6.Basiceconomy Banking institutions

Qts 1 Explain about Export Import Bank of India (EXIM Bank):

Export Import Bank of India (EXIM Bank). It was established in 1982 and having head office in Mumbai. The bank grants loans to exporters and importer  and also provides information about the international market.

Qts 2 Explain about National Bank for Agriculture and Rural Development (NABARD)

National Bank for Agriculture and Rural Development (NABARD): It was established in the year 1982 and having head office in Mumbai. It is a central or apex institution for financing agricultural and rural sectors.

Qts 3 Explain about National Housing Bank (NHB)

National Housing Bank (NHB): It was established in 1988 and having head office in New Delhi. Apex institution for housing finance in India. Finance to banks and Non-Banking financial corporation for housing projects. 

Qts 4 Explain about Small Industries Development Bank of India (SIDBI)

Small Industries Development Bank of India (SIDBI): It was established in 1990 and having head office in Lucknow. The focus of SIDBI is to promote, finance and develop small-scale industries.

Qts 5 Explain about Bharatiya Mahila Bank (BMB)

Bharatiya Mahila Bank (BMB):  It is the India's first all women bank and inaugurated in Mumbai on 19th November, 2013. The bank commenced with an initial capital of Rs. 1,000 crore. It is based on the principle of: Women Empowerment in India

Qts 6 Explain about Mudra Bank (Micro Units Development and Refinance Agency Bank)

Mudra Bank (Micro Units Development and Refinance Agency Bank): It provides loans at low rate of interest  to small entrepreneurs.

Qts7 Explain Basel Norms

Basel Norms: Set by Bank of International Settlement (BIS) headquartered in Basel, Switzerland. It prescribes for a set of minimum capital requirement for banks. 

Qts 8. Explain  NEFT (National Electronic Fund Transfer): NEFT enables funds transfer from one bank to another .Here   RBI acts as the service provider to transfer the money from one account to another. One can transfer any amount through NEFT, even a rupee.

Qts 9. What  is meant by RTGS (Real Time Gross Settlement): 

In RTGS system funds takes place from one bank to another on a 'real time' and 'gross' basis. In RTGS  transactions are settled as soon as they are processed.

Qts 10 What is the difference between NEFT and RTGS 

NEFT has no minimum or maximum limit on the amount to be transferred, RTGS transactions can only be performed if the amount to be transferred is equal to or more than Rs. 2 lakh.

Qts 11. What  is NOSTRO Account: 

A NOSTRO account is maintained by an Indian Bank in the foreign countries

Qts 12 What is VOSTRO Account:

 A Vostro account is maintained by a foreign bank in India with their corresponding bank.

Qts 13 What is CRAR (Capital to Risk Weighted Assets Ratio):

Capital to risk weighted assets ratio is arrived at by dividing the capital of the bank with aggregated risk weighted assets for credit risk, market risk and operational risk.

Qts 14 What is  Non-Performing Assets (NPA)

An asset (loan), including a leased asset, becomes non-performing when it stops generating income for the bank.

Qts 15 What is SWIFT (Society for World Wide Interbank Financial Telecommunication)

SWIFT (Society for World Wide Interbank Financial Telecommunication): It was setup in 1973 in Belgium. It is a cooperative society under Belgian Law. 

The Majority of International Interbank Messages use the swift network.

Qts 15.What is KYC (Know Your Customer)

KYC (Know Your Customer): It enables banks to know their customers and their financial dealings. It is basic tool to control money laundering. Example : Aaadhar card, Pan pan card.

Qts 16. What is  IFSC (Indian Financial System Code)

IFSC (Indian Financial System Code): It is an alpha-numeric 11 character code for unique identification of a bank branch provided by RBI. The first 4 alpha characters speak the bank name, the 5th character is 0 (Zero) and the last 6 characters represent branch code.

Qts 17. What is NBFC (Non-Banking Financial Company)

It is company registered under the Companies Act of 1956. The NBFC cannot accept demand deposits.

Qts 18. MICR (Magnetic Ink Character Recognition): 

MICR code is 9 digit in character printed on a cheque book to facilitate the processing of cheques to identify the branch and bank.

Qts 19 What is CBS (Core Banking Solution) or Unified Payment Interface

Core stands for centralized online real time exchange. CBS is the technology used for fast communication between the bank branches and also for fund transfer

Qts 20 What is Monetary Policy?

Monetary policy is an economic policy that manages the size and growth rate of the money supply in an economy. It is a powerful tool to regulate macroeconomic variables such as inflation and unemployment.

Qts 21 What is  bank rate 

Bank rate is the rate of interest which is charged by a central bank while lending long term loans to a commercial bank.

Qts 22  What is  repo  rate 

Repo rate is the rate of interest which is charged by a central bank while lending short  term loans to a commercial bank.

Qts 23 What is Reverse repo rate 

Reverse repo rate is the rate at which the central bank, the RBI in our case, borrows money from the commercial banks when there is excess liquidity in the market

Qts 24  What is Statutory Liquidity Ratio

Statutory Liquidity Ratio popularly called SLR is the minimum percentage of deposits that the commercial bank maintains through gold, cash and other securities. However, these deposits are maintained by the banks themselves and not with the RBI or Reserve Bank of India

Qts 25 What is Cash Reserve Ratio?

The cash reserve is the amount of capital a bank has. The Cash Reserve Ratio (CRR) is the percentage of total deposits a bank must have in cash to operate risk-free. The Reserve Bank of India decides the amount and is kept with them for financial security. The bank cannot use this amount for lending and investment purposes and does not get any interest from the RBI.

Qts 26 Open Market Operations

Open market operations (OMOs)--the purchase and sale of government securities in the open market by RBI. 

RBI sell Government sell securities in market whenever money circulation increases in the market. RBI sell Government buy  securities in market whenever money circulation decreases  in the market