Banking and Financial Awareness – 92

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03 Jun, 2015

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PayPal-2015

1) India’s largest commercial bank SBI on 21 May 2015 signed an MoU with which leading international digital payments company to facilitate cross-border transactions? – PayPal

Explanation: PayPal has a presence in 203 countries and processes 11.5 million transactions daily. SBI on 21 May entered into an agreement with PayPal to help its nine lakh SME customers make varied international transactions in a safe and secured manner. The agreement initially aims at facilitating cross-border transactions after which domestic payments would be covered. Subsequently, SBI would look into e-governance areas such as e-visas, e-travel documents. The facility would also be available to SBI debit card holders.

 


2) Country’s largest private bank – ICICI Bank on 25 May 2015 launched which new password service for its customers? – Voice Password Service

Explanation: Under ICICI Bank’s Voice Password Service, the customers can make transactions using just their voice, without using other means of authentication like a password. The voice recognition service authenticates customers based on their speech patterns and allows them to execute banking transactions through the bank’s call centre. Customers, in general, use various means of authentication like entering card numbers, answering security questions and entering a personal identification number (PIN) to carry out a phone banking transaction. Over 33 million savings bank and credit card customers of ICICI Bank will be able to use the service. This password service works on unique ‘voice prints’ which comprise over 100 characteristics, including voice modulation, speed, accent and pronunciation, which are impossible to imitate. The voice print is stored and matched whenever the customer calls from the registered mobile number.

 


3) Which private-sector bank on 31 May 2015 announced that it will discontinue issuing slips after cash withdrawals at ATMs and will alert the customer through SMSes? – HDFC Bank

Explanation: This is a part of the digital initiative by the HDFC Bank, under which it had last year launched the ‘green PIN’ scheme wherein card-users were given the PIN numbers electronically rather than in a printed kit. The bank is piloting the initiative at a few ATMs at present and will roll out the same across its network of over 11,700 ATMs by the end of June 2015. Cash withdrawals account for the bulk of transactions at ATMs and the bank witnesses an average of 2 crore cash withdrawals every month at its ATMs. At present, customers are given a choice on whether they want a printed receipt or not. However, much of the receipts get discarded as soon as they come out and if not disposed off in the right way, also pose a security risk as they contain private information. The bank expects that the switch to paperless mode will help it save under Rs. 10 crore a year spent on paper.

 


4) The US Department of Justice on 20 May 2015 imposed record $5.7bn fine on 5 banks for rigging foreign exchange markets. Which five banks are involved in this case? – Barclays, Royal Bank of Scotland (RBS), UBS, Citigroup and JP Morgan

Explanation: The imposition of fines was announced by Loretta Lynch, the US Attorney General, who said that the banks had exhibited flagrancy in setting up a group they called “the cartel” to manipulate the foreign exchange market between 2007 and the end of 2013. The decision came as another huge blow to these banks. The new fines followed £2.6bn of penalties announced in November 2014 for manipulation of the £3.5 trillion a day currency markets. An unprecedented series of guilty pleas was extracted by the US DoJ from four of the banks: Barclays, RBS, Citigroup and JP Morgan. Swiss bank UBS was granted immunity for being the first to report the manipulation of the foreign exchange markets, although it was forced admit to wrongdoing in other offences.

 


5) Bank unions and the Indian Banks’ Association (IBA) on 25 May 2015 signed a wage revision agreement, which will benefit 1 million bank employees, including some from foreign and private banks. How much increase in bank employees’ salary and allowances has been agreed to in this agreement? – 15%

Explanation: The wage revision affected by the agreement is effective retrospectively from 1 November 2012. Following the wage revisions, the scale of pay of officer-level employees has been revised from Rs.14,500–Rs.52,000 to Rs.23,700–Rs.85,000, including special allowance and dearness allowance. The scale of pay of workmen-non-subordinate has been revised fromRs.7,200–Rs.19,300 to Rs.11,765–Rs.31,540, while the scale of subordinate staff has been revised from Rs.5,850–Rs.11,350 to Rs.9,560–Rs.18,545, including allowances. The wage settlement also includes a medical insurance scheme for the families of employees.

 


6) Which major European country slipped into deflation recently as disclosed by the government on 19 May 2015? – Britain

Explanation: This is the first time Britain has fallen into deflation since official records began in 1996. Modelled data produced by the Office for National Statistics (ONS) suggest it is also the lowest rate since 1960. Prices, as measured by the consumer prices index (CPI), fell by 0.1% in the year to April 2015, following zero inflation in February and March. Deflation is the economic stage of an economy when there is decrease in prices of commodities and services. It occurs when the inflation rate falls below 0% (a negative inflation rate). Deflation thus increases the real value of money, i.e., a person can buy more goods with the same amount of money over time. Deflation is generally regarded negatively, as it causes a transfer of wealth from borrowers and holders of illiquid assets, to the benefit of savers and of holders of liquid assets and currency. It results in reduction in investments (or under-investment).


7) On 26 May 2015 who was appointed as the head of the newly constituted committee that will give recommendations to recast the model of the so-called public-private-partnership (PPP) model in India? – Vijay Kelkar

Explanation: Vijay Kelkar is a renowned economist and a former Finance Secretary. The Kelkar committee will review the PPP policy and suggest a better risk-sharing mechanism between private developers and the government after analysing such projects in different. It is worth mentioning that Union Finance Minister Arun Jaitley in his budget speech had announced the committee after stating that the current PPP model was not robust enough to reduce risk for the private companies to increase investment in infrastructure. He had advocated increased public spending and promised to look into ways to resolve issues hampering the so-called public-private-partnership (PPP) model. India is one the largest PPP markets with over 900 projects at various stages of development.


8) The State Bank of India (SBI) on 20 May 2015 signed a Memorandum of Understanding (MoU) with which e-commerce entity to develop payment and commerce solutions for customers and small businesses? – Amazon

Explanation: SBI is presently in the process of being aggressive in digital and online space with the aim to grab a piece of the business in the digital commerce space. As part of this initiative, the bank on 20 May signed an MoU with Amazon under which it will develop payment and commerce solutions for customers and small businesses pertaining to Amazon. SBI is working on ways to enrich customers’ payment experience and opening up the window of e-commerce to its customers. SBI will also provide loans to SME customers which supply products to Amazon, to help them increase their operations. The bank also elaborated that it is open to similar tie-ups with other e-commerce players. It might soon sign an agreement with Snapdeal, another major e-commerce entity.


9) State Bank of India (SBI), on 22 May 2015 reported a better-than-expected 23% increase in quarterly profit for fourth quarter ended March 2015. What was the total net profit during the quarter? – Rs. 3742 crore ($589.11 million)

Explanation: Net profit earnings thus were 23% more as compared to the same quarter of 2015, which it stood at Rs. 3041 crore. SBI’s gross bad loans ratio stood at 4.25% in the March quarter, compared with 4.9% in the December quarter. SBI accounts for about a quarter of Indian loans and deposits.


10) Which Indian stock exchange on 18 May 2015 announced the introduction of the first-of-its-kind Overnight Liquid Fund product which will provide the facility to invest even for a single night in liquid funds? – BSE

Explanation: India’s leading stock exchange BSE announced the introduction of an Overnight Liquid Fund product on the Exchange’s Mutual Fund platform, BSE StAR MF. The product will help the smallest investor, corporate or trust to invest even for a single night in liquid funds anywhere in India. It will be an alternative investment avenue for idle monies which would be invested in liquid mutual funds for better returns and relatively lower risk. The facility will be available only for non-Demat mode.


 


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