The Banking Updates

THE BANKING & FINANCIAL UPDATES OCTOBER 2020 0

 The Banking Updates

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WE ARE ALSO IN THE PROCESS OF

Volume Issue Month RELEASING COMPREHENSIVE STUDY
MATERIAL SUITABLE FOR VARIOUS BANK
1 10 October 2020 PROMOTION TEST

THE MAGAZINE COVERS ALL FIELDS OF BANKING AND FINANCIAL AWARENESS OF AND ALSO COVERS THE
CONCEPT OF SOME TOPICS FOR INDEPTH KNOWLEDGE. USEFUL FOR BANK PROMOTION EXAMINATIONS
AND INTERVIEWS AND ALL THOSE DEALING WITH FINANCIAL SERVICES

CONTENTS

RBI GUIDELINES ...................................................................................................................... 2

REGULATORS / LEGAL CORNER............................................................................................. 5
BUSINESS, FINANCE & ECONOMY .......................................................................................... 6
OUTLOOK/PROJECTIONS ....................................................................................................... 7
PARTNERSHIP/NEW PRODUCTS ........................................................................................... 8
NEW APPOINTMENTS ............................................................................................................. 9
DEVELOPMENT ........................................................................................................................ 9
GENERAL AWARENESS............................................................................................................ 9
SUBJECT NOTES ..................................................................................................................... 10
MULTIPLE CHOICE QUESTIONS ........................................................................................... 14
RECALLED QUESTIONS OF VARIOUS BANK PROMOTION TESTS .................................... 16

THE BANKING & FINANCIAL UPDATES OCTOBER 2020 1

 The Banking Updates

RBI GUIDELINES
FURTHER DEFERMENT OF REQUIREMENT OF
KEY POLICY RATES: LAST TRANCHE OF CAPITAL CONSERVATION
BUFFER:
w.e.f W.e.f The capital conservation buffer (CCB) is designed
17.04.20 22.05. to ensure that banks build up capital buffers
20 during normal times (i.e., outside periods of
2020 stress) which can be drawn down as losses are
Repo Rate 4.40% 4.00% incurred during a stressed period. As per Basel
Reverse Repo Rate 3.75% 3.35% standards, the CCB was to be implemented in
Bank Rate 4.65% 4.25% tranches of 0.625% per annum in phases and the
Marginal Standing Facility 4.65% 4.25% transition to full CCB of 2.5 per cent was set to be
CRR 3.00% 3.00% completed by March 31, 2019 and was
SLR # 18.00% 18.00% subsequently deferred to 31 March 2020 for
implementation. Considering the potential stress
Total Reserves (As on US$ 542.02 billion
on account of COVID-19, it has been extended to
25.09.2020)
September 30, 2020 and further on account of
Foreign Currency Assets (As US$ 499.94 billion
continuing stress on financial sector, it has been
on 25.09.2020)
decided to defer the implementation of the last
# (wef 11.04.2020)
tranche of 0.625 per cent of the Capital
Conservation Buffer (CCB) from September 30,
DEFERMENT OF IMPLEMENTING NSFR
2020 to April 1, 2021. Consequently, the pre-
GUIDELINES: Basel Committee on Banking
specified trigger for loss absorption through
Supervision (BCBS) had introduced the concept of
conversion/write-down of Additional Tier 1
Net Stable Funding Ratio (NSFR) which reduces
instruments (PNCPS and PDI) shall remain at 5.5
funding risk by requiring banks to fund their
per cent of risk-weighted assets (RWAs) and will
activities with sufficiently stable sources of
rise to 6.125 per cent of RWAs from April 1, 2021.
funding over a time horizon of a year in order to
mitigate the risk of future funding stress.
POSITIVE PAY SYSTEM FOR CHEQUE
Net Stable Funding Ratio = (Available amount of
CLEARING: To further augment customer safety
stable funding ÷Required amount of Stable
in cheque payments and to reduce instances of
funding) × 100 which should be more than 100%
fraud occurring on account of tampering of
As per the prescribed timeline, banks in India
cheque leaves, RBI announced to introduce a
were required to maintain NSFR of 100 per cent
mechanism of Positive Pay for all cheques of value
from April 1, 2020. But on account of COVID19
₹50,000 and above in the Statement on
pandemic, RBI vide its notification dated 27
Developmental and Regulatory Policies dated
March 2020 had deferred its implementation by
August 6, 2020.
six months to October 1, 2020. In view of the
The Positive Pay system involves a process of
continued uncertainty on account of COVID-19, on
reconfirming key details of large value cheques
a review, it has been decided to defer the
from the issuer of the cheque, who submits
implementation of NSFR guidelines by a further
electronically, through channels like SMS, mobile
period of six months. Therefore, these guidelines
app, internet banking, ATM, etc., certain minimum
shall now come into effect from April 1, 2021.
details of that cheque (like date, name of the
beneficiary / payee, amount, etc.) to the drawee

