Banking and Financial Awareness – 114

Site Administrator

Editorial Team

01 Sep, 2016

5587 Times Read.

Banking Awareness,


RSS Feeds RSS Feed for this Article



Read this in Hindi

NPA-2-2015

1) The Reserve Bank of India (RBI) on 13 June 2016 offered relief to banks on bad loans by announcing a new scheme that facilitates to convert up to half the loans held by corporate borrowers into equity or equity-like securities. What is the name given to this scheme? – Scheme for Sustainable Structuring of Stressed Assets (S4A)

Explanation: Scheme for Sustainable Structuring of Stressed Assets (S4A) is an optional framework prepared by the RBI for the resolution of large stressed accounts.

Under S4A banks will be allowed to convert up to half the loans held by corporate borrowers into equity or equity-like securities.

The scheme is intended to help restore the flow of credit to crucial sectors such as infrastructure and iron and steel, among others, reduce the stress on corporate borrowers and stanch bad loans across banks.

………………………………………………………………….

SBI-Associates-2016

2) The Union Cabinet on 15 June 2016 approved the merger of five associate banks as well as Bharatiya Mahila Bank (BMB) with State Bank of India (SBI). The merger will create Rs 37-lakh crore banking behemoth with over 50 crore customers. Which were the two other SBI associates that were merged with the SBI earlier? – State Bank of Saurashtra and State Bank of Indore

Explanation: According to the proposal cleared by the Union Cabinet on 15 June 2016, five associate banks – State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad as well as Bharatiya Mahila Bank (BMB) will be merged with State Bank of India (SBI).

Among the 5 SBI associate banks, State Bank of Bikaner and Jaipur, State Bank of Mysore and State Bank of Travancore are listed.

It is worth mentioning that SBI had first merged State Bank of Saurashtra with itself in 2008. Two years later in 2010, State Bank of Indore was merged.

………………………………………………………………….

PPF-2016

3) The Union Finance Ministry announced which new change pertaining to subscribers of the public provident fund (PPF) on 20 June 2016? – PPF holders can now prematurely close the PPF deposit scheme after completing five years

Explanation: According to an announcement made by the Union Finance Ministry on 20 June 2016 the subscribers of the public provident fund (PPF) accounts can now prematurely close the deposit scheme after completing five years for reasons such as higher education or expenditure towards medical treatment.

A PPF subscriber shall be allowed premature closure of his account or account of a minor of whom he is the guardian on ground that amount is required for treatment of serious ailments or life-threatening diseases of the account holder, spouse or dependent children on production of supporting documents from competent medical authority.

The normal term of a PPF account is 15 year.

………………………………………………………………….

Raghuram-Rajan-2015

4) According to an announcement made by RBI Governor Raghuram Rajan on 18 June 2016, he will step down as the head of central bank when his term expires on 4 September 2016. Rajan’s decision to leave came as a surprise to the markets and investors who have become accustomed to Rajan’s quick and decisive style to tackling issues plaguing the economy and the banking sector. Rajan is ………Governor of the RBI? – 23rd

Explanation: Raghuram Rajan had taken over as 23rd Governor of the Reserve Bank of India on 4 September 2013. He took over from D. Subbarao.

Earlier he was chief economist at the International Monetary Fund (IMF) from 2003 to 2007, the youngest to occupy the position.

From converting the Reserve Bank of India into inflation targeting central bank to forcing a long overdue clean-up of the banking sector, Rajan’s three year term has packed a punch.

………………………………………………………………….

RBI-N.S. Vishwanathan-2016

5) Who was appointed as the new Deputy Governor of the Reserve Bank of India (RBI) after his appointment was cleared by the government’s appointments committee on 28 June 2016? – N.S. Vishwanathan

Explanation: N.S. Vishwanathan, who has been Executive Director at RBI since 2014, will take over from H.R. Khan, who retires on 3 July 2016. He has been overseeing the banking and non-banking regulation departments.

Khan was appointed deputy governor in 2011 and has since been managing portfolios including payment and settlement systems, foreign exchange and internal debt management.

RBI has four deputy governors with two of them being appointed from the outside. The other two are typically promoted from within RBI. Urjit Patel, S.S. Mundra and R. Gandhi are the other three deputy governors at present.

………………………………………………………………….

6) Which financial entity launched the first sale of so-called masala bonds from 12 July 2016 that is basically a rupee-denominated bond sold overseas? – HDFC

Explanation: A masala bond is a rupee-denominated bond sold overseas. Such bonds allow an issuer to raise funds in the overseas market without taking on the currency risk typically associated with foreign-currency denominated bonds or loans.

