Banking and Financial Awareness – 38

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Agnihotri Ravindra

06 Oct, 2013

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Banking Awareness,


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nachiket-Mor

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1) The Reserve Bank of India (RBI) on 23 September, 2013 announced a 13-member committee to frame a clear and detailed vision for financial inclusion/deepening across the country. This committee named ‘The ‘Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households’ is being headed by – Nachiket Mor, member on the RBI’s Central Board of Directors (The committee members are: Bindu Ananth (President, IFMR Trust); Prakash Bakshi (Chairman, Nabard); Bharat Doshi (Chairman, Mahindra & Mahindra Financial Services); A. P. Hota (Managing Director and CEO, National Payments Corporation of India); Sunil Kaushal (CEO, Standard Chartered Bank India); Roopa Kudva (MD and CEO, Crisil); Zia Mody (Managing Partner, AZB & Partners); S. S. Mundra (CMD, Bank of Baroda); Vikram Pandit (former CEO, Citigroup); Ramesh Ramanathan (Chairman, Janalakshmi Financial Services) and Shikha Sharma (MD & CEO, Axis Bank))

  • 2) In what seemed like an unexpected move Reserve Bank of India’s (RBI’s) newly appointed Governor Raghuram Rajan in his maiden Monetary Policy Review on 20 September, 2013 raised the repo rate under the liquidity adjustment facility (LAF). He thus kept RBI’s focus on controlling inflation, which it felt would be above the expected levels in the current fiscal. What is the new Repo Rate? – 7.5% (Repo Rate was increased by 25 basis points from its earlier level of 7.25%)

  • 3) What were the main highlights of RBI Governor Raghuram Rajan’s first monetary policy review presented on 20 September, 2013 since taking office on 4 September?

    Following are the main highlights of Raghuram Rajan’s first monetary policy review –

    • Repo rate under the liquidity adjustment facility (LAF) increased by 25 basis points from 7.25% to 7.5% with immediate effect (This move clearly reiterated the fact that RBI is still keeping its focus on bringing down the inflation. Consequently, the Reverse Repo Rate under the LAF stands adjusted to 6.5%, and the bank rate stands reduced to 9.5% with immediate effect)
    • Marginal standing facility (MSF) rate reduced by 75 basis points from 10.25% to 9.5% with immediate effect
    • The minimum daily maintenance of the cash reserve ratio (CRR) reduced from 99% of the requirement to 95% effective from the fortnight beginning 21 September, 2013 (This move was aimed at inducing liquidity into the system)
    • Cash Reserve Ratio (CRR) kept unchanged at 4.0% (CRR is the portion of deposits that banks are required to maintain with the RBI in cash)

    (With these changes, the MSF rate and the bank rate are re-calibrated to 200 basis points above the repo rate)

  • 4) A high-level panel on 23 September, 2013 submitted to Finance Minister P. Chidambaram its report on the alleged irregularities at the National Spot Exchange Ltd (NSEL). The panel in its report recommended two sets of measures to deal with the NSEL issue and also the problem of regulatory gaps in oversight of spot exchanges. Enforcement action has been recommended against NSEL and the persons behind the company. Who headed this panel on NSEL? – Arvind Mayaram, Economic Affairs Secretary

  • 5) Air India tied up with which public-sector bank to launch a co-branded credit card that provides numerous privileges to the holder? – SBI (This newly launched credit card has been named Air India SBI Credit Card and it allows a customer spending Rs 5 lakh in a year to earn up to three Delhi-Mumbai return tickets on Air India. The launch of this credit card marks the beginning of a new collaboration between the two major public sector entities (Air India and SBI). State Bank of India is also the leader of a consortium of banks that have helped Air India in its financial restructuring exercise. SBI Cards is a joint venture between SBI and GE Capital)

  • 6) Insurance Regulatory and Development Authority’s (IRDA’s) insurance repository system was launched by Union Finance Minister P. Chidambaram on 16 September, 2013. This repository system, which is claimed by IRDA as the first-of-its-kind in the world is situated in – Hyderabad (The objective of creating an insurance repository is to provide policyholders the facility to keep insurance policies in electronic form (like shares are kept in Demat account). Five companies have been given the status of insurance repositories and have been provided with a licence that will be valid till 31 July, 2014. Insurers can enter into agreements with one or more repositories)

  • 7) SEBI on 16 September, 2013 notified new norms for angel investors, who provide funding to companies at their initial stages. This has been done with an objective of giving encouragement to entrepreneurship in the country by financing small start-ups. What are the important points under this notification?

    • Angel investors have been allowed to be registered as Alternative Investment Funds (AIFs), which is a newly created class of pooled-in investment vehicles for real estate, private equity and hedge funds
    • Investments under angel investing restricted between Rs 50 lakh and Rs 5 crore
    • Angel funds can make investments only in those companies which are incorporated in India
    • Angel funds needs to be invested in a firm for at least three years
    • Angel funds can be availed for companies not older than 3 years
    • Angel funds are required to have a corpus of at least Rs 10 crore and minimum investment by an investor should be Rs 25 lakh

    8) How much advance tax for second quarter of present financial year was paid by country’s largest commercial bank State Bank of India (SBI), as announced by it on 15 September, 2013? – Rs. 1,120 crore (This was about 40% less than that paid during the corresponding period last year when it paid Rs. 1,820 crore. The advance tax pay-out decline from SBI comes amid a period of gloom on the economic front, with the quarterly GDP growth falling to a four-year low of 4.4 per cent for the April-June period)

  • 9) An advanced universal banking solution named Finacle 11E was launched on 18 September, 2013 by a leading IT company of India. This banking solution has been developed to enable banks of all sizes to rapidly modernize their operations. Which company launched this solution? – Infosys (Finacle is a range of CBS banking solutions developed by Infosys for Indian banks)

  • 10) The World Wide Web Consortium (W3C) opened its tour programme in India at Delhi under the aegis of the Department of Electronics & Information Technology on 17 September, 2013 to promote the features of a new standard for application developers. Which new standard is this which is expected to meet the goal of Open Web Platform? – HTML 5 (HTML 5 is the next evolution of web development standards by which application developers create end-user experience. One of the most important benefits of HTML 5 is that it is capable of making the Web useful on mobile and wireless devices, which will be next paradigm shift for internet growth in India. HTML 5 is intended to subsume not only HTML 4, but also XHTML 1 and DOM Level 2 HTML. W3W also held its tours programmes to promote HTML 5 at Bangalore, Hyderabad, Kolkota and Pune)

  • Responses on This Article

    Previous Responses on This Article

    1. kalpesh Parmar says:

      Kindly Provide it in hindi also.

    2. Ankita says:

      All the Articles are very helpful. I request you to plz update more Articles & brief about Banking terms.

    3. unni says:

      thanku for the updates…
      likely to have more details about the income tax and thier slabs….
      incentives for the each slabs ………..
      Also acts concsrning fema and its details.. PMLA and other acts
      i cant it find anywhere in digestible form

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