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Wednesday, 25 December 2019

Question-Answer




Q 1 You have received proposal for construction of compos pit and purchase of related equipment for setting up vermicompost unit.  You will not stipulate margin provided the loan is _____ and not stipulate collateral security provide the loan is_____.

a) 25,000 an Rs. Rs. 50,000
b) Rs. 1.00 lakh for both
c) Rs. 1.60 lakh for both
d) Rs. 1.60 lakh and Rs.1.00 lakh

Q 2 The process whereby fertilizers are injected for soil amendments, water amendments, and others amendments generally related with irrigations system, is known as

a) Neo-irrigation
b) Fertigation
c) Chemigation
d) Nurugation

Q 3 National Horticulture Board is located at

a) New Delhi
b) Gurgaon
c) Patiala
d) Palampur

Q 4 It is estimated that startups in year 2019 created indirect jobs to the extent of

a) 1 million
b) 1.5 million
c) 3 million
d) 0.5 million

Q 5 A Regional Rural Bank has made huge gains on account of sale of assets and gain has been taken to Capital Reserve Account.  For the purpose of Capital Adequacy norms, this will be reckoned as

a) Common Equity Capital CET 1
b) Additional Tier I Capital
c) Tier II Capital
d) Not to be reckoned for the purpose of CAR

Q 6 Sovereign Gold Bonds issued by Government of India are held as Bond Ledger Account (BLA).   Your bank proposes to extend loan against security of these bonds. How will you mark lien against this security?

a) SGBs held in BLA cannot be accepted as security

b) The lien can be marked with the depository
c) The lien can be marked in E Kuber portal
d) The lien for BLA bonds are to be marked on Certificate of Holding

Q 7. The RBI has directed the banks to ensure NEFT facility to customers on 24 x 7 hours basis on all days including holidays. The NEFT Facility post banking hours will be available to the customers through

a) Online Gateway
b) Straight Through Process
c) Connect Servers
d) PoS

Q 8 The ______ is the confirmation message given to Customers for NEFT credit

a) N10
b) N11
c) ST10
d) ST11

Q 9  An asset reconstruction company cannot acquire financial assets on bilateral basis from the following  (Mark the answer which contains the correct options)

i) Bank/FI which is sponsor of ARC
ii) Bank/FI which is lender to ARC
iii) Bank/FI which is subscriber to the ARC
iv) An entity in the group to which ARC belongs
a) All are correct
b) only (i)
c) (i) (ii) and (iii)
d) (i) (ii) and (iv)

Q 10 REPO transaction means offering security and obtaining funds against that security, with an agreement to reverse the transaction on maturity of transaction.  The first leg the transaction is completed on

a) The day of transaction
b) next day of transaction
c) On (a) or (b)
d) T+0, or T+1 or T+2

Q 11  The last security to be added in the list of securities against which a repo transaction can be completed.

a) Units of Debt Exchange Traded Funds
b) Certificate of Deposit
c) Commercial Paper
d) Bharat ETF

Q 12 In a repo transaction the value of security, against which repo transaction is made, is valued on day of last leg __________

a) Market Value on the day of last leg
b) Market value as arrived on the day of first leg
c) Market value as arrived on the day of first leg plus interest
d) Not required to be arrived

Q 13 Who among the following has been appointed as Head of National Stock Exchange

a) Ashok Chawla
b) Girish Chaturvedi
c) Lini Sajeesh
d) Ripu Daman

Q 14  Which of the following is true regarding Small Finance Banks

i) Resident Individuals can float a Small Finance Bank
ii) Corporates can float a Small Finance Bank
iii) The minimum capital required is Rs. 200 Cr
iv) The minimum capital required is Rs. 100 Cr
a) (i) (ii) and (iii)
b) (i) (ii) and (iv)
c) (i) and (iii)
d) (ii) and (iii)

Q 15 An individual alongwith relatives can have maximum _____ of paid up voting equity capital in a small finance bank.

a) 15%
b) 10%
c) 26%
d) 40%
Answers

1-c        2-b       3-b       4-b       5-a        6-c        7-b       8-a        9-a        10-c

11-a      12-c      13-b      14-a      15-b

Sunday, 9 June 2019

MONETARY POLICY AND FISCAL POLICY







Monetary Policy –

The process by which the Govt., central bank or monetary authority of country controls –

A.      Supply of money

B.      Availability of money

C.      Cost of money or rate of interest

Monetary policy is referred to as either being an expansionary policy or a contractionary policy



Expansionary policy
Contractionary policy
Increase total supply of money in economy
Decrease the total supply of money
Combat unemployment in a recession by lowering interest rate
Raising interest rate in order to combat inflation

  

Monetary policy is contrasted with fiscal policy, which refer to Govt. borrowing, spending & taxation.



Tools of Monetary policy –

A.      Bank Rate

B.      Cash Reserve Ratio (CRR)

C.      Statutory Liquidity Ratio (SLR)

D.      Market Stabilization Scheme (MSS)

E.       Repo Rate

F.       Reverse Repo

G.     Open Market Operations (OMO)



Bank Rate

Ø  Also refer to discount rate

Ø  The rate of interest which a central bank charges on the loans and advances that it extends to commercial banks and other financial intermediaries.

Ø  Used by central bank to control the money supply



Cash Reserve Ratio (CRR)

Ø  Banks have to maintain with RBI as a certain percentage of their total deposit (net demand & time deposit) in the form of liquid cash.

