Banking notes

Top 49 banking and financial notes for sure success upcoming banking exams

1) India’s largest commercial bank SBI during July 2016 signed an agreement with which global alternative asset manager to form a joint-venture to invest in SBI’S stressed assets?   - Brookfield Asset Management Inc.

Explanation: In an effort to clean up its balance sheet, State Bank of India (SBI) during July 2016 signed an agreement with Brookfield Asset Management Inc. to form a joint venture, which will invest in stressed assets.

– Under the proposed joint venture, Brookfield will commit about Rs. 7,000 crore and SBI up to 5% of total investments into stressed assets.

– The joint venture will be in the nature of an alternative investment fund. Such funds are regulated by the capital market regulator SEBI.

– Brookfield is a global alternative asset manager with $240 billion in assets under management. It has an over 100-year history of owning and operating assets with a focus on property, renewable power, infrastructure and private equity.

2) In the largest bancassurance partnership in the country, Life Insurance Corporation of India (LIC of India) during July 2016 signed an agreement with which banking entity to sell its life insurance policies? – Axis Bank

Explanation: During July 2016 Axis Bank signed an agreement with Life Insurance Corporation of India (LIC) to distribute policies through its banking channels. This is the largest bancassurance partnership after the insurance regulator IRDAI allowed banks to sell policies of more than one company.

– It is worth mentioning that ‘bancassurance’ is the selling of life insurance and other insurance products and services by banking institutions. Banks in India have increased their role in Insurance distribution with ‘bancassurance’ being the biggest contributor.

– Axis Bank already had a distribution arrangement with Max Life Insurance where it also holds a small stake.

– LIC is also a promoter of Axis Bank is the second largest shareholder with a 12% stake.

3) HDFC, India’s largest private sector mortgage lender, created history on 1 August 2016 as it issued world’s first rupee-denominated bond for overseas buyers at the London Stock Exchange (LSE). What is a popular name given to this first-of-its-kind bond? – Masala Bonds

Explanation: Housing Development Finance Corporation (HDFC) became the first entity to issue a bond of this type. This bond, listed on the LSE, raised Rs. 30 billion, equivalent to around US$ 450 million. It has a maturity of three years and an annual yield of 8.33% and was more than four times oversubscribed.

– The listing of ‘Masala Bonds’ on the LSE was described as a landmark event that will boost economic ties between India and the UK post Brexit. This bond issue will help HDFC to diversify its borrowing profile and access global investors.

4) IDFC Bank acquired which Tamil Nadu-based microfinance institution (MFI), as announced by it on 12 July 2016? – Grama Vidiyal

Explanation: Grama Vidiyal is the name of a Tamil Nadu based microfinance institution (MFI) that has a customer base of 1.2 million customers with an asset base of Rs.1,500 crore.

– IDFC Bank has received approval from the Reserve Bank of India (RBI) for the transaction.

– IDFC Bank started banking operations on 1 October 2015, converting itself from an infrastructure focused lender into a universal bank. IDFC was one of two entities that got a banking licence from the RBI in 2014 along with Bandhan Bank.

5) 25 years of which landmark event associated with the Indian economy were completed on 24 July 2016? – Economic Liberalization and Reforms

Explanation: 24 July 2016 marked 25 years of liberalization and reforms in the country. The process of economic reforms was unleashed officially on 24 July 1991 as the then Finance Minister Manmohan Singh presented his landmark budget on that day.

– The Budget of 24 July 1991 brought about sea change in liberalizing the apparently protection-based Indian economy which had concepts like licence regime, state intervention in business regulation and Soviet-style planning. It did away with the so-called ‘Licence Raj’, reduced tariffs and interest rates and ended many public monopolies, allowing automatic approval of foreign direct investment (FDI) in many sectors.

– The economic reforms kick-started in 1991 brought about expansion of the services sector helped largely by a liberalized investment and trade regime. They also increased consumer choices and reduced poverty significantly.

6) Union Government allocated how much amount as capital infusion in 13 public sector banks for 2016-17 as announced on 19 July 2016? – Rs. 22,915 crore

Explanation: Rs. 22,915 crore will be given during 2016-17 fiscal to 13 PSU banks that are burdened with non-performing loans, to help improve their liquidity and support lending operations.

– According to Finance Ministry, of the allocated amount for each bank, 75% has been released for now to provide liquidity support for lending operations and enable them to raise funds from the market. The balance amount is linked to performance and would be released later.

– The country’s largest public sector bank State Bank of India has received the highest amount (Rs. 7,575 crore), followed by Indian Overseas Bank (Rs.3,101 crore) and Punjab National Bank (Rs.2,816 crore). Bank of India received Rs.1,784 crore and Central Bank of India Rs.1,729 crore, while Allahabad Bank received the least amount (Rs.44 crore).

– It is worth mentioning that a part of its Indradhanush plan to revitalise state-owned lenders, the Finance Ministry plans to infuse Rs.70,000 crore in the four-year period between 2015-16 and 2018-19.

7) The Union Cabinet on 27 July 2016 decided to raise the cap for individual foreign investors in Indian stock exchanges to 15%. What was this cap till now? – 5%

Explanation: Individual foreign investors can now hold up to 15% stake in Indian stock exchanges, up from the earlier 5%. This happened after a decision to this effect was taken by the Union Cabinet on 27 July 2016.

