Professional Documents
Culture Documents
SBI - General Awareness - Text.marked - Text.marked
SBI - General Awareness - Text.marked - Text.marked
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General
Awareness
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Ramandeep Singh
B.com (PU), MBA (PAU)
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Here are some awards which are given to the celebrities in India:
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Awards in India
Music Awards Music director, lyricists, male/female vocalists, song of the year and
album of the year
MAKA Award, Dronacharya Award,Dhyan Chand Award,Rajiv Gandhi
Khel Ratna Award
Civillian
Award
Literacy
Awards
Gallantry
Awards
Bollywood
Awards
Filmfare Awards, OSCAR, Best Film, Best Male Debut, Best Supporting
Actor, Best Director, Best Comedian, Best Villain, Dadasaheb Phalke
Award
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Sports
Awards
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Achievements 2014
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All the latest achievements related to any Indian Celebrity is cover in this section.
From below you may get all the latest happenings and news related to prizes and
honours which are received or will receive in the session 2014.
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General Awareness for SBI PO and Clerk
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Padma Bhushan
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Padma Shri
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Headquarters
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Organisation
United Nations Organisation
New York
New York
New York
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Geneva
Geneva
Geneva
Geneva
Geneva
Geneva
Geneva
Geneva
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(UNESCO)
Paris
Paris
Vienna
Vienna
Vienna
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Washington DC
World Bank
Washington DC
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Amnesty International
London
London
Commonwealth of Nations
London
The Hague
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Organisation
Headquarters
Berne
Rome
Brussels
Transparency International
Berlin
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Kathmandu
Jakarta
Singapore
Jeddah
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Ebene, Mauritius
The Hague, The
Netherlands
Lausanne, Switzerland
Gland, Switzerland
Zurich, Switzerland
Geneva, Switzerland
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Monaco
Monaco
Winnipeg, Canada
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Functions of Banks
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Primary Functions
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Accepting deposits
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Most important function of a bank is to mobilize public funds. Bank provides safe
custody as well as interest to the depositors.
Saving deposit
Saving deposit account meant for those people who wants to save for future needs
and uncertainties. There is no restriction on number and amount of withdrawals.
Bank provides cheque book, ATM cum debit card and Internet banking facility.
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In fixed deposit account, money is deposited for a fixed tenure. Banks issues a
deposit certificate which contains name, address, deposit amount, withdrawal
date, depositor signatures and other important information.
Depositor can't withdraw money during this period. In case depositor want to
withdraw before maturity, banks levy pre-mature withdrawal penalty.
Current account
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In this type of account depositors deposits certain sum of money at regular period
of time. Benefit of recurring account is that it provides benefit of compounded
rate of interest and enables depositors to collect big sum of money.
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It is a short term loan facility under which banks allows its customers to take loan
up to a certain limit, normally bank grants this loan against mortgage of certain
property.
Bank overdraft
Bank provides this facility to current account holders.Account holder can
withdraw money anytime up to the provided limit. He need to pay interest only on
borrowed amount for the period for which he took loan.
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Loans
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Banks providing loans for various kinds of short term as well as long term needs.
Borrower pay back the loan in installments.
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Discounting bills
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In normal day to day business, sellers sends bills to buyer whenever they sell their
products and it is mentioned in bill to make payment in stipulated time. Lets take
it 30 days. In such conditions seller may discount the bill from bank for some
fees. In such situation bill discounting acts as short term loan. In case the buyer or
the drawer defaults, bank send the bill back to seller to drawer so that he may take
legal action against drawee or buyer.
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Secondary functions
Agency functions
Funds transfer
Cheques collection
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Periodic payments/collection
Portfolio management
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Utility functions
Locker facility
Underwriting of shares
Project reports
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The NRE account can be opened by Non-Resident Indians (NRIs). The account
can be operated individually or jointly. Persons of Indian Origin are also eligible
for the account. In case of NRE accounts, nomination can be made for NRI or
PIO resident only.
