GENERAL BANKING FOR INTERVIEW

These are questions all candidate should know about

banking.
Subject wise questions for agriculture, MBA/B,COM,B tech
graduates are available to individual candidate on demand.

1 Functions of RBI?
Monetary policy (inflation management, liquidity management),
supervision of bank (risk, capital), government bank, lender of last
resort to banks, not issue, licencing of banks, foreign exchange
management, settlement bank for the banking system,
appointment of board of directors of private sector banks,
Complaint redressal mechanism.
2. What is monetary policy committee?
It is a 6 member committee consists of 3 members from RBI
including the governor and 3 from government nominee. They are
supposed to initiative measures like changing the policy rates so
that the inflation and liquidity is maintained for the robust growth
of the economy
3 The objective of the committee is to maintain the inflation at 4%,
but not below 2% and not above 6 percent during the period from
2016 to 2021
4 How they control it?
Through periodical reviewing, they asses the inflation and control
it by changing the policy rate or policy ratios. By changing the
rates or ratios, the cost of funding of bank increases or decreases
which affects its lending rate. As the lending rate increases, owing
to an increase in rates/ratios, the interest rates increases , so the
off take of credit. Money become dearer, which reduce the
purchasing power and demand for goods. The reduction in
demand for goods are expected to result in decrease in inflation.

Another method is through open market operation. If the

government want to squeeze the money supply with banks, they
offer govt securities to banks at a higher rate so that banks are
tempted to invest there and the lending commitment is reduced to
that extent and thereby the liquidity in the economy.
 The government have sharpened its tools further by persuading
the banks to link their lending rate with repos rate so that the
change in repo rate will work as a remote control in controlling
banks lending rate.

5 What are the other methods of monetary control?

It is known as selective credit control. Change in rates /ratios as
discussed above control the money supply in economy across the
board and affect the inflation/or recession as the case may be. In
this case, a particular commodity price rises like sugar , etc. The
RBI instruct the bank to control the money pumped to this sector
by way of loan by increasing the margin to be brought in by
borrowers. So the money supply with manufacturers decreases
and they are forced to pump more sugar to market.

6 RBI issues currency notes and coins which are controlled by

government of India including 2 rupee note and 1 rupee notes. Of
late, government have stopped printing of 5 rupee note and
below. These notes and coins are distributed through currency
chests all over the India
6A What is SLR/CRR
To maintain the liquidity of banks , banks are to keep certain
portion of their deposits in the form of liquid assets. If they keep
in the form of cash with Reserve Bank of India, it is known as CRR.
Now it is 4% for which reserve bank of India pays NO interest.
Another 19.25% are to be invested in liquid bonds and govt
securities.
RBI imposes penalty for non maintenance of both these ratios.
7 What is a currency chest?
Currency go-down of RBI maintained by commercial banks at
various strategic locations. The expenses for maintaining such
chest are borne by RBI
8 Banking system:
1)State bank of India- public sector bank where central govt hold
more than 51% share. Came into existence by State bank of India
Act 1955 in the parliament. IT IS NOT A NATIONALISED BANK
2)Nationalised Bank came into existence by nationalisation of 14
banks in 1969 and 6 more banks in 1980, It is a public sector bank
as central govt hold more than 51% share. There were 20
nationalised bank. Now nationalised banks are on the way of
consolidation which is discussed elsewhere.
3)Regional Rural bank (now known as Gramin bank) came into
existence in 1975 as per RRB act. IT IS NOT A PUBLIC SECTOR
BANK AS OF NOW.
4)New Private sector Bank.
Those bank which came into existence after 1990( economic
liberalisation) in the computer platform and registered with
companies act. Hence the word Ltd is added with the names.
Other banks discussed above do not add LTD with their names as
there are not came into existence by registering with companies
Act.
5) Old Private sector bank: The private sector in existence since
long like south Indian bank, Federal bank etc are known as Old
private sector bank and registered as [per companies act. Hence
Ltd is also added with names.
6) Foreign Bank: Bank incorporated outside India and licenced by
RBI to do banking in India. Every branch has to keep Rs.20 lakh as
reserve money with RBI and every year 20% of their profit are to
be deposited with RBI.
Of late RBI is allowing subsidiary route too. They can launch a
subsidiary in India.
7)IDBI Bank Ltd: A public sector bank registered as per companies
act. Govt holding were more than 51%. Subsequently LIC of India
acquired the 51% share holding and became a subsidiary of LIC.
Hence IDBI bank is not a public sector bank.
8) Co operate banking system:
Three tyre system. State co operative bank at apex level, district co
operative bank at district level and service co operative bank at
village or taluk level. If such a Service co operative bank in a
Municipal or corporation area is established, it is known as Urban
cooperative bank.
9. Small finance Bank: To accelerate financial inclusion, RBI have
given licence to Micro finance institutions and similar organisation
to do banking business in a limited way. They can under take
lending and deposit taking with some restrictions. Example ESAF
bank
10. Payment Bank: Similarly banking licences were issued to
Telcom companies and post office to run banks only to take
deposit and remittances. Such banks are known as Payment. Using
technology, Telcom companies are expected to run bank cost
 effective. They can not lend.
9 What you mean by Schedule bank? Those banks which are listed
with second schedule of Reserve bank of India Act are scheduled
bank. In India, district co operative bank, service co operative
bank urbank bank are not scheduled bank. But state co operative
bank is scheduled bank. IF the total deposit of a Urban bank is
more than 750 crore, they are also a scheduled bank.
10 What is open market operation?
It is the sale and purchase of government securities and treasury bills by
RBI or the central bank of the country.  The objective of OMO is to
regulate the money supply in the economy. 
When the RBI wants to increase the money supply in the economy, it
purchases the government securities from the market and it sells
government securities to suck out liquidity from the system. 
RBI carries out the OMO through commercial banks and does not
directly deal with the public.

