TY B.

Com (Banking & Insurance) April 2017

Sem 6 Q.P. Code-10313
For Enquiry contact-Principal Dr. Vaidehi Daptardar 9820613685
Dr. Shraddha Shukla 9967127291
Q.1.a. Write the full form of the following abbreviations:

1) NEFT-National Electronic Funds Transfer

2) IDBI-Industrial Bank Of India
3) CAC –Capital Account Convertibility
4) NPA –Non-Performing Asset
5) RRBs-Regional Rural Banks

b.State true or false

1.There is no apex financial institution in India to control the sector.False

2.Prudential norms is a part of financial sector reforms-True

3.RBI is an autonomous institution-False

4.The monetary policy implies only control on money.False

5.NBFCs are subject to interest rate ceiling on depositsTrue

OR

Q.1.a.Answer in brief

1.What is Rural credit structure?

Ans- Three Tier Structure comprises of Regional Rural Bank , State co-opertative Bank, District Co-
operative bank

2.What are Basel II norms?

Ans- Basel II is a second international banking regulatory accord that is based on three main
pillars: minimal capital requirements, regulatory supervision and market discipline

3.Enlist any two departments of RBI.

Ans-Issue,Banking,Exchange control, Departmrnt of Banking Operations and Development, Induatrial

finance department, Research and statistics department, legal department, Department of finance
companies, Department of accounts, Departmnet of accounts, department of administration, Inspection
department, Secretial department.

4.What are participatory notes?

Ans-- Participatory Notes commonly known as P-Notes or PNs are instruments issued by
registered foreign institutional investors (FII) to overseas investors, who wish to invest in the
Indian stock markets without registering themselves with the market regulator, the Securities
and Exchange Board of India - SEBI

5.Decribe the RBI measures to improve the payment system of the country.

Ans- Regulatory and policy framework for inducing efficiency, Rationalise the guidelines for
payment systems, Standardisation, portability and inter-operability,

b. Give the appropriate terms of the following:

1) Sectors which are given preferential treatment for bank loans Ans.-Priority sector lending
2) The rate charged by RBI to commercial banks for short term funds. Ans-REPO
3) The purchase and sell of securities in open market. Ans-OMO
4) The technical term used by RBI to describe the narrow money.-M1
5) The rate at which a unit of money changes hands.- Ans-Velocity of money

Q.2.a.Explain the core and optional functions of the RBI.

A. Traditional functions B. Supervisory FunctionsC. Promotional

function
1.Currency Issue, 1.Granting License to Banks 1. Promotion of banking
2.Bankers Bank, 2.Function of Inspection and habits
3.Custodian of Foreign Enquiry 2. provides refinance for
Exchange Reserves, 3.Controls the Non-Banking export promotion
4.Bank of central Clearance, Financial Corporations 3. facilities for
settlement and transfer, agriculture
5.Lender of last resort, 4. facilities to small
6.Controller of credit scale industries

b.What are the objectives of monetary policy? How does RBI achieve them?

Ans-* To manage the monetary and credit system of the country. * To stabilizes internal and external
value of rupee.
* For balanced and systematic development of banking in the country.
* For the development of organized money market in the country. * For proper arrangement of agriculture
finance.
* For proper arrangement of industrial finance.
* For proper management of public debts.
* To establish monetary relations with other countries of the world and international financial
institutions.
* For centralization of cash reserves of commercial banks.
* To maintain balance between the demand and supply of currency.
 OR

Q.2.a Discuss the financial sector reforms in India?

Ans-Financial reporting,Foreign Banking operations,Monitering and surveillance.

b.Enumerate the measures taken by the RBI to improve the supervisory mechanism and financial
soundness of commercial bank.

Q.3.a.What is financial instability? Explain the reasons for it in integrated financial systems.

Ans-Weak Fundamentals,2.Panic in financial system,3.weak supervision and Regulation,3.Lack

of transperancy,5.Mismatches of Assets &Liabilities,6.Exchange Rate volality,7.Inadequate
payment system,8.Debt & Financial fragility.

b.How has monetary policy management given a new orientation in open economy of India?

OR

a.Discuss RBI’s concept of money supply in India.

Ans- M1,M2,M3

b.’Integrated financial systems offer opportunities and threats’.Comment.

Q.4. Write short notes on any three: (Marks can be allotted according to discretion of examiner)

1.NABARD

2.Balance-Sheet of RBI

3.Monetary Transmission channels

4.Selective credit control

5.Institutional framework for industrial finance.