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There could be multiple type of accounts under NRE. These include: Saving
Fund, Current Account , Recurring Deposit, or Term Deposit. The funds under
NRE are maintained in Indian Rupees as the currency.
The fund amount including the principal as well as the interest can be repatriated.
This facility may not be there in other accounts for NRIs. The repatriation could
be in foreign currencies.
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The deposits under the NRE accounts are not taxable under Wealth Tax. Also, the
interest income is exempt from the income-tax.
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While the NRE accounts are accessible only to NRI and PIO there might be some
special cases. NRIs who return to India for permanent settlement may hold the
account till maturity of their deposits.
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The reforms are targeted at the individual banks and banking institutions. It is also
aimed at reducing the system-wide risks.
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The norms have received a positive appreciation in India. The Reserve Bank of
India (RBI) Governor, D. Subbarao in an interview to a newspaper mentioned that
BASEL-III norms would strengthen Indian banks.
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The BASEL-III norms have provided important guidelines for Liquidity and
Capital. There are three important pillars defined for Capital.
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Pillar I
Capital
Risk Coverage
Containing Leverage
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Pillar-III
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Pillar-II
Market Discipline
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In order to meet the BASEL-III requirements, Indian banks would have to raise a
lot of external capital. While the norms would strengthen the robustness of banks
against risks, it will also have some effect on the profitability in the short run. The
norms would increase the cost of capital for the banks and have an adverse effect
on the reqturn on equity in the short run.
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Special Economic Zone (SEZ) is an area where economic laws are more relaxed
than a country's typical or national laws. In India SEZs have been developed to
promote exports.
The Special Economic Zones (SEZs) Policy was announced in April 2000.
The Special Economic Zones Act, 2005, was passed by the Parliament in 2005.
The SEZ act came into effect in 2006.
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Exemption from Central Sales Tax (CST).
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Exemption from Service Tax (Section 7, 26 and Second Schedule of the SEZ
Act).
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Started - 02-10-2007
Objective - To provide life and accident insurance to people without land living
in rural areas
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Doodh Ganga
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Goal - Provide interest free loan and capital subsidies to diary farmers
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Objective - Prociding financial assistance to rural and urban poor for construction
of houses
Working - Financial assistance of Rs 70,000 in plain areas and Rs 75,000 in
difficult areas is provided.
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Construction of sanitary latrine and smokeless chullah is mandatory
House is allotted in the name of woman or jointly in the name of both man
and woman.
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Prefernce is given to
Mentally challenge
Physical challenged
Transgenders
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Government provides
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Ladli Scheme
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Aim- Objective of this scheme was to raise the status of girl child and change the
social mindset of people towards girls in Madhya Pradesh.
Working - Government purchases National saving certificate worth Rs 6000 per
year for four years for every girl child born after 01-04-2008 and whose parents
are domicile of Madhya Pradesh.
Additional money paid on following events :At the time of admission in 4th standard - Rs 2000
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unskilled labourer to do public works for which he is paid Rs 120 per day. In case
Government is unable to provide employment to labourers then it need pay
labourers for 100 days at their home.
Budget aloocated for MNREGA - Rs 45000 crores ( 2012-2013)
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Started - 2001
Aim - Provide useful and free education to children in the age group of 6 -14
years under RTE act 2009
Funds allocated - Rs 61,734 crores allocated in 2011-12
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Swabhiman
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Swavalamban
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General Awareness for SBI PO and Clerk
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Repo Rate
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Repo rate or repurchase rate is the rate at which banks borrow money from the
central bank (RBI for India) for a short period by selling their securities (financial
assets) to the central bank with an agreement to repurchase it at a future date at
predetermined price. It is similar to borrowing money from a money-lender by
selling him something, and later buying it back at a pre-fixed price.
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Bank Rate
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People often get confused between Bank Rate and Repo Rate. Though they
appear similar there is a fundamental difference between them.
