Allahabad Bank Probationary Officers Exam., 2011

                        General Awareness
                                                           (Exam Held on 17-4-2011)

1. Which of the following is/are the objective(s) of Free Trade Agreement, India has done with many countries ?
1. To provide support to entrepreneurs for setting up new projects in tiny/SSI sector.
2. For undertaking expansion of business.
3. To support technology up-gradation.
(A) Only 1 and 2
(B) Only 2 and 3
(C) All 1, 2 and 3
(D) Only 1 and 3
(E) None of these
Ans : (C)

2. Which of the following organisations issue the rules of global trade ?
(A) World Bank
(B) World Trade Organisation
(C) Foreign Exchange Dealers’ Association
(D) Directorate General and Foreign Trade
(E) None of these
Ans : (B)

3. One single statement that depicts the financial position of a bank and/or business enterprise at a given point of time is called—
(A) Statement of product details
(B) Reconciliation Statement
(C) Balance Sheet
(D) Quarterly returns submitted to RBI
(E) Trading and manufacturing account
Ans : (C)


4. Banks borrow money from the RBI on which of the following rates ?
(A) Reverse Repo Rate
(B) Repo Rate
(C) SLR
(D) CRR
(E) Savings Rate
Ans : (B)

5. The Reverse mortgage scheme is launched to give benefit to which of the following groups of society ?
(A) Govt. employees
(B) Senior Citizens
(C) Unemployed youth
(D) War widows
(E) None of these
Ans : (B)

6. What does the letter ‘M’ depict in the term SME as used in the financial world ?
(A) Maximum
(B) Medium
(C) Mercantile
(D) Mutual
(E) Ministry
Ans : (B)

7. One of the major challenges banking industry is facing these days is deliberate efforts of some people to bring money earned through illegal activities in circulation. Which of the following acts is passed to prevent this activity ?
(A) Payment & Settlements Act
(B) Banking Regulation Act
(C) Negotiable Instrument Act
(D) Narcotics and Psychotropic Substance Act
(E) Prevention of Money laundering Act
Ans : (E)

8. Which of the following organizations provides guarantee to the exporters ?
(A) Exim Bank
(B) Export Credit Guarantee Corporation
(C) Director General Foreign Trade
(D) Reserve Bank of India
(E) Registrar of companies
Ans : (B)

9. Which of the following terms is not used in Banking World ?
(A) Credit
(B) Rate
(C) Financial Status
(D) Discount
(E) Absolute zero
Ans : (E)

10. What is the full form of IRR as used in banking/financial sectors ?
(A) Internal Rate of Return
(B) Internal Revaluation Reserve
(C) Investment Reserve Ratio
(D) Internal Risk Return
(E) None of the above
Ans : (A)

11. Which of the following organisations provides credit history of the borrowers ?
(A) CIBIL
(B) ARCIL
(C) SEBI
(D) RBI
(E) CCIL
Ans : (A)

12. Banks need liquidity to meet which of the following objectives of banking ?
1.Meet deposit withdrawal
2.Fund loan demands
3.Maintain public confidence
(A) Only 1
(B) Only 2
(C) Only 3
(D) Only 1 and 2
(E) Only 2 and 3
Ans : (D)

13. According to latest Economic Survey, which of the following sectors will provide largest share to Indian economy in the days to come?
(A) Agriculture
(B) Industry
(C) Services
(D) Exports
(E) None of these
Ans : (C)

14. Which one of the following group represents key industries ?
1. Crude oil, electricity
2. Petroleum refining and finished steel
3. Cement and coal
(A) Only group 1
(B) Only group 2
(C) Only groups 1 and 2
(D) Only group 3
(E) All groups 1, 2 and 3
Ans : (E)

15. Which one of the following is covered in the list of services for service tax purposes ?
1. Insurance/health services
2. Hotel accommodation/air travel services
3. Money changers/legal services
(A) Only 1
(B) Only 2
(C) Only 3
(D) Both 1 and 3
(E) All 1, 2 and 3
Ans : (E)

16. Which of the following agencies is providing Unique Identity Cards to all Indian Residents ?
(A) Election Commission of India
(B) Ministry Foreign Affairs
(C) Govt. of Maharashtra
(D) Border Secutiry Force
(E) None of these
Ans : (A)

17. Vikram Pandit is associated with which of the following banks ?
(A) Yes Bank
(B) ICICI Bank
(C) Citigroup
(D) HSBC
(E) State Bank of India
Ans : (C)

18. Banks make frequent changes in their product profile including introduction of new products etc. This is called—
(A) Product Control
(B) Product enhancement
(C) Product marketing
(D) Product enrichment
(E) None of these
Ans : (B)

19. Banking and financial services, all over the world, are regulated usually by Monetary Authority of the land. Who controls this function in India?
(A) Ministry of Finance
(B) SEBI
(C) RBI
(D) IRDA
(E) FEDAI
Ans : (C)

20. As per guidelines of the RBI, banks are to provide appropriate banking facilities to habitations having population in excess of 2000 by which year ?
(A) 2011
(B) 2012
(C) 2015
(D) 2016
(E) None of these
Ans : (B)

21. Which one of the following is the target fixed for maintaining fiscal deficit in the Union Budget of India ?
(A) 4•6 per cent of total budget
(B) 4•6 per cent of GDP
(C) 3•6 per cent of total budget
(D) 3•6 per cent of GDP
(E) None of these
Ans : (B)

22. FIMMDA stands for—
(A) Foreign Investment Markets & Derivatives Market Association
(B) Fixed Income Money Markets and Derivatives Association
(C) Fixed Income and Money Market Development Association
(D) Floating Income and Money Markets Derivative Assets
(E) None of these
Ans : (B)

23. On which one of the following issues, a group of top business leaders and other eminent citizens have expressed their concern to the Govt. of India ?
(A) Corporate Governance
(B) Fiscal deficit
(C) Inflation
(D) Governance deficit
(E) None of these
Ans : (C)

24. Nobel Laureate Muhammed Yunus belongs to which one of the following countries ?
(A) Sri Lanka
(B) Pakistan
(C) Maldives
(D) Bangladesh
(E) None of these
Ans : (D)

25. Who is the author of the book ‘Darkness At Noon’ ?
(A) V. S. Naipaul
(B) Chetan Bhagat
(C) Arthur Koestler
(D) Vikram Seth
(E) None of these
Ans : (C)

26. For which one of the following purposes, Mega Food Parks scheme was introduced by the Government of India ?
(A) To provide better price to farmers
(B) To improve the productivity of food crops
(C) To control the prices of food items
(D) To avoid wastage of fruits and vegetables stored for export
(E) None of these
Ans : (A)

27. Which of the following terms is not used in banking ?
(A) Debit Card
(B) Credit Card
(C) Kisan Card
(D) ELISA Test
(E) None of these
Ans : (D)

28. Which of the following is the reason, owing to which Government charges export duty on some export items ?
(A) It is to get benefit of high international prices
(B) To improve the tax collection targets
(C) It is as per international practices
(D) To ensure the smooth availability of the items in India
(E) None of these
Ans : (D)

29. Pipavav Port is located in which of the following States ?
(A) Odisha
(B) Andhra Pradesh
(C) Tamil Nadu
(D) Gujarat
(E) West Bengal
Ans : (D)

30. Which of the following is/are the objective(s) of our monetary policy ?
1. Anchor inflation expectations
2. Actively manage liquidity
3. Maintain interest rate regime consistent with price output and financial stability
(A) Only 1
(B) All 1, 2 and 3
(C) Both 1 and 3
(D) Only 2
(E) None of these
Ans : (C)

