Important Banking terminologies

• Accrued interest: Interest due from issue date or from the last coupon payment date to the settlement date. Accrued interest on bonds must be added to their purchase price.

• Arbitrage: Buying a financial instrument in one market in order to sell the same instrument at a higher price in another market.

• Ask Price: The lowest price at which a dealer is willing to sell a given security.

• Asset-Backed Securities (ABS): A type of security that is backed by a pool of bank loans, leases, and other assets. Most ABS are backed by auto loans and credit cards – these issues are very similar to mortgage-backed securities.

• At-the-money: The exercise price of a derivative that is closest to the market price of the underlying instrument.

• Basis Point: One hundredth of 1%. A measure normally used in the statement of interest rate e.g., a change from 5.75% to 5.81% is a change of 6 basis points.

• Bear Markets: Unfavorable markets associated with falling prices and investor pessimism.

• Bid-ask Spread: The difference between a dealer’s bid and ask price.

• Bid Price: The highest price offered by a dealer to purchase a given security.

• Blue Chips: Blue chips are unsurpassed in quality and have a long and stable record of earnings and dividends. They are issued by large and well-established firms that have impeccable financial credentials.

• Bond: Publicly traded long-term debt securities, issued by corporations and governments, whereby the issuer agrees to pay a fixed amount of interest over a specified period of time and to repay a fixed amount of principal at maturity.

• Book Value: The amount of stockholders’ equity in a firm equals the amount of the firm’s assets minus the firm’s liabilities and preferred stock

• Broker: Individuals licensed by stock exchanges to enable investors to buy and sell securities.

• Brokerage Fee: The commission charged by a broker.

• Bull Markets: Favorable markets associated with rising prices and investor optimism.

• Call Option: The right to buy the underlying securities at a specified exercise price on or before a specified expiration date.

• Callable Bonds: Bonds that give the issuer the right to redeem the bonds before their stated maturity.

• Capital Gain: The amount by which the proceeds from the sale of a capital asset exceed its original purchase price.

• Capital Markets: The market in which long-term securities such as stocks and bonds are bought and sold.

• Certificate of Deposits (CDs): Savings instrument in which funds must remain on deposit for a specified period, and premature withdrawals incur interest penalties.

• Closed-end (Mutual) Fund: A fund with a fixed number of shares issued, and all trading is done between investors in the open market. The share prices are determined by market prices instead of their net asset value.

• Collateral: A specific asset pledged against possible default on a bond. Mortgage bonds are backed by claims on property. Collateral trusts bonds are backed by claims on other securities. Equipment obligation bonds are backed by claims on equipment.

• Commercial Paper: Short-term and unsecured promissory notes issued by corporations with very high credit standings.

• Common Stock: Equity investment representing ownership in a corporation; each share represents a fractional ownership interest in the firm.

• Compound Interest: Interest paid not only on the initial deposit but also on any interest accumulated from one period to the next.

• Contract Note: A note which must accompany every security transaction which contains information such as the dealer’s name (whether he is acting as principal or agent) and the date of contract.

• Controlling Shareholder: Any person who is, or group of persons who together are, entitled to exercise or control the exercise of a certain amount of shares in a company at a level (which differs by jurisdiction) that triggers a mandatory general offer, or more of the voting power at general meetings of the issuer, or who is or are in a position to control the composition of a majority of the board of directors of the issuer.

• Convertible Bond: A bond with an option, allowing the bondholder to exchange the bond for a specified number of shares of common stock in the firm. A conversion price is the specified value of the shares for which the bond may be exchanged. The conversion premium is the excess of the bond’s value over the conversion price.

• Corporate Bond: Long-term debt issued by private corporations.

• Coupon: The feature on a bond that defines the amount of annual interest income.

• Coupon Frequency: The number of coupon payments per year.

• Coupon Rate: The annual rate of interest on the bond’s face value that a bond’s issuer promises to pay the bondholder. It is the bond’s interest payment per dollar of par value.

• Covered Warrants: Derivative call warrants on shares which have been separately deposited by the issuer so that they are available for delivery upon exercise.

• Credit Rating: An assessment of the likelihood of an individual or business being able to meet its financial obligations. Credit ratings are provided by credit agencies or rating agencies to verify the financial strength of the issuer for investors.

• Currency Board: A monetary system in which the monetary base is fully backed by foreign reserves. Any changes in the size of the monetary base has to be fully matched by corresponding changes in the foreign reserves.

• Current Yield: A return measure that indicates the amount of current income a bond provides relative to its market price. It is shown as: Coupon Rate divided by Price multiplied by 100%.

• Custody of Securities: Registration of securities in the name of the person to whom a bank is accountable, or in the name of the bank’s nominee; plus deposition of securities in a designated account with the bank’s bankers or with any other institution providing custodial services.

• Default Risk: The possibility that a bond issuer will default ie, fail to repay principal and interest in a timely manner.

• Derivative Call (Put) Warrants: Warrants issued by a third party which grant the holder the right to buy (sell) the shares of a listed company at a specified price.

• Derivative Instrument: Financial instrument whose value depends on the value of another asset.

• Discount Bond: A bond selling below par, as interest in-lieu to the bondholders.

• Diversification: The inclusion of a number of different investment vehicles in a portfolio in order to increase returns or be exposed to less risk.

• Duration: A measure of bond price volatility, it captures both price and reinvestment risks to indicate how a bond will react to different interest rate environments.

• Earnings: The total profits of a company after taxation and interest.

• Earnings per Share (EPS): The amount of annual earnings available to common stockholders as stated on a per share basis.

• Earnings Yield: The ratio of earnings to price (E/P). The reciprocal is price earnings ratio (P/E).

• Equity: Ownership of the company in the form of shares of common stock.

• Equity Call Warrants: Warrants issued by a company which give the holder the right to acquire new shares in that company at a specified price and for a specified period of time.

• Ex-dividend (XD): A security which no longer carries the right to the most recently declared dividend or the period of time between the announcement of the dividend and the payment (usually two days before the record date). For transactions during the ex-dividend period, the seller will receive the dividend, not the buyer. Ex-dividend status is usually indicated in newspapers with an (x) next to the stock’s or unit trust’s name.

• Face Value/ Nominal Value: The value of a financial instrument as stated on the instrument. Interest is calculated on face/nominal value.

• Fixed-income Securities: Investment vehicles that offer a fixed periodic return.

• Fixed Rate Bonds: Bonds bearing fixed interest payments until maturity date.

• Floating Rate Bonds: Bonds bearing interest payments that are tied to current interest rates.