– It is worth mentioning that currently foreign investors, in aggregate, can hold up to 49 per cent stake in any stock or commodity exchange.

8) ‘Who Moved My Interest Rate?’ is the name of the book written by which former Governor of the Reserve Bank of India (RBI) that gets released on 15 July 2016? – D. Subbarao

Explanation: Duvvuri Subbarao, was Governor of the RBI between 2008 and 2013.

– He has written about the experiences of his 5-year RBI tenure in the book titled “Who moved my interest rate? – Leading the Reserve Bank of India through Five Turbulent Years”.

– The book is replete with stories of how finance ministers, during the time he was in charge of the central bank (P Chidambaram and Pranab Mukherjee), often made public their differences with the RBI on decisions on the interest rate.

– The book is being released on 15 July 2016.

9) Which entity will become the first to get debt relief under RBI’s Scheme for Sustainable Structuring of Stressed Assets (S4A), as announced during July 2016? – HCC

Explanation: Construction and infrastructure major HCC is poised to become the first entity to get debt under Reserve Bank of India (RBI’s) recently announced scheme for restructuring of stressed assets of companies.

– The RBI’s Scheme for Sustainable Structuring of Stressed Assets (S4A) allows banks to separate the total debt of a stressed company into two. While the company will service the sustainable part of debt, the rest is converted into equity.

– According to a statement released by HCC on 13 July 2016, the joint lenders’ forum has agreed to consider the recast of HCC’s Rs. 12,000-crore debt pile. Lenders get 90 days from the ‘reference date’ (12 July 2016) to formulate a resolution plan and implement it, along with necessary internal approvals.

10) All the nine important unions of the banking industry under the umbrella organisation of the United Forum of Bank Unions (UFBU) observed one-day strike across almost all banks in the country on 29 July 2016. What is the primary reason for observing this strike? – To voice against the proposed merger of State Bank associate banks with SBI

Explanation: The United Forum of Banks Unions (UFBU), an umbrella organisation of nine bank employees and officers unions representing 8 lakh staffers, went ahead with the strike on 29 July 2016, thus affecting services like cheque clearances, cash deposit and withdrawal at branches and other facilities.

– The bank unions are protesting against the proposed merger of State Bank associate banks with SBI, under which four associate banks of SBI will be merged with the parent group.

– The bank employees are also protesting against privatisation of IDBI and other banking reforms that the government has initiated. The unions are opposing the move to privatise regional rural banks and co-operative banks, and consolidate and merge banks.

11) The Reserve Bank of India (RBI) on 13 June 2016 offered relief to banks on bad loans by announcing a new scheme that facilitates to convert up to half the loans held by corporate borrowers into equity or equity-like securities. What is the name given to this scheme? – Scheme for Sustainable Structuring of Stressed Assets (S4A)

Explanation: Scheme for Sustainable Structuring of Stressed Assets (S4A) is an optional framework prepared by the RBI for the resolution of large stressed accounts.

– Under S4A banks will be allowed to convert up to half the loans held by corporate borrowers into equity or equity-like securities.

– The scheme is intended to help restore the flow of credit to crucial sectors such as infrastructure and iron and steel, among others, reduce the stress on corporate borrowers and stanch bad loans across banks.

12) The Union Cabinet on 15 June 2016 approved the merger of five associate banks as well as Bharatiya Mahila Bank (BMB) with State Bank of India (SBI). The merger will create Rs 37-lakh crore banking behemoth with over 50 crore customers. Which were the two other SBI associates that were merged with the SBI earlier? – State Bank of Saurashtra and State Bank of Indore

Explanation: According to the proposal cleared by the Union Cabinet on 15 June 2016, five associate banks – State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad as well as Bharatiya Mahila Bank (BMB) will be merged with State Bank of India (SBI).

– Among the 5 SBI associate banks, State Bank of Bikaner and Jaipur, State Bank of Mysore and State Bank of Travancore are listed.

– It is worth mentioning that SBI had first merged State Bank of Saurashtra with itself in 2008. Two years later in 2010, State Bank of Indore was merged.

13) The Union Finance Ministry announced which new change pertaining to subscribers of the public provident fund (PPF) on 20 June 2016? – PPF holders can now prematurely close the PPF deposit scheme after completing five years

Explanation: According to an announcement made by the Union Finance Ministry on 20 June 2016 the subscribers of the public provident fund (PPF) accounts can now prematurely close the deposit scheme after completing five years for reasons such as higher education or expenditure towards medical treatment.

– A PPF subscriber shall be allowed premature closure of his account or account of a minor of whom he is the guardian on ground that amount is required for treatment of serious ailments or life-threatening diseases of the account holder, spouse or dependent children on production of supporting documents from competent medical authority.

– The normal term of a PPF account is 15 year.

14) According to an announcement made by RBI Governor Raghuram Rajan on 18 June 2016, he will step down as the head of central bank when his term expires on 4 September 2016. Rajan’s decision to leave came as a surprise to the markets and investors who have become accustomed to Rajan’s quick and decisive style to tackling issues plaguing the economy and the banking sector. Rajan is ………Governor of the RBI? – 23rd

Explanation: Raghuram Rajan had taken over as 23rd Governor of the Reserve Bank of India on 4 September 2013. He took over from D. Subbarao.