31. With which one of the following fields was Pandit Bhimsen Joshi associated ?
(A) Dance
(B) Music
(C) Short-story writing
(D) Novels
(E) None of these
Ans : (B)

32. For which of the following purposes, RBI has constituted a Working Group with Shri Deepak Mohanty as Chairman ?
(A) Deregulation of primary markets
(B) Deregulation of secondary markets
(C) Deregulation of Savings Bank Rates
(D) Introduction of Base Rate
(E) None of these
Ans : (D)

33. Who is Kapil Sibal ?
(A) Coal Minister of India
(B) Civil Aviation Minister of India
(C) Telecom Minister of India
(D) Economic Advisor to Prime Minister of India
(E) None of these
Ans : (C)

34. Which of the following will set up core banking infrastructure for rural banks ?
(A) SIDBI
(B) IBA
(C) RBI
(D) SBI
(E) NABARD
Ans : (E)

35. Colonel Muammar al Gaddafi is associated with which one of the following countries ?
(A) Libya
(B) Beharin
(C) Yemen
(D) Tunisia
(E) None of these
Ans : (A)

36. What is Gross Domestic Product ?
(A) It is the cost of production of all final goods and services made in the country
(B) It is the cost of services made within the borders of a country in a year
(C) It is the market value of all final goods and services made in the country
(D) It is the market value of all final goods and services made within the borders of a country in a year
(E) None of these
Ans : (D)

37. Which of the following metals is used for generation of Nuclear Power ?
(A) Silver
(B) Gold
(C) Uranium
(D) Copper
(E) Barium
Ans : (C)

38. In which one of the following States, India’s first Islamic Bank is proposed to be set up ?
(A) Kerala
(B) Tamil Nadu
(C) Odisha
(D) Bihar
(E) None of these
Ans : (A)

39. In which one of the following States, Niyamgiri Bauxite Mining Project is proposed to be set ?
(A) Odisha
(B) Jharkhand
(C) West Bengal
(D) Bihar
(E) Chhattisgarh
Ans : (A)

40. Which of the following terms is not used in Economics ?
(A) Demand and Supply
(B) Ad Valoram Tax
(C) Break even
(D) HIV positive
(E) Cost benefit analysis
Ans : (D)

41. For which one of the following reasons Finance Minister denied entry of NRI funds for infra bonds ?
(A) It will bring in more liquidity in the country
(B) NRIs can withdraw their funds any time
(C) It will bring interest burden on the country
(D) It could lead to losses at the time of redemption because of fluctuations in the Indian Currency
(E) None of these
Ans : (B)

42. What is ‘financial inclusion’ ?
1. Easy access to bank accounts for safe parking of savings
2. Availability of cheap credits through appropriately designed loans for poor and low income households and small entrepreneurs
3. Availability of basic financial products like insurance
(A) Only 1
(B) Only 2
(C) Only 3
(D) Both 1 and 2
(E) All 1, 2 and 3
Ans : (B)

43. According to the Securities and Insurance Laws (Amendment) Bill 2010, who amongst the following will be Vice-Chairman of joint commission to resolve differences amongst the financial regulators ?
(A) Finance Minsiter, GOI
(B) Deputy Chairman, Planning Commission
(C) SEBI Chairman
(D) Chairman, Central Vigilance Commission
(E) RBI, Governor
Ans : (E)

44. Which of the following terms is used in Economics ?
(A) Keynesian
(B) Adsorption
(C) Affinity Matrix
(D) Gene Flow
(E) None of these
Ans : (A)

45. Which one of the following is the directive given to the Govt. of India in the Financial Stability Report submitted to it ?
(A) Focus on financial consistency
(B) To reduce fiscal deficit
(C) To ensure GDP growth
(D) To reduce revenue deficit
(E) None of these
Ans : (B)

46. In which one of the following States, Jangi-Thopon and Thopon-Powari Power Projects are proposed to be set up ?
(A) J & K
(B) H. P.
(C) U. P.
(D) Manipur
(E) Meghalaya
Ans : (B)

47. Which one of the following is the proposal under the Food Security Law ?
(A) To provide 25 kg of food-grains to ration card holders
(B) To provide 25 kg of food-grains to targeted beneficiaries
(C) To provide 35 kg of food-grains to ration card holders
(D) To provide 35 kg of food-grains to targeted beneficiaries
(E) None of these
Ans : (C)

48. Which one of the following are key policy rates used by RBI to influence interest rates ?
1. Bank Rate/the Repo Rate
2. Reverse Repo Rate
3. CRR/SLR
(A) Only 1
(B) Only 2
(C) All 1, 2 and 3
(D) Only 3
(E) Both 1 and 3
Ans : (C)

49. For giving cooking gas connection to poor families, which of the following one time subvention (in rupees) will be provided by the Planning Commission ?
(A) 500
(B) 600
(C) 750
(D) 1000
(E) 1400
Ans : (E)

50. Which one of the following rates signal the RBI’s long term out-look on interest rates ?
(A) Repo Rate
(B) Reverse Repo Rate
(C) Bank Rate
(D) SLR
(E) CRR
Ans : (C)

51. What do you understand by ‘Para Banking’ services ?
(A) Eligible financial services rendered by banks
(B) Utility services provided by banks
(C) Services provided through business correspondents
(D) Services provided to armed force personnel
(E) None of these
Ans : (C)

52. For which one of the following reasons, the Steel Ministry wants complete ban on export of iron ore from India ?
(A) The price of iron ore exports is not competitive
(B) The iron ore exports do not provide any value addition to exports
(C) The prices of iron ore are high and as such the exports of the ore should be banned
(D) Iron ore is a non-renewable resource like coal and petroleum products, hence it should be preserved
(E) None of these
Ans : (D)

53. What is a cross Border Exchange ?
(A) Trading of foreign currency in India
(B) Trading of Indian rupee in exchange of other currencies/ goods
(C) Hawala transactions in Indian Rupee
(D) Unauthorized remittance of Indian Rupee
(E) None of these
Ans : (A)

54. What is Cartosat-2B ?
(A) It is an advanced remote sensing statellite built by ISRO
(B) It is a warhead developed by DRDO
(C) It is an educational project launched by UGC
(D) It is an advanced computer developed by IIT Kanpur
(E) None of these
Ans : (A)

55. For which one of the following reasons RBI has decided to undertake mid-quarter policy reviews ?
1. To realign its policies
2. To take steps and ensure smooth flow of credit
3. To provide guidance to the economy
(A) Only 1
(B) Only 2
(C) Only 3
(D) All 1, 2 and 3
(E) None of these
Ans : (D)

56. Which one of the following is the objective of Financial Stability and Development Council ?
(A) To address inter-regulatory issues only
(B) To focus on financial literacy only
(C) To focus on financial inclusion only
(D) Only (A) and (B)
(E) All (A) , (B) and (C)
Ans : (C)

57. For which one of the following reasons has the Planning Com-mission decided to convert itself into a system Reforms Commission ?
(A) It is to make people to people contact
(B) It is to understand the problems of people
(C) It is to review the implementation of its policies
(D) It is aimed at changing economic profile of the country
(E) None of these
Ans : (A)

58. Which one of the following sectors in India has attracted highest amount of Foreign Direct Investment during 2009-10 ?
(A) Manufacturing
(B) Construction
(C) Wholesale and Retail Trade
(D) Financial Insurance, Real Estate
(E) Civil Aviation
Ans : (B)

59. Which of the following is/are a renewable source of energy ?
1. Wind
2.Solar
3. Thermal
(A) Only 1
(B) Only 2
(C) All 1, 2 and 3
(D) Only 2 and 3
(E) Only 1 and 2
Ans : (E)

