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This lending is done primarily to refinance the loans given to exporters and some other sectors by banks. Bank rate is expressed in terms of percent and depends on the inflation and the credit policy of the central bank of the country, the RBI. 2) What is REPO rate ? Ans. Repo is also known as repurchase agreement or buyback. It is a contract where the seller of securities agrees to buy them back at a specified future date and price. Banks offer government securities and avail of liquidity. The bank pays interest to the RBI for funds availed. The rate, at which the interest is paid, is termed as repo rate. Repo is a means of managing liquidity from the banking system. 3) What is Reverse REPO ? Ans. It is also called reverse repurchase agreement. It is a contract to purchase securities with an agreement to resell the securities at a future date and at a higher price. RBI sells the government securities to banks and the banks park liquid funds with the RBI. RBI pays interest to the banks for the money deposited by the banks. The rate at which the interest is paid is termed as reverse repo rate. Reverse repo is also a means of managing the liquidity from the banking system. 4) What is CRR ? Ans. CRR - Cash Reserve Ratio is a specified percentage of deposits the banks have to maintain with the RBI in cash or near cash assets. CRR ensures the bank's ability to remain liquid at any moment of time. High CRR ensures low credit creation capacity of the bank and vice versa. It is a lifeline and protective insulators' for a commercial bank (Sec 42 of RBI Act, 1934).
5) What is SLR ? Ans. SLR is a specified percentage of deposits the banks have to maintain with themselves in approved securities. SLR ensures the bank's ability to remain liquid at any moment of time. High SLR ensures low credit creation capacity of the bank and vice versa. It is a lifeline and protective insulators' for a commercial bank (Sec 24 of Banking Regulation Act, 1949).
6) Banking Ombudsman Scheme Ans. The Banking Ombudsman Scheme, 2006 enables resolution of complaints of bank customers relating to certain services rendered by banks The Scheme has come into force from January 1, 2006. The Banking Ombudsman is person appointed by the Reserve Bank of India to redress customer complaints against certain deficiency in banking services. 7) What is Financial Inclusion ? Ans. Financial inclusion is defined as delivery of Banking services, at an affordable cost to vast sections of the disadvantaged and the downtrodden groups, especially in the rural areas. In other words, it aims at providing access to savings, payment and remittance facilities, loans, insurance, etc. by the formal financial system to those who are excluded. Sustainable development can be achieved when rural people are part of the development process and it is education, which unlocks the mental faculty and prepare the so called majority for active participation in this process. Bank nationalization in India marked a paradigm shift in the focus of banking as it was intended to shift the focus from class banking to mass banking. The rationale for creating Regional Rural Banks was also to take the banking services to poor people. 8) WHY TECHNOLOGY • • • • • • • Technology provides the cutting edge to the Bank to counter the threat from the New Generation Private Sector Banks and other tech-savvy Banks. It ensures faster, operationally efficient and customer centric solutions with alternative delivery channels and reduced transaction costs. Facilitates easier, faster and error free MIS reports including control returns and irregularity statements. It also leads to faster decision making. Helps in devising and implementing new products and services. Efficient and computerized book- keeping acts as deterrant to frauds. Helps in meeting regulatory requirements. Gradually leading to One Customer, One Bank, One Account Anywhere Anytime situation.
