Banking and Financial Awareness – 89

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27 Apr, 2015

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1) MUDRA Bank, an ambitious initiative to provide boost to India’s micro and small business entities, was inaugurated by Prime Minister Narendra Modi at a programme held in New Delhi on 8 April 2015. What is the full expansion of the term MUDRA? – Micro Units Development and Refinance Agency

Explanation: MUDRA Bank will primarily serve the financial needs of small entrepreneurs and will also act as a regulator for ‘Micro-Finance Institutions (MFIs). It is being set up through a statutory enactment and will be responsible for developing and refinancing through the Pradhan Mantri MUDRA Yojana, which was also launched on this occasion. MUDRA Bank has a corpus of Rs 20,000 crore and a credit guarantee corpus of Rs 3,000 crore. Initially it will work as part of the Small Industries Development Bank of India (SIDBI).


2) The Reserve Bank of India (RBI) on 17 April 2015 came out with which important proposal pertaining to term deposits? – It proposed to allow banks to offer differential interest rates for term deposits

Explanation:  The RBI allowed banks to offer differential interest rates, based on whether their term deposits are with or without a premature withdrawal facility. In its sixth bi-monthly monetary policy review, in February 2015, the RBI had had decided to introduce the feature of early withdrawal facility in a term deposit as a distinguishing feature for offering differential rates of interest. Liquidity or ease of withdrawal, touted as the biggest advantage of bank fixed deposits (FDs), might soon be restricted due to this proposed move. According to RBI’s proposal, all term deposits of individuals held singly or jointly of Rs 15 lakh and below should have such a facility. Banks have also been allowed to offer deposits without the option.


3) Which entity has become India’s newest public sector undertaking (PSU) during April 2015 after Union Govt. increased its stake to over 51% in this entity? – IFCI Limited

Explanation: IFCI was earlier known as the Industrial Finance Corporation of India and was incorporated on 1 July 1948 as a government company. It was the first development finance institution in the country. Till now the Union Govt. had 47.93% stake in it. Some time back the govt. acquired IFCI’s 6 crore preference shares and taking up its stake up to 51.04%. Thus, as per the provisions of Section 2(45) of the Companies Act, 2013 IFCI became a government company (PSU) with effect from 7 April 2015. IFCI is at present the leading infrastructure finance company in the country.


4) Small Industries Development Bank of India (SIDBI) completed how many years of its operations during April 2015? – 25 years

Explanation: SIDBI is the leading financial entity engaged in the growth and development of micro, small and medium-scale enterprises (MSME) in India. It is a non-independent financial institution which was set up through a Parliamentary act on 2 April 1990. It was initially the wholly-owned subsidiary of IDBI while at present Govt. of India holds 33% stake in it. It initially started its operations as a refinance agency to banks and state level financial institutions for their credit to small industries. But later it expanded its activities by including direct credit to the SME through 100 branches in all major industrial clusters in India.

5) Which bank was placed at the top spot among all banking entities in mobile banking transactions during January 2015 according to the pertaining data released by RBI on 14 April 2015? – HDFC Bank

Explanation: Private sector-based HDFC Bank maintained the lead in mobile transactions, with Rs 4,906.86 crore worth recorded in January 2015. The bank saw a huge nine-fold growth in mobile banking transactions during January 2015 as compared to January 2014. ICICI Bank followed HDFC Bank with mobile banking transactions worth Rs 2,224.97 crore while SBI was third in the list with Rs. 1,586.4 crore. HDFC Bank has seen robust growth in the internet banking space and recent trends suggest mobile banking, a subset of internet banking, has far outpaced the latter.

6) India continued to be the leading nation in remittances during 2014 as announced by the World Bank on 14 April 2015. How much net remittance was received by India from its global migrant workforce in 2014? – $70 billion

Explanation: According to World Bank’s Report on Remittance, India, China, Philippines, Mexico and Nigeria were the top five remittance recipient countries, in terms of value of remittances during 2014. Total remittances in 2014 reached $583 billion. This is more than double the official development assistance (ODA) in the world. India received $ 70 billion, China $ 64 billion, the Philippines $ 28 billion. On the other hand, United States, Saudi Arabia, Germany, Russia and the United Arab Emirates (UAE) remained the top five migrant destination countries.


