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CSEB JUNIOR CLERK / SECRETARY / KERALA BANK / KSCARD

BANK / APEX SOCIETIES

BANKING – SPECIAL NOTES – PART 1

1. Financial Sector Regulators: (i) RBI: Banks, NBFCs, Payment

& Settlement System, Credit
Information Companies etc. (ii) SEBI (Securities & Exchange
Board of India): Stock Markets,
Securities trading, Credit Rating Companies etc. (iii) IRDAI
(Insurance Regulatory &
Development Authority of India) : Insurance Sector. (iv) PFRDA
(Pension Fund Regulatory
and Development Authority): NPS (National Pension Scheme), Atal
Pension Scheme.
2. RBI Policy Rates : (i) Repo Rate : 6.50%, (ii) MSF (Marginal
Standing Facility Rate): 6.75%, (iii)
Bank Rate: 6.75%, (iv) Reverse Repo Rate: 3.35%
3. RBI Reserve Ratios: (i) CRR (Cash Reserve Ratio) : 4.5% of NDTL,
(ii) SLR (Statutory Liquidity
Ratio), 18% of NDTL
4. Repo rate is the interest rate at which RBI charges banks when
the banks borrow money
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from RBI against the Government or approved securities. Repo

rate shall set the tone for
short term interest rate in the market. If Repo rate is reduced,
bank’s interest rates will
reduce & vice versa.
5. Reverse Repo rate is the rate at which RBI pays to banks when
the banks park its surplus
funds with RBI.
6. Bank Rate is the rate at which RBI buys or rediscount bills of
exchange or other commercial
papers from banks.
7. CRR is the quantum of cash that banks shall have to keep with
RBI, as certain percentage of
its NDTL. All Scheduled Banks to keep CRR, as per Section 42(1) of
RBI Act 1934. CRR for Non-
scheduled banks is as per Section 18 of Banking Regulation Act
1949. Non-scheduled banks
can keep it with themselves or with other banks/RBI.
8. Money Market is a segment of the financial market in India
where short term borrowing &
lending take place. Maturity period of money market instruments
is from one day to one
year. Money market is regulated by RBI.
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9. Money market instruments: (i) Call money: 1 day borrowing or

lending in unsecured
funds(overnight basis), (ii) Notice Money: 2 to 14 days borrowing
or lending in unsecured
funds, (iii) Term Money : Above 14 days to up to 1 year borrowing
or lending.
10. Government Treasury Bills (managed by RBI, as banker to the
Central Government): (i) 91
days, (ii) 182 days & (iii) 364 days.

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CSEB JUNIOR CLERK / SECRETARY / KERALA BANK / KSCARD

BANK / APEX SOCIETIES

BANKING – SPECIAL NOTES – PART 2

11. Certificate of Deposits (CD) are issued by banks as a Usance

Promissory Note. Period: 7 days
to one year. Amount: Rs. 5 lakh & multiples of Rs.5 lakh.
Issued at discount value.
12. Commercial Paper (CP) is issued by Companies, Financial
Institutions etc., as Usance
Promissory Note. Minimum Rs.5 lakh & then in multiples of
Rs. 5lakh. Minimum period 7
days & maximum period 12 months.
13. Corporate bonds are debt securities issued by private and
public Corporations (PSUs, PSBs,
Private Sector banks, AIFIs, HFCs, NBFCs etc.)
14. Types of bonds: Coupon Bonds (fixed interest bearing bonds.
Interest rate is the coupon
rate), Zero Coupon Bonds (issued at discount, no periodic interest.
Face value will be paid on
maturity), Convertible Bonds: Bonds which can be converted in to
equity after specific
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date/period
15. Stock Exchanges is a financial market place where securities,
shares, bonds and other
financial instruments are listed and bought and sold by traders or
brokers. Premier stock
exchanges in India are the BSE (formerly, Bombay Stock Exchange)
& the National Stock
Exchange (NSE).
16. (Main) types of Shares: (i) Equity Shares/Common shares: held
by the promoters of the
Company & have voting rights, (ii) Preference Share: No
voting rights. Entitled to dividends.

