Saturday, 31 December 2016



**SIDBI: Small Industries Development Bank of India (SIDBI), set up on April 2, 1990 under an

Act of Indian Parliament, is the Principal Financial Institution for the Promotion, Financing and

Development of the Micro, Small and Medium Enterprise (MSME) sector and for Co-ordination

of the functions of the institutions engaged in similar activities.

**National Bank for Agriculture and Rural Development (NABARD) is an apex development

bank in India having headquarters based in Mumbai (Maharashtra) and other branches are all

over the country. The Committee to Review Arrangements for Institutional Credit for Agriculture

and Rural Development (CRAFICARD), set up by the Reserve Bank of India (RBI) under the

Chairmanship of Shri B. Sivaraman, conceived and recommended the establishment of the

National Bank for Agriculture and Rural Development (NABARD). It was established on 12 July

1982 by a special act by the parliament and its main focus was to uplift rural India by increasing

the credit flow for elevation of agriculture & rural non-farm sector and completed its 25 years on

12 July 2007. It has been accredited with "matters concerning policy, planning and operations in

the field of credit for agriculture and other economic activities in rural areas in India". RBI sold its

stake in NABARD to the Government of India, which now holds 99% stake.

**Export-Import Bank of India is the premier export finance institution of the country, established

in 1982 under the Export-Import Bank of India Act 1981.

**Export Credit Guarantee Corporation of India Limited (ECGC) is a company wholly owned by

the Government of India based in Mumbai, Maharashtra. It provides export credit insurance

support to Indian exporters and is controlled by the Ministry of Commerce. Government of India

had initially set up Export Risks Insurance Corporation (ERIC) in July 1957. It was transformed

into Export Credit and Guarantee Corporation Limited (ECGC) in 1964 and to Export Credit

Guarantee Corporation of India in 1983. Provides a range of credit risk insurance covers to

exporters against loss in export of goods and services.




Background / White Label ATM in Canada and India

White label ATMs are popular in Canada. Since 2006, some banks have been pressing with RBI to

introduce white label ATMs in India too. On 14th February, 2012, RBI has issued DRAFT

guidelines and asked the comments of the bankers and public in this regard. Thus, these guidelines

are still not applicable but are likely to be soon approved.

Definition and Meaning of White Label ATM - India ? or What is White Label ATM ? or What is


White Label ATM or White Label Automated Teller Machines or WLAs in India will be owned and

operated by Non Bank entities. From such White Label ATM customer from any bank will be able to

withdraw money, but will need to pay a fee for the services. These white label automated teller

machines (ATMs) will not display logo of any particular bank and are likely to be located in non

traditional places.

What is the purpose for introduction of White Label ATMs in India

In India only Banks are allowed to set up ATMs. Although between 2008 - 2011, there has been 30%

growth in number of ATMs and by the beginning of 2012, we have about 87,000 ATMs in India, yet the

penetration of ATMs in Tier III and Tier IV cities has been low and downtime of such ATMs has been

high. Thus, RBI is feeling that there is a need to expand ATM network, which can be done by only with

the help of private operators.

Who will benefit from White Label ATMs

The white label automated teller machines are likely to benefit customers as well as banks. With the

expansion of ATM network, customers will be able to withdraw funds at more locations which will be

convenient and located near to their home or place of work. Banks too support introduction of white

label ATMs as such machines are likely to reduce pre-transaction cost for them and will be free from the

problems relating to maintaining and running such a payment channel.

What Problems are Likely to be Faced by Bankers and Customers

Bankers are already sounding caution about the pitfalls of white label ATMs. The first and foremost

concern for customers will be the inconvenience they may feel in case of failed transactions on WLAs.

In such cases the dispute resolution mechanism will involve three entities — the WLA operator, the

sponsor bank of the operator, and the customer's bank. The WLA operators being non bank entities

and running purely on profit basis may take longer time or avoid payments on account of failed

transactions. The second concern for customers will be the high cost they are likely to pay for use of

such ATMs


Description and Meaning of Brown Label ATMs

'Brown label' ATM are those Automated Teller Machines where hardware and the lease of the ATM

machine is owned by a service provider, but cash management and connectivity to banking networks is

provided by a sponsor bank whose brand is used on the ATM.

The `brown label' has come up as an alternative between bank-owned ATMs and 'white label' ATMs.

As in India white label ATMs were not allowed by RBI (in February, 2012, RBI has issued the draft

guidelines for introduction of white ATMs, but final approval has yet to come.), the concept of Brown

Label ATMs started picking up.