Real Time Gross Settlement (RTGS) system. Internet. i. is a system through which electronic instructions can be given by banks to transfer funds from their account to the account of another bank. The numerator should be two times of the denominator which indicates that the unit will be in a comfortable position to service both principal and interest component. Operational risk is the risk of direct or indirect loss resulting from inadequate or failed internal processes. The basic principle of lending is that the repayment of term loan should be through the surplus generation in a going concern. As the name suggests.9) Write short notes on RTGS. 12) What is Debt Service Coverage Ratio ? Ans. funds transfer between banks takes place on a ‘real time’ basis.e. It links the banking network with the Internet. people and systems or from external . money can reach the beneficiary instantaneously and the beneficiary’s bank has the responsibility to credit the beneficiary’s account within two hours. 13) What is Operational Risk ? Ans. To assess the amount of surplus generation. Ans. banks calculate debt service coverage ratio. 11) What are Firewalls? They are components or set of components that restrict access between a protected network and the outside world. 10) What is Payment Gateway? Payment Gateway is a third party network that acquires transactions from an ecommerce portal and processes them through the banking or credit card system. The RTGS system is maintained and operated by the RBI and provides a means of efficient and faster funds transfer among banks facilitating their financial operations. Therefore. The formula is : Profit after Tax (PAT) + Interest on Term Loan + Depreciation DSCR = ------------------------------------------------------------------------Interest on Term loan + Instalments of Term loans DSCR is calculated for each year for the entire repayment tenure of the loan period and thereafter the average is taken.. introduced in India since March 2004.
technology and business practices. Merchant banking. encrypted information that our Members provide us with is extremely secure. The traditional paradigm of customer's relationship with the bank is replaced by an electronic paradigm. The term Virtual Banking refer to computer and information technology based banking.1/.RBI Governor. 14) What is encryption ? Ans. These risks may be in the nature of internal fraud. Lead bank scheme 16) What are the essential features of a currency note ? Ans. Ministry Finance on behalf of Govt. system failures. Sustainable best practices would lead to reduced losses. By creating an operational risk awareness culture.By Secretary.1/. higher profitability. a) Name of Issuing Authority b) Guarantee Clause c) Promise Clause d) Signature of Issuing Authority Rs. of India. banks can improve their processes. f) Water Mark. which is new and innovative. Under Virtual Banking concept.events.. Botique banking. g) Security Thread . Encryption is technique used to mask proprietary information in order to prevent it from being accessed by unauthorized individuals. bank services are delivered by way of computer controlled system that doesn't directly involve inter face with the customers or they visit at the bank's branches. Venture capital. Thus. UCPDC. Above Rs. In a broader spectrum it can also be called an electronic banking or E Banking. 55) Virtual Banking Ans. collateral management failure. incomplete legal documentation etc. business disruption. e) Ashoka Piller emblem. and improved customer and employee satisfaction. external fraud. Participants to note to prepare in Mutual funds. Only authorized individuals who have been provided with the appropriate decoding software can unscramble the information.
. A unit that has defaulted in meeting its repayment obligations to the lender and has also disposed of or removed the movable fixed assets or immovable property given by it for the purpose of securing the loan without the knowledge of the bank/lender is the willful defaulter. . nor the funds available with the unit in the forms of other assets d) The unit has defaulted in meeting its repayment obligations to the lender and has also disposed of or removed the movable fixed assets or immovable property given by them for the purpose of securing term loan without the knowledge of the Bank. assets and out flows i. ALM system primarily involves categorizing various inflows i. RBI has included those borrowers also who have defaulted in payment obligation and have disposed of or removed the movable fixed assets or immovable property without the knowledge of the bank/lender.e. Ans. Union of India. Willful defaulters misuse the banking facilities and it result into non availability of credit facilities to other borrowers due to resources constraints. The objective of ALM is not eliminating risk but to manage it in such a way as to profit from it. to expand the scope of definition of willful default. The assets and liabilities must be matched in terms of rate and maturity to obtaining optimum yield.. liabilities of a Bank according to their residual maturity to even out the liquidity crunch. 19) Guidelines expanded by RBI regarding Scope of willful default.e. Pursuant to a Supreme Court order in case of Common Cause Vs. b) The unit has defaulted in meeting its repayment obligations to the lender and has not utilized the finance from the lender for the specific purposes for which the finance was availed of but has diverted the funds for other purposes. a) The unit has defaulted in meeting of its repayment obligations to the lender even when it has the capacity to honour the said obligations. 18) Who is a willful defaulter ? Ans. c) The unit has defaulted in meeting its repayment obligations to the lender and has siphoned of the funds so that the funds have not been utilized for the specific purpose for which the finance was availed of.17) Asset Liability Management Ans.
