The Board of Financial Supervision (BFS) was constituted in November 1994.

- Supervision of the financial sector comprising commercial banks,

financial institutions and non-banking finance companies.
- It is chaired by RBI Governor

Union Territory recently presented a tax free budge of Rs.6100 Crore for itself -
Puducherry

Maximum age for retirement for MD/CEO of all private banks is 70 years.

The term 'financial inclusion' was coined by former Reserve Bank of India (RBI)
governor YV Reddy in 2005.

“Financial inclusion is the process of ensuring access to appropriate financial

products and services needed by all sections of society including vulnerable groups
such as weaker sections and low income groups at an affordable cost in a fair and
transparent manner.

A universal bank is a financial service conglomerate combining retail, wholesale

and investment banking services under one roof and reaping synergies between them.

Micro Units Development and Refinance Agency Bank (or MUDRA Bank) is a public
sector financial institution in India. It provides loans at low rates to micro-
finance institutions and non-banking financial institutions which then provide
credit to MSMEs. It was launched by Prime Minister Narendra Modi on 8 April 2015.

MUDRA Bank will have an initial capital of Rs.200 billion (US$3.1 billion) and a
credit guarantee fund of Rs.30 billion
- Shishu : Allowed loans up to Rs.50,000
- Kishore : Allowed loans up to Rs.5 lakh
- Tarun : Allowed loans up to Rs.10 lakh

Financial exclusion can be defined as the unavailability of banking services to

people with low or non income.

Electronic benefits transfer (EBT). Electronic benefits transfer, or EBT, is a

system through which recipients of certain government benefits receive and spend
funds electronically.

The Bank of Rajasthan Ltd was a private sector bank of India which merged with
ICICI Bank in 2010.

A cheque is a negotiable instrument(Negotiable Instrument Act, 1881) instructing a

financial institution to pay a specific amount from a specified transactional
account held in the drawer's name with that institution.

A cheque typically involves three parties,

(1) the drawer who writes the cheque,
(2) the payee, to whose order the cheque is made out, and
(3) the drawee or payer bank, the bank which has the drawer's account from
which the cheque is to be paid.

Cheque truncation is the conversion of a physical cheque into a substitute

electronic form for transmission to the paying bank.

Demand draft - It is kind of a pre-paid negotiable instrument that is used to

direct payments from one bank to another bank or one of its own branches to pay a
certain sum to the specified party. DD should not exceed Rs.50,000
Demand draft ---- Drawer – bank only (individual pays)
Drawee – Same or other banks
Payee – any party

Cheque --- Drawer – individual/account holder,

Drawee – Banker of
individual,
Payee – any party

As per RBI guidelines,the validity period of Cheques, Demand Drafts, is reduced

from 6 months to 3 months.

IFSC stands for Indian Financial System Code. This is an 11 digit alpha-numeric
code used to uniquely identify all bank branches within the National Electronic
Funds Transfer network by the RBI.
- The IFSC code helps to transfer money using RTGS, NEFT or IMPS method.
- The first 4 digits of the IFSC represent the bank and last 6 characters
represent the branch. The 5th character is zero.

MICR code is a code printed using MICR (Magnetic Ink Character Recognition
technology) on cheques to enable identification the cheques.
- A MICR code is a 9-digit code that uniquely identifies a bank and a
branch participating in an Electronic Clearing System (ECS).
- The first 3 digit of the code represents the city code, the middle ones
represent the bank code and last 3 represents the branch code .

Banks provide multiple transfer methods such as

- National Electronic Funds Transfer (NEFT) [ Min - Rs.1 # Max - No
limit]
- Real Time Gross Settlement (RTGS) [Min - Rs.2 Lakh #
There is no upper ceiling for RTGS transactions ]
- Immediate Payment Service (IMPS) [Min - Rs.1 # Max - 2 lakh]

Biggest tax paying sector in India is Industrial Sector.

White label ATM doesn’t have such Bank logo, hence called White label ATMs.
- Any non-bank entity with a minimum net worth of Rs.100 crore, can apply
for white label ATMs.
- Tata Communications Payment Solutions Limited =the first company to get
RBI’s permission to open White label ATMs.
- They started their chain under brand-name “Indicash”
- Other White label= Muthoot Finance, Srei Infra., Vakrangee Software,
Prizm Payments, AGS ETC.