• Fundamental Analysis: Research to predict stock value that focuses on such determinants as earnings and dividends prospects, expectations for future interest rates and risk evaluation of the firm.

• Future Value: The amount to which a current deposit will grow over a period of time when it is placed in an account paying compound interest.

• Future Value of an Annuity: The amount to which a stream of equal cash flows that occur in equal intervals will grow over a period of time when it is placed in an account paying compound interest.

• Futures Contract: A commitment to deliver a certain amount of some specified item at some specified date in the future.

• Hedge: A combination of two or more securities into a single investment position for the purpose of reducing or eliminating risk.

• Income: The amount of money an individual receives in a particular time period.

• Index Fund: A mutual fund that holds shares in proportion to their representation in a market index, such as the S&P 500.

• Initial Public Offering (IPO): An event where a company sells its shares to the public for the first time. The company can be referred to as an IPO for a period of time after the event.

• Inside Information: Non-public knowledge about a company possessed by its officers, major owners, or other individuals with privileged access to information.

• Insider Trading: The illegal use of non-public information about a company to make profitable securities transactions

• Intrinsic Value: The difference of the exercise price over the market price of the underlying asset.

• Investment: A vehicle for funds expected to increase its value and/or generate positive returns.

• Investment Adviser: A person who carries on a business which provides investment advice with respect to securities and is registered with the relevant regulator as an investment adviser.

• IPO price: The price of share set before being traded on the stock exchange. Once the company has gone Initial Public Offering, the stock price is determined by supply and demand.

• Junk Bond: High-risk securities that have received low ratings (i.e. Standard & Poor’s BBB rating or below; or Moody’s BBB rating or below) and as such, produce high yields, so long as they do not go into default.

• Leverage Ratio: Financial ratios that measure the amount of debt being used to support operations and the ability of the firm to service its debt.

• Libor: The London Interbank Offered Rate (or LIBOR) is a daily reference rate based on the interest rates at which banks offer to lend unsecured funds to other banks in the London wholesale money market (or interbank market). The LIBOR rate is published daily by the British Banker’s Association and will be slightly higher than the London Interbank Bid Rate (LIBID), the rate at which banks are prepared to accept deposits.

• Limit Order: An order to buy (sell) securities which specifies the highest (lowest) price at which the order is to be transacted.

• Limited Company: The passive investors in a partnership, who supply most of the capital and have liability limited to the amount of their capital contributions.

• Liquidity: The ability to convert an investment into cash quickly and with little or no loss in value.

• Listing: Quotation of the Initial Public Offering company’s shares on the stock exchange for public trading.

• Listing Date: The date on which Initial Public Offering stocks are first traded on the stock exchange by the public

• Margin Call: A notice to a client that it must provide money to satisfy a minimum margin requirement set by an Exchange or by a bank / broking firm.

• Market Capitalization: The product of the number of the company’s outstanding ordinary shares and the market price of each share.

• Market Maker: A dealer who maintains an inventory in one or more stocks and undertakes to make continuous two-sided quotes.

• Market Order: An order to buy or an order to sell securities which is to be executed at the prevailing market price.

• Money Market: Market in which short-term securities are bought and sold.

• Mutual Fund: A company that invests in and professionally manages a diversified portfolio of securities and sells shares of the portfolio to investors.

• Net Asset Value: The underlying value of a share of stock in a particular mutual fund; also used with preferred stock.

• Offer for Sale: An offer to the public by, or on behalf of, the holders of securities already in issue.

• Offer for Subscription: The offer of new securities to the public by the issuer or by someone on behalf of the issuer.

• Open-end (Mutual) Fund: There is no limit to the number of shares the fund can issue. The fund issues new shares of stock and fills the purchase order with those new shares. Investors buy their shares from, and sell them back to, the mutual fund itself. The share prices are determined by their net asset value.

• Open Offer: An offer to current holders of securities to subscribe for securities whether or not in proportion to their existing holdings.

• Option: A security that gives the holder the right to buy or sell a certain amount of an underlying financial asset at a specified price for a specified period of time.

• Oversubscribed: When an Initial Public Offering has more applications than actual shares available. Investors will often apply for more shares than required in anticipation of only receiving a fraction of the requested number. Investors and underwriters will often look to see if an IPO is oversubscribed as an indication of the public’s perception of the business potential of the IPO company.

• Par Bond: A bond selling at par (i.e. at its face value).

• Par Value: The face value of a security.

• Perpetual Bonds: Bonds which have no maturity date.

• Placing: Obtaining subscriptions for, or the sale of, primary market, where the new securities of issuing companies are initially sold.

• Portfolio: A collection of investment vehicles assembled to meet one or more investment goals.

• Preference Shares: A corporate security that pays a fixed dividend each period. It is senior to ordinary shares but junior to bonds in its claims on corporate income and assets in case of bankruptcy.

• Premium (Warrants): The difference of the market price of a warrant over its intrinsic value.

• Premium Bond: Bond selling above par.

• Present Value: The amount to which a future deposit will discount back to present when it is depreciated in an account paying compound interest.

• Present Value of an Annuity: The amount to which a stream of equal cash flows that occur in equal intervals will discount back to present when it is depreciated in an account paying compound interest.

• Price/Earnings Ratio (P/E): The measure to determine how the market is pricing the company’s common stock. The price/earnings (P/E) ratio relates the company’s earnings per share (EPS) to the market price of its stock.

• Privatization: The sale of government-owned equity in nationalized industry or other commercial enterprises to private investors.

• Prospectus: A detailed report published by the Initial Public Offering company, which includes all terms and conditions, application procedures, IPO prices etc, for the IPO

• Put Option: The right to sell the underlying securities at a specified exercise price on of before a specified expiration date.

• Rate of Return: A percentage showing the amount of investment gain or loss against the initial investment.

• Real Interest Rate: The net interest rate over the inflation rate. The growth rate of purchasing power derived from an investment.

• Redemption Value: The value of a bond when redeemed.

• Reinvestment Value: The rate at which an investor assumes interest payments made on a bond which can be reinvested over the life of that security.

• Relative Strength Index (RSI): A stock’s price that changes over a period of time relative to that of a market index such as the Standard & Poor’s 500, usually measured on a scale from 1 to 100, 1 being the worst and 100 being the best.

• Repurchase Agreement: An arrangement in which a security is sold and later bought back at an agreed price and time.

• Resistance Level: A price at which sellers consistently outnumber buyers, preventing further price rises.

• Return: Amount of investment gain or loss.

• Rights Issue: An offer by way of rights to current holders of securities that allows them to subscribe for securities in proportion to their existing holdings.