THE BANKING & FINANCIAL UPDATES OCTOBER 2020 2


bank for cross checking. Positive Pay System shall
be implemented from January 01, 2021.
National Payments Corporation of India (NPCI)
shall develop the facility of Positive Pay in CTS for
participant banks. Banks, in turn, shall enable it
for all account holders issuing cheques for
amounts of ₹50,000 and above. While availing of
this facility is at the discretion of the account
holder, banks may consider making it mandatory
in case of cheques for amounts of ₹5,00,000
and above.
AUTOMATION OF INCOME RECOGNITION,
ASSET CLASSIFICATION & PROVISIONING IN
BANKS: RBI has made an observation that the
Asset Classification and provisioning process in
Banks are still not fully system driven. In this
regard RBI has instructed Banks to ensure the
completeness and integrity of the automated
Asset Classification, Provisioning calculation and
Income Recognition processes, and banks are
advised to put in place / upgrade their systems to
conform to the guidelines latest by June 30,
2021.
In any exceptional circumstance where manual
intervention is required to override the System
classification, it must have at least two-level
authorisation. Such delegation of powers for
authorising the exceptions should be as per the
Board approved policy of the bank (by CEO, in
case of unavailability of Board) and preferably
should be done from the centralised location and
suitably documented. Further, any such
intervention shall have appropriate audit trails
and subjected to audit by concurrent and
statutory auditors. Detail reports of such manual
intervention shall be placed before the Audit
Committee / Audit Head (banks having no Board)
regularly.
Banks shall maintain logs for all exceptions i.e.
manual interventions / over-rides including, but
not limited to, the date and time stamp;
purpose/reason; user-IDs, name and designation
of those making such manual intervention and
necessary account details. These logs shall also be
stored for a minimum period of three years and
THE BANKING & FINANCIAL UPDATES OCTOBER 2020
The Banking Updates
not be tampered with during the storage period.
These logs shall be system generated.
ROLE OF CHIEF COMPLIANCE OFFICER IN
BANKS: As part of robust compliance system,
banks are required to have an effective
compliance culture, independent corporate
compliance function and a strong compliance risk
management programme. Such an independent
compliance function is to be headed by Chief
Compliance Officer (CCO) selected through a
suitable process. However, it is observed that the
banks follow diverse practices in this regard. To
bring uniformity in approach followed by banks,
as also to align the supervisory expectations on
CCOs with best practices, RBI has issued the
following guidelines:
• A bank shall lay down a Board-approved
compliance policy clearly spelling out its
compliance philosophy, expectations on
compliance culture. The policy shall be
reviewed at least once a year. The bank shall
also develop and maintain a quality assurance
and improvement program covering all
aspects of the compliance function. The
quality assurance and improvement program
shall be subject to independent external
review periodically (at least once in three
years).
• The CCO shall be appointed for a minimum
fixed tenure of not less than 3 years. The
Audit Committee of the Board (ACB) /
Managing Director (MD) & CEO should factor
this requirement while appointing CCO. The
CCO may be transferred / removed before
completion of the tenure only in exceptional
circumstances with the explicit prior approval
of the Board.
• The CCO shall be a senior executive of the
bank, preferably in the rank of a General
Manager or an equivalent position (not below
two levels from the CEO). The CCO could also
be recruited from market.
• Age should not be more than 55 years and
shall have an overall experience of at least 15
years in the banking or financial services, out
of which minimum 5 years shall be in the
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Audit / Finance / Compliance / Legal / Risk
Management functions.
• No vigilance case or adverse observation from
RBI, shall be pending against the candidate
identified for appointment as the CCO.
• Selection of the CCO shall be done on the basis
of recommendations made by the senior
executive level selection committee
constituted by the Board and Board shall take
final decision in the appointment of CCO.
• The CCO shall have direct reporting lines to
the MD & CEO and/or Board/Audit
Committee of Board (ACB) of the bank. In case
the CCO reports to the MD & CEO, the Audit
Committee of the Board shall meet the CCO
quarterly on one-to-one basis, without the
presence of the senior management including
MD & CEO. The CCO shall not have any
reporting relationship with the business
verticals of the bank and shall not be given
any business targets.
• The compliance function shall include, To
apprise the Board and senior management on
regulations, rules and standards and any
further developments, to provide clarification
on any compliance related issues, To conduct
assessment of the compliance risk (at least
once a year) and to develop a risk-oriented
activity plan for compliance assessment, to
report promptly to the Board / ACB / MD &
CEO about any major changes / observations
relating to the compliance risk, To monitor
and periodically test compliance by
performing sufficient and representative
compliance testing, To ensure compliance of
Supervisory observations made by RBI
and/or any other directions etc.
FINANCIAL PARAMETERS FOR RESOLUTION
FRAMEWORK FOR COVID-19-RELATED
STRESS:
As per RBI guidelines on resolution framework for
COVID-19 related stress notified on 06 August
2020, RBI constituted an Expert Committee with
Shri K. V. Kamath as the Chairperson to make
recommendations on the required financial
THE BANKING & FINANCIAL UPDATES OCTOBER 2020
The Banking Updates
parameters to be factored in the resolution plans
for eligibility of borrowers.
Accordingly, all lending institutions shall
mandatorily consider the 5 key ratios while
finalizing the resolution plans in respect of eligible
borrowers which are: (i) Total Outside Liabilities
/ Adjusted Tangible Net Worth (TOL/ATNW), (ii)
Total Debt / EBITDA, (iii) Current Ratio, (iv) Debt
Service Coverage Ratio (DSCR) for the relevant
year and (v) Average Debt Service Coverage Ratio
(ADSCR) over the period of the loan.
The sector-specific thresholds for each of the
above key ratios that should be considered by the
lending institutions in the resolution assumptions
is prescribed by the committee. In respect of those
sectors where the sector-specific thresholds have
not been specified, lending institutions shall make
their own internal assessments regarding
TOL/ATNW and Total Debt/EBITDA. However,
the current ratio and DSCR in all cases shall be 1.0
and above, and Average DSCR shall be 1.2 and
above.
Lending institutions are free to consider other
financial parameters as well while finalizing the
resolution assumptions in respect of eligible
borrowers apart from the above mandatory key
ratios.
CESSATION OF “ADITYA BIRLA IDEA
PAYMENTS BANK LIMITED”: Aditya Birla Idea
Payments Bank Limited” has ceased to be a
banking company with effect from July 28, 2020.
SLR HOLDINGS IN HTM CATEGORY: Currently,
banks are permitted to exceed the limit of 25 per
cent of the total investments under Held to
Maturity (HTM) category, provided the excess
comprises only of SLR securities and total SLR
securities held under HTM category is not more
than 19.5 per cent of NDTL as on the last Friday of
the second preceding fortnight. On a review, it has
been decided to allow banks to hold under HTM
category, SLR securities acquired on or after
September 1, 2020 up to an overall limit of 22 per
cent of NDTL, up to March 31, 2021, which shall
be reviewed thereafter.
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WMA LIMIT FOR GOVERNMENT OF INDIA FOR
THE SECOND HALF OF THE FINANCIAL YEAR
2020-21: RBI in consultation with the
Government of India, has fixed the limits for Ways
and Means Advances (WMA) for the second half of
the financial year 2020-21 at ₹1,25,000 crore. The
Reserve Bank may trigger fresh floatation of
market loans when the Government of India
utilises 75 per cent of the WMA limit. The Rate of
Interest on WMA will be @ Repo Rate and that of
Overdraft will be @ Two percent above the Repo
Rate.
EXTENSION OF INTERIM RELAXATION IN
WMA LIMITS AND OD REGULATIONS FOR
STATE/UTS: With a view to provide greater
comfort to State Governments in mitigating
COVID-19 measures, RBI had announced an
increase in WMA limit of the States/UTs by 60%
over and above the level as on March 31, 2020,
vide its press release dated April 17, 2020.
Further, in order to provide flexibility to State
Governments to tide over their cash flow
mismatches, with effect from April 7, 2020 it was
decided to (a) increase the number of days for
which a State/ UT can be in overdraft
continuously to 21 working days from 14 working
days; and (b) the number of days for which a
State/ UT can be in overdraft in a quarter to 50
working days from 36 working days. Both these
relaxations were currently available till
September 30, 2020. On a review, it has been
decided to extend the above-mentioned measures
for a further period of 6 months till March 31,
2021.
INDIA’S EXTERNAL DEBT POSITION AS ON
END OF JUNE 2020: As per data released by RBI,
At end-June 2020, India’s external debt was
placed at US$ 554.5 billion, recording a decrease
of US$ 3.9 billion over its level at end-March 2020.
The external debt to GDP ratio increased to 21.8
per cent at end-June 2020 from 20.6 per cent at
end-March 2020. US dollar denominated debt
remained the largest component of India’s
external debt, with a share of 53.9 per cent.
THE BANKING & FINANCIAL UPDATES OCTOBER 2020
The Banking Updates
INDIA’S BALANCE OF PAYMENTS DURING THE
FIRST QUARTER (APRIL-JUNE) OF 2020-21: As
per data released by RBI, At the end-June 2020,
India’s current account balance (CAB) recorded a
surplus of US$ 19.8 billion (3.9 per cent of GDP) in
Q1 of 2020-21. The surplus in the current account
in Q1 of 2020-21 was on account of a sharp
contraction in the trade deficit to US$ 10.0 billion
due to steeper decline in merchandise imports
relative to exports on a year-on-year basis. Net
foreign direct investment recorded outflow of US$
0.4 billion as against inflows of US$ 14.0 billion in
Q1 of 2019-20. Net foreign portfolio investment
was US$ 0.6 billion as compared with US$ 4.8
billion in Q1 of 2019-20 as net purchases in the
equity market were offset by net sales in the debt
segment. With repayments exceeding fresh
disbursals, external commercial borrowings to
India recorded net outflow of US$ 1.1 billion in Q1
of 2020-21 as against an inflow of US$ 6.0 billion a
year ago. Net inflow on account of non-resident
deposits increased to US$ 3.0 billion from US$ 2.8
billion in Q1 of 2019-20.
RBI PUBLISHED “’TECHNOLOGY VISION FOR
CYBER SECURITY’ FOR UCBS: Reserve Bank of
India will implement the “Technology Vision for
Cyber Security’ for Urban Co-operative Banks
(2020-2023) to enhance the IT security system of
Urban Co-operative banking to prevent, detect,
respond to and recover from cyber-attacks. RBI
plans to achieve this objective using its five-
pillared strategic approach ‘GUARD’.
REGULATORS / LEGAL CORNER
INTRODUCTION OF AADHAAR CARD FOR USE
AT PAR WITH OTHER FORMS OF AADHAAR:
UIDAI has introduced a new service known as
"Order Aadhaar Card (OAC)" for facilitating Indian
residents to get their Aadhaar number and
demographic details on a PVC Card by paying a
nominal charge @ Rs.50/-. It is pocket sized
verifiable identity of residents which is easy to
carry and durable. Similar to other forms of
Aadhaar, it has a digitally signed secure QR code
with photograph and demographic details
5

