This whole material was prepared by Pawan PO (RBI), I am nothing.

I just
sharing..
1.LAF
A tool used in monetary policy that allows banks to borrow money through repurchase
agreements. This arrangement allows banks to respond to liquidity pressures and is
used by governments to assure basic stability in the financial markets.
Liquidity adjustment facilities are used to aid banks in resolving any short-term cash
shortages during periods of economic instability or from any other form of stress caused
by forces beyond their control. Various banks will use eligible securities as collateral
through a repo agreement and will use the funds to alleviate their short-term
requirements, thus remaining stable.
2.CRAR
The Capital Adequacy Ratio is a thermometer of Bank's health, because it is the ratio of
its capital to its risk. So simply, Capital Adequacy Ratio = Capital Risk So, the Capital
Adequacy can indicate the capacity of the Bank's ability to absorb the possible losses.
The Regulators check CAR to monitor the health of the Bank, because a good CAR
protects the depositors and maintains the faith and confidence in the banking system.
3.CRR
The Cash Reserve Ratio is the amount of funds that the banks are bound to keep with
Reserve bank of India
4.What is Basel Committee on Banking Supervision
Basel Committee on Banking Supervision is an institution of Governors of the Central
Banks of "G-10" nations and was formed in 1974.
This Basel Committee on Banking Supervision works on strengthening the soundness
and stability of the banking system, internationally.
5. What are Risk Weighted Assets?
The Risk weighted assets refer to the fund based assets such as Cash, Loans,
Investments and other assets. This means that they are the total assets owned by the
Banks, however, the value of each asset is assigned a risk weight

Investment in which among the following is the Most Risk Free asset of a Bank as per
the RBI guidelines? Housing Loans Government Approved Securities Venture Capital
Professional moneys co-invested with the entrepreneur usually to fund an early stage,
more risky venture. Offsetting the high risk is the promise of higher return.
Investments: Loans against Jewellery.

6.TIER 1 CAPITAL
The Tier-I Capital is the core capital while the Tier-II capital can be said to be
subordinate capitals
DEFINITION OF 'CORE CAPITAL'
The minimum amount of capital that a thrift bank, such as a savings bank or savings
and loan company, must have on hand in order to comply with Federal Home Loan
Bank regulations. Core capital consists of equity capital and declared reserves. The
minimum requirement was put in place to ensure that consumers are protected when
creating financial accounts.
DEFINITION OF 'PAID-UP CAPITAL'
The amount of a company's capital that has been funded by shareholders. Paid-up
capital can be less than a company's total capital because a company may not issue all
of the shares that it has been authorized to sell. Paid-up capital can also reflect how a
company depends on equity financing.
Paid up CapitalThe amount of capital, both equity and preference, paid up by the
shareholders against the capital subscribed to by them.
7.TIER II CAPITAL
Tier 2 capital represents "supplementary capital" such as undisclosed reserves,
revaluation reserves, general loan-loss reserves, hybrid (debt/equity) capital
instruments, and subordinated debt.
8. Three Pillars of Basel III
1.Minimum Capital Requirement..2.Supervisory review Process 3.Market Discipline

Basel III are basically guidelines which focus upon adequate capital in the banks and
minimize the risk to the customers or depositors. The idea is to make a sound financial
system which not only helps the banks and but the entire economyeconomy of the
country to maintain the trust and faith, as transparency in the business. The
centerpieces are "Capital Adequacy" and "Risks".
9.CREDIT RATING
What is CAMELS Rating ?
CAMELS ratings is a Banks rating used in United States. The 6 alphabets in CAMELS
denote the following:
1.
C:
Capital Adequacy Ratio
2.

A:

Asset Quality

3.

M:

Management Effectiveness

4.

E:

Earning (profitability)

5.

L:

Liquidity (using the ALM Asset Liability Mismatch Considerations)

6.

S:

Sensitivity to market risk

10. ASSET LIABILITY MISMATCH?

The Primary source of funds for the banks is deposits, and most deposts have a
short- to medium-term maturities, thus need to be paid back to the investor in 3-5 years.
In comparison, the banks usually provide loans for a longer period to borrowers. Out of
them, the home loans and Infrastructure projects loans are of longest maturity. So when
a bank provides the long term loans from much shorter maturity funds, the situation is
called asset-liability mismatch.
Asset Liability Mismatch or ALM is considered to be a comprehensive and dynamical
framework for measurement, monitoring and managing the market risk of the Banks

ALM creates Risk and Risk has to be managed. This is called Asset Liability
Management.
Consequences of the Asset Liability Mismatch
The Interest rate risks (due to fluctuation) and Liquidity Risk (due to long maturity of
loans) are two typical consequences of Asset Liability Mismatch.

1.

Interest Rate Risk: The banks would require to reprice the deposits faster than
the loans and during this process if the bank has to pay a higher rate, the adjustment is
difficult.

2.

Liquidity Risk: The banks would have to repay the depositors when their funds
mature. But when they repay, the cannot recall their loans. In this situation, bank would
require the new deposits. This may create a acute situation if there are no deposits
available. In some cases, the bank may also need to be paying higher interests on new
deposits.
11ASSET LIABILITY MANAGEMENT
This is basically management of the structure of the balance sheet (which comprises
the assets and liabilities) in such a way that interest gain is maximized and risk is
minimized. Most of the banks have an elaborate institutional arrangement to manage
the Asset liability Mismatch. They manage the above as follows:

1.

