December.
Axis Bank ties up with Vistara to introduce cobranded credit card

Guragon based India’s fastest developing air carrier“VISTARA” ties up with AXIS bank to release a
contactless Vistara credit card using the VISA platform.
Cauvery Delta’s Irrigation Facilities to be Boosted up through ADB’s Loan Agreement with GOI
In order to fortify and develop the important Irrigation and Drainage management system in the Cauvery
Delta of Tamil nadu, GOI AND ADB has signed a pact on July 14 which estimates around $100
million (670 Crores approx.). This system is going to revitalize the mounds and hills of the six major
Irrigation systems in the Vennar system and also to renovate the existing Pumping stations.
IndusInd Bank opens IFSC Banking Unit at GIFT City

i. Mumbai based Indian new generation lender IndusInd Bank has opened its IFSC Banking Unit (IBU) at
the Gujarat International Finance Tec-City (GIFT City) to meet the requirements of offshore banking.
ii. It became the sixth bank to open an IBU at GIFT.
Ex-Google engineer, Paul Taylor launches blockchain-based system for banks

A former Google engineer Paul Taylor launched speech recognition software is used in more than a
billion Android smartphones, that uses block chain technology to build a new operating system for banks.
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Soiled Notes can be Exchanged for Free till certain Limits – RBI
Reserve Bank of India advised banks to exchange up to 20 pieces of soiled Indian currency notes with a
cap value of Rs 5,000 through the counter without any processing fee in order to improve the customer
service.
Transactions above 3 Lakhs are to be Banned to curb Black Money – SIT

In order to trace the Black and illegal Money, Special Investigation Team (SIT) has advocated for the ban
of cash transactions above 3 lakh rupees and also restrict the Money Holding Capacity to 15 Lakhs in order
to curb the Black Money in the nation.
RBI is all set to monitor the customer rights in the commercial banks
i. RBI is all set to monitor the issues related to the customer rights in the five broadare as of banking
soon. This step is adopted by the banker’s bank to enhance the banking experience of the customers.
ii. The five core areas to be monitored by the RBI are:-
♦ Right to privacy,
♦ Right to fair treatment & transparency,
♦ Fair and honest dealing,
♦ Right to suitability and
♦ Right to grievance redress & compensation.
IRCTC and SBI join hands to promote UTS and E-Ticketing System to ease the Service for
Passengers
i. Indian Railway Catering and Tourism Corporation (IRCTC) and one of the World’s Leading commercial
Banks State Bank of India (SBI), have signed a Memorandum of Understanding (MoU) on July 20.
Federal Bank partners with Reliance Jio Money

Kochi based Federal Bank have announced partnership with Reliance Jio Money for One-Click payment
service that will make payment ease for their customers.
HDFC ERGO enters into bancassurance tie-up with SVC Bank

HDFC ERGO General Insurance Company and Mumbai based Shamrao Vithal Co-operative (SVC)
Bank bancassurance tieup to offer wide range of non-life insurance produts to the customers of the bank.
ICICI Bank organises Coin Exchange Mela during the ‘Ratha Yatra’ festival in Puri
India’s largest Private Sector lender ICICI bank has conducted a coin exchange mela during Rath Yatra
festival at the RBI financial literacy camp in Puri..
ICICI & AXIS bank teams with Global Payment Giant SWIFT Payment Group
Global payments leader SWIFT, which already has over 70 other leading banks globally now signs up
with ICICI and Axis Bank, thereby become the first domestic leaders to enter the international payment
group.
Bonanza for 7th pay commission beneficiaries – SBI unveils two new cheap housing loans
SBI unveiled a new cheaper home loan scheme for defense and other government employees. This new
decision reflects to attract the donee of the 7th pay commission’s salary hike. SBI eyes that the surplus
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income of the employees can thus be utilized by government employees and defense personnel towards
purchase of house.
Raghuram Rajan released the consolidated norms of On-Tap Licensing process to enact reform in the
Banking Industry
In order to switch over bank licensing process from once-in-a-decade affair into an ongoing process, RBI
governor Raghuram Rajan has released the key features regarding the consolidated norms of the ‘on tap
licensing’ or continuous licensing process.
RBI launches portal to curb illegal money pooling by firms

i. The Reserve Bank of India has launched a website sachet.rbi.org.in– in a bid to curb illegal and
unauthorized pooling of funds by unscrupulous firms. It was launched by RBI Governor Raghuram Rajan.
ii. The move will help people obtain information about entities allowed to collect deposits and also would
help in arriving logical conclusion by punishing the guilty is paramount to deter entities.
RBI panel to benchmark India’s household finance

i. Reserve Bank has constituted a panel to study the various facets of household finance in India and to
benchmark India’s position visav is both in other major world markets and advanced economies.
ii. The panel headed by Financial Economics Professor Tarun Ramadorai at Oxford University.
RBI makes no changes in Repo rate and CRR in its third Bi-Monthly Monetary Policy Review
As expected The Reserve of India (RBI) in its third bi-monthly monetary policy review kept the repo
rate unchanged at 6.50 per cent citing upside risk to March 2017 inflation target.
Ponzi schemes not under our purview: SEBI

Market Regulator SEBI has clarified that any regulatory purview over Ponzi schemes will come under
purview of state governments. The state government is the responsible to protect investors.
Union finance Minister Arun Jaitley launches MSME Data Bank Portal and Online Finance
Facilitation Web Portal.
Finance Minister Arun Jaitley launched an online finance facilitation portal for the micro, small and
medium enterpris (MSMEs) to facilitate ease of doing business at New Delhi on August 11.
RBI’s Draft for Limiting Liability of Customers in Unauthorized Electronic Banking Transactions
RBI has come up with a Draft Circular for public comments on “Limited Liability” for customers in case
of frauds in Internet Banking and Card transactions.
• RBI has also proposed zero liability on the customer if the loss is reported within three working days
even if the cause is not directly linked to deficiency on the part of the lender and the fault lies
elsewhere in the system.
SBI and Korea Development Bank ties up for Business Development.

