Important banking questions & terms
- Who is the Governor of RBI?
Governer of RBI is Shri Urjit Patel, who took over from Raghuram Rajan on 4 September 2016.
- Who are the deputy governors of RBI?
- Viral V. Acharya
- Shri N. S. Vishwanathan,
- Shri S S Mundra,
- Shri R Gandhi
- What are the basics of Monetary policy?
Monetary policy is the macroeconomic policy laid down by the central bank. It involves management of money supply and interest rate and is the demand side economic policy used by the government of a country to achieve macroeconomic objectives like inflation, consumption, growth and liquidity.
Tools are Repo Rate, Reverse Repo Rate, Bank Rate , SLR etc.
- What are the functions of RBI?
Main Functions of RBI:
- Monetary Authority:Formulates, implements and monitors the monetary policy to maintain price stability and ensuring adequate flow of credit to productive sectors.
- Regulator and supervisor of the financial system:
- Manager of Foreign Exchange : Manages the Foreign Exchange Management Act, 1999.
- Issuer of currency:
- Developmental role : Performs a wide range of promotional functions to support national objectives.
- Related Functions: Banker to the Government & Banker to bank
- What is CBS?
CBS stands for Core Banking Solution
- CORE stands for ?
The term CORE means – Centralized Online Real-time Exchange.
- Real Time Gross Settlement (RTGS)– Under this system, fund transfer takes place in real time and are settled on continuous, individual settlement basic. Normally, the beneficiary Bank branch receives the funds in real time as soon as funds are transferred by the remitting Bank.
- National Electronic Fund Transfer (NEFT)– Under the NEFT system fund transfers take place on Deferred Net Settlement basis and are take place in hourly batches. Presently, NEFT operates in hourly batches from 9 am to 7 pm on week days and 9 am to 1 pm on Saturdays. Currently there are eleven settlements from 9 am to 7 pm on week days and five settlements from 9 am to 1 pm on Saturdays.
Immediate Payment Service (IMPS) is an instant interbank electronic fund transfer service through mobile phones. It is also being extended through other channels such as ATM, Internet Banking.
- What is a fixed deposit? (min and max periods for the same.)
Term Deposit Accounts can be opened for a minimum period of 7 days up to maximum period of 10 years.The minimum amount accepted for fixed/short deposit is Rs.1,000/- for a period of 15 days and above and minimum of Rs.100/- lacs and above for a minimum period of 7 days.
TDR and STDR terms are different types of fixed deposits. TDR means Term Deposit and STDR means special term deposit. Following is main difference between them.
If you are interested on getting periodic payments from your fixed deposit after short period like week, month or quarterly, you have to deposit under TDR scheme. Bank will pay you normal interest rate on your fixed deposit as per the payout option chosen by you.
If you are not interested in getting periodic payments but looking for interest accrual and a bullet payment at the end of the term then you hav to opt for STDR. The advantage with this scheme is that it will be quarterly compounding.
- What is subprime crisis?
A situation starting in 2008 affecting the mortgage industry due to borrowers being approved for loans they could not afford. As a result, a significant rise in foreclosures led to the collapse of many lending institutions and hedge funds.
- What is repo rate?
Repo rate is the rate at which the central bank of a country (Reserve Bank of India in case of India) lends money to commercial banks in the event of any shortfall of funds.
- What is Reverse repo rate?
Reverse Repo rate is the short term borrowing rate at which RBI borrows money from banks. The Reserve bank uses this tool when it feels there is too much money floating in the banking system. An increase in the reverse repo rate means that the banks will get a higher rate of interest from RBI.
- What is Bank rate?
Bank Rate refers to the official interest rate at which RBI will provide loans to the banking system.
- What is SLR?
The share of NDTL that banks shall maintain in safe and liquid assets, such as, unencumbered government securities, cash and gold. Changes in SLR often influence the availability of resources in the banking system for lending to the private sector.
- What is CRR?
The average daily balance that a bank shall maintain with the Reserve Bank as a share of such per cent of its NDTL that the Reserve Bank may notify from time to time in the Gazette of India.
Net Demand and Time Liabilities (NDTL): Bank accounts from which you can withdraw your money at any time are called “Demand Liabilities” for exemplification, Savings accounts, Current Deposits etc.
Accounts from which you can’t just withdraw money at any time but you have to wait for certain period are called Time Liabilities for instance Fixed Deposits, cash certificates etc.
- What is Call money rate?
Call money rate is the rate at which short term funds are borrowed and lent in the money market. The duration of the call money loan is 1 day.
- What is prime lending rate?
The interest rate charged by banks to their largest, most secure, and most creditworthy customers on short-term loans.
- SAFRAESI Act.
The full form of SARFAESI Act as we know is Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Banks utilize this act as an effective tool for bad loans (NPA) recovery. It is possible where non-performing assets are backed by securities charged to the Bank by way of hypothecation or mortgage or assignment. Upon loan default, banks can seize the securities (except agricultural land) without intervention of the court. SARFAESI is effective only for secured loans where bank can enforce the underlying security eg hypothecation, pledge and mortgages.
- What are NBFCs?
A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property.
- How many times demonetization have happened in India?
3 times Demonetization has happened in India
· 1946(Rs 1000 & Rs 10,000 Notes),
· 1978(Rs 1000, Rs 5000 & Rs 10,000 Notes) &
· 2016 ( Rs500 & Rs1000 Notes).
22.What is UPI(Unified Payment Interface) and what can a user do with the app?
UPI is a payment system that allows money transfer between any two bank accounts bu a smart phone.UPI allows a customer to pay directly from a bank account to different merchants, both online and offline, without the hassle of typing credit card details, IFSC code, or net banking/wallet passwords. The per transaction limit is Rs.1 lakh.
23. USSD(Unstructured Supplementary Service Data).
when anyone dial a number that starts with * and ends with #, he/she is using USSD. USSD is currently the best available communications technology to deliver mobile financial services to low-income customers. USSD-based communication can be used for checking your account balance, generating mini statement, fund transfer via MMID, IFSC code or Aadhaar number.
One should have to register for mobile banking to access this facility. The same is not mandatory for the beneficiary. Next, he just need to type in *99# (for English language) from his mobile phone. This USSD code is common across all telecom operators.
23. What is QR code?
QR code (Quick Response code) is a two-dimensional (matrix) machine-readable bar code made up of black and white square. This code can be read by the camera of a smartphone. It is used for storing URLs or other information that link directly to text, emails websites phone numbers. It is capable of 360 degrees (omni-directional), high speed reading. It carries information both horizontally and vertically. It has error correction capability and data stored in it can be restored even if it is partially damaged or dirty.
- The Union Government has launched Bharat QR code, a quick response (QR) code to enable digital payments without card swiping machines. It is world’s first interoperable payment acceptance solution launched by Indian Government to move towards less-cash economy. QR code has been developed by jointly by National Payments Corporation of India (NPCI), Visa, MasterCard and American Express under instructions from Reserve Bank of India (RBI). It works as common interface for the MasterCard/Visa/RuPay platforms and also facilitate acceptance of Aadhaar-enabled payments and Unified Payments Interface (UPI). It enables person to make payments to retailers without using the merchant’s ID or number. It eliminated need of using card swiping machines making digital payments. Using, BharatQR code merchants will be required to only display one QR code instead of multiple ones. Users can make payment by scanning the code.BharatQR code is of two types static and dynamic. In static QR code, first code need to be scanned and then amount is entered to make payment. In case of dynamic QR code, new QR code will be generated in real time for every transaction. In this case there is no need to enter the amount. The payment is just made by scanning and entering the PIN.