Capacity. rubber etc. tapping of toddy for sale b) Industry connected with cultivation of crops/plantation like tea. Activities not permitted -a) Industry/business connected with meat (slaughter). processing. preparation/ producing tobacco as raw material. It is a mode of transfer of funds from one bank account to another bank account by electronic media using the services of clearing house. Conditions and collateral. There are two types of ECS . d) Industry such as processing of pashmina wool and such other products like hand spinning and hand weaving. c) Manufacturing of polythene carry bags of less than 20 microns thickness and manufacture of carry bags or containers made of recycled plastic for storing. horticulture floriculture.PRIME MINISTER'S EMPLOYMENT GENERATION PROGRAM: NEGATIVE LIST : i. piggery. Capital. coffee. This can be used both for making payments by institutions or for collection of amounts.e. poultry harvester machines etc.20) Negative list under PMEGP. project and purpose. shikara and tourist boats in J & K and cycle rickshaw. 23) What do you under stand by 5Cs and 3 Ps? The 5 Cs represent Character. animal husbandry like pisciculture.e. sericulture. suppliers credit. 22) Describe External Commercial borrowings ? Ans. securitized instruments (floating rate notes and fixed rate bonds) availed from non resident lenders with a minimum average maturity of 3 years or above. 21) What is Electronic Clearing Service ? Ans. i. ECB refer to commercial loans in the form of bank loans. 24) What are sub prime loans ? . PMEGP . e) Rural transport except auto rickshaw in Andaman & Nicobar Islands. dispensing or packaging of food stuff and any other item which causes environmental problems. production/manufacturing or sale of intoxicant items like beedi/pan/cigar/ cigarette etc. buyers credit. Ans. The 3 Ps are person. carrying. canning and/or serving items made of it as food.ECS credit and ECS debit. house boats. Any hotel or dhaba or sales outlet serving liquor.
if the interest rate for Government securities come down. the viability of the bank will be affected. RBI has selectively allowed banks to promote insurance outfits (subsidiary companies). It is also called the referral business and the bank functions as corporate agents and market the insurance products through the networks of the branches.Ans. integrity of accounting practices and disclosure norms and internal control system with a view to protect rights of . its board. This will ensure that NPA will come down over a period of time. 27) Bancassurance Ans. Sub prime loans are called "B" loans or second chance loans or loans extended to borrowers who do not qualify for market interest rates because of the problem in their credit history. This enables banks to use their surplus staff (rendered surplus due to computerization) and use the branch network to their advantage thus increase earnings. In these loans the interest rate is higher. Also. 25) What is Narrow Banking? This concept originated in USA. subsequently elaborated by Khan Committee. The concept was originally mooted by Narasimham Committee. After Government of India opened up the insurance sector to private players. Under this concept Banks are required to invest in highly marketable liquid assets such as treasury bills. shareholders and other stakeholders composition and role of board of directors. another view is that banks are essentially set up to finance commercial activities and hence they should not be prohibited from this activity. 54) Write short notes on Universal Banking. This enables banks to improve customer service and retain customer base and greater fee income is generated from an increase in overall sales. Bancassurance involves distribution of insurance products (both life and non life) on the counters of the branches. It refers to harmonizing the role of development financial institutions and commercial banks. But. 28) Corporate governance Ans. Ans. Corporate governance means a set of transparent relationship between an institution’s management. They are considered risky. Narsimham Committee suggested that financially weak banks should be allowed to invest only in 100 % secured Government Paper. Universal Banking means providing all types of financial services under the same roof. Borrowers who have low credit score or rating are generally defined as sub prime borrowers.
