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Vol. - VIII April-2014 Issue - 8

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 J.S. DIGEST OF
BANKING AND FINANCE
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Vol.-VIII Apr.-14 Issue-8
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This issue consists of total
140 pages including cover.
Editor
G. Subramanian
From the Editor’s Pen...
We have pleasure in placing
before our readers April 2014
Digest.
The issue contains the
latest developments
Banking, Finance
Economy, Recent Banking
Developments,
Briefs, Model Tests & Hints
for Answering Objective
Questions.
We are sure these will be
found immensely useful by
the readers. We wish success
for our readers in the ensuing
exams and interviews.
JS Digest of Banking and Finance
CONTENTS
Vol. – VIII April ’14 Issue - 8
BANKING & FINANCE – April 2014
IMF On Unexpected Losses ____ 14
SBI: Fitch on Indian Banks _________ 14
Home Delivery of Pension _____ 7 Finance, SE:
New and Women Borrowers ___ 7 Private Trusts Filing Returns __ 14
Overseas Bond Sale ____________ 7 IRDA Penalty on Reliance Life _ 14
Review of Branch Policy in SEBI’s Powers Cleared by 14
Metros _______________________ 7 President ____________________ 14
TAB Banking _________________ 7 IRDA Draft Guidelines for
RBI: Insurance Marketing _________ 15
In-Principle Approval to 2 Limit to Liquidity Schemes of
in New Ban _____________________ 8 SEs _________________________ 15
MF Interest Rate Caps _________ 8 Corporates:
and Deadline for BASEL III Sun to Acquire Ranbaxy _______ 16
Implementation _______________ 8 Future Group to Acquire Nil __ 16
New Deputy Governor ________ 8 Sahara Group ________________ 16
Nominee on Central Board _____ 8 TCS-Mitsubishi J _____________ 16
Concept Limit of WMA Advances _______ 8 Top Global IT Services Co _____ 16
Cap on Prepaid Instruments ____ 9 LEGAL:
Working Group on Pricing of SC on transgenders ___________ 16
Credit _______________________ 9 Economy:
Card Interest Charges ________ 10 Online Retail ________________ 16
REER _______________________ 10 Exporter of Steel _____________ 17
RBI’s Reforms for Banks _______ 10 ECBs ________________________ 17
All-in-cost Ceiling ___________ 11 Black Money _________________ 17
Differential Rate Advantage to CRISIL’s Growth Forecast _____ 17
MSMEs ______________________ 11 Monsoon ____________________ 17
G.Gopalakrishna, ED _________ 11 Gold Consumption ___________ 17
RBI to do Forensic Audit of ‘Fraud’ Table of Key Statistics ________ 17
Com ________________________ 11 National:
Vijaya Bhaskar Committee Polio-free Nation ____________ 18
Recommendations ___________ 12 Industrial Performers _________ 18
Uniform Accounting Norms for PSLV C24 Launch ____________ 18
ARC Fi ______________________ 13
Richest Candidate in National
Banking/Other Banks: Elections ____________________ 18
No Split in CMD post _________ 13 SC on Transgenders __________ 18
Kingfisher Airlines Brand on SC on Maternity Leave ________ 18
Sale _________________________ 14
National Icons _______________ 19
Touch Banking at ICICI Bank __ 14
CAG Audit of Telecom
- Editor
Apr.- 14 3 4 Contents
Companies __________________ 19
Rules for Auditors ____________ 19
India’s First Double-decker
Flyover _____________________ 19
Iron-ore Extraction Allowed in
Goa _________________________ 19
Audit on Padmanabha Swamy
Temple ______________________ 19
International:
IIMA-Harvard-MIT-Berkeley Joint
Research ____________________ 19
Saudi Equates Atheists to
Terrorists ___________________ 20
BofA Settlement ______________ 20
IMF’s Aid to Ukraine _________ 20
Forbes’ List of Venture
Capitalists ___________________ 20
Social Progress Index _________ 20
G20 Central Bankers’ Meet ____ 20
China’s Bitcoin ATM __________ 20
European Bank Job Cuts: ______ 20
Government Requests to block FB
Content _____________________ 21
Chile Earthquake ____________ 21
Avalanche in Mt. Everest ______ 21
Egyptian Polls _______________ 21
Afghanistan Polls ____________ 21
Human Rights Resolution _____ 21
Nancy Powell Retirement _____ 21
India-Korea Tensions _________ 21
South Korean Ferry Sinks _____ 21
Ukraine Crisis _______________ 21
China’s Growth Rate _________ 22
Black Money _________________ 22
Wipro Hiring in USA _________ 22
Technology:
Facebook Acquisition _________ 22
Google Fined by CCI _________ 22
Google Penalised by Italian
Regulator ___________________ 22
Twitter Acquisition ___________ 22
Galaxy S5 ___________________ 22
Microsoft Phone _____________ 22
Dates, Anniversaries _________ 23
Personalities _________________ 23
Sports: ______________________
Awards/Recognitions _________
Miscellaneous: _______________
Appointments: _______________
Recent Banking Developments:
P B BUSINESS
DROP BOX: ____________________ 2 7
SAVINGS BANK: _______________ 2 7
EDUCATION LOANS __________ 2 8
LAUNCH OF SAVINGS BANK
ACCOUNT OPENING USING–
TABLET (TAB) _________________ 2 8
REAL ESTATE, HABITAT &
HOUSING DEVELOPMENT: ____ 2 9
SME BUSINESS:
CREDIT GUARANTEE FUND
TRUST FOR MICRO AND SMALL
ENTERPRISES (CGTMSE). PAYMENT
OF GUARANTEE FEE (GF)
THROUGH RTGS/NEFT.