verifiable by using STQC certified scanner devices
with Windows application and Android / iOS
mobile scanner App available on Google play store
/ Apple store. Aadhaar card is a valid proof of
identity like other forms of Aadhaar such as
Aadhaar letter, e-Aadhaar, masked e-Aadhaar and
m-Aadhaar under section 4(3) of the Aadhaar Act,
2016 read with Regulation 15(1) of the Aadhaar
(Enrolment and Update) Regulations, 2016.
AMMENDMENT TO REWARDS UNDER
MERCHANDISE EXPORTS FROM INDIA
SCHEME (MEIS): The Central Government made
amendments in the Foreign Trade Policy 2015-20
with immediate effect. Under this, the total
reward which may be granted to an IEC holder
under the Merchandise Exports from India
Scheme (MEIS) shall not exceed Rs. 2 Crore per
IEC on exports made in the period 01.09.2020 to
31.12.2020. The aforesaid ceiling may be subject
to further downward revision to ensure that the
total claim under the Scheme for the period
(01.09.2020 to 31.12.2020) does not exceed the
allocation prescribed by the Government, which is
Rs 5,000 Cr. Further, it has also been notified that
any IEC holder who has not made any exports for
a period of one year preceding 01.09.2020 or any
new IECs obtained on or after the date of
publication of this Notification would not be
eligible for submitting any claim under MEIS. In
addition, it has been notified that MEIS Scheme is
withdrawn with effect from 01.01.2021.
NEW FEATURES IN IMPSv3.5: NPCI has
introduced 2 new features in IMPS with the
revised Online Technical Specifications version
3.5. (I) Check Status: This is a non-financial
transaction type introduced to address the
challenges with respect to Deemed approved
Transactions in IMPS. This will enable the service
providers to fetch the latest status of the
transaction. (II) Name Inquiry: The non-financial
transaction enables Remitter Bank to validate the
beneficiary name on the basis of IFSC Code +
Account Number (for P2A) and MMID (for P2P).
All member banks have been requested by NPCI
to implement all above mentioned features by
15th November 2020.
COMMEMORATIVE COIN ON THE OCCASION
OF 75TH ANNIVERSARY OF FOOD AND
AGRICULTURE ORGANISATION: GoI introduced
Commemorative Coin on the Occasion of 75th
THE BANKING & FINANCIAL UPDATES OCTOBER 2020
The Banking Updates
Anniversary of Food and Agriculture Organization
with denomination of Rs.75/- under Coinage
(Issue of commemorative coin on the occasion of
75th anniversary of food and agriculture
organization) rules, 2020
OBSERVANCE OF VIGILANCE AWARENESS
WEEK, 2020: The central vigilance Commission
has decided that this year the Vigilance
Awareness Week would be observed from 27th
October to 2nd November, 2020 with the theme
"Satark Bharat, Samriddh Bharat (Vigilant
India, Prosperous India)".
BUSINESS, FINANCE & ECONOMY
RBI LICENCE TO VAKRANGEE LTD: RBI has
granted in-principle approval to Vakrangee Ltd to
set up Bharat Bill Payment Operating Unit
(BBPOU).
IDBI BANK BECOMES 1ST BANK TO ENABLE
DOCUMENT EMBEDDING FEATURE ON SFMS:
IDBI Bank become the first Bank to implement the
document embedding facility with LC / BG
messages over SFMS (Structured Financial
Messaging System) platform of Indian Financial
Technology and Allied Services (IFTAS), a wholly
owned subsidiary of RBI. The process would be
conducted via a middleware application
“i@Connect-SFMS (CSFMS) developed by IDBI
Intech.
SBI CARD STARTS NEW BRAND CAMPAIGN
‘CONTACTLESS CONNECTIONS’: SBI Card has
launched its new brand campaign titled
‘Contactless Connections’, which aims to spread
the message that love and care can be shared even
during this difficult period where social distancing
is the norm.
RBI ROPES AMITAV BACHHAN FOR ITS
CUSTOMER AWARENESS CAMPAIGN: RBI has
roped in Bollywood actor Amitabh Bachchan for
the customer awareness campaign to prevent
gullible account holders from being duped by
fraudsters.
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IRDAI IDENTIFIES DOMESTIC SYSTEMICALLY
IMPORTANT INSURERS (D-SIIs): IRDAI has
identified Life Insurance Corporation of India
(LIC), General Insurance Corporation of India
(GIC) and New India Assurance as domestic
systemically important insurers (D-SIIs). D-SIIs
refer to insurers of such size, market importance
and domestic and global inter-connectedness
whose distress or failure would cause a significant
dislocation in the domestic financial system. D-
SIIs are perceived as insurers that are ‘too big or
too important to fail’ (TBTF).
WORLD’S FIRST SOVEREIGN BOND BY
MEXICO: Mexico has become the first country in
the world to issue a sovereign bond linked to the
sustainable development goals set by the United
Nations and has raised EUR 750 million ($890
million) through such bonds.
MASTERCARD LAUNCHES CENTRAL BANK
DIGITAL CURRENCY TESTING PLATFORM:
Mastercard has launched “Central Bank Digital
Currencies” (CBDCs), a Virtual Testing
Environment for Central Banks to Assess and
Explore National Digital Currencies that will allow
central banks to evaluate, use cases and test roll-
out strategies for CBDCs by simulating a CBDC
ecosystem.
BANK OF BARODA TOPS EASE 2.0 INDEX
RELEASED BY IBA: As per the EASE Banking
Reforms Index 2.0 released recently by IBA, Bank
of Baroda has been placed at the first spot
followed by State Bank of India and Oriental Bank
of Commerce (OBC).
REBRANDING OF VODAFONE IDEA: Vodafone
Idea has announced its new unified brand identity
by renaming all its products under a new name
and logo “Vi”.
BANKS SANCTION LOANS WORTH RS 1.77 TRN
TO 4.4 MN MSMES UNDER ECLGS SCHEME: The
Finance Ministry said, banks have sanctioned
THE BANKING & FINANCIAL UPDATES OCTOBER 2020
The Banking Updates
loans of about Rs 1.77 lakh crore to 44.2 lakh
business units under the Rs 3-lakh crore
Emergency Credit Line Guarantee Scheme
(ECLGS) for the MSME sector. As of 21 Sept 2020,
the total amount sanctioned under the 100%
Emergency Credit Line Guarantee Scheme by
#PSBs and private banks to #MSMEs and
individuals stood at Rs 1,77,353 crore, of which Rs
1,25,425 crore has already been disbursed.
AUSTRALIAN BANK WESTPAC TO PAY
RECORD $920 MILLION FINE TO SETTLE
MONEY LAUNDERING CASE: Westpac, one of
Australia’s largest banks, announced that it had
reached an agreement with the Australian
government’s financial intelligence agency
Australian Transaction Reports and Analysis
Centre (AUSTRAC) to settle a civil lawsuit.
Westpac has agreed to pay a civil penalty A$1.3
billion ($920 million). The lawsuit revealed over
23 million breaches of the country’s Anti-Money
Laundering and Counter-Terrorism Financing Act,
2006.
ADB APPROVES 300 MILLION DOLLAR LOAN
FOR RAJASTHAN’S SECONDARY TOWNS: The
Asian Development Bank (ADB) has approved a
300-million-dollar loan to finance inclusive water
supply and sanitation infrastructure and services
in secondary towns of Rajasthan.
OUTLOOK/PROJECTIONS
• ICRA downgrades India’s GDP projection
for FY21 to -11%: Rating agency ICRA has
revised its forecast for the contraction in
India’s FY21 GDP to 11 per cent from its
earlier assessment of 9.5 per cent.
• The National Council of Applied Economic
Research (NCAER) has projected the GDP
growth for the Indian economy at -12.6% For
2020-21.
• United Nations Conference on Trade and
Development (UNCTAD), in its Trade and
Development Report 2020 has predicted that
the GDP of India will contract by 5.9% in
7