30) Distinguish between Diversion and siphoning of funds Ans. uniformity in approach and to clearly delineate the risks involved. c) Transfering funds to subsidiaries/group companies or other corporates d) Routing of funds through other bank without prior permission e) investment in other companies with approval of lenders. Alternatively. Under this banks offer the following services to corporate customers and others : a) pick up of cash b) pick up of instruments c) deliver cash/draft either through own employees or through agents. The corporate borrower also suggests name of dealers who are also sanctioned bills limit. In order to ensure transparency in respect of the rights and obligations of customers. Diversion of funds would be construed to include : a) Utilization of short term working capital funds for long term purposes not in conformity with the terms of sanction. it can be stated as financing of supply-delivery chain. Credit limits for conversion of raw material into finished goods (hypothecation limits) and also credit facility for selling of finished goods (Receivables financing). . Siphoning of funds should be construed to occur if any funds borrowed from banks/Financial Institutions are utilized for purposes and related to the operations of the borrower to the detriment of the financial health of the entity or of the lender. The dealers repay the credit to the bank directly. He identifies/suggests name of suppliers of raw materials/inputs and the suppliers are sanctioned bills limit and on supplying the goods to the corporate borrower gets immediate finance from the bank in its own name. RBI has advised the general principles and broad parameters to be followed by banks while offering ‘Doorstep’ services to their customers. 31 Channel financing Ans. 29) Doorstep banking Ans. The corporate borrower is only sanctioned CC hypothecation limit. banks can now offer ‘Doorstep’ banking services which should be reviewed by the Boards of Banks. It is enhances the value for all stakeholders including depositors. Channel financing is a mode of financing the suppliers of inputs on the one hand and dealers of finished goods on the other hand.shareholders and enhance shareholders value through ethical conduct of business. In accordance with these guidelines. b) Deploying borrowed funds for creation of assets other than those for which loan was sanctioned. It is distinct from conventional lending where the manufacturer is provided with working capital limit for buying of inputs (drawee bills financing).
5. DRI is a scheme classified as priority sector under which banks sanction loans to selected low-income group of borrowers among weaker sections of the community for productive endeavors at 4% p. What are the recent changes in the scheme ? Ans.15. mutual funds.20.000) Repayment period is fixed depending upon the income generated to the extent of maximum 5 years including gestation period. Para banking activities refer to certain eligible financial services such as leasing. At least two third of DRI advances should be granted through rural and semi-urban branches. 18. 3) Education : For setting up of project costing above Rs.32) Para banking activities Ans.a. 1949.in rural areas (as per recent guidelines). factoring. To assist poorest of the poor and to bring them above the poverty line DIR scheme was launched in the year 1972. either departmentally or through subsidiaries under Section 19(1) of the Banking Regulation Act. credit card.15.000/.000/.for Housing and also for Physically Handicapped (Rs. The scheme is operative throughout the country and 1% of total advances outstanding as at the end of the previous year should be of DIR loans.000/.000/.in urban and semi-urban areas and Rs. 33) Describe DIR Scheme.Rs. ELIGIBILITY : 1) Age : An individual above 18 years of age. It should be ensured that not less than 40% of the total advances granted under DRI scheme go to SC/ST. hire purchase. Rs. debit card.5 lacs in the business/service sector. the beneficiary should posses atleast 8th standard pass educational qualification. rate of interest. .10 lacs in the manufacturing sector and above Rs. 2) Income : There is no income ceiling.000/for purchase of artificial limbs in addition to Rs.as TL or WC or both . Introduced to generate employment opportunities in rural and urban areas through setting up of new self employment ventures/ projects/ micro enterprises and to provide sustainable employment to artisans and rural and urban unemployed youth to help and arrest migration of rural youth to urban areas. underwriting etc. 34) Describe PMEGP. Ans. the annual income of the family should not exceed Rs. 24. To be eligible.