MODIFICATION IN EXISTING
PROCEDURE: __________________ 3 2
FOREIGN EXCHANGE:
FCNR (B) DEPOSITS: ___________ 3 3
INWARD REMITTANCE UNDER
MONEY TRANSFER SERVICE
SCHEME (MTSS) DIRECT TO
ACCOUNT FACILITY: _________ 3 3
RISK MANAGEMENT AND INTER
BANK DEALINGS ______________ 3 3
FOREIGN PORTFOLIO INVESTOR -
INVESTMENT UNDER PORTFOLIO
INVESTMENT SCHEME,
GOVERNMENT AND CORPORATE
DEBT: _________________________ 3 4
RISK MANAGEMENT & INTER-
BANK DEALINGS: BOOKING OF
FORWARD CONTRACTS –
LIBERALISATION: _____________ 3 5
RUPEE DRAWING ARRANGEMENT
– ‘DIRECT TO ACCOUNT’
FACILITY ______________________ 3 6
MERCHANTING TRADE
TRANSACTIONS - REVISED
GUIDELINES __________________ 3 7
TECHNOLOGY:
RETAIL INTERNET BANKING
JS Digest of Banking and Finance Apr.- 14
23 (RINB); INTERNET BANKING ESSAY -1
24 REQUEST APPROVAL THROUGH Customer Retention is Better than
ATM (IRATA): __________________ 3 8
26 Customer Acquisition ________ 56
GOVT. BUSINES
26 TDS DEDUCTION AND
REMITTANCE TO THE ESSAY -2
GOVERNMENT _________________ 3 9 Cross-selling for Improving
HUMAN RESOURCES Business and Profitability of the
LEAVE TRAVEL CONCESSION / Bank ________________________ 58
HOME TRAVEL CONCESSION (LTC/
HTC). VISITING FOREIGN ESSAY -3
DESTINATIONS ENROUTE _____ 3 9
Vigilance Mechanism in Banks 60
GENERAL
RATE OF INTEREST ON 5 YEAR
SENIOR CITIZEN SAVINGS SCHEME RECENT RATIONALE _______ 63
– (2004): ________________________ 3 9
INFLATION INDEXED NATIONAL FOREIGN EXCHANGE
SAVINGS SECURITIES- RATIONALE: _______________ 71
CUMULATIVE, 2013 ____________ 3 9
SMART MONEY BACK GOLD ___ 4 0
Hints for Answering Objective
MERCHANT ACQUIRING BUSINESS
(MAB).ENLARGEMENT OF SCOPE Questions -1
OF PRE-APPROVED MDR FOR SME Banking & Finance (Jan 14 to
POWER ACCOUNTS ____________ 4 1 Mar 14) _____________________ 75
FOREIGN INVESTMENT IN INDIA IN
GOVERNMENT SECURITIES ____ 4 2 Hints for Answering for
SBI LIFE: RETIRE SMART (NEW Objective Questions – 2 _______ 80
POLICY): _______________________ 4 3
SBI LIFE: SARAL PENSION ______ 4 4
OPERATIONAL RISK Hints for Answering
MANAGEMENT BUSINESS Objective Questions -3
CONTINUITY PLANNING (BCP) Banking – Based on Mar’14
POLICY AND MANUAL: Information _________________ 84
OPERATIONAL GUIDELINES FOR
USERS __________________________ 4 5
Hints for Answering Objective
BANK’S OUTSOURCING POLICY –
2013: GUIDELINES ON MANAGING
Questions – 4
RISK AND CODE OF CONDUCT IN Banking & Finance ___________ 92
OUTSOURCING FINANCIAL,
CREDIT AND IT SERVICES: _____ 4 6 FOREIGN EXCHANGE
OBJECTIVE TYPE
CONCEPT BRIEF – I QUESTIONS ________________ 99
Bi-monthly Policy Statement
2014-15 ______________________ 48
MODEL TEST
CONCEPT BRIEF – II TRAINEE OFFICERS’ WRITTEN
Indian Economy Roundup –
EXAMINATION _____________ 103
April 2014 ___________________ 50
QUESTIONS RELATED TO
MODEL TEST BASED ON APRIL-
SBI ________________________ 124
14 INFORMATION __________ 54
5 6 Contents
 BANKING & FINANCE – APRIL 2014
SBI:
 Home Delivery of Pension: SBI has initiated a pilot project
called ‘SBI 75+’ in Kolkata from April 1 2014 wherein if a
customer is over 75 years of age and has a pension account
with SBI, the bank will deliver the pension amount to his/