– Earlier he was chief economist at the International Monetary Fund (IMF) from 2003 to 2007, the youngest to occupy the position.

– From converting the Reserve Bank of India into inflation targeting central bank to forcing a long overdue clean-up of the banking sector, Rajan’s three year term has packed a punch.

15) Who was appointed as the new Deputy Governor of the Reserve Bank of India (RBI) after his appointment was cleared by the government’s appointments committee on 28 June 2016? – N.S. Vishwanathan

Explanation: N.S. Vishwanathan, who has been Executive Director at RBI since 2014, will take over from H.R. Khan, who retires on 3 July 2016. He has been overseeing the banking and non-banking regulation departments.

– Khan was appointed deputy governor in 2011 and has since been managing portfolios including payment and settlement systems, foreign exchange and internal debt management.

– RBI has four deputy governors with two of them being appointed from the outside. The other two are typically promoted from within RBI. Urjit Patel, S.S. Mundra and R. Gandhi are the other three deputy governors at present.

16) Which financial entity launched the first sale of so-called masala bonds from 12 July 2016 that is basically a rupee-denominated bond sold overseas? – HDFC

Explanation: A masala bond is a rupee-denominated bond sold overseas. Such bonds allow an issuer to raise funds in the overseas market without taking on the currency risk typically associated with foreign-currency denominated bonds or loans.

– HDFC thus became first Indian public issuer of synthetic rupee notes. The synthetic rupee notes are in the nature of rupee denominated bonds as per applicable Reserve Bank of India (RBI) guidelines. The bonds will bear a fixed coupon and will have a tenor of 3 years and 1 month.

– The concept of masala bonds was first spelt out by RBI in April 2015, following which the central bank issued guidelines for the securities in September.

– The primary idea was to allow Indian companies to raise money through an overseas debt instrument where the currency risk lies with the investor rather than the issuer.

17) Insurance regulator IRDA on 8 June 2016 proposed norms for selling and servicing of insurance policies through e-commerce platform with a view to increase insurance penetration in the country in a cost-effective manner. This would be done through own network of insurance companies. What name has been given to this network as described in IRDA’s proposals? – The Insurance Self-Network Platform (ISNP)

Explanation: According to the draft proposals of the Insurance Regulatory and Development Authority of India (IRDA), the Insurance Self-Network Platform (ISNP) will undertake Insurance e-commerce activities in India such as selling and servicing of insurance products.

– The IRDA draft defines participants who can set up the ISNP. These include entities granted certificate of registration by IRDA such as insurers, insurance intermediaries, insurance agents and any other entity recognised by the Authority.

– It also lays down the procedure for grant of permission for establishing an ISNP. The pricing of the product would be decided by the insurer.

– All products which are approved under the Product Approval Regulations/ Guidelines and permitted by the respective regulations can be offered through the ISNP.

– According to IRDA’s proposals, promotion of e-commerce in insurance space will lower the cost of transacting insurance business and bring higher efficiencies and greater reach.

18) In the biggest-ever consolidation in the country’s private insurance sector, which two entities will merge into HDFC Standard Life Insurance, as announced on 17 June 2016? – Max Life Insurance and Max Financial Services

Explanation: The boards of directors of HDFC Standard Life Insurance Company, Max Life Insurance Company Ltd and Max Financial Services Ltd have approved a merger of Max Life Insurance Company Ltd and Max Financial Services Ltd into HDFC Life.

– This is thus the biggest-ever consolidation in country’s private insurance sector.

19) The Union Government on 20 June 2016 came out with which radical change in the foreign direct investment (FDI) regime? – It allowed 100% FDI under government approval route for almost every sector including defence

Explanation: In a major reform in the area of FDI, the Union Govt. on 20 June opened up a few more sectors, where FDI can be pumped in, either via automatic route or through the approval of the government.

Defence:

The defence sector is now completely opened up to FDI through government approval route, in cases resulting in access to modern technology in the country or for other reasons to be recorded.

Broadcasting:

Direct to Home (DTH), teleports, cable networks, mobile TV, headend-in-the Sky Broadcasting Service (HITS) has been opened up and 100% FDI through automatic route can now invested.

Pharma:

Up to 74% investment will be under automatic route, while the rest will need a government approval in brownfield pharma sector. Till now, approval was needed in the entire 100% investment in brownfield pharma.

Aviation:

FDI in airports, in case of brownfield projects, is now under automatic route for the entire 100%. Earlier, the automatic route was available till 74% of equity.

Trading:

The government also permitted 100% FDI in trading, including through e-commerce, in respect of food products manufactured or produced in India.

Single brand retail trading:

The Govt. decided to relax local sourcing norms up to three years. It also relaxed sourcing regime for another five years for firms undertaking single brand retail trading of products that have ‘state-of-the-art’ and ‘cutting edge’ technology.

20) In a first-of-its-kind of tax in India, which state government during July 2016 imposed 14.6% tax on junk food like pizzas, burgers, donuts etc.? – Kerala

Explanation: 14.5% tax on junk food items like pizzas, burgers, hamburgers, donuts, etc. sold in posh restaurant and joints was imposed in the Kerala Budget for year 2016-17 that was announced by Finance Minister Thomas Isaac on 7 July 2016. This was the first budget of newly formed LDF government under Chief Minister P.Vijayan.