Pricing large percentage of loans at variable (Floating Rate Regime) interest

rateswhich actually move in tandem with the markets.
Balance Sheet
An accounting statement of a companys assets and liabilities, provided for the benefit
of shareholders and regulators. It gives a snapshot, at a specific point of time, of the
assets that the company holds and how the assets have been financed.
12.TAKE OUT FINANCING
The procees of providing large loans for long gestation period like infrastructure loans
It involves 1.Huge money 2.Long gestation period
13BANKASSURANCE
Bancassurance or Bank Insurance Model refers to the distribution of the
insurance and related financial products by the Banks whose main business is
NOT insurance. So, simply Bancassurance, i.e., banc + assurance, refers to banks
selling the insurance products. Bancassurance term first appeared in France in
1980, to define the sale of insurance products through banks' distribution
channels

14.Universal Banking
Universal Banking means that Financial Institutions (FIs) and Banks are allowed
to undertake all kinds of activity of banking , financing and related businessesApart from
savings and loans, the Universal banks provides services such as investing in
securities, credit cards, project finance, remittances, payment systems, project
counselling, merchant banking, forex operations, insurance and so on.

The process of providing all financial product under the same roof
15. Merchant Banking
The dealing in international finance, long-term loans for companies and underwriting.
Merchant banks do not provide regular banking services to the general public.
A merchant bank is a financial institution that provides capital to companies in the form
of share ownership instead of loans. A merchant bank also provides advisory on
corporate matters to the firms they lend to. In the United Kingdom, the term "merchant
bank" refers to aninvestment bank.
16. Narrow Banking
Narrow Banking involves mobilizing the large part of the deposits in Risk Free assets
such as Government Securities
1.

In Narrow Banking, Banks just accept deposits and provide loans.

2.

In Narrow Banking, there is rarely Asset Liability Mismatch.

17 NPA

Terms Loans on which interest and / or installment of principal remain overdue

for a particular quarter for a period of more than 90 days from the end of that particular
quarter.

The Bills those remain overdue for a period of More than 90 Days from the end of
a quarter.

Any amount to be received remains overdue for a period of more than 90 days.
The Cash Credit account remains out of order for a period of more than 90 days.
Out of order means over the sanctioned limit.
A loss asset is uncertain but it must be identified as a loss. So, as a thumb rule, an
account remains NPA for a period of 12 months it is classified under Substandard, if it
remains Substandard for 12 months it is classified as Doubtful. A Loss Asset is one
where loss has been identified by the internal or external auditors.
NPA and SARFAESI Act :

The Securitization and Reconstruction of Financial Assets and Enforcement of Security

Interest (SARFAESI) Act has provisions for the banks to take legal recourse to recover
their dues.
Here is how this process is takes place:

Willful Default

1.

A borrower makes any default in repayment and his account is classified as NPA.

2.

The secured creditor has to issue notice to the borrower giving him 60 days to
pay his dues.

3.

If the dues are not paid, the bank can take possession of the assets and can also
give it on lease or sell it.

The party defaults in meeting its payment obligations even if it has capacity to
repay.

The party defaults in meeting its payment obligations and diverts the finance
away from the purpose it was availed for.

The funds are available with the firm in other form of assets and has not made a
payment

The party defaults in meting its payment and also disposed off the removable
assets / immovable property which was used for the purpose of secured loan, without
the knowledge of the Bank.

Deposit Insurance

The idea behind the Deposit Insurance is to boost the faith of the public in the banking
system, and provides protection against the loss of deposits to a significant extent. In
India, the bank deposits are covered under the insurance scheme provided by Deposit
Insurance and Credit Guarantee Corporation (DICGC). DGCIC is a wholly owned
subsidiary of the Reserve Bank of India.

Negotiable Instruments Act 1881

What is a Negotiable Instrument?
Negotiability means transfer of an instrument from a person / entity to another person /
entity. The transfer should be without restriction and in good faith.
Before we move ahead , please note the following:

The NI Act has 147 sections.

Draft was not included and was made included in the Section 85(a).
Currency Note is not a negotiable instrument as per section 21 of the Indian
Currency Act .
Section 4 deals with promissory notes
Section 5 deals with Bill of Exchange
Section 6 deals with Cheque
Section 9 deals with holder and holder in Due course.
Section 15 deals with Endorsements
Various other sections such as 123-131 deal with crossing of cheques.