India’s largest public sector bank, State bank of India (SBI) and Korea Development Bank (KDB) have
signed an MOU to develop business synergies in the domains of corporate finance, project finance and
asset finance.
Syndicate Bank launches Project Ananya to improve Digital Banking Services

i. Syndicate Bank has adopted a large scale transformation program called “Project Ananya” that focuses
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on improved customer service and offering latest indigital banking services.

ii. The bank plans to transform 10% of its branches to a new format in next 6-12 months and the bank has
opened one such branch.
BSE gets approval to establish International exchange at GIFT

Mumbai based Bombay Stock Exchange has got approval from the Corporate Affairs Ministry to establish
BSE International Exchange and BSE International Clearing Corporation at Gujarat International Finance
Tec-city (GIFT).
South Indian Bank, SBI Card to launch co-branded credit card

Kochi Based leading private sector Lender South Indian Bank and India’s Largest lender State Bank of
India has joined hands for their co-branded credit card for the South Indian Bank customers.
Union Bank of India launches USSD based mobile app for basic banking needs with NPCI
National Payments Corporation of India (NPCI) ties up with Union Bank of India to launch an USSD based
*99# mobile application for their customers.
NPS: PFRDA lowers minimum contribution to Rs 1,000 per year

i. Insurance regulator PFRDA has substantially lowered the minimum annual contribution to Rs 1,000 to
keep the account active in order to encourage more people to join the National Pension System.
ii. Priorly instead of 1000, a subscriber had to contribute at least Rs 6,000 in a financial year to keep the
Tier-1 account running.
India Post Payments Bank Incorporated Sets to begin in 2017.

India Post Payments Bank has come into existence after it received certificate of incorporation from the
Registrar of Companies, setting the stage for the new bank to begin operations in 2017.
SBI bank board approves the significant merger of Five associate banks and BMB with itself
i. In an attempt to create global size bank, the board of State Bank of India approved scheme of merger of
five associate banks and Bharatiya Mahila Bank (BMB) with itself while protecting the interest of the
existing staff.
ii. SBI also approved the share swap ratio for merging three associates—State Bank of Bikaner and Jaipur
(SBBJ), State Bank of Mysore (SBM) and State Bank of Travancore (SBT)—and BMB. But the Swap
ratios for State Bank of Hyderabad and State Bank of Patiala were not announced.
Forex reserve at record high of USD 365.82 billion

i. India’s foreign exchange reserves surged by USD 73.2 million to touch a life-time high of USD 365.82
billion in the week ended. It was surged by USD 253.6 million to touch USD 365.75 billion last week.
ii. The Gold reserves remained unchanged at USD 21.58 billion in the week. While special drawing rights
held by India with the IMF gone down by USD 3.2 million to USD 1.49 billion, while the country’s reserve
position plunged by USD 5.2 million to USD 2.39 billion.
Central Government to ban cash transactions over 3 lakhs to curb black money
i. In the next move to clamp down on black money in the economy, the government is set to ban cash
transactions over Rs 3 lakh.
ii. The Rs 3 lakh-limit is aimed to ensure that transactions are made using credit or debit cards, cheques or
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drafts which can be easily tracked.

iii. The government has already initiated several steps, including banning cash advance of more than Rs
20,000 for property transactions.
Finance Ministry set up a committee for digitalize incentive payments

i. The Finance Ministry led by Arun Jaitley has set up a committee to consider incentives such as cash
back schemes and tax rebates for promoting card and digital payments in a step towards discouraging
cash transactions.
ii. The 11-member committee, headed by former Finance Secretary Ratan P Watal, will recommend
various measures to incentivize transactions through cards and digital means, e.g., through tax
rebates/incentives, introduction of cash back/lottery.
World Bank sanctions Rs 980 cr for Brahmaputra dredging: Min

i. The World Bank has announced a funding of Rs 980 crore to dredge the Brahmaputra as an initiative to
develop waterways to Bangladesh and to other South East Asian countries which is give fillip to trade and
industry in the Area.
ii. Upon this Brahmaputra waterways will pave the way for trade that will lead to a reduction in the cost
of transportation of goods and will finally the state of Assam will become export hub for the South East
Asian countries.
Doha Bank opens branch in Kerala

Qatar based Doha Bank has opened a branch, the Kerala’s Chief Minister Pinarayi Vijayan inaugurated the
branch at Lulu International Shopping Mall in Edapally.
India to grow at 7.6% in FY’17: RBI

i. Reserve Bank of India predicts India to clock at 7.6 per cent in 2016-17 in the wake of near-term growth
outlook for India seems brighter than last fiscal.
ii. The Central Bank in its annual report said that overall gross value added growth is expected at 7.6 per
cent this fiscal, up from 7.2 per cent last year.
NPCI launches Bharat Bill Payment System pilot project

i. Mumbai based National Payments Corporation of India (NPCI) with 26 Bharat Bill Payment Operating
Units (BBPOUs) launched the pilot project for Bharat Bill Payment System(BBPS).
ii. Bharat Bill Payment System will provide interoperable bill payment services to customers. Now it will
cover repetitive payments such as electricity, water, gas, telephone and Direct-to-Home (DTH).
Urjit R. Patel – Reserve Bank of India’s New Governor

Union Finance Ministry notified that Urjit R. Patel, Reserve Bank of India (RBI) deputy governor, has been
appointed as the new governor of Reserve Bank of India as Raghuram Rajan’s successor.
Amul MD, RS Sodhi appointed on board of India Post Payment Banks

i. Board of India Post Payment Banks (IPPB) has appointed RS Sodhi, MD, Amul as its new
independent director. IPPB is the payment arm of the postal department.
ii. Mr. R. S. Sodhi has been the Managing Director at Gujarat Cooperative Milk Marketing Federation
since January 4, 2011.
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ICICI Bank announces deployment of Software Robotics for business processes

i. ICICI Bank has announced the deployment of Software Robotics for business processes across various
functions of the bank. The bank said that the software robots have reduced the response time to customers
by up to 60% and have increased accuracy to 100%.
Bombay Stock Exchange filed for the much-awaited IPO on NSE

BSE Ltd, India’s second-biggest stock exchange filed for an initial public offering (IPO) in order to list
its shares on larger rival National Stock Exchange (NSE).
CBDT launches e-nivaran to resolve Income Tax grievances

i. e-nivaran(electronic resolution) for online redressal of taxpayers’ grievances launched
by CBDT(Central Board of Direct Taxes)
ii. It’s link has recently been activated on the e-filing portal of the department–
http://incometaxindiaefiling.gov.in–where taxpayers can register their complaints through their PC and
receive a special PIN number on their registered mobile and email, as their unique number to keep track of
the issue.
India’s foreign exchange reserves up at $371 bn

i. The Reserve Bank of India (RBI) announced India’s foreign exchange reserves went up to$371.27
billion as on September 9.
ii. According to data released by the RBI, the reserves stood at $371.27 billion as on September 9, as
against $367.76 billion as on Sep 2.
IDFC issues commercial papers of Rs 700 crore.

i. Infrastructure Development Finance Company(IDFC) Limited has issued commercial Papers of Rs.700
crore.
ii. The company issued Commercial Papers for an aggregate amount of Rs 700 crore on September 12,
2016 having maturity date ofSeptember 29, 2016.
ADB approves $631 million loan for Vizag-Chennai industrial corridor