What is the Status of Brown label ATMs in India

In view of the high cost of ATM machines and RBI's guidelines for expansion of ATMs, the concept of

Brown Label ATM network is likely to expand at a brisk pace in next few years. In the recent years,

there is a visible shift in the way banks look at the ATM business. From the earlier model where banks

used to buy outright the ATM machines and bear the cost of service, they are now preferring brown

label ATMS i.e. where the machine and service is outsourced. There are indications that as many as

50% may soon be under this category.

However, after approval of white label ATMs, the bankers will review the expansion model for their









There has been a lot of confusion among bankers as well as students about various concepts used by

RBI in liquidity management. Therefore, I thought of writing about these in simple language. I

hope this will be of great use to young bankers as well as students.

What are the Open Market Operations (OMOs)?

An open market operation (popularly also known as OMO) is an activity by a central bank to buy or sell

government securities on the open market. Central banks use these operations as the primary

means of implementing monetary policy.

Thus we can say that in India OMOs are the market operations conducted by the Reserve Bank of India

(it is central bank of India) by way of sale/ purchase of Government securities to/ from the market with

an objective to adjust the rupee liquidity conditions in the market on a durable basis.

Sale of Government Securities

When the RBI feels there is excess liquidity in the market, it resorts to sale of securities thereby sucking

out the rupee liquidity. It is simple operation, wherein RBI sells the government securities to banks, who

pay for these investments. Thus excess liquidity goes to RBI.

Purchase or Buy Back of Government Securities

When RBI feels that the liquidity conditions are tight, it will purchase / buy back securities from the

market, thereby releasing liquidity into the market. Under this operation, RBI purchases government

securities from banks and thus pays the bank equivalent amount to banks. Thus, liquidity is injected

into the system.

What is buyback of Government securities and What Are its Results ?

Buyback of Government securities is a process whereby the Government of India and State

Governments buy back their existing securities from the holders. The buy back of securities by RBI is

done to achieve any one or all results:-

(i) The objectives of buyback can be reduction of cost (by buying back high coupon securities),

(ii) reduction in the number of outstanding securities; and

(iii) improving liquidity in the Government securities market (by buying back illiquid securities) and

infusion of liquidity in the system.

Governments make provisions in their budget for buying back of existing securities. Buyback can be

done through an auction process or through the secondary market route, i.e., NDS/NDS-OM.

What is Liquidity Adjustment Facility (LAF)?

LAF is a facility extended by RBI to scheduled commercial banks (excluding RRBs) and primary dealers to

avail of liquidity in case of requirement or park excess funds with the RBI in case of excess liquidity on an

overnight basis against the collateral of Government securities including State Government securities.

As we have seen above OMO is also a liquidity management tool in the hands of RBI, but that is a tool

used to adjust long term liquidity in the banking system. However, LAF enables liquidity

management on a day to day basis.

The operations of LAF are conducted by way of repurchase agreements (repos and reverse repos with

RBI being the counter-party to all the transactions. The latest rates can be viewed at or

also at our website

Banking Ombudsman Scheme: The Banking Ombudsman Scheme enables an expeditious and inexpensive forum to bank

customers for resolution of complaints relating to certain services rendered by banks. The Banking Ombudsman Scheme

introduced by RBI in 1995. There after many norms were issued by RBI and the important one was issued in 2006.

Banking Ombudsman is a quasi-judicial authority (the Banking Ombudsman- is a senior officials appointed by the Reserve Bank

of India) to redress customer complaints against deficiency in certain banking services. The Banking Ombudsman Scheme

functioning under India’s Banking Ombudsman Scheme 2006, and the authority was created pursuant to the decision by the

Government of India to enable resolution of complaints of customers of banks relating to certain services rendered by the banks.

The Banking Ombudsman provides speedy solutions to the grievances faced by the customers from various banks. It addresses

grievances by way of its legal framework and redressal is done accordingly. It is set up specifically for handling grievances

related to banking services and related matters under its purview. As on date, fifteen Banking Ombudsmen have been appointed

with their offices located mostly in state capitals. All Scheduled Commercial Banks, Regional Rural Banks and Scheduled

Primary Co-operative Banks are covered under the Scheme.

Bank Rate: It is the rate at which the RBI discounts bill of exchange or other commercial papers. Simply put, bank rate is the rate

at which the RBI extends credit to the commercial bank. Bank rate is also called discount rate.

