06 Jan, 2015
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Banking Awareness, Uncategorized,
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1) The Union Government on 31 December 2014 announced which major decision regarding reforms in the banking sector? – Splitting the post of Chairman and Managing Director (CMD) into two for the public sector banks
Explanation: In a significant departure from the past practice, the Government of India announced to separate the post of Chairman and MD & CEO. In Public Sector Banks (PSBs), so far the top executive was designated as CMD, with the exception of the largest lender State Bank of India (SBI), where the top position is commanded by the Chairman and there are four Managing Directors with clearly defined executive roles under them. The posts of Chairman and MD in the private sector are held separately.
2) The Union Government has notified ‘Printing of One Rupee Currency Notes Rules, 2015’, which will come into effect from 1 January 2015. This means that the 1 rupee paper note, which was discontinued due to high cost, would make its comeback. When the Re. 1 paper note discontinued? – November 1994
Explanation: Due to higher cost and for freeing capacity to print higher denomination notes, printing Re. 1 note was discontinued in November 1994, followed by Rs. 2 in February 1995, and Rs. 5 in November 1995. Since then, only coins have been issued for these denominations. However, old notes are still in circulation and remain legal tender. The new Re. 1 note will be different in terms of colour, too. It will be predominantly pink and green. Earlier, the Re. 1 currency note had a predominantly indigo colour. Also, the new note will have ‘Bharat Sarkar’ on its masthead, with ‘Government of India’ printed below that. As before, the new one rupee note will have the signature of the Finance Secretary. Apart from the one rupee note, all other paper currency (Rs. 2, Rs. 5, Rs. 10, Rs. 20, Rs. 50, Rs. 100, Rs. 500 and Rs. 1,000) will have the signature of the RBI Governor, as these are issued by the Reserve Bank of India, whereas Re. 1 is issued by the Government of India.
3) The Reserve Bank of India (RBI) on 23 December extended the deadline for exchanging pre-2005 currency notes of various denominations including Rs. 500 and Rs. 1,000. What is the new deadline? – 30 June 2015
Explanation: Earlier in March 2014 the RBI had set 1 January 2015 as the deadline to exchange pre-2005 currency notes. Thus it extended this deadline by 6 months. RBI also clarified that all such notes will continue to remain a legal tender. These notes can be exchanged for their full value. Currency notes issued before 2005 do not have the year of printing on the reverse side. In notes issued after 2005, the year of printing is visible at the bottom on the reverse. Post-2005 notes have added security features and help in curbing the menace of fake currency. Seeking cooperation for withdrawing pre-2005 currency notes from circulation, the RBI has asked the public to deposit the old design notes in their bank accounts or exchange them at a bank branch convenient to them.
4) A latest report on the status of health insurance in India prepared by the Insurance Regulatory and Development Authority (IRDA) was tabled in Parliament by Union Finance Minister Arun Jaitley during December 2014. According to this report what percentage of Indian population has been covered under health insurance? – Around 17%
Explanation: This IRDA report stated that Only 21.62 crore people, or around 17% of the total population, were covered by health insurance at the end of March 2014. It is worth mentioning that the figure of health insurance quoted in this IRDA report is far fewer than the estimates given by a World Bank report of 2012. The World Bank report of 2012 titled “Government-Sponsored Health Insurance in India: Are You Covered?” estimated that over 30 crore people, or more than 25% of the population, gained access to some form of health insurance by 2010, up from 5.5 crore during 2003-04. More than 18 crore of them were people below the poverty line. World Bank report found that from 2007 to 2012, government-sponsored schemes contributed to a significant increase in the population covered by health insurance, at a pace possibly unseen elsewhere in the world.
5) The Mid-Year Economic Review for fiscal year 2014-15 was tabled in the Lok Sabha on 19 December 2014. According to this review the Indian economy is expected to record what growth rate during the year? – 5.5%
Explanation: The Mid-Year Economic Review (2014-15) was prepared by Arvind Subramanian, Chief Economic Advisor in the Finance Ministry. In the review it was stated that adhering to the fiscal deficit target of 4.1% of GDP is a major challenge for the government. The Finance Ministry is now betting big on a pick-up in economic activity in the second half of the year.