– The said tax has been called ‘fat tax’ and is first-of-its-kind of tax anywhere in India.

– It is worth mentioning that fat tax is a reality in European countries such as Denmark and Hungary but looks out of place in Indian market barely recovering from a six-quarter back-to-back slump in eating out.

– Industry estimates suggest there are 50-60 outlets of organised fast-food restaurant chains in Kerala, including global brands McDonald’s, Burger King, Pizza Hut, Domino’s Pizza and Subway.

21) The RBI issued which directive pertaining to non-maintenance of minimum balance in saving accounts on 10 May 2016? – It asked banks to stop imposing charges for non-maintenance of minimum balance once the balance in a savings account touches zero

Explanation: The Reserve Bank of India (RBI) had in 2014 revised its guidelines for banks imposing penal charges for non-maintenance of minimum balance in a savings bank account.

– Subsequently, with effect from 1 April 2015, it had asked banks not to take undue advantage of customer difficulty or inattention and to give an advance notice to the customer before deducting charges from their bank balance.

– But some banks were continuing with the practice of creating negative balances in savings accounts until recently. This RBI directive was given to address the same problem.

– According to the RBI, if any bank continues to debit charges on a savings account creating a negative balance, customers can approach the banking ombudsman.

22) Which public-sector bank reported a loss of Rs. 5,367 crore for quarter ended March 2016, which is the largest quarterly loss in the history of Indian banking? – Punjab National Bank (PNB)

Explanation: PNB’s staggering Rs. 5,367 crore loss, as reported on 18 May 2016, came against the backdrop of a surge in bad loans. The bank reported gross bad loans of Rs. 55,818 crore compared to Rs. 34,338 crore in the previous quarter.

– To cover for these bad loans, provisions have been increased, which has led to the bank reporting the worst loss in the history of the Indian banking sector.

– Till now the worst quarterly loss reported by a bank in India was in the name of Bank of Baroda (BOB), whose net loss for quarter-ended December 2015 stood at Rs. 3,342 crore. The third highest quarterly loss is also in the name of BOB, Rs. 3,230 crore in the March 2016 quarter.

– In the December 2015 quarter, IDBI Bank reported a loss of Rs. 2,183 crore. This is the fourth highest loss reported by any bank.

23) In an important development in country’s banking industry, the 5 associate banks of State Bank of India (SBI) on 17 May 2016 proposed their merger with it. Which are the 5 associate banks of SBI? – a) State Bank of Bikaner and Jaipur, a) State Bank of Hyderabad, c) State Bank of Mysore, d) State Bank of Patiala and e) State Bank of Travancore

Explanation: The respective boards of these 5 associate banks proposed their merger with the State Bank of India (SBI), the parent, in a meeting held on 17 May 2016.

– Banking industry observers and experts maintained that there is a case for merging some of the public sector banks, which are very small when compared to their global peers.

– SBI, India’s largest commercial bank, is still not among the top 50 banks in the world. It is ranked only 67th among the global banks. For an economy such as India , the fastest growing large economy in the world, the domestic banking industry is fragmented.

– During the United Progressive Alliance (UPA) regime, two associate banks, State Bank of Indore (2010) and State Bank of Saurashtra (2008), were merged with the SBI.

24) Which multinational bank on 16 May 2016 announced to wind up all its banking operations in India in a phased manner? – Royal Bank of Scotland Plc.

Explanation: According to the announcement made by the management of Royal Bank of Scotland Plc. (RBS), the bank will wind up its corporate, retail and institutional operations in India and shut its 10 retail branches in a phased manner.

– The move to shut its Indian operations is part of a global plan to reduce international operations to 13 countries from 38-spelt out last year by CEO Ross McEwan.

– RBS globally spent nearly eight years cutting down costs and reorganizing following a bailout by the UK government in the aftermath of the 2008 global financial crisis. In India, it has already sold the offshore loan book and private banking business.

25) What is the name of SBI’s newly launched card-less payment solution for offline transactions? – mVisa

Explanation: State Bank of India, the country’s largest public sector bank, during May 2016 launched a mobile payment solution that will enable customers to make digital payments at offline stores by scanning a QR (quick response) code on their smartphones.

– Dubbed ‘mVisa’, the solution is a card-less way for customers to pay for goods at offline stores, and will be available to all SBI credit card, debit card and net banking users. The solution which is bank agnostic will be accessible to customers through the company’s SBI Anywhere app.

– Merchants too will be able to initiate transactions through the SBI mVisa merchant app which will display a dynamic QR code that a customer will be able to scan to authenticate the transaction. The payment process is completely cashless and enhances security as users don’t have to share their card or details with the merchant.

– The service has been initially launched in Bengaluru with a sizable number of merchants and will soon expand into other cities.

26) The Rajya Sabha on 11 May 2016 passed the Insolvency and Bankruptcy Code 2016, a move that is expected to make it much easier to do business in India. What will be the primary benefits of new proposed bankruptcy laws? – It will ensure time-bound settlement of insolvency, enable faster turnaround of businesses and create a database of serial defaulters

Explanation: The Insolvency and Bankruptcy Bill, 2016 which received the Rajya Sabha’s nod on 11 May 2016, was passed by the Lok Sabha some days back. Now the President has to sign the bill to make it legislation.