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Unlike Repo Rate, there is no sale of security in Bank Rate. Bank rate is the rate
at which banks borrow money from the central bank without any sale of
securities. It is generally for a longer period of time. This is similar to borrowing
money from someone and paying interest on that amount.
Both these rates are determined by the central bank of the country based on the
demand and supply of money in the economy.
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Reverse Repo Rate is used by the central bank to absorb liquidity from the
economy. When it feels that there is too much money floating in the market, it
increases the reverse repo rate, which means that banks earn higher rate of interest
when they deposit money with the central bank.
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Reverse Report rate was an independent rate till 03/05/2011. However, in the
monetary policy announced on 03/05/2011, RBI decided to link it to Repo rate.
So, Reverse Repo Rate is now always 100 bps below the Repo rate (till RBI
decides to delink the same).
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Have you ever wondered what happens to the amount that you deposit in bank? It
is used by banks to earn money by investing or lending it to others (house loans,
personal loans etc.). But as per the regulations, banks cannot use the entire
amount deposited with them for this purpose. They are required to maintain a
percentage of their deposits as cash. So, if you deposit Rs. 100/- in your bank,
then bank cant use the entire Rs. 100/- for lending or investment purpose. They
have to maintain a portion of the deposit as cash and can use only the remaining
amount for lending/investment. This minimum percentage, which is determined
by the central bank, is known as Cash Reserve Ratio.
So if CRR is 6% then it means for every Rs. 100/- deposited in the bank, it has to
maintain a minimum of Rs. 6/- as cash. However, banks do not keep this cash
with them, but are required to deposit it with the central bank, so that it can help
them with cash at the time of need.
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Apart from keeping a portion of deposits with the RBI as cash, banks are also
required to maintain a minimum percentage of deposits with them at the end of
every business day, in the form of gold, cash, government bonds or other
approved securities. This minimum percentage is called Statutory Liquidity Ratio.
Example
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If you deposit Rs. 100/- in a bank, and assuming CRR to be 6% and SLR to be
8%, the bank can use 100-6-8= Rs. 86/- for giving loan or for investment purpose.
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Chidambaram said India's economy, the 11th largest in theworld, had stabilised an
d was showing signs of turnaround. Hisspeech was marred by protests over the pr
oposed division of asouthern state.
GROWTH
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FISCAL DEFICIT
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* Fiscal deficit seen at 4.6 percent of GDP in 2013/14, belowtarget of 4.8 percent.
* Fiscal deficit projected at 4.1 percent of GDP in 2014/15
* Says need to bring down the deficit to 3 percent of GDP by 2016/17
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* Current account deficit for 2013/14 estimated at $45 billion from last fiscal year'
s $88billion.
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BORROWING/DEBT SERVICING
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* Gross market borrowing for 2014/15 seen at 5.97 trillion rupees, net market borr
owing at4.57 trillion rupees.
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* Interest payments seen rising to 4.27 trillion rupees in 2014/15 from a revised es
timate of3.8 trillion rupees for the current fiscal year.
PRIVATISATION
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* Target from stake sale in state run firms for 2013/14 revised to 258.41 billion ru
pees
* Target for 2014/15 increased to 569.25 billion rupees
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* Plan expenditure for 2014/15 seen at 5.55 trillion rupees, the same level as the p
reviousfiscal year
* Non plan spending estimated at about 12.08 trillion rupees in 2014/15
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SUBSIDIES
* Total spending on food, fertilisers and fuel at 2.5 trillion rupees in 2014/15
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DEFENCE
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* Food subsidy estimated at 1.15 trillion rupees, fertiliser subsidy at 679.71 billio
n rupees.Petroleum subsidy seen at 634.27 billion rupees versus revised figure of
854.8 billion rupeesfor 2013/14.
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EXPORTS
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* Merchandise exports seen at $326 billion in 2013/14, up 6.3 percent year on yea
r.
