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.

Banks fail the ‘deposits' test after seven years

For six long years, the Indian banking industry has had no difficulty in collecting a larger sum as fresh deposits than the previous year.

That record had been broken in 2011-12 with the industry failing to match the collections of 2010-11.

For the year ended March 2012, banks added Rs 6.95 lakh crore to their deposit base, a decline from the figure of Rs 7.15 lakh crore garnered in 2010-11.

The shortfall in fresh mobilisation also resulted in the growth rate declining from 16 per cent in 2010-11 to a little over 13 per cent in the fiscal year just gone by. The decline has come about despite a trend of rising interest rate that began in the later part of 2010-11 being sustained through the whole of 2011-12.

For instance, State Bank of India's three-year deposit rate was 6.5 per cent in August 2010. The current deposit rate for a similar term now is 9.25 per cent.

Many alternatives

There is also evidence of investors making use of other options fetching higher rates of returns. The year 2011-12 saw quite a few debt instruments especially from non-banking finance companies hitting the market. Gold inflows have seen an upsurge.

Non-banking finance companies raised nearly Rs 6,400 crore by way of bond issues in 2011-12, offering yields of 10-13 per cent.

Additionally, another Rs 30,000 crore flowed into tax-free bonds issued by entities such as NHAI. Infrastructure bonds which offered tax exemption on the value of investment were also raised during this period. The data on the exact quantum of money raised arenot known as yet.

There is also evidence that investors put more money into physical assets such as gold. Data from the World Gold Council show that Indians poured roughly Rs 1.58 lakh crore into gold in first nine months of 2011-12, a 15 per cent jump over last year. The trend of increasing preference witnessed in 2010-11 (45 per cent) has been sustained in 2011-12.

Investors are continuously chasing avenues to better their returns on savings is clear from two distinct pieces of data.

Small savings schemes suffered an outflow of Rs 7,000 crore. Even within the pool of sums invested in banks investors have shifted more monies from savings bank accounts to term deposits to earn a higher yield. Inflation in the economy, as measured by rise in consumer prices, was close to 8 per cent in 2011-12.

With deposit inflows flagging banks are raising their interest rates once again. About 20 banks have raised their deposit rates in the last two months. The banks' credit:deposit ratio too is at a all-time high of 78 per cent.

Reserve Bank of India released the Fair Practices Code for NBFCs

The Reserve Bank of India on 26 March 2012 restructured the fair practices code (FPC) to be adopted by non-banking finance companies (NBFCs) while doing lending business. The guidelines issued by the central bank covered general principles on adequate disclosures on the terms and conditions of a loan and also adopting a non-coercive recovery method.

The modified FPC is required to be put in place by all NBFCs with the approval of their boards within one month from the date of issue of this circular (26 March 2012). Also RBI directed that the FPC should be published and disseminated on the web-site of the company for public information.

NBFCs were however granted the freedom of drafting the FPC, enhancing the scope of the guidelines. It is however not to contradict the spirit dominating the guidelines. The RBI directed NBFCs to mention the penal interest charged for late repayment in bold in the loan agreement. Also the NBFCs were directed not to resort to undue harassment such as persistently bothering the borrowers at odd hours and use of muscle power with respect to loan recovery.

The RBI had in 2006 issued FPC norms for all NBFCs to be adopted by them while doing the lending business. It had also covered norms on adequate disclosures on terms and conditions of a loan, and also adopting a non-coercive recovery method.

Zero Inflation

Inflation is the measure of rise in general prices in any economy over a given period of time.  Normally inflation is measured every week, but for the policy purposes its annual measure is taken into account. Inflation is measured by the government by considering the changes in wholesale price index and those in the consumer price index over the given period of time.

 

Inflation is of several types and the ‘creeping’ or ‘walking’ inflation of upto 5 per cent per annum is called functional inflation and considered good for the health of growing economies. Running, galloping and hyper inflation is bad for the economy as it also erodes the real income level of the poorer sections of the emerging economies, thereby making their livelihood even more difficult. Hence, in a developing economy, the government policies aim at keeping the inflation rate within the functional limits.

 

Due to increased prices of the food items, India, along with most parts of the world, faced high inflation rate in double digits during the middle of 2008, which could be termed as ‘running’ inflation. The government took several monetary and fiscal policy measures to control it and succeeded to bring it down. But in early 2009 a peculiar phenomenon was experienced. In March 2009, the inflation rate in the country went down as low as 0.44 per cent, a sudden drop from 2.43 per cent during the week prior to that. This has given rise to the speculation that the country may experience zero inflation rate. The apprehensions are that zero rate of inflation would act as discouragement to the new investors, who are likely to put on hold their new projects, which would affect the growth rate of the economy. Zero inflation reduces the level of profits drastically. Such a situation, though may be cheered by the consumers and benefit the poorer sections spending most of their earnings on consumption, yet may actually reduce the economic activity in the economy to the minimum. This may be harmful to the economy in the medium and long run.

Bank of Baroda opened 1001 Ultra Small Branches Across India

Bank of Baroda, the public sector lender, on 22 March 2012 launched 1001 ultra small branches to provide banking services to the people of villages which don’t have access to banling services. The bank launched the ultra small branches under the financial inclusion initiative.
The virtual launch of 1001 ultra small branches was done by K. C. Chakraborty, Deputy Governor, Reserve Bank of India, in the presence of M. D. Mallya, Chairman and Managing Director, Bank of Baroda, at Varanasi.
On the same day, 551 ultra small branches were inaugurated across Uttar Pradesh and Uttarakhand. Bank of Baroda is set to open 1700 ultra small branches in various villages across the country.