Difference between a Crossed cheque and A/C Payee cheque

A person who signs the cheque and transfers the instrument is an endorser and in
whose favor it is transferred is endorsee. The endorsee acquires a right to negotiate the
instrument to anyone he / she likes. By making an endorsement the endorser promises
that in case of dishonor, he / she provides a guarantee to compensate the holder.
Crossing a cheque by making two parallel lines with or without such words as ___&
company is general crossing. Section 126 of the NI Act says that this is a direction to
the bank to not to pay the cheque across the counter.
This crossed cheque is no more a bearer cheque where anyone can negotiate and get
payment across the counter.
In case of a crossed cheque, the payee is free to make further endorsements.
For example , Ayesha receives a check from Rohan which has been crossed, Ayesha
can get this payment in her account only and not across the counter. But in this case
Ayesha is free to endorse the cheque in favor of Suresh and further Suresh is free to
endorse the instrument in favor of Mukesh and so on...This means that crossing a

cheque does not put restrictions on endorsements. In case the cheque gets dishonored,
Mukesh can sue Suresh and Suresh can sue Ayesha and Ayesha can sue Rohan.
Now let's discuss A/C Payee cheques. The NI act does not talk about the A/C payee
crossing. There is no definition of A/C payee crossing in the NI act and it is a child of
banking practice. Making a cheque A/C Payee is a result of custom, use and practice
and is now accepted legally.
But, the A/C payee cheque cannot be further endorsed. This means that if the cheque in
the above example which is in favor of Ayesha bears "A/C Payee", payment can be
collected in Ayesha's account only. The paying bank makes sure that amount is being
credited to the account of the payee only

BALANCE OF TRADE
DEFINITION OF 'BALANCE OF TRADE - BOT'
The difference between a country's imports and its exports. Balance of trade is the
largest component of a country's balance of payments. Debit items include imports,
foreign aid, domestic spending abroad and domestic investments abroad. Credit items
include exports, foreign spending in the domestic economy and foreign investments in
the domestic economy. A country has a trade deficit if it imports more than it exports; the
opposite scenario is a trade surplus.

BALANCE OF PAYMENTS

DEFINITION OF 'BALANCE OF PAYMENTS (BOP)'

A statement that summarizes an economys transactions with the rest of the world for a
specified time period. The balance of payments, also known as balance of international
payments, encompasses all transactions between a countrys residents and its
nonresidents involving goods, services and income; financial claims on and liabilities to
the rest of the world; and transfers such as gifts. The balance of payments classifies
these transactions in two accounts the current account and the capital account. The
current account includes transactions in goods, services, investment income and

current transfers, while the capital account mainly includes transactions in financial
instruments. An economys balance of payments transactions and international
investment position (IIP) together constitute its set of international accounts.

FISCAL POLICY
Government spending policies that influence macroeconomic conditions. Through fiscal
policy, regulators attempt to improve unemployment rates, control inflation, stabilize
business cycles and influence interest rates in an effort to control the economy. Fiscal
policy is largely based on the ideas of British economist John Maynard Keynes (1883
1946), who believed governments could change economic performance by adjusting tax
rates and government spending.
To illustrate how the government could try to use fiscal policy to affect the economy,
consider an economy thats experiencing a recession. The government might lower tax
rates to try to fuel economic growth. If people are paying less in taxes, they have more
money to spend or invest. Increased consumer spending or investment could improve
economic growth. Regulators dont want to see too great of a spending increase though,
as this could increase inflation.
Another possibility is that the government might decide to increase its own spending
say, by building more highways. The idea is that the additional government spending
creates jobs and lowers the unemployment rate. Some economists, however, dispute
the notion that governments can create jobs, because government obtains all of its
money from taxation in other words, from the productive activities of the private sector.
One of the many problems with fiscal policy is that it tends to affect particular groups
disproportionately. A tax decrease might not be applied to taxpayers at all income levels,
or some groups might see larger decreases than others. Likewise, an increase in
government spending will have the biggest influence on the group that is receiving that
spending, which in the case of highway spending would be construction workers.
Fiscal policy and monetary policy are two major drivers of a nations economic
performance. Through monetary policy, a countrys central bank influences the money

supply. Regulators use both policies to try to boost a flagging economy, maintain a
strong economy or cool off an overheated economy.

TRVELERS CHECK
A medium of exchange that can be used in place of hard currency. Travelers' checks are
often used by individuals who are traveling on vacation to foreign countries. The checks
were first introduced by American Express back in 1891.
Travelers' checks provide a safe way to carry currency abroad. Security is provided
against lost or stolen checks by the issuing party - usually a bank. Specific checks are
given unique check numbers, similar to a normal check. When a lost or stolen check is
identified, it is simply canceled and the individual is re-issued a new check.
LETTER OF CREDIT
A letter from a bank guaranteeing that a buyer's payment to a seller will be received on
time and for the correct amount. In the event that the buyer is unable to make payment
on the purchase, the bank will be required to cover the full or remaining amount of the
purchase.
Letters of credit are often used in international transactions to ensure that payment will
be received.
NON CO-OPERATIVE BORROWER
The Reserve Bank of India (RBI), on Monday, modified the definition of a noncooperative borrower and also fixed the cut off limit for classifying borrowers as noncooperative would be those borrowers having aggregate fund-based and non-fund
based facilities of Rs.5 crore from the concerned bank/financial institution (FI).
A non-cooperative borrower is one who does not engage constructively with his lender
by defaulting in timely repayment of dues while having ability to pay, thwarting lenders
efforts for recovery of their dues by not providing necessary information sought, denying
access to assets financed/collateral securities, obstructing sale of securities, etc, said
the RBI.
In effect, said the RBI, a non-cooperative borrower is a defaulter who deliberately
stonewalls legitimate efforts of the lenders to recover their dues.
RBI asked banks/FIs to report information on these borrowers to the Central Repository
of Information on Large Credits (CRILC). Further removal of names from the list of non-