her doorstep. If the scheme is successful, it will be rolled
out across the country.
 New and Women Borrowers: State Bank of India (SBI) has
extended its special home loan rates for new and women
borrowers for an indefinite period of time. In December
2013, new borrowers received a concession of up to 0.4%
while women borrowers received an additional concession
of 0.05%. The rates are as follows:
* For loans up to Rs.75 lakh –
 to new borrowers - 10.15%
 to women borrowers 10.10%
* For loans above Rs.75 lakh
 to new borrowers – 10.30%
 to women borrowers – 10.25%
 Overseas Bond Sale: State Bank of India (SBI) has raised
US$ 1.25 bn in an overseas bond sale – US$ 500 mn through
10 year bonds and US$ 750 mn through 5-year bonds. This
is the largest investment grade US Dollar-denominated
bond transaction.
 Review of Branch Policy in Metros: State Bank of India
(SBI) plans to appoint an external advisor to review its
branch expansion policy in metros with the objective of
reducing its break-even period to 1 year from the
current 2.
 TAB Banking: SBI has launched 3 digital banking facilities
at the customer’s doorstep – using TAB banking for – (a)
customers opening Savings Bank account and (b) Housing
Loan applications (c) e-KYC. These services will make it
more convenient for customers to bank. ICICI Bank was
the first bank to use TAB or tablet banking which means
customers have the convenience of opening bank accounts
at their home or office.
JS Digest of Banking and Finance
 SBI Life made a net profit of Rs.740 cr in 2013-14. SBI Life
is the ‘Most Trusted Private Life Insurance Brand’ – thrice
in a row (2011 to 2013) by the Economic Times, Brand
Equity and Nielsen Survey.
RBI:
 In-Principle Approval to 2 New Banks: RBI has given its
in-principle approval for banking licences to 2 new entities
- Infrastructure Development Finance Co (IDFC), Chennai,
and microfinance lender Bandhan Financial Services Ltd.,
Kolkata. This approval is valid for 18 months; in that period,
the 2 institutions have to comply with all RBI’s rules and
regulations to secure a permanent licence. This is the first
time RBI has issued a licence in 2003-04 for Yes Bank.
 MF Interest Rate Caps: RBI has set the upper limit of
lending rates of Micro-Finance Institutions (MFIs) at 27.75%
for the April-June 2014 quarter. This rate will be revised
quarterly. This rate is fixed based on the average of the
base rates of 5 of the largest commercial banks on the last
working day of March multiplied by 2.75 times.
 Deadline for BASEL III Implementation: RBI has extended
the deadline for implementation of BASEL III guidelines
by 1 year to March 2019. Banks need to raise capital to
comply with the capital adequacy requirements as well as
to make provisions for increasing bad loans.
 New Deputy Governor: Shri R Gandhi, Executive Director
of the RBI, was appointed as the new Deputy Governor of
the RBI for a term of 3 years.
 Nominee on Central Board: RBI has nominated Shri Gurdial
Singh Sandhu, Secretary, Department of Financial Services,
Ministry of Finance, as a Director on the Central Board of
Directors of the RBI.