Multilateral funding agency Asian Development Bank (ADB) approved a loan of $631
million or Rs.4228.9 crore (at Tuesday’s exchange rate) for building India’s first coastal industrial
corridor between Visakhapatnam and Chennai.
World Bank to invest Rs 1,000 cr. for improvement of inland waterways in Assam
i. World Bank will invest nearly 1,000 crore rupees in Assam for the betterment of the inland waterways.
ii. It was conveyed to State Transport Minister Chandra Mohan Patowary by Union Minister of Road
Transport and Highways Nitin Gadkari.
Govt Notifies Constitution Of Monetary Policy Committee Under RBI Act

i. Towards the next step in Setting the stage for next monetary policy review by the newly constituted
monetary policy committee (MPC), the government on formally notified the constitution of the
MPC under the Reserve Bank of India Act, 1934.
ii. The appointments committee of the cabinet approved the names of Chetan Ghate, a professor at Indian
Statistical Institute, Pami Dua, director at Delhi School of Economics (DSE); and Ravindra Dholakia,
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professor at the Indian Institute of Management, Ahmedabad,

iii. The members of the committee from RBI are governor Patel, deputy governor R. Gandhi, who is also
in charge of monetary policy, and executive director Michael Patra. The RBI governor will have a
casting vote in case of a tie.
Government decided to raise EPFO Investment in ETF from 5 to 10 per cent

i. The Government has decided to raise the Employees Provident Fund ( EPF) investment in Exchange
Traded Funds from present 5 per cent to 10 per cent.
ii. Shri Bandaru Dattatreya, the Minister of State(IC) for Labour and Employment announced that the
decision has been taken considering the good returns in ETF investment.The move was set to see nearly Rs
13,000 crore flow into the stock markets from the EPFO during the current fiscal year.
Interest rates on small savings schemes cut by 0.1%

i. Interest rates on small savings schemes have been reduced marginally by0.1 percent for the October-
December quarter of 2016-17, leading to lower returns on Public Provident Fund, Kisan Vikas Patra,
Sukanya Samriddhi Account, among others.
ii. Public Provident Fund will fetch interest rate of 8 percent in the third quarter of the current fiscal as
against 8.1 percent in the previous three-months period.
iii. Interest rate on Kisan Vikas Patra has been brought down to 7.7 percent from 7.8 percent. As a result
the KVP will now mature in 112 months instead of 110 months.
iv. The rate of interest for the third quarter for5-Year Senior Citizens Savings Scheme and 5-Year
National Savings Certificate has been reduced to 8.5 percent and 8 percent, respectively.
v. The Sukanya Samriddhi Account Scheme, for girl child, will now fetch 8.5 percent interest rate. It was
8.6 percent in July-September quarter.
vi. Interest rate on 1, 2, 3, 4 and 5 year time deposits too have been reduced by 0.1 percent.
vii. Depositors will get an interest rate of 7.3% on five-year recurring deposit.
viii. The interest rate on savings deposit has, however, been kept unchanged at 4 percent.
Jim Yong Kim wins second term of World Bank President

i. World Bank President Jim Yong Kim effectively won a second five-year term after nominations to lead
the global development bank no other candidates proposed.
ii. Kim, who was Korean-American medical doctor had focused the World Bank on programs to reduce
extreme poverty, earned solid backing for a second term from the United States, France, Germany,
China, and other major shareholders of the bank.The US is the World Bank’s largest shareholder.
Atul Kumar Goel takes charges as ED in UBI

i. Executive Director of Allahabad Bank Atul Kumar Goel appointed as Executive Director in Union Bank
of India for a period of 3 years .He will be replaced by Raj Kamal Verma.
ii. He has taken over charge of the post of Executive Director of Union Bank of India on September 15,
2016
VK Sharma replaces SK Roy as LIC chairman

i. VK Sharma was appointed as chairman of state-owned Life Insurance Corporation of India on
September 17, 2016, announced by finance ministry.He will be replaced SK Roy
ii. Sharma is currently working as the Managing director of LIC
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Bangladesh’s Junaid Ahmad Is The New World Bank Head In India

i. Junaid Ahmad from Bangladesh was appointed as World Bank Country Director for India. He will
replace Onno Ruhl.
ii. Prior to this he was working as the Chief of Staff to World Bank Group President Jim Yong Kim.
RBI Governor Urjit Patel cuts interest rates, bats for growth in first monetary policy
In order to ease the inflation, the Reserve Bank of India cut policy rate (repo rate) by 25 basis points to
6.25% from 6.5%.
Bank Rate Reduction :
The Monetary Policy Committee (MPC) all members of policy decided for 25 basis point rate cut.
• This was the fourth bi-monthly monetary policy of the RBI. It was first monetary policy
statement after Urijit Patel took over as governor on September 04, 2016.
• On the basis of an assessment of the current and evolving macroeconomic situation MPC decided
to reduce the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points
from 6.5% to 6.25% with immediate effect.
• A lower repo rate—the rate at which banks borrow from RBI–would mean households may
expect cheaper bank loans to buy houses and goods such as cars, which peak during the
festival shopping season in October and November.
• The BSE Sensex rose 85 points to 28,328 mirroring the stock markets’ heightened expectations
about lower rates.
• India’s economy grew 1% during April to June, the slowest in 6 quarters, but the RBI and
the MPC expect a revival in the coming months boosted by good rains, a pay bonanza for
government employees and festive season buying.
• The RBI retained its earlier growth projection of 7.6 percent for 2016-17.
SBI becomes first domestic bank to open branch in Yangon

i. SBI has announced its entry into Myanmar by opening a branch in the Yangon, former capital city of
Myanmar.
ii. Ghanshyam Srivastava has been appointed as the chief executive of SBI Yangon branch
Finance Ministry set up debt management cell

i. Union Finance Ministry constituted a Public Debt Management Cell (PDMC). The cell was created to
streamline government borrowings and better cash management with the overall objective of deepening
bond markets.
ii. The cell which would function from the Reserve Bank of India (RBI) premises here would be upgraded
to an independent and statutory debt management agency — Public Debt Management Agency (PDMA)
ICICI Bank Executes India’s First Transaction On Blockchain

ICICI Bank has successfully executed transactions in international trade finance and remittances
using blockchain technology in partnership with Emirates NBD.
In a first, Bank deposits cross Rs 100 lakh crore

i. According to a data released by the RBI shows that India’ banking system reported total deposits of Rs
100 lakh crore for the first time ever in September
ii. Demand deposits crossing R10 lakh crore and time deposits crossing the Rs 90 lakh crore mark, the
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month saw the highest-ever monthly rise of Rs 5.32 lakh crore — more than the total deposits in the
banking sector 20 years back.
SBI declares Silchar as its 5th zone in North East