In case of liquidation of the Company will have preference claim

over equity share-holders,
(iii) Convertible Share. Share can be converted in to Equity Shares
after a specified
date/period, (iv) Redeemable Shares: Shares that can be
redeemed/taken back by the
Company for cash or other property at a stated time or after a
specific event.
17. ‘Factoring’ is financing against receivables
18. ‘Risk’ is threat or chance/probability of encountering loss. The
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‘BASEL-III’ are (i) Credit Risk, (ii) Operational Risks & (iii)
Market Risk
19. Credit risk is the possibility of loss arising from the
borrower's failure to repay a loan or meet
contractual obligations. It is the probability that the lender may
not receive the principal &
or interest payments.
20. Market risk may arise from “adverse movement” of interest
rate, foreign exchange rate,
equity price or commodity price. Market risk is the uncertainty
associated with market/
investment decisions.

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CSEB JUNIOR CLERK / SECRETARY / KERALA BANK / KSCARD

BANK / APEX SOCIETIES

BANKING – SPECIAL NOTES – PART 3

21. Operational risk is the prospect of loss arising from inadequate

or failed procedures,
systems, policies or internal controls, employee errors, Systems
failures, fraud or other
criminal activity or an event that disrupts the business process.
22. Minimum Capital for banks (as per RBI guidelines): CRAR
(Capital to Risk Weighted Asset
Ratio) shall be minimum 9%, of which minimum 7% shall be Tier-1
capital. In addition to
Minimum CRAR of 9%, banks shall also keep 2.5% as Capital
Conservation Buffer.
23. UCBs are classified in to 4, depending on its deposit size. Tier-
1, Coop banks having deposits
of up to Rs.100 crore, Tier-2 Coop banks having deposits of above
Rs.100 crore & up to
Rs.1000 crore. Tier -3, Coop banks having deposits of above
Rs.1000 crore & up to Rs.10,000
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crore. Tier-4, Coop banks having deposits of above Rs.10,000

crore.
24. Minimum Capital to Risk-weighted Assets Ratio (CRAR) of
Cooperative banks is 9%. Tier 2 to
Tier 4 Cooperative banks shall have CRAR of minimum 10% by
31.03.2024, 11% by
31.03.2025 & 12% by 31.03.2026.
25. Minimum initial maturity period of unsecured
bonds/debentures issued by Cooperative
Banks, for including in the capital of the bank shall be 10 years
(Section 12 of BR Act, as
applicable to Coop banks.
26. The minimum amount of outstanding dues for initiation of
SARFAESI Act provisions to
recover the dues is above Rs.1 lakh ( minimum outstanding shall
be not less than 20% of the
total dues)
27. Minimum notice period, as per Section 13(2) of SARFAESI Act,
to the borrower for making
payment of the dues is 60 days.
28. As per Section 14 of SARFAESI Act, banks can seek the
assistance of the District Jude in
taking possession of the property charged to the bank.
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29. The ‘exposure ceiling; for UCBs for sanction of credit facilities
to a single borrower is 15% of
its Tier-1 capital & for group of borrowers is 25% of its Tier-1
capital.
30. Tier – 1 UCBs can sanction maximum housing loan of up to
Rs.60 lakh per individual
borrower & Tier -2 to Tier -4 can sanction maximum housing
loan of up to Rs.140 lakh.

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CSEB JUNIOR CLERK / SECRETARY / KERALA BANK / KSCARD BANK /

APEX SOCIETIES

BANKING – SPECIAL NOTES – PART 4

31. UCBs shall obtain licence from RBI for opening of the bank
under Section 22 of B R Act & for
opening offices under Section 23 of B R Act.
32. UCBs shall take prior approval of RBI before appointing, re-
appointing or removing the
‘Auditor’ of the bank.
33. UCBs shall publish its Audit Report, Balance sheet and Profit
and Loss Account within 3
months from the closure of the financial year.
34. National Federation of Urban Co-operative Banks and Credit
Societies Ltd. (NAFCUB) is the
RBI recognized ‘Umbrella Organization of UCBs.

35. Reporting of Transactions to FIU-IND (Financial Intelligence

Unit-India) by banks: (i) Cash
Transaction report by the 15 th of succeeding month, in case of
cash transactions of above
Rs.10 lakh in a month. (ii) Suspicious Transaction Report within 7
1

days of treating the

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transaction as suspicious. (iii) Counter-feit Currency Report (in

case number of counter-feit
currencies are 5 or more in a remittance, FIR also to be filed).
36. The ‘Three Pillars” of ‘BASEL-III norms are (i) Minimum capital,
(ii) Supervisory Review
Process & (iii) Market Discipline (Disclosure)
37. Credit Information Companies in India: (i) TransUnion CIBIL, (ii)
Experian, (III) Equifax & (iv)
CRIF Highmark. CICs are regulated by RBI. Score: between 300
& 900. Score of 700 is treated
as satisfactory. No loan availed means no Score (-1).
38. IFSC (Indian Financial Service Code) is an 11 digit Alpha-
numerical Code. The first 4 digits are
alphabets are shows the name of the bank.
39. Pre-paid instruments (PPI) limit is Rs.2 lakh for full KYC
complied accounts.
40. Maximum amount of deposits (demand deposits only) that a
Payment bank can have from a
customer at day-end: Rs.2 lakh (earlier Rs. 1 lakh)
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CSEB JUNIOR CLERK / SECRETARY / KERALA BANK / KSCARD BANK /