60. Expand the term SWIFT—
(A) Society for Worldwide Inter-national Financial Telecommunications
(B) Society for Worldwide Inter-bank Financial Telecommunications
(C) Society for Worldwide Inter-national Financial Transfers
(D) Society for Worldwide Inter-bank Fiscal Transactions
(E) None of these
Ans : (B)

61. For which one of the following reasons. NABARD has set up joint liability groups (JLG) of farmers ?
(A) To facilitate delivery of credit to farmers
(B) To facilitate better delivery of credit to farmers through informal sources
(C) To facilitate better delivery of credit to share croppers and those who do not have their own land
(D) To facilitate better delivery of credit to farmers through Panchayats
(E) None of these
Ans : (A)

62. Which of the following terms is not used in Banking World ?
(A) Holding Company
(B) Post dated cheque
(C) Credit
(D) Time deposit
(E) Centripetal force
Ans : (E)

63. What is the extent of claim that can be entertained by a Lok Adalat ?
(A) Up to lakhs
(B) Up to 10 lakhs
(C) Up to 20 lakhs
(D) Up to 50 lakhs
(E) No limit
Ans : (A)

64. ‘ASHA’ is a scheme for providing which of the following services to the people in India ?
(A) Health Service
(B) Clean water
(C) Primary Education
(D) Employment for 100 days
(E) None of these
Ans : (A)

65. Some private organizations are running e-choupals, to help which of the following section of society ?
(A) Farmers
(B) Small businessman
(C) Cooperative Credit Societies
(D) School-going children
(E) Unemployed youth
Ans : (A)

66. Which is the currency of U.A.E. ?
(A) Dirham
(B) Dinar
(C) Dollar
(D) Taka
(E) Pound Sterling
Ans : (A)

67. Who amongst the following is the author of the book ‘A bend in the River’ ?
(A) Chetan Bhagat
(B) V. S. Naipaul
(C) Kiran Desai
(D) Anita Desai
(E) None of these
Ans : (B)

68. Which of the following terms is used in game of Cricket ?
(A) Love
(B) Scoop
(C) LBW
(D) Tee
(E) Back-hand drive
Ans : (C)

69. Which one of the following was India’s per cent GDP growth during 2009-10 ?
(A) 6•7
(B) 9•2
(C) 7•4
(D) 9•7
(E) None of these
Ans : (C)

70. Which one of the following countries in Europe is facing financial crisis ?
(A) Ireland
(B) Portugal
(C) Rumania
(D) Hungary
(E) France
Ans : (D)

71. Which of the following schemes is launched for school children ?
(A) Rajlakshmi
(B) Kutir Jyoti
(C) Mid Day Meal
(D) Swajal Dhara
(E) None of these
Ans : (C)

72. Loans of small or very small amounts given to low income group people are known as—
(A) Investment Loans
(B) Micro Credit
(C) Savings Loan
(D) Secured Loans
(E) Cash Credit Loans
Ans : (B)

73. Which of the following is the Central Bank of U.S.A. ?
(A) Federation of Banks in U.S.A.
(B) Citigroup U.S.A.
(C) Bank of America
(D) Central Bank of U.S.A.
(E) Federal Reserve System
Ans : (E)

74. Which one of the following countries was second biggest net importer of goods and services in the year 2009 ?
(A) U.S.A.
(B) India
(C) China
(D) Germany
(E) Russia
Ans : (B)

75. The activity of purchasing shares of various companies is called—
(A) On-line Trading
(B) Share Trading
(C) Real estate investment
(D) Corporate Trading
(E) None of these
Ans : (C)

BANKING AWARENESS PRACTICE QUESTIONS

1. Central Banking Investigation committee recommended in 1930 to establish .........?
1) SBI
2) SEBI
3) RBI
4) ONGC
5) Allahabad Bank

2. Reserve Bank of India was started with a share capital of Rs .........crores on 1 April 1935?
1) 100
2) 200
3) 5
4) 15
5) 250

3. All India Credit Survey Committee(1952) suggested to set up .........?
1) SBI
2) RBI
3) NABARD
4) SBH
5) IRDA

4. The first credit card was issued in India by VISA in .........?
1)1994
2)1991
3)2001
4)1986
5)1981

5. First international credit card issued by..........through VISA, getting special permission from RBI in 1987?
1) Andhra Bank
2) Corporation bank
3) ICICI
4) HDFC
5) None

6. The Central Government decided to give the loans to SHG(Self Help Groups) at .........% on par with Agriculture. ( International summit on Micro finance and Inclusive Development held on June 21, 2011 at Hyderabad)?
1) 6
2) 10
3) 15
4) 11
5) 7

7. The Local area banks were permitted to establish in .........?
1) 1986
2) 2001
3) 2006
4) 1991
5) 1996

8. Expand ECGC Ltd .........?
1) Export Cash Guarantee Corporation of India Life
2) Export Credit Guild Corporation of India Loop
3) Export Credit Guarantee Company of India Liability
4) Expand Credit Guarantee Corporation of India Limited
5) Export Credit Guarantee Corporation of India Limited

9. RBI conducts sales of dated securities and treasury bills through its .........?
1) Statutory Liquidity Ratio (SLR)
2) Negotiable Instruments
3) Open Market Operations
4) Bank Rate
5) None

10. ......... got $95.16 million loan agreement with the Asian Development Bank to strengthen tourism sector?
1) Goa
2) Himachal Pradesh
3) Andhra Pradesh
4) Bihar
5) Kerala

11. Central Bank of USA is .........?
1) Bank of America
2) Citi Bank
3) Federal Reserve
4) Reserve Bank of USA
5) Obama bank

12. Government securities Act passed in .........to stream line the government securities?
1) 2011
2) 2006
3) 2007
4) 2009
5) 2008

13. Hurricane Irene disturbed .........?
1) India
2) Pakistan
3) USA
4) Australia
5) Japan

14. Transition economies mean .........?
1) economies left modern economies and go to central or conventional set up
2) countries transforming from dictator ship to autocrat rule
3) economies that cancelled licensing system and hand over system to central bank
4) countries left European Union to join USA Exchange system
5) abandoned central or conventional set up and changing to modern market economies

15. Trotting Inflation means .........?
1) When prices down moderately and the annual inflation rate is a single digit
2) when prices rise in fast mode and the annual inflation rate is a double digit
3) when prices rise slowly and the annual inflation rate is a single digit
4) when prices rise moderately and the annual inflation rate is Zero
5) When prices rise moderately and the annual inflation rate is a single digit

16. On 6 September 2011, UNCTAD's Trade and Development Report 2011, projected an economic growth of 8.1 per cent for India. Expand UNCTAD?
1) United Nations Conference on Tier and Development
2) Unit Nations Conference on Trade and Development
3) United Nations Conference on Trade and Deal
4) Unique Nations Conference on Trade and Development
5) United Nations Conference on Trade and Development

17. ......... announced six months maternity leave for its women employees who adopt less than year old child in the month of July?
1) Rajasthan
2) Andhra Pradesh
3) Bihar
4) Jammu
5) Uttar Pradesh

18. Best performing state award for wheat for 2010-11 got by .........?
1) Punjab
2) Haryana
3) M.P.
4) Odisha
5) Tamilnadu

19. Keri Anne Payne belongs to .........?
1) Acquatics
2) polo
3) Cricket
4) Volleyball
5) Tennis

20. .........is the winner of Snooker World Champion ( 2011)?
1) Geeth Sethi
2) Yasin Merchant
3) Greme Dott
4) John Higgins
5) None

