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IDBI PRT 20 DECEMBER

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 PSL
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MONETARY POLICY
PRIORITY SECTOR LENDING
Priority Sector refers to those sectors which the Government of India and RBI consider as
important for the development of the basic needs of the country. They are assigned priority over
other sectors. The banks are mandated to encourage the growth of such sectors with adequate
and timely credit.

What are the Different Categories of the Priority Sector?

•Agriculture
•Micro, Small and Medium Enterprises
•Export Credit
•Education
•Housing
•Social Infrastructure
•Renewable Energy
•Others
What is its History?

•The origins of Priority Sector Lending is traced back to 1966

•The then government felt the need for increasing credit to agriculture and small industries.
•However, the definition for Priority Sector was only formalized based on a Reserve Bank of India (RBI) report
in the National Credit Council in 1972.
•After bank nationalization, the Priority Sector formulation also allowed the government to focus on different
sectors by making credit available, through direct lending.
•Over the years the classification of the Priority Sector has evolved primarily from agriculture and small
industries (MSME) to various other domains till today.
https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=11959

RBI LINK FOR PSL DETAILS

Previous year questions (Based on memory)

Q. Which of the following organization administered

Monetary Policy as an arm of the economic policy?
1. Government of India
2. Reserve Bank of India
3. SEBI
4. SIDBI
5. NABARD
Previous year questions (Based on memory)

Q. Reserve Bank of India was established under which

act?
1. Reserve Bank of India Act 1930
2. Reserve Bank of India Act 1921
3. Reserve Bank of India Act 1934
4. Reserve Bank of India Act 1945
5. None of these
Previous year questions (Based on memory)

Q. RBI was established in:

1. 1 April, 1940
2. 1 April, 1935
3. 1 April 1948
4. 1 April 1958
5. None of these
Previous year questions (Based on memory)

Q. On 50 rupee currency note in India, whose

signature is found?
1. President of India
2. Governor, RBI
3. Finance Minister
4. Prime Minister of India
5. Secretary, Ministry of Finance
Previous year questions (Based on memory)

Q. Which of the following organization provide

Insurance cover for bank deposits in India?
1. SBI
2. Government
3. RBI
4. LIC
5. DICGC
Previous year questions (Based on memory)

Q. What is the minimum value of stock of gold coins,

bullion & foreign securities which RBI has to
maintain at any point of time :
1. Rs 200 cr
2. Rs 215 cr
3. Rs 115 cr
4. Rs 500 cr
5. None of the above
In which of the following city, the headquarter of
National Housing Bank is located?

(a) Mumbai

(b) New Delhi

(c) Chennai

(d) Hyderabad

(e) Bengaluru
If a bank goes into liquidation, DICGC is liable to pay to each
depositor through the liquidator, the amount of his deposit upto
Rupees 5 lakh within ___________ from the date of receipt of
claim list from the liquidator.

(a) 6 Months

(b) 3 Months

(c) 2 Months

(d) 12 Months

(e) 15 Days
What does the second “C” stand for in DICGC?

(a) Company

(b) Corporation

(c) Credit

(d) Capital

(e) Council
Which of the following is not a fully owned subsidiary
of Reserve Bank of India?

A) DICGC
B) NABARD
C) RBIH
D) BRBNMPL
At any time RBI can have atmost____ deputy
governor.

A) 3
B) 4
C) 5
D) 6
The headquarter of Reserve Bank of India was shifted
from Calcutta to Mumbai in which year?

A) 1936
B) 1937
C) 1945
D) 1949
 STAGES OF INFLATION

100

20
10
3

Creeping inflation(0- Trotting inflation (3%- Galloping Hyper inflation(20%

3%) 10%)* inflation(10%-20%) and above)
* DATA MAY
Types of inflation Inflation is usually categorized on different basis which are given as below: A. On the basis of Rate: Inflation
has been categorized into following types on the basis of its different rates:

1. Creeping Inflation: Creeping Inflation also known as a Mild Inflation or Low Inflation refers to that type of inflation when
the rise in prices is very slow like that of snail or creeper. It is the mildest form of inflation with less than 3% per annum.