LOAN AMOUNT : Project Cost : Minimum not specified.10 lacs. 6) Other eligible organisations : 1) SHGs.25 lacs . 3) production co-operative societies. CATEGORY URBAN AREA RURAL GENERAL____________________15.2 lacs and upto Rs. Above Rs. 1860. CHARGES : Upfront fee . Minority/Women. INSPECTION CHARGES : NIL Other processing charges NIL. subsidy are not eligible. However.00%______________25.5 lacs in respect of the projects cleared by the Task force. Schemes and availed govt.00%_________ SPECIAL_____________________25. Existing units hitherto alredy covered under other Govt.25% of the loan amount. 2) Subsidy will be credited to the borrower's loan account after 3 years from the date of first disbursement to the borrower/institution. TYPE OF LOAN : Composite term loan SUBSIDY : 1) Subsidy will be routed by KVIC. comprising SC/ST. and 4) charitable trusts. No interest will be paid on TDR and no interest will be charges on the loan to the corresponding amount of TDR. banks will take their own credit decision on the basis of viability of each project. Max Rs. MARGIN : 10% of the project cost for general category and 5% for special category. OBC. REPAYMENT : Minimum 36 months.25 lacs Manufacturing sector Rs. Maximum 84 months. 2) Institutions registered under societies registration act. ex-servicemen.3 weeks EDP/SDP/ESDP or vocational training is mandatory 5) Assistance is available only for new projects sanctioned. north east region. SECURITY : No collateral security will be insisted upon by banks in line with the RBI guidelines for projects involving loan upto Rs. Project cost will include capital expenditure and one cycle of working capital projects without capital expenditure are not eligible. Subsidy should be kept in TDR for 3 years at branch level in the name of the beneficiary/institution.4) Training : 2 .1.00%______________35%____________ .2 lacs NIL. Business/service sector Rs.Upto Rs.25 lacs.
RBI & State Govts. ii. vi. Based on the recommendations of the Committee for review of arrangements for institutional Credit to Agriculture and Rural Development (CRAFICARD) National Bank for Agriculture and Rural Development (NABARD) came into existence on 12. RURAL AREA : 1) Area classified as village in revenue records.1982. (II)Medium Term loans to SCBs. Direct loaning to approved govt. c) 36) What is a bio-gas plant? It is an installation where cattle dung is digested with the help of microbes. SLDBs and AFIs (18months to 7 years) (III) Long Term credit to SCBs. Agency to GOI. RRBs. projects. ii) Permission for opening of new branches of cooperative banks and RRBs. RBI and State Govts.OTHER GUIDELINES : Family: Family includes self and spouse. 2) Areas classified as town even where population does not exceed 20. RRBs. and AFIs(15months). v. irrespective of population. AFIs (7years to 15 years): b) Development: i.. SLDBs. Training and expertise skills to bank officials Regulatory: i) Inspection of Co-operative banks and RRBs. RRBs. Assistance to GOI.7. 35) When did the NABARD come into existence? What are the functions of NABARD? Ans. iv. As a result of this ‘methane gas’ is produced which is helpful as fuel for . Institution building iii. Co-ordination and review.000 persons. The functions of NABARD are broadly classified into three as given hereunder: a) CREDIT: (I) It provides short term credit to SCBs. Only one person from one family is eligible for obtaining financial assistance to set up projects under PMEGP. commercial Banks..