11 What are policy ratios and policy rates

CRR and SLR are policy ratios and Repos, Reverse Repos, MSF,
commonly known as liquidity adjustment Facility(LAF) are policy
rate
12 What are bank rate? Please do not confuse with lending rate of
bank. It has no connection with banks rates. It is a RBI referral
rate which has little relevance with present day banking. It is the
rate at which RBI rediscount the genuine trade bills of commercial
banks.
13 What is the lending rate of bank is known as? It is known as Base
rate which are impoverished to MCLR rate. Both run concurrently.
Over a period of time, MCLR will replace Base rate. Of late banks
are persuaded to link their rate with Repos, so that RBI will have a
direct control over banks lending rate.
14 What is lead bank scheme.? Upon nationalisation of banks in
1969, a bank in every district was given responsibility to co
ordinate implementation of the government policy/programme
like rural banking, financial inclusion, etc. They convene the
meeting of bankers periodically and discuss various issues like
progress in priority sector lending, Annual action plan etc.
15 Various deposit Accouint: SB account- account of individual.
Interest is calculated on daily basis and paid quarterly. Individual
banks can fix the rate.
Current deposit account: Account of business people with no
interest and no restrictions of number of operations
 Term deposit : Deposit for pre determined period (Various types of
fixed deposits are Short deposit(7 days to 179 days), Fixed deposit
receipt( 6 months to 10 years). Fixed Deposit interest is paid
quarterly. At the depositors option it can be drawn monthly,
quarterly, or along with maturity). If deposit is made at monthly
intervals of fixed instalments, it is called RD.
16 Account with no minimum balance, restricted withdrawal, no
restrictions for deposit are called BSBDA Account. (Basic Saving
Bank deposit account>
If such account is not KYC complied , it is called Small account.
Account holders are supposed to comply the KYC within one year,
or at the banks option one more year. There are maximum balance
restrictions for Small account(Rs.50000)
17 Business correspondent(BC) and Business facilitators(BF)
Banks outsourced agent to spread banking habit among selected
areas. BC can receive and pay cash with Micro ATM(POS machine)
Business facilitators( BF) can not handle cash but do all other work
BC doing like customising and explaining banks schemes and
helping them to link with bank.
18 What is Priority Sector? Government desires that the banks
lending activities are to be regulated so that the needy sector of
the economy should get adequate credit. Hence government have
asked to lend 40% of their lendable fund(technically named as
Adjusted Net Bank Credit (ANBC) to those sectors like Agriculture,
SME, Housing finance, Education, SHG, renewal source of energy
etc. These sectors are known as priority sector and a minimum of
40% to be lend to this sector.(Sub targets:18% to Agriculture, 10 %
to weaker sections, 7.5 percent to Micro sector etc.
19 What is the capital required for a commercial bank:
Normally 500 crore
Small and Payment bank :Rs.200 crore.
Foreign Bank: To start with , they need to deposit Rs.20 lacs with
RBI and every year 20% of their reserve to be deposited with RBI.
Of late for a new foreign bank, they have to register a standalone
subsidiary of the main bank abroad. The existing bank can
continue old practice
20 What is NPA? If any loan become overdue for more than 90
days(excepting crop loans under KCC), owing to non payment of
interest or instalment, it is non as Non Performance Asset. Bank
can not charge interest from date of NPA and immediate recovery
 measures are to be taken. Additionally bank has to make provision
for the probable loss as per RBI instructions. However this does
not mean, customer has got any concession of rate of interest.
They need to pay the uncharged interest at the time of repayment.
Depending on the age of the loan and realisable security available,
it is classified to Substandard Asset, Doubt ful Asset and Loss
Asset.Regular accounts are known as Standard Asset.
21 Who is an NRI and what is an NRE Account?
An Indian national going abroad for job, occupation,education or
migration, and staying there for more than 180 days, he is an NRI.
The money brought in by him from abroad is credited to NRE