the year 2020 and to grow by 3.9% in the
year 2021.
• Fitch Solutions projects India’s GDP growth
at -8.6% in FY21.
• UBS Securities projects India’s GDP at -
8.6% in FY21.
• The Organisation for Economic Cooperation
and Development (OECD) projected the
Indian economy to contract by 10.2% in
FY21against its previous estimate of 16.7% in
June.
• Asian Development Bank projects India’s
GDP at -9% in FY21.
• S&P Global Ratings Projects India’s GDP at -
9% in FY21.
• Moody’s forecasts India’s GDP at -11.5% for
FY21.
• CARE ratings projects India’s GDP to
contract between 8-8.2% in FY21.
• CRISIL has projected India’s GDP rate at -
9% for the financial year 2020-21.
• The Indian arm of Fitch Ratings, India
Ratings and Research (Ind-Ra) has
projected India’s FY21 GDP growth forecast
at -11.8% as against its earlier prediction of -
5.3%.
PARTNERSHIP/NEW PRODUCTS
• Flipkart tied up with Bajaj Allianz to
launch Cyber Insurance Cover: Flipkart and
Bajaj Allianz General Insurance have launched
a cyber insurance cover for online financial
frauds. The product, ‘Digital Suraksha Group
Insurance’, will help customers who want to
cover themselves against financial losses
caused as a result of cyber-attacks, cyber
frauds etc across various online platforms.
• HDFC Life partners with YES Bank to sell its
insurance policies.
• Google Pay partners with Visa for card-
based payments with tokenisation. Through
tokenization, Google Pay users can make
payment by using the debit or credit card
without physically sharing their credit or
debit card details.
THE BANKING & FINANCIAL UPDATES OCTOBER 2020
The Banking Updates
• HDFC Bank has launched video-based KYC
facility for its customers.
• Bandhan Bank sets up new vertical
“Emerging Entrepreneurs Business” to
support the emerging needs of the unbanked
and underbanked segment of customers in
their journey to becoming entrepreneurs.
• Canara Bank introduces i-Lead 2.0
(Inspiring Leads System version 2.0) a Lead
Management System to provide its services to
customers irrespective of where they reside.
• ICICI Home Finance launched “Apna Ghar
Dreamz” Home Loan Scheme for skilled
laborers like electricians, mechanics,
painters, grocery store owners etc in the
informal sector of Delhi with Loan amount
ranging from Rs.2.00 Lacs to Rs.50.00 Lacs.
• Titan has partnered with the SBI to launch
India’s first contactless payment watches
named “Titan Pay”.
• SBI General Insurance enters corporate
agency agreement with YES Bank to sell its
products.
• ICICI Bank launched a new product named
“iStartup 2.0”, to cater to the banking needs
of start-ups and entrepreneurs that takes care
of their banking as well as beyond-banking
needs such as regulatory assistance, analytics,
staffing, accounting, customer acquisition etc.
• National Skill Development Corporation
(NSDC) and LinkedIn partner to provide
digital skills training for youth.
• ICICI Prudential Life launched voice
chatbot “LiGo” on Google Assistant which
will enable the company’s policyholders to
address their queries by simple voice
commands.
• SBI Card enters into strategic partnership
with American Express: SBI Card, and
American Express have entered into a
strategic partnership to offer a powerful mix
of global benefits and exclusive privileges for
discerning consumers in India. With this
partnership, SBI Card`s top end premium
products — SBI Card ELITE and SBI Card
PRIME — will be available on American
Express’ global merchant network.
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NEW APPOINTMENTS
• Khadi and Village Industries Commission has
appointed Sunil Sethi, (Chairman of the
Fashion Design Council of India) as its
Advisor.
• RBI appoints AK Dixit (ex- General Manager
of Union Bank of India) as new administrator
of PMC Bank.
• Simanchala Dash appointed as advisor to
IMF Executive Director.
• Rajesh Khullar has been appointed as
Executive Director at World Bank.
• Sameer Kumar Khare has been appointed
Executive Director at ADB.
• Jane Fraser named as the 1st female CEO of
Citigroup.
• Ayushmann Khurrana appointed as Brand
Ambassador of Bajaj Allianz Life.
• S Krishnan has been appointed as new MD &
CEO of Punjab & Sind Bank.
DEVELOPMENT
GOVT OF RAJASTAN SIGNS MOU WITH SIDBI
TO DEVELOP ITS MSME ECOSYSTEM: The
Government of Rajasthan signed a MOU with the
Small Industries Development Bank of India
(SIDBI) to develop its micro, small and medium
enterprises (MSMEs) ecosystem by supporting the
state government to have a better understanding
and provide better solutions for the problems of
MSMEs. Under this MoU Both will work together
to provide financial, technical, marketing and
export support to the MSMEs in the state.
GOI CONSTITUTES COMMITTEE FOR
ASSESSMENT OF RELIEF TO BANK
BORROWERS: Government of India has
constituted an Expert Committee for making an
overall assessment of relief to bank borrowers
related to waiver of interest and waiver of interest
on interest on the COVID-19 related moratorium
with secretarial support by SBI. Rajiv Mehrishi,
THE BANKING & FINANCIAL UPDATES OCTOBER 2020
The Banking Updates
former CAG of India is appointed as
Chairperson of the committee.
PRADHAN MANTRI MATSYA SAMPADA
YOJANA: Prime Minister Narendra Modi, unveiled
the scheme which aims to enhance fish
production to 70 lakh tonnes by 2024-25 and to
double the income of fish farmers. The PMMSY is a
flagship scheme for focused and sustainable
development of the fisheries sector in the country
with an estimated investment of Rs. 20,050
crores.
GENERAL AWARENESS
NABARD TO UNDERTAKE SANITATION
LITERACY CAMPAIGN IN KARNATAKA: NABARD
will begin a Sanitation Literacy Campaign (SLC) in
Karnataka to promote literacy on ‘WASH’ (Water,
Sanitation and Hygiene) in 2,000 villages covering
one lakh rural population. The campaign will start
from October 2 and continue till January 26, 2021.
ANTYODAYA DIVAS ON 25 SEPTEMBER:
Antyodaya Diwas is being observed in the country
on 25th September every year to mark the birth
anniversary of Pandit Deendayal Upadhyaya. The
day was declared by GoI on September 25, 2014.
Antyodaya means uplifting the poorest of the
poor.
ODISHA GOVT LAUNCHES ‘GARIMA’ SCHEME FOR
SANITATION WORKERS: Odisha Govt. has
launched a new scheme named ‘GARIMA’ which
aims to ensure the economic safety and social
dignity of core sanitation workers in the state.
HINDI DIWAS CELEBRATED ON 14 SEPTEMBER:
Hindi Diwas is observed every year on 14
September to mark the popularity of Hindi as an
official language of India, because, on this day in
1949, the Constituent Assembly of India had
adopted Hindi written in Devanagari script as the
official language of the Republic of India. The
language was adopted under Article 343 of the
Indian Constitution.
9

