1. finance
2. bank

APRIL 2015
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E NEWS LETTER-APRIL15
AICE is promoted by a group of former Bankers and
present day academicians for the purpose of paving the
path of success to the young aspirants to their dream
careers and professions. We develop our students
to face challenges. They will realise that SUCCESS is
not an end, but a habit of life, which is a result of
smartly directed hard work.
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“ Vishnu Shila”, B T Ranadive Road, Edappally PO, Ernakulam-682024, Kerala.
Telephone: 0484-6900370, Mob: 9495780370.
Email: [email protected];
(Land mark: Opp. Post Office, Edappally)
[email protected]
Web site: www.aice4bankingcareers.com
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APRIL 2015
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Letter from Editor’s Desk
Dear Student,
You are poised to get into the mega world of career opportunities. We wish you all
the best in your Endeavour!
There are going to be large number of vacancies in the Banking sector, in view of the
impending retirements during 2015-2019. When competition gets tougher, only the
tough gets going. So it is imperative that you equip yourself with right kind of skill
and knowledge to get the right kind of employment.
SBI has already advertised for the selection of PO (Probationary Officer) posts. The
calls for IBPS PO and Clerks are expected by July 2015 and tentative exam dates are
already notified.
A close look at the pattern of examinations gives us the impression that increased
importance is given to Logical Reasoning and Data interpretation. SBI is placing an
important role to one’s language skills also. Proficiency in English has become an
important factor in one’s selection. At the same time, enhancement of articulation,
interview & group discussion skills have the bearing at the latter stage of selection.
So, a change from traditional style of preparation is essential to get elevated to the
list of winners, which we provide at AICE.
We welcome you to the seminar on “Career Opportunities in Banks and FIs”,
which will be conducted on 09/05/2015.
Please visit our website
www.aice4bankingcareers.com and register your name. The seminar will open
up the world of opportunities for you. A printed copy of this newsletter will be given
to all participants.
This month’s GK Digest contains special mention to RBI, as, RBI and it’s policy
directives have come to sharp focus during recent months and it’s role is increasingly
discussed about.
Looking forward to meet you soon!
With Best Wishes!
Editor
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“ Vishnu Shila”, B T Ranadive Road, Edappally PO, Ernakulam-682024, Kerala.
Telephone: 0484-6900370, Mob: 9495780370.
Email: [email protected];
(Land mark: Opp. Post Office, Edappally)
[email protected]
Web site: www.aice4bankingcareers.com
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APRIL 2015
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RESERVE BANK OF INDIA- CERTAIN CONCEPTS
The Reserve Bank of India is India's Central Bank, which controls the Monetary Policy of
the nation. It commenced its operations on 1 April 1935, on recommendations of Hilton
Young Commission, with the provisions of the Reserve Bank of India Act, 1934. Following
India's independence, the RBI was nationalised on01/01/1949 under the Reserve Bank
(Transfer of Public Ownership) Act, 1948. It has a paid up capital of Rs.5.00 crore
The general Administration of the RBI is entrusted with the 21-member Central Board of
Directors: the Governor (Dr.Raghuram Rajan), 4 Deputy Governors, 2 Finance
Ministry representatives, 10 government-nominated directors to represent important
elements from India's economy, and 4 directors to represent local boards headquartered at
Mumbai, Kolkata, Chennai and New Delhi.
Functions of RBI
A. Traditional Central Banking Functions
1.
2.
3.
4.
5.
6.
7.
8.
Monopoly of Note issue- Under Minimum Reserve System
Banker to Govt.
Bank of Banker’s
Lender of last resort
National clearing house
Credit control
Custodian of Forex reserves
Other functions-collection of data & publication, export assistance
B. Developmental Functions
C.
1. Agricultural credit
2. Industrial finance
3. Development of bills market
C. Supervisory functions
D.
1. Licensing to Banks
2. Inspection of Banks
3. Control over management
4. Control over management, methods, amalgamation
5. Audit
6. Credit information service
7. Deposit Insurance
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“ Vishnu Shila”, B T Ranadive Road, Edappally PO, Ernakulam-682024, Kerala.
Telephone: 0484-6900370, Mob: 9495780370.
Email: [email protected];
(Land mark: Opp. Post Office, Edappally)
[email protected]
Web site: www.aice4bankingcareers.com
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APRIL 2015
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CREDIT CONTROL- Through Two Methods
A) Quantitative Credit Control
B) Qualitative Credit control
Quantitative Methods
1: The Bank Rate, also known as the discount rate, is the rate of interest charged by
the RBI for providing funds or loans to the banking system. This banking system
involves commercial and co-operative banks, Industrial Development Bank of
India, IFC, EXIM Bank, and other approved financial institutes. Funds are provided
either through lending directly or rediscounting or buying money market instruments
like commercial bills and treasury bills. Increase in Bank Rate increases the cost of
borrowing by commercial banks which results into the reduction in credit volume to
the banks and hence declines the supply of money. Increase in the bank rate is the
symbol of tightening of RBI monetary policy. As of 18/4/2015, the bank rate is
8.50%.