Account. Such account is not subject to Income tax and he can
take back the money to abroad anytime he want.
If the Same person is having some income generated in India, it is
kept in NRO Account which is taxable .
If he desires he can keep the money from abroad in foreign
currency too with banks in India which is non as FCNR account.
This facility is available to PIO(Person of Indian Origin) too. A PIO
is a person who is a foreign citizen, but his parents or grant parents
were an Indian citizen at any point of time.
22 IFSC Code?
It is an 11 digit alpha numeric code to identify each branch of
commercial bank who are participating in NEFT/RTGS transaction.
23 MICR code?
It is a nine digit code for each branch of bank which are used to
electronically sort cheques bank wise /branch wise in interbank
clearing house. This help faster sorting and clearing of cheques in
large numbers.
24 Swift ?
The full form is Society for world wide interbank financial
telecommunication. It is a mechanism to send financial messages
between member bank internationally. It is secured, error free,
avoid all possible duplication, multi layer authenticated and fast.
Swift is headquartered at Paris. Each branch having swift
connectivity is having a unique code.
25 NEFT?
It is a faster way of sending interbank financial remittance from
one branch of bank to other. NO upper limit. Though it has no
maximum limit, since there is a faster way(RTGS), normally it is
used to remit amount up to Rs.2 lac. Cash transactions are
 permitted only upto Rs.50000/-. Each branch is identified through
IFSC Code. It happens batch wise at fixed time intervals. Timings
have been changed to 7 am to 8 p.m. since august 2019 and it has
made free of cost.
26 RTGS?
Faster way of remitting high value interbank remittance from one
branch account to another using IFSC code and account no. as
identifier. Normally amount beyond Rs.2 lac is used for RTGS. It
happens real time, transaction to transaction. Timings have been
changed to 7 am to 8 p.m. since august 2019 and it has made free
of cost.
27 Micro ATM- Using POS machine
Bank ATM: Owned and operated by individual banks
Brown Label ATM: Outsourced to third parties on behalf of banks
White Label: Owned and operated by NBFCs, non bank entities.
Not related by banks
All ATMS can be used by any bank customer who owns a card
having VISa, Master, Rupay logo.(Example ATMS run by Tata
telecommunications, prism payments, Muthot etc)
28 Payment cards:
For your understanding purpose, there are three types of payment
cards. Debit card or ATM card which is a no risk card. If you have
balance in your account, you can draw. This is known as Electronic
cheque book. Credit cards are normally issued to people who are
having verifying nature of income and a credit limit is embedded in
it. YOU can purchase goods on credit. Then pre paid card like gift
card.
29 Risks
There are three major risks identified by Basel committee which
they are expected to manage. They are Credit Risk(probability of
default of loans), Market risk( risk owing to interest and foreign
exchange rate), and operation risk(risk owing to people , system
and procedure)
30 CAR/CRAR: Capital adequacy ratio or Capital to risk weighted Asset
Ratio.
Both are same. The risk discussed in column NO. 29 are to to be
measured and appropriate capital to be provided in proportion to
the risk assessed. This is the minimum capital each bank is
expected to maintain
31 Basel Accord: Basel I, II, III
 Bank for International settlement(BIS) is an international body
situated at Basel, Switzerland. They issue guidelines on risk and
risk management in the form of Basel I, Basel II and latest one is
Basel III to be implemented by bank by 01.04.2019. For
implementation of Basel III banks are supposed raise huge amount
of capital, which is one of the challenges commercial banks in India
faces today.
32 Banking Ombudsman:
Banks have got a robust complaint redressal mechanism. All
branch are to receive complaints and an acknowledged to be
provided. Within 30 days, a decision on the complaint to be taken.
If the complaint is not satisfactory, the borrower can approach
Ombudsman against the Bank. Ombudsman is a reconciliatory
body appointed by RBI. Of late each bank is having its own
Ombudsman, before it is referred to Banking Ombudsman.
Now of late, NBFC are also having ombudsman at four major cities.