• Risk-Averse, Risk-Neutral, Risk-Taking:
  Risk-averse describes an investor who requires greater return in exchange for greater risk.
  Risk-neutral describes an investor who does not require greater return in exchange for greater risk.
  Risk-taking describes an investor who will accept a lower return in exchange for greater risk.

• Senior Bond: A bond that has priority over other bonds in claiming assets and dividends.

• Short Hedge: A transaction that protects the value of an asset held by taking a short position in a futures contract.

• Settlement: Conclusion of a securities transaction when a customer pays a broker/dealer for securities purchased or delivered, securities sold, and receives from the broker the proceeds of a sale.

• Short Position: Investors sell securities in the hope that they will decrease in value and can be bought at a later date for profit.

• Short Selling: The sale of borrowed securities, their eventual repurchase by the short seller at a lower price and their return to the lender.

• Speculation: The process of buying investment vehicles in which the future value and level of expected earnings are highly uncertain.

• Stock Splits: Wholesale changes in the number of shares. For example, a two for one split doubles the number of shares but does not change the share capital.

• Subordinated Bond: An issue that ranks after secured debt, debenture, and other bonds, and after some general creditors in its claim on assets and earnings. Owners of this kind of bond stand last in line among creditors, but before equity holders, when an issuer fails financially.

• Substantial Shareholder: A person acquires an interest in relevant share capital equal to, or exceeding, 10% of the share capital.

• Support Level: A price at which buyers consistently outnumber sellers, preventing further price falls.

• Technical Analysis: A method of evaluating securities by relying on the assumption that market data, such as charts of price, volume, and open interest, can help predict future (usually short-term) market trends. Contrasted with fundamental analysis which involves the study of financial accounts and other information about the company. (It is an attempt to predict movements in security prices from their trading volume history.)

• Time Horizon: The duration of time an investment is intended for.

• Trading Rules: Stipulation of parameters for opening and intra-day quotations, permissible spreads according to the prices of securities available for trading and board lot sizes for each security.

• Trust Deed: A formal document that creates a trust. It states the purpose and terms of the name of the trustees and beneficiaries.

• Underlying Security: The security subject to being purchased or sold upon exercise of the option contract.

• Valuation: Process by which an investor determines the worth of a security using risk and return concept.

• Warrant: An option for a longer period of time giving the buyer the right to buy a number of shares of common stock in company at a specified price for a specified period of time.

• Window Dressing: Financial adjustments made solely for the purpose of accounting presentation, normally at the time of auditing of company accounts.

• Yield (Internal rate of Return): The compound annual rate of return earned by an investment

• Yield to Maturity: The rate of return yield by a bond held to maturity when both compound interest payments and the investor’s capital gain or loss on the security are taken into account.

Zero Coupon Bond: A bond with no coupon that is sold at a deep discount from par value.

ATM System

Reserve Bank of India (RBI) has decided to permit non-bank entities to set up, own and operate ATMs. Such ATMs will be called White Label ATM. The draft guidelines on deployment of White Label ATMs were placed on RBI website for Public Comments. Various issues related to deployment of White Label ATMs were also discussed with the stakeholders. The following benefits are likely to accrue to the rural/ urban areas of all over the country (including Madhya Pradesh):

1. ATM penetration on a per capita basis in the country is expected to improve considerably.

2. There is less presence of ATMs in Tier III to VI unbanked/ underbanked areas of the country. ATM penetration in Tier III to VI unbanked/ underbanked areas will increase.

3. This initiative is expected to boost the Financial Inclusion process.

Connection of Banks with EPS

The Reserve Bank of India (RBI) has initiated action to expand the membership of Centralized Electronic Payment System (CEPS) making more banks eligible to connect to these systems. RBI issued instructions in September, 2011 by which the access criteria to Centralised Electronic Payment Systems has been rationalized by bringing down the net worth requirement to Rs. 25 crore from Rs.50 crore, thus making more banks eligible for membership of CEPS. Since April 2012, sub-membership route to Centralised EPS has also been opened to all licenced banks who were not participating in these systems on account of either not meeting the access criteria or because of cost considerations.

National Policy on Microfinance

Planning Commission had constituted a High Level Committee on financial sector reforms under the Chairmanship of Shri Raghuram G. Rajan, Professor, Graduate School of Business, University of Chicago in August, 2007. The Committee submitted the report in September, 2008.

The Committee observed that, “despite its success, the future growth of microfinance is constrained by a number of factors. An important issue is the ability of MFIs to raise financing. Given the large estimated demand for microcredit, MFIs need multiple sources of financing, apart from the traditional loan financing from banks. Other constraints include an unclear regulatory environment and the lack of well-developed management information systems and an adequate supply of trained management talent to facilitate sustainable scaling up.”

To provide a formal statutory framework for the promotion, development, regulation and orderly growth of the micro finance sector and thereby to facilitate universal access to integrated financial services for the unbanked population, the Department of Financial Services is formulating Micro Finance Institutions (Development and Regulation) Bill 2012.

Agriculture Development Bank

National Bank for Agriculture and Rural Development (NABARD) was established on 12 July 1982 by an Act of the Parliament for providing and regulating credit and other facilities for the promotion and development of agriculture, small scale industries, cottage and village industries, handicrafts and other rural crafts and other allied economic activities in rural areas with a view to promoting integrated rural development and securing prosperity of rural areas, and for matters connected therewith or incidental thereto.

NABARD provides refinance assistance under Sec.21 (i) of NABARD Act, 1981 for Short Term Seasonal Agricultural Operations (STSAO) purposes for a period not exceeding 8 months to Cooperatives, Regional Rural Banks (RRBs) and any other financial institutions approved by Reserve Bank of India. Further, in terms of Govt. of India’s instruction the Short Term refinance to Cooperative Banks, RRBs is being provided by NABARD at concessional rate of interest in order to enable them to provide crop loans upto Rs. 3 lakh for a period of one year to farmers at 7% p.a.

Banks in Rural Areas

There are 93,659 branches of Scheduled Commercial Banks (SCBs) functioning in the country as on 31st March, 2012, out of which 34,671 branches are in rural areas and 24,133 are in semi-urban areas, which together constitute about 63% of the total bank branches.

During 2010-11, the SCBs opened 3,294 branches in rural/ semi-urban areas against 1,795 branches opened in urban/ Metropolitan areas of the country.

As per the extant Branch Authorization Policy of Reserve Bank of India (RBI), general permission has been granted to domestic SCBs (other than Regional Rural Banks) to open branches in centres with a population upto 99,999 and in all centres of the North-Eastern States and Sikkim, subject to reporting. In order to further expand the banking network, RBI has advised that while preparing their Annual Branch Expansion Plan, the Banks should allocate at least 25 percent of the branches proposed to be opened during a year in unbanked rural centres with population upto 9999.