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* Agriculture exports expected to touch $45 billion in 2013/14, up from $41 billio
n in2012/13
TAX PROPOSALS
* No major change in tax rates
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BANKS RESTRUCTURING
* Govt to provide 112 billion rupees capital infusion in state run banks in 2014/15
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* Propose to set up public debt management office to start5 work from 2014/15
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"I can confidently assert that the economy is more stable today than what it was t
wo yearsago. The fiscal deficit is declining, the current account deficit has been c
onstrained, inflationhas moderated, the quarterly growth rate is on the rise, the exc
hange rate is stable, exportshave increased and hundreds of projects have been un
blocked."
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6. WEF The Global Gender Gap Report - India ranked 114 lisetd very poorly on
the economic,
education and health sub- indexes.
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10. India ranked at 105 in the Education for All Development Index.
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Bank Slogans
Punch line
CITI Bank
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HSBC Bank
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Barclays Bank
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Scotia Bank
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DBS Bank
A passion to perform
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Bank Slogan
Allahabad Bank
A tradition of trust
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Bank Name
Andhra Bank
Bank of Baroda
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General Awareness for SBI PO and Clerk
Relationships beyond Banking
Bank of Maharashtra
Bank of Rajasthan
Together we Prosper
Canara Bank
It's easy to change for those who you love, Together we Can
Corporation Bank
Dena Bank
Federal Bank
HDFC Bank
HSBC
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Bank of India
ICICI Bank
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IDBI Bank
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Indian Bank
J & K Bank
Serving to Empower
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The Nation banks on us; Pure Banking Nothing Else; With you
Syndicate Bank
Knowledge is Power
UCO Bank
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Vijaya Bank
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Yes Bank
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Bank name
State Bank of India
State Bank of Bikaner & Jaipur
State Bank of Hyderabad
State Bank of Mysore
State Bank of Travancore
State Bank of Patiala
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Bank name
Allahabad Bank
Andhra Bank
Bank of Baroda
Bank of India
Bank of Maharashtra
Bharatiya Mahila Bank
Canara Bank
Central Bank of India
Corporation Bank
Dena Bank
IDBI Bank Ltd
Indian Bank
Indian Overseas Bank
Oriental Bank of Commerce
Punjab & Sindh Bank
Punjab National Bank
Syndicate Bank
UCO Bank
Union Bank of India
United Bank of India
Vijaya Bank
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General Awareness for SBI PO and Clerk
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(NSG).
Mr. Dilip Trivedi : Director-General, CRPF.
Mr. Devendra Kumar Pathak : Director-General, Border Security Force (BSF).
Mr. Arvind Ranjan : Director-General, Central Industrial Security Force (CISF).
Mr. P. K. Mehta : Director-General, Railway Protection Force. (RPF)
Mr. Subhas Goswami : Director-General, Indo-Tibetan Border Police (ITBP).
Mr. Arun Chaudhary : Director-General, Sashastra Seema Bal.
Vice-Admiral Anurag G. Thapliyal : Director-General, Indian Coast Guard.
Lt. Gen. Avtar Singh : Director-General, Defence Intelligence Agency.
Prof. Ved Prakash : Chairman, UGC.
Dr. Avinash Chander : Scientific Adviser to Defence Minister and Secretary,
Defence Research and Development Organisation. (DRDO)
Dr. R. Chidambaram : Principal Scientific Adviser to the Government.
Mr. K. Radhakrishnan : Chairman, Space Commission and ISRO.
Mr. Ratan Kumar Sinha : Chairman, Atomic Energy Commission and
Secretary, Dept. of Atomic Energy.
Mr. Naseem Ahmad : Chairperson, National Commission for Minorities.
Mr. Rajiv Mathur : Chief Information Commissioner.
Mr. Amitava Bhattacharya : Chairman, Staff Selection Commission (SSC).
Dr. Vishwa Mohan Katoch : Director-General, Indian Council of Medical
Research.