6) The RBI Deputy Governor H R Khan on 19 December 2014 stated that RBI will come out with norms on easing the two-factor authentication requirement for small value transactions in a couple of months. What is the limit for small value transactions as proposed by the RBI for same? – Rs. 3,000
Explanation: RBI is looking at removing the two-factor authentication requirement for small value transactions up to Rs. 3,000 to facilitate easy transactions especially in the wake of e-commerce transactions gaining traction.
7) The Reserve Bank of India (RBI) on 17 December 2014 imposed fines on state-run Bank of Baroda (BOB) and ICICI Bank – the largest private bank in India. What was the charge on these two banks? – Violation of KYC and anti-money laundering norms
Explanation: RBI imposed fines worth Rs.50 lakh and Rs.25 lakh on ICICI Bank and Bank of Baroda, respectively, for violations of its instructions on know-your-customer (KYC) and anti-money laundering norms. Three other banks including State Bank of India, Axis Bank and State Bank of Patiala, were cautioned to put in place appropriate measures and review them from time to time to ensure strict compliance of KYC requirements in future. This RBI action came after it received a complaint in this regard. It cautioned these banks to put in place appropriate measures and review them from time to time to ensure strict compliance of KYC requirements in future. The fraudsters had managed to open fictitious accounts in the name of the statutory organisation in the above five banks and operated the accounts mainly for encashing cheques/demand drafts/postal orders of which they were not the rightful owners, for periods ranging from one month to two years, without being detected by the banks.
8) Anil Ambani-led Reliance Capital recently entered into a long-term strategic alliance with which Japanese banking group to make its foray into the banking sector? – Sumitomo Mitsui Trust Bank
Explanation: As part of the agreement, the Reliance Capital will allot a 2.77% stake valued at Rs. 371 crore through a preferential allotment with a one year lock-in period to Sumitomo. Sumitomo Mitsui Trust Group is the fourth-largest bank in Japan by market capitalisation and corporate loans, and Japan’s largest financial institution managing assets of $682 billion with assets under custody of $1.8 trillion as of September 2014.
9) In an important development a major deadlock between the Centre and the States was broken on the issue of Goods and Services Tax (GST) on 15 December 2014 paving the way for the GST Bill to be introduced in the current session of Parliament. To break the deadlock, the Centre agreed to which major demand of the States? – To keep petroleum out of the GST regime
Explanation: While on its part, the Centre agreed to the demand of the States to keep petroleum out of the GST regime, the States on their part agreed to entry tax being subsumed in the new tax regime which is proposed to be introduced from April 2016. Compromise was reached after an over hour-long meeting between Finance Minister Arun Jaitley and finance ministers of seven states – Punjab, Haryana, Gujarat, Tamil Nadu, Maharashtra, Karnataka, and Jammu and Kashmir. Concerns of other states have already been addressed. It was agreed that petroleum goods would be kept out of the Goods and Services Tax (GST) Bill for initial few years and a decision to include in the new tax regime would be taken later. States, which earn over 50% of their revenue from taxes on petrol and other petro products, wanted it to be out of GST so they could continue with levying different tax rates on these products.
10) The 14th Finance Commission submitted its report to the President on 15 December 2014. The commission headed by former RBI Governor Y.V.Reddy has been constituted for which period for which it submitted its report? – 1 April 2015 to 31 March 2020
Explanation: The 14th Finance Commission was constituted by the President on 2 January 2013 and was to give its report by October 31 this year. But its tenure was extended till 31 December. In this report the commission gave its views on the devolution of tax receipts from the Centre to the states between 1 April 2015 and 31 March 2020. The Commission had sought two more months to examine financial projections and carry out consultations with the Andhra Pradesh and Telangana governments. It was also asked to look into the issue of Goods and Services Tax (GST). The commission’s terms of reference also included the pricing of public utilities such as electricity and water in an independent manner and the sale of non-priority public-sector units.