Cash Reserve Ratio (CRR):

The RBI Act, 1934 stipulates that a commercial bank is required to keep in cash a portion of its deposits with the RBI. This is

known as Cash Reserve Ratio. The RBI can vary this ratio between 3 and 15 per cent.

Statutory Liquidity Ratio (SLR):

The SLR specifies that a commercial bank invests a designated minimum proportion of its total assets in liquid assets, such as

cash, gold and unecumbered approved securities (not government securities but having the status of the same). This is in

addition to the Cash Reserve Ratio. The SLR cannot be raised beyond 40%.

In other words, SLR refers to that protion of total deposits of a commercial bank which RBI has to keep with itself in the form of

cash resevers. SLR is an effective instrument of credit control with RBI. By varying the SLR, the RBI controls the expansion and

contraction of credit. If SLR is reduced, the lendable resources with the scheduled commercial banks gets correspondingly

increased and vice versa

Repo market

Repo : We have seen above LAF and now that it is conducted through Repos and Reverse Repos. The

Repo is also known as ready forward contact, and is an instrument for borrowing funds by selling

securities with an agreement to repurchase the said securities on a mutually agreed future date at an

agreed price which includes interest for the funds borrowed. Thus under Repo, banks borrow from RBI

and thus liquidity comes to banking system.

Reverse Repo : The reverse of the repo transaction is called ‘reverse repo’ which is lending of funds

against buying of securities with an agreement to resell the said securities on a mutually agreed future

date at an agreed price which includes interest for the funds lent. Thus, under Revere Repo banks

lend money to RBI and thus liquidity reduces in the banking system.

Thus, we can conclude that there are two legs to the same transaction in a repo/ reverse repo. The

duration between the two legs is called the ‘repo period’. Predominantly, repos are undertaken on

overnight basis, i.e., for one day period. Settlement of repo transactions happens along with the outright

trades in government securities.

Now from June 2014, RBI has also started conducting Term Reverse Repo too, under which the Reverse

Repo is done for periods longer than overnight. On 2nd June 2014 it conducted 4 day Term Reverse

Repo. Now onwards RBI will conduct these even for longer periods.

Collateralised Borrowing and Lending Obligation (CBLO)

This is another money market instrument used in India. This is operated by the Clearing Corporation

of India Ltd. (CCIL), for the benefit of the entities who have either no access to the inter bank call money

market or have restricted access in terms of ceiling on call borrowing and lending transactions.

CBLO is a discounted instrument available in electronic book entry form for the maturity period ranging

from one day to ninety days (up to one year as per RBI guidelines). In order to enable the market

participants to borrow and lend funds, CCIL provides the Dealing System through Indian Financial

Network (INFINET), a closed user group to the Members of the Negotiated Dealing System (NDS) who

maintain Current account with RBI and through Internet for other entities who do not maintain Current

account with RB

Balloon Payment

A large, lump-sum payment scheduled at the end of a series of considerably smaller periodic payments. A balloon payment may

be included in the payment schedule for a loan, lease or other stream of payments.

Bank assurance

Selling of insurance through the vast network of banks. It is part of what is today called as relationship banking.

Bank Credit

The borrowing capacity provided to an individual by the banking system in the form of credit or a loan. The total bank credit the

individual has is the sum of the borrowing capacity each lender bank provides to the individual.

Bank Discount

The bank charge made for payment of a note prior to maturity, expressed as a percentage of the note’s face value. In short,

front-end interest discounted on an instrument or the amount paid to the holder/bearer of the instrument (borrower) after interest

is deducted. The full amount expressed in the instrument is collected as repayment.

Bank Draft

A cheque drawn by one bank against funds deposited into its account at another bank, authorising the second bank to make

payment to the individual named in the draft.

Bank Guarantee

A guarantee from a bank ensuring that the liability of a debtor will be met. It is used in trade finance. Unlike a line of credit, the

sum is only paid if the counterparty does not fulfill the stipulated obligations under the contract.

Bank Rate

The rate at which RBI lends long term loans to scheduled commercial banks.

Bank Run

It occurs when a large number of customers withdraw their deposits because they believe the bank is, or might become,


Bank Reconciliation

The process of adjusting balance in an account reported by a bank to reflect transactions that have occurred since the reporting

date. For instance, cheque issued by account holder may not yet reflect in the bank’s books but accounted for by the issuer.

Hence, the need to know the likely balance.

