This page contains the important terms discussed on the website during Sep-2015
- 30th September 2015
Vote on Account: Vote-on account is basically a statement ,where the government presents an estimate of a sum required to meet the expenditure that it incurs during the first three to four months of an election financial year until a new government is in place, to keep the machinery running.
Difference between Vote on Account and Interim Budget?Vote-on-account deals only with the expenditure side of the government’s budget, an interim Budget is a complete set of accounts, including both expenditure and receipts. - 29th September 2015
Reverse Repo Rate :: This is exact opposite of Repo rate. Reverse Repo rate is the rate at which Reserve Bank of India (RBI) borrows money from banks. RBI uses this tool when it feels there is too much money floating in the banking system. Banks are always happy to lend money to RBI since their money is in safe hands with a good interest. An increase in Reverse repo rate can cause the banks to transfer more funds to RBI due to this attractive interest rates. Usually Reverse Repo is 1% less than the Repo Rate.
- 28th September 2015
Inflation :: Inflation is as an increase in the price of bunch of Goods and services that projects the Indian economy. An increase in inflation figures occurs when there is an increase in the average level of prices in Goods and services. Inflation happens when there are fewer Goods and more buyers; this will result in increase in the price of Goods, since there is more demand and less supply of the goods. - 27th September 2015
What is SLR Rate? :: SLR (Statutory Liquidity Ratio) is the amount a commercial bank needs to maintain in the form of cash, or gold or govt. approved securities (Bonds) before providing credit to its customers.
SLR rate is determined and maintained by the RBI (Reserve Bank of India) in order to control the expansion of bank credit. SLR is determined as the percentage of total demand and percentage of time liabilities. Time Liabilities are the liabilities a commercial bank liable to pay to the customers on their anytime demand. SLR is used to control inflation and propel growth. Through SLR rate tuning the money supply in the system can be controlled efficiently. - 26th September 2015
What is SEZ? :: SEZ means Special Economic Zone is the one of the part of government’s policies in India. A special Economic zone is a geographical region that economic laws which are more liberal than the usual economic laws in the country. The basic motto behind this is to increase foreign investment, development of infrastructure, job opportunities and increase the income level of the people. SEZ can be classified on terms of industry for which the SEZ has been set up. Permission for Special Economic Zone is awarded on basis of SEZ Act 2005. - 25th September 2015
BCSBI: Banking Codes and Standard Board of India, is an independent organisation meant to protect the services and rights of banking customers. The board oversee the compliance with the “Code of Bank’s committment to customers. It only checks if there is any systematic compliance failure on part of the bank. It is registered under societies Registration Act, 1860. As of February 2013, 69 scheduled commercial banks, 11 Urban Co-operative Banks and 54 regional rural banks are members of the board. Its headquarters are situated at Mumbai, Maharashtra. Present chairman of BSBI AC Mahajan - 22nd September 2015
E-Commerce: A Short form for Electronic Commerce. E-Commerce is one of the fastest growing sector in India. E-Commerce can be understood as trading in products or services using computer networks, like internet. E-Commerce can be found in various services like mobile commerce, electronic fund transfer, online payments, payments through POS etc. This industry has got very popular in India with every 3rd transaction in cities being done on the E-commerce model. In India many companies like Amazon, flipkart, IRCTC and many more are working on E-Commerce Model. - 21st September 2015
Nabard: National Bank for Agriculture and Rural Development with a main focus on to uplift rural India by increasing the credit flow for elevation of agriculture and rural non farm sector. It was established on 12th July 1982 by a special act of parliament with headquarters at Mumbai, and offices across India. Nabard is active in developing financial Inclusion policy and is a member of the Alliance for Financial Inclusion. - 20th September 2015
SIDBI : Small Industrial Development Bank of India is an independent financial institution aimed at the growth and development of micro, small and medium scale enterprises in India. It is a fully owned subsidiary of Industrial Development of India, set up on April 2nd,1990. Various State-owned banks, insurance companies and financial institutions have shareholding in SIDBI. Headquarters of SIDBI are situated at Lucknow, Uttar Pradesh. SIDBI is among the world top 30 development banks. SIDBI also provides facility of CGTMSE cover, which gives a chance to MSME units to take collateral free bank loans. - 18th September 2015
Lok Adalat: Lok Adalat is a system of alternative dispute resolution in India. The idea of Lok Adalat was mainly advocated by Justice P.N. Bhagwati, a former Chief Justice of India. Lok Adalat is a non-adversarial system, whereby mock courts (called Lok Adalats) are held by the State Authority, District Authority, etc. These are usually presided over by retired judges, social activists, or other members of the legal profession. The Lok Adalats can deal with all Civil Cases, Matrimonial Disputes, Land Disputes, Bank Settlements, Partition/Property Disputes, Labour Disputes etc., and compoundable criminal Cases. The first Lok Adalat was held on March 14, 1982 in Gujarat. - 17th September 2015
Phishing (Technology): phishing is a term used to describe a malicious individual or group of individuals who scam users. They do so by sending e-mails or creating web pages that are designed to collect an individual’s online bank, credit card, or other login information.