2.Open Market Operations- buying and selling of govt. securities by RBI, which
has a direct effect on the availability and cost of credit.
3. Cash reserve Ratio (CRR)- The RBI Act 1934 requires commercial Banks to
keep a minimum cash reserve. An variation in rate affect the availability of funds of
commercial banks for credit. The present CRR is 4%.
4. Statutory liquidity ratio (SLR)- Under Banking Regulation Act, 1949 banks are
required to maintain liquid assets in the form of cash, gold and approved securities
equal to not less than certain percentage of their net demand and time liabilities.
(NDTL). The present SLR is 21.5%
Liquidity adjustment facility (LAF) is a monetary policy tool which allows banks
to borrow money through repurchase agreements. LAF is used to aid banks in
adjusting the day to day mismatches in liquidity. Repo rate (presently 7.50%) is
the rate at which RBI lends to commercial banks generally against government
securities. Reduction in Repo rate helps the commercial banks to get money at a
cheaper rate and increase in Repo rate discourages the commercial banks to get
money as the rate increases and becomes expensive. Reverse Repo rate (presently
6.50%) is the rate at which RBI borrows money from the commercial banks. The
increase in the Repo rate will increase the cost of borrowing and lending of the banks
which will discourage the public to borrow money and will encourage them to deposit.
As the rates are high the availability of credit and demand decreases resulting to
decrease in inflation. This increase in Repo Rate and Reverse Repo Rate is a symbol of
tightening of the policy.
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“ Vishnu Shila”, B T Ranadive Road, Edappally PO, Ernakulam-682024, Kerala.
Telephone: 0484-6900370, Mob: 9495780370.
Email: [email protected];
(Land mark: Opp. Post Office, Edappally)
[email protected]
Web site: www.aice4bankingcareers.com
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APRIL 2015
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Qualitative Methods
1.
2.
3.
4.
Variation of margin requirements on loans
Control of Banks advances
Differential interest rates
Moral suasion
Five Pillars of RBI's Developmental Measures
1. Clarifying and strengthening the monetary policy framework.
2. Strengthening banking structure through new entry, branch expansion,
encouraging new varieties of banks, and moving foreign banks into better
regulated organisational forms.
3. Broadening and deepening financial markets and increasing their liquidity and
resilience.
4. Expanding access to finance to small and medium enterprises, the unorganized
sector, the poor, and remote and underserved areas of the country through
technology, new business practices, and new organizational structures; that is,
we need financial inclusion.
5. Improving the system’s ability to deal with corporate distress and financial
institution distress by strengthening
6. Real and financial restructuring as well as debt recovery.
MONETARY POLICY
Monetary policy is the process by which monetary authority of a country, generally
a central bank controls the supply of money in the economy by its control over
interest rates in order to maintain price stability and achieve high economic
growth. In India, RBI is so designed as to maintain the price stability in the
economy. Other objectives of the monetary policy of India, as stated by RBI, are:
o Price Stability
o Controlled Expansion Of Bank Credit
o Promotion of Fixed Investment
o Restriction of Inventories and stocks
o Promotion of Exports and Food Procurement Operations
o Desired Distribution of Credit
o Equitable Distribution of Credit
o To Promote Efficiency
o Reducing the Rigidity
***
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“ Vishnu Shila”, B T Ranadive Road, Edappally PO, Ernakulam-682024, Kerala.
Telephone: 0484-6900370, Mob: 9495780370.
Email: [email protected];
(Land mark: Opp. Post Office, Edappally)
[email protected]
Web site: www.aice4bankingcareers.com
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APRIL 2015
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Highlights of Railway Budget 2015
Railway Minister -Sri.Suresh Prabhu
-There is no increase in passenger rail fares.
-Rs.8.5 lakh crore will be invested in Railways in next 5 years.
-'Operation 5 mins', wherein passengers travelling unreserved can purchase a ticket in
5 minutes.
-Rail tickets can now be booked 120 days in advance.
-Speed on nine railway corridors to go up to 200 km per hour
-Centrally managed Rail Display Network is expected to be introduced in over 2K
stations over the next 2 years
-Four Railway Research Centres to start in four universities
Economic Survey 2014-15
India’s economy will grow at a rate of more than 8 per cent in the 2015-16 fiscal year,
while consumer inflation will drop to between 5 and 5.5 per cent, according to the
Economic Survey report.