2. Chronic Inflation: If creeping inflation persist for a longer period of time then it is often called as Chronic or Secular
Inflation. It is called chronic because if an inflation rate continues to grow for a longer period without any downturn which
may possibly lead to Hyperinflation.

3. Walking or Trotting Inflation: When prices rise moderately with a single digit of less more than 3% but less than 10% per
annum it is called as Walking Inflation.
4. Running Inflation: A rapid acceleration in the rate of rising prices is referred as Running Inflation. This type of inflation
occurs when prices rise by more than 10% per annum.

5. Galloping Inflation: Galloping inflation also known as Jumping inflation occurs when prices rise by double or triple digit
inflation rates of more than 20% but less than 1000% per annum.

6. Hyperinflation: when prices rise at an alarming high rate with quadruple or four digit inflation rate of above 1000% per
annum then is termed as Hyperinflation. It is a situation where the prices rise so fast that it becomes very difficult to measure
its magnitude. During a worst case scenario of hyperinflation, value of national currency of an affected country reduces almost
to zero. Paper money becomes worthless and people start trading either in gold and silver or sometimes even use the old barter
system of commerce. Two worst examples of hyperinflation recorded in world history are of those experienced by Hungary in
year 1946 and Zimbabwe during 2004-2009 under Robert Mugabe's regime
B. On the basis of Causes: Inflation has been categorized into following types on the basis of its different causes:

1.Demand-Pull Inflation: Demand-Pull Inflation also known as Excess Demand Inflation takes place when
aggregate demand for a good or service outstrips aggregate supply. In other words, when aggregate demand for all
purposes- consumption, investment and government expenditure-exceeds the supply of goods at current prices then it is
called Demand-Pull Inflation. Demand-Pull inflation gives rise to a situation often economists describe as “Too much money
chasing too few goods”.

2.Cost-Push Inflation: When prices rise due to growing cost of production of goods and services then it is
known as Cost-Push Inflation. Cost-push inflation also came to known as “New Inflation” is determined by supply-side
factors mainly caused by higher wage-push, Profit-Push and higher costs of raw materials.

3.Scarcity Inflation: Scarcity inflation occurs due to hoarding by unscrupulous traders and black marketers so as
to create an artificial shortage of essential goods like food grains, kerosene,etc. with an intension to sell them only at higher
prices to make huge profits.

4. Structural Inflation: Structural inflation is that type of inflation often experienced in developing countries which is
caused by structural rigidities such as agricultural bottlenecks, resource constraints bottlenecks, foreign exchange
bottlenecks, physical infrastructural bottlenecks etc
• Built-in Inflation
• This type of inflation involves a high demand for wages by the
workers which the firms address by increasing the cost of goods and
services for the customers.
 Base Effect
Current Inflation Rate = [(Current Price Index - Base year’s Price
Index) ÷ Base year’s Price Index] X 100

What is Base Year?

Increase or decrease in general price level is measured
against price level of some reference year called base
year.
• Core inflation: It is the measure of inflation calculated after deducting
the prices of food and fuel.
• Super core inflation: It is the measure of inflation calculated after
deducting the gold and silver price inflation from the core inflation.
 MONETARY POLICY

DIRECT INSTRUMENT INDIRECT INSTRUMENT

REPO RATE
CRR
REVERSE REPO RATE
MSF
SLR
BANK RATE
OPEN MARKET OPERATION
REFINANCE
FACILITY MARKET STABILISATION
SCHEME
 मौद्रिक नीद्रि

प्रत्यक्ष उपकरण अप्रत्यक्ष उपकरण

रे पो दर
सीआरआर
ररिसस रे पो दर
एमएसएफ
एसएलआर
बैंक दर
ररफाइनेंस खुले बाजार प्रचालन
सुद्रिधा बाजार स्थिरीकरण योजना
 (CRR)-CASH RESERVE
RATIO
It is applicable on all scheduled
commercial banks.
The share of net
demand and It has no minimum and maximum
time liability limits.
(NDTL) that a
bank must No interest is paid on it by RBI.
maintain with
RBI in cash. It is mentioned in RBI Act 1934
section 42 (1)
 नकद सांरक्षण अनुप त

