1. What do you mean by money laundering?
Using the banking channel for the purpose of bringing illegal money is known as money laundering.
2. What do you mean by subprime lending?
Mass lending by commercial banks to the borrowers without ascertaining the credit worthiness of the borrowers
3. What is meant by LPG and who is responsible for the introduction of LPG strategy in our country?
LPG means liberalization, privatization, and globalization and this was coined by Dr. Manmohan Singh, the then finance minister of our country. The salient highlights of the Liberalisation, Privatisation and Globalisation Policy in India are: Foreign Technology Agreements; Foreign Investment; MRTP Act, 1969 (Amended); Industrial Licensing; Deregulation Beginning of privatization; Opportunities for overseas trade; Steps to regulate inflation; Tax reforms; Abolition of License -Permit Raj
4. What do you mean by PURA?
PURA means providing urban amenities in rural areas. This concept was coined by Dr. A.P.J. Abdul Kalam, the then president of India.
5. What do you know by the current ratio?
It is one equation between current assets and current liabilities. This ratio provides the liquidity position of the organization. When the ratio is more than one it is known as positive current ratio and the unit is having sufficient working capital and when it is less than one, the unit is found to have more current liabilities than current assets and the liquidity position is found to be very weak.
6. What do you know about negotiable instruments act?
In India, the negotiable instruments act was passed during 1881 which came into force with effect from March 1, 1882. Negotiable instruments mean and include a promissory note, bills of exchange and cheque payable to order or bearer. A promissory note, bill of exchange, cheque and demand draft are negotiable instruments.
7. What do you know by MICR?
- MICR means magnetic ink character recognition. The MICR code is available in MICR bank at the bottom of the cheque or demand draft.
- It consists of nine numerical digits of which the first three digits represent the center/city; the middle three digits represent the bank and the last three digits represent the branch of the bank.
8. When it comes to rural lending, which is all considered to be priority sector advances?
When it comes to rural lending, the loans granted to the following are considered to be priority sector advances – Loans granted to all agriculture related activities; self help group; Differential rate of interest; Loans to SC/ST beneficiaries; Loans provided to doctors for setting up clinics in rural areas; Loans to dealers in fertilizers and pesticides; loans to dealers of springler irrigation and drip irrigation equipments etc.,
9. Who is called as an authorized dealer?
An authorised dealer is at present is known as authorized person. An authorised person is an individual or organization permitted to deal in foreign exchange business in the country.
10. What do you know by financial inclusion?
Financial inclusion means the following: Providing formal banking services to poor people in urban and rural areas; Promoting the habit of money savings, insurance, pension-investment among poor people; Helping the people in getting loans at reasonable rates from commercial banks
so that they do not become victims to local moneylenders
11. What are the important initiatives taken through financial inclusion in the country?
The following are the important initiatives taken through financial inclusion in our country: Lead banking scheme; No frill accounts; Basic savings bank deposit accounts; JANDHAN accounts; business correspondent and business facilitator facilities; Swabhiman campaign;
12. What do you mean by MCLR?
MCLR replaces the base rate system. RBI introduced the system with effect from 1.4.216 in order to determine the base rate by commercial to improve the efficiency of monetary policy transmission. All rupee loans sanctioned and credit limits renewed with effect from 1.4.216 to be priced with reference to MCLR and it will be an internal benchmark for the banks. It consists of the marginal cost of funds, negative carry on account of CRR, operating costs and tenor premium. The marginal cost of funds consists of two components namely; the marginal cost of borrowings and return on networth
13. What are the major money market instruments?
Certificate of deposits; Commercial paper; Inter Bank participation certificates; iner bank term money; Treasury bills; Bills rediscounting and call/notice money
14. What are the differences between NEFT and RTGS?
Both are two categories of online remittance facilities through CBS enabled branches of commercial banks. The minimum balance that can be sent through RTGS is Rupees two lakhs whereas, in the case of NEFT, there is no such limit. The beneficiary gets his funds at real time and it means instantaneously without any loss of time. In the case of the beneficiary gets his funds in between batches
15. Who is deciding the rate of interest for savings deposit accounts?
Rate of interest for savings deposits is decided by respective commercial banks only and RBI has permitted full freedom in this connection.
