Banking and Financial Awareness – 73

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21 Nov, 2014

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Cheque-Guidelines-Nov-2014

1) The Reserve Bank of India (RBI) during November 2014 asked banks to put in place preventive measures in view of the rise in the number of cheque related fraud cases. What were the important measures recommended by the RBI in this issue?

– Provision of an SMS alert to payer/drawer when cheques are received in clearing

– Provision of alerting customers by a phone call and get the confirmation from the payer/drawer in case of large value cheques

– Ensuring 100% implementation of CTS (cheque truncation system) in clearance

– Ensuring complete KYC-compliance in clearance of cheques

In its notification, the RBI said that the rise in the number of cheque related fraud cases is a matter of serious concern. It is evident that many of such frauds could have been avoided had due diligence been observed at the time of handling and/or processing the cheques and monitoring newly opened accounts.

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2) New restricted free monthly ATM usage regime came into effect in 6 metro cities of the country from 1 November 2014. Under this regime the number of mandated free transactions for savings bank account holders at other bank ATMs located in six metros has been reduced from five to ……..per month – Three

Explanation: This restricted free monthly ATM usage regime came into effect in country’s 6 metro cities Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad. The choice of 6 metros for introducing this regime was made primarily due to well-served payment infrastructure available here. This reduction in the number of mandated free transactions will, however, not apply to customers having no-frills/small/Basic Savings Bank Deposit Account (BSBDA) type of accounts as well as for transactions done by savings bank account holders at ATMs situated outside these six metro centres. Banks are also free to offer free transactions above this mandated limit.

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3) During October 2014 which bank became the second after United Bank of India to tag Vijay Mallya-owned Kingfisher Airlines (KFA) as a wilful defaulter? – UCO Bank

Explanation: UCO Bank is amongst the consortium of 17 banks that have a total exposure of Rs. 6,500 crore in KFA. While the consortium is led by SBI, UCO on its part is said to have lent Rs. 300 crore. The grounded airline was earlier declared a wilful defaulter by United Bank of India. According to Reserve Bank of India’s (RBI) guidelines a wilful defaulter is one who has the capacity to repay but chooses not to do so. The money borrowed is being used for purposes other than for which it was taken.

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4) What will the base year for computation of India’s GDP data from January 2015 as announced by the National Statistical Commission recently? – 2011-12

Explanation: The base year for computation of country’s GDP was 2004-05 till now. This change in base year is being implemented so as to take into account the structural changes which have taken place in the economy and also to include more sectors in GDP computation which were not included till now. This would be sixth time that the base year will be changed since 1948-49 was chosen as the first base year for computing country’s GDP estimates.

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5) Which country’s central bank surprised global financial markets on 31 October 2014 by expanding its massive stimulus spending, which resulted in rally in global stock markets and India’s Sensex hitting an all-time high on the day? – Japan

Explanation: Bank of Japan (BOJ), the central bank of Japan announced its decision to buy more assets as a preemptive strike to keep policy on track. The bank would accelerate purchase of Japanese government bonds to increase its holding annually by ¥30 trillion ($725 billion) and triple its purchases of exchange-traded funds and real-estate investment trusts. But this move of BOJ was criticized by numerous economists who wondered if pushing even more money into the financial system would be effective as long as consumer confidence continues to worsen and demand remains weak. The BOJ’s move stands in marked contrast with the Federal Reserve, the central bank of United States, announced closing its monthly bond purchase programme on 29 October 2014.

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6) Which private-sector bank was the only banking entity from entity to be recognised by the World Economic Forum (WEF) as a “Global Growth Company” (GGC) for 2014? – RBL Bank (Formerly known as Ratnakar Bank Limited)

Explanation: 17 companies from India were recognised as Global Growth Company by WEF as notified by it on 5 November 2014. RBL Bank, headquartered at Kolhapur (Maharashtra), is the only banking entity out of these 17 companies from India, which have been described as region’s most dynamic and high-growth companies by the WEF. Bandhan Financial Services, the micro-finance entity which has won the banking license to operate banking services in the country, was also among these 17 entities. Other prominent entities in this list are Sobha Developers, MakeMyTrip, JustDial, Finolex, FlipKart, InterGlobe Enterprises, Radikal Foods, 4G Identity Solutions and Transasia Bio-Medicals.

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7) Who took over as the Secretary Economic Affairs on 31 October 2014 to complete the official-level makeover of Finance Ministry? – Rajiv Mehrishi

Explanation: Rajiv Mehrishi succeeded Arvind Mayaram who was shifted to Ministry of Minority Affairs on 30 October 2014. Earlier on 16 October 2014 Arvind Subramaniam joined as the new Chief Economic Advisor.

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8) Who has been appointed as the new Financial Services Secretary by the Union Govt. on 3 November 2014? – Hasmukh Adhia

Explanation: Hasmukh Adhia replaces G S Sandhu, who was transferred as the new Chairman of National Authority for Chemical Weapon Convention (NACWC). Sandhu is the second Secretary among five Secretaries in the Finance Ministry who has been shifted after Arvind Mayaram in last few days. Adhia is a 1981-batch Indian Administrative Service (IAS) officer of Gujarat cadre and is presently posted in Gujarat. After this reshuffle, the General Budget for 2015-16 will be presented by new team of Secretaries with Rajiv Mehrishi as Economic Affairs Secretary (who is also likely to be nominated as new Finance Secretary because of his seniority), Expenditure Secretary Ratan Watal, Revenue Secretary Shaktikantha Das, Financial Services Secretary Adhia and Disinvestment Secretary Aradhana Jauhri with Chief Economic Advisor Arvind Subramanian.

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9) Who was appointed as the new Chairperson of the National Institute of Public Finance and Policy (NIPFP) recently? – Vijay Kelkar

Explanation: Vijay Kelkar was the former Chairman of the 13th Finance Commission and he succeeded former PMEAC chairman C. Rangarajan. National Institute of Public Finance and Policy (NIPFP) is a think tank for doing applied research in the field of public finance and is based in New Delhi.

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10) Who was named as the most-powerful woman in business in India by ‘Fortune Magazine in a list released on 8 November 2014? – Arundhati Bhattacharya, Chairperson of SBI

Explanation: Arundhati Bhattacharya is heading India’s largest banking group – the State Bank of India (SBI). Bhattacharya made to number one spot due to her relentless fight against bad loans. Since she took over a year or so ago, she has improved assets quality, cut costs and recapitalised SBI. ICICI Bank’s Chanda Kochhar and Shikha Sharma of Axis Bank follow Bhattacharya at the second and the third place respectively. The other women who figure in the top 10 are Zia Mody Co-founder AZB Partners; Mallika Srinivasan CEO of TAFE and Aruna Jayanthi CEO of Capgemini India; Preetha Reddy, MD, Apollo Hospital Enterprise; Kiran Mazumdar Shaw chairperson and MD at Biocon and Shobhana Bhartia, chairperson, HT Media.

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Previous Responses on This Article

  1. midhun940 says:

    It’ very useful

  2. ramini says:

    thanks a lot for giving useful info

  3. Premashanthi says:

    Each and every information is very useful……thanks a lot

  4. kumjat says:

    Thanks …
    Keep it up nirdeshak

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