Highlights
-GDP growth seen at 8.1–8.5 per cent in 2015-16
-Double digit growth trajectory; 8–10 per cent GDP in coming years
-Current Account Deficit (CAD) to decline to about 1 per cent in 2015-16
-To adhere to fiscal deficit target of 4.1 per cent of GDP
-Food grains production for 2014-15 estimated at 257.07 million tonnes; will exceed
last 5-year average by 8.5 million tones
- NITI Aayog, 14th Finance Commission to enhance fiscal federalism
-Need balance between ‘Make in India’ and ‘Skilling India’
-Consumer inflation in 2015-16 to be between 5-5.5%Lower inflation opens up space
for more monetary easing
-Labour, capital, land, market reform and skills to be engines of growth
-JAM Trinity — Jan Dhan Yojana, Aadhaar, Mobile — to help transfer of funds to poor
without leakage
-Shield domestic industry to promote ‘Make In India’ • Borrowings to fund
investment, not for meeting expenses
-Food subsidy bill in April-Jan up 20% to Rs 1.08 lakh cr
-Reform Railway’s structure, commercial practices, overhaul of technology • Public
investment key growth engine in short-run for Railways, but not a substitute for
private investment.
-Under-recoveries on petroleum products to come down to Rs 74,664 crore in 201415, from Rs 1.39 lakh crore in FY14
-4Ds — Deregulation, Differentiation, Diversification, Disinter (better bankruptcy
laws) — to push financial sector growth
-Ecommerce sector to witness 50% growth in 5 years
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“ Vishnu Shila”, B T Ranadive Road, Edappally PO, Ernakulam-682024, Kerala.
Telephone: 0484-6900370, Mob: 9495780370.
Email: [email protected];
(Land mark: Opp. Post Office, Edappally)
[email protected]
Web site: www.aice4bankingcareers.com
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APRIL 2015
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UNION BUDGET HIGHLIGHTS 2015-16
-Move to making India cashless society
-Challenges mentioned by the Finance Minister Arun Jaitley are:
a) Poor agricultural income b) decline in manufacturing c) need for fiscal
discipline.
Sector-wise highlights:
a)
b)
c)
d)
e)
f)
g)
a)
b)
c)
TAXATION
Abolition of Wealth Tax.
Additional 2% surcharge for the super rich with income of over Rs. 1 crore.
Rate of corporate tax to be reduced to 25% over next four years.
No change in tax slabs.
Total exemption of up to Rs. 4,44,200 can be achieved.
100% exemption for contribution to Swachch Bharat, apart from CSR
Service tax increased to14 per cent.
AGRICULTURE
Rs. 25,000 crore for Rural Infrastructure Development Bank
Rs. 5,300 crore to support Micro Irrigation Programme.
Farmers credit - target of 8.5 lakh crore.
INFARSTRUCTURE
a) Rs. 70,000 crores to Infrastructure sector.
b) Tax-free bonds for projects in rail road and irrigation.
c) PPP model for infrastructure development to be revitalized and govt. to bear
majority of the risk.
d) Atal Innovation Mission to be established to draw on expertise of entrepreneurs,
and researchers to foster scientific innovations. Allocation of Rs. 150 crore.
e) Govt. proposes to set up 5 ultra mega power projects, each of 4000MW.•
EDUCATION
AIIMS in Jammu and Kashmir, Punjab, Tamil Nadu, Himachal Pradesh, Bihar
and Assam. IIT in Karnataka; Indian School of Mines in Dhanbad to be
upgraded
to IIT. PG institute of Horticulture in Amritsar.• Kerala to have
University of
Disability Studies. Centre of film production, animation
and gaming to come
up in Arunachal Pradesh. IIM for Jammu and
Kashmir and Andhra Pradesh.
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“ Vishnu Shila”, B T Ranadive Road, Edappally PO, Ernakulam-682024, Kerala.
Telephone: 0484-6900370, Mob: 9495780370.
Email: [email protected];
(Land mark: Opp. Post Office, Edappally)
[email protected]
Web site: www.aice4bankingcareers.com
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APRIL 2015
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DEFENCE
a) Allocation of Rs. 2,46,726 crore, an increase of 9.87 per cent over last year.
b) Focus on Make in India for quick manufacturing of Defence equipment.