Brown Label ATM have respective bank’s logo. So just by looking, this is SBI’s
ATM, this is ICICI’s ATM and so on.
- When banks outsourced the ATM operations to a third party.

RBI requires White label-ATM companies to install machines in the ratio of,
- Two ATMs in (tier 3 to 6 place) : One ATM in (tier 1-2 place)

ICICI Bank says that We take care of you - A deep understanding of customer needs -
Khayaal Aapka (Hum Hai Na)

Know your customer (KYC) norms were introduced in 2002 by the Reserve Bank of India
(RBI).

The Banking Ombudsman Scheme was introduced under Section 35 A of the Banking
Regulation Act, 1949 by RBI with effect from 1995.
- Presently the Banking Ombudsman Scheme 2006 (As amended upto July 1,
2017) is in operation
- As on date, twenty Banking Ombudsmen have been appointed with their
offices located mostly in state capitals.
- All Scheduled Commercial Banks, Regional Rural Banks and Scheduled
Primary Co-operative Banks are covered under the Scheme.

National Payments Corporation of India (NPCI) is the umbrella organisation for all
retail payment systems in India, which aims to allow all Indian citizens to have
unrestricted access to e-payment services.
- Founded in 2008 under section 8 of the Companies Act 2013.
Headquarters - Mumbai, Maharashtra, India.
- Promoted by the country’s central bank, the Reserve Bank of India
(ten core promoter banks)
- Dilip Asbe (MD and CEO)

The key products of NPCI are:

- National Financial Switch (NFS),

- Immediate Payment Service (IMPS),
- National Automated Clearing House (NACH),
- Aadhaar Payments Bridge System (APBS) ,
- Cheque Truncation System (CTS),
- Aadhaar-Enabled Payment System (AEPS),
- RuPay – Domestic Card Scheme,
- The newest and most advanced addition to the NPCI revolution is
the Unified Payments Interface (UPI) which was launched on 11 April 2016.

National Financial Switch (NFS) is the largest network of shared automated teller
machines (ATMs) in India. It was designed, developed and deployed by the Institute
for Development and Research in Banking Technology (IDRBT) in 2004.

The first ATM in India was set up in 1987 by HSBC in Mumbai.

RuPay is an Indian domestic card scheme conceived and launched by the National
Payments Corporation of India (NPCI)
- RuPay facilitates electronic payment at all Indian banks and financial
institutions
- The IndiaPay scheme was conceived by the NPCI as an alternative to the
MasterCard and Visa card scheme
- RuPay is a portmanteau of the words rupee and payment.The colors used in the
logo is tricolor national flag.
- The RuPay card was launched on 26 March 2012.
- NPCI entered into a strategic partnership with Discover Financial Services
(DFS) for RuPay Card.
- Discover,Diners Club,JCB in Japan,UnionPay in China (To increase acceptance
around the world RuPay has form several agreements with other payment networks.)

EMV (Europay, MasterCard and Visa) chip technology, which is a global standard for
debit and credit cards.

Closed System Payment Instruments: These are payment instruments generally issued
by business establishments for use at their respective establishment only. These
instruments do not permit cash withdrawal or redemption. Example - Freecharge
credit, Ola money etc.

Semi-Closed System Payment Instruments: These are payment instruments which are
redeemable at a group of clearly identified merchant locations/ establishments
which contract specifically with the issuer to accept the payment instrument. These
instruments do not permit cash withdrawal or redemption by the holder. Example -
Paytm

Semi-open System Payment Instruments: These are payment instruments which can be
used for purchase of goods and services at any card accepting merchant locations
(Point of sale terminals). These instruments do not permit cash withdrawal or
redemption by the holder. Example - several private label cards issued by
merchants.

Open System Payment Instruments: These are payment instruments which can be used
for purchase of goods and services and also permit cash withdrawal at ATMs. Example
- Almost every Visa, MasterCard or Rupay card issued in India.

Mobile Prepaid Instruments: The prepaid talk time issued by mobile service
providers. This value of talk time can also be used for purchase of 'value added
service' from the mobile service provider or third-party service providers.