Banker’s Acceptance

A written demand accepted by a bank to pay a specified amount at a future date.


In general terms, the business activity of accepting and safeguarding money owned by other individuals and entities and then

lending out this money in order to earn a profit.

Banking Code and Standards Board of India (BCSBI)

It was set up in 2005 by the RBI as an independent and autonomous watch dog to monitor and ensure that the Banking Codes

and Standards adopted by the banks are adhered to in true spirit.

Banking Ombudsman

The Banking Ombudsman is a senior official appointed by the RBI to redress customer complaints against deficiency in certain

banking services.

Banking Ombudsman Scheme

It enables an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services

rendered by banks. Introduced in 1995 and revised in 2002 and 2006.

Barter System

It refers to a primitive exchange system where there is an exchange of goods or services without involving money.

Base Currency

The first currency quoted in a currency pair on foreign exchange. It is also typically considered the domestic currency or

accounting currency.

Base Effect

The base effect refers to the impact of the rise in price level (ie last year’s inflation) in the previous year over the corresponding

rise in price levels in the current year (ie current inflation). For example, if the price index had risen at a high rate in the

corresponding period of the previous year, then a similar absolute increase in the Price index in current year will be relatively

lower and vice-versa.

Base Rate

It is the minimum rate of interest that a bank is allowed to charge from its customers. It was recommended by Deepak Mohanty

Committee in 2009-10 and has replaced Benchmark Prime Lending Rate (BPLR) since July 2010.

Base Year

In the construction of an index, the year from which the weights assigned to the different components of the index, is drawn is

called Base Year. It is conventional to set the value of an index in its base year equal to 100.

Basel Accords

It refer to the banking supervision Accords prescribed by Basel Committee on Banking Supervision (BCBS). By far, BCBS has

issued three accords known as Basel I, Basel II and Basel III.

Basel Committee on Banking Supervision (BCBS)

Under Bank for International Settlement, the BCBS provides a forum for regular cooperation on banking supervisory matters. Its

objective is to enhance understanding of key supervisory issues and improve the quality of banking supervision worldwide.


It is the first international accord to develop standardised risk-based capital requirements for banks across countries. It became

operational in 1988 and was replaced with a Basel-II in June 2004.


It is based on three mutually reinforcing pillars that allow banks and supervisors to evaluate various risks that banks face. These

are: Piller-I Minimum Capital Requirements (MCR); Pillar-II Supervisory Review Process (SRP); and Pillar-III Market Discipline



It is a global regulatory standard on bank capital adequacy, stress testing and market liquidity risk agreed upon by the members

of the Basel Committee on Banking Supervision in 2010-11. It was developed in a response to the deficiencies in financial

regulation revealed by the late-2000s financial crisis. It, therefore, attempts to reduce risk in banking by increasing quality and

quantity of capital



*Fiduciary issue: is the part of the issue of notes and coins that is not backed by gold. In the past bank notes were

issued and were backed by gold. You could always redeem your notes and have gold back in exchange. However,

the system quickly developed so that the value of notes issued exceeded the amount of gold. That part of the note

issue in excess of the amount of gold was the fiduciary issue. In other words the amount of money issued on trust.

Today the whole note issue is fiduciary.

*Fiduciary: This term can be used both as an adjective and a noun. It is used in the context of a trust relationship.

For example, if one is said to have a fiduciary obligation, it means that one is acting in trust for other parties. A

fiduciary is one who is in a position of trust. One can also use the adjective fiducial - for example, one has fiducial

dependence on someone else.

*Rights issue: An new share issue to existing shareholders giving them the right to buy new shares at a

predetermined price.

*Vanilla issue: A security issue that has no unusual features.

*Unseasoned issue: Issue of a security for which there is no existing market.

*Mirror Account Service: Mirror Account Service is a concentration service that enables you to pool your funds

from accounts maintained by your various subsidiaries, divisions or related entities while maintaining operating

account autonomy among the participants. By consolidating funds, you are able to earn higher interest returns or

minimize the use of operating bank credit lines through inter-entity lending, while maintaining autonomy in day-to-

day banking activities

*An asset–liability mismatch occurs when the financial terms of an institution's assets and liabilities do not


*TARC-Tax Administration Reforms Commission. The government set up a seven-member panel under the

chairmanship of Parthasarathi Shome to revisit tax laws and recommend measures for putting in place a stable

and non-adversarial tax administration.