For example you are going to a website for online banking via an email. The website given will the copy of the main site and you will not be able to identify the trap till the time you enter your details. Phishing is done to steal your information.
To protect yourself from fishing you must not click on unknown links offering free remedies and always check the address bar of the website. If its Phishing the address will not be same as original website. - 15th September 2015
Lead Bank Scheme: The Lead Bank Scheme (LBS) was introduced by RBI in 1969 when designated banks were made key instruments for local development in specific areas. The bank with maximum number of branches in a district is designated as lead bank. A lead bank takes record of all the social development schemes, financial Inclusion and loans processed under government sponsored scheme. Lead Bank also identifies growth centres, assessing deposit potential and credit gaps. A lead bank works as a connect between banks and local administration.
All banks in a district are supposed to submit LBR returns to Lead bank. LBR is the overview of all accounts opened and government sponsored loans processed during a month.
- 13th September 2015
RTI Act 2005: The Right to Information Act was introduced in the year 2005 to give the citizens of India the right to information. Any Indian citizen under this law can file a RTI Application with any government institute and demand information regarding particular issue. RTI act is applicable across India except Jammu and Kashmir. A reply to a RTI has to be positively given within 30 days though time limit can be increased to 45 days with permission from Appellate Authority. Applicant can file and RTI application with a Indian Postal Order of Rs 10.
- 12th September 2015
Banking Ombudsmen: It is also known as banking lokpal. A banking Ombudsmen take care of public grievances against banks and solve them. Banking ombudsmen can reward a maximum penalty upto 10 Lacs. A bank has to comply with the orders issued by Banking Ombudsmen. The head of Banking Ombudsmen is the deputy Governor of RBI.
- 11th September 2015
Non Negotiable Crossing: Non Negotiable crossing is done over cheques to avoid Cash Payment on Bank Counters. These Cheques can be used for transferring money directly to account or Can be endorsed to someone else if “OR Bearer” has not been stricken off. If a cash payment is made on a Non Negotiable instrument bank is liable to bear the loss incurred by the concerned person (if Any)
- 10th September 2015
Market Risk in Banks
Market Risk refers to the risk involved in losses to the bank due to change in equity prices, interest rates, Foreign Exchange rates or market lending rate.
Suppose the lending interest/decreasing
rates have been decreasing/increasing in the market but a bank doesn’t view the change and increase/decrease it. Slowly and eventually people will start taking their business away from the bank.
- 9th September 2015
One Time Settlement:- The offer for one-time settlement, called OTS in banking parlance, comes when you are unable to pay up and the interest accrued becomes more than the principal. In the offer, the lender usually demands payment of a part of the amount due, usually more than the principal. OTS also works as a books cleaning tools for the banks which via OTS remove bad assets from their books.
- 8th September 2015
Cross-Selling : Banks in recent times to increase their public penetration and their business opportunities have started offering various products to its customers. Cross-selling means offering to the existing customers some additional products of the bank so as to expand the banking business,reduce per customer cost of operation and provide more satisfaction and value to the customers. Many banks have collaborated with international partners and have launched companies like SBI Life, PNB life etc.
- 7th September 2015
AMRUT: Atal Mission for Rejuvenation and Urban Transformation
AMRUT seeks to ensure basic infrastructure and sanitation. Through AMRUT, the aim of Govt. is to change the landscape by addressing the issue of infrastructure gap in urban areas so that the cities become more livable beside enhancing the business climate to benefit the poor. This will help the government to check the influx of people towards big cities and also develop infrastructure required to build a stronger India.
500 Cities having 1 lakh and more population will be chosen for Amrut Project.
- 6th September 2015
MUDRA Bank: Micro Units Development and Refinance Agency Bank is a public sector financial institution in India. It provides loans at low rates to microfinance institutions and non-banking financial institutions which then provide credit to MSME’s.
Eligible to borrow from MUDRA bank
Small manufacturing unit
Shopkeepers
Fruits / Vegetable vendors
Artisans
- 4th September 2015
Payment Banks: These banks are limited banks which are allowed to carry out all banking transactions except lending. These banks can accept deposit upto a maximum of Rs 1 Lakh. These banks can issue Debit Cards but are not allowed to issue credit cards. These bank avoid large offices instead operate through mobiles and ATM’s. So of these banks are also linked with a scheduled bank.
Read Post Related to Payment Banks - 3rd September 2015
Assignment: Assignment is transfer of an actionable claim(like life insurance policy etc.), which may be existing or future, as a security for loan. Banks have the flexibility to claim the policy in case of default. - 1st September 2015
Indradhanush: This is the name given to Seven pronged strategy to revamp Public Sector Banks by the finance ministry. 7 points aimed to revitalize and modernize functioning of the Public Sector Banks are :
1: Selection of Chiefs
2: Streamlining of appointment
3: setting up of B.B.B. ( bank board bureau )
4: re-capitalization measures
5: De-stressing
6: empowerment framework of accountability
7: Governance reforms