– On the parameter of resolving insolvency, India is ranked 136 among 189 countries. At present, it takes more than four years to resolve a case of bankruptcy in India, according to the World Bank. The Insolvency and Bankruptcy Code 2016 seeks to reduce this time to less than a year.

– The bill proposes the creation of a new class of insolvency professionals that will specialize in helping sick companies. It also proposes to set up the Insolvency and Bankruptcy Board of India to act as a regulator of these utilities and professionals.

– The new code will replace existing bankruptcy laws and cover individuals, companies, limited liability partnerships and partnership firms. It will amend laws including the Companies Act to become the overarching legislation to deal with corporate insolvency.

27) During May 2016 which noted industrialist announced withdrawing his plan to launch a payments bank? – Dilip Shanghvi

Explanation: Dilip Shanghvi, the promoter of Sun Pharmaceutical Industries Ltd., was given in-principle approval by the Reserve Bank of India (RBI) to start a payments bank in his personal capacity. He had announced a tie-up with Telenor Financial Services and IDFC Bank Ltd to pursue the venture.

– On 20 May 2016 he announced that he has dropped the idea to launch a payments bank. The proposed partners in the venture Telenor Financial Services and IDFC Bank also jointly announced this development.

– Shanghvi thus became the second to give up on plans to launch a payments bank. In March 2016, Cholamandalam Investment and Finance Co. said it would not pursue a payments banking venture even though it had received in-principle approval from RBI last year.

– In 2015 the RBI had allowed 11 entities and individuals to open payment banks, subject to final approvals. This list is now down to nine.

– Payments banks will provide basic savings, deposit, payment and remittance services to people without access to the formal banking system.

28) Saudi Arabia-based Islamic Development Bank (IDB) will open its first branch in India in which state, as announced during June 2016? – Gujarat

Explanation: Islamic Development Bank (IDB) is in the final stages of setting up its first branch in India in Gujarat, Prime Minister Narendra Modi’s home state.

– IDB’s operations in India is expected to usher Islamic finance for homegrown startups and fund Indian exports to many African and central Asian Muslim nations.

– Islamic Banking is a finance system based on the principle of not charging interest, prohibited under Islam.

– IDB’s India operations will be led by Zafar Sareshwala, a prominent Muslim businessman from Gujarat, who is also a supporter of Narendra Modi.

29) Which bank launched India’s first certified green bond at the London Stock Exchange (LSE) to raise $500 million on 6 June 2016? – Axis Bank

Explanation: Axis Bank on 6 June 2016 raised $500 million at the London Stock Exchange (LSE) after it launched India’s first internationally-listed certified green bond to finance climate change solutions around the world.

– The green bond has been certified by the Climate Bonds Standards Board (CBSB).

– The proceeds of the bond will be invested in green energy, transportation and infrastructure projects, reinforcing India’s commitment to produce 175,000 MW of renewable power by 2022.

30) How many years of the infamous massive devaluation of Indian rupee, by a huge 57%, were completed on 6 June 2016? – 50 years

Explanation: Fifty years ago, on 6 June 1966, the rupee was devalued dramatically in response to the first significant balance of payments crisis faced by independent India. After independence in 1947, the 1950s and the early 1960s were the years when India ran up high trade deficits. Foreign aid from rich nations was what came to India’s rescue.

– Things got tough in 1965 as India and Pakistan went to war. Military spending skyrocketed, putting further pressure on the Indian government’s finances.

– With limited options, the Indira Gandhi-led government that followed in 1966 resorted to a steep devaluation of the rupee, in a decision that was widely criticized.

– The devaluation meant that the effective value of the rupee went from Rs.4.76 against the dollar to Rs.7.50 per dollar. That worked out to be a devaluation of 57%.

– The Reserve Bank of India (RBI) documents 1966 as the second episode of rupee devaluation, the first being a consequence of a devaluation in the pound (on 18 September 1949), to which the rupee was pegged earlier.

31) The Reserve Bank of India (RBI) on 5 May 2016 released draft guidelines for issuing ‘on-tap’ universal bank licences. What is meant by ‘on-tap’ banking licences? – Under the ‘on tap’ mechanism an application for banking licence can be made at any time subject to certain conditions

Explanation: The RBI has been opening the bank licence window only periodically. Under the ‘on tap’ mechanism, however, an application can be made at any time subject to certain conditions.

– The proposed licensing policy is a change from the current stop-start policy where RBI opens the window for bank licences periodically but rarely. Under Raghuram Rajan, RBI has been trying to create a more diverse banking sector that can better serve the needs of the Indian economy.

– By putting universal bank licences on-tap, it is taking the attempt to encourage a more diverse and competitive sector a step further.

32) Which private-sector bank on 19 April 2016 became country’s first private sector bank to have an exclusive branch for start-ups? – RBL Bank

Explanation: RBL Bank established an exclusive bank branch for start-ups in Bengaluru, which is often called the unofficial start-up capital of India. Thus RBL Bank became country’s first to have a branch catering to the specific needs of the burgeoning start-up sector.