cooperative borrowers should be separately reported to CRILC with adequate

reasoning/rationale.
A non-cooperative borrower in case of a company will include, besides the company, its
promoters and directors (excluding independent directors and directors nominated by
the Government and the lending institutions).
In case of business enterprises (other than companies), non-cooperative borrowers
would include persons, who are in-charge and responsible for the management of the
affairs of the business enterprise.
The RBI told banks/FIs to put in place a transparent mechanism for classifying
borrowers as non-cooperative.
The decision to classify the borrower as non-cooperative borrower should be entrusted
to a committee of higher functionaries, headed by an Executive Director and consisting
of two other senior officers of the rank of general managers/deputy general managers
as decided by the board of the concerned bank/FI.
An opportunity should be given to the borrower for a personal hearing if the committee
feels such an opportunity is necessary, the RBI added.
However, it said that the order of the committee should be reviewed by another
committee headed by the Chairman/CEO and MD and consisting, in addition, of two
independent directors of the bank/FI and the order shall become final only after it is
confirmed by the Review Committee.
Boards of banks/FIs were asked to review on a half-yearly basis the status of noncooperative borrowers .

CO-OPERATIVE BANK
Co-operative bank is a financial entity which is created by its members who belong to
same professional community or have same interest to meet their common economic
needsCo-operatives are based on the values of self-help, self-responsibility, democracy,
equality, equity and solidarity. A co-operative bank is a financial entity which belongs to
its members, who are at the same time the owners and the customers of their bank. in a
co-operative bank, the needs of the customers meet the needs of the owners, as cooperative bank members are both. As a consequence, the first aim of a co-operative
bank is not to maximise profit but to provide the best possible products and services to
its members

CASH CREDIT ACCOUNT

This account is the primary method in which Banks lend money against the security of
commodities and debt. It runs like a current account except that the money that can be
withdrawn from this account is not restricted to the amount deposited in the account.
Instead, the account holder is permitted to withdraw a certain sum called "limit" or
"credit facility" in excess of the amount deposited in the account.
Cash Credits are, in theory, payable on demand. These are, therefore, counter part of
demand deposits of the Bank.

OVERDRAFT FACILITY
The word overdraft means the act of overdrawing from a Bank account. In other words,
the account holder withdraws more money from a Bank Account than has been
deposited in it.

SWEEP ACCOUNT
1. A cash account is set up first and a lump sum of money is deposited into that
account.
2. A financial advisor and the client will discuss and determine an average balance
that should be kept in this account. Depending on the institution's service, this
amount may be pre-determined.
3. Most of the extra cash above the average balance will be invested into a money
market, CD, or some other form of investment that can be easily liquidated.
4. When the balance in the cash account falls below the pre-determined average
balance, some of the investment is liquidated and the proceeds get deposited
into the cash account, thus maintaining the average balance.
CLOUD COMPUTING?
Large groups of remote servers r networked to allow centralized data storage and
online access to computer services or resources
In very simple terms, whrevr u go ur data goes wid u. m NOT toking about the physical
device(Eg. Pen Drive) dat u carry. All your data is basically stored in companys Hard

Disk Drive at a completely different location(another country), and that data can be
accessed frm anywhre in the world, with an internet connection.

What have u to say abt merger of small public sector banks with bigger PSU's ? Do u
agree with the proposal
1.In the present scenario the major problem with the small PSU is the deficiency of
capital which comes as a halt in their way to provide the art of technology nd to build up
the world class infrastructure, in their expansion plans to penetrate deep in the domestic
as well as at international front... so the possibility of merger can't be ruled out
2.merger always brings prosperity for both sides. for example suppose one company
have good infrastructure and resources for one product and another one have much
money and better administarion and both are working in same area then merger will be
good for both sides.
as there was a merger of state bank of saurastra and indore with their parent company
sbi.or the merger of new bank of india with pnb

MICRO ATM
Micro-ATMs are biometric authentication enabled hand-held device (also known as a
Point of Transaction [PoT] terminal). Micro-ATMs will primarily perform following
functions:

Cash withdrawal

Cash deposit

Balance enquiry

Remittances

Business Correspondents (BCs) appointed by the banks will operate these devices. The
physical currency would be handled by this Business Correspondent and not a machine
like a regular ATM. All transactions will require online biometric authentication with the
UIDAI authentication server in order to be processed.

FDI IN RETAIL
if FDI come in retail,it will be very beneficial for the economy bcoz by this new approach
jobs will create and the productivity will increase bcoz farmers will aquaint themselves

with foreign methods of irrigation and they can sell their products at much higher prices.
but people thought it would impact Kirana shops,, which is just only an illusion bcoz in
actual way it will not make any impact on kirana shops bcozs supermarkets will come at
the outskirts of the cities and people wounldn't prefer it to buy their daily need they will
prefer only kirana shops which is located in their locality. supermarkets will create
competition for large Retailers not on Kirana shops(which is only for low and medium
class people)

BROWN LABEL ATM

'Brown label' ATM are those Automated Teller Machines where hardware and the
lease of the ATM machine is owned by a service provider, but cash management
and connectivity to banking networks is provided by a sponsor bank whose
brand is used on the ATM.
The `brown label' has come up as an alternative between bank-owned ATMs and
'white label' ATMs. As in India white label ATMs were not allowed by RBI (in
February, 2012, RBI has issued the draft guidelines for introduction of white
ATMs, but final approval has yet to come.), the concept of Brown Label ATMs
started picking up.