Further, under the “Swabhimaan” financial inclusion campaign, banking facilities have been provided to over 74,000 villages having population over 2000.

IBPS CLERKS EXAM SOLVED PAPER

GENERAL AWARENESS 
(With Special Reference to Banking Industry)
(Exam Held on : 27-11-11)

1.    Which of the following organisation / agencies is specifically set up to boost overall rural development in India ?
1)RBI 
2) SIDBI
3) NABARD 
4) SEBI
5) EXIM
2.    Which of the following States has expressed its unhappiness over the agreement on sharing of Testa water between India and Bangladesh? (Agreement was not signed because of the objection)
1) Jharkhand 
2) Assam
3) Manipur 
4) Bihar
5) West Bengal
3.    Banks in India are regulated under ..........
1) Companies Act, 1956
2) Banking Regulation Act, 1949
3) Reserve Bank of India Act, 1934
 4) Special powers conferred on the RBI
5) None of these
4.    Which of the following countries is a major producer of Jute
1) Pakistan 
2) Afghanistan
3) South Africa 
4) Bangladesh
5) Sri Lanka
5.    Compilation of data on industrial production in India is done y which of the following agencies / organizations ?
1) National Testing Lab
2) Reserve Bank of India
3) Census Commission of India
4) Planning Commission of India
5) Central Statistics Office
6.    The President of India visited which of the following countries in July 2011 and held discussions with Mr. Lee Myung-bak, the President of the country ?
1) South Korea 
2) Mongolia
3) China 
4) North Korea
5) Thailand
7.    India is providing financial help to which of the following countries for building a large harbour there named as Kankasanthurai Harbour ?
1) Nepal 
2) Myanmar
3) Bangladesh 
4) Sri Lanka
5) Vietnam
8.    A Savings Bank Account opened with a commercial bank with zero balance or very minimal balance is known as :
1) Savings Bank - Ordinary Account
2) Student Savings Bank Account
3) No Frill Account
4) Current Account
5) Call Deposit
9.    What does the letter 'R' denote in the abbreviation 'BR Act' which controls banking acitivities in the country ?
1) Reformation
 2) Regulation
3) Reporting 
4) Resolution
5) Ranking
10.    'Base Rate' in banks is :
    1) Rate of interest payable on demand deposits
    2) Rate of interest payable on fixed deposits
    3) Rate of interest charged by RBI on long term borrowings of Public Sector Banks
    4) Minimum lending rate decided by RBI which shall be adopted by all Public Sector Banks
    5) The minimum interest rate fied by individual banks, below which they cannot lend funds, except cases like Govt, sponsored scheme
11.    Banking Sector will fall under which of the following ?
    1) Agricultural Sector       
    2) Service Sector
    3) Manufacturing Sector
    4) Industrial Sector
    5) Small Scale Sector
12.    THe Govt, of India has recently added the following currency for allowing Indian companies to raise debts through External Commercial Borrowings
1) EURO 
2) Dinar
 3) Great Britain Pound
4) Chinese Yuan
5) Japanese Yen
13.    A Saving Bank Deposit Account is one where:
    1) The deposits are made only once in a year
    2) Amounts are deposited and are withdrawn as per requirement of the customers
    3) Periodical Fixed amount are deposited monthwie and withdrawal are allowed after a fixed period
    4) The deposits are made once in every month
    5) None of these
14.    ASBA scheme is related to Purchase of :
1) IPO 
2) CP
3) CD 
4) TCs
5) None of these
15.    Who among the following is the ex-officio Chairman of the Rajya Sabha at present ?
    1) Mrs. Pratibha Patil
    2) Sri Mohammad Hamid Ansari
    3) Dr. Manmohan Singh
    4) Ms. Miera Kumar
    5) Sri L.K. Advani
16.    WHich of the following States at the instance of the Supreme Court of India, has decided to conduct electronic auction of Iron Ore stocks to be allotted to Iron and Steel producers ?
1) Gujarat 
2) Bihar
3) Madhya Pradesh 
4) Uttar Pradesh
5) Karnataka
17.    Mobile banking requires :
    1) account with a bank with mobile phone linked to interbank mobile payment service
    2) account with mobile post office
    3) account with bank along with mobile phone linked to international mobile payment service
    4) account with bank and mobile phone linked to interstate mobile payment service
    5) account with bank along with mobile phone linked to interdistrict mobile payment service
18.    Saina Nehwala famous player associated with the game of :
1) Hockey 
2) Badminton
3) Golf 
4) Lawn Tennis
5) Table Tennis
19.    Who among the following is the Prime Miniter of Japan at present ?
    1) Mr. Yoshihiko Noda
    2) Mr. Naoto Kan
    3) Mr. Abe Shinzo   
    4) Mr. Yasuo Fukuda
    5) None of these
20.    Central Drug Research Institute is located in which of the following cities in India ?
1) Jamshedpui 
2) New Delhi
3) Jaipur
 4) Lucknow
5) Dhanbad
21.    Which of the following books is written by the Classic Russian author Maxim Gorky ?
1) As You Like It 
2) Lolita
3) The Mother 
4) War and Peace
5) Alice in Wonderland
22.    Summer Olympic of 2016 will be organized is a city in :
1) China 
2) India
3) Brazil 
4) Denmark
5) South Africa
23.    WHich of the following terms is NOT used in the game of Hockey ?
1) Bully 
2) Follow-on
3) Penalty corner 
4) Center pass
5) Scoop
24.    In a bank the following are the usual types of deposit accounts
    1) Savings accounts, electricity accounts and insurance premium accounts
    20 Fixed deposits, Post office savings bank accounts and current deposit accounts
    3) Current accounts, savings bank accounts and term deposit accounts
    4) Loan accounts, savings bank accounts and term deposit accounts
    5) Current bill accounts and term deposit accounts
25.    When a bank dishonours a cheque
    1) it is called settlement of the cheque
    2) it is called withdrawing of the cheque
    3) it is called nullifying of the cheque