“MISSION KARMAYOGI” NATIONAL PROGRAMME
FOR CIVIL SERVICES CAPACITY BUILDING
(NPCSCB): Union Cabinet approved launch of this
programme under which a sum of Rs. 510.86
crore will be spent over a period of 5 years from
2020-21 to 2024-25 in order to cover around 46
lakh Central Govt.employees. The scheme will
prepare the Indian Civil Servant for the future by
making them more creative, constructive,
imaginative, innovative, proactive, professional,
progressive, energetic, enabling, transparent and
technology-enabled.
‘SWACHH SURVEKSHAN 2020’: The Union
Housing and Urban Affairs announced results of
‘Swachh Survekshan 2020’ listing out the cleanest
cities in India. For the fourth time in a row, Indore
has been declared as India’s cleanest city followed
by Gujarat’s Surat and Maharashtra’s Navi
Mumbai. Bihar’s capital Patna was ranked as the
dirtiest city in the population category of over 10
lakh.
NATIONAL RECRUITMENT AGENCY: Union
cabinat approved the establishment of “National
Recruitment Agency” for a reform in the
recruitment process for central government jobs.
NRA will comprise of representatives of Ministry
of Railways, Ministry of Finance / Department of
Financial Services, the SSC, RRB as well as IBPS.
‘KORMO’ APP IN INDIA: Google has launched its
employment application named ‘Kormo Jobs’ in
India. It would help millions of Indians to get
entry-level jobs.
IN SHORT:
❖ Kerala Tourism’s ‘Human by Nature Print
Campaign’ bagged the Prestigious Pacific Asia
Travel Association (PATA) Grand Title Winner
2020 for Marketing.
❖ Bollywood actor Sonu Sood honoured with
Special Humanitarian Action Award by UNDP.
❖ India ranked 89th in World Risk Report 2020.
THE BANKING & FINANCIAL UPDATES OCTOBER 2020
The Banking Updates
❖ Bollywood actor Aamir Khan becomes Brand
Ambassador of CEAT.
❖ PM Narendra Modi is the only politician
placed in Time Magazine’s ‘100 most
influential people of 2020’ list.
❖ India ranked 116th in the World Bank’s
Human Capital Index.
❖ Karnataka Govt launches “Arthika Spandana”
loan disbursal programme through various
cooperative institutions.
❖ The shortest-serving Governor of the Reserve
Bank of India, Amitabha Ghosh (served as the
16th Governor of the Reserve Bank of India
for 21 days) passed away.
❖ TikTok choses Oracle as its technology
partner for its US operations.
❖ Managing Director of HDFC Bank, Aditya Puri
has been conferred the Lifetime Achievement
Award by Euromoney Awards of Excellence
2020.
❖ India has been ranked 105th position “Global
Economic Freedom Index 2020 Annual
Report” by Canada’s Fraser Institute.
❖ Saudi Arabia chairs G20 Foreign Ministers’
Extraordinary Meeting.
❖ India ranks 48th in Global Innovation Index
2020
SUBJECT NOTES
DAY - NATIONAL RURAL
LIVELIHOODS MISSION (DAY-
NRLM)
(Based on RBI Master Circular dated 18 September 2020)
The Ministry of Rural Development (MoRD),
Government of India launched the National Rural
Livelihood Mission (NRLM) by restructuring
Swarnajayanti Gram Swarojgar Yojana (SGSY)
with effect from 01st April 2013. Later on the
scheme was renamed as DAY-NRLM (Deendayal
Antyodaya Yojana - National Rural Livelihoods
Mission) w.e.f. March 29, 2016. The objective of
the scheme is for promoting poverty reduction
through building strong institutions of the poor,
10

particularly women, and enabling these
institutions to access a range of financial services
and livelihoods.
KEY FEATURES OF NRLM:
• Universal Social Mobilization: At least one
member from each identified rural poor
household, preferably a woman, is to be
brought under the Self-Help Group (SHG)
network in a time bound manner. At least
50% of the beneficiaries should be SC/STs,
15% are minorities and 3% should be persons
with disability, while keeping in view the
ultimate target of 100% coverage of all
eligible households.
• Participatory Identification of poor (PIP):
The needy poor to be identified as households
with at least one deprivation criteria as per
Socio-Economic and Caste Census (SECC).
DAY- NRLM would also undertake
community-based process i.e. participation of
the poor in the process of identifying the
target group. The list finalized after PIP
process would be vetted by the Gram Sabha
and approved by the Gram Panchayat. Up to
30% of the total membership of the SHGs may
be from among the population marginally
above the poverty line, subject to the approval
of other members of the group.
• Promotion of Institutions of the poor:
Strong institutions of the poor such as SHGs
and their village level and higher-level
federations are necessary to provide space,
voice and resources for the poor and for
reducing their dependence on external
agencies.
• Universal Financial Inclusion: DAY-NRLM
would work towards achieving universal
financial inclusion, beyond to all the poor
households, SHGs and their federations.
• Funding Pattern: DAY-NRLM is a Centrally
Sponsored Scheme and the financing of the
programme would be shared between the
Centre and the States in the ratio of 60:40
(90:10 in case of North Eastern States
including Sikkim; completely from the Centre
in case of UTs).
THE BANKING & FINANCIAL UPDATES OCTOBER 2020
The Banking Updates
• Phased Implementation: A phased
implementation approach is adopted in DAY-
NRLM which will reach to all districts by the
end of 12th Five-year Plan.
• Intensive blocks. The blocks that are taken
up for implementation of DAY-NRLM,
‘intensive blocks’, would have access to a full
complement of trained professional staff and
cover a whole range of activities of universal
and intense social and financial inclusion,
livelihoods, partnerships etc. However, in the
remaining blocks or non-intensive blocks, the
activities may be limited in scope and
intensity.
SHGs AND THEIR FEDERATIONS: The SHGs
under NRLM should be all Women SHGs except
for groups to be formed with Persons with
disabilities, and other special categories like elder,
transgender etc, where DAY-NRLM may have both
men and women in the Self-Help Groups. Number
of Members in the groups should be 10-20
persons except in special cases i.e. groups in the
difficult areas, groups with disabled persons, and
groups formed in remote tribal areas, this number
may be a minimum of 5 persons. SHG is an
informal group and registration is not mandatory,
however Federations of Self-Help Groups formed
at Village, Gram Panchayat, Cluster or higher level
may be registered under appropriate acts
prevailing in their respective states.
FINANCIAL ASSISTANCE TO THE SHGs:
Revolving Fund: MoRD would provide
Revolving Fund to SHGs, as a corpus, with a
minimum of ₹10,000 and up to a maximum of
₹15,000 per SHG, only to those SHGs who have
not received any RF earlier, in existence for a
minimum period of 3/6 months and follow the
norms of good SHGs, i.e. they follow ‘Panchasutra’
– regular meetings, regular savings, regular
internal lending, regular recoveries and
maintenance of proper books of accounts. The
purpose of RF is to strengthen their institutional
and financial management capacity and build a
good credit history within the group.
11