CSR
csr means corporate social responsiblity. it's the social work done by an organisation
apart from its regular business.
recently tcs has given 100 crore for sanitation purpose. tata steel is doing several types
of csr activities. infosys have also pledge to do so
companies whose fall under following criteria 500 crore net worth, 1000 crore turnover
or 5 crore net profit...

SUB-VENTION
Subvention means a part of the interest burden on a loan will be borne by the
government, not the borrower. In other words, subvention is subsidy on a loan.

SWIFT?
he society for worldwide interbank financial telecommunication provides a network that
enables financial intitutions worlwide to send and receive information about their
financial transaction in a secure standardised and reliable environment.

what you will do to increase the business of your branch as branch manager?
Sir, to increase the business of my branch, I will take following measures:- (1) I will
conduct an awareness campaign for making the people aware about the products ad
services offered by my bank. Normally, it is seen that people are not aware about the
services offered. With awareness campaign, eforts would be made to increase the
customer base of the branch (2) I will set up kiosks at few vantage points in the city
where people can clarify their doubt about the bank products and the accounts can be
opened very easily (3) I shall direct my bank staff to be more professional, customeroriented and helpful (4) I shall approach the corporates and business houses in the city
to utilise the services offered by the bank like salary and pension disbursement of
employees, computer and vehilce loans etc. (5) I shall also use the newspaper and
audio visual media to give wide publicity to the bank products (6) I shall pay special
attention towards the low income group and encourage them to invest in small savings
schemes offered by the bank. For this, a door to door campaign utilising the bank staff
and banking correspondants can be undertaken. (7) I shall improve upon the services
offered by the bank e.g. availability of cash in ATM, setting time frame for various
activities like opening of bank account, clearing of cheque, issue of DD, withdrawal and
deposit etc. I think by adopting these measures I can improve upon the health of my
branch.

WHAT IS ARC?
It stands for Asset Reconstruction companies which incorporated under company act
whose function is to acquire distressed assets from banks or FIs at a discount and take
steps to recover these loans by securitisation, reconstruction or by sale of asset... to
undertake such types of activity it's mandatory to get the company registered with RBI
under SARFAESI act and should commence its business with in six months of its
registration and they should maintain capital adequacy ratio of 15% of total risk
weighted assets.
arc stands for asset reconstruction company...arc get licence from rbi..they purchase
npa of banks..and according to new rbi guidelines arc hav to deposit 15 % amount

recovered with rbi also the recovery time of npa has been decreased to 6months from 1
year for ARC by RBI .

WHAR ARE BONDS?

Bonds, however, in India are typically issued by financial institutions, government
undertakings and large companies. The interest rate is assured and is paid at a fixed
interval, i.e. on an annual or semi-annual basis. On maturity, the principal is repaid.
Bond is a form of loan. The holder of the bond is the lender and the issuer of the bond is
the borrower. In todays scenario, you see many government undertakings and
companies issuing bonds. These are done to fund their long-term capital expenditure
needs. In case of a government, raising the same helps in funding its current
expenditure. There are many types of bonds, but only a few types are relevant to the
Indian markets. Deep discount bonds, also known as zero-coupon bonds, are bonds
wherein there is no interest or coupon payment and the interest amount is factored in
the maturity value. So, the issue price of these bonds is inversely related to their
maturity period. Corporate bonds are issued by companies and offer interest rates
higher than bonds issued by public sector units and other financial institutions. The
interest rate on these bonds is governed by their credit rating and higher the rating,
lower is the interest rate offered by them. Hence, an investor needs to be careful before
investing in themshe should take a decision after checking the credit ratings as well
and not only the interest being offered. Sovereign bonds are issued by a government
in India, by the Reserve Bank of India. These can be referred to as low-risk or even riskfree bonds. Convertible bonds is another category wherein the bond holder has an
option to convert the bonds into equity after a fixed tenor. These may be fully or partially
convertible where only a part is converted and the other part matures.

ZERO COUPON BOND?

A debt security that doesn't pay interest (a coupon) but is traded at a deep discount,
rendering profit at maturity when the bond is redeemed for its full face value.
funding its current expenditure. There are many types of bonds, but only a few types are
relevant to the Indian markets. Deep discount bonds, also known as zero-coupon
bonds, are bonds wherein there is no interest or coupon payment and the interest
amount is factored in the maturity value. So, the issue price of these bonds is inversely
related to their maturity period

DEBENTURES?
A type of debt instrument that is not secured by physical assets or collateral.
Debentures are backed only by the general creditworthiness and reputation of the
issuer. Both corporations and governments frequently issue this type of bond in order to
secure capital. Like other types of bonds, debentures are documented in an indenture.
Gehen _ Vichar : Prasnay United Bank of India launches new alternate delivery
products.1. Providing RuPay Debit Cards 2. TD on Missed Call 3. The online PPF
account maintenanceWhat are their main purpose behind these three launch. ?