16. Who cannot open savings deposit accounts?
Proprietorship concerns, partnership firms, limited liability partnership firms, private limited companies, and public limited companies are not permitted to open savings accounts
17. What is meant by the memorandum of association?
Memorandum of association is the parent document for any company whether it is a private limited company or private limited company. It contains the details of the formation of the company, policies, objectives, registered office and more.
18. What is known as power of attorney?
Power of attorney is an authorization given by one person called as principal in favor of another person called as an agent authorizing the agent to perform certain activities on behalf of the principal and it can be specific power of attorney or particular power of attorney.
19. In which currencies FCNR accounts can be opened in our country?
FCNR account can be opened in the following currencies namely; US dollars, Sterling Pounds; Euro; Japanese Yen; Australian dollars and Canadian dollars.
20. What are the differences between NRE and FCNR?
- NRE and FCNR accounts are opened by nonresident Indians and Persons of Indian Origin in India.
- NRE accounts are to be opened in rupees whereas FCNR is opened in foreign currencies.
- NRE accounts can be opened in the form of savings account, current account, reinvestment deposit, and fixed deposit whereas, FCNR account is permitted to be opened as fixed deposit or reinvestment deposit.
- NRE term deposits can be opened for a minimum period of seven days and a maximum period of ten years.
- FCNR accounts can be opened for a minimum period of one year and a maximum period of five years.
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21. What do you know by PIN number?
The PIN number is four digit number expressed in numerical characters. A PIN number is used for the transactions done using debit cards and credit cards through automated teller machines and point of sale terminals.
22. What do you know by PAN number?
- PAN number is known as a permanent account number.
- This is used for the purpose of remittance of income tax with the income tax department.
- Tax payers should get one PAN number by sending an application along with relevant documents and by payment of the specified sum of money to the Income tax department or their agencies.
- It is ten digit number consisting and alphapetical and numerical characters.
23. What are the functions of DICGC?
DICGC means Deposit Insurance and Credit Guarantee Corporation and this corporation provides deposit insurance upto a number of Rupees one lakh per depositor per bank in the event of insolvency of the bank and it also provides small loans guarantee upto certain limits
24. What is the role played by ECGC?
ECGC provides guarantee support to the exporters of the country in the form of several export guarantees
25. Mention the Regional Rural Banks which are functioning in Tamilnadu?
The Regional rural banks which are functioning in Tamilnadu are Pandiyan Grama Bank and Pallavan Gramin Bank. Pandiyan Grama Bank has been sponsored by Indian Overseas Bank and pallavan Gramin Bank has been sponsored by an Indian bank.
26. What do you mean by Mergers and what are the different kinds of mergers?
When two independent units merge together to form a single unit, it is known as a merger. The mergers can be vertical merger, horizontal merger, reverse merger, consolidation, amalgamation, etc.,
27. What do you mean by horizontal merger and reverse merger?
When the business functions of two units are identical in nature and when the merger takes place between those units, it is known as a horizontal merger. New Bank of India merged with Punjab National Bank and both are banking organizations. Industrial Credit and Investment Corporation of India Limited was instrumental in establishing ICICI bank as per LPG norms and subsequently Industrial Credit and Investment Corporation Limited merged with ICICI Bank and when a parent unit gets merged with an ancillary unit, it is known as a reverse merger.
28. Which are the top two private sector banks in our country?
The top private sector banks in our country are HDFC bank limited and ICICI bank limited
29. Whether housing loan is a priority sector advance and if so, upto what amount?
Housing loans granted are treated as priority sector advances subject to certain conditions. Loans to individuals up to Rupees 28 lakh in metropolitan centers (with population of ten lakh and above) and loans up to Rupees 2 lakh in other centers for purchase/construction of a dwelling unit per family, are eligible to be considered as priority sector provided the overall cost of the dwelling unit in the metropolitan centre and at other centres does not exceed Rupees 35 lakh and Rupees 25 lakh, respectively. Housing loans to banks’ own employees are not eligible for classification under priority sector.