Ombuds man scheme is now integrated. Now Banking

ombudsman, Digital banking ombudsman, NBFC ombudsman are
integrated and made on line and head quartered at Goregaon.
You can complain on line. You will be provide with a reference
number wtih which you can track the status of your complaint.
33 Mortgage and Reverse Mortgage:
Mortgage is created as per Transfer of Properties Act, when bank
lend money, taking landed property as security. Reverse
Mortgage is the same procedure, but given to senior citizen, in
instalments as pension where no repayment is stipulated. When
the borrower dies, such property is sold and loan is realised.
34 Negotiable instruments are instruments representing payment
obligation, which can be transferred by endorsement and delivery.
The major negotiable instruments are DPNote (taken when loan
are given as evidence of loan), Bills of Exchange ( normally
associated with mercantile transactions) and Cheques and drafts.
35 Development Banks: We have got NABARD, SIDBI, MUDRA,
Export import bank, National Housing bank:
All are Eithor Government owned or owned by some banks Which
caters the development of the specialised sectors it represent like
Agriculture, MSME, Micro sector, etc.
36 FDI(Foreign Direct Investment):
Foreign entities who bring capital and technology, establish
 manufacturing hub in India. It is also known as make in India. The
investment is long term and hence most importance source of
foreign exchange Reserve
37 Foreign Institutional Investment:
Those foreign investment company registers with SEBI and invest
in the stock market. This are short term source of foreign
exchange resource. For a growing economy with political stability,
this is a welcome source.
38 Participatory Note(PTC)
Those retail foreign investors who are not having the volume or
expertise to work as an FII can entrust their funds with a FII and
the FII help the retail investor to invest their funds in India. The
receipt issued by FII to foreign investor is known as participatory.
37 ADR,GDR,Masala Bond
If an Indian corporate are issuing bonds in USA against their equity
with the help of an American bank and later list it in American
stock exchange is known as American Depository receipt. It is
denominated in USD
If the same corporate issues bond in US dollars in any other
country other than America is Global depository receipt.
If the same corporate issues bonds in Indian rupee abroad is
known as Masala Bond.
38 Prompt corrective Action:
Reserve Bank of India (RBI) has issued a Prompt Corrective Action (PCA) framework
to maintain sound financial health of banks. It facilitates banks in breach of risk
thresholds for identified areas of monitoring, viz., capital adequacy, NPA and
profitability, to take corrective measures in a timely manner, in order to restore their
financial health. Thus, it is intended to encourage banks to eschew certain riskier
activities, improve operational efficiency and focus on conserving capital to
strengthen them. s, viz., Dena Bank, Central Bank of India, Bank of Maharashtra, UCO
Bank, IDBI Bank, Oriental Bank of Commerce, Indian Overseas Bank, Corporation
Bank, Bank of India, Allahabad Bank and United Bank of India under the PCA
framework.
39 Hypothecation and Pledge:
If moveable security given to bank as security , but possession is
with the borrower , it is called mortgage. Like car, stock of goods,
standing crop etc.
If the possession can be handed over to bank, it is pledge like gold
ornaments, goods in godown, etc.
40 What you mean by micro credit, Self help group,
kudumbasree(father of micro credit= Mohammed yunus,
Bangladesh). Small credit given to poor through group is micro
 credit. Kudumbasree is a wider model of SHG supported by Kerala
government
41 Net worth :
Owned fund+reserve+accumulated profit +premium- intangible
asset
41 What is KYC norms:
involving identification of customer with approved documents,
before opening account, risk profiling of the customer, etc. KYC
norms have undergone change recently to the effect that AADHAR
and PAN card is compulsory for opening the account.
Subsequently Supreme court have directed that AADHAR can not
be made mandatory but optional. However banks persuade
customers to link their account with AADHAR
42 What you mean by money laundering?
Money laundering is the process of transforming the profits of
crime and corruption into legal money It is sometimes used more
generally to include misuse of the financial system (involving
things such as securities, digital currencies, credit cards, and
traditional currency), including terrorism financing and evasion
of international sanctions. Most anti-money laundering laws
openly conflate money laundering (which is concerned
with source of funds) with terrorism financing (which is concerned
with destination of funds) when regulating the financial system.
43 What is hawala transactions?
Inward flow of foreign exchange from abroad out of the banking
channel . For example a remitter entrusting his foreign exchange
abroad to a hawala trader. The agent of hawala trader in India
hand over the money equivalent immediately to the beneficiary in
India. The agent of hawala trader receive Indian rupee from some
smugglers, or black money or illegal money. Now the black money
of the Indian has reached a foreign centre.
44 What is the difference between Black money and illegal money.
Black money is source is legal, but tax is evaded. Illegal money is
source is illegal or use is illegal.
45 What is IMPS and its utility?
Immediate Payment Service (IMPS) is an instant interbank
electronic fund transfer service through mobile phones. It is also
being extended through other channels such as ATM, Internet
Banking, etc
46 During inflation, the govt should squeeze its expenditure
 especially on infrastructure and construction and during
recession the govt spending should increase. Do you agree.
ANS YES
47 What is NEFTY and SENSEX and what its variation indicate?
The Sensex is an "index". What is an index? An index is basically an
indicator. It gives you a general idea about whether most of the
stocks have gone up or most of the stocks have gone down.
The Sensex is an indicator of all the major companies of the BSE.
The Nifty is an indicator of all the major companies of the NSE. 
If the Sensex goes up, it means that the prices of the stocks of
most of the major companies on the BSE have gone up. If the
Sensex goes down, this tells you that the stock price of most of the
major stocks on the BSE have gone down. It shows the trend
Just like the Sensex represents the top stocks of the BSE, the Nifty
represents the top stocks of the NSE.
BSE, is the Bombay Stock Exchange and the NSE is the National
Stock Exchange. The BSE is situated at Bombay and the NSE is
situated at Delhi. These are the major stock exchanges in the
country.
48 What is insider trading which is prohibited by SEBI: Insider trading
is defined as a malpractice wherein trade of a company's securities
is undertaken by people who by virtue of their work have access to
the otherwise non public information which can be crucial for
making investment decisions.