    4) it is called trancating of the cheque
    5) it is called return of the cheque unpaid
26.    The latest merger of bank with State bank of India is :
    1) State Bank of Hyderabad
    2) State bank of Indore
    3) State Bank of Saurashtra
    4) State Bank of Travancore
    5) None of these
27.    Mr. Salva Kur Mayardit has taken over as the President of :
1) Republic of South Sudan
2) Vietnam
 3) Myanmar
4) Libya
 5) Iraq
28.    The most powerful tool used by the Reserve Bank of India to control inflatin is
    1) Raise interest rates
    2) Reduce interest rates
    3) Raise Currency Supply
    4) Reduce Currency Supply
    5) Raise interest rates and reduce currency supply
29.    Sub Prime Lending which was the root cause for global meltdown in banks during 2008 means :
    1) Bank finance for non-productive activities
    2) Bank finance not properly disclosed in its Balance Sheet
    3) Bank finance in violation to the directives of the Central Bank
    4) Bank finance to fictitious entities
    5) Bank finance who do not qualify for the best market interest rates
30.    Which of the following represents female literacy rate in India  (As per provisional figures of Census 2011)
1) 60%
 2) 62%
3) 65% 
4) 70%
5) None of these
31.    Corssing of cheques makes them
    1) Invali document
    2) Inteligible to endorse to a person other than the payee
    3) Remain the same in all respect, it is only a practice
    4) Eligible for payment irrespective of sufficient balance in the account
    5) Ineligible to get cash across the bank counter
32.    NEFT and RTGS in banking terminology speaks of
    1) Various deposit products
    2) Various loan products
    3) Electronic Payment Products within a bank
    4) Electronic Fund Transfer from bank to bank
    5) Cheque Truncation Process
33.    The Head Quarters of the World Bank is located in
1) London
 2) Paris
3) New York 
4) Tokyo
5) None of these
34.    Which of the following schemes is lanuched by the Govt. of India only for school children?
1) Kutir Jyoti 
2) Kishor Jeevan
3) Aadhaar 
4) SEWA
5) None of these
35.    Which of the following days is observed as 'World Ozone Day'?
1) 10th August
 2) 16th October
3) 16th September 
4) 10th December
5) 19th January
36.    Which of the following Awards is given by the Govt of Mdhya Pradesh for eexcellence in the field of classical music / dance etc. ?
1) Saraswati Samman
2) Kalidas Samman
3) Shanti Swarup Bhatnagar Award
4) Sahitya Akademi Award
5) None of these
37.    The ownership of Public sector banks rests
    1) Wholly with Government of India
    2) Jointly with Government of India and State Bank of India
    3) Wholly with shareholders from the public
    4) Jointly with Government of India and Reserve Bank of India
    5) Jointly with Government of India and shareholders from the public
38.    Which of the Cups / Trophies is associated with the game of Cricket ?
1) Azlan Shah Cup 
2) Davis Cup
3) Nehru Gold Cup 
4) Ranji Trophy
5) Wimbledon Trophy
39.    Which of the following is the currency of South Korea ?
1) Yen 
2) Kyat
3) Won 
4) Rupee
5) Ringit
40.    Who among the following is the Railway Minister of India at present ?
    1) Sri Sharad Pawar   
    2) Sri Virbhadra Singh
    3) Smt. Ambika Soni   
    4) Sri Dinesh Trivedi
    5) None of these
41.    WHo among the following was a famour Scientist and is known as the, 'Father of India's Nuclear Programme ?
    1) Dr. Homi J. Bhabha
    2) Dr. Satyendra Nath Bose
    3) Dr. Vikram Sarabhai
    4) Dr. Satish Dhawan
    5) Dr. C.V. Raman
42.    Which of the following Awards was given to Dr. M. S. Ahluwalia in 2011 by the Govt. of India?
    1) Padma Vibhushan   
    2) Padmashree
    3) Bharat Ratna   
    4) Man of the Year
    5) Man of the Decade
43.    Which of the following awards is given to Dr. Harish Hande and Ms. Nileema Mishra recently ?
    1) Ramon Magsaysay
    2) Booker Prize
    3) Golden Pen Award
    4) Mercy Ravi Award
    5) Sangeet Natak Akademi Award
44.    Which of the following pacts / agreement will allow agfhanistan to sell its goods in India without paying any tax ?
    1) SAFTA   
    2) Free Market Agreement
    3) Most Favoured Nation Pact
    4) Agreement for Direct Foreign Investment
    4) Agreement to help Least Developed Countries
45.    Non performing assets mean .................
    1) the assets have stopped giving losses to a bank
    2) the assets have stopped giving capital to a bank
    3) the assets have stopped giving income to a bank
    4) the assets have stopped giving income and expenses to a bank
    5) the assets have stopped giving expenses to a bank
46.    Which of the following banks in India has maximum number of branches and ATMs in India ?
    1) IDBI Bank   
    2) Bank of India
    3) Punjab National Bank
    4) ICICI Bank
    5) State Bank of India
47.    EFT means :
    1) Effective Funds Transfer
    2) Efficient FUnds Transfer
    3) Easy Funds Transfer
    4) Elecronic Funds Transfer
    5) Electric FUnds Transfer
48.    UNESCO is an organization working in the field of
    1) Social Welfare
    2) Protecting interest of prisoners of war
    3) Framing international laws
    4) International Collaboration through education, culture and science
    5) Protecting children's right
49.    If a cheque is post dated
    1) bank on whom it is drawn will not honour the cheque before the date of the cheque
    2) bank on whom it is drawn has to honour the cheque before the date of the cheque
    3) bank on whom it is drawnhas the option to honour the cheque before the date of the cheque or not
    4) bank on whom it is drawn has to refer to RBI to bonour the cheque before the date of the cheque
    5) bank on whom it is drawn has to reer to the court to honour the cheque before the date fo the cheuqe
50.    Which of the following countries is a Member of G-8?
1) Iran 
2) Turkey
3) France 
4) Brazil
5) China