As per the existing policy of the Cash Reserve Ratio (CRR) of scheduled banks is fixed at a certain percentage of their NDTL. What is the Full form of NDTL?—Net Demand & Time Liabilities.
Basel Committee on Banking Supervision is also popularly known as—Bank for International Settlements Committee.
While investing in mutual funds we come across a term called NAV. What is the meaning of NAV?—Net Asset Value.
Commercial Papers are issued by—Banks to Banks.
MAT Provision in Income Tax stands for—Minimum Alternate Tax.
Many times we read about SWIFT in newspapers. Full form of SWIFT—Society for world-wide interbank financial telecommunication.
India is following a system of fiat money, while issuing currency. What is fiat money?—the currency backed by Government Guarantee.
Initial repayment holiday given to a borrower for repayment of loan is called as—Moratorium.
Almost all banks in our country have introduced— Kisan Credit Cards—facility for granting crops loans for farmers.
Full Form of CBS—Core Banking Solutions.
Sub Prime Lending is a term applied to the loans made to—those borrowers who don’t have a good credit history.
Financial Inclusion is the latest powerful tool adopted by Reserve Bank of India, to fulfill the basic objective of—Connecting every Indian to the Country’s Banking System.
Full Form of FLCC—Financial Literacy and Credit Counselling.
The rate of interest charged by RBI for lending money to various commercial banks by rediscounting of the bills in India is called—Bank Rate.
Basel II norms are to be followed by Commercial Banks for—Risk Management.
NABARD—will set up core banking infrastructure for rural banks.
NPA in banking terminology denotes—Non-performing Assets.
Full Form of ALM—Asset Liability Management.
Full Form of LIBOR—London Inter Bank Offered rate.
Full Form of FSDC—Financial Stability and Development Council.
One single statement that depicts the financial position of a bank and business enterprise at a given point of time is called—Balance Sheet.
ECGC—Export Credit Guarantee Corporation—is the organization that provides guarantee to the exporters.
CIBIL—provides credit history of the borrowers.
FIMMDA stands for—Fixed Income Money Markets & Derivatives Association.
Operation by cheques is permitted in—savings bank accounts and current accounts.
Real Time Gross Settlement or RTGS enables—immediate transfer of money from customer of one bank to customer of another bank.
Para banking —utility services provided by banks.
Hot Money—this is the fund which is dumped into a country to get the advantage of a favourable interest rate and hence brings higher returns.
If a crossed cheque is presented for payment—can be paid through only a banker.
A savings bank account opened with a commercial bank with zero balance or very minimal balance is known as—NO FRILLS Account.
Minimum lending rate decided by RBI which shall be adopted by all Public Sector Banks—Base Rate.
Opening the savings bank account of a minor girl will be called as—Retail Banking—in Banking terminology.
Banking Sector will fall under the – Service Sector.
An account in which trading of shares in their electronic form is done, is known as—Demat Account.
RBI’s open market operation transactions are carried out with a view to regulate—Liquidity of economy.
When a bank dishonours a cheque—it is called return of the cheque unpaid.
The funds which are created to be used as relief funds or bailouts packages are known as—sovereign funds.
If a cheque is post dated—bank on whom it is drawn will not honour the cheque before the date of the cheque.
Banking Regulation Act, 1949 deals with—the regulation of banking companies; the control over the management of banking companies; suspension and winding up of banking companies.
Bank Marketing—deals with providing services to satisfy customers’ financial needs and wants.
Disadvantages to Credit Card holders include: over spending ending in Debt Trap; Frauds due to loss of theft of cards; Forged Signatures.
The instrument used in RBI under general credit control is—Exchange Control.
Open Market Operation (OMO)—is a tool for general credit control used by RBI which not only influences the flow of liquidity for the purpose of expansion or contraction of credit but also helps RBI to stabilize money supply and prices of Government Securities.
Mutual Funds in India are regulated by: SEBI.
Basel II accord differs from the earlier accord by the introduction of an explicit treatment for – Operational Risk—in the definition of risk weighted assets.
By Financial Inclusion, we mean provision of – Affordable Financial Services—by the formal financial system to those who are hitherto excluded.
RBI was established in 1935 pursuant to the recommendations of: Hilton Young Commission.
The Banking Companies Act, 1949 was enacted to consolidate and amend the law relating to banking companies with effect from 1st March 1966; the name of the Act has been changed as—The Banking Regulation Act.
A scheduled bank is one, the name of which is included in the 2nd Schedule of RBI Act, 1934. Such a bank should have a paid up Capital and Reserves of an aggregate value of not less than: Rs. 5 Lakhs.
The working of RRBs was reviewed in 1986 and their continuance and greater involvement of the sponsor bank in their management was recommended by: Kelkar Committee.
Main objective of Land Development Bank is: providing investment credit for agriculture.
Regulatory authority for the activities of Merchant Banking in India: Securities and Exchange Board of Delhi.
Industrial Development Bank of India is an apex body in the field of industrial finance in the country.
As per the provision of Section 29 of the Banking Regulation Act, 1949 every banking company is required to prepare its final accounts; viz. Profit & Loss Account and Balance Sheet in the firms prescribed in: the 3rd Schedule to the Banking Regulation Act, 1949.
World over most of the supervisory authorities have adopted the following as the basis of assessment of capital adequacy: Risk Assets Ratio System.
Basic Committee has defined capital in two tiers (Tier-I and Tier-II). Tier-I is known as: Core Capital.
Treasury Bill means: an instrument is used by the Central Government for short term borrowing.
Commercial Banking System in India comprises of: Scheduled and Non-Scheduled Banks.
Banking Regulation Act, 1949, applies to the following categories of banks: Nationalised Banks; Non-Nationalised Banks; Co-operative Banks.
 Full Form of ECB—External Commercial Borrowing.
Forward Markets Commission is responsible for regulation of Commodities Futures Trading in India.
SEBI is a Non-statutory body.
Scheme is related exclusively to Financial Inclusion: Swabhiman.
Full Form of KYC: Know Your Customer.
Insurance Cover for bank deposits in our country is provided by: DICGC.
Full Form of CDR—Corporate Debt Restructuring.
Banking Ombudsman—resolves complaints of customers.
The rate below which banks cannot generally lend is called as: Base Rate.
1st state in the country to launch RBI’s e-payment system for commercial tax payers-Karnataka.
Full Form of IFRS—International Financial Reporting Standards.
NRE Deposit is—Non-Resident External deposit.
Banks in India are regulated under—Banking Regulation Act, 1949.
Banking Sector falls under- Service Sector.
Negotiable Instruments are: Cheque, Fixed Deposit receipt, Promissory Note, Bill of Exchange.
Banking Ombudsman Scheme is applicable is applicable to the business of—all scheduled commercial banks excluding RRBs.
A bank is called as Scheduled Bank when—it is included in the 2nd Schedule of the RBI Act.
Upper limit prescribed for RTGS transaction is—Rs. 2 lacs.
Full form of FRBM—Financial Responsibility and Budget Management.
Money Market Instruments are: treasury Bills, Commercial Papers, Certificate of Deposit and Share of Bonds.
Finance Ministry has asked the Reserve Bank of India to allow common ATMs that will be owned and managed by non-banking entities hoping to cut transaction costs for banks. Such ATMs are known as—White Label ATMs.