यह सभी अनुसूद्रचि िाद्रणस्िक बैंकोों पर

लागू है ।
शुद्ध म ां ग और समय इसकी कोई न्यूनिम और अद्रधकिम
दे यत (NDTL) क सीमा नही ों है ।
हिस्स जो एक बैंक आरबीआई द्वारा इस पर कोई ब्याज नही ों
को नकदी में RBI के द्रदया जािा है ।
प स बन ए रखन
च हिए। आरबीआई अद्रधद्रनयम 1934 की धारा
42 (1) में इसका उल्लेख है
 (SLR)-STATUTORY LIQUIDITY RATIO
It is applicable on all banks and
Financial Institutions.
The share of net It has no minimum and 40%
demand and time maximum limits.
liability (NDTL)
that a bank must Liquid assets includes gold,
bonds, foreign currency etc.
maintain with
itself in cash and
It is mentioned in BR Act 1949
liquid assets. section 24.
 िैधाद्रनक िरलिा अनुपाि
शुद्ध माोंग और समय
दे यिा (NDTL) का
द्रहस्सा द्रजसे एक
बैंक को नकदी और
िरल सोंपद्रत्तयोों में
खुद को बनाए
रखना चाद्रहए।
यह सभी बैंकोों और द्रित्तीय सोंथिानोों पर
लागू है ।
इसकी कोई न्यूनिम सीमा नही ों है
40% अद्रधकिम सीमा।
िरल सोंपद्रत्त में सोना, बाोंड, द्रिदे शी मुिा
आद्रद शाद्रमल हैं ।
बीआर एक्ट 1949 सेक्शन 24 में इसका
उल्लेख है ।
 REPO/REVERSE REPO RATE
Repo rate, also called repurchase rate, is the rate of interest that banks
pay when they borrow money from the Reserve Bank of India to meet their
short-term fund requirements.

Reverse repo rate is the rate of interest that banks get when they
keep their surplus money with the RBI. Repo rate is always higher
than the reverse repo rate.
 रे पो / ररजिस रे पो दर
रे पो रे ट, द्रजसे पुनखसरीद दर भी कहा जािा है , ब्याज की दर है जो बैं क िब भुगिान
करिे हैं जब िे भारिीय ररज़िस बैंक से अपनी अल्पकाद्रलक द्रनद्रध आिश्यकिाओों को
पूरा करने के द्रलए पैसे उधार लेिे हैं ।

ररिसस रे पो दर िह ब्याज दर है जो बैं कोों को आरबीआई के पास अपना अद्रिररक्त धन

रखने पर द्रमलिा है । रे पो दर हमेशा ररिसस रे पो दर से अद्रधक होिी है ।
 MARGINAL STANDING FACILITY
Marginal Standing Facility is a window for banks to borrow from
Reserve Bank of India in emergency situation when inter-bank
liquidity dries up completely.

Introduced with effect from May 9, 2011

Minimum amount of Rs. 1 crore and in multiples of Rs. One

crore thereafter.
Amount that can be availed is
Available on all working days in
upto two percent of their
Mumbai, excluding Saturdays
respective Net Demand and Time
between 5.30 P.M. and 7.30 P.M.
Liabilities (NDTL).
 सीमाोंि थिायी सुद्रिधा
सीमाोंि थिायी सुद्रिधा बैंकोों के द्रलए आपािकालीन स्थिद्रि में भारिीय ररज़िस बैंक से
उधार लेने के द्रलए एक स्खड़की है जब अोंिर-बैंक िरलिा पूरी िरह से सूख जािी है ।

9 मई, 2011 से प्रभािी रूप से पेश द्रकया गया

न्यूनिम राद्रश रु 1 करोड़ और रुपये के गुणकोों में। इसके बाद एक करोड़ रु।

जो राद्रश प्राप्त की जा सकिी है , िह उनके सोंबोंद्रधि

मुोंबई में सभी कायस द्रदिसोों पर उपलब्ध, शद्रनिार
नेट द्रडमाोंड और टाइम लायद्रबद्रलटी (NDTL) के दो
को छोड़कर 5.30 बजे के बीच। और 7.30 बजे ।
प्रद्रिशि िक होिी है ।
 BANK RATE
Bank rate is the rate at which Central Bank lends money to
the Commercial Banks by buying or re-discount their eligible
rated securities - Bills of Exchange or Commercial Paper.