Description: When insiders, e.g. key employees or executives who

have access to the strategic information about the company, use
the same for trading in the company's stocks or securities, it is
called insider trading and is highly discouraged by the Securities
and Exchange Board of India to promote fair trading in the market
for the benefit of the common investor.
49 Bulls and Bear in stock exchange ambience:
The use of "bull" and "bear" to describe markets comes from the
way the animals attack their opponents. A bull thrusts its horns up
into the air, while a bear swipes its paws downward. These actions
are metaphors for the movement of a market. If the trend is up,
it's a bull market. Or else, it is bear market
50 What you mean by profit booking in share market?. Booking profit
means selling a stock that has increased in value so that you
actually get (book) the gain..
51 What you mean by dormant account in a bank? A savings as well
as a current account is classified as 'inoperative' or 'dormant' if.
there are no transactions in the account for over a period of two
years. Interest. credited by the bank on the balance in the account
and any charges debited by the bank is not considered as
transactions for this purpose. Customer can make the active by
making a representation
52 What you mean by financial inclusion? Financial inclusion or
inclusive financing is the delivery of financial services at affordable
costs to sections of disadvantaged and low-income segments of
society, in contrast to financial exclusion where those services are
not available or affordable. The first step of financial inclusion is to
connect each and everyone through a bank account. Later it can
extend to literacy, education, health, group insurance, mutual
fund, etc, etc. The name of the project of central government for
financial inclusion is Swabhiman.

53 Electronic virtual assistant or banking chat box,

It is a customer interface electronically, that any of your bank
related queries will be answered instantly through an aap or bank
internet site. The latest development on this is a robot for
customer service
54 What you mean by CTS related to Cheque collection: Cheque
truncation system. Instead of physical transfer of cheque from
one bank to another for collection, an electronic image is passed
to and the physical cheque is with collecting bank. The paying
bank pays the cheque on the basis of the electronic image.
55 What is bankruptcy? Bankruptcy is a legal status of a person or
other entity that cannot repay the debts it owes to creditors. In
most jurisdictions, bankruptcy is imposed by a court order, often
initiated by the debtor and end up in liquidation. It differs from
Insolvency. Insolvency is inability to pay the debt and the creditor
can extend the borrower by restructuring, rescheduling,
replacement etc,etc to make the project further viable
56 Systemically important Bank of India, as declared by RBI is State
bank of India, ICICI Bank and HDFC . These banks are known as
domestically systematically important bank-DS-SIB. NO
internationally systematic important bank is declared so far. This is
subject to annual review and change.
This is as per the Basel Norms
57 Contemporary Currency notes have _15__ languages on the panel
which appear on the
Reverse of the note.
58 What is the importance of 20 rupee currency note as far as Kerala
is concerned.
It has the picture of Kovalam beach on the reverse
59 World bank is referred as International Bank of Reconstruction and
Development established after the second world war.
60 The note which has become dirty due to usage and also include a
two piece note pasted Together by gum etc. is known as Soiled
Note. All banks are expected to exchange such note to both
customers and non-customers compulsorily
61 What is recession?
A period of temporary economic decline, generally identified by a
fall in GDP in twosuccessive quarters
62 A _Letter of credit is a document from a bank guaranteeing that a
seller will receive payment in full as long as certain delivery
conditions have been met
63 Basic Purpose of World Bank is:
a) Removal of Poverty from world
b) Provide Credit to Poor Countries and Developing Countries
64 What is hot money?
"Hot Money" means Short-term capital movements from one
country to another seeking safety or, less often, higher rate of
interest. Example FII, NRI deposits etc.
65 What is P2P lending? It is known as person to person lending
without the presence of an intermediary. The lender and investor
meet at some portal and exchange their conditions. The site
facilitate some information of the borrower.
66 Shell bankilng: A shell bank is a term that describes a financial
institution that does not have a physical presence in any country..
A shell bank is any domestic or foreign bank that has no
physical address or location in the country where it
is incorporated.
Shell banks (also known as "foreign shell banks") normally operate
by using a PO box address for mailing and other correspondence or
by having a representative agent or person accept mail on behalf
of the shell bank.