30. Whether an educational loan is a priority sector advance?
Loans to individuals for educational purposes including vocational courses upto Rupees 1 lakh irrespective of the sanctioned amount are eligible for classification under priority sector.
31. What do you mean by micro, small and medium enterprises?
The classification is based on the original investment in plant and machinery: For micro enterprises, upto Rs. 25 lakhs for manufacturing units and Rupees 1 lakhs for service units; For small enterprises, for manufacturing units above Rupees 25 lakhs and upto Rs. 5 crores and for service units above Rupees 1 lakhs and upto Rupees 2 crores; For medium enterprises, for manufacturing units above Rupees 5 crores and upto 1 crore and for service units above Rupees 2 crores and upto Rupees five crores
32. What do you mean by KYC and name any two important documents which are obtained as per KYC?
KYC means know your customer guidelines and these guidelines were prescribed by RBI for new customers who are willing to open accounts with commercial banks and according to KYC, any new customer who is willing to open accounts with commercial banks should submit the photocopy of anyone of the following namely; driving licence, voter id card, AADHAARA card, passport as address proof and photocopy of anyone of the following namely; driving licence, voter id card, AADHAAR card, passport, pancard as identity proof. KYC is antimony laundering device.
33. What is the present repo rate and reverse repo rate?
The present repo rate is 6.25% and the reverse repo rate is 5.75%
34. In the case of the MICR code, the middle three digits represent what?
The MICR code consists of nine numerical digits and the middle three numerical digits represent the bank name
35. PAN number consists of how many alpha characters?
PAN number consists of ten digits. The first three alpha characters are random alphapetical characters between AAA to ZZZ; next one alpha character represents the category of the cardholder; the next one alpha character represents the first character of the name of the cardholder; the next four numerical digits are auto generated sequential numbers and the last one single alpha character is a check digit.
36. What do you know by biometric automated teller machines?
In the case of automated teller machines, the four digits numerical PIN number is used for performing transactions using a debit card and credit card. In the case of biometric automated teller machines, instead of PIN numbers, anyone of the following body parts is used – left-hand thumb impression; eye retina and voice recognition. In India, the left-hand thumb impression is the accepted mode and these kinds of automated teller machines are known as green label automated teller machines.
37. What are the criteria by which a bank is considered as a largest bank?
For the purpose of ranking, a bank is considered to be largest or smallest taking into consideration the business position of the bank; namely – the total deposits and total advances as at the end of March each year.
38. What do you mean by commercial paper?
- Commercial papers are issued by well-rated organizations for mobilizing funds from the public and other corporate. They are issued at a discount and they are freely negotiable by endorsement and delivery.
- The minimum maturity period is seven days and the corporate should have earned credit rating equivalent to P2 issued by CRISIL
39. What do you mean by FCNR?
FCNR means foreign currency nonresident accounts. Nonresident Indians and Persons of Indian origin are eligible to invest in this deposit. It is a term deposit accepted in the currencies – US dollar, Sterling Pound, Euro, Japanese Yen, Canadian dollar and Australian dollar. The minimum period of deposit is one year and the maximum period is five years and the deposit is held in foreign currencies and the interest earned is free from income tax.
40. What do you mean by Escheat?
He is a person who dies without leaving any legal heirs and in this case, his estate will revert to the state government.
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41. What do you mean by an appraisal of gold loans?
Gold loans are granted against the security of gold jewelry namely gold chains, necklaces, etc., The jewelry apart from gold contains a certain amount of copper and stones. An appraiser is a person well versed in the art of appraising the jewelry and on the appraisal of the jewelry, he will be finding out the approximate gold content so that the bank may be able to provide loans against the gold content.