– Through this branch, RBL will offer start-ups banking services around foreign exchange, remittances and cash management. It will also facilitate registration, legal and tax formalities through verified partners, brought together as part of its Start-up Club programme. The bank is also in the process of establishing such exclusive start-up branches in Delhi-NCR, Mumbai and Chennai.

– RBL Bank Limited (formerly known as The Ratnakar Bank Limited) is a scheduled commercial bank headquartered in the Kolhapur region of Maharashtra.

33) The RBI on 28 April 2016 proposed which measure for peer-to-peer (P2P) lending platforms? – It proposed that peer-to-peer (P2P) lending platforms should be registered as non-banking finance companies (NBFCs)

Explanation: The Reserve Bank of India (RBI) on 28 April proposed registering of peer-to-peer (P2P) lending platforms as non-banking finance companies (NBFCs) so that they can be brought under the regulatory purview of the central bank. This proposal was made in a consultation paper released on RBI’s website, feedbacks for which have been invited till 31 May 2016.

– RBI suggested regulating the permitted activities of P2P lenders, along with capital requirements, governance and business continuity plans of such entities.

– Peer-to-peer lending (P2P lending), is the practice of lending money to individuals or businesses through online services that match lenders directly with borrowers.

– Close to 20 new online P2P lending companies have been launched in the last one year. At present, there are around 30 start-up P2P lending companies in India.

34) The RBI came out with which important exclusion in its draft guidelines for universal bank licences that were released during May 2016? – Large industrial houses have been excluded from entering banking sector

Explanation: The guidelines draft for universal bank licences released by the Reserve Bank of India (RBI) on 5 May 2016 has categorically mentioned the prevention on the entry of large conglomerates into the banking sector.

– Large industrial/business houses are excluded as eligible entities for universal banking licences but permitted to invest in the banks to the extent of less than 10%. The restriction is likely aimed at ensuring no unhealthy linkages between banks and their promoting industrial houses. Industrial houses can’t have a director on the board of a bank either.

– The 10% shareholding cap would apply to individuals and all inter-connected companies belonging to the concerned large industrial houses on an aggregate basis.

35) Which bank became the first banking entity from India to have a tie-up as a strategic partner of the New Development Bank (NDB), a multilateral development bank established by the BRICS? – ICICI Bank

Explanation: On 5 May 2016 the New Development Bank (NDB) and ICICI Bank signed a Memorandum of Understand (MoU) according to which they would consider each other as “preferred partners” to work in various areas.

– This tie-up would help NDB in exploring bond issuance opportunities in the Indian and international bond markets, particularly in rupee-denominated bonds. The two entities will also be working together to fund development projects in the country.

– Another area where the two banks will be collaborating will be around treasury risk management, account and cash management services and human resource development.

– Prior to taking over the head of NDB Bank, Kamath was the non-executive chairman of ICICI Bank till 2015.

36) What is the new name of the Department of Disinvestment as announced by the Union Government during April 2016? – Department of Investment and Public Asset Management (DIPAM)

Explanation: The Department of Disinvestment will now be known as the Department of Investment and Public Asset Management (or DIPAM). It will work under Finance Ministry and it will deal with all matters relating to management of central government investments in equity including disinvestment of equity in central public sector undertakings.

– This change has been done primarily to efficiently manage Centre’s investments in equity including its disinvestment in central public sector undertakings.

– DIPAM has been mandated to advise the government in the matters of financial restructuring of central public sector enterprises and for attracting investment through capital markets.

37) Which Singapore-based bank on 26 April 2016 announced an interest of 7% on its savings bank (SB) accounts, which is highest in the industry? – DBS Bank India

Explanation: DBS Bank India, is the Indian subsidiary of Singapore’s DBS Bank, which was before 2003 known as The Development Bank of Singapore Limited.

– DBS Bank India on 26 April announced that has swung back into the black (profits) with a small profit in 2015-16. Now to widen retail footprint the bank will offer an interest of 7% on its savings bank (SB) accounts, which is highest in the industry. The main feature of this 7% interest will be that it will be given on all savings banks accounts.

– It is worth mentioning that Kotak Mahindra and Yes Bank also provide interest of 7. % but only on savings bank deposits over 1 lakh. On the other hand RBL pays 7.1 per cent but on deposits above Rs 10 lakh. Now DBS will pay 7 per cent even on Re 1 balance.

38) The 49th Annual Meeting of the Asian Development Bank (ADB) was held at which place from 2 May 2016 where its 50th anniversary celebrations were also kicked-off? – Frankfurt (Germany)

Explanation: The Asian Development Bank (ADB) is a regional development bank that was established on 19 December 1966. It will thus complete 50 years of its establishment during December 2016.

– The programmes associated with ADB’s 50th anniversary celebrations were kicked-off from Frankfurt (Germany), where this multilateral organization’s 49th Annual Meeting started from 2 May 2016.

– Manila-based ADB is the only multilateral development institution that has been addressing the development needs of the region until the establishment of new institutions including the Asian Infrastructure Investment Bank (AIIB) and the New Development Bank (NDB) over the past couple of years.