67 What is ASBA? Application supported by blocked account. When

 a customer applies for share in a public issue, if your bank is ASBA
enabled, you need not remit the application money in advance.
After allotment of shares, the company will receive the exact
amount from the bank. Hence advance sending money and likely
refund can be avoided.
68 What is GDP and its component?  GDP provides one single number
that represents the monetary value of all the finished goods and
services produced within a country's borders in a specific period
69 Kisan credit card? Loan given to farmers as crop loan. The total
requirement of crop loan for all the crops for a full year are
calculated in advance adding some consumption component and a
total limit is arrived it. The liberty is given to the farmer to draw
the money at his convenience for the entire year any time he
wants. Interest to be serviced as and when charged. He can use
the account as an operative account without any repayment
obligation. Or repaid loan can be drawn back at his will and
pleasure.
70 What is one time settlement? When a bank loan become sticky
and difficult to recover, the lender assess the possibility of
recovery of the money through constant persuasion and realising
the security with the Bank. Once bank finds it difficult to recover
for any reason, bank feel that it is better to recover the maximum
possible amount. So it offers some concession to the borrower
and at a mutually accepted amount they decide to settle the
matter for ever. It is called one time settlement. It is one time
because bank conveys to the borrower that these concession is as
a one time measure and not always available.
71 What you mean by wilful defaulter? A person who has availed a
loan from la bank and i)not used the money for the purpose ii)
have enough cash flow but not repaying iii) sold of the asset
financed with banks knowledge
72 Why should we link Adhar card with Pan: To avoid people holding
multiple holding of pan card
73 Priority lending certificate? Banks are supposed to lend 40% of
their ANBC to the sectors defined by govt named Priority sector.
Then there are sub sectors like Agriculture 18%, Small/marginal
farmer 8% and Micro sector 7.5% etc. If any of the bank who have
done excess on these fronts, can trade the excess in the form of a
certificate to those bank who could not achieve the targets. There
are 4 type of priority sector certificate issued by RBI and life of
 such certificate is upto 31st March of the issue year.
74 What is Debt recovery Tribunal(DRT): It is a special court to handle
cases of bank exclusively . Any debt over 10 lacs can be referred
to DEBT recovery tribunal. Prolonged court procedures are not
there. DRT is having their own recovery agents too
75 What is Mission Indradhanus? IT is an initiative for revamping the
banking sector. It is having seven initiative like setting up of a
committee for Appointments,BBB(bank board bureau),
Capitalisation of banks, de stressing, empowering, frame work of
accountability, governance
76 What is a DeMat Account?
DeMat is nothing but a dematerialized account. If one has to save
money or make cheque payments, then he/she needs to open a
bank account. Similarly, one needs to open a DeMat account if
he/she wants to buy or sell stocks. Thus, DeMat account is similar
to a bank account wherein the actual money is being replaced by
shares. In order to open a DeMat account, one needs to approach
the Depository Participants [DPs].
In India, a DeMat account is a type of banking account that
dematerializes paper-based physical stock shares. The DeMat
account is used to avoid holding of physical shares: the shares are
bought as well as sold through a stock broker. In this case, the
advantage is that one does not need any physical evidence for
possessing these shares. All the things are taken care of by the
DPs. In India, there are two organisations offer depository
services. Central Depository services Limited (CDSL). Another is
National Depository Services Limited (NSDL) Both are public sector
undertaking.