WELFARE SCHEMES
a) GST and JAM trinity (Jan Dhan Yojana, Aadhaar and Mobile) to improve quality
of life and to pass benefits to common man.
b) Six crore toilets across the country under the Swachh Bharat Abhiyan.
c) MUDRA (Micro Units Development and Refinance Agency) Bank will
refinance micro finance orgs. to encourage first generation SC/ST entrepreneurs.
The bank will have a initial corpus of ₹20,000 crore. The bank will initially
function as An NBFC (Non Banking Financial Company) and a subsidiary of
the Small Industries Development Bank of India (SIDBI). The bank will classify its
clients into three categories and the maximum allowed loan sums will based on the
category: 1.SHISHU-Upto Rs.50,000/- 2.Kishore-upto Rs.500,000/- 3.Tarunupto Rs.10,00,000/d) Up gradation 80,000 secondary schools.
e) DBT will be further be expanded from 1 crore to 10.3 crore.
f) For the Atal Pension Yojana, govt. will contribute 50% of the premium limited to
Rs. 1,000 a year.
g) New scheme for physical aids and assisted living devices for people aged over 80.
h) Govt. to use Rs. 9,000 crore unclaimed funds in PPF/EPF for Senior Citizens
Fund.
i) Rs. 5,000 crore additional allocation for MGNREGA.
j) Govt. to create universal social security system for all Indians.
k) A series of welfare measures for the aged- Senior Citizens Plan, youth – Nayi
Manzil, girls - Beti Bachao Beti Padhao, financial inclusion and insurance cover
to all – Pradhan Mantri Jeevan Jyoti Bima Yojana (life cover) and Pradhan
Mantri Suraksha Bima Yojana (accident), social security Atal Pension Yojana,
education – Pradhan Mantri Vidya Lakshmi Karyakram,
Entrepreneural
support for start-up business - Self
Employment and Talent Utilization,
Refinance to MFIs – Pradhan Mantri Mudra Yojana, Environment –Namami
Gange, Agriculture- Paramparagat Krishi Vikas Yojana (organic farming) and
Pradhan Mantri Gram Sinchai Yojana (irrigation)
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“ Vishnu Shila”, B T Ranadive Road, Edappally PO, Ernakulam-682024, Kerala.
Telephone: 0484-6900370, Mob: 9495780370.
Email: [email protected];
(Land mark: Opp. Post Office, Edappally)
[email protected]
Web site: www.aice4bankingcareers.com
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APRIL 2015
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RENEWABLE ENERGY
a) Rs. 75 crore for electric cars production.• Renewable energy target for 2022: 100K
MW in solar; 60K MW in wind; 10K MW in biomass and 5K MW in small hydro
TOURISM
a) Development schemes for churches and convents in old Goa, Hampi, Elephanta•
caves, Forests of Rajasthan, Leh palace, Varanasi , Jallianwala Bagh, Qutb Shahi
tombs at Hyderabad to be under the new tourism scheme.
b) Visa on Arrival for 150 countries.
OTHERS
GOLD - Sovereign Gold Bond, as an alternative to purchasing metal gold.
- New scheme for depositors of gold to earn interest and jewelers to obtain loans
on their metal accounts.
To develop an Indian gold Coin, which will carry the Ashok Chakra on its face, to•
reduce the demand for foreign coins and recycle the gold available in the country.
–
-Forward Markets Commission to be merged with the Securities and Exchange
Board of India
-NBFCs registered with the RBI and having asset size of Rs 500 crore and above to
be considered as ‘financial institution’ under Sarfaesi Act, 2002, enabling them to
fund SME and mid-corporate businesses.
- Permanent Establishment norms to be modified to that mere presence of
offshore fund managers in the country does not lead to “adverse tax
consequences.”
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“ Vishnu Shila”, B T Ranadive Road, Edappally PO, Ernakulam-682024, Kerala.
Telephone: 0484-6900370, Mob: 9495780370.
Email: [email protected];
(Land mark: Opp. Post Office, Edappally)
[email protected]
Web site: www.aice4bankingcareers.com
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APRIL 2015
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Brief Notes
NITI AAYOG: (NITI- NATIONAL INSTITUTION FOR TRANSFORMING INDIA)
-Replaces Planning Commission , established on 15/03/1950
-PM Chairperson, will have a CEO and Vice Chairperson. Governing council with CMs and Lt.
Governors as members.
-Arvind Panagariya as Vice Chairman and V K Saraswat and Bibek Debroy as full time
members.
-For fostering “ Co-operative federalism” for providing a national agenda
--For promotion of citizen engagement, egalitarian access to opportunity, participative and
adaptive governance and increasing use of technology.
