Bank Exams Today Weekly Summary: Feb 13 to Feb 19

1. What is the difference between FDI and FII?

Answer
Foreign Direct Investment (FDI) Foreign Institutional Investment (FII)
When a company situated in one country invests in a company located abroad is termed FDI. When a foreign company invests in stock market of a country is termed FII.
It’s difficult to enter and exit. Here it’s very easy to enter and exit.
It brings long term capital thereby increasing the GDP of the country. It can bring long term as well as short term capital and only results in increase in capital of the country.
Here funds, technology, resources, concepts get transferred from one country to another. Here only funds are transferred.

2. What are the sectors where FDI limit is 100 %?

Answer Agriculture and animal husbandry, defense, broadcasting, e-commerce, railway, white label ATM and NBFC.


3. What is the FDI limit for print media, private and public sector banks and insurance sector?

Answer Print media – 26%
Private sector banks – 74%
Public sector banks – 20%
Insurance – 49%

4. What do you know about Bharat Bill Payment System (BBPS)?

Answer Origin – 2013
Committee – RBI executive director G. Padmanabhan committee
Aim – to provide a unified gateway to make payments related to electricity bill, water/Municipality bill, gas supply, telephone & DTH, institutional fees, insurance, mutual funds, government payment etc either online via credit cards, debit cards, IMPS, net-banking, NEFT etc or offline via network of agents.

5. What are Micro ATM’s and their uses?

Answer Micro ATMs are a new and advanced version of Point of Sale (PoS) devices connected using GPRS mobile internet and enables biometric scanning. It uses Core Banking Solution (CBS). These machines are run by Business Correspondents appointed by banks.
These ATMs provide cash withdrawal, cash deposit, fund transfer, balance enquiry, linking Aadhar with the bank accounts etc. These are mainly found in rural and semi-urban areas where traditional ATMs are not available.

6. Who is Business correspondent?

Answer  Business correspondent is a person appointed by the bank to provide basic banking services to the rural people as well as in those areas where bank find it difficult or unprofitable to open a branch.

7. What amount is allocated for Prime Minister Gramin Digital Saksharta Abhiyan under Budget?

Answer Rs. 2,351.38 crore

8. What do you mean by Green Banking?

Answer Green banking means promoting environmental friendly practices and reducing your carbon footprints from banking activities. Some of the measures adopted by banks are:
  • Paperless banking 
  • Carbon Credit Business 
  • Installing energy efficient technology 
  • Green Banking financial products such as green loan on low rate of interest 
  • Initiating pollution checkup camps, maintenance of parks etc. 
  • Mass transportation system 

Various banks have adopted these measures such as State Bank of India, YES bank, HSBC bank, ICICI bank, IDBI bank, HDFC bank, PNB, Bank of Baroda, Canara bank and Kotak Mahindra bank.

9. What is the maximum denomination of currency notes that RBI can issue?

Answer Under section 22 of RBI Act 1934, RBI can issue maximum denominations not exceeding Rs 10,000 but can't issue one rupee coin which are issued by Union Ministry of Finance and signed by Finance Minister.
The highest denomination currency note of INR10, 000 was issued for the very first time by RBI in 1938 but was demonetised by British Government on 12th January, 1946 after World War II.

10. In how many languages the amount of a currency note is written?

Answer  The amount of a Currency Note is written on it in 17 language s (Two on the front side and 15 on the backside) of the 22 official languages of India mentioned in the VIII Schedule of Indian Constitution. Sindhi, Manipuri, Bodo, Dogri, Maithili and Santhali are not present on the currency notes.

11. When was first commemorative coin issued?

Answer The first Indian commemorative coin was issued in 1964 to mourn the death of Jawaharlal Nehru, the first Prime Minister of India.

12. Explain briefly about BRBNMPL.

Answer Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL) was established by RBI as its wholly owned subsidiary on 3rd February 1995 with a view to augmenting the production of bank notes.
BRBNMPL manages 2 Presses one at Mysore in Karnataka and the other at Salboni in West Bengal.

13. What is CAMELS rating system?

Answer CAMELS is an acronym of the following factors and each factor is assigned a weight as follows:
C - Capital adequacy 20 %
A - Asset quality 20%
M - Management 25%
E - Earnings 15%
L - Liquidity 10%
S - Sensitivity 10%
This system helps the supervisory authorities to identify banks that need maximum amount of regulatory concern. It is used to measure risk and financial stability of a bank. It determines the banks overall conditions in the areas of financial, managerial and operational aspects.

14. What is the difference between overdraft and cash credit?

Answer
Overdraft Cash credit
Can be availed for any purpose (that means for personal use as well as for business purpose also). Specifically given for the purpose of business or, business related activities.
The excess withdrawal facility is provided to the current account holders and in exceptional cases to the saving account holders. The excess withdrawal facility is given only if a customer opens a Cash Credit account with a bank.
Generally, they don’t require any asset as security to avail overdraft facility. Cash credit requires assets like company inventory, property, receivables.
Provided for a shorter duration of time (generally one week to one month) and high rate of interest w.r.t cash credit. Can be short terms and medium terms also (generally up to 1 year) and low rate of interest as compared to overdraft.
The Overdraft amount limit i.e. the excess withdrawal limit remains constant. The excess withdrawal limit keeps varying as per the current assets kept as security.

15. What is NACH?

Answer National Automated Clearing House (NACH), implemented by the National Payments Corporation of India (NPCI), replaced ECS (Electronic Clearing Services) from 1st May 2016. It is an electronic payment service for Banks, Financial Institutions, Corporate and Government to facilitate interbank, high volume, electronic transactions which are repetitive and periodic in nature thereby removing any geographical barriers within the country while making payments.
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