39) On 24 April 2016, it was reported in sections of media that Reserve Bank of India (RBI) Governor Raghuram Rajan is not the top paid official of the RBI despite being its Governor. Who was reported as the highest paid official? – Gopalkrishna Sitaram Hegde

Explanation: As per the latest details published by the Reserve Bank of India (RBI) under the RTI Act, RBI Governor Raghuram Rajan total monthly emoluments stood at Rs. 1,98,700. This included a basic pay of Rs 90,000, a dearness allowance (DA) of Rs. 1,01,700 and ‘others’ of Rs 7,000.

– He was thus not the highest paid RBI official despite being the most powerful person at the central bank.

– Gopalkrishna Sitaram Hegde, who has served as the central bank’s Principal Legal Advisor in the past, was the highest paid RBI official with monthly salary of over Rs. 4 lakh. He was followed by Annamalai Arappuli Gounder (Rs 2,20,355) and V Kandasamy (Rs 2.1 lakh) in the list.

40) Which was the first disinvestment of the 2016-17 fiscal for Union Govt. which was divested on 27 and 28 April 2016? – National Hydroelectric Power Corporation (NHPC)

Explanation: PSU-based hydroelectricity generating entity National Hydroelectric Power Corporation (NHPC) became Indian Government’s first disinvestment for year 2016-17 as the govt. divested 11.36% of its stake in the entity on 27 and 28 April 2016.

– The stake sale in NHPC was done through the offer for sale mechanism. The portion reserved for institutional investors was divested on 27 April and it was oversubscribed within three hours of the opening of trade. Over 100.61 crore shares were on offer for institutional investors while the remaining over 25.15 crore shares were sold to retail investors on 28 April 2016. Around Rs. 2,800 crore were garnered through this divestment.

– NHPC thus became the first public sector undertaking (PSU) to go for stake sale in the current fiscal. Post the sale, the government stake in NHPC came down to 75%.

– The government has set a target of collecting Rs. 56,500 crore from disinvestments in the current financial year.

41) What is the name of the new payment interface that was launched as its most ambitious project by the National Payments Corporation of India Ltd (NPCI) on 11 April 2016 and is expected to bring about a significant shift in the way mobile banking transactions are conducted? – Unified Payments Interface (UPI)

Explanation: Unified Payments Interface (UPI) is the name of the revolutionary payments interface that was made live by the National Payments Corp. of India Ltd (NPCI) from 11 April 2016.

– UPI will allow users to make payments using their mobile phone as the primary device without the need to download a wallet app to send or receive money. With the UPI, money transfer will be as simple as sending a text message.

– Unlike the Immediate Payments Service (IMPS) which allows people to only send money, it will allow people to receive money and initiate requests, too.

– It will be inter-operable across different banks and will allow instant payments. In the first phase, which was launched on 11 April, 29 banks will operate the UPI platform.

– UPI is expected to bring about a sea change in the micro-payment landscape in the country.

42) What important step pertaining Category-I banks so as to improve the ease of doing business in India was taken by the Union Govt. on 12 April 2016? – It empowered authorsied Category-I banks to approve establishment of branch office by foreign entities in India in most sectors

Explanation: Authorised Dealer Category-I banks, those dealing with forex, were empowered to approve establishment of branch office by foreign entities in India in most sectors by the Union Govt. on 12 April.

– In addition to this, anyone who has been awarded a contract for a project by a government authority or public sector unit will be automatically given approval to open a bank account.

– The arrangement will however, not be available to a few sensitive sectors, including defence, telecom, private security, information and broadcasting, and non-government organisations.

43) Which country during April 2016 became the 189th and the latest member of the IMF and the World Bank? – Nauru

Explanation: Nauru, the tiny South Pacific island nation, on 12 April 2016 became the 189th and the latest member of the International Monetary Fund (IMF) and the World Bank.

– Before Nauru, the last country to join the IMF and World Bank was South Sudan, in April 2012.

– Nauru applied for membership in the Washington-based IMF and World Bank in April 2014, after joining the United Nations in 1996 as the world’s smallest independent republic.

– By becoming the member of IMF Nauru can benefit from the crisis lender’s advice on managing government finances and monetary policy. On the other hand its association with the World Bank it gains access to financial support, technical support and special expertise in dealing with Pacific area issues, such as water and sanitation and disaster risk management amid the threat of climate change and rising sea levels.

– These announcements were made as the Centre is trying hard to improve the ease of doing business.

44) The New Development Bank (NDB) of BRICS countries approved its first package of loans worth $811 million for four renewable energy projects in four member countries – Brazil, China, South Africa and India. Out of this $250 million was handed to India. Which Indian bank became the first bank in India to receive this loan? – Canara Bank

Explanation: The New Development Bank (NDB) of BRICS countries handed out $250 million to India’s Canara Bank for renewable energy projects as part of its first set of loans amounting to $811 million.

– A bank in Brazil, a new energy company in China and the largest producer of electricity in South Africa, Eskom, are other recipients of NBD loans.

– The financial assistance of $811 million has been given to Brazil, China, South Africa and India.

Along with Russia, all four countries are founding members of the bank.

– The money, to be disbursed in a staggered manner, will be used to support renewable energy projects with a capacity of 2,370 MW in the four countries. These projects will lead to reduction in greenhouse gas emissions by nearly 4 million tonnes a year.