Bank Rate
 बैंक दर
बैंक दर को द्रबल में कटौिी दर के रूप में भी जाना जािा है जो द्रक
ब्याज की िह दर है , जो केंिीय बैंक द्वारा लोंबी अिद्रध के ऋणोों ि
अद्रिमोों पर िाद्रणस्िक बैंकोों से द्रलया जािा है ।

Bank Rate
REFINANCE FACILITIES / पुनहवित्त सुहवध एां

Sector-specific refinance facilities

(e.g., against lending to export
sector) provided to banks.
बैंकोां को प्रद न की ज ने व ली सेक्टर-हवहशष्ट
पुनहवित्त सुहवध एां
 OPEN MARKET OPERATION/खुले ब ज र सांच लन
OMO refers to the buying and selling of Government Securities in the Open Market in order to
expand or contract the amount of money in the banking system. Purchase of securities inject
money into the banking system and stimulate growth, while sales of securities do the opposite
and contract the economy.
ओएमओ बैंद्रकोंग प्रणाली में धन की मात्रा का द्रिस्तार या अनुबोंध करने के द्रलए ओपन माकेट में सरकारी प्रद्रिभूद्रियोों
की खरीद और द्रबक्री को सोंदद्रभसि करिा है । प्रद्रिभूद्रियोों की खरीद बैंद्रकोंग प्रणाली में धन को इों जेक्ट करिी है और
द्रिकास को उत्तेद्रजि करिी है , जबद्रक प्रद्रिभूद्रियोों की द्रबक्री द्रिपरीि होिी है और अिसव्यिथिा को अनुबोंद्रधि करिी
है ।
 LIQUIDITY ADJUSTMENT FACILITY
When banks need
Reserve Bank of India's liquidity to meet its daily
liquidity adjustment requirement, they borrow
facility of LAF helps banks from RBI through Repo.
to adjust their daily
liquidity mismatches.
LAF has two components-
Repo (repurchase agreement)
and Reverse Repo. By
controlling these rates, the
RBI controls the rate of
interest in the economy.
 चलद्रनद्रध समायोजन की सुद्रिधा

एलएएफ की तरलत सम योजन एलएएफ के दो घटक िैं -रे पो

सुहवध बैंकोां को अपनी दै हनक
तरलत बेमेल को सम योहजत करने
में मदद करती िै ।
(पुनखिरीद समझौत ) और ररवसि
रे पो। इन दरोां को हनयांहित करके,
आरबीआई अर्िव्यवस्र् में ब्य ज
दर को हनयांहित करत िै ।
 MARKET STABILIZATION SCHEME (MSS) 2004
बाजार थिापन योजना (MSS) 2004
MSS is a Monetary Policy intervention by the RBI to withdraw excess liquidity (or money
supply) by selling Government securities in the economy.

एमएसएस अर्िव्यवस्र् में सरक री प्रहतभूहतयोां को बेचकर अहतररक्त तरलत (य धन की आपूहति) को व पस लेने के हलए
आरबीआई द्व र एक मौहिक नीहत िस्तक्षेप िै ।
Government
Securities

Funds
CBS - Core Banking Solution
This word is more often used by bankers and now-a-days postal officials are also using it. CBS is an acronym of
Core Banking Solutions. Again one will wonder what the meaning of core is, core is also an acronym. It stands for
"Centralized On-line Real-time Exchange".

Core Banking Solution

 Definition:-
Core Banking Solution (CBS) is networking of branches, which enables
Customers to operate their accounts, and avail banking services from any branch of the Bank on CBS network,
regardless of where he maintains his account. The customer is no more the customer of a Branch. He becomes
the Bank’s Customer.

Another interesting fact regarding CBS is that all CBS branches are inter-connected with each other. Therefore,
Customers of CBS branches can avail various banking facilities from any other CBS branch located anywhere in
the world.

Top CBS Application Software Providers

1) Infosys Technologies Ltd. Finnacle is the universal banking solution from
Infosys.
2) I-flex solutions Ltd. since late 2005 it is owned by Oracle
3) TCS FNS (Financial Network Services Limited) is an Australian developer and
supplier of banking application software, operating in world markets. Now
owned and managed by TCS.