ANSWERS:
  1) 3    2) 5   3) 2    4) 4    5) 5    6) 1    7) 4    8) 3    9) 2    10) 5 
11) 4    12) 4   13) 2    14) 1    15) 2    16) 5    17) 1    18) 2        19) 1    20) 4 
21) 3    22) 3    23) 2    24) 3        25) 5    26) 2    27) 1    28) 1    29) 5   30) 3     
31) 2    32) 4    33) 5    34) 5    35) 3    36) 2       37) 4    38) 4    39) 3    40) 4
41) 1    42) 1        43) 1    44) 1    45) 3    46) 5    47) 4    48) 4    49) 1    50) 3 

SBI launches ‘virtual' card for online transactions

State Bank of India has launched a ‘virtual' electronic debit card for e-commerce transactions.

The ‘State Bank Virtual' card can be created by a customer using the bank's Internet Banking facility with transaction rights.

The product allows the user to create a virtual card for any online transaction and the customer is not required to share the details of the principal account on the merchant Web site, said the bank in a statement.

The new product is a convenient and secure gateway to online payment for SBI's Internet banking users. Among the features of the virtual card are: no charges on creation of the card and the customer can create any number of cards at the same time. The card is created for each online transaction and is valid for a maximum of 48 hours.

There is no transfer of balance from the principal account inasmuch as only a lien is marked on the account. The minimum amount with which the card can be loaded with is Rs 100. There is no upper limit.

Transfer of balance takes place only when the customer does the actual transaction online.

Punjab National Bank slashed Lending Rates by 25 Basis Points

Punjab National Bank (PNB) the second largest public sector bank on 19 April 2012 reduced lending rates by lowering their benchmark rates by 25 basis points.
The bank reduced its base rate and prime lending rate (PLR) by 25 bps from 10.75% to 10.50% in the case of base rate and from 14.25% to 14% in the case of PLR. In addition to the cut in the base rate, PNB also lowered interest rates on home and car loans. Home loans of up to 75 lakh rupees will carry interest of 10.75% and for loans above 75 lakh rupees the rate is pegged at 11%. Car loans will be priced at 12%. This reduction will apply to new and existing customers.
The bank’s move came in the backdrop of the RBI’s decision to cut down the key policy rates. The RBI on 17 April 2012 had slashed the repo rate and reverse repo rate by 50 basis points.

Printing of MICR, IFSC code must on passbook

The Reserve Bank has made it mandatory for all banks to print the MICR and IFSE code on the passbook and statement of account of the customers.

“Currently, the MICR code is available on the cheque leaf along with the IFSC code of the branch. On a review it has been decided that this information should also be made available in the passbook/statement of account of the account holders,” RBI said in a statement.

As per RBI guidelines, MICR code is necessary for all electronic clearing services (credit and debit) transactions.

IFSC code is a pre-requisite for national electronic funds transfer (NEFT) and real time gross settlement (RTGS) transactions.

Karnataka signed a Memorandum of Understanding with Mizuho Corporate Bank of Japan

Karnataka government on 19 April 2012 signed a memorandum of understanding (MoU) with Mizuho Corporate Bank of Japan.
The high-level delegation from Karnataka met senior officials of Mizuho Corporate Bank. The MoU for mutual co-operation and investment promotion was signed between Karnataka Udyog Mitra and Mizuho Corporate Bank.
The delegation, led by Murghesh Nirani, Minister for Large and Medium Industries, is conducting a road show in Japan to attract investments for the forthcoming Global Investors Meet in June.
The delegation during its meeting held with the management teams of Honda, Toyota and Sony asked the companies to continue their association with the state.
The Minister also held meeting with several other Japanese companies including Mitsubishi, Hitachi, East Nippon Expressway Company in order to encourage them to invest in the state.

GENERAL AWARENESS PRACTICE QUESTIONS FOR BANK EXAMS

1. What role do Micro, Small and Medium Enterprises (MSMEs) play in a country’s economic and industrial development ?
(A) They have the capacity to absorb skilled and unskilled labour available in the country.
(B) Such institutions help in distribution of income in a wide spectrum and do not allow it to get concentrated in few hands or in few areas.
(C) They help in eradication of poverty by providing self-emplovment opportunities.
(1) Only (A)
(2) Only (B)
(3) Only (C)
(4) Only (A) & (C)
(5) All (A), (B) & (C)
2. Which of the following statements about the Indian Economy is correct ?
(1) Indian economy is as developed as that of China
(2) About 70% Indians are involved in some type of self-employment and are the owners of some or the other micro or small enterprise
(3) In India single biggest employment is agriculture and allied activities
(4) About 48% Indian workforce is employed in foreign countries or in organisations assisted by foreign capital
(5) None of these
3. Which of the following is/are correct about the problems of Indian Agriculture ?
(A) Large agricultural subsidies are hampering productivity-enhancing investments.
(B) Irrigation infrastructure is in bad shape and needs immediate improvement.
(C) Frequent takeovers of fertile land by private companies and multinationals to launch big business complexes.
(1) Only (A)
(2) Only (A) & (B)
(3) Only (A) & (C)
(4) All (A), (B) & (C)
(5) None of these
4. As per news in various journals, many banks have failed to achieve agri-loan target fixed by the RBI for the year 2010-11. What was the target fixed for the year ?
(1) 10%
(2) 15%
(3) 18%
(4) 24%
(5) 30%
5. Which of the following statements about Agro and Allied activities is not correct ?
(1) Farmers do not get adequate credit for purchase of cattle
(2) There is a need to improve breed and genetic characteristics of the cattle folk
(3) India has huge forest cover and also degraded and marshy land which can be used for productive purposes
(4) India is the 10th largest producer of medicinal and aromatic plants, but the products are not of commercial-value
(5) Animal husbandry plays an important role in providing sustainability under Rain-fed conditions
6. Which of the following schemes launched by the Government of India aims at enhancing the livelihood security of the people in rural areas by guaranteeing hundred days of employment in a financial year to a rural household whose adult members volunteer to do unskilled manual work ?
(1) TRYSEM
(2) Pradhan Mantri Gram Sadak Yojana
(3) Kutir Jyoti Scheme
(4) ASHA
(5) MGNREGA
7. In some parts of India, farmers face acute distress because of heavy burden of debt from non-institutional lenders. Who can be called a non-institutional lender ?
(1) Small Banks
(2) Grameen Banks
(3) Credit Cooperative Societies
(4) Micro Finance Institutions
(5) Moneylenders