 Limit of WMA Advances: RBI has set the limit for the
Ways and Means Advances (WMAs), in consultation with
the GOI, at Rs.35,000 crore for the period between April
and September 2014. Every Friday as well as at the end of
the GOI’s financial year and RBI’s financial year (June 30)
the GOI must maintain a minimum balance of Rs.100 crore.
Apr.- 14 7 8 Banking & Finance
 On every other day, it is Rs.10 crore. The Normal WMA
limit for the State Governments and the Union Territory
of Puducherry for the fiscal 2014-15 has been left unchanged
at Rs.15,360 crore.
 Cap on Prepaid Instruments: RBI has limited the maximum
value of prepaid instruments that can be issued to Rs.50,000.
It has also stated that the issuer must get all Know Your
Customer (KYC) details of the issued party before issuing
a card. This is to ensure that Anti-Money Laundering and
KYC laws are adhered to.
 Working Group on Pricing of Credit: An RBI panel headed
by former Deputy Governor, Anand Sinha has suggested
the following to ensure fair and transparent pricing of
credit:
* There should be a new tool for floating rate loans –
Indian Banks Base Rate. This should be fixed by the
Indian Banks’ Association (IBA) and initially used on
home loans.
* Banks that hold back borrowers from shifting their loans
accounts to other banks or do not respond to customer
grievances must be penalised.
* Retail loan customers must have an option to ‘exit’ the
loan at the time of entering into the contract. Banks
may charge for this but at a reasonable rate.
* Banks use specific operating cost, credit risk premium
and tenor premium to determine the spread. They must
also take into account factors such as competition,
business strategy and customer relationship. The pricing
policy adopted by the bank must be rational.
* Customers must receive the benefit of interest reduction
on the principal in case of prepayment of a loan on the
day the bank receives the money from the customer.
* Banks especially those with a high proportion of short-
term deposits in their portfolio must link the base or
benchmark rate to the marginal cost of funds. Marginal
Cost of funds is the incremental costs incurred on raising
additional funds. If they use any other methodology,
the Board of banks must ensure that there is no
differentiation between old and new borrowers.
JS Digest of Banking and Finance
 Credit Card Interest Charges: RBI has asked banks to give
customers more time to pay their credit balance – till the
next bill date even if the customer fails to pay by the due
date. RBI has also asked the banks to make interest charges
more “reasonable”. Credit card interest rates range from
35% to 47% annually and are among the most expensive
loans available.
 REER: RBI will use the Consumer Price Index (CPI) for
computing India’s Real Effective Exchange Rate (REER) vis-
à-vis other countries as opposed to the Wholesale Price
Index (WPI) earlier from this financial year onwards. This
is expected to give a better picture of India’s international
competitiveness with respect to other trading partner
countries. REER reflects the movement of home country’s
currency against a basket of currencies of trading partner
countries.
 RBI’s Reforms for Banks: RBI has suggested the following
reforms to Public Sector Banks (PSBs) to improve their
management:
* Separate Chairman and Managing Director’s posts
* Reduce Government holding in PSBs
* Grant day-to-day autonomy to banks in operations
* Select top management of banks independent of RBI
and Government
* Allow 5 year terms for Chief Executives of banks
* Remunerate employees based on market rates with
accountability
* Withdraw RBI and Government nominees from
Government bank boards
* Permit early lateral movement of staff in PSBs including
SBI – which is more vulnerable as there is only internal
selection of senior management
* Provide incentives over a period of time as opposed to
immediate disbursal
* Ensure that Chartered Accountant director not part of
management
* Enforce better accountability in Human Resource and
loan sanctioning
Apr.- 14 9 10 Banking & Finance
 * Hold senior management responsible for frauds.
 All-in-cost Ceiling: RBI has extended the existing interest
rate that may be paid for External Commercial Borrowings
(ECBs) or the all-in-cost ceiling rates till June 2014. The
current rates are:
* ECBs with maturity of 3-5 years – 6 months’ LIBOR +
350 bps
* ECBS with maturity of over 5 years – 6 months’ LIBOR
+ 500 bps
 Differential Rate Advantage to MSMEs: When banks
offer loans to Micro Small and Medium Enterprises (MSME)
they get credit guarantee covers of Credit Guarantee Fund
Trust for Micro and small enterprises (CGTMSE). RBI has
asked banks to factor this in when they price loans to this
sector but not to reduce the loan rate below the base rate
of the bank.
 G.Gopalakrishna, ED, RBI has taken voluntary retirement
before his term. He has become the director of the Centre
for Advanced Financial Research and Learning.