Thus, CBS is a step towards enhancing customer convenience through anywhere

and anytime banking.
पररभ ष : -
कोर बैंद्रकोंग सॉल्यूशन (CBS) शाखाओों का नेटिद्रकिंग है , जो सक्षम बन त िै
ग्र िक अपने ख तोां क सांच लन करते िैं , और सीबीएस नेटवकि पर बैंक की हकसी भी श ख से बैंहकांग सेव ओां क ल भ
उठ ते िैं , भले िी वि अपन ख त रखत िो। िाहक कोई शाखा का िाहक नही ों है । िह बैंक का िाहक बन जािा है ।

सीबीएस के सांबांध में एक और हदलचस्प तथ्य यि िै हक सभी सीबीएस श ख एां एक-दू सरे से जुडी हुई िैं । इसहलए, सीबीएस
श ख ओां के ग्र िक दु हनय में किीां भी स्स्र्त हकसी भी अन्य सीबीएस श ख से हवहभन्न बैंहकांग सुहवध ओां क ल भ उठ
सकते िैं ।

शीर्स सीबीएस एप्लीकेशन सॉफ्टिेयर प्रदािा

1) इन्फोहसस टे क्नोलॉजीज हलहमटे ड ह़िनकल इन्फोहसस क स विभौहमक बैंहकांग सम ध न िै ।
2) 2005 के उत्तर धि से I-flex solution Ltd. क स्व हमत्व िै
3) TCS FNS (फ इनेंहशयल नेटवकि सहविसेज हलहमटे ड) एक ऑस्ट्रेहलय ई डे वलपर और बैंहकांग एप्लीकेशन सॉफ्टवेयर क
आपूहतिकत ि िै , जो हवश्व ब ज रोां में क यिरत िै । अब इसक स्व हमत्व और प्रबांधन टीसीएस के प स िै ।
The National Payments Corporation of India (NPCI) is an initiative taken by the
Reserve Bank of India (RBI) and Indian Bank’s Association (IBA) to operate the
retail payments and settlement systems in India. This organisation was founded in
the year 2008 under the Payment and Settlement Systems Act, 2007. NPCI has been
incorporated as a ‘not for profit’ company under section 8 of Companies Act 2013.
Banking Ombudsman Scheme
The Banking Ombudsman Scheme was introduced in 2006 by the Reserve Bank of India (RBI)
under Section 35A of the Banking Regulation Act, 1949. It came into effect on January 1, 2006.
Here are the key details about this scheme....
Use of Technology
The scheme incorporates the use of Artificial Intelligence tools to enhance coordination
between banks and investigating agencies, enabling faster resolution of complaints. Customers
will be able to file complaints, submit documents, track status, and provide feedback through
a single email address. A multilingual toll-free number will also be available for providing
relevant information on grievance redress.

Appellate Authority
The Appellate Authority under the integrated scheme is the RBI’s Executive Director-in-charge
of the Consumer Education and Protection Department

https://www.rbi.org.in/commonperson/English/Scripts/FAQs.aspx?Id=3407

INTERNAL OMBUDSMAN SCHEME

The Reserve Bank introduces Internal Ombudsman Scheme, 2018 for Scheduled Commercial
Banks

Reserve Bank of India (RBI) had, in May 2015, advised all public-sector and select private and foreign banks to
appoint Internal Ombudsman (IO) as an independent authority to review complaints that were partially or wholly
rejected by the respective banks. The IO mechanism was set up with a view to strengthen the internal grievance
redressal system of banks and to ensure that the complaints of the customers are redressed at the level of the bank
itself by an authority placed at the highest level of bank’s grievance redressal mechanism so as to minimize the
need for the customers to approach other fora for redressal.
As a part of this customer-centric approach, to enhance the independence of the IO while simultaneously
strengthening the monitoring system over functioning of the IO mechanism, RBI has reviewed the arrangement and
issued revised directions under Section 35 A of the Banking Regulation Act, 1949 in the form of ‘Internal
Ombudsman Scheme, 2018’. The Scheme covers, inter-alia, appointment / tenure, roles and responsibilities,
procedural guidelines and oversight mechanism for the IO.
All Scheduled Commercial Banks in India having more than ten banking outlets (excluding Regional
Rural Banks), are required to appoint IO in their banks. The IO shall, inter alia, examine customer complaints
which are in the nature of deficiency in service on the part of the bank, (including those on the grounds of
complaints listed in Clause 8 of the Banking Ombudsman Scheme, 2006) that are partly or wholly rejected by
the bank. As the banks shall internally escalate all complaints, which are not fully redressed to their respective IOs
before conveying the final decision to the complainant, the customers of banks need not approach the IO directly.
The implementation of IO Scheme, 2018 will be monitored by the bank’s internal audit mechanism apart from
regulatory oversight by RBI.
 IMPORTANT DAYS OF SEPTEMBER 2023
THEME
Date Important Days in September