Answers --- Megha Munshi said banks are encouraging the alternet delivery
channel like to avail the digital channel of delivery to the customers. customers need not
to visit branch for the small transaction cost effective as well for banks

Abhi Dwivedi said : Benefits would be - 1. Providing Rupay Debit Cards DebitThe bank wanna provide facility to their customer by which they can avail service
of Rupay e-commerce (( means customer will prefer more as less charges will be
applicable )) 2. TD on Missed Call - For TD customer have to give a miss cal on ths
no. 084 70 820820, looking for providing more ease to customers (( saving time of
customer , getting more loyalty of customer --- which in turn more FD and more saving
in bank ))Btw it will give the ease of investment in pre-defined Fixed Deposit (( upto
Rs10,000 )) 3. Online PPF Account maintenance -- to attract more PPF account
holders in their bank so that they can enjoy this service

Anand Sa said - To reduce dependence on branches and cost cutting

Rachana Mishra said - Rachana Mishra Better and instant service

Khushboo Shukla said - Alternate delivery channels costs less to bank wic help
dem on the other side to earn more profit

Harsh Mehta said - load on the stationary branches will low as they have to do
too much things,operational cost will be low by rupee card,online ppf account
maintainance and missed called TD will encourage bank deposits.overall beneficiary for
both bank and customers

Himani Chaturvedi said -- 1) to make this indian card more in use...with

lowcost...making profit to indian market..2) To make their bank more cooperative to
customers...they fill more secure..3) To make banking services more easier without
being going to their bank.. :)

Why NPA is increasing?

1. slow economic growth impacts business, if there's loss in business the borower may
default on pymnt
2. bad weather , late arrival of manson impacts corps, so farmers may default on
payment.
3. inflation impacts the budget of common people, so they may default on payments
1-banks have not efficient recovery process
2-natural calamity like flood, earthquake due to which farmers are losing their capital
and not able to pay back
3- recessions due to which small investors are not able to cope with it
4-govt. policy like increasing or decreasing import or export, it also ultimately affect
investors
5- increase of fdi, due to which local manufacturer are losing there business and not
able to pay their loan
6- sudden change of some environment related factor as example in case of delhi
where govt. has made a rule for pollution related vechiles. now investors who have
invested their money in manufacturing of these vechiles, how they will survive and able
to pay back
1. Natural calamities,floods.global meltdown etc
2. Death of debtor
3. Immoral or greedynss of borrower lead Npa
4. Corruption at top level in psu like syndicate bank md sudhir jain case

What is Refinance and Restructuring?

Refinance--The process of getting new loan at lower interest rate to pay-off original
loan......Example---If some one borrowed 1lac at 15% rate and he had to pay-off in 24
months and after 12 months some other lender willing to provide the loan at 10% rate of
interest then he borrow the money and pay-off original loan so that borrower saves 5%
interest rate.This is called Refinance Restrucuring---When the borrower is in difficult
financial situation but still he has the capability to repay the loan at this situation debt
restructuring is done i.e to extend the repayment date of loan
BENEFITS OF MAKE IN INDIA COMPAIGN?
make in indai campaign is mainly done in order to boost infratsructure investment in
country like railways roadways, construction etc. this is only definition, now come to
merits-1) boost economies of scale as high production generates low cost.2) lowers
inflation in country. 3) generated fdi as more foreigners will be attracted towards

infrastructure development 4) reduce imports and increase exports as wewill have

better level of opportunities in our country
generally india is importing all electronic and defence material from abroad which is
resulting in fiscal deficit if the same things are manufactured in india there is a chance of
providing job to indian youth and government will get tax income and if they export from
india thenwe can contol fiscal deficit as exports will be more than imports
What if u r posted in remote area far away from your home town? R u ok to that ?
job location doesn't matter for me. what matters is my work. so i will work anywhere
irrespective of working condition. as i have spent a lot of my life in my village so it'll be
easy for my to work in remote areas
BREAK-EVEN POINT?
A stage where there is no profit no loss
When total expenses is equal to total revenue earned
GST?
Now we pay many forms of tax like service tax, entertainment tax etc. But GST is a
concept which wud remove all forms of tax and we wud b required to give only one tax.
The benefits wud b that we can buy anything at the same rate anywhere in the
country.e.g. A car. It wud be easier for the traders to move their goods anywer in the
country. GST wud enable gtowth of GDP to 2% approx. The only problem with GST is
that state govt.whose main revenue is through petrolrum ,tobacco etc may incur losses
initially. However central govt has promised to compensate for their losses for first five
years.

What is equity market and debt market ?

both comes under financial market where funds are raised for varius perposes
debt market: is also called fixed incom market or bond market where money is lent, bt
no ownership is exchanged
instruments: cp, cd, bond debentures, tbill, gsec
equity merket: also called share market, stock market. here money is raised by
exchanging ownership means selling a part of the business ownership
instruments: shares, equity, stocks etc
this amount is nt paid back to the share holders by the company

Bill of Exchange:
A Bill of Exchange is an instrument in writing, containing an unconditional order,
signed by maker, directing a certain person to pay, a certain sum of money only, to or
to the order of certain person or to the bearer of the instrument.
Parties: Drawer, Drawee [Acceptor] and Payee
Where no period is mentioned on PN or BOE for payment, is payable on demand
Where the BOE is lost, the drawer is under obligation [Sec 45A] to issue a duplicate bill.
An instrument can be made payable to two or more persons jointly or payable to one of
two or one or some several payees.
*Bank note is not a promissory note
A promissory note is an instrument in writing (not being a bank-note or a currencynote) containing an unconditional undertaking signed by the maker, to pay a certain sum
of money only to, or to the order of, a certain person, or to the bearer of the instrument.