SBI has declared Silchar as its 5th zone in North East after Guwahati, Shillong, Dibrugarh and Jorhat,
which will cater to the banking needs of the people of Mizoram, Tripura and Manipur along with the Barak
Valley.
NABARD sanctions Rs 19,702 cr for 50 irrigation projects

i. National Bank for Agriculture and Rural Development(NABARD) has sanctioned Rs 19,702 crore
loan to National Water Development Agency (NWDA) for 50 irrigation projects.
ii. The loan is sanctioned under Long Term Irrigation Fund (LTIF), announced by Finance Minister Arun
Jaitley during the Budget 2016-17.
iii. This would help create additional irrigation potential of 39.14 lakh hectares under these projects in 11
states.
BSE launches ‘paperless SIP’ facility for mutual fund investors.

i. BSE has introduced a paperless SIP(Systematic Investment Plan) facility for mutual fund (MF)
investors.
ii. It will extremely cut the registration time and also allow subscribers to transact throughdifferent
payment modes including net banking.
iii. SIP is an investment vehicle that allows investors to invest in small amounts periodically instead of lump
sums. The frequency of investment is usually weekly, monthly or quarterly
DIPP notifies 100% FDI in more financial services

i. The Department of Industrial Policy & Promotion (DIPP) notified 100 per cent foreign direct
investment in ‘other financial services’ carried out by Non-Banking Finance companies(NBFCs ) to attract
foreign capital into India
ii. Other financial services will include activities which are regulated by any financial sector regulator –
RBI, SEBI, IRDA, PFRDA, NHB or any other financial sector regulator.
MMTC ties up with banks to sell Indian Gold Coin

i. State-run trading firm MMTC has tied up with seven banks, including ICICI and HDFC Bank, to sell
government minted ‘Indian Gold Coin’
ii. The Indian Gold Coin is available in denominations of 5 gm and 10 gm coin and 20 gm bar and is
available at about 383 MMTC outlets across India.
RBI allows start-ups to raise $3 million through ECBs

i. Reserve Bank of India (RBI) issued rules permitting these to raise External Commercial
Borrowings (ECBs) per start-up was capped at $3 million per financial year to support financing for start-
ups
ii. The borrowing could be either in rupees or a convertible foreign currency or a combination of both.The
money could be used for any expenditure of the borrower’s business.
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India’s forex reserves rise $1 billion to $367.14 billion

i. India’s forex reserves rose by USD 1 billion to USD 367.14 billion.
ii. In the reporting week, Foreign Currency Assets (FCAs), a major component of the overall reserves,
increased by USD 1.015 billion to USD 341.923 billion.
iii. According to the apex bank, the special drawing rights with the International Monetary Fund declined by
USD 5.4 million to USD 1.463 billion, while India’s reserve position with the Fund dipped by USD 8.8
million to USD 2.347 billion.
State Bank of Patiala gets special award for excellence in MSME lending
i. State Bank of Patiala has been conferred “Special Award for Excellence in MSME lending” for its
performance in lending to the MSME sector during the year 2013-14 and 2014-15 at the National Award
Function held at Punjab Agricultural University (PAU), Ludhiana.Prime Minister of India, Narendra Modi
was the chief guest of this function
Rajeev Rishi elected IBA Chairman for 2016-17

Rajeev Rishi was elected as the Chairman of the Indian Banks’ Association (IBA) for the financial year
2016-17 at IBA meeting held in Mumbai on October 7 2016.
Rs. 500 and Rs. 1000 Currency no longer Legal Tender

Honorable Prime Minister Shri Narendra Modi while addressing the nation on November 8 2016, made a
historical announcement that the Rs. 500 and Rs. 1000 currency notes currently in use will no longer
be legal tender from midnight 8th November 2016 that is these notes will not be accepted for any kind of
transactions from midnight onwards.
• The aim behind such move is to curb corruption, black money, money laundering, terrorism
creating an environment of panic.
• However one hundred, fifty, twenty, ten, five, two and one rupee note will remain legal tender
and will not be affected by the decision.
• On recommendation of RBI, government of India has decided to issue Rs. 2000 notes and new
notes of five hundred for circulation.
Features of New Rs. 500 Note
1. The note size is 63mm x 150mm.
2. Color is stone grey and
3. The new theme is Indian heritage site – Red Fort.
4. Ashoka pillar emblem on the right.
5. Color of windowed security thread changes from green to blue when it is tilted.
6. Devnagari script used for denoting numeral.
7. Watermark of electrotype and portrait of mahatma gandhi
8. On top left and bottom right side of the note the numerals are increasing from small to big.
9. Mahatma Gandhi portrait position shifted to center.
10. Governor’s signature, promise clause, Guarantee clause, and emblem of RBI tilted towards right
Back Side of the note depicts
1. Year of printing the note appears on left
2. Swacchh bharat logo and slogan on bottom left
3. Image of red fort with Indian flag
4. Denomination value in devanagari on right top.
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Features of Rs. 2000 notes

1. The Note size is 66mm x 166mm
2. Color of the note is Magenta
3. Front side of the note depicts:
4. Mahatma Gandhi portrait in the center
5. Denomination value 2000 in devanagari
6. Ashoka pillar emblem on the right.
7. On top left and bottom right side of the note the numerals are increasing from small to big.
8. Governor’s signature, promise clause, Guarantee clause, and emblem of RBI tilted towards right
9. Bharat’, RBI and 2000 inscribed with windowed security thread whose color changes from green
to blue when tilted
10. Latent image of 2000 can be seen when the note is held at 45 degree angle at the eye level
11. When the note is held against light denominational numeral 2000 can be seen through registers.
Reverse side of the note depicts
1. Year of printing on the note on left
2. Swachh Bharat logo with slogan
3. Language panel in the centre
4. Image depicting Mangalyan
RBI Opened Second Banking Ombudsman Office In New Delhi

i. The RBI has opened a second office of the Banking Ombudsman in New Delhi, taking into account the
significant increase of the banking network.
ii. The first office of the banking ombudsman at RBI, New Delhi, would have jurisdiction over
Delhi and Jammu & Kashmir. The second office would have jurisdiction over Haryana(except Panchkula,
Yamuna Nagar and Ambala districts)
RBI doubles the E-wallet Limit to Rs. 20,000

i. The Reserve Bank of India on November 23, 2016 declared to increase the limit of the Prepaid
Payment Instruments (PPIs) from Rs. 10,000 to Rs. 20,000 per month and Rs. 50,000 for Merchant Bank
to facilitate digital transactions.
ii. The decision was taken to ease the problem faced by the public with the demonetization move of the
Government.
RBI introduces incremental CRR to manage excess liquidity