1st September - 7th September National Nutrition Week

2nd September World Coconut Day

5th September International Day of Charity

5th September Teachers' Day (India)

8th September International Literacy Day

8th September World Physical Therapy Day

9th September World First Aid Day

 IMPORTANT DAYS OF SEPTEMBER 2023
THEME
Date Important Days in September

10th September World Suicide Prevention Day (WSPD)

11th September National Forest Martyrs Day

14th September Hindi Diwas

15th September Engineer's Day (India)

15th September International Day of Democracy

16th September World Ozone Day

16th September International Red Panda Day

 IMPORTANT DAYS OF SEPTEMBER 2023
THEME
Date Important Days in September

17th September World Patient Safety Day

18th September World Bamboo Day

19th September International Talk Like a Pirate Day

21st September International Day of Peace (UN)

21st September World Alzheimer's Day

22nd September Day for the Welfare of Cancer Patients

22nd September World Rhino Day

 IMPORTANT DAYS OF SEPTEMBER 2023
THEME
Date Important Days in September

23rd September International Day of Sign Languages

24th September World Day of the Deaf

24th September World Rivers Day

25th September World Pharmacists Day

25th September Antyodaya Diwas

26th September World Contraception Day

26th September World Environmental Health Day

 IMPORTANT DAYS OF SEPTEMBER 2023
THEME
Date Important Days in September

27th September World Tourism Day

28th September World Rabies Day

28th September World Maritime Day

29th September World Heart Day

30th September International Translation Day

 BILATERAL EXERCISES
S.I. No. Participating Nations Army Type Name of the Exercise

Army AUSTRA HIND

1 India and Australia
Navy AUSINDEX

Army SAMPRITI

2 India and Bangladesh Navy IN-BN CORPAT

Air Force Table Top Ex

3 India and China Army HAND IN HAND

S.I. No. Participating Nations Army Type Name of the Exercise
Army SHAKTI
4 India and France Navy VARUNA
Air Force GARUDA
Army GARUDA SHAKTI
5 India and Indonesia Navy IND-INDO CORPAT
Navy SAMUDRA SHAKTI
Army DHARMA GUARDIAN
6 India and Japan
Navy JIMEX
S.I. No. Participating Nations Army Type Name of the Exercise
7 India and Kazakhstan Army PRABAL DOSTYK
8 India and Kyrgyzstan Army KHANJAR
9 India and Maldives Army EKUVERIN
10 India and Mongolia Army NOMADIC ELEPHANT
Army IMBEX
11 India and Myanmar
Navy IMCOR
12 India and Nepal Army SURYA KIRAN
S.I. No. Participating Nations Army Type Name of the Exercise
Army AL NAGAH
13 India and Oman Navy Naseem-al-Bahr
Air Force EASTERN BRIDGE-IV
Army INDRA
14 India and Russia Navy INDRA NAVY
Air Force INDRA
15 India and Seychelles Army LAMITIYE
S.I. No. Participating Nations Army Type Name of the Exercise
Army MITRA SHAKTI
16 India and Sri Lanka
Navy SLINEX
Army MAITREE
17 India and Thailand Navy INDO-THAI CORPAT
Air Force SIAM BHARAT
Air Force INDRA
S.I. No. Participating Nations Army Type Name of the Exercise
Army AJEYA WARRIOR
India and United
18 Navy KONKAN
Kingdom
Air Force INDRADHANUSH-IV
Army YUDHABHAYAS
VAJRA PRAHAR
19 India and USA Navy MALABAR (Multilateral)
Air Force RED FLAG 16-1
Air Force Exercise COPE India 23.
20 India and Vietnam Army VINBAX