Difference between Promissory note and bill of exchange

(1) Parties.
There are three parties to a bill of exchange, namely, the drawer, the drawee and the
payee; while in a promissory note there are only two parties maker and payee.
(2) Nature of payment.
In a bill of exchange, there is an unconditional order to pay, while in a promissory note
there is an unconditional promise to pay.
(3) Acceptance.
A bill of exchange requires an acceptance of the drawee before it is presented for
payment, while a promissory note does not require any acceptance since it is signed by
the persons who is liable to pay.

(4) Liability.
The liability of the maker of a promissory note is primary and absolute, while the liability
of a drawer of bill of exchange is secondary and conditional. It is only when the drawee
fails to pay that the drawer would be liable as a surety.
(5) Notice of dishonor.
In case of dishonor of bill of exchange either due to non-payment or non-acceptance,
notice must be given to all persons liable to pay. But in the case of a promissory note,
notice of dishonor to the maker is not necessary.
(6) Makers position.
The drawer of a bill of exchange stands in immediate relationship with the acceptor and
not the payee. While in the case of a promissory note, the maker stands in immediate
relationship with the payee.
(7) Nature of acceptance.
A promissory note can never be conditional, while a bill of exchange can be accepted
conditionally.
(8) Copies.
A bill of exchange can be drawn in sets, but a promissory note cannot be drawn in sets.
(9) Payable to bearer.
A promissory note cannot be made payable to a bearer, while a bill of exchange can be
so drawn provided it is not payable to bearer on demand.
(10) Payable to maker.
In a promissory note, the maker cannot pay to himself. While in the case of a bill of
exchange, the drawer and the payee may be one person.
(11) Protest.
Foreign bills must be protested for dishonor when such protest is required by the law of
the place where they are drawn. But no such protest is required in the case of a
promissory note.

Statuory body
any org established following an act passed by Parliament is called statutory body. sbi
act 1955, sebi 1992, rbi 1934 etc
As the word 'STATUTE ' means a written law passed by parliament or state assemblies..
in other way statutory body is the one which is created by the resolution or act in the
parliament like RBI, IRDA,PFRDA, FMC etc.... on the other hand non statutory body is
the one which don't have any mention in the statute book of India.. for instance SEBI
was first established as non statutory body in 1988 to regulate security market but later
become an autonmus body through an ordinance route

constitunal body:
org which are established to fulfill obligation of the constitution of india like the supreme
court, high court, etc

UNDER WRITING?
Underwriting is an agreement, entered into by a company with a financial agency, in
order to ensure that the public will subscribe for the entire issue of shares or debentures
made by the company. The financial agency is known as the underwriter and it agrees
to buy that part of the company issues which are not subscribed to by the public in
consideration of a specified underwriting commission. The underwriting agreement,
among others, must provide for the period during which the agreement is in force, the
amount of underwriting obligations, the period within which the underwriter has to
subscribe to the issue after being intimated by the issuer, the amount of commission
and details of arrangements, if any, made by the underwriter for fulfilling the
underwriting obligations. The underwriting commission may not exceed 5 percent on
shares and 2.5 percent in case of debentures. Underwriters get their commission
irrespective of whether they have to buy a single security or not.

Plzz explain article 370 in simple words & wat is the issue which is in limelight?

acrdng to article 370 generaly if any amendments is made in parliment it will be

aplicable to whole country except jammu and kashmir to pass that bill they have to take
permission from j& k asembly the asembly constituencies have been changed 2 or 3
times in whole india but the same is continuing in kashmir which was followed in 1950
no other person from any part of india cannot buy land in kashmir compare with other
states there are more number of government jobs in j&k
article 370 provides special rights to jammu and kashmir to write its own constitution,
dual citizenship, to fly its own flag and citizen of other states are not allowed to
permanently reside in j&k more over national emergency can not be imposed over j&k
without consent of legislative assembly of j&k and many more rights.
Article 370 of the Indian Constitution is a 'temporary provision' which grants special
autonomous status to Jammu & Kashmir. All the provisions of the Constitution which
are applicable to other states are not applicable to J&K.
According to this article, except for defence, foreign affairs, finance and
communications, Parliament needs the state government's concurrence for applying all
other laws. Thus the state's residents live under a separate set of laws, including those
related to citizenship, ownership of property, and fundamental rights, as compared to
other Indians. As a result of this provision, Indian citizens from other states cannot
purchase land or property in Jammu & Kashmir. Under Article 370, the Centre has no
power to declare financial emergency under Article 360 in the state. It can declare
emergency in the state only in case of war or external aggression. The Union
government can therefore not declare emergency on grounds of internal disturbance or
imminent danger unless it is made at the request or with the concurrence of the state
government.