The Reserve Bank of India increasing the Cash Reserve Requirement (CRR) for incremental deposits
between September 16 and November 11 to 100% while the current CRR is 4%, effective from
November 25, 2016.
Islamic Banking to be opened in Indian banks

i. The RBI has planned to open “Islamic window” in conventional banks
ii. Aim: Gradual introduction of Sharia-compliant ( interest-free banking) in the country.
iii. The Centre and RBI are taking steps to introduce Islamic banking to make financial inclusion available to
those sections of the society that are neglected due to religious reasons.
Bharti Airtel Starts First Payments Bank Service in Rajasthan

Airtel Payments Bank Ltd (Airtel Bank), a subsidiary of the country’s largest telecom operator Bharti
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Airtel, started its first pilot banking services in Rajasthan from November 23, 2016.
Aim: The banking service is aimed at testing systems and processes before a full scale pan Indian is
launched.
• According to the pilot service Airtel Payments Bank will provide basic banking services along with
the facility to open bank accounts at Airtel retail outlets.
NABARD sanctions Rs 21,000 crore to district cooperative banks

i. NABARD has sanctioned Rs. 21,000 crores to the District Central Cooperative Banks (DCCBs) to help
farmers in Rabi agricultural seasons.
ii. The DCCBs will disburse loans to farmers through the network of Primary Agricultural Cooperative
Societies (PACS). Government has chosen DCCB for loan disbursal because 40% of the small-scale
farmers go to co-operative banks.
IBBI Notifies regulation Under Bankruptcy Code, 2016

i. The Insolvency and Bankruptcy Board (IBBI) of India on 23 November 2016 notified three sets of
regulations directing the eligibility criteria of becoming a professional member of an Insolvency
Professional Agency or for registering with the IBBI as an Insolvency Professional Agency
ii. The regulation is applicable to
1.Insolvency Professionals,
2.Insolvency Agencies and
3.Model Bye-Laws and Governing Board of Insolvency Professional Agencies.
These regulations were notified under the Insolvency and Bankruptcy Code, 2016 and will come into effect
from 29 November 2016.
Insolvency and Bankruptcy Board set up two advisory panels headed by Mohandas Pai and Uday
Kotak
i. Insolvency and Bankruptcy Board of India (IBBI) sets up two high-level s under the Insolvency and
Bankruptcy Code to consolidate and amend laws relating to reorganisation as well as insolvency resolution
of corporate persons, partnership firms and individuals in a time-bound manner.
ii. Advisory committee on service providers consists of 9 members, the panel is lead by
educationist Mohandas Pai
iii. Corporate insolvency and liquidation panel is chaired by noted banker Uday Kotak.
Earthport receives RBI nod for Outbound Cross Border Payments

i. Reserve Bank of India has given an approval to British payments company Earthport for outbound
cross-border payment services to banks in India.
ii. The company is already into facilitating the inbound payments into the country.
iii. India is amongst the fastest growing economies in the world and plays a very important role in the cross
border payments ecosystem globally.
SEBI granted in-principle approval to BSE for global exchange.

i. BSE aimed to operationalise the international exchange by early next year. Mock trading for the same
commenced from October 3.
ii. The BSE board at its meeting held on May 5, 2016, had approved creation of two fully-owned subsidiary
companies for the purpose of setting up the first international exchange and clearing corporations.
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Banks to report frauds of Rs 1 crore and above to CVC

i. With high level frauds involving industrialists such as Vijay Mallya loan default case revealed,
the Central Vigilance Commission (CVC) has now made it compulsory for the public sector banks to
report to it all such matters involving funds over Rs.1 crore.
ii. Vigilance Commissioner TM Bhasin announced that CVC has now made it mandatory for the public
sector banks to share their reports relating to all loan frauds involving funds over Rs.1 crore. Till now this
report was shared with the RBI only.
City Union Bank unveils artificial intelligence powered robot-Lakshmi

i. Kumbakonam based City Union Bank has introduced a robot on pilot basis to improve customer service.
The robot is named CUB-LAKSHMI. The robot has been introduced in Thyagaraya Nagar branch of
Chennai.
ii. Lakshmi designed and developed by a French Company, has been programmed to answer about 120
general banking questions/query in English language. However in near future it will be programmed to
speak in Tamil and Malayalam languages also.
Ujjivan Small Finance Bank Limited Issued Licence By RBI

Ujjivan Small Finance Bank Limited, subsidiary of the Company, Ujjivan Financial Services Ltd has been
issued licence (the licence no. MUM 122) from the Reserve Bank Of India (RBI) on November 11, 2016
to set up Small Finance Bank business in
First small finance bank Kicked off its operation

i. India’s first small finance bank Capital Small Finance Bank Ltd, has commenced operations with 10
branches from November 12 2016 in Jalandhar ,Punjab.The bank ceases to exist with effect from April 24,
2016.
ii. In the current fiscal, the bank would consolidate in Punjab by adding 29 branches.
iii. The bank’s business is projected to increase four-fold from Rs 3,000 crore as on March 31, 2016 to Rs
12,000 crore and branch network to 216 by March 2021.
Federal Bank to open its first overseas branch in Dubai

i. Federal Bank has received Reserve Bank of India (RBI)’s permission to open its first international
branch at the Dubai International Financial Centre, Dubai.
ii. The proposed branch at Dubai will help the Bank serve its Non-Resident clientele better.
iii. Federal Bank has an IFSC Banking Unit(IBU) in Gujarat International Finance Tec-City (GIFT
City).This bank has totally 1,252 branches and 1,524 ATMs in India.
Utkarsh Micro Finance gets final nod to set up Small Finance Bank
i. After Ujjivan Small Finance Bank got final license from RBI for its set up in November, Utkarsh Micro
Finance has also received final license from RBI to start operations as Small Finance Bank (SFB).
ii. The new SFB will be named as ‘Utkarsh Small Finance Bank Ltd.’ and is likely to start banking
operations in early 2017.
ICICI Bank to convert 100 villages into digital in 100 days

i. Mumbai based ICICI Bank announced to transform 100 villages into ‘ICICI Digital Villages’ in 100 days
to enable villagers go in cash less banking and payments transactions.
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ii. People from 100 villages will be able to open bank accounts using Aadhar-based e-KYC and make
cashless payments to retail stores through a unique SMS/USSD-based mobile solution.
RBI appoints M Rajeshwar Rao as new Executive Director