The 123 Agreement: Section 123 of the US Atomic Energy Act 1954, establishes an
agreement for co-operation as a prerequisite for nuclear deals between US and any other
nation. The Indo-US Civilian Nuclear Energy Co-operation Agreement is called the 123
Agreement. This is the result of a decade long negotiations. The 123 Agreement aims at
removing the ban imposed by the NNPT- Nuclear Non-Proliferation Treaty. India would thus
have independent Civilian and Military nuclear facilitieFDI: China is the world’s largest FDI
recipient with USD 128 bn, in 2014, super ceding the US prime position over 3 decades,
currently at USD 86 bn. Service sector accounts for China topping the list. In India, too
owing to service sector, FDI rose by 26% to USD 35 bn. This is one of the highest in years,
only behind USD 47 bn in 2008 and USD 35bn in 2009.
Grand Slam 2015: the Australian Open, the opening Grand Slam event of every season.
Serbian Novak Djokovic and American Serena Williams carried home the men’s and
women’s singles trophies. Djokovic’s fifth Australian Open title. World No. 1 Serena
Williams celebrated her 19th Grand Slam title, 65th single title and 92nd overall title. She needs
just four more Grand Slam titles to break Stefi Graf’s highest record of 22 Grand Slams.
Indian Leander Paes won the mixed doubles, paired with Swiss Martina Hingis.
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“ Vishnu Shila”, B T Ranadive Road, Edappally PO, Ernakulam-682024, Kerala.
Telephone: 0484-6900370, Mob: 9495780370.
Email: [email protected];
(Land mark: Opp. Post Office, Edappally)
[email protected]
Web site: www.aice4bankingcareers.com
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APRIL 2015
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OTHERS
•
1964 Nobel Physics laureate and American Charles Townes, inventor of LASER,
passed away in centenary year
•
Afghanistan debutant in 2015 World Cup Cricke
•
MUDRA bank to refinance SME and Micro financial institutions catering to SC/ST
•
Swachh Rail Swachh Bharat- the new cleanliness drive proposed in Railway Budget
2015-16
•
No new trains and no fare hike in this year’s Railway Budget
•
Partners in Maritime Silk Road- India, Sri Lanka and China
•
Ceres is a dwarf planet
•
The 1st digital bank in the country, ‘Pockets’, on a mobile phone is launched by ICICI
Bank. HDFC bank launched Chillr, a third party platform for making payments
through mobile phones
•
Most admired woman in the world – Angelina Jolie, film actor and director
•
PM Narendra Modi has greeted the following nationals on their respective New Years
in their languages: China, Korea, Vietnam and Mongolia
•
Kayakalp refers to an innovative project in the Railway Budget 2015-16
•
Halwa Ceremony is associated with PM swearing in ceremony
•
Rashtriya Ekta Diwas is observed on 31st October, the birthday of Sardar Vallabhbhai
Patel, who worked on the reorganization of states, post independence
•
Meghalaya figures on Indian rail map, as announced in Railway Budget
•
Save money, live better - punchline of Wal-mart
•
PMJDY in Spectacular World of Guinness Records, for 11.5 crore new bank accounts
in a record time of less than 5 months, with 99.74% of the population financially
included. This account has Overdraft facility of Rs.5000/- where borrower’s annual
income does not exceed rs.60000/ in rural area and Rs.120,000/- in non rural areas.
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“ Vishnu Shila”, B T Ranadive Road, Edappally PO, Ernakulam-682024, Kerala.
Telephone: 0484-6900370, Mob: 9495780370.
Email: [email protected];
(Land mark: Opp. Post Office, Edappally)
[email protected]
Web site: www.aice4bankingcareers.com
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APRIL 2015
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•
RBI has signed a currency swap agreement of US$400 million with Central Bank of Sri
Lanka.
•
Aditya Puri of HDFC Bank has been named in the list of American Financial
Magazine’s top 30 CEOs
•
Lee Kuan Yew, Singapore’s first PM and founding father has passed away.
•
LIC will invest Rs.1.5 lakh crore in Railways to upgrade and modernise it over the next
5 years
Thought of the day!
“I'm
a greater believer in luck, and I find the harder I work
the more I have of it”
― Thomas Jefferson
(Disclaimer: This newsletter is not a legal document. This has been compiled, with sole intention to disseminating useful information to the readers. In case of any
variation between what has been stated herein and the relevant Acts, Rules & Regulations, Policy Statements, data, etc., the latter shall prevail.)
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“ Vishnu Shila”, B T Ranadive Road, Edappally PO, Ernakulam-682024, Kerala.
Telephone: 0484-6900370, Mob: 9495780370.
Email: [email protected];
(Land mark: Opp. Post Office, Edappally)
[email protected]
Web site: www.aice4bankingcareers.com
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