8. The South Asian Free Trade Agreement (SAFTA) was introduced with a view of levying how much custom duty for trading any product within the SAARC zone ?
(1) 5%
(2) 4%
(3) 2%
(4) 1%
(5) No customs duty
9. Which of the following organisations prepares rural credit plans on annual basis for all districts in India, which in turn form the base for annual credit plans of all rural financial institutions ?
(1) SIDBI
(2) NABARD
(3) RBI
(4) Indian Banks Association
(5) CII
10. Which of the following is TRUE about the current population trend (s) in India ?
(A) Every year India adds more people to the world’s population than any other country.
(B) Currently India has a young population which will grow somewhat older largely as a result of decline in fertility.
(C) The National Family Planning Programme did not contribute much in controlling fertility rate.
(1) Only (A)
(2) Only (B)
(3) Only (C)
(4) Only (A) & (B)
(5) All (A), (B) & (C)
11. In economic terms, which of the following factors determine the ‘Individual’s demand’ of a product/ commodity ?
(A) Price of a commodity.
(B) Income of the mdividual.
(C) Utility and quality of a commodity
(1) Only (A)
(2) Only (B)
(3) Only (C)
(4) Only (A) & (C)
(5) All (A), (B) & (C)
12. Which of the following terms is used in the field of economics ?
(1) Adiabatic
(2) Bohr Theory
(3) Plasma
(4) Barter System
(5) Viscosity
13. “Pascal Lamy calls on trade negotiators to move out of their comfort zones towards agreements”, was the headline in some major newspapers. This news is associated with which of the following organisations/agencies ?
(1) World Trade Organisation
(2) International Monetary Fund
(3) World Bank
(4) United Nations Organisation
(5) North Atlantic Treaty Organisation
14. Which of the following is not a function of the Planning Commission of India ?
(1) Assessment of the material, capital and human resources of the country
(2) Formulation of plans for the most effective and balanced utilisation of country’s resources
(3) Public cooperation in national development
(4) Preparation of annual budget of the country and collection of taxes to raise capital for the implementation of the plans
(5) Determination of stages in which the Plan should be carried out
15. Which of the following periods represents the period of the first Five-Year Plan in India?
(1) 1948 – 53
(2) 1947 – 52
(3) 1952 – 57
(4) 1950 – 55
(5) 1951 – 56
16. Which of the following is the name of the process available to common people to seek court’s intervention in matters of public interest ?
(1) Public Interest Litigation (PIL)
(2) Habeas Corpus
(3) Ordinance
(4) Residuary power
(5) None of these
17. India’s foreign policy is based on several principles, one of which is
(1) Panchsheel
(2) Satyamev Jayate
(3) Live and Let Live
(4) Vasudhaiv Kutumbkam
(5) None of these
18. As we know thousands of tonnes of foodgrain was washed away in the floods in Haryana and Punjab a few months back. This incident is an example which indicates that there is a scope for improvement in our machinery controlling our
(1) Mid Day Meal Scheme
(2) Public Distribution System
(3) Food for Work Programme
(4) Village Grain Bank Scheme
(5) Operation Flood Scheme
19. President Barack Obama was on a visit to India a few months back. His visit is said to have forged both the nations into a new era of relations. India managed to sign a special agreement with US in which of the following fields/areas as a byproduct of the visit of Obama ?
(A) Energy sector & Nuclear energy as US has lifted sanctions on supply of high tech machines.
(B) Skill Development Programmes in IT sector in which US has super-specialisation.
(C) Training in management of Micro-finance Institutions.
(1) Only (A)
(2) Only (B)
(3) Only (A) & (C)
(4) Only (B) & (C)
(5) Only (A) & (B)
20. Many times we read a term Tax Haven’ in various newspapers. What does it mean ?
(A) It is a country where certain taxes are levied at a very low rate.
(B) It is a country where people can dump their illegal money without any problem.
(C) It is a place where foreigners can work without paying any tax on their income.
(1) Only (A) & (B)
(2) Only (B)
(3) Only (B) & (C)
(4) Only (A)
(5) All (A), (B) & (C)
21. As per existing law, what is the minimum per day wages paid to a worker from unorganised sector in India ?
(1) Rs. 50
(2) Rs. 75
(3) Rs. 100
(4) Rs. 125
(5) No such law is there
22. Who amongst the following was awarded the “Indira Gandhi Peace Prize” for 2010 ?
(1) Ronald Noble
(2) Luiz Inacio Lula D’Silva
(3) Mohammed ElBaradei
(4) Aung San Suu Kyi
(5) None of these.
23. Which of the following is not a Poverty Eradication Programme launched by the Government of India ?
(1) Swarnjayanti Gram Swarozgar Yojana
(2) Jawahar Gram Samridhi Yojana
(3) National Social Assistance Programme
(4) AADHAAR
(5) National Family Benefit Scheme
24. According to the World Bank estimate about 40% Indians are living below International Poverty line of US $
(1) 1 per day
(2) 1.25 per day
(3) 2 per day
(4) 2.5 per day
(5) 3 per day
25. The 10th Trilateral Ministerial Meeting of RIC group was organised in November 2010. Who are the members of the RIC ?
(1) Russia – Iran – China
(2) Russia – India – China
(3) Romania – Iran – Canada
(4) Romania – Israel – Chile
(5) Russia – India – Croatia
26. India and Syria recently decided to double their trade in next 2 years. Indian Government has decided to export which of the following commodities to Syria ?
(1) Natural gas
(2) Milk
(3) OIL
(4) Wheat
(5) All of these
27. India has sanctioned a Rs. 26 million grant to which of the following countries for development of tube wells ?
(1) Myanmar
(2) Bangladesh
(3) Nepal
(4) Pakistan
(5) Sri Lanka
28. Which of the following is the name of the scheme launched by the Government of India for adolescent girls ? (Launched in November 2010)
(1) Swawlamban
(2) SABALA
(3) AADHAAR
(4) ASHA
(5) None of these
29. Many times we see in financial journals/bulletins a term M3. What is M3 ?
(1) Currency in circulation on a particular day
(2) Total value of the foreign exchange on a particular day
(3) Total value of export credit on a given date
(4) Total value of the tax collected in a year
(5) None of these
30. As per news in various newspapers, Government has allocated a huge sum of Rs. 31,000 crore for ‘RTE’. What is full form of RTE ?
(1) Right to Education
(2) Reforms in Technical Education
(3) Return to Empowerment
(4) Right to Empowerment
(5) Renewable Technology for Energy
31. Which of the following is not a major function of the RBI in India ?
(1) Issuance of currency notes
(2) To facilitate external trade and payment and developing a foreign exchange market in India
(3) Maintaining price stability and ensuring adequate flow of credit to productive sectors
(4) Taking loans/credit from World Bank/IMF and ADB etc. and reallocating it for various activities decided by the Government of India
(5) Formulation and monitoring the monetary and credit policy
32. The RBI has regional offices at various places. At which of the following places it does not have an office ?
(1) Kota
(2) Shimla
(3) Lucknow
(4) Panaji
(5) Guwahati
33. Which of the following organisations/agencies has given a US, $ 407 billion loan to India to boost up its micro finance services in unbanked areas ?
(1) IMF
(2) World Bank
(3) Bank of Japan
(4) ADB
(5) Jointly by IMF and ADB
34. The Prime Minister’s Economic Advisory Council (PMEAC) has projected that the Indian Exports will grow by what percentage during 2010-11 ?
(1) 15%
(2) 18%
(3) 22%
(4) 24%
(5) 28%
35. Which of the following organisations/agencies has given the estimate that India will be third largest FDI recipient in 2010-12 ?
(1) UNCTAD
(2) WTO
(3) World Bank
(4) IMF
(5) None of these
36. The performance of which of the following industries is considered performance of a core industry ?
(1) Garments
(2) Leather
(3) IT
(4) Oil and Petroleum
(5) Handicrafts
37. Who amongst the following is not a recipient of Nobel Prize in economics ?
(1) Peter A. Diamond
(2) Dale T. Mortensen
(3) Amartya Sen
(4) Paul Krugman
(5) Robert G. Edwards
38. Basel Committee has given its recommendations on which of the following aspects of banking operations ?
(1) Marketing of bank products
(2) Priority sector lending
(3) Risk Management
(4) Micro financing
(5) All of these
39. Which of the following is the rank of India in Human Development Report 2010 prepared by the UNO ?
(1) 99
(2) 100
(3) 115
(4) 119
(5) None of these
40. Which of the following was/were the key objectives of the RBI’s review of Monetary and Credit Policy 2010-11 which was reviewed again on 2nd November 2010 ?
(A) To sustain the anti-inflationary thrust.
(B) To maintain an interest rate regime consistent with price.
(C) To provide e^rtra tax incentives to exporters who were in stress due to market fluctuations.
(1) Only (A)
(2) Only (B)
(3) Only (A) & (B)
(4) All (A), (B) & (C)
(5) None of these
41. PUGS is the group of nations falling under
(1) Euro zone
(2) Asia Pacific
(3) SAARC
(4) NATO
(5) Commonwealth
42. Which of the following is / are the preconditions, the IMF has put to provide bail out package to Ireland ?
(A) It should gradually lower down unemployment benefits.
(B) It should bring down the minimum wages in order to boost employment.
(C) It should import some of the crucial commodities from non euro countries as an immediate measure to improve shortage of the same.
(1) Only (A) & (B)
(2) Only (B) & (C)
(3) Only (A) & (C)
(4) Only (A)
(5) All (A), (B) & (C)
43. India is self sufficient in production of which of the following commodities ?
(1) Edible oil
(2) Milk
(3) Pulses
(4) Natural gas
(5) All of these
44. Which of the following is used as a fuel in Nuclear power stations in India ?
(1) Thorium
(2) Copper
(3) Tin
(4) Cromium
(5) All of these
45. Which of the following States has taken up the job of improving Dams with the help of the World Bank’s Dam Rehabilitation and Improvement project ?
(1) Kerala
(2) Gujarat
(3) Tamil Nadu
(4) Uttar Pradesh
(5) Guwahati
46. Nitish Kumar-led National Democratic Alliance won how many seats in recendy held assembly elections in Bihar ?
(1) 150
(2) 243
(3) 200
(4) 206
(5) None of these
47. Who amongst the following is the author of the book “Development as Freedom”?
(1) M. S. Swaminathan
(2) C. Rangarajan
(3) Manmohan Singh
(4) Y.V. Reddy
(5) Amartya Sen
48. Which of the following terms is used in Finance and Banking ?
(1) Line of Sight
(2) Scattering Loss
(3) Revenue
(4) Oscillation
(5) Shielding
49. Who amongst the following is a famous economist ?
(1) Richard Dawkins
(2) Alan Greenspan
(3) Vernon Heywood
(4) Olivar Sachs
(5) Stephen Hawking
50. Who amongst the following has never held post of the Governor of the RBI
(1) C. Rangarajan
(2) L. K. Jha
(3) Manmohan Singh
(4) Bimal Jalan
(5) Usha Thorat

