IMPORTANT NOTES ON BANKS

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 1^st 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 2^nd 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 3^rd 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.

1^st 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 2^nd 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.