77 What is foreign exchange reserves?

Foreign exchange reserves (also called Forex reserves) in a strict
sense are only the foreign currency deposits and bonds held by
central banks and monetary authorities. However, the term in
popular usage commonly includes foreign exchange and gold,SDRs
and IMF reserve positions. It means the purchasing power in
foreign currency using which India can meet its import obligations.
The present foreign exchange reserve is to the tune of 400 plus
billion US dollars
78 What is Bitcoin?
Bitcoin is a consensus network that enables a new payment
 system and a completely digital money. It is the first decentralized
peer-to-peer payment network that is powered by its users with
no central authority or middlemen. From a user perspective,
Bitcoin is pretty much like cash for the Internet. Bitcoin can also be
seen as the most prominent triple entry bookkeeping system in
existence. They use cryptography for secured transaction. In
India, it is not legal.

79 What is NIti ayog? It is a replacement of Planning commission. NITI

Aayog (Hindi for Policy Commission), also National Institution for
Transforming India, policy think tank of Government of India,
established with the aim to achieve Sustainable Development
Goals and to enhance cooperative federalism by fostering
involvement of State Governments of India in the economic policy-
making process using a bottom-up approach. The prime minister
is the ex officio chairman
80 What is TAT (turn around time).: The average time taken by a
bank to convert a loan application to a loan delivery. In short the
loan processing time.
81 What is Swachh Bharat (Clean India) campaign? Prime Minister
Narendra Modi on 2 October 2014 launched Swachh Bharat (Clean
India) campaign . The Swachh Bharat campaign was launched on
the occasion of 145th birth anniversary of Mahatma Gandhi and is
aimed at making India clean by 2019, i.e. 150th birth anniversary
of Mahatma Gandhi. He asked people to donate (Shramdaan) 100
hours every year or two hours every week for cleanliness. He
nominated Sachin Tendulkar (retd. cricketer), Sashi Tharoor
(Congress leader), Anil Ambani (industrialist), Salman Khan,
Priyanka Chopra, Kamal Hasan, Baba Ramdev, Mridula Sinha
(Governor of Goa) and the whole team of TV serial Taarak Mehta
Ka Ooltah Chashmah.
82 What is Right to information Act? The Right to Information act is a
law enacted by the Parliament of India giving citizens of India
access to records of the Central Government and State
governments. The Act applies to all States and Union Territories of
India, except the State of Jammu and Kashmir
83 What is Indian Bankrupotcy code
The Insolvency and Bankruptcy Code of 2016 is where the
code is geared towards insolvent individuals. Insolvent
individuals are the debtors who are not able to pay their
creditors within the prescribed time. An unsatisfied creditor
 if the payment is not forthcoming, can approach the Debt
recovery tribunal appellate or National company Law Board
for declaring the defaulter a insolvent so that the procedure
may end up in speedy liquidation of the company and
recovery.

84 What is Lok adalath

Lok Adalat is one of the alternative dispute redressal mechanisms, it is a
forum where disputes/cases pending in the court of law or at pre-litigation
stage are settled/ compromised amicably. Lok Adalats have been given
statutory status under the Legal Services Authorities Act, 1987. It is a process
of legalising a compromise with no loss of time.
85 What is compromise
Both the lender and borrower mutually agree to pay the debt at a
lower level of dues. For the lender it is the time value for money.
The borrower getting out of the debt. The process is voluntary.
86 What is loan write off
If the best of effort , the loan could not be recovered, banks will
resort to closing the loan account by taking the money from its
own profit.
87 What is the impact of NPA
Reputation risk, loss in revenue as interest can not be charged
once it is declared as NPA, additionally the plrofit is further
reduced because certain portion of the loan equivalent are to be
taken from the profit and kept as reserve/provision against any
possible future loss.
What is PMMY Schem(Pradhan Manthri Mudra YOjana): This is a
88 scheme for self employed upto Rs.10 lacs . This scheme is later
termed as Mudra Yojana. Loans are given in three types.
Shishu(Upto Rs.50000/-. ), Rs.50000 to Rs.5 lacs(Kishore) and Rs.5
lac to 10 lac(Tharun). It has diluted security norms, user friendly
procedures and easy repayment terms at concessional rate of
interest.
89 WHAT YOU KNOW ABOUT AAJEEVIKA ?To increase the household
income of rural poor, through financial and selected public
services, The Government has started a programme named
Swsarnajanahti swarojagar yojana which was restructured as
NRLM in 2011. Which was further renamed as Aajeevika
90 What is PMJDY Scheme? It is another step towards financial
inclusion. All families are connected with a bank and the benefits
of economic development, government benefits are routed
through that account.
91 Consolidation of nationalised banks from the present 19 to 12.
Government took initiative for merger of bank as under:-
Bank of Baroda+Vijaya Bank+Dena Bank
Canara Bank +Syndicate Bank
Union Bank of india+Andhra Bank +corporation Bank
PNB +Oriental Bank of Commerce +United Bank of India
Indian Bank with Allahabad Bank