45) What important monetary measure was announced in first bi-monthly monetary policy review meet of the RBI’s for 2016-17 that was held on 5 April 2016? – Repo Rate was reduced by 25 basis points

Explanation: The Repo Rate (or repurchase rate) is the interest rate at which the central bank provides short-term liquidity to banks. It was 6.75% till now and was reduced to 6.50% in the first bi-monthly monetary policy review for 2016-17 that was presented by Reserve Bank of India (RBI) Governor Raghuram Rajan on 5 April.

– At 6.5%, the Repo Rate is the lowest since March 2011. The Reverse Repo Rate (RRR) was reduced to 6%, thus narrowing the difference between the Repo and Reverse Repo by 50 bps. Reverse Repo Rate is the rate at which banks park excess funds with the RBI. The marginal standing facility (MSF) rate was 7.0%. The Bank Rate which is aligned to the MSF rate also stood adjusted to 7.0%.

– The RBI also reduced the minimum daily maintenance of the cash reserve ratio (CRR) from 95% of the requirement to 90% with effect from the fortnight beginning 16 April 2016. But the CRR was kept unchanged at 4.0% of net demand and time liabilities (NDTL).

– The RBI also retained its target of 5% consumer price inflation by March 2017 and GDP growth forecast for the year at 7.6%.

– A reduction in all-important Repo Rate had been widely expected, although the quantum of his reduction had had mixed backers. The rate cut also suggested that the RBI has taken note of the central government’s commitment to fiscal discipline, freeing it up to infuse more liquidity into the system.

46) Which entity became the latest entity to enter India’s mutual fund business as during April 2016 it filed papers with the SEBI for launching at least four mutual fund schemes? – Mahindra Asset Management Company (Mahindra AMC)

Explanation: Mahindra Asset Management Company (Mahindra AMC), a wholly-owned subsidiary of Mahindra and Mahindra Financial Services is the latest Indian conglomerate to enter country’s mutual fund markets. It had received capital market regulator Securities and Exchange Board of India (SEBI’s) approval to set up mutual fund business during February 2016.

– Mahindra AMC on 8 April 2016 disclosed that it has started the process of setting up its products and marketing. It will focus on rural and semi-urban markets where its non-bank lender parent Mahindra Finance has a strong presence.

– It has filed papers with the SEBI for launching at least four schemes. These schemes are Mahindra MF Bachat Yojana, Mahindra MF Kar Bachat Yojana, Mahindra MF Bal Vikas Yojana and Mahindra Liquid Fund, as per information available with SEBI.

47) Which domestic bank from April 2016 started first-of-its-kind Aadhaar-based ATM usage facility wherein a customer can transact using his biometric details instead of the PIN? – DCB Bank

Explanation: DCB Bank is a small-sized private scheduled commercial bank with its presence in 17 states and 2 union territories. From April 2016 it started the first ATM in the country which operates using the Aadhaar data.

– The user can key-in the 12-digit Aadhaar number or swipe the card at an automated teller machine (ATM) to start a transaction, but at the stage of confirming the identity, it requires biometric details rather than the PIN.

– Seeding the bank account with the Aadhaar number will be essential before a customer can use the facility. The solution has been developed in-house and involves connecting up with the Aadhaar server to authenticate the identity of the customer every time a transaction is initiated.

48) By starting its operations from 25 March 2016, which stock exchange became the newest stock exchange in Asia? – Yangon Stock Exchange (Myanmar)

Explanation: The Yangon Stock Exchange (YSE) started its operations from 25 March 2016 with First Myanmar Investment (FMI), one of Myanmar’s largest companies, becoming the first company to launch an initial public offering (IPO) at the exchange.

– The YSE was founded during October 2015 as a joint venture with the state-owned Myanma Economic Bank and two Japanese entities.

– There has been no stock exchange in Myanmar for last 50 years. Country’s economy was devastated by nearly 50 years of economic mismanagement under the military government, which ended direct rule of the country in 2011.

– The outgoing semi-civilian government that replaced the junta ushered in numerous economic reforms. One of them was to establish the Yangon Stock Exchange (YSE).

49) Prime Minister Narendra Modi on 14 April 2016 launched an online portal for trading in agriculture produce that is expected to liberate farmers from the clutches of middle-men and realise fair market value for their yields. What is the name of this portal? – National Agriculture Market portal (e-NAM)

Explanation: The idea behind the online portal (e-NAM) is to provide transparency in pricing by removing the information asymmetry between sellers and buyers and enable farmers to benefit from price discovery.

– The farmers can list the items they want to sell on the portal. Local traders, as well as traders in other States, can then bid for the produce. The farmer will be free to choose to accept the offer made locally or by traders in other States.

– The e-NAM marketplace will initially enable farmers in eight States – Uttar Pradesh, Madhya Pradesh, Jharkhand, Himachal Pradesh, Gujarat, Telangana, Rajasthan and Haryana – to sell 25 commodities in 21 wholesale mandis.

– The commodities that will initially be sold online include chana (black gram), castor seed, paddy, wheat, maize, turmeric, onion, mustard, mahua flower, tamarind and shelling pea.

– The Agriculture Ministry has targeted integrating all 585 regulated markets on the e-NAM platform by March 2018. Of these, 200 will be on board by September 2016, 200 more by March 2017, and the other 185 markets by the date.

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