Mr. C. Chandramouli : Registrar-General of India and Census Commissioner.
Justice D. K. Jain : Chairman, Law Commission.
Dr. Baldev Raj : President, Indian National Academy of Engineering (INAE).
Mr. Justice (Retd.) B. N. Kirpal : Chairman, National Forest Commission.
Mr. T. Nanda Kumar : Chairperson, National Dairy Development Board
(NDDB).
Lt. General AT Parnaik : Director-General, Border Roads Organisation.
Dr. Raghuram Rajan : Governor, RBI.
Justice Mr. Markandey Katju : Chairman, Press Council of India.
Mr. Ravindra Pisharody : Chairman, Audit Bureau of Circulations (ABC).
Mr. R. K. Tewari : Chairman, Central Board of Direct Taxes (CBDT).
Mrs. J.M. Shanti Sundharam : Chairman, Central Board of Excise and
Customs.
Mr. Ashok Chawla : Competition Commission of India
Justice Syed Rafat Alam : Chairman, Central Administrative Tribunal
Mr. G. Sai Prasad : CMD, National Hydroelectric Power Corporation (NHPC).
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(NFDC).
Mr. Ravindra Kumar: Chairman, United News of India.
Mr. K. N. Shanth Kumar : Chairman, PTI.
Mr. Ravindra Kumar : President, Indian Newspaper Society (INS).
Mr. Rana Kapoor : President, The Associated Chambers of Commerce and
Industry of India (ASSOCHAM).
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Note: CDs can be issued by (i) scheduled commercial banks {excluding Regional
Rural Banks and Local Area Banks}; and (ii) select AllIndia Financial
Institutions (FIs) that have been permitted by RBI Minimum amount of a CD
should be Rs.1 lakh, and in multiples of Rs. 1 lakh thereafter. The maturity period
of CDs issued by banks should not be less than 7 days and not more than one
year, from the date of issue.
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5. Direct Tax: A direct tax is that which is paid directly by someone to taxing
authority. Income tax and property tax are an examples of direct tax. They are not
shifted to somebody else.
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6. Indirect Tax: This type of tax is not paid by someone to the authorities and it
is actually passed on to the other in the form of increased cost. They are levied on
goods and services produced or purchased. Excise Tax, Sales Tax, Vat,
Entertainment tax are indirect taxes.
7. NOSTRO Account: A Nostro account is maintained by an Indian Bank in the
foreign countries.
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9. SDR (Special Drawing Rights): SDR are new form of International reserve
assets, created by the International Monetary Fund in 1967. The value of SDR is
based on the portfolio of widely used countries and they are maintained as
accounting entries and not as hard currency or physical assets like Gold.
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Types of Cheque:
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i. Ante Dated Cheque: A cheque bearing a date prior to actual date of signing the
cheque or opening of an account is
called an ante dated cheque which is valid and can be paid till it become stale.
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ii. Stale Cheque: If the validity of the cheque has already expired it is called stale
cheque which cannot be paid. The
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11. Crossing of Cheque: Crossings refers to drawing two parallel lines across the
face of the cheque.
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A crossed cheque cannot be paid in cash across the counter, and is to be paid
through a bank either by transfer, collection or clearing. A general crossing means
that cheque can be paid through any bank and a special crossing means where the
name of the Bank is indicated on the cheque can be paid only through the named
bank.
Dishonour of Cheque: Non payment of cheque by the paying banker with a
return memo giving reasons for the non payment.
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12. Demand Draft: Demand draft is defined as an order to pay money drawn by
one office of a bank upon another office of the same bank for a sum of money
payable to order on demand. Cheque and Demand draft both are used for transfer
of money.
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Difference b/w Cheque & DD: A cheque can be bounce but D.D cannot be
bounce as it is already paid.
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13. Current account: Current account with a bank can be opened generally for
business purpose. There are no restrictions on withdrawals in this type of account.
No interest is paid in this type of account.