Capital Subsidy: There will be no capital subsidy
under DAY-NRLM.
Community Investment Support Fund (CIF):
CIF would be provided by MoRD to the SHGs
promoted under DAY – NRLM and would be
routed through the Village level/ Cluster level
Federations, to advance loans to the SHGs and/or
to undertake the common/collective socio-
economic activities.
INTEREST SUBVENTION:
DAY-NRLM has a provision for interest
subvention, to cover the difference between the
Lending Rate of the banks and 7%, on all credit
from the banks/ financial institutions availed by
women SHGs, for a maximum of ₹ 300,000/- per
SHG. This would be available across the country in
two ways:
❖ In 250 identified districts, banks may lend to
the women SHGs @7% up to an aggregated
loan amount of ₹300,000/-. The banks would
be subvented to the extent of difference
between the Weighted Average Interest
Charged and 7%, subject to the maximum
limit of 5.5%. An additional interest
subvention of 3% is also available on prompt
repayment by the SHGs, reducing the effective
rate of interest to 4%.
❖ In the remaining districts, the banks may lend
at their respective lending rates, applicable to
SHGs. In these districts, all women SHGs
under DAY– NRLM would be eligible for
interest subvention on prompt repayment.
The difference between the bank lending
rates and 7% for loans up to ₹300,000/-
subject to a maximum limit of 5.5%, would be
subvented directly in the loan accounts of the
SHGs by the SRLMs. This part of the scheme
would be operationalized by the SRLMs.
An SHG account would be considered prompt
payee if it satisfies the following criterion;
a. For Cash Credit Limit: Outstanding balance
shall not have remained in excess of the
limit/drawing power continuously for more than
30 days. There should be regular credit and debits
in the accounts. In any case there shall be at least
THE BANKING & FINANCIAL UPDATES OCTOBER 2020
The Banking Updates
one customer induced credit during a month and
that should be sufficient to cover the interest
debited during the month.
b. For Term loans: A term loan account where all
of the interest payments and/or instalments of
principal were paid within 30 days of the due date
during the tenure of the loan, would be
considered as an account having prompt payment.
The banks should credit the amount of 3%
interest subvention to the eligible prompt payee
SHG loan accounts and seek the reimbursement
after the end of reporting quarter.
The funding for the scheme would be met out of
Central Allocation under DAY- NRLM
OPENING OF SAVINGS ACCOUNT OF SHGs: KYC
verification of only the office bearers shall suffice
for opening of savings bank account. Banks may
not insist on Permanent Account Number (PAN)
of SHGs at the time of opening of account or
transactions and may accept declaration in Form
No 60 as may be required. While opening of
accounts, Customer Due Diligence (CDD) of all the
members of SHG shall not be required and CDD of
only the office bearers shall suffice. At the time of
credit linking of SHGs, banks may undertake KYC
verification of all the members in the SHG.
OPENING OF SAVINGS ACCOUNT OF
FEDERATION OF SHGS: Banks are advised to
open savings account of Federations of SHGs at
village, Gram Panchayat, Cluster or higher level.
These accounts may be categorized as savings
account for ‘Association of persons. The ‘Know
Your Customer’ (KYC) norms for the signatories of
such accounts as specified from time to time by
Reserve Bank of India would be applicable.
LENDING NORMS
Eligibility:
• SHGs should be in active existence at least
since the last 6 months as per the books of
account of SHGs and not from the date of
opening of S/B account.
• SHGs should be practicing ‘Panchasutras’ i.e.
Regular meetings; Regular savings; Regular
12

inter-loaning; Timely repayment; and Up-to-
date books of accounts;
• Qualified as per grading norms fixed by
NABARD. As and when the federations of the
SHGs come to existence, the grading exercise
may be done by the Federations to support
the banks.
• The existing defunct SHGs are also eligible for
credit if they are revived and continue to be
active for a minimum period of 3 months.
Loan Amount: SHGs may avail either Term Loan
(TL) or a Cash Credit Limit (CCL) loan or both
based on the need. In case of need, additional loan
may be sanctioned even though the previous loan
is outstanding, based on the repayment behaviour
and performance of the SHG.
Cash Credit Limit: Minimum limit to be
sanctioned to eligible SHGs is Rs.6.00 Lacs for a
period of 3 years with Yearly Drawing Power
(DP). The drawing power may be enhanced
annually based on the repayment performance of
the SHG. The drawing power may be calculated as
follows:
• DP for First Year: 6 times of the existing
corpus or minimum of ₹1 lakh, whichever is
higher.
• DP for Second Year: 8 times of the corpus at
the time review/ enhancement or minimum of
₹2 lakh, whichever is higher.
• DP for Third Year: Minimum of ₹6 lakh based
on the Micro credit plan prepared by SHG and
appraised by the Federations /Support agency
and the previous credit history.
• DP for Fourth Year onwards: Above ₹6 lakh,
based on the Micro credit plan prepared by
SHG and appraised by the Federations
/Support agency and the previous credit
History.
Term Loan: In case of Term Loan, banks are
advised to sanction loan amount in doses as
mentioned below:
• First Dose: 6 times of the existing corpus or
minimum of ₹1 lakh, whichever is higher.
• Second Dose: 8 times of the existing corpus or
minimum of ₹2 lakh, whichever is higher.
THE BANKING & FINANCIAL UPDATES OCTOBER 2020
The Banking Updates
• Third Dose: Minimum of ₹6 lakh, based on the
Micro credit plan prepared by the SHGs and
appraised by the Federations /Support agency
and the previous credit history.
• Fourth Dose onwards: Above ₹6 lakh, based
on the Micro credit plan prepared by the SHGs
and appraised by the Federations /Support
agency and the previous credit History.
Corpus is inclusive of revolving funds, if any,
received by that SHG, its own savings, interest
earning by SHG from on-lending to its members,
income from other sources, and funds from other
sources in case of promotion by other
institutes/NGOs.
Purpose of Loan: The loan amount would be
distributed among members based on the Micro
Credit Plan (MCP) prepared by the SHGs. The
loans may be used by members for meeting social
needs, high cost debt swapping, construction or
repair of house, construction of toilets and taking
up sustainable livelihoods by the individual
members within the SHGs or to finance any viable
common activity started by the SHGs. At least
50% of loans above ₹2 lakh, 75% of loans above
₹4 lakh and at least 85% of loans above ₹6 lakh be
used primarily for income generating productive
purposes. Micro Credit Plan (MCP) prepared by
SHGs would form the basis for determining the
purpose and usage of loans.
Repayment Schedule for Term Loan: The
repayment of loan may be in monthly / quarterly
instalments. The First dose of loan may be repaid
in 24-36 months, 2nd dose in 36-48 months, 3rd
dose in 48-60 months and the 4th dose should be
repaid in between 60-84 months based on the
cash flow.
Margin and Collateral: No collateral and margin
should be insisted for credit limit up to ₹10.00
lakh to the SHGs. (Although the collateral free loan
limit is enhanced to Rs.20.00 Lacs under
Atmanirbhar Package by GoI, Guidelines from RBI
is yet to come)
Dealing with Defaulters: Wilful defaulters
should not be financed under DAY-NRLM. In case
wilful defaulters are members of a group, they
13
 The Banking Updates