92 Benefits of merger
1.Wider capital base and can offer large loan amount. (exposure
limit increased)
2.Improve efficiency and service delivery
3.Burden of central govt repapitalising again and again will come
down
4.Merged small bank customers will get advanced financial
products of large bank like credit card, Cash management services,
factoring, insurance etc
4.Cost of interbank transactions will come down and the relative of
settlement and reconciliation
5)Economies of scale in training, purchases, administrative office,
consolidation of branches etc
6)Cost of technology upgradation, soft ware will come down
7) bigger balance sheet, better acceptability in the international
financial centre.
93 Disadvantages of merger?
1.Identity loss of small bank
2. it is against the concentration risk theory and the concentration
risk for the economy is larger. If one business model of a bank
fails, it affects a large number of branches pan India
3.HR issues difficult to manage
4)Career growth is uncertain to employees
5) Possible employment opportunity loss on consolidation.
96 Repo rate is reduced to 6.25% and accordingly Bank rate and MSF
at 5.50 and reverse repo at 3.55%. SDF 6%
97 Inflation rate is 3.1% in the second quarter ended 31st august.
98 NBFC to lend to priority sector, bank can refinance such lending
which will be treated as their Priority sector committement, and
further Banks exposure norms to NBFC is increased to 15 to 20 %
so that NBFC gets more finance from bank
99 What is MSME freedom card? It is a corporate credit card issued
 to MSME/start up depending upon their trade cycles. They can
borrow for a trade cycle thro card and on repayment, such limits
are replaced.

100 .
101 Monetary limit to prefer a case in DRT is increased
from Rs.10 lacs to Rs.20 lacs WE have 39 DRTs in
India
102 Why the Dollar price is increasing?
Basically we are a trade deficit country. Our import
is much much higher than export. We are managing
show by attracting foreign capital by way of FII,FDI,
ADR,GDR, etc. Demand and supply altogether put it
brings strains dollar prices. Dollar Exchange rate
against rupee is increasing devaluing Indian Rupee.
Most of the currencies in the world especially
emerging economies are facing this problem. The
reasons are trade war between china and USA,
heavy outflow of FII from India to USA as USA
interest rates are increasing. The problem is
aggravated by steep increase in Crude oil prices
103 Why petrol Prices are increasing? The petrol prices
depends on supply of crude oil and its production.
The OPEC countries as a policy have reduced
production as a tactics. The reduced supply with
increasing value of dollar created the problem.
104 How petrol prices can be controlled? Decreasing the
tax on petrol, alternative source of energy,
increasing internal production, government subsidy,
etc
105 What is section 7 of RBI act? RBI is an autonomous
 body, profit making. IN emergency, the central
government can interfere and give directions to RBI
as per Section 7.
106 What are the problems faced by banks in India
especially public sector banks?
1) Mounting NPA of banks. Banks have reportedly
dumped money to economy during the period
of 2008 to 2012 when the world was facing
recession especially USA. This have turned NPA
2) RBI failed to check or sense the problem timely
3) Now most of the Banks are in red
4) Banks need huge capital to meet Basel III norms
by 1.4.2019. The central govt have not pumped
enough capital to the Public sector bank.
5) Large number of retirement from banking
sector which created a vacuum of experienced
hands.
6) Huge recruitment of human capital needed to
be converted to seasoned bankers
7) Customisation of technology products to not so
techno savvy customers.
107 The five yearly salary revision exercise known as
Bipartite settlement in banking sector due from 12th
November 2017 yet to be concluded as both
management and representative unions are not able
to arrive at an agreement
110 Project Sashakt : An RBI initiative to contain the NPA
of banks with time frame for resolution. Separate
Asset Management Company to handle loans above
Rs.500 crores.
113 Government launches 59 minutes scheme wherein
 GST registered SME borrowers for loan upto 100
lakhs get instant sanction. (Psbloansin59
minutes.com)
114 New governor for RBI. Mr.SakthiKantha das
115 Esaf Bank set to become a full fledged scheduled
bank
116
117 Politically motivated agriculture loan write off is in
the news, which is not a healthy trend for the
economy
118 The definition of bulk deposit undergoes changes.
Earlier it iwas Rs.1 crore and it has been increased to
Rs.2 crores.
119 Collateral free farm loan limit by banks to farmers is
increased from Rs. 1 lakh to 1,60,000/-