i. The Reserve Bank has appointed M Rajeshwar Rao as Executive Director to look Department of
Statistics and Information Management, Financial markets Operations Department and International
Department. He will replace G Mahalingam who is retired from the RBI.
ii. Prior to this, Rao was the Chief General Manager, Financial Markets Operations Department.
RBI to Issue new Rs. 20 and Rs. 50 notes Soon

i. The Reserve Bank of India made an announcement on December 4, 2016 that it will shortly issue new
Rs 50 and Rs 20 notes bearing the signature of new Governor Urjit Patel, however, existing banknotes of
both denominations will continue to be legal tender.
ii. The year ‘2016’ will be printed on the reverse of the banknotes.
iii. The new Rs 50 notes won’t have inset letters in the number panels and the new Rs 20 notes will have
the inset letter ‘L’ in both the number panels.
Vijayawada Parliamentary constituency becomes first to have health insurance for all
i. AP government with Tata Trusts has launched a health insurance scheme, Swatha Kutumbam in
Vijayawada which became India’s first constituency to have health insurance for all people include new
born for a year from December 1, 2016 to November 30, 2017.
ii. Under this insurance scheme every individual has to pay Rs 1 per day or Rs 120 per month per family as
premium.
RBI announces its first policy review post-demonetisation

The RBI Governor Urjit Patel led six-member MonetaryPolicy Committee (MPC) on December 7, 2016,
announced the fifth bi-monthly monetary policy statement of 2016-2017, which is also the first policy
after the implementation of the demonetization decision of Government.
Major highlights of the RBI Monetary Policy Statement
1.Repo rate remained unchanged at 6.25%
2.Reverse Repo at 5.75%
3.Cash reserve ratio or CRR unchanged at 4%
4.Due to demonetization, the central bank has lowered the GDP growth forecast from 7.6 per cent to
7.1 per cent for the current fiscal.Inflation target remains 5 percent for March 2017 with risks tilted to the
upside.
5.Demonetisation to lower prices of perishables and could reduce inflation by 10-15 basis points by
December.
Paytm launched Toll Free Number 180018001234 for Transactions Without Internet connection
Indian e-commerce website Paytm launched it’s toll-free number 180018001234 to enable transaction
through mobile phones without an internet connection on December 7, 2016.
100 banks join National Financial Switch network as direct members

100 banks have joined the National Financial Switch (NFS) network as direct members established ATM
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networks, now NFS network comprise of 745 members said by Maharashtra based National Payments
Corporation of India (NPCI) on December 7, 2016
Mahila E-haat ties up with India Post, State Bank of India for Wider Payment Option
The Women and Child Development Ministry has tied up with India Post and State Bank of India to offer
more payment options to buyers and simplify shipping of products bought from “Mahila E-haat”.
NABARD to spend Rs 228 Crore to encourage digital transaction in rural area

i. To promote digital transaction in rural areas of the country, National Bank for Agriculture and Rural
Development (NABARD) made an announcement on December 8, 2016 to provide monetary support of Rs
228 Crore to the responsible banks to install PoS Machines and EMV based Debit Cards for Farmers.
ii. The move is aimed at encouraging rural India to moe towards cashless payment systems
India and IBRD signs Grant Agreement for Additional Financing in MSME Project.
i. India on December 13, 2016, signed a Grant Agreement of USD 5.19 million with International Bank
for Reconstruction and Development (IBRD) for Additional Financing for Financing Energy Efficiency at
MSMEs Project- Programmatic Framework for Energy Efficiency.
ii. The agreement was signed by Raj Kumar, Joint Secretary at Department of Economic Affairs on behalf of
the Union Government and Junaid Ali Ahmad, Country Director of World Bank (India) on behalf of IBRD.
India, ASEAN set target of $100 billion trade to be achieved by 2020

i. India and ASEAN have set a target of trading at 100 billion dollar to be achieved by 2020 while current
trading between India and ASEAN is 57 billion dollars.
ii. It was announced by Mr. AKP Mochtan,the Deputy Secretary-General, ASEAN ahead of its 25th
anniversary in 2017
iii. India and ASEAN countries are planning to enhance people to people contact.
Number of E-Governance transaction in India crosses 1000 crore in 2016

i. The Electronics and IT Ministry, on December 16, 2016, informed that electronic transactions for
availing government service increased by 33 per cent in 2016, crossing over Rs. 1000 crore.
ii. It indicates the adoption of digital medium of transaction by the citizens for easy and convenient
method of consuming e-Governance services and also indicates the speed of digital transformation in the
Government.
Bank of Baroda, First Indian Company to Support FIFA U-17 World Cup India 2017
Bank of Baroda has become the first Indian company to sign up as a National Supporter for the FIFA U-17
World Cup India 2017, which will be held from 6 to 28 October 2017.
BRICS bank approves USD 75 million loan for Shanghai Solar Power Project
i. The New Development Bank, jointly found by the BRICS countries approved USD 75 million (525
million yuan) loan for a solar power project in Shanghai, China on December 20, 2016.
ii. The loan with a maturity period of 17 years was approved under an agreement signed between New
Development Bank (NDB), the Ministry of Finance and the Shanghai municipal government.
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Government reduces transaction fee on IMPS, NEFT transfer of over Rs 1,000

i. The Finance Ministry on December 21, 2016 directed the state-owned banks to reduce fees on payments
made through Immediate Payment Service (IMPS) and Unified Payments Interface (UPI) in order to
further promote digital and card payments.
ii. Transaction fee on these payment modes would be restricted to the extent that is applicable for NEFT
fund transfer of over Rs 1,000. This direction will apply for all transactions made up to March 31, 2017.
RBI opens banking ombudsman office in Dehradun

i. India’s central banking institution, Reserve Bank of India(RBI) has opened its 17th banking ombudsman
office in Dehradun, Uttarakhand on December 23, 2016.It is the third such office in North India after
Kanpur and Chandigarh.
ii. RBI also announced that ombudsman office opens in Ranchi, Jharkhand on the same day.
iii. With this, the total number of RBI ombudsman offices have increased to 18 in India.
SBI adopts a village Shirki in Maharashtra to make it cashless

i. India’s public sector banking and financial services company State Bank of India(SBI) has adopted a
village Shirki in Maharashtra to make the entire village will turn cashless within 30 days said by SBI
deputy managing director and CIO Mrutyunjay Mahapatra.
Bank of Maharashtra Adopts Village in Sangli for Digital Transactions

Pune based public sector lender Bank of Maharashtra, has adopted the village of Malangaon, in Sangli
district, Maharashtra, with the help of District Collector and several government officials to make it a
completely cashless village.
Twitter partners with ICICI Bank for advanced customer care

i. Social Networking Service Twitter and Mumbai based ICICI Bank announced a partnership to
enable customers with direct online response to their queries and feedback in real-time.
ii. With this ICICI Bank become the first bank in India to implement the Twitter based customer
serives @ICICIBank_Care.
Kerala’s Nedumkayam tribal colony becomes country’s first digital colony