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14. NEFT (National Electronic Fund Transfer): NEFT enables funds transfer
from one bank to another but works a bit differently than RTGS. NEFT is slower
than RTGS. The transfer is not direct and RBI acts as the service provider to
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transfer the money from one account to another. You can transfer any amount
through NEFT, even a rupee.
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15. RTGS (Real time gross settlement ): RTGS system is funds transfer systems
where transfer of money or securities
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takes place from one bank to another on a "real time" and on "gross" basis.
Settlement in "real time" means payment transaction is not subjected to any
waiting period. The transactions are
settled as soon as they are processed. Minimum & Maximum Limit of RTGS: 2
lakh and no upper limit.
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16. BOND: Publicly traded ling term debt securities issued by corporations and
governments, whereby the issuer agrees
to pay a fixed amount of interest over a specified period of time and to repay a
fixed amount of principal maturity.
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17. Call Money: Call Money is the borrowing or lending of funds for 1day.
18. Notice Money: Money borrowed or lend for period between 2 days and 14
days it is known as Notice Money
19. Term Money: Term Money refers to borrowing/lending of funds for period
exceeding 14 days
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capital of the bank with aggregated risk weighted assets for credit risk, market
risk and operational risk.
21. Non Performing Assets (NPA): An asset, including a leased asset, becomes
non performing when it ceases to
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22. INFLATION: inflation is a rise in the general level of prices of goods and
services in an economy over a period of time. When the general price level rises,
each unit of currency buys fewer goods and services. Consequently, inflation
reflects a reduction in the purchasing power per unit of money a loss of real
value in the medium of exchange and unit of account within the economy.
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23. DEFLATION: deflation is a decrease in the general price level of goods and
services. Deflation occurs when
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the inflation rate falls below 0% (a negative inflation rate). This should not be
confused with disinflation, a slowdown
in the inflation rate (i.e., when inflation declines to lower levels).
24. REFLATION: When government wants to control the deflation condition,
the suggests RBI to decrease the key rates.
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If inflation in not controlled, govt. makes a fiscal policy. (taxes increased, subsidy
on loan decreased)
26. Doubtful Asset: An asset would be classified as doubtful if it has remained in
the substandard category for a period
of 12 months.
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28. Liquid Assets: Liquid assets consists of cash, balances with RBI, balances in
current accounts with banks, money at call and short notice, interbank
placements due within 30 days and securities under held for trading and
available for sale categories excluding securities that do not have ready market.
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29. Import parity price (IPP): The price that a purchaser pays or can expect to
pay for imported goods such as petrol, diesel or cooking gas. The import parity
price (IPP) is the price at the border of a good that is imported, which includes
international transport costs and tariffs. The IPP is used in International trade and
is sometimes referred to as the International Benchmark Price.
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30. Export parity price (IPP): The price that a producer gets or can expect to get
for its product if exported, equal to
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the Freight on Board price minus the costs of getting the product from the farm or
factory to the border. The EPP applies only to the quantity that is exported and not
to the quantity that is sold domestically
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AGM - Annual General Meeting, it is the year meeting held by every registered
company. Agenda is to explain the performance during the year, presentation of
annual financial statements, voting on important financial decisions. Any
shareholder can participate in AGM.
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Asset turnover ratio - This ratio can be explained as Net assets / Total turnover
or sales. This ratio measures the operational efficiency of business assets. In
simple terms this measures how many time total assets turned in a year and how
efficiently the assets are used in a business.
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Acid test ratio - This is one of the important ratio to measure business liquidity.
Business liquidity is defined as ability of a business to pay it;s short term debts.
Acid test ratio = Highly liquid assets / current liabilities
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deposits and gets their money back at the end of period. Benefit of Annuity is
investor gets compound interest over a period of time.
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Bear market - A market situation in which most of the investors thinks that
markets will fall.