 RBI to do Forensic Audit of ‘Fraud’ Companies: The
Reserve Bank of India (RBI) has taken upon itself the task
of investigating bank frauds after a series of inquiries by
banks themselves in high-profile cases such as those
involving Deccan Chronicle and Kingfisher Airlines yielded
very little.
The Board for Financial Supervision, chaired by RBI
Governor Raghuram Rajan, has cleared a proposal that the
central bank will conduct an independent forensic audit of
corporates declared fraudulent by banks. Independent
audits, however, will be restricted to corporates that have
borrowed more than Rs.1,000 crore.
The central bank will first try to find out what went wrong
with Deccan Chronicle. What’s interesting is that the
mandate has been given to PwC, which was banned by the
RBI for nearly a decade for possible audit lapses of Global
Trust Bank. The bank was later forcefully merged with
the Oriental Bank of Commerce for alleged
mismanagement.
JS Digest of Banking and Finance
The Deccan Chronicle borrowed Rs.4,000 crore from a
consortium of 18 lenders, who alleged that the company
misused the banking system by borrowing from one set of
lenders without keeping others in the loop. Bank officials
say the central bank’s move reflects poorly on the banks,
and reaffirms the fact that banks and some promoters have
developed cozy relationship, that has led to thousands of
crores of bad loans.
A consortium of lenders, led by Canara Bank, appointed
Ernst & Young to conduct a forensic audit on Deccan
Chronicle yielded very little. “The report itself was
inconclusive and lenders did not act upon it,’’ said a bank
chief who did not want to be named.
The steep rise in bad loans in the past few years has forced
the central bank to come up with strong measures to ensure
that banks do not sweep bad loans under the carpet. The
gross non performing assets – bad loans prior to making
provisions – for the calendar year 2013 stood at Rs.24,3210
crore, up 35% on a y-o-y basis. Besides, the number of
cases referred to the corporate debt restructuring (CDR)
cell has also risen sharply in recent months.
Independent forensic audit is one of the many steps taken
by the RBI to check the rise in stressed assets in the banking
system. (E.T:18-4-2014).
 Vijaya Bhaskar Committee Recommendations: After the
manipulations regarding the fixing of the London Inter
Bank Offer Rate (LIBOR) were revealed, RBI set up a panel
under the chairmanship of P Vijaya Bhaskar to ensure
transparency in fixing of Indian financial benchmarks like
the Mumbai Interbank Offer Rate (MIBOR). Based on its
recommendations RBI has decided the following:
* The Indian money and currency markets should fix
benchmarks based on transactions rather than polls.
* The Fixed Income Money Market and Derivatives
Association of India and the Foreign Exchange Dealers
Association of India must act as administrators to the
Indian currency, interest rate and foreign exchange
benchmarks; an independent body may be formed to
avoid conflicts of interest.
Apr.- 14 11 12 Banking & Finance
 * Personnel with adequate knowledge must set the rates contended by the apex bank and the Board of banks make
submitted by different submitters; internal controls on collective decisions.
the procedure may be formulated by the submitters.  Kingfisher Airlines Brand on Sale: 14 banks, including
* The administrators of the benchmark must disclose the SBI, to whom the Kingfisher Airlines (KFA) brand was
rates with a lag for transparency. pledged have put the Kingfisher Airlines brand on sale in
* Submitters must keep records of past submissions with a bid to recover part of the loans amounting to Rs.6,500
methodologies. crore that was restructured and converted to equity. A
* Periodic audit must be done on the submissions. few years ago, the brand was worth Rs.3,000 crore.
 Touch Banking at ICICI Bank: ICICI Bank has increased
 Uniform Accounting Norms for ARC Firms: RBI has set
its Touch Banking branches to 100 across 33 cities in India.
some uniform accounting standards for Asset
These branches allow customers to withdraw cash, deposit
Reconstruction Companies (ARCs) effective 2014-15 based
money, deposit cheques, open Fixed Deposits (FDs),
on the recommendations of the Key Advisory Group
generate bank statements and transfer funds 24/7.
constituted by the Central Govt. on ARCs:
 IMF On Unexpected Losses: In its Global Financial Stability
* Yields should be recognised only after fully redeeming
Report (GFSR), the International Monetary Fund (IMF) has
the entire principal amount of security receipts and
stated that Indian banks have not provided as much money
instruments issued to investors.
to deal with bad assets as some other countries - Indian
* Management fees may be recognised on an accrual basis.
banks are exposed to foreign currency and exchange rate
* Expenses for diligence before acquiring financial assets
risk. The IMF has projected that India will grow by 6.4%
should be charged immediately by recognising them in
in 2015-16.
the Profit and Loss A/C for the period in which costs
 Fitch on Indian Banks: Rating agency Fitch has stated that
are incurred.
the quality of Indian banks’ assets is likely to worsen with
* ARCs must provide for net depreciation while net
high interest rates and economic slowdown. Non-
appreciation must be ignored.
performing and restructured loans are likely to increase
* Liabilities due within a year must be classified as
from 10% of total loans in mid 2013 to 15% by March 2015.