HDFC thus became first Indian public issuer of synthetic rupee notes. The synthetic rupee notes are in the nature of rupee denominated bonds as per applicable Reserve Bank of India (RBI) guidelines. The bonds will bear a fixed coupon and will have a tenor of 3 years and 1 month.

The concept of masala bonds was first spelt out by RBI in April 2015, following which the central bank issued guidelines for the securities in September.

The primary idea was to allow Indian companies to raise money through an overseas debt instrument where the currency risk lies with the investor rather than the issuer.

………………………………………………………………….

7) Insurance regulator IRDA on 8 June 2016 proposed norms for selling and servicing of insurance policies through e-commerce platform with a view to increase insurance penetration in the country in a cost-effective manner. This would be done through own network of insurance companies. What name has been given to this network as described in IRDA’s proposals? – The Insurance Self-Network Platform (ISNP)

Explanation: According to the draft proposals of the Insurance Regulatory and Development Authority of India (IRDA), the Insurance Self-Network Platform (ISNP) will undertake Insurance e-commerce activities in India such as selling and servicing of insurance products.

The IRDA draft defines participants who can set up the ISNP. These include entities granted certificate of registration by IRDA such as insurers, insurance intermediaries, insurance agents and any other entity recognised by the Authority.

It also lays down the procedure for grant of permission for establishing an ISNP. The pricing of the product would be decided by the insurer.

All products which are approved under the Product Approval Regulations/ Guidelines and permitted by the respective regulations can be offered through the ISNP.

According to IRDA’s proposals, promotion of e-commerce in insurance space will lower the cost of transacting insurance business and bring higher efficiencies and greater reach.

………………………………………………………………….

8) In the biggest-ever consolidation in the country’s private insurance sector, which two entities will merge into HDFC Standard Life Insurance, as announced on 17 June 2016? – Max Life Insurance and Max Financial Services

Explanation: The boards of directors of HDFC Standard Life Insurance Company, Max Life Insurance Company Ltd and Max Financial Services Ltd have approved a merger of Max Life Insurance Company Ltd and Max Financial Services Ltd into HDFC Life.

This is thus the biggest-ever consolidation in country’s private insurance sector.

………………………………………………………………….

9) The Union Government on 20 June 2016 came out with which radical change in the foreign direct investment (FDI) regime? – It allowed 100% FDI under government approval route for almost every sector including defence

Explanation: In a major reform in the area of FDI, the Union Govt. on 20 June opened up a few more sectors, where FDI can be pumped in, either via automatic route or through the approval of the government.

Defence:

The defence sector is now completely opened up to FDI through government approval route, in cases resulting in access to modern technology in the country or for other reasons to be recorded.

Broadcasting:

Direct to Home (DTH), teleports, cable networks, mobile TV, headend-in-the Sky Broadcasting Service (HITS) has been opened up and 100% FDI through automatic route can now invested.

Pharma:

Up to 74% investment will be under automatic route, while the rest will need a government approval in brownfield pharma sector. Till now, approval was needed in the entire 100% investment in brownfield pharma.

Aviation:

FDI in airports, in case of brownfield projects, is now under automatic route for the entire 100%. Earlier, the automatic route was available till 74% of equity.

Trading:

The government also permitted 100% FDI in trading, including through e-commerce, in respect of food products manufactured or produced in India.

Single brand retail trading:

The Govt. decided to relax local sourcing norms up to three years. It also relaxed sourcing regime for another five years for firms undertaking single brand retail trading of products that have ‘state-of-the-art’ and ‘cutting edge’ technology.

………………………………………………………………….

10) In a first-of-its-kind of tax in India, which state government during July 2016 imposed 14.6% tax on junk food like pizzas, burgers, donuts etc.? – Kerala

Explanation: 14.5% tax on junk food items like pizzas, burgers, hamburgers, donuts, etc. sold in posh restaurant and joints was imposed in the Kerala Budget for year 2016-17 that was announced by Finance Minister Thomas Isaac on 7 July 2016. This was the first budget of newly formed LDF government under Chief Minister P.Vijayan.

The said tax has been called ‘fat tax’ and is first-of-its-kind of tax anywhere in India.

It is worth mentioning that fat tax is a reality in European countries such as Denmark and Hungary but looks out of place in Indian market barely recovering from a six-quarter back-to-back slump in eating out.

Industry estimates suggest there are 50-60 outlets of organised fast-food restaurant chains in Kerala, including global brands McDonald’s, Burger King, Pizza Hut, Domino’s Pizza and Subway.

………………………………………………………………….

| Current Affairs | Banking Awareness | SBI | RRB | SBI | IBPS | Banking | GK | Banking| Banking Updates | 2016 Banking | Banking Awareness 2016 |


Responses on This Article

© NIRDESHAK. ALL RIGHTS RESERVED.