21. .........has the greatest number of newborn deaths more than 9 lakh a year?
1) Somalia
2) UK
3) India
4) Japan
5) Pakistan

22. ..........Indian firms made the cut in the list of world's 500 largest companies declared by Fortune Magazine?
1) 4
2) 6
3) 11
4) 8
5) 2

23. GMR Energy Limited establish 800 megawatt power project in .........getting $ 1 billion dollars fund from the 6 banks consortium?
1) USA
2) Singapore
3) UK
4) Japan
5) None

24. ..........is the third largest trading partner for India?
1) European Union
2) Japan
3) Russia
4) USA
5) Australia

25. ..........has sanctioned Rs. 1.5 crore to set up a kumki elephant (tamed/ trained) camp at Chadivayal at the foothills of Siruvani.?
1) Kerala
2) Karnataka
3) Tamil Nadu
4) Goa
5) Odisha

26. ..........the scheme introduced by Odisha enables pregnant women in rural areas to avail monetary assistance for accessing medical care?
1) Suguna
2) Sila
3) Bangram
4) Cloud
5) Mamata

27. ..........launched the First Gold Index in India with a Base Date of 2 January 2007?
1) BSE
2) CRISIL
3) NSE
4) SEBI
5) RBI

28. On 8 July 2011, the Central Government issued the new series of coins with improved design and revised size. The coins are .....?
1) 25 Paise, one rupee, two rupee, five rupee and ten rupee
2) one rupee, two rupee, five rupee and ten rupee
3) one rupee, two rupee, five rupee and hundred rupee
4) 50 Paise , one rupee, two rupee, five rupee and thousand rupee
5) 50 Paise, one rupee, two rupee, five rupee and ten rupee

29. ...........bank was penalized for Rs.25 lakh for violating norms relating to Know Your Customer (KYC)
1) UCO
2) Citi
3) SBI
4) Syndicate
5) Andhra

30. RBI allowed domestic companies to issue shares against the import of .......... goods, allowing them to expand the business.
1) Luxury
2) Cheap
3) Capital
4) White
5) Smuggled

31. The account in which trading of shares in their electronic form is ............?
1) NRI account
2) Foreign account
3) Trio account
4) Current account
5) DEMAT account

32. The Modern Banking System includes ............?
1) Customer Banking
2) Infusion of IT
3) Risk Based Management
4) Add on Services
5) All of above

33. ............is a term not used in Banking?
1) Advance
2) Garnishee
3) Lien
4) Emission
5) Crossing

34. Which among the following is not a part of Institutional Banking?
1) Commercial banks
2) Private Banks 3) Money Lenders
4) Co-operative Banks
5) Regional Rural Banks

35. Central bank is going to insist on a minimum asset size of more than
Rs............crore for registering any new non-banking finance company (NBFC)?
1) 100
2) 500
3) 50
4) 150
5) 60

36. Kamala Beniwal the Gujarath Governor appointed ............as the Lokayukta, with out the consulting State Government?
1) Justice R.A.Mehatha
2) Justice Balakrishnan
3) Justice Narashimhan
4) Justice Kalidasa
5) Justice Panduranga

37. Which is the first north eastern state to bring the Chief Minister under the jurisdiction of Lokayuktha on 26 August 2011?
1) Arunachal Pradesh
2) Sikkim
3) Assam
4) Manipur
5) Mizoram

38. Rogers cup winner is ............?
1) Maria Sharapova
2) Venus William
3) Serena Williams
4) Sania Mirza
5) None

39. On 13th August, ............ crores was abolished by the Union Government for hand weavers?
1)1500
2) 2000
3) 3000
4) 10000
5) 7500

40. The World Bank says that the world may see another recession worst than 2008 due to ............region crises?
1) USA
2) UK
3) France
4) Germany
5) Euro Zone

41. Expand EASIEST?
1) Electronic Account System in Excise and Service Tariff
2) Electric Accounting System in Excise and Service Tax
3) Electronic Accounting System in Exemption and Service Tax
4) Empowered Accounting System in Excise and Service Tax
5) Electronic Accounting System in Excise and Service Tax

42. On 29 August 2011, RBI issued Draft guidelines regarding the Licensing of New Banks in the Private Sector. Find out one not among them?
1) Entities having the share of 10 percent or more source of income from the construction sector/real estate not eligible to open new private banks
2) New banks will be set up through a wholly owned Non-Operative Holding Company (NOHC)
3) Minimum capital requirement will be 500 crore
4) At least 50 per cent of the directors of the NOHC should be independent directors
5) The aggregate non-resident share holding in the new bank shall not exceed 74 percent for the first 5 years

43. ............is the new corporate affairs minister?
1) Anand Sharma
2) Chidambaram
3) Manmohan Singh
4) Veerappa Moily
5) Vilasarao Deshmukh

44. Locate the wrong Award?
1) World's best Airline-Qatar Airways
2) Air India got second best Airline
3) Air Asia won the best Low-Cost Air line Award
4) Nordic Carriew Finnair bagged the Best Airline award in customer satisfaction award
5) None

45. South Sudan is the new country in the world map. Pick the wrong one?
1) Its capital is Juba
2) Salva Kiir Mayarditi is the first president
3) South Sudanese pound is the currency
4) It is 194 member in UNO
5) It is a 54 nation in Africa

46. G-20 farming meeting urgently called for the more agriculture production. The summit held in ............on 22, 23 June 2011?
1) Toranto
2) Paris
3) Tokyo
4) New Delhi
5) London

47. National Communal Harmony Award got by ............?
1) Hamid Ansari
2) Anna Hazare
3) Hareesh Handey
4) Mohammad Hanif Khan Shastri
5) Sonia Gandhi

ANSWERS:

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

IBPS PO/MT GENERAL AWARENESS PRACTICE QUESTIONS

1. Which of the following ministries has launched a new "Skill Development Initiative Scheme" so that the employability of the young people can be increased?

(a) Ministry of Finance

(b) Ministry of Agriculture

(c) Ministry of Heavy Industry

(d) Ministry of Home Affairs

(e) Ministry of Labour and Employment

Ans: (a)

2. Sachin Tendulkar has recently, become the first cricketer in ODI history to cross the milestone of

(a) 10000 runs             

(b) 12000 runs

(c) 15000 runs             

(d) 17000 runs

(e) 20000 runs

Ans: (d)

3. The East Asia Summit took place in October 2009 in Hua Hin town, This is a town in -

(a) China   

(b) Myanmar

(c) Cambodia   

(d) Malaysia

(e) Thailand

Ans: (e)

4. What percent of India's GDP is invested in providing education?

(a) 1%              

(b) 2.5%

(c) 4%              

(d) 6%

(e) None of these

Ans: (a)

5. Why has Dr. Sublr Gokarn’s name been in the news recently?

(a) He has, taken over as the Deputy Governor of the RBI

(b) He has taken over as the Deputy Governor of the RBI

(c) He will be the new Deputy Chairman of the Planning Commission of India.

(d) He has taken over as the Chief of the Economic Advisory Council attached to Prime Minister's Office

(e) None of these

Ans: (b)

6. As published invarious newspapers, the Experian Credit Information Company of India is going to launch its operation in India soon. At present the only credit information bureau fuctional in India is

(a) AMFI   
(b) ICRA

(c) CIBIL   
(d) CRISIL

(e) None of these

Ans: (d)

7. As per the news published, in a financial population RBI is redesinging its 'ECS' to function as a Automated Clearing House (ACH) for bulk transactions. What is full form of  'ECS'?