Ø  When RBI feels that money supply is increasing and causing an upward pressure on inflation, then RBI has option of increasing the CRR thereby reducing the deposit available with bank to make loan and hence reducing the money supply and inflation



Statutory Liquidity Ratio (SLR)

Ø  It refer to the amount that all banks require maintaining in cash or in the form of Gold or approved securities (i.e dated securities, Govt. bonds & share)

Ø  SLR is maintained in order to control the expansion of bank credit.

Ø  SLR is a way to ensure the solvency of commercial banks.





Market Stabilization Scheme (MSS)

Ø  Under this scheme, the Govt. would issue existing instrument such as Treasury Bill & or dated securities by way of auction under MSS



Repo Rate

Ø  The rate at which RBI lends short-term money to the banks

Ø  When Repo rate increases, borrowing from RBI becomes more expensive.

Ø  Bank lending rates are determined by the movement of repo rate



Reverse Repo

Ø  The rate at which bank park their short-term excess liquidity with RBI

Ø  An increase in the reverse repo means that the RBI will borrow money from banks at a higher rate of interest.



Open Market Operation (OMO)

Ø  Under the OMO, RBI buys or sells Govt. bonds in the secondary market.








FISCAL POLICY

Ø  Fiscal policy is the use of Govt. spending & revenue collection to influence the economy.

Ø  The two main instrument of fiscal policy are Govt. spending & taxation.

Ø  Govt. use fiscal policy to influence the level of aggregate demand in economy, in an effort to achieve economic objective of price stability, full employment & economic growth.



FRBM Acts

Ø  (Fiscal Responsibility & Budget Management Acts)

Ø  Committee headed by Dr. E. A. S. Sarma in Jan 2000 to recommended draft legislation on fiscal responsibility.

Ø  Submitted in July 2000, introduce in parliament in Dec 2000 & enacted as law in Aug. 2003.






Friday, 1 February 2019

Key highlights: Interim Budget 2019-20






Taxes changes
1. No income tax for income up to Rs 6.5 lakh (Rs 5 lakh + Rs 1.5 lakh under 80C of the Income Tax Act)
2. Full tax rebate for income up to Rs 5 lakh per annum
3. No tax on notional rent on second self-occupied house
4. Capital Gains exemption under Section 54 to be available on two house properties
5. Tax benefit of Rs 18,500 crore given to three crore middle-class tax payers
6. Standard deduction raised to Rs 50,000 from Rs 40,000
7. TDS limit hiked from Rs 10,000 to Rs 40,000 on post-office savings

8. Group of Ministers looking at ways to ease GST burden on homebuyers



Economy
1. FY20 fiscal deficit target set at 3.4 percent.
2. Expenditure target for FY20 set at Rs 27.84 lakh crore.
3. Capital expenditure for FY20 set at Rs 3.36 lakh crore.

4. FY19 fiscal deficit pegged at 3.4 percent of GDP; current account deficit at 2.5 percent of GDP







Farmers
1. Farmers with less than two hectares to be offered Rs 6,000 per year as direct transfer under PM Kisaan Samman Nidhi. The benefit will be transferred directly into the bank account of beneficiary farmers in three installments of Rs 2,000 each. Around 12 crore farmers to benefit from the scheme. This scheme will cost the government around Rs 75,000 crore.

2. Mahatma Gandhi National Rural Employment Guarantee program’s allocation increased by Rs 5,000 crore to Rs 60,000 crore for FY20

3. Farmers struck by natural calamities will now receive 2-5 percent interest subvention under insurance scheme

4. Two percent interest subsidy to be given to farmers involved in animal husbandry activities via kisaan credit card scheme. An additional three percent subsidy will be paid on timely payment of loans

5. Government announces setting up of Rashtriya Kamdhenu Aayog to enhance productivity of cows



Rural infrastructure
Pradhan Mantra Gram Sadak Yojana allocation set at Rs 19,000 crore, the same as FY19



Workers
1. Monthly pension of Rs 3,000 for workers in the unorganized sector to be paid out after retirement. 

2. Pension scheme to benefit 10 crore workers in the unorganized sector.

3. Those who join at 18 years of age will have to contribute a mere Rs 55 per month.

4. The government will contribute equal matching share in the pension account. This scheme will cost the government Rs 500 crore

5. Employees’ State Insurance eligibility cover limit has been raised to Rs 21,000 per month from Rs 15,000 per month

6. Gratuity limit increased from Rs 10 lakh to Rs 30 lakh

7. Workers who suffer grievous injuries will now receive Rs 6 lakh from Rs 2.5 lakh through Employee Provident Fund Organisation (EPFO)






Education
Rs 38,572 crore allocated for the National Education Mission



Medical
Another All India Institutes of Medical Sciences to be set up in Haryana



Society
1. Rs 76,800 crore allocated for welfare of Scheduled Castes (SCs) and Scheduled Tribes (STs)

2.  Centre to implement special strategy for uplift of nomadic tribes



Filmmakers

Single window clearance for film-makers. Anti-camcording provision to be introduced to Cinematography Act to combat film privacy



Railways
Railway capital expenditure raised to Rs 64,586 crore in FY20 from Rs 53,060 crore in FY19



Defence

Defence budget for FY20 raised to Rs 3 lakh crore



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