Mohammed Younus? Prof. 40) Write a brief note on Kisaan Credit Cards (K. Pass book :-Kisaan Credit Card – cum – pass book will be issued. electricity charges etc. Also the entire credit requirements of the farmer for agricultural production and ancillary activities related to the same such as maintenance of agricultural machinery / equipment. To some extent farmers’ contingent needs are also to be taken care of to the extent of 20% of the limit.cooking . 37) What is a subsistence farming? Subsistence farming arises when the land holding is very low and the surplus generated from the farm operations is so meagre that while it may cover the cost of cultivation it may not be adequate to meet the farmer’s family expenses. withdrawals within the limit. The crop loan should be adjusted first from the produce marketing loan.C.Agricultural Cash Credit f.C) ? This scheme will be implemented in all the branches. Drawal of funds:-Cash Withdrawal will be made through withdrawal slips accompanied by Kisaan Credit Card Passbooks (No cheque book need to be issued) . The farmer should have availed crop loan from the branch. The advance can be granted for a maximum period of 12 months.and lighting.10000/-. It is treated as a direct advance. The salient features of the scheme are as under: a. g. Eligibility : -All Agricultural Crop loan borrowers b. including warehousing receipt. e. Accounted for under:.00 lac (75% of the value of the produce) can be granted to a farmer against the pledge or hypothecation of produce. Number of withdrawals: Any number of withdrawals and repayments. Mohammed Younus of Bangladesh experimented the concept of SHGs in 1975-76 and found that the concept is well taken by the people below the poverty line. subject to a maximum of Rs. The digested manure will be rich in nutritive value and can be used as a manure. Credit limit (Under the K. crops grown and relevant scales of finance.C.C):Fixed on the basis of land-holdings.10. Nature of facility:-Revolving Cash Credit limit valid for 3 years. d. 39) What is produce marketing loan? Under the scheme a maximum advance of Rs. 38) Who is Prof. c.
Horticulture/Plantation/Forestry. power tillers. (Land development. documents.poultry. B. sericulture) V. Mehsani (Gujarat) Nili Ravi (Punjab) 44) What is silk production cycle? Silk production cycle known as sericulture includes four distinct activities but at the same time they are inter related and form part of the one activity of getting finished silks. Marketing & Storage (Construction of godowns. The tractor loan is to be repaid in nine years in half-yearly instalments. ware-houses.Coffee. Farm.(Mango. (Tractors. Ongole Buffaloes : Graded Murrah (Haryana. The farmer (s) should own at least 4 acres of perennially irrigated land or corresponding acreage of dry land capable of yielding adequate surplus. (Dairy. Miscellaneous (Bio-gas. . Security. UP. transport vehicles.h. Holstein Friesian. Silk-Worm rearing from larva to cocoon 3.Sheep/goat rearing. 41) What are the six categories of Agricultural Term Loans? I. Mulberry cultivation. 43) Give the names of a few breeds of dairy animals for bank financing? Cows : Jersey.Power/mechanisation/equipment. conversions) 42) What is the eligibility criteria for tractor financing? A. C. coldstorages) VI.coconut. jaffarabandi. 1. margin and discretion:-Same as applicable to agricultural advances. farm equipment) III.eucalyptus) IV. Silk reeling which transforms cocoons into continuous filament called raw silk. 50% of repayment obligation (Instalment + Interest) should come by way of incremental income from farmer’s own fields. Diversified/allied activities. 2. The farmer should be in a position to use the tractor for 600 hrs a year on his own farm lands and for custom hiring. Irrigation) II. On–farm development. Punjab). Water-shed development.
Industrial enzymes j. 49) What are Agri Clinics and Agri-Business Centres? Agri clinics are centres providing expert advice and services to farmers on technology. h. Agri business centres provide farm equipments on hire. F. Controlled environment agri. Bio-mass utilization. Hydroponics iv. iii. Acquaculture. CONSORTIUM .4. ii. cropping patterns. and such extension activities on a commercial basis. protection from pests and diseases. Production iii. Bio-tech projects. Manufacture of malted food E. 45) What are the categories in ‘High-tech Agriculture’? ‘High-tech Agricultural Projects are broadly classified into three categories: i. Manufacture of resins.. Meat/poultry processing units D. Animal vaccines g. clinical services for animal health etc. Hybrid seeds d. 46) What are Bio-tech projects? a. Post harvest and processing projects. i. 47) What are Hi-tech agricultural production projects? i. Un-conventional agricultural products 48) What are post harvest & processing projects? A. New bio-products. Cold storages B. Floriculture c. 50) SYNDICATION VS. Food processing f. Drip and sprinkler irrigation ii. Hi-tech agricultural production projects. Tissue culture. sale of inputs and other paid services. Marine Food Processing C. Improved packaging. b. Apiculture e. Silk weaving in which silk filaments are twisted and woven into silk yarn.