7) The first ever International Financial Services Centre (IFSC) or Finance Special Economic Zone (FSEZ) became operational on 10 April 2015 after it was inaugurated by Union Finance Minister Arun Jaitley. This first-of-its-kind IFSC called Gujarat International Finance Tech-City (GIFT City) is situated at which place of Gujarat? – Between Gandhinagar and Ahmedabad

Explanation: GIFT City is the first-of-its-kind IFSC to be established in India and has been centrally and strategically located between Gujarat capital Gandhinagar and Ahmedabad. Its main purpose is to provide high quality physical infrastructure (electricity, water, gas, district cooling, roads, telecoms and broadband), so that finance and tech firms can relocate their operations there from Mumbai, Bangalore, Gurgaon etc. where infrastructure is either inadequate or very expensive. This project is also called a FSEZ (Finance Special Economic Zone). This is one of the dream projects of Prime Minister Narendra Modi, when he was the Chief Minister of Gujarat. Union Govt. expects that GIFT City will likely get back much of the business of financial services -currency derivatives and reinsurance businesses, for instance -that India is losing out to Singapore, Dubai and London now. During inauguration of GIFT City, Arun Jaitley also unveiled rules and regulations for this global financial hub. The regulations are aimed at creating a vibrant IFSC on the lines of those in Dubai and Singapore and check the flight of trading in rupee and Indian securities to such offshore financial hubs.

8) What would be the maximum sum assured for life insurance policies sold through common service centres (CSCs) as proposed in the draft regulations released by the Insurance Regulatory and Development Authority of India (IRDA)? – Rs. 2 lakh

Explanation: The common service centre (CSC) platform is currently being used by citizens to access and pay for the services offered by multiple government agencies and private sector players. Set up under the national e-governance plan, about 150,000 CSCs are functioning under different names in different states. The IRDA had issued guidelines for utilising the CSC network to sell insurance products in September 2013. The IRDA has now proposed a maximum sum assured of Rs. 2 lakh for life insurance policies sold through CSCs. However, motor insurance would be allowed to exceed this limit.


9) Which company became the first Indian private company since the year 2000 to list overseas as it recently made its debut on US stock exchange NASDAQ? – Videocon D2h

Explanation: Videocon D2h is a private company from the stable of Videocon Group and is engaged in providing direct-to-home services across India. It made its debut on New York-based NASDAQ by raising $ 325 million through issuance of American Depository Receipts (ADRs). Thus it became the first Indian private company since the year 2000 to list overseas. VideoconD2h also became the first sizeable Indian listing on US exchanges and the first Indian media company to be listed at NASDAQ. With a market capitalization of around $1.15 billion, it is now among the most valued Indian companies at NASDAQ.


10) Which leading online retail company acquired mobile transactions platform FreeCharge as announced by the company on 8 April 2015? – Snapdeal

Explanation: Snapdeal, which is one of India’s largest online retail marketplace, acquired FreeCharge, a mobile commerce platform where users can pay their mobile, DTH and utility payments across most major operators. However, FreeCharge will continue to function as an independent platform and without any changes in its shopping experience. With this acquisition, Snapdeal can offer a wide range of products and services, including financial services, mobile recharge and utility payments with a growing user base of over 40 million.


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Know, who is Vijay Kelkar and what is PPP !

Vijay Kelkar is a renowned economist and a former Finance Secretary. He was appointed head of newly constituted committee to give recommendations to recast the model of Public-Private-Partnership (PPP) model in India. India is one of the largest PPP market with over 900 projects. The Kelkar committee will review the PPP policy, suggest a better risk-sharing mechanism between private developers and the government after analysing such projects.

Know, who is Yaduveer Krishnadatta Chamaraja Wadiyar !

Yaduveer Krishnadatta Chamaraja Wadiyar was crowned as the new Maharaja of of Mysuru (Mysore) royal family. He is the 23-year old grandson of Princess Gayathri Devi, who was the eldest daughter of the last Maharaja of Mysore, Sri Jayachamarajendra Wadiyar. The coronation was held at Mysuru’s famous Amba Vilas Palace, which was decked up for the occasion.

Know about Sepp Blatter!

Swpp Blatter, was re-elected as FIFA president for a fifth term at the 65th Annual Congress of FIFA held at Zurich for four year term.

Prince Ali bin al-Hussein of Jordan stood against Blatter in this election. It is worth mentioning that FIFA is going through a major controversy regarding corruption in the organisation with two FIFA vice presidents and a recently elected FIFA executive committee member still in custody.


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