Banking and Financial Awareness – 72

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02 Nov, 2014

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KYC

1) The Reserve Bank of India (RBI) on 21 October 2014 asked the banks to take a step against bank accounts of customers who have not complied with KYC requirements despite repeated reminders. What step these banks have been asked to take? – Partially freeze such accounts in a partial manner

Explanation: The RBI, while imposing this partial freezing, advised the banks to ensure that the option is exercised after giving due notice of three months initially to the customers and followed by a reminder for further period of three months. If the accounts are still KYC non-compliant after six months of imposing initial ‘partial freezing’, banks may disallow all debits and credits from/to the accounts, rendering them inoperative. Further, it would always be open to the bank to close the account of such customers. Meanwhile, the account holders can revive accounts by submitting the KYC documents as per instructions in force.

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2) What is the name of the China-backed Asian infrastructure bank that was launched on 24 October 2014 and is seen as a challenge to the World Bank (WB) and Asian Development Bank (ADB)? – Asian Infrastructure Investment Bank (AIIB)

Explanation: The AIIB was launched in Beijing at a ceremony attended by Chinese Finance Minister Lou Jiwei and delegates from 21 countries including India, Thailand and Malaysia. The MOU for the proposed bank was signed on this occasion. China is set to be its largest shareholder with a stake of up to 50%. However, three major countries, Australia, Indonesia and South Korea, were absent from this launch ceremony. AIIB, which is expected to start its operation from 2015, is being seen as the new rival to Western-dominated multilateral lenders. The main objective of AIIB will be to give project loans to developing nations.

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3) The Union Government sacked the heads of six Public Sector Unit (PSU) banks on 27 October 2014. This action was taken after submission of a report by a high-level committee in this issue that stated about irregularities being found in the selection process of the Chairman and Managing Directors (CMDs) of these banks. The CMDs who were sacked were associated with which six PSU banks? – Bank of Baroda, Canara Bank, Indian Overseas Bank, Oriental Bank of Commerce, United Bank and Vijaya Bank

Explanation: The probe into appointment of CMDs in PSU banks was ordered following the arrest and termination of Syndicate Bank CMD SK Jain for alleged graft during September 2014. Following this the Finance Ministry had set up a committee comprising Expenditure Secretary, RBI Governor and Secretary School Education to examine the selections to six PSU banks. The government has now scrapped the selection process adopted during the UPA Govt. and decided to fill vacancies of 8 posts of CMDs and 14 posts of Executive Directors through a fresh process involving RBI Governor or his nominee.

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4) Which country was rated as the most bullish consumer market in the world in the Nielsen Global Consumer Confidence Index for third quarter of 2014 that was released on 29 October 2014? – India

Explanation: India was given 126 points, a drop of 2 points from previous quarter, in this index that was conducted between 13 August and 5 September 2014 and covered more than 30,000 consumers across 60 markets. The overall Global Consumer Confidence Index rose 1 point in the third quarter to 98. Australia saw the biggest increase in confidence index from the previous quarter, by 12 points, followed by Slovenia with a 9 point increase and Thailand with 8 points. In overall picture India was followed closely by Indonesia (125 points), the Philippines (115 points), Thailand (113 points), UAE (112) and China (111).

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5) The European Central Bank (ECB) recently conducted a landmark health check of the banks of the Euro zone to ascertain real condition of the banking industry. Which country performed worst in this test with nine of its banks falling short and two still needing to raise funds? – Italy

Explanation: Italian bank Monte dei Paschi had the largest capital hole to fill at €2.1 billion as revealed in this test. The ECB found the biggest problems in Italy, Cyprus and Greece but concluded that banks’ capital holes had since chiefly been plugged, leaving only a modest €10 billion to be raised. The test was designed to mark a clean start before the ECB takes on supervision of the banks from November 2014. The exercise provided the clearest picture yet of the health of the Euro Zone’s banks more than 7 years after the eruption of a financial crisis that almost bankrupted a handful of countries and threatened to fracture the Euro Zone.

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6) The Union Finance Ministry on 30 October 2014 issued new austerity measures in view of lower revenue realization. These measures included cut in non-plan expenditure and ban on creation of new posts. How much reduction in non-plan expenditure had been proposed? – 10%

Explanation: An office memorandum issued by the Expenditure Department of the Finance Ministry stated that for the year 2014-15, every Ministry/Department shall affect a mandatory 10% cut in non-plan expenditure which will exclude interest payment, repayment of debt, defence capital, salaries, pension and Finance Commission grants to the States. The Ministry also made it clear that Government officials will not travel in first class. These measures have been announced after indirect tax collection grew mere 5.8% during first six months of the current fiscal against the budgeted target of 25.8%.

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7) Which bank won the IDRBT Banking Technology Excellence award for 2013-14 in four out of total five categories in the mid-sized lenders segment? – Federal Bank

Explanation: Kerala-based Federal Bank was adjudged as the ‘best bank’ for use of Technology for Financial Inclusion, Social Media and Mobile Banking, Business Intelligence Initiatives and for Best IT Team, becoming the bank to have won the maximum number of awards for 2013-14. Karur Vysya Bank bagged the Best Bank Award for Business Intelligence Initiatives among small banks. The awards were presented to the winners at a function held in Hyderabad on 1 October 2014 by RBI Governor Raghuram Rajan in Hyderabad. Instituted in 2001, the IDRBT Banking Technology Excellence Awards recognise and honour the best innovative use of information technology to enhance levels of customer service.

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8) Aditya Birla Financial Services Group recently signed a memorandum of understanding (MOU) with which overseas entity to enter the health insurance market of India? – MMI Holdings Ltd of South Africa

Explanation: The Aditya Birla Group currently operates in the life insurance segment through Birla Sun Life Insurance (BSLI). BSLI is a joint venture with the Canada-based Sun Life Financial Inc. Aditya Birla Financial Services Group and MMI Holdings will enter into a formal joint venture in which the foreign partner will hold 26% stake, which is the maximum holding allowed as per the existing foreign direct investment norms in the sector.

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9) Chinese e-commerce giant Alibaba Group Holding Ltd changed the name of its Alipay financial services unit as announced on 16 October 2014. What is the new name of this financial services unit? – Ant Financial Services Group

Explanation : Alibaba, the world’s largest e-commerce company, presently processes roughly half of China’s e-commerce transactions through this financial unit. The company has been aggressively offering new financial services around Alipay, including a money market fund for consumers, a mobile payment app and even a new private bank that was recently approved by the Chinese government.

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10) Who was selected as the new Chairman of the Central Board of Excise and Custom (CBEC)? – Kaushal Srivastava

Explanation: Kaushal Srivastava a 1978 batch Indian Revenue Service (IRS) officer and senior-most in the board after the present chairperson, is at present Member (budget) with additional charge of computerisation and vigilance. He will replace JM Shanti Sundharam, who is retiring on 31 October 2014. CBEC is the apex policy making body of indirect taxes in India.

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Responses on This Article

Previous Responses on This Article

  1. vkbasha says:

    Excellent

  2. premlawaniya says:

    Very nice information….

  3. ankur019 says:

    SUPERB

  4. sonalkr1729 says:

    Vry imp news specially for bankng exam…..want more updates .
    Thnks alot sir.

  5. Nitesh Singh says:

    exellent work
    cmpile all banking awareness in pdf.

  6. tphani says:

    Excellent work sir..

  7. Vijay648 says:

    Very very super sir..

  8. Satyam Raj says:

    Please Release banking and financial awareness PDF if possible

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