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Capital gain - Gain by selling a capital asset in which a person is not doing
business. Income by selling a house by a bank employee is a capital gain whereas
when a builder do the same thing it is Income from business and professional.
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Current asset - An asset that can be converted into cash with 12 months. For
example - debtors, stock etc.
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Dividend payout ratio - It is the ratio of dividend paid per share and EPS (
Earning per share )
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Ex-divided - Ex-dividend means without dividend. When a seller makes a exdividend sales contract then he is entitled to get dividend or interest payment.
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Floating rate - Rate of interest which changes with change in market rate.
Fund manager - A person who manages a mutual fund and tries to maximize
fund's returns while sticking to fund's objectives.
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Gearing - It is the ratio of debt to equity
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GDP - Gross domestic product is the aggregate value of goods and services
produced by every person of a nation.
GST - Goods and services tax is the same tax system for everything. It is
proposed that GST will replace the multi tax system in India by 2015.
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Income statement
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IPO - Initial public offer is issue of stocks for the first time in the market.
Intangible assets Assets which cant be seen but have value for business. For
example Goodwill.
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Indemnity A legal contract under which one party promises to pay another for
any loses incurred to them by their acts.
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Interest rate risk Risk that value of financial assets will deteriorate because of
fall in interest rate. For example value of bonds decreases with decrease in interest
rate.
Irredeemable stocks Stocks which cant be exchanged for cash in future.
Indirect Costs - Indirect cost is a cost incurred on product that is not directly
related to its production.
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Junk fund A fund which invests investors money in junk investments means
high risk investments which high returns.
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KYC Know Your Customer policy is mandatory in India and every investor
irrespective of his investment volume needs to furnish his identity and residence
details.
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Libor London
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Liquidity Ability of a business to pay off its short term debts with current
assets. Currently NISL is facing liquidity crunch.
Liquid assets Assets which can be readily converted into cash
Liquid ratio Liquid assets/Current liabilities
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Monopoly - A situation in market where there are many buyers but a single seller
exist.
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Money market - Market dealing in short term lending and borrowing of funds.
Also know as Cash market.
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Margin call - Margin call term is used in two situations. First - Whenever a
lender gives a secured loan and loan value is a fixed percentage of loan then
whenever the value of security decrease below the decided ratio then lender given
a margin call to borrower to bring loan to security ratio to decided
level. Secondly in stock exchanges traders trades in various securities by paying
20-30% of the value of securities. Whenever the value of security goes below that
margin, broker gives margin call to trader to bring the margin to desired level.
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NPV - Net Present Value is aggregate of future cash flows from a project minus
total costs. NPV is a capital budgeting technique used to check feasibility of
projects.
Net profit - Net profit is Gross profit minus indirect cost. See indirect costs
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NAV - Net Assets Value is mutual fund's per unit exchange traded price
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Preference shares - A type of shares having no voting rights and have higher rate
of dividend.
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PLR - Prime lending rate is the minimum rate of interest that is to be charged by
a bank. Each bank decides its own PLR.
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Repo rate - Rate at which Central bank (RBI in case of India) lends money to
commercial banks
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Reverse repo rate - Rate at which commercial banks lends to central bank
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Right issue - Issue of shares in which existing shareholders gets right to buy
shares in proportion of their existing holding
Risk free return - Rate of return, normally it is 90 days bills issued by a national
government
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Working capital - Money required by a business to run its day to day business.
Working capital = Current assets / Current liabilities
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Warrants - A document which gives right to holder to get shares at stated price
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Yield - Yield is the return on investment which may in form dividend or interest
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Accrual basis - An accounting system which explains that expenses and incomes
should be recognized at the time when they are actually realized.
Amortization - It is the splitting off a loan or intangible assets over a future
period
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Annual report - Report issued by a company at the end of year containing all
important financial statements and preview of management's goals.
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Bills Payable : A bill which shows that a firm has to pay money to the person or
firm whose name is mentioned in the bill.