(a) Extra Closing System

(b) Electronic Cheque System

(c) Evening Cheque Sorter

(d) Evening Cheque System

(e) Electronic Clearing Service

Ans: (e)

8. Which of the following challenges will be the most crucial for human existence on earth in the days to come?

(a) Pollution   

(b) Food Secudty

(c) Availability of natural gas

(d) Need for Financial Inclusion

(e) Cyber Crimes

Ans: (a)

9. The Reserve Bank of India has asked all the banks to install. "Note Sorting Machines" in the branches. How will this help banks and the general public?

(A) The machines will check for counterfeit notes and drop these from circulation.     .

(B) This will help banks to count the notes quickly and accurately.

(C) This will help in sorting out soiled 1I0teS so that they are not reissued by the banks.

(a) Only B   
(b) Only A

(c) Only C   
(d) Only A and B

(e) None of these

Ans: (a)

10. A study report entitled "India Generation Gap Review" was presented at the World Economic Forum in November 2009. This was presented during which of the following summits/conferences?

(a) G-8 Summit   

(b) G-20 Summit

(c) India Economic Summit

(d) SAARC Finance Ministers' Conference

(e) None of these

Ans: (c)

11. As we know the Government of India has notified certain new rules to calculate Income Tax on various perks like accommodation and conveyance etc. being given by employers to their salaried employees. The new rules will replace which of the following taxes which has been abolished now?

(a) Capital Gains Tax

(b) Sales Tax

(c) Cash Transaction Tax

(d) Fringe Benefit Tax

(e) None of these

Ans: (c)

12. Dr. K. Radhakrishnan has taken over as the Chief of -

(a) Electionics Commission

(b) Indian Space Research Organisation

(c) Atomic Energy Commission of India

(d) Deputy Governor of Reserve Bank of India

(e) None of these

Ans: (b)

13. As per the guidelines issued by the RBI, banks are preparing for a service which will allow customers to withdraw upto Rs .1,000 using their debit cards from notified shops/stores. allover the country. All such shops/stores will have 'pas' terminals for the same. What is full form of the 'pas'?

(a) Payment on Sale   

(b) Power of Sale.

(c) Point of Sale

(d) Payment Order Service

(e) None of these.

Ans: (c)

14. The working group set up by the RBI has suggested-the launch of an Emergency Fund Facility Scheme for banks. This scheme will help which of the following types of banks?

(a) Public Sector Banks

(b) Small Banks

(c) Urban Cooperative Banks

(d) Private Banks   

(e) Foreign Banks

Ans: (c)

15. As we all know banks publish their quarterly performance to bring transparency in the system and also to give a clear picture of their performance to the public. How were results of Quarter 2 different from the results of Quarter 1 of the listed banks including giants like SBI and ICICI banks?  
(A) Performance was subdued in the Quarter 2.

(B) Yields on advances of almost all listed banks have come down.

(C) Advances grew at a slower pace when compared to deposits.

(a) Only A is true

(b) Only B is true

(c) Only C is true

(d) All A B and C are true  
(e) None of these

Ans: (a)

16. After the Subprime crisis which of the following problems has hit the global economy/world markets recently?

(a) Dubai debt problem

(b) Change of Government in Japan and its new economic policies.

(c) High rate of inflation in India

(d) Extremely volatile behaviour of the Bombay Stock Exchange and other major Stock Exchanges world wide.

(e) None of these.

Ans: (a)

17. As per the news published in major newspapers in India Banks in India need about 12 lakh business correspondents for rural areas. What will be the role of these correspondents?

(A) They will help rural people in their day to day banking activities.

(B) They will work as a link between banks and the customers.

(C) They will ascertain eligibility of rural people so that relief packages can be provided to them.

(a) Only A   
(b) Only B  
(c) Only C   
(d) All A. B and C  
(e) None of these

Ans: (d)

18. It is evident that the economic slowdown still continues to weigh on the performance of the banks in India. How is this affecting banks and/or general public?

(a) The number of bank account holders has gone down

(b) The gross Non Performing Assets (NPAs) of the listed banks have increased substantially.

(c) Inflation has reached at a very high level

(d) Relief packages announced by the Government have proved insufficient to improve the situation of agri sector

(e) All of these

Ans: (e)



19. As published in major newspapers public sector banks have asked the Government of India to provide more funds for "Capital Infusion". How much is the need of PSBs collectively for the purpose? (Rs. in crores)?

(a) 10,000   
(b) 15,000

(c) 20.000   
(d) 25,000

(e) 30,000

Ans: (d)

20. Who amongst the following has purchased about 200 tonnes of gold from international Monetary Fund (IMF) in 2009?

(a) Infrastructure Finance Company Ltd.

(b) Bombay Stock Exchange of India

(c) Gold Council of India

(d) Reserve Bank of India

(e) None of these

Ans: (d)

21. One of the major emphasis of Basel II is that banks, should have

(a) adequate Capital Adequacy Ratio

(b) only few branches in urban centres

(c) more and more branches in rural areas

(d) core banking mode of operation

(e) all the above to comply with Basel II norms

Ans: (a)

22. As per the reports published by various agencies/organisation, it is estimated that around 3 billion extra people will join our existing population of 6 billion by the year 2050. To provide food for all of them, a second round which of the following initiatives is required to be start much in advance?

(a) Green Revolution   

(b) Planned Urbanisation     

(c) Industrialisation   

(d) Climate Migration     

(e) All of these

Ans: (e)    

23. Who amongst the following is the President of the European Union at present?

(a) Catherine Ashton     

(b) Mr. Jose Manuel Barroso,     

(c) Mr. Fredrik Reinfeldt

(d) Mr. Sergi Lavrov     

(e) None of these

Ans: (e)

24. As per the reports published in various newspapers, and journals almost all big nations are trying their best to resolve various disputes between the nations where in either the are a party or because of that their peace and stability many be affected. Stability in which of the following two nations is more vital to India than that of any other nations?

(a) Bangladesh & China

(b) China & USA   

(c) Iraq & Russia

(d) South & North Korea     

(e) Pakistan & Afghanistan

Ans: (e)

25. India's bilateral per annum trade with European Union at present is about -

(a) 50 billion US $   

(b) 75. billion US $     

(c) 100 billion US $   

(d) 150 billion US $     

(e) 200 billion US $

Ans: (b)         

26. Some world bodies/organisations/agencies are of the view that agriculture should adopt a "Cross Disciplinary Approach", and fake help of all types of sciences and studies. This approach will help in which of the following crucial problems being faced by humanity?

(a) Use of Genetically Modified Crop   

(b) Melting of glaciers

(c) Food crisis

(d) Climate change

(e) None of these

Ans: (c)

27. An agreement between two nations or a group of nations which establishes unimpeded exchange and flow of goods and services between/among trade partners regardless of national boundaries is called-

(a) Import Free Agreement

(b) Free Trade-Agreement

(c) Export Free Agreement

(d) Special Economic Zone Agreement

Ans: (b)

28. Which of the following correctly describe what "One Carbon Credit" is?

(A) Credit permit to release one ton of carbon dioxide.

(B) Providing loans to establish one new production unit which can produce carbon dioxide for Industrial use.

(C) Finding out one new business which can use and recycle green house gases.

(a) Only C       

(b) Only B

(c) Only A       

(d) All A, B and C

(e) None of these

Ans: (c)

29. As per various reports issued by the UNO and other world bodies, agricultural and allied, activities consume what percentage of global water resources every year?

(a) 15%   

(b) 30%

(c) 50%   

(d) 70%

(e) 60%

Ans: (d)

30. The Food and Agriculture Organisation (FAO) is a wing/agency of the _

(a) World Bank

(b) United Nations Organisation

(c) Asian Development Bank

(d) Ministry of Agriculture Government of India

(e) None of these

Ans: (b)

31. As a policy India does not encourage tree, movement of unskilled labours from _

(a) Gulf Countries

(b) USA and South American Nations

(c) European Union Nations

(d) All these nations

(e) None of these

Ans: (d)

32. The Government of India has decided to disinvest its share in major listed public sector under-takings. How much of its share will be off loaded in this method?