ANSWERS:

1. [4]	6. [5]	11. [5]	16. [1]	21. [3]	26. [4]	31. [4]	36. [4]	41. [1]	46. [4]
2. [3]	7. [5]	12. [4]	17. [1]	22. [2]	27. [5]	32. [1]	37. [1]	42. [5]	47. [5]
3. [4]	8. [5]	13. [3]	18. [4]	23. [2]	28. [5]	33. [2]	38. [3]	43. [1]	48. [3]
4. [3]	9. [2]	14. [4]	19. [5]	24. [1]	29. [1]	34. [3]	39. [4]	44. [1]	49. [2]
5. [4]	10. [1]	15. [5]	20. [2]	25. [2]	30. [1]	35. [1]	40. [3]	45. [1]	50. [5]

Meet on implications of IT in banking

A conference on “Information Technology and its implications on banking sector” will be conducted in Mangalore from April 17-19. A press release by the Department of Postgraduate Studies in Commerce, University College, Mangalore, said here that the conference aims at making analysis of the process of re-inventing the banking system. There will be three plenary and seven technical sessions at the conference.

Banks told to allow customers to use NEFT facility

The Reserve Bank of India has advised all banks to allow their customers to use the National Electronic Funds Transfer (NEFT) facility for repaying loans.

This directive comes as the RBI has received some complaints from customers regarding non-acceptance of NEFT for credit to loan accounts, thereby causing inconvenience to them.

On examination of the customers’ complaints, it was observed that only a few banks were following the restrictive practice of not allowing the use of NEFT for credit to loan accounts. These banks, however, were willingly taking Electronic Clearing System as one of the modes for repayment.

“It is, therefore, advised that all banks should allow the customers to choose NEFT also as one of the electronic modes of making payment towards loan EMIs/repayments, etc,” the RBI said in a statement.

NEFT was launched in 2005. The system is meant for one-to-one funds transfer and can be used for transferring funds to beneficiaries (individual, institutions etc.) and no restrictions have been placed thereon.

In March 2012, the total number of NEFT transactions recorded by the banking system was 2.71 crore for a value aggregating Rs 2.4 lakh crore.

The RBI said that the phenomenal growth in the NEFT system, both in terms of branch coverage and volume/value of transactions handled, reflects the acceptability and popularity of the system.

3,200 MW wind energy capacity added in 2011-12

The Indian Wind Power Association has said 3200 mw of wind power generation capacity was commissioned in the country during 2011-12 in spite of tough times.

Prof. K.Kasthoori Rangaian, Chairman of the association said while the wind industry has been complaining about issues relating to grid in Tamil Nadu, the State topped with a generation capacity addition of 1087 mw capacity.

During his visit to Hyderabad to take part in National Council Meeting of IWPA on Saturday, he said investors are keen to take up wind projects in spite of difficulties, but need support.

Gujarat, Rajasthan, Maharashtra are preferred locations after Tamil Nadu. They have managed to add about 789.85 mw, 546 mw, 418 mw and 1087 mw respectively last year.

Six windy States have made rapid strides with Tamil Nadu having a capacity of 6974 MW, Gujarat following with 2942 MW, Maharashtra (2735 MW), Rajasthan (2068 MW), Karnataka (2934 MW) and Madhya Pradesh (314 MW).

The Association has requested the Andhra Pradesh Government to support them in implementing more projects by offering higher tariffs and permitting trading in Renewable Energy Certification by entering into agreements.