Insurance Regulatory and Development Authority(IRDA)

Insurance Regulatory and Development Authority (IRDA) is an autonomous apex statutory body which regulates

and develops the insurance industry in India. It was constituted by a Parliament of India act called Insurance

Regulatory and Development Authority Act, 1999 and duly passed by the Government of India.

The agency operates its headquarters at Hyderabad, Andhra Pradesh where it shifted from Delhi in 2001. The

Insurance regulatory and Development Authority (IRDA), batted for a hike in the foreign direct investment (FDI)

limit to 49 per cent in the sector from the present 26 per cent.

The IRDA Act, 1999 was passed as per the major recommendation of the Malhotra Committee report (1994) which

recommended establishment of an independent regulatory authority for insurance sector in India. Later, It was

incorporated as a statutory body in April, 2000. The IRDA Act, 1999 also allows private players to enter the

insurance sector in India besides a maximum foreign equity of 26 per cent in a private insurance company having

operations in India. It serves as an Authority to protect the interests of holders of insurance policies, to regulate,

promote and ensure orderly growth of the insurance industry and for matters connected therewith. IRDA role is to

protect rights of policy holders & they provides registration certification to life insurance companies & responsible

for renewal, modification, cancellation & suspension of this registered certificate.

Former LIC chief T S Vijayan today took over as the chairman of the Insurance Regulatory and Development

Authority (IRDA). Mr Vijayan succeeds J Hari Narayan, who completed his five-year term yesterday. IRDA

chairperson's tenure is for five years.

Friday, 30 December 2016











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