(a) 2%                   

(b) 4%

(c) 8%                   

(d) 10%

(e) None of these

Ans: (d)

33. The United Nations Development Fund for Women (UNIFEM) is working in an Indian city to make it safe for women. Which of the following is that city?

(a) Pune              

(b) Kolkata

(c) Delhi      

(d) Mumbai

(e) Lucknow

Ans: (c)

34. At present the trade between India and China is in a state of "Payment Imbalance", What does this mean in real terms?

(A) China does not import many items from India whereas India-imports more from. China.

(B) China does not pay India in time and a lot of delay is reported by the exporters.

(C) India wants all payments to be made in US Dollars whereas China pays in its own currency.

(a) Only A          

(b) Only B

(c) Only C          

(d) All A, B and C

(e) None of these

Ans: (d)

35. India has signed an agreement on climate change with which of the following countries recently?

(a) USA                  

(b) Russia

(c) United Kingdom     

(d) Australia

(e) China

Ans: (e)

36. Some Scientists are of the opinion that extra agricultural production should be achieved. without, going for the cultivation of extra land and also without causing damage to essential eco-system. This concept, in other words, is known as-

(a) Sustainable growth

(b) Renewability of Inputs

(c) Global Melt down

(d) Climate Migration

(e) None of these

Ans: (a)

37. Mr. Z. E. A. Ben Ali has taken over as the President of -

(a) Tunisia   

(b) Malaysia

(c) Indonesia   

(d) Kuwait

(e) None of these

Ans: (a)

38. Which of the following is NOT a Government of India undertaking?

(a) Oil India Ltd.

(b) Sutlej Jal Vidyut Nigam Ltd.

(c) ICICI Bank

(d) National Thermal Power Corporation Ltd.

(e) Rural Electrification Corporation Ltd.

Ans: (c)

39. India shares its border with China along the Himalayan range. Which of the following states touches the border of China.

(a) Punjab                     

(b) Bihar

(c) Arunachal Pradesh 

(d) chhattisgarh

(e) All of these

Ans: (c)

40. Which of the following has been the growth of India's GDP during 2008-09? (Final data are issued in late 2009).

(a) 5%                 

(b) 5.5%

(c) 6%                 

(d) 6.5%

(e) None of these

Ans: (d)

41. India has recently gained the status of becoming the third largest producer of Steel in the world. Who is the largest producer?

(a) USA                

(b) Russia

(c) Japan               

(d) China

(e) None of these

Ans: (d)

42. Dadaab Refugee Camp which was, in the news recently is located in which of the following countries?

(a) Sudan     

(b) Iraq

(c) Pakistan     

(d) Afghanistan

(e) Kenya

Ans: (e)

43. Which of the following countries, objected to the Indian Prime Minister's recent visit to Arunachal Pradesh?

(a) Pakistan   

(b) Nepal

(c) Myanmar   

(d) Bhutan

(e) None of these

Ans: (e)

44. Which of the following is NOT associated with climate change and/or Global Warming?

(a) Basel Norms

(b) Bali Meet 2007

(c) Copenhagen Conference

(d) Kyoto Protocol

(e) Bangkok Meet in 2009

Ans: (a)

45. Which of the following terms is used in the game of Hockey?

(a) Baseline   

(b) Smash

(c) Drop   

(d) Centre Forward

(e) None of these

Ans: (d)

46. Which of the following Geneticaly Modified vegetables is recently being made available in Indian markets?

(a) Carrot   

(b) Radish

(c) Brinjal   

(d) Potato

(e) None of these

Ans: (e)

47. Each Nobel Prize winner gets an amount of 10, million Swedish-

(a) Kroner   

(b) Dollar

(c) Yen        

(d) Pound

(e) Euro

Ans: (a)

48. Which of the following is NOT a plant product?

(a) Camphor   

(b) Aloe Vera

(c) Vanilla   

(d) Kiwi

(e) All are plant products

Ans: (e)

49. Dr. Venkatraman Ramakrishnan is one of the recipients the Nobel Prize in the field of__

(a) Physics   

(b) Chemistry     

(c) Medicine   

(d) Economics     

(e) Literature

Ans: (b)

50. As per the reports published in newspapers the Government of India has asked all the states to conduct a 'Social Audit” of each and every work of which of the following scheme,     
(a) National Rural Employment Guarantee Act     

(b) Pradhan Mantri Gram Sadak Yojana     

(c) Indira Aawas Yojana     

(d) Rajiv Gandhi Grameen Vidyutikaran Yojana     

(e) None of these.

Ans: (a)

51. Which of the following is NOT the name of a major Lai Tennis Tournament?

(a) U S Open                

(b) Wimbledon     

(c) French Open   

(d) Grand Master     

(e) Australian Open

Ans: (d)  

52. 'Derby' is associated with which of the following sports events?

(a) Horse Racing   

(b) Chess     

(c) Cricket                 

(d) Hockey     

(e) Football

Ans: (a)        

53. Which of the following terms is NOT used in Banking and Finance?

(a) Bid Price   

(b) Jacksonian Seizure     

(c) Call Option   

(d) Bluechip     

(e) Dividend

Ans: (b)

54. Dada Saheb Phalke Award is given for the exemplary won in the field of -

(a) Literature   

(b) Music   

(c) Films   

(d) Sports     

(e) None of these

Ans: (c)

55. Who amongst the following is the Chief Justice of India at present?

(a) Justice R. C. Lahoti   

(b) Justice Y.K. Sabharwal   

(c) Justice G. P. Mathur

(d) Justice K.G. Balakrishnan     

(e) None of these

Ans: (d)

56. Which of the fallowing terms is NOT used in Econamics?

(a) Exogenous                

(b) Depreciation     

(c) Deep Market   

(d) Zero Sum Game     

(e) Handedness

Ans: (e)

57. Who amongst the fallowing is NOT a lawn Tennis player?

(a) Cara Black                

(b) Dinara Safina     

(c) Jelena Jankovic   

(d) Leander Paes   

(e) Anand Pawar

Ans: (e)

58. Which of the following books is written by V.S. Naipaul?

(a) A Woman Alone

(b) The Open Cauple     

(c) The Grass is Singing

(d) The Golden Notebook     

(e) Half a Life

Ans: (e)

59. Sri Balraj Puri, who was in the news recently, is a famous _

(a) Classical Singer   

(b) Cine Actor

(c) Social Warker   

(d) Sportsman

(e) Journalist

Ans: (e)

60. Which of the following is caused by H5NI virus?

(a) Yellow fever   

(b) Measles

(c) Plague                

(d) Bird flu

(e) None of these

Ans: (d)

61. Which of the following rivers is NOT in India?

(a) Tapti   

(b) Ural

(c) Mahi   

(d) Mahanadi

(e) Penner

Ans: (b)

62. Mr. Mohamed Nasheed was on a five day state visit to India recently. He is the President of -

(a) Bangladesh         

(b) Iran

(c) Indonesia         

(d) Maldives

(e) None of these

Ans: (d)

63. India celebrated which of the following Birth Anniversary of Mahatma Gandhi in October 2009?

(a) 110    

(b) 120

(c) 130                

(d) 140

(e) None of these

Ans: (d)

64. Which of the following states has launched e-Shakti Programme so that poverty can be reduced in the state?

(a) Delhi                

(b) Maharashtra

(c) Uttar Pradesh   

(d) Bihar

(e) None of these

Ans: (d)

65. Which of the following schemes is launched by the Government of India to improve the health of pregnant and lactating mothers?