the result arrived is deducted from the weight taken in the air.A syndicated credit is an agreement between two or more lending institutions to provide a borrower a credit facility using common loan documentation. A prospective borrower intending to raise resources through this method awards a mandate to a bank known as Lead Manager. The weight of the lewllery is done in normal course and the again the weight is measured in water. 52) What is specific gravity of gold? How do you test jewllery by specific gravity method? The specific gravity of gold is 19. 53) how many types of tests are done for checking purity of gold? 1. the banker has to do a rigid and comprehensive appraisal of the proposal for issue of DPG as is done in case of sanction of a term loan. Consortium finance means several banks finance a single borrower with a common appraisal.. Advantages are : a) Resources of banks are conserved by limiting exposure b) Risk can be spread over a larger portfolio of borrowal account c) cut throat competition for high quality and high value accounts can be avoided d) when banks act together. Nitric acid test. If it is correct the gold is genuine. a down payment of around 15% of the cost of goods is made and the balance of 85% including interest thereon is agreed to be made payable to installments spread over a period of time. who prepares an information memorandum in consultation with the borrower and circulates the same among prospective lenders soliciting their participation in the proposed loan.P. Usually in such transaction. joint supervision and follow up. specific gravity test. 51) D. The weight measured in the air is divided by 19 . common documentation. The mandate spells out the commercial terms of credit.G. e) credit management work is shared resulting in saving of man power and other resources. 3. Syndication is very similar to the system of consortium lending in terms of dispersal of risk but enforces better discipline on the borrower through a fixed repayment period. The lead manager charges a syndication fee for his services. it should tally with the weight measured in water. Touch stone method. Deferred payment guarantees are basically financial guarantees which are considered when transactions of sale-purchase of capital goods are involved. f) banks can learn from each other and improve credit management skills. 2. As this involves commitment on the part of guaranteeing banker for a long period. enforcement of financial discipline is easier.3. .
It reduces vulnerability. Planning is a process of choice of the course of action in the future. based on the criteria to achieve the ultimate objective. Financial decisions depend upon risk management. In involves: a) listing of alternative courses of action from which a choice is to be made b) measuring results that might flow from following each of the listed courses c) finally deciding the course of action. Risk is the potential loss of an asset or a portfolio which may likely to suffer due to variety of reasons. 56) Write short notes of CRM. The aim of CRM is to produce high customer satisfaction. policies and expansion in consideration of a) predominant regional factors and environmental data b) past performance and trends c) special operational constraints. a predetermined schedule of activities in a given period for the achievement of objectives established.54) What is risk management ? Ans. It serves as an important inputs for risk profiling.keep and growing with current customers 57) Distinguish between planning and budgeting Ans. 55) Describe Risk Focused Internal Audit (RFIA) Ans. It broadly covers business goals. It is having two fold effect : . Risk Management may be defined as process of identifiying. Customer Relationship Management is the process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction by carefully managing customer "touch points" in order to "maximise customer loyalty". It is the most important concept of modern marketing. A budget is a plan of action. measuring and controlling all kinds of risks. Risk Focused Audit provides checks and balances to risk management and control system. Ans.attracting new customers . and d) priorities set out . Risk is inherent in all business but the risk exposure is much more in the financial activity. Risk is a fundamental element that influences financial behavious.
Sec 30 of Banking Regulation Act.15) Audit : Ans. 1949 provides for submission of audited Balance Sheets and Profit & Loss Account by all the banking companies. Audit refers to thorough check of the entire system so that it facilitates Prevention and early Detection of frauds. Audit is an independent check on the functions of the management. . 26) Write short notes on carbon credits Ans. which has some value in the eyes of law and the taxation authority.