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Bills receivable : A bill which shows that money is to be paid to firm from those
whose names are mentioned in the bill.
Bonus shares : Shares which are issued to the existing shareholder w
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Brought forward : Written as b/f. This term is generally used to open an account
for the current year by posting the closing balance of previous year.
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Carriage inwards : These are the expenses incurred for transporting the goods
purchased by the firm.
Carriage outwards : Expenses incurred for transporting goods sold by the firm.
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Cash : It broadly covers currency and generally accepted equivalents of cash, like
cheques, drafts and demand deposits in bank.
Cash at bank : Deposit with bank.
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Cash Book : A book of all transactions or entries for cash payments and receipts.
Cash on hand : Cash available and undeposited.
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Conservatism principle : Accounting concept that states that all expected losses
should be recorded but not expected gains.
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Double-entry: Transaction entered in both sides debit as well as credit i.e. every
transaction has to entered twice.
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Du-Pont System : The System merges the income statement and balance sheet
into two measures of profitability: Return on Assets (ROA) and Return on Equity
(ROE).
EBIT : Earnings before interest and tax.
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Entity Principle : The business firm is treated as a separate entity for the purpose
of accounting.
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Exchange Rate : The rate at which one currency can be converted into another.
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Financial Ratio : Ratio based on firm's financial statement which reflects firm's
financial condition and performance.
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Funds Flow Statement : A statement which shows inflow and outflow of funds.
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Gross Profit Margin : Ratio of Gross profit to net sales i.e. gross profit as a
percentage of net sales.
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HRA Report : After measuring the cost and value of its people, the organisation
prepares a report which is known as HRA Report.
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Income Received but not due : Income received during current accounting
period which is supposed to be received at some future date.
Income statement : Profit and loss statement that measures the firm's operations.
Insolvency : Inability of debtors to meet their debt obligations i.e. lack of
liquidity.
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Intangible assets : Assets like patents, copyrights, goodwill etc which are
valuable but are not physical in nature.
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Interest earned ratio : Ratio which measures firm's ability to meet its interest
payments out of its annual earnings i.e. EBIT / Interest expense.
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Market value : Mutually accepted price of an asset between buyers and sellers. It
is price at which an asset would trade in market.
Matching Principle : States that expenses should be recorded during that period
when it is incurred, regardless the period of transfer of cash.
Miscellaneous expenditure : Lower monetary value costs are misc expenditure
like various meals, ticket prices etc.
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Net block : Net block is what asset are worth to the company. Generally, it is
gross block less accumulated depreciation.
Net current assets : Current assets less current liabilities.
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Net income : Total earnings of company. It represents firm's total profit or loss,
calculated by taking all revenues and deducting all the costs of the business.
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Net profit margin : Net profit or income as a percent of sales i.e. net Income/
Sales.
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below zero.
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Paid up capital : The amount of company's capital which has been funded by
shareholders.
Patent : The sole right to make and sell the product for set period of time.
Petty cash book : Record of entries for small amount payments.
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Prepaid expenses : Expenses which have been paid but benefits of which is yet to
be received.
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Profit and loss account : A statement which shows all revenues and expenses of
firm for a given time period. Subtracting expenses from revenues gives net
income of the firm for that time period, that's why known as profit and loss
account.
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Provision for doubtful debts : Keeping aside an amount out of the firm's profit
to meet the losses due to doubtful debts.
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Provision for tax : Keeping aside an amount to meet future tax liability.
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Realization principle : It states that recognize the revenue only when it is earned.
Redeemable Preference Shares : Preference shares which are redeemed by
issuing company at an agreed price on a specified date.
Reserves and surplus : Accumulated profits of the firm.
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Sales Returns Book : A record of entries of those goods which are returned by
customers and earlier sold on credit.
Secured loans : Loan backed by an asset belongs to the borrower, just to reduce
the risk for the lender.
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Sinking fund : Fund created by keeping aside some money annually for gradual
repayment of debt.
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