(a) Matritva Sahayog Yojana

(b) Dhan Lakshmi Yojana   

(c) ASHA

(d) Health for All Scheme   

(e) None of these

Ans: (a)

66. As per the decision taken by the Orissa cabinet the new name of the state would be written as _

(a) Odisha   

(b) Orissha

(c) Aurissa   

(d) Horissa

(e) None of these

Ans: (a)

67. India recently organized sixth ministerial level of Indo-US- TPF. What is full form of TPF?

(a) Trade Policy Forum

(b) Traditional Planning Force

(c) Trade and Payment Finance

(d) Technical Planning Force

(e) None of these

Ans: (a)

68. Which of the following is the abbreviated name of state level agency on afforestation created by the Government of India?

(a) NDMA          

(b) SFDA

(c) ICMJE           

(d) JCCROM

(e) None of these

Ans: (e)

69. Which of the following states has launched 'Atta-Dal Scheme' under which atta and dal Will be supplied at affordable prices to ration card holders?

(a) Rajasthan                

(b) Gujarat

(c) Uttar Pradesh   

(d) Orissa

(e) None of these

Ans: (a)

70. Which of the following states has the maximum number of Sugar mills?

(a) Bihar                   

(b) Rajasthan

(c) Gujarat                

(d) Haryana

(e) None of these

Ans: (e)

71. India purchased the Barak Anti Missile Defence System from –

(a) USA                   

(b) Japan

(c) France                

(d) Israel

(e) None of these

Ans: (d)

72. Mullaperiyar Dam is built on which of the following rivers?

(a) Pamba                  

(b) Godavari

(c) Krishna                

(d) Cauvery

(e) None of these

Ans: (e)

73. Which of the following countries won the Champions Trophy Cricket Tournament 2009?

(a) England   

(b) Pakistan

(c) Australia   

(d) New Zealand

(e) None of these

Ans: (c)

74. Who amongst the following has not been nominated for Man Booker Prize -2009?'

(a) J.M. Coetzee            

(b) Hilary Mantel

(c) Sarah Waters            

(d) Thomas Cromwell

(e) None of these

Ans: (d)

75. Shanti Swarup Bhatnagar Awards are given far excellence in the field of-

(a) Sports                             

(b) Economics

(c) Science and Technology   

(d) Cinema

(e) None of these

Ans: (c)

First-ever microfinance ‘bank' to begin operations

From September 15, poor women in Andhra Pradesh will be able to access micro credit within 48 hours after applying for a loan.

The rate of interest to be charged is 13 per cent, half of what is being charged by the microfinance institutions at present, thanks to a new microfinance ‘bank' labelled ‘Stree Nidhi'.

The ‘bank' – which will begin operations from Thursday – is actually an apex co-operative credit society formed as a joint venture between the Government of Andhra Pradesh and the Mandal Mahila Samkhyas (MMS) of self-help groups.

“The operations of ‘Stree Nidhi' will be handled completely with the aid of technology. Mobile banking-based transactions hold the key.

The administrative costs would be limited to 10 per cent of the net return to make the loans cheaper.

As of now, four types of loans would be offered to women borrowers including funds to meet business requirements, education and health.

There is no water-tight criteria for sanctioning loans. The members of MMS, who are actually from among the same SHG community would do the due diligence and asses the need and repaying capacity.

The average size of loan is Rs 15,000 with a duration of one year in monthly repayment mode.

``They will be given a one per cent commission to do the due diligence, Including this and other costs, it is very much viable to extend loans at 13 per cent interest.

The prompt repayment will make a big difference. If the repayments are on track, the borrowers will be eligible for a nominal three per cent interest on subsequent loans.

The initial authorised capital is Rs 500 crore. “In the current financial year, Rs 1000 crore funds would be mobilised which will be increased to Rs 4,000 crore by 2014".

The objective of ‘Stree Nidhi' is to ‘lead by example' and to provide an alternative source of funds to the poor.

Infrastructure Debt Funds

Infrastructure Debt Funds is a debt instrument being set up by the finance ministry in order to channelize long term funds into infrastructure projects which require long term stable capital investment. According to the structure laid out by the finance ministry, after consultations with stakeholders, infrastructure NBGCs, market regulators and banks, an IDF could either be set up as a trust or as a company. IDFs in India: The government of India has unveiled the structure of infrastructure debt funds (IDFs), allowing local infrastructure developer’s access to money from insurance and pension funds from India and overseas, even as bank lending to roads and power projects is constrained by limits set by the central bank. IDFs are expected to provide long-term, low-cost debt for infrastructure projects. At present, banks are the main source of funding for these projects. Asset-liability mismatches and loan exposure limits to industries set by the Reserve Bank of India (RBI) have made it difficult for banks to provide long-term funding. It is here underscored that the IDF was proposed by in Budget 2011-12. The ultimate aim of the IDFs is to accelerate and enhance the flow of debt for funding the ambitious programme of infrastructure development in the country. The requirement of infrastructure in the 12th Plan has been pegged at $1 trillion. The IDF would help garner resources from domestic and off-shore institutional investors, especially insurance and pension funds. Banks and financial institutions would be allowed to sponsor IDFs. In India the IDFs could be set up by NBFCs or banks, with a minimum capital of Rs 150 crore. Such a fund would be allowed to raise resources through rupee or dollar denominated bonds of minimum five year maturity. These bonds could be traded among the domestic and foreign investors. Company based IDFs would be allowed to fund projects in public-private partnership (PPP) which have completed one year of commercial operations. Potential investors in this category, include off-shore and domestic institutional investors, high net worth individuals and non-resident Indians. If the IDFs are set up as a trust, the fund could be sponsored by a regulated financial sector domestic entity. It would have to invest 90 per cent of its assets in the debt securities of infrastructure companies or SPVs across all infrastructure sectors. Minimum investment by trustbased IDF would be Rs 1 crore with Rs 10 lakh as minimum size of the unit. The credit risks associated with underlying projects will be borne by the investors and not by IDF, but in case of company-based IDF, the fund would bear the risk.

Credit Default Swap

CDS are a financial instrument for swapping the risk of debt default. Credit default swaps may be used for emerging market bonds, mortgage backed securities, corporate bonds and local government bond. The buyer of a credit default swap pays a premium for effectively insuring against a debt default. He receives a lump sum payment if the debt instrument is defaulted. The seller of a credit default swap receives monthly payments from the buyer. If the debt instrument defaults they have to pay the agreed amount to the buyer of the credit default swap. Process: A CDS contract involves the transfer of the credit risk of municipal bonds, emerging market bonds, mortgage-backed securities, or corporate debt between two parties. It is similar to insurance because it provides the buyer of the contract, who often owns the underlying credit, with protection against default, a credit rating downgrade, or another negative “credit event.” The seller of the contract assumes the credit risk that the buyer does not wish to shoulder in exchange for a periodic protection fee similar to an insurance premium, and is obligated to pay only if a negative credit event occurs. It is important to note that the CDS contract is not actually tied to a bond, but instead references it. For this reason, the bond involved in the transaction is called the “reference obligation.” A contract can reference a single credit, or multiple credits.
CDS have the following two uses:
(a) Hedging:
 A CDS contract can be used as a hedge or insurance policy against the default of a bond or loan. An individual or company that is exposed to a lot of credit risk can shift some of that risk by buying protection in a CDS contract. This may be preferable to selling the security outright if the investor wants to reduce exposure and not eliminate it, avoid taking a tax hit, or just eliminate exposure for a certain period of time.
(b) Speculation:
The second use is for speculators to “place their bets” about the credit quality of a particular reference entity. With the value of the CDS market, larger than the bonds and loans that the contracts reference, it is obvious that speculation has grown to be the most common function for a CDS contract. CDS provide a very efficient way to take a view on the credit of reference entity. An investor with a positive view on the credit quality of a company can sell protection and collect the payments that go along with it rather than spend a lot of money to load up on the company’s bonds. An investor with a negative view of the company’s credit can buy protection for a relatively small periodic fee and receive a big payoff if the company defaults on its bonds or has some other credit event. A CDS can also serve as a way to access maturity exposures that would otherwise be unavailable, access credit risk when the supply of bonds is limited, or invest in foreign credits without currency risk.