The Nedumkayam tribal colony in Malappuram district of Kerala has become the first fully-digital tribal
colony in the country. The district collector, Amit Meena on December 27 officially declared the colony as
the first digital and cashless colony at a function held in the colony.
AU Financiers (India) gets RBI’s final approval to start Small Finance Bank
i. Jaipur-based Non-Banking Finance Company (NBFC), Au Financiers (India), received final approval
of the Reserve Bank of India on December 27 to start operations as Small Finance Bank in India.
ii. The company was among the 10 entities that received in-principle approval of RBI in September 2015 to
set up small finance banks.
RBI allows FPIs to invest directly in NCDs/bonds issued by Indian companies

i. Reserve Bank of India has issued notification allowed foreign portfolio investors to transact in non-
convertible debentures/bonds issued by Indian companies either directly or in any manner as per the
prevalent/approved market practice.
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ii. Aim: Toproviding flexibility in regard to the manner in which such instruments issued by Indian
companies can be acquired by FPIs
South Indian Bank Introduces SIB Mirror+ App for NRIs

i. Kerala headquartered South Indian Bank has launched a full-fledged NRI-focused mobile banking
application called SIB Mirror+ across major mobile platforms.
ii. SIB Mirror+ enables the customers to perform almost all banking transactions from their smart phones.
RBI Extends the Loan Repayment Period by 30 days

To further provide some relief to people hit by demonetisation, the Reserve Bank of India (RBI) on
December 28 gave borrowers another 30 days in addition to 60 days for repayment of housing, car, farm
and other loans worth up to Rs 1 crore.
World Bank approved USD 235 Million Credit for Bihar Rural Roads Project
i. World Bank has approved a USD 235 million credit for the Bihar Rural Roads Project to upport the
construction of about 2,500 km of rural roads in Bihar under the Mukhiya Mantri Gram Sampark
Yojana (MMGSY)
ii. The fund is allocated from the International Development Association (IDA) with a maturity of 25
years, including a 5-year grace period.
BoB launches agriculture investment credit scheme in Rajasthan

Indian state-owned banking and financial services company Bank of Baroda has launched an agricultural
investment credit for the farmers in Sri Ganganagar, Rajasthan on December 31, 2016
Aim :To help the farmers in doubling their income by the year 2022
RBI Extends Period of Enhanced Payment Instruments (PPI) limit

i. The Reserve Bank of India (RBI) has extended the period of enhanced Prepaid Payment Instruments
(PPI) limit of Rs 20,000 to meet the needs of people to perform digital payments.
ii. While the balance in such PPIs cannot exceed Rs 20,000 at any point of time and the merchants can
transfer funds from such PPIs to their own linked bank accounts up to Rs 50,000 per month, without any
limit per transaction.
Centre extends deadline for Direct Tax Dispute Resolution Scheme

The Centre on December 30 announced that it has extended the last date for availing the Direct Tax
Dispute Resolution Scheme to January 31, 2017 from the earlier deadline of December 31, 2016.
EPFO Cuts Interest Rate from 8.8 percent to 8.65 percent

Retirement fund body, Employees Provident Fund Organisation (EPFO) on December 19, 2016, reduced
interest rate on employee provident fund (EPF) deposits to 8.65 per cent for 2016-17 from the current 8.8
per cent..
Foreign Exchange Reserve of India Declines by 887.2 million dollars to 362.987 billion dollars
i. The Reserve Bank of India (RBI) on December 16, 2016, announced that the Foreign exchange
reserves of India has declined by 887.2 million dollars to 362.987 billion dollars in a week from
52 | P a g e
December 9 due to fall in foreign currency assets.

ii. In the previous week, the reserves had declined by $1.431 billion to $363.874 billion.
IDFC Bank appoints Veena Mankar as Non-Executive Chairperson

i. Veena Mankar was appointed as Non-Executive Chairperson of Mumbai based IDFC Bank with effect
from December 9, 2016 up to July 26, 2018.
ii. She replaced Anil Baijal who is retired from the board on December 8, 2016.
Kannan takes charge as new Indian Banks’ Association (IBA) chief

i. V G Kannan took charge as Chief Executive of the Indian Banks’ Association (IBA) on December 14,
2016. He replaced M V Tanksale.
ii. Kannan had working as Managing Director & Group Executive (Associates & Subsidiaries) of State Bank
of India till July 31, 2016.
Viral V. Acharya Appointed as the Fourth Deputy Governor of RBI

i. Government has appointed Viral V. Acharya, a professor of economics at New York University, as one
of the Reserve Bank of India’s four deputy governors for a term of three years on December 28, 2016.
ii. The RBI had a vacancy for deputy governor after Urjit Patel was made RBI Governor to succeed Rajan
with effect from September 4. The existing three Deputy Governors of RBI are S S Mundra, N S
Vishwanathan and R Gandhi.
Questions Asked in Previous Interviews

Banking Questions asked in previous Interviews
● What is a bank? What are the functions of bank?
● If you are posted in a branch with almost no progress, what will you do to bring it back to life?
● Define capital market and money market.
● What are the functions of RBI?
● What is NABARD? Its full form and functions. Does it work like RBI?
● RBI. Its functions and monetary policy.
● What is financial inclusion?
● How CRR and SLR helps in Economy?
● What is RTGS? If its limit is 2 lakh then for transferring money less than 2lakh what will you do?
● What is Ridden Lending?
● Phishing? How will you prevent phishing?
● Retail Lending? Which lending is better for Banks? Retail or corporate?
● What is Balance Sheet?
● What is Intangible asset?
● Explain briefly about CAD and what is the current economic situation of our country? Is CAD
increasing or decreasing now? And why?
● What is the impact of dollar outflow? Why there was ban on gold imports?
● Explain trade deficit.
● What is the benefit of lending?
53 | P a g e
● How many types of loans are there?