Rs. 2) Describe DIR Scheme. at an affordable cost to vast sections of the disadvantaged and the downtrodden groups. The scheme is operative throughout the country and 1% of total advances outstanding as at the end of the previous year should be of DIR loans.000/. At least two third of DRI advances should be granted through rural and semi-urban branches. which unlocks the mental faculty and prepare the so called majority for active participation in this process. it aims at providing access to savings. rate of interest. 24.QUESTION ON PRIORITY SECTOR 1) What is Financial Inclusion ? Ans. 18. by the formal financial system to those who are excluded.15.000/.5. In other words. the annual income of the family should not exceed Rs. loans.as TL or WC or both . To assist poorest of the poor and to bring them above the poverty line DIR scheme was launched in the year 1972. especially in the rural areas.Rs.000/.for Housing and also for Physically Handicapped (Rs. What are the recent changes in the scheme ? Ans. .000/for purchase of artificial limbs in addition to Rs. etc. It should be ensured that not less than 40% of the total advances granted under DRI scheme go to SC/ST.in rural areas (as per recent guidelines). Bank nationalization in India marked a paradigm shift in the focus of banking as it was intended to shift the focus from class banking to mass banking. insurance.000/.a. Financial inclusion is defined as delivery of Banking services.in urban and semi-urban areas and Rs.000) Repayment period is fixed depending upon the income generated to the extent of maximum 5 years including gestation period. DRI is a scheme classified as priority sector under which banks sanction loans to selected low-income group of borrowers among weaker sections of the community for productive endeavors at 4% p. To be eligible. Sustainable development can be achieved when rural people are part of the development process and it is education.15. payment and remittance facilities.20. The rationale for creating Regional Rural Banks was also to take the banking services to poor people.
RRBs. Institution building iii. Based on the recommendations of the Committee for review of arrangements for institutional Credit to Agriculture and Rural Development (CRAFICARD) National Bank for Agriculture and Rural Development (NABARD) came into existence on 12. RRBs. and AFIs(15months). Direct loaning to approved govt.. commercial Banks. Agency to GOI. (II)Medium Term loans to SCBs. RBI & State Govts.7. . vi. SLDBs and AFIs (18months to 7 years) (III) Long Term credit to SCBs. Training and expertise skills to bank officials Regulatory: i) Inspection of Co-operative banks and RRBs.1982.3) When did the NABARD come into existence? What are the functions of NABARD? Ans. ii) Permission for opening of new branches of cooperative banks and RRBs. v. Assistance to GOI. The functions of NABARD are broadly classified into three as given hereunder: a) CREDIT: (I) It provides short term credit to SCBs. iv. RBI and State Govts. As a result of this ‘methane gas’ is produced which is helpful as fuel for cooking . Co-ordination and review. projects. The digested manure will be rich in nutritive value and can be used as a manure. SLDBs. 5) What is a subsistence farming? Subsistence farming arises when the land holding is very low and the surplus generated from the farm operations is so meagre that while it may cover the cost of cultivation it may not be adequate to meet the farmer’s family expenses. ii. c) 4) What is a bio-gas plant? It is an installation where cattle dung is digested with the help of microbes. RRBs.and lighting.. AFIs (7years to 15 years): b) Development: i.
he is paid proportionately less amount of compensation. SBI) Jayanagar. GUWAHATI (Assam) . When the stocks are burnt on account of fire. GUWAHATI (Assam) LFAR stands for: a) Long Form Audit Report b) Long Form Audited Report c) Long Form Auditor Report d) Long Form Adjusting Report Contributed by Shri Harbhajan Singh (Retired Chief Manager. SBI) Jayanagar.MULTI-CHOICE QUESTION ON BANKING CONTRIBUTED BY INTERNET VIEWERS 1. GUWAHATI (Assam) “A” category branches can maintain the following accounts: a) VOSTRO b) NOSTRO c) both (a) and (b) d) none of these Contributed by Shri Harbhajan Singh (Retired Chief Manager. SBI) Jayanagar. This is based on the principle of: a) indemnity c) average clause b) insurable interest d) none of these Contributed by Shri Harbhajan Singh (Retired Chief Manager. A business concern has made under-insurance of its stocks against risk of fire.
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