might be allowed to benefit from the thrift and c) ₹ 50, 000 and ₹ 5,00,000
credit activities of the group, but at the stage of d) ₹ 10, 000 and ₹ 1,00,000
accessing bank loan by SHG, the wilful defaulters 4. The Chief Compliance Officer of Banks
should not have the benefit of such bank loan until shall be a senior executive of the bank,
the outstanding loans are repaid. However, banks preferably in the rank of a _____________ or an
should not deny loan to entire SHG on the pretext equivalent position.
that spouse or other family members of individual a) Dy. General Manager
members of SHG being a defaulter with the bank. b) Executive Director
Further, non-wilful defaulters should not be c) General Manager
debarred from receiving the loan. d) Chief General Manager
5. Under the Resolution framework for
Post Sanction Follow-up: Loan pass books or
COVID related stress for other than MSME
statement of accounts in regional languages may
and retail borrowers, the current ratio and
be issued to the SHGs. Bank branches may
DSCR in all cases shall be ______ and above,
observe one fixed day in a fortnight to enable the
and Average DSCR shall be _____ and above.
staff to go to the field and attend the meetings of
a) 1.33 and 1.50
the SHGs and Federations.
b) 0.80 and 1.10
c) 1.10 and 1.25
MULTIPLE CHOICE QUESTIONS d) 1.00 and 1.20
6. RBI in consultation with the Government
of India, has fixed the limits for Ways and
1. Banks in India are required to implement
Means Advances (WMA) for the second half
the guidelines of Net Stable Funding Ratio
of the financial year 2020-21 at
(NSFR) with effect from_____
₹__________________.
a) 01 January 2021
a) ₹1,00,000 crore
b) 01 April 2021
b) ₹1,25,000 crore
c) 01 June 2021
c) ₹1,50,000 crore
d) None of the above
d) ₹1,75,000 crore
2. As per RBI directives, Positive Pay System
7. As per amendments to Foreign Trade
in clearing of High value Cheques shall be
Policy, Govt. of India is going to withdraw
implemented from:
the scheme of reward granted to an IEC
a) January 01, 2021
holder under the Merchandise Exports
b) 01 April 2021
from India Scheme (MEIS) w.e.f;
c) 01 June 2021
a) 01.09.2020
d) None of the above
b) 01.01.2021
3. Under positive Pay system for high value
c) 01.04.2021
clearing, reconfirming key details of large
d) 01.07.2021
value cheques from the issuer of the
8. GoI introduced Commemorative Coin with
cheque, NPCI shall enable it for all account
denomination of Rs.75/- on the Occasion of
holders issuing cheques for amounts of
75th Anniversary of which Organization?
₹___________ and above at the discretion of
a) Asian Development Bank
the account holder and banks may
b) Indian Council of Agriculture and
consider making it mandatory in case of
Research
cheques for amounts of ₹____________ and
c) Food and Agriculture Organization
above.
d) IMF
a) ₹ 1,00, 000 and ₹ 5,00,000
9. Which Bank has become the first Bank in
b) ₹ 25, 000 and ₹ 2,00,000
India to implement the document

THE BANKING & FINANCIAL UPDATES OCTOBER 2020 14

 The Banking Updates

embedding facility with LC / BG messages 15. Which Public Sector Bank has topped the
over SFMS Platform? EASE Banking Reforms Index 2.0 released
a. SBI recently by IBA?
b. HDFC Bank a) Bank of Baroda
c. IDBI Bank b) SBI
d. Yes Bank c) PNB
10. Moody’s forecasts India’s GDP at _________% d) Bank of India
for FY21. 16. Flipkart has tied up with which insurance
a. -11.50% company to launch Cyber Insurance Cover?
b. -9.00% a) Bajaj Allianz
c. -8.50% b) HDFC Ergo
d. -10.25% c) TATA AIA
11. RBI has roped which Bollywood actor for d) New India Assurance Co Ltd.
the customer awareness campaign to 17. Titan has partnered with which Bank to
prevent gullible account holders from launch India’s first contactless payment
being duped by fraudsters? watches named “Titan Pay”?
a) Akshya Kumar a) ICICI Bank
b) Shahrukh Khan b) HDFC Bank
c) Amir Khan c) SBI
d) Amitabh Bachchan d) Bank of Baroda
12. IRDAI has identified which of the following 18. Who has been named as named as the 1st
Insurance companies as Domestic female CEO of Citigroup?
Systemically Important Insurers (D-SIIs)? a) Mike Tony
a) Life Insurance Corporation of India (LIC), b) Jane Fraser
b) General Insurance Corporation of India c) Indira Noyee
(GIC) d) None of the above
c) New India Assurance Company 19. On which day, Antyodaya Diwas is being
d) All of the above observed in the country?
13. Which country has become the first a) 25th September
country in the world to issue a sovereign b) 27 August
bond linked to the sustainable c) 01 November
development goals set by the United d) 01 December
Nations and has raised EUR 750 million 20. India has been placed at which rank in the
($890 million) through such bonds? World Bank’s Human Capital Index?
a) USA a) 101th
b) Israil b) 76th
c) Mexico c) 106th
d) Indonesia d) 116th
14. Which company has launched “Central 21. India has been ranked ______ position
Bank Digital Currencies” (CBDCs), a Virtual “Global Economic Freedom Index 2020
Testing Environment for Central Banks to Annual Report” by Canada’s Fraser
Assess and Explore National Digital Institute.
Currencies? a) 88th
a) VISA b) 105th
b) Mastercard c) 111th
c) American Express d) 128th
d) NPCI

THE BANKING & FINANCIAL UPDATES OCTOBER 2020 15

 The Banking Updates

22. India ranks _________ rank in Global

RECALLED QUESTIONS OF
Innovation Index 2020
a) 37th VARIOUS BANK PROMOTION
b) 52nd TESTS
c) 78th
d) 48th
23. Asian Development Bank projects India’s 1. What is the extent of guarantee cover
GDP at ______ in FY21. available under Credit Guarantee Scheme for
Stand Up India (CGSSI) ? (Ans. 80% of the
a) -10.50%
amount in default for credit facility above
b) -9.00%
Rs.10 lakh and upto Rs.50 lakh, subject to a
c) -11.25%
maximum of Rs.40 lakh. For credit facility
d) -7.60% above Rs.50 lakh and upto Rs.100 lakh -
24. Which organization has recently stopped Rs.40 lakh plus 50% of amount in default
the publication of its “Ease of Doing above Rs.50 lakh subject to overall ceiling
Business” report to probe data collection of Rs.65 lakh of the amount in default.)
irregularities in the annual ranking of 2. Rearing/Farming of Fresh Water Fishes is
countries’ business and investment called: (Ans. Aquaculture)
climates? 3. What is the Full Form of TReDS ? (Ans. Trade
a) IMF Receivables e-Discounting System)
b) World Bank 4. Loans granted to units in the KVI sector will
c) UNDP be eligible for classification under: (Ans.
d) None of the above Micro Enterprises under MSME)
25. Financial Action Task Force’s Asia Pacific 5. At least what percentage of loans granted to
SHGs under NRLM to be used primarily for
Group has placed which country on the
income generating productive purposes?
blacklist?
(Ans. 50% of loans above ₹2 lakh, 75% of
a) Pakistan
loans above ₹4 lakh and 85% of loans
b) Afganistan above ₹6 lakh)
c) Iran 6. Section 11 of Banking Regulation Act deals
d) Bangladesh with: (Ans. minimum paid-up capital and
reserves required by a Banking Company)
ANSWERS TO MCQ: 7. Power of Court to try cases summarily for
1 2 3 4 5 6 7 8 9 10 offences under NI Act is defined in : (Section
B A C C D B B C C A 143 of NI Act)
11 12 13 14 15 16 17 18 19 20 8. Amount of External Commercial Borrowing
D D C B A A C B A D limit per Start-up in a financial year is limited
21 22 23 24 25 to: (Ans. USD 3 million or equivalent)
B D B B A 9. Food Credit is classified under which sector as
per RBI Classification? (Ans. Priority Sector)
10. What should be the Risk Weight for exposure
of Bank to NGFCs? (Ans. Bank exposures to
NBFCs, excluding core investment
companies, will be risk weighted according
to ratings assigned by agencies. Exposures
to CICs, rated as well as unrated, will
continue to be risk-weighted at 100%)
11. Crystallisation of foreign currency import bills
drawn under letters of credit shall be done
into Rupee liability within what period? (Ans.