FCRA

The central government notified the Foreign Contribution Regulation Act, 2010 and it came into force from May, 1, 2011.
Salient Features of the Act:
(a)    Any association granted prior permission or registered with the Central Government under Section 6 or under the repealed FCRA, 1976, shall be deemed to have been granted prior permission or registered, as the case may be, under FCRA, 2010 and such registration shall be valid for a period of five years from the date on which the new Act has come into force.
(b)     While the provisions of the repealed FCRA, 1976 have generally been retained, the FCRA, 2010 is an improvement over the repealed Act as more stringent provisions have been made in order to prevent misutilisation of the foreign contribution received by the associations.
(c) Any organization of a political nature and any association or company engaged in the production and broadcast of audio or audio visual news or current affairs programme have been placed in the category prohibited to accept foreign contribution.
(d)    A new provision has been introduced to the effect that no person who receives foreign contribution as per provisions of this Act, shall transfer to other person unless that person is also authorized to receive foreign contribution as per rules made by the Central Government.
(e)     Another new provision has been made to the effect that foreign contribution shall be utilized for the purpose for which it has been received and such contribution can be used for administrative expenses up to 50 per cent of such contribution received in a financial year.
(f)     No funds other than foreign contribution shall be deposited in the FC account to be separately maintained by the associations etc. Every bank shall report to such authority, as may be prescribed, the amount of foreign remittance received, sources and manner and other particulars.
(g)     Provision has been made for inspection of accounts if the registered person or person to whom prior permission has been granted fails to furnish or the intimation given is not in accordance with law.
(h)     Any person contravening the provisions of the Act shall be punishable with imprisonment for a term which may extend to five years or with fine or with both.

Self-Help Groups

The RBI has allowed urban cooperative banks (UCBs) to give loans to selfhelp groups (SHGs). This decision by the RBI is definitely going to promote financial inclusion in the nation in addition to expand the scope of UCBs. If the reach of the UCBs is expanded, it will result in promoting financial inclusion. According to the latest guidelines of the RBI, lending to SHGs and JLGs (Joint Liability Groups) would be considered as normal business activity of the bank. UCBs will be required to frame a comprehensive policy on lending to SHGs and JLGs. The maximum amount of loan to SHGs should not exceed four times of the savings of the group. With regard to loans given to JLGs, the guidelines stated that the JLGs were not obliged to keep deposits with the bank and hence the amount of loan granted to them would be based on their credit needs and the bank’s assessment of the credit requirement.
Definition of Self-Help Group:
A Self-Help Group is a small voluntary association of poor people preferably from the same socio-economic back drop. The micro-credit given to them makes hem enterprising; it can be all women group, all-men group or even a mixed group. However, it has been the experience that women’s groups perform better in all the important activities of SHGs. In other words we can define the SHGs as a group of micro entrepreneurs with homogeneous social and economic background who voluntarily come together to save small amounts regularly and mutually agree to contribute to a common fund to meet their emergency needs.
Defining Joint Liability Groups:
A Joint Liability Group (JLG) is an informal group comprising preferably of 4 to 10 individuals coming together for the purposes of availing bank loan either singly or through the group mechanism against mutual guarantee. The JLG members are expected to engage in similar type of economic activities. The management of the JLG is to be kept simple with little or no financial administration within the group. JLGs can be formed primarily consisting of tenant farmers and small farmers cultivating land without possessing proper title of their land.

Marginal Standing Facility Scheme

The Reserve Bank of India (RBI) has introduced a new Marginal Standing Facility (MSF) scheme, which was announced to be implemented in its Monetary Policy for the year 2011-12. Under the new facility, banks will borrow overnight up to 1 per cent of net demand and time liabilities (NDTL) outstanding at the end of the second preceding fortnight. The MSF will be 100 basis points above the repo rate – the rate at which banks borrow from RBI. It needs to be noted that the repo rate has now become the only independent variable policy rate, marking a shift from earlier method of calibrating various policy rates separately. The reverse repo rate — the rate at which RBI borrows – will be kept 100 basis points lower than the repo rate. All scheduled commercial banks that have current account and subsidiary general ledger (SGL) account with RBI are eligible to participate in the MSF scheme.
RBI will receive requests for a minimum amount of Rs 10 million and in multiples of Rs 10 million thereafter. The central bank has the right to accept or reject partially or fully, the request for funds under this facility.
Marginal Standing Facility will curb inter-bank lending volatility:
The Reserve Bank of India’s new Marginal Standing Facility is expected to curb volatility in the overnight lending rates in the banking system. The banks will use Marginal Standing Facility to borrow overnight money only when they have exhausted all other existing channels like collateralized borrowing and lending obligation (CBLO) and liquidity adjustment facility (LAF). Difference between Liquidity Adjustment Facility-Repo Rate and Marginal
Standing Facility Rate:
 Banks can borrow from the RBI under LAF-Repo Rate, which stands at 7.25 per cent by pledging government securities over and above the statutory liquidity requirement of 24 per cent. Though in case of borrowing from the marginal standing facility, banks can borrow funds up to one per cent of their net demand and time liabilities at 8.25 per cent. However, it can be within the statutory liquidity ratio of 24 per cent.

Merger of SBI Commercial with SBI

The Union Cabinet has approved acquisition of the State Bank of India Commercial and International Bank Ltd. (SBICI Bank Ltd.) by State Bank of India (SBI), in terms of sub-section (2) of section 35 of the State Bank of India Act, 1955. SBICI, with two branches in Mumbai, is a wholly owned subsidiary of State Bank of India (SBI) and functions as a private sector bank offering an array of financial products and services. The terms and conditions for the acquisition have been approved by board of directors of both the banks and also by the Reserve Bank of India. It is hoped that the merger would help in eliminating the cost involved in maintaining the administrative structure of SBICI as both the branches of SBICI would be easily absorbed in the operations of the main bank.
Significance of the merger by the government: In the overall analysis, continuation of SBICI in its present form would not create a sustainable organization with a separate niche, able to hold on its own in the medium term. As an independent Bank also, SBICI has had to maintain a full-fledged, elaborate administrative setup to conform to regulatory requirements. The cost of maintaining such a structure is disproportionate to the level of operations of the SBICI. The proposed merger would help in eliminating the cost involved in maintaining the administrative structure of SBICI as both the branches of SBICI would be easily absorbed in the operations of the main Bank. While no present beneficiary of the State Bank of India would be affected, the number of beneficiaries would be the clients of SBI Commercial and International Bank Ltd. who will have access to the bigger network of State Bank of India.
SBICI:
SBICI Bank Ltd. is a wholly owned subsidiary of SBI, which was set up in 1994 after taking over the Indian operations of the erstwhile Bank of Credit and Commerce International Ltd. (BCCI), which went into liquidation in 1991. SBICI Bank Ltd. has only two branches, both in Mumbai.