42. What are the different kinds of term deposits available in a commercial bank?
The different kinds of term deposits available in a commercial bank are – fixed deposit, recurring deposit, and reinvestment deposit. In the case of a fixed deposit, a fixed amount is accepted for a definite period and interest is paid on a quarterly basis. In the case of reinvestment deposit which is similar to a fixed deposit, interest is paid on maturity since interest is reinvested. In the case of a recurring deposit, monthly installments are accepted for a fixed period.
43. What are the minimum period for which a fixed deposit is accepted and the maximum period for which a fixed deposit is accepted?
The minimum period for which fixed deposit is accepted is seven days and the maximum period is ten years.
44. Whether a fixed deposit can be accepted for a period of more than ten years?
In the case of deposits in the names of minors on account of the settlement of claims, the deposit can be for more than ten years
45. What do you mean by FERA?
FERA means foreign exchange regulations act and it came into effect from the year 1973. An act to regulate certain payments dealing in foreign exchange, securities, the import & export of currency and acquisition of immovable property by foreigners. Under Section 31 (1) of the Foreign Exchange Regulation Act ( FERA) of 1973, it is mandatory for foreign corporations, which are not incorporated in India to obtain permission from the Reserve Bank Of India (RBI) to acquire, hold, transfer or dispose off in any manner (expect by way of lease for a period not exceeding five years) any immovable property in India.
46. What do you mean by ECS?
ECS means electronic clearing service and the customer can authorize on a periodical basis to make payment of certain utility bills like electricity charges, water charges, etc., by debiting his account till such time he submits a revocation letter. Similarly, he can authorize corporate to credit the dividends on shares and interest on debentures as and when due to the credit of his account with the bank.
47. What is the minimum amount that can be sent through RTGS?
The minimum amount that can be sent through RTGS is Rupees two lakhs and there is no maximum limit
48. What is the maximum amount that can be remitted through NEFT?
There is no or maximum limit for remittances sent through NEFT
49. What is the maximum amount that can be sent abroad by any resident individual?
Under liberalized remittance scheme, all resident individuals including minors are allowed to freely remit an amount upto US dollars 250000 (or its equivalent freely convertible foreign currency) per financial year
50. What is the name of apex bank which is responsible for the development of agriculture in the country?
NABARD is the apex bank which is responsible for the development of agriculture in the country.
51. What are the different kinds of schemes available in our country aiming towards poverty alleviation?
National old age pension scheme; Jawahar Gramin Samruddi Yojana; National Family Benefit scheme; Mahatma Gandhi National Rural Employment Guarantee Scheme; National Maternal Benefit Schemel Annapurna, etc.,
52. What do you mean by the crossing of any cheque?
Writing of two parallel transverse lines drawn on the face of the cheque on top left-hand corner with or without any words between the lines is known as crossing and it is for the purpose of making payment of the cheque through an account in the name of the payee or holder.
53. What are the different kinds of crossing?
Two parallel transverse lines drawn on the face of the cheque on top left hand corner of the cheque with any words or without any words is known as general crossing and then the payment can be made to the account of the payee or holder with any bank. In case the name of any bank is mentioned within the two parallel lines, it is known as special crossing and in this case, the payment should be made to the account of the payee or holder with the bank mentioned in the crossing only and not to any other bank.
54. What do you mean by CASA?
CASA means current and savings and this is applicable to computerized branches linked under core banking solution
55. Whose signature is available in Rs. 100/- currency note?
The signature of RBI governor is available in Rs. 100 currency note
56. What do you know by dividend?
The dividend is the return available in the form of money for the investments made by the shareholders in the equity shares and preference shares of any company.
57. Bank holidays are declared according to which act?
Holidays for banks are declared according to Negotiable Instruments act 1881 by the respective state governments in their states. However, all Sundays, all second and fourth Saturdays have been declared as holidays apart from the holidays permitted for religious and national ceremonies.
58. Banks are functioning according to which act?
Commercial banks in the country are functioning according to Banking Regulation act 1949 and to some extent as per Reserve Bank of India act 1934
59. RBI is functioning in the country as per which act?
Reserve Bank of India is functioning according to the Reserve Bank of India act 1934.