Collateral security?
Property or other assets that a borrower offers a lender to secure a loan. If the borrower
stops making the loan payments, the lender can seize the collateral to recover its
losses.
A security that is given against loan , collateral will be asset of a borrower -- loan issued
covered almost 70 % of the collateral security
DEFINITION OF 'GRESHAM'S LAW'
A monetary principle stating that "bad money drives out good." In currency valuation,
Gresham's Law states that if a new coin ("bad money") is assigned the same face value
as an older coin containing a higher amount of precious metal ("good money"), then the

new coin will be used in circulation while the old coin will be hoarded and will disappear
from circulation.
Coins were first made with gold, silver and other precious metals, which gave them their
value. Over time, the amount of precious metals used to make the coin decreased
because the metals were worth more on their own than when minted into the coin itself.
If the value of the metal in the old coins was higher than the coin's face value, people
would melt the coins down and sell the metal. Similarly, if a low quality good is passed
off as a high quality good, then the market will drive down prices because consumers
won't be able to determine the good's real value.

What is consortium finance?

It is a formal arrangement between two or more banks who provide the credit facilities to
a large borrower jointly. One bank called the lead bank assess the total credit
requirement of the borrower and all consortium members banks provide the facilities.
This is done usually for loans above 50 crores
hen a borrower or bigger corporates demand hefty credit then two or more banks come
together to lend the borrower which is called consortium financing. Usually the lead
bank infuses the maximum exposure like SBI in the case of kingfisher airline. In
consortium financing the lead bank makes the appraisal of loan, have a single window
format of documentation.
SOCIAL BANKING?
it is a new age banking service in india now banks are nt solely cnsntrated on profit
making bt wants to add society as a whole ..means lending for social causes
eg.charity ,CSR lending,lending for construction of schools,lending for environment
protection etc.

CHIT FUNDS?
Chit funds in India are governed by the Chit Funds Act, 1982. Under this Act, the chit
fund businesses can be registered and regulated only by the respective State
Governments. Regulator of chit funds is the Registrar of Chits appointed by respective
state governments under Section 61 of Chit Funds Act. Powers of adjudication vest in
the Registrar and the state government concerned is the Appellate authority. In case of
failure of a chit fund business, the responsibility for winding up such a business also
vests with the respective State Governments. Moreover, the Prize chits and money

circulation schemes are illegal and are banned under the Prize Chits and Money
Circulation Schemes (Banning) Act, 1978. Powers of investigation under this Act are
vested with the concerned state police authorities.

MAKE IN INDIA
Ms. Swaraj, who is one her first visit to South Korea, said India is committed to
qualitatively expanding our industrial base, both to meet the growing domestic demand,
export and also to generate employment.
What d u think about Privatisation of Banks ?
Is it benificial for Indian economy ?
1.every coin has two sides. you've mentioned only one. 2nd side is that it will lead to a
monopoly, some rich people will make their own rule, bank won't go for much social
work, it'll invest much in big corporate sectors, no priority lending will be there, lots of
pressure will be on staff for target completion, which will be ultimately harmful for bank
staffs.
so a solution is there we should make it partially pvt. partially govt. means govt. should
make the rule there and those sectors in bank which are going to loss like npa case
should be given to pvt. Players
2.Employees wil do their work with greater efficiency,Targets will be met,Less Npa

What is reverse mortgage?

sweta its a service launched by nhb to get loan against home or any immovable
property and they dnt hv to pay the loan back at all. they can also use the property or
live in case of home as long as they are alive. once they die the bank will take
possession of the property n sell them or if any legal heir is there he will pay all the loan
amount+interest in order to get the property back.
this is for only for senior citizens.
benificial to those whose sons dnt respect their parents

what is suspicious transactions ?

uspicious transaction is any transaction which seems to be violating financial norms. i.e
money laundering, fema violation , tax evasion etc

When tds is imposed..??

when ur yearly income exceeds the tax limit mentioned in the union budgey 2014-15
tax deducted at source (of ur income). it means if u are making much money using all
infrastructure and resources of the country u should pay tax for the develpmnt of the
same infrastructure , resources and the society where u earn money.
in case of nri they dnt use these resources much thats y the tax rate for them is different

If you are posted in rural area then how will you manage ?
i hv grown up in rural areas, i hd been among financially illiterate people for years. so its
nt a big deal to adjust my self among them or adopting new environment. moreover its
one of my strengths that i adopt new environment, people, place, technology, language
very sooon.

External Commercial Borrowings

Any money that has been borrowed from foreign sources for financing the
commercial activities in India are called External Commercial Borrowings.
Government permits the ECBs as an additional source of financing for expanding
the existing capacity as well as for fresh investments. The ECB policy of the
Government seeks to emphasize the priority of investing in the infrastructure and
core sectors such as Power, telecom, Railways, Roads, Urban infrastructure etc.
There is also emphasis on the need of capital for Small and Medium scale
enterprises.
Please note that ECB means any kind of funding other than Equity. If the foreign money
is used to finance the Equity Capital, it would be termed as Foreign Direct Investment.
Some other questions..
Difference between MSS and OMO?
Difference b/w offshore and onshore ?
Types of capital 1. Share capital, Paidup Capital, Authorised capital, Called up
capital, subscribed capital. Define all
Explain Tier I, Tier II Capital and risk weighted asset ratio in a simpler form with
respect to CAR?

You said RBI controls monetary policy, But when govt. passes budget what is the need
of it..?

Thank you and all the Best..!!

`Survivor