THE BANKING & FINANCIAL UPDATES OCTOBER 2020 16


On the 10th day from the date of receipt of
documents in the case of demand bills and
on the due date in the case of usance bills.)
12. What is the maximum Turnover Criteria for
Micro Enterprises under MSME? (Ans.
Rs.5.00 crores)
13. CGTMSE may reject the claim if the account
turns NPA within a period of _____from the
date of revival of account. (Ans. 180 days)
14. At least _____% of the beneficiaries under
NRLM should be SC/STs (Ans. 50%)
15. Under second Financial assistance in PMEGP,
the maximum cost of the project/unit
admissible under Service/Trading sector for
up-gradation is _____(Rs.25 lakhs)
16. Appeal against the award or decision of the
Banking Ombudsman to be made within a
period of _____________(Ans. 30 days of the
date of receipt of the Award)
17. What is the amount that can be financed to an
SHG under NRLM in second dose? (Ans. 8
times of the existing corpus or minimum of
₹2 lakh, whichever is higher)
18. Crystallization of export bills sent for
collection to be done at which rate? (Ans. TT
Buying rate)
19. In hybrid security model under CGTMSE
Coverage, CGTMSE will have what type of
charge on Primary and Collateral Securities?
(Ans. Paripassu Charge for Primary
Security and 2nd charge on collateral
security)
20. What is the rate of incentive payable to Bank
Branches for exchange of soiled notes up to
denomination ₹ 50 over the counter? (Ans. ₹
2 per packet)
21. The name of Portal used for reporting
Currency chest transactions to RBI is: (Ans.
CyM – CC portal)
22. What is the penalty payable by Bank to RBI
for detection of counterfeit notes in soiled
note remittance and chest balance? (Ans.
100% of the notional value of Counterfeit
Notes, in addition to the recovery of loss to
the extent of the notional value of such
notes)
23. What is the penalty payable by Bank to RBI
for detection of mutilated notes in soiled note
remittance and chest balance? (Ans. ₹ 50/-
THE BANKING & FINANCIAL UPDATES OCTOBER 2020
The Banking Updates
per piece irrespective of the denomination
in addition to recovery of amount of loss.)
24. Banks should settle the deceased claims of the
deceased depositors accounts within _______
days from the date of receipt of the claim
along with all required documents. (Ans. 15
days)
25. Under 2nd dose financial assistance under
PMEGP for existing units, maximum cost of
the project/unit admissible under
manufacturing sector for up-gradation is;
(Ans. Rs.1.00 Crore)
26. Under 2nd dose financial assistance under
PMEGP for existing units, the rate of subsidy
is; (Ans. 15% (20% in NER and Hill States))
27. Under 2nd dose financial assistance under
PMEGP for existing units, what is the
percentage of contribution required by the
beneficiary? (Ans. 10% for all categories)
28. Maximum Overdraft limit permissible in
PMJDY Accounts is; (Ans. Rs.10,000/-)
29. Who is eligible for remittance abroad under
Liberalised Remittance Scheme? (Ans.
Resident individuals only. HUF and
firms/companies are not permitted)
30. Bank credit to registered NBFCs (other than
MFIs) for on-lending to Micro & Small
enterprises will be eligible for classification as
priority sector subject to the maximum loan
amount per borrower doesn’t exceed;
(Rs.20.00 Lacs)
31. For setting up new Currency Chests in areas
other than hilly / inaccessible places, the
minimum area of strong room should be
_________ and the minimum Processing capacity
of __________ pieces of banknotes per day. (Ans.
1500 square feet and 6,60,000)
32. A Document is defined under which act? (Ans.
Section 3 of Indian Evidence Act, 1872)
33. Section 26C of SARFAESI relates to; (Ans.
Effect of registration of charge on CERSAI)
34. Under GST, e-Way bill is mandatory for inter
state transportation of goods where value of
goods/bill exceeds Rs________ (Rs.50,000/-)
35. Contactless payment through card can be
made by placing the card at close proximity to
the device using Near Field Communication
within a maximum distance of ___________ (Ans.
4.00 cm)
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36. After issue of demand notice U/s 13(2) of
SARFAESI Act, if the borrower makes any
representation or raises any objection to the
notice, the Authorized Officer shall reply
within ______ days of receipt of such
representation or objection (Ans. 15 days)
37. What is the maximum all-in-cost per annum
for buyers’ credit as per RBI norms? (Ans.
Benchmark rate plus 250 bps spread)
38. Bank finance to agriculture infrastructure
projects up to what amount can be classified
under Priority Sector Lending? (Ans. 100.00
crores)
39. What is the target for Banks to achieve finance
to Micro Enterprises? (Ans. 7.5% of ANBC or
CBOE whichever is higher)
40. As per the recent guidelines, what is the
admissible age to avail the benefits of Senior
Citizens Deposit Scheme for Retired personal
of Defence Services excluding civilians? (Ans.
On attaining age of 50 Years.)
41. Type of partnership, where there is no fixed
period has been agreed upon for the duration
of the partnership; and there is no provision
made as to the determination of the
partnership is known as; (Ans. Partnership
at Will)
42. Local address proof should be obtained within
30 days of opening of NRO account of foreign
students and the said local address is verified.
Pending the verification of address, the
account shall be operated with a condition of
allowing foreign remittances not exceeding
USD 1,000 or equivalent into the account and
a cap of Rs________ on aggregate in the same,
during the 30-day period. (Ans. Rs.50000/-)
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THE BANKING & FINANCIAL UPDATES OCTOBER 2020
The Banking Updates
43. Under NRLM, the group should have at least
what percentage of members from poor
families? (Ans. 70%)
44. Bank credit to NBFCs (including HFCs) for on-
lending under Agriculture, MSME and Housing
up to certain limit is allowed for classification
under Priority Sector up to an overall limit of
______percent of individual bank’s total
priority sector lending. (Ans. 5%)
45. No margin to be stipulated for Bank loans
under agriculture up to what amount? (Ans.
1.60 Lacs)
46. For default in payment of monthly
contributions under Atal Pension Yojana,
what is the amount of penalty to be charged
for monthly contributions worth upto Rs.
100? (Ans. Re. 1 per month)
47. In case of OTP based account opening, the
maximum amount of Term Loan that can be
provided is; (Rs.60000/-)
48. Under Gold monetization scheme, where the
redemption of the deposit is in gold, an
administrative charge at a rate of _______% of
the notional redemption amount in terms of
INR shall be collected from the depositor.
(Ans. 0.2%)
49. A user can send up to Rs ___________ per
transaction and a maximum of Rs ____________
per day for one bank account linked with
BHIM. (Ans. Rs. 40000/- and Rs.40000/-)
50. In case of appeal against conviction u/s 138
awarded by the trial court, the drawer of a
cheque should deposit minimum percentage
sum of what percentage of the compensation
awarded? (Ans. 20%)
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