APEX SOCIETIES

BANKING – SPECIAL NOTES – PART 5

41. Contactless card transaction limit is Rs.5000/-, without

additional factor authentication.
Works on Near Field Technology
42. Collateral free loan to SHGs under DAY-NRLM (Deena Dayal
Antyodaya Yojana- National
Rural Livelihood Mission) increased from Rs.10 lakh to Rs.20 lakh
43. MSME classification: Micro Enterprise– Investment up to 1
crore & turnover up to Rs.5
crore, Small Enterprise – investment up to Rs.10 crore &
turnover Rs.50 crore, Medium
enterprise – investment Rs.50 crore & turnover Rs.250 crore.
Large enterprise investment
of above Rs.50 crore& turnover of above Rs.250 crore
44. Resolution time for failed transactions in ATM = T (Transaction
date) + 5 days. To pay
Rs.100/- in case of delay
45. Retail lending by Banks: Segment Reporting as per AS 17:
Maximum Credit exposure to a
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single borrower increased from Rs.5 crore to Rs.7.5 crore.

(Treasury, Corporate/wholesale,
Retail Banking & other banking business)
46. Interest payable on overdue fixed deposits, as per RBI
direction: At savings interest rate of
the bank or the interest on the fixed deposit, whichever is lower.
47. DEAF Account (Depositors’ Education & Awareness Fund)
: Banks to transfer balance in
deposit accounts which are not operated for 10 years &
above to RBI
48. Small Company: Paid up capital up to Rs.4 crore &
turnover up to Rs.40 crore
49. The term “Customer” has been defined under PMLA
(Prevention of Money Laundering Act)
50. Reporting by banks to FIU-IND (Financial Intelligence Unit-
India: Cash Transaction Report (if
cash deposit/withdrawal in a calendar month is above Rs.10 lakh,
Suspicious Transaction
Report ( of any amount if banks treat the transaction as
suspicious, Counterfeit Currency
Report ( if more than 4 counterfeit currencies in single remittance
FIR also to be lodged)
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CSEB JUNIOR CLERK / SECRETARY / KERALA BANK / KSCARD BANK /

APEX SOCIETIES

BANKING – SPECIAL NOTES – PART 6

51. Lok Adalat: Maximum amount that can be settled through Lok
Adalat is Rs.20 lakh
52. RBI Integrated Ombudsman Scheme 2021: Maximum amount
of compensation that can be
awarded = Rs.20 lakh. For loss of time or mental agony, additional
Rs.1 lakh can be awarded
53. Minimum dues to banks for filing application to DRT (Debt
Recovery Tribunal) Rs.20 lakh.
54. SARFAESI Act provisions cannot be initiated if: Loan
outstanding is up to Rs.1 lakh, loan
outstanding is less than 20% of the total loan dues, account not
classified as NPA, Secured
asset is agricultural land etc.
55. Legal Entity Identifier is a unique 20 digit number to identity
the parties to financial
transactions worldwide. As per RBI directions, for remittance
through RTGS etc. of Rs.50
crore & above the legal entity identifier of the parties are
1

required
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56. No charges for ATM usage up to 5 times in a month in own

ATMs of the bank. For other
bank ATMs, no charges for up to 3 usage in Metro areas & up
to 5 usages in other than
metro areas.
57. Positive Pay: Customer to provide information (cheque
number, name of payee, amount
etc.) to the bank at least 24 hours before presentation of the
cheque in clearing. Threshold
limit Rs.50, 000/- & above. In case of Rs.5 lakh & above,
complaint resolution will NOT be
undertaken in cases the facility of positive pay is not utilised.
58. CTS cheques records to be preserved for 10 years
59. Hindi Divas is celebrated on 14 th September
60. MUDRA Loan = (i) Sishu, up to Rs.50,000/- (2% interest subsidy
available) (ii) Kishore, loans
above Rs.50,000/- & up to Rs.5 lakh (iii) Tarun, loans above
Rs.5 lakh & up to Rs.10 lakh
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