● Difference between Savings a/c and Savings student a/c?
● What is marginal utility?
● What is CRR and SLR?
● How will you deal with a rural person if he comes to bank to open an account without any
documents?
● What is nationalization of banks? What makes government to take up banks?
● What is the first quality that a banker should posses?
● What is the major problem that all the banks are facing?
● Difference between credit card and debit card?
● What is a negotiable instrument? How do you transfer a cheque to a payee?
● If you have to pass a cheque related to a customer's current account then what are the observations
you will make?
● What is MICR?
● Which act is used for reducing NPA?
● What is draft? What is cross cheque? What is the difference between cross cheque and Bearer
Cheque?
● If you are seated in counter then a customer comes and asks you what i have to do for opening an
account then you said to him bring that document this document he doesn't understand you. Do you
have patience to make understand him about the documents?
● What are RTGS and NEFT? Full form and differences.
● What is PIN? Can you disclose it to anybody?
● Do you use debit card? For what purposes? What we require to use debit card for payment?
● What is Indian Banking System?
● What is Banking Ombudsman and what is Single Window in bank?
● What is Cross Selling.
● Let's say that a new bank branch is about to come up then how will you inform people about it and
get customer?
● What are the qualities required in candidate as a PO?
● If one person came to you to break his fixed deposit because he needs some money what will you
do?
● What is lead banking?
● What is priority sector lending?
● What is the procedure for granting loan?
● Which technology is used in banking?
● Payment and small bank purpose
● Difference between savings account and current account.
● What are the KYC norms?
● What is demat account?
● What is Purchasing Power Parity?
● What is Narrow Banking and Payment gateways?
● What is the need for payment banks if there are other banks?
● What is the benefit of high CASA for banks?
● What is Net interest margin?
● What are the benefits for a bank in defining risk categories?
54 | P a g e
● We want to start an ATM in rural place where not even a landline connection is there then how will
you provide ATM? Can u tell the antenna name using In this process?
● What is contingent liability?
● What is the use of marketing in banks?
● What are the differences between private banks and nationalised banks?
● What is mean by Cyber crime?
● Do you know which bank give highest interest on saving accounts and how much?
Current Affairs Questions asked in previous Interviews

● What do you know about PMJDY?
● Tell us something about swachh bharat abhiyan.
● What is Bharat Ratna?
● Currency of China and its value against rupee.
● Number of lok Sabha seats?
● What is the maximum no. of ministers that can be formed out of lok sabha ?
● Who is the HRD minister?
● Names of 4 Dhams and their locations also?
● Schemes to alleviate poverty?
● Statue of Unity?
● Who is the Finance Minister and External Affairs Minister of India?
● Highest Civilian Award? Second highest civilian award?
● What is spot fixing?
● Who received Nobel Prize in Economics this year and for what?
● Who won US Open in 2015 . Women Singles?
● What is Atal pension yojana and what is mission indradhanush?
● What is financial inclusion? When did it start? Which five year plan is going on?
● What is the name of India’s First Lady prime Minister?
● What is GDP and GNP and also the difference between both?
● Briefly explain Make in India?
● What is Sewa Kendra?
● What is ISIS and what’s their aim?
● Prime minister who never visited parliament?
● What is call drop and TRAI?
● Difference between monetary and fiscal policies?
● Who abolished single child policy and why?
● What is financial literacy?
● Who started "bachpan bachao andolan"?
● What is NITI aayog?
● What is current GDP and growth rate of India?
Personal Questions asked in previous Interviews

● Your name ____ its meaning. Where you came from?
● How many members in your family?
55 | P a g e
● Your Weakness and strength

● Why not you tried for defence?
● What's your target in life?
● Why banking?
● Does banking field interest you or just because your family is in banking field and You look up to
them and that is the reason you want to join it?
● Do you watch Bollywood Movies and your favourite Actors?
● Tell me some news happened in 2-3 days.
● What’s the use of your field in banking?
● Do you have bank account? How are you doing your transactions?
● Favourite subject?
● Tell me what are your hobbies and interests?
● How you are different from other candidates?
● Any motivational films you have seen?
● Why you came to banking even after having work experience?
● Can you distinguish between manager and a leader?
● Hobbies? (If reading novels)Who is the author of your 1st novel? What is the name of the novel? Did
you like the novel?
● Did you like the banking services at your place?
● How do you motivate whom you're leading?
● Do you know about the recent controversial film?
● What you have done for swacch bharat abhiyan?
● Why you have a gap of a year after your degree?
● What are your top five preference banks? If you are appointed for the other bank you want to join or
not?
● Why should we select you? What qualities do you have that others don’t?
● What is the meaning of your name and give synonyms of it?
● What is your father’s profession?
● Which bank is your first preference? Why you filled it?
● What is the importance of your village or city or town?
● If we withdraw money from bank or deposit then message comes at your registered mobile number.
Does it charge money for that?
● Don’t you think you are overqualified for this job?
● What is Bio metric system?
● What is the use of computer in banking field?
● Why should we hire you for this position ?
Interview Experiences
Click here to View Shared Interview Experiences in our website
56 | P a g e
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• Afffairscloud Exam Capsule

How to face Bank Interview................................................................................................................................... 3

3 Rules For Overcoming Interview Jitters

2. Repeat A Positive Affirmation

3. Read Over Nice Things People Have Said About You

How to face Bank Interview

Tell us something about yourself

Why do you want to join Banking Sector?

How do you see yourself flourish in Banking Sector after 5 Years?

Why did you leave your previous job?

How will you add value to our organization?

Do you have any achievement?

Why should we select you?

Do you have any questions?

How do the Banks work?

How banks create money?

Assets Vs. Liabilities

Dormant account Vs. Frozen account

Cross selling Vs. Up Selling

Consortium Financing Vs. Multiple Banking

Moratorium period Vs. Grace period

NRO Account Vs. NRE Account Vs. FCNR Account

Cheque Vs. Demand Draft

Cheque Truncation System (CTS)

Know your customer(KYC)

Requirements for opening a bank account:

*Difference between small accounts and other accounts

● balance should not exceed Rs.50,000

All about RBI

Wholly owned subsidiaries of RBI:

● Regulating the issue of currency in India

Major functions of RBI

1. Monetary Authority of India

3. RBI as Banker of Banks

4. Management of foreign exchange reserves

5. RBI as a regulator and supervisor of financial system

6. RBI as Banker and Debt Manager to the Government

7. Developmental & Promotional roles

Story behind Nationalization in the 1960s

What are Public Sector Banks?

● Sponsor bank → 35%

● To initiate steps for technological upgradation and modernisation of existing units.

All About SEBI

All about IMF & WORLD Bank

IMF(International Monetary Fund) World Bank

● IMF is about balancing the ● World Bank is for development

● IMF is a fund. Meaning it has a pool of ● World Bank is a bank. Meaning it

World Bank is a much bigger institution and has two arms:

NBFC(Non-Banking Financial Company)

Difference between Banks & NBFCs

NBFCs but exempted from the requirement of registration

Bharatiya Reserve Bank Note Mudran Private Ltd.

Coins are minted at the four India Government Mints at

Each mint has its mark on the coin minted by it

Security Printing and Minting Corporation of India Limited (SPMCIL)

DICGC(Deposit Insurance and Credit Guarantee Corporation)