Current Liabilities.
* Assets maturing within one year must be treated as
Finance, SE:
Current Assets.
* Private Trusts Filing Returns: The Employee Provident
* Where underlying cash flows are dependent on
Fund Organisation (EPFO) has made it mandatory for
realisation from Non Performing Assets Security
private Provident Fund Trusts to file their returns
Receipts may be classified as Available for Sale.
electronically every month to enable better supervision of
* Investments in Security Receipts and long-term deposits
employees.
with banks must be treated as Fixed Assets.
* IRDA Penalty on Reliance Life: Insurance Regulatory and
* Capital and reserves must be treated as liabilities.
Development Authority (IRDA) has penalised Reliance Life
Rs.1.77 crore for violating rules relating to obtaining
Banking/Other Banks:
business from unlicensed entities, investment policies and
 No Split in CMD post: The Finance Ministry has rejected sharing of databases.
RBI’s proposal to split the post of Chairman and Managing
Director (CMD) in Public Sector Banks (PSBs) – it has stated SEBI’s Powers Cleared by President: President Pranab
that the post does not give absolute powers to the CMD as Mukherjee has cleared the ordinance that gives Securities
and Exchange Board of India (SEBI) added powers to

JS Digest of Banking and Finance Apr.- 14 13 14 Banking & Finance

 monitor anti-social elements more effectively – like scan call
records, attach bank accounts and property and arrest people
who do not obey orders. This ordinance was not passed by
Parliament the first time and has been re-promulgated now
till the next Parliament passes it.
IRDA Draft Guidelines for Insurance Marketing Firms: Insurance
marketing firms market insurance policies and other financial
products. The Insurance Regulatory and Development Authority
(IRDA) has issued draft guidelines for insurance marketing firms:
 Licensed Individuals: There will be 2 licensed individuals
who sell these products – insurance salespersons who
will market only insurance products and financial service
executives who will handle other products like mutual
funds and National Pension System and services related
to them.
 Insurance Salesperson: They must be qualified (Class 10
pass) and must pass insurance brokers’ examination.
Insurance agents and salespersons are separate and
cross-over cannot take place unless they have licences.
They will be paid a fixed remuneration with a
performance incentive. They must safeguard customers’
interests.
 Financial Services Executive: Depending on the type of
product being sold, these executives must be qualified;
for instance those selling Mutual Funds must have passed
the Association of Mutual Funds of India (AMFI) test.
 Net Worth: An insurance marketing firm must have at
least Rs.10 lakh in net worth. It must also purchase a
professional indemnity insurance policy worth 4 times
the business turnover of the marketing firm for a licence
valid for 3 years. They may charge commissions
according to the Insurance Act.
 Limit to Liquidity Schemes of SEs: Securities and
Exchange Board of India (SEBI) has limited the period
of liquidity enhancement schemes of Stock Exchanges
(SEs) to 3 years. These schemes were introduced to help
brokers increase liquidity in illiquid securities in the cash
and derivative segments.
JS Digest of Banking and Finance Apr.- 14
Corporates:
* Sun to Acquire Ranbaxy: Sun Pharmaceuticals is to acquire
Ranbaxy Laboratories from Japan’s Daiichi Sankyo for US$ 4
bn. The Ranbaxy brand will cease to exist after this deal goes
through and both companies will have a single management.
Ranbaxy was bought by Daiichi from its promoters in 2008
when the company was valued at US$ 8.4 bn. Since then, its
value has deteriorated because of the US Food and Drug
Administration (FDA)’s import bans on 4 of its factories for
non-conformance of set standards of production. The new
company will be India’s largest drugs manufacturer.
* Future Group to Acquire Nilgiris: Future Group plans to buy
the Nilgiris group for Rs.150-175 crore.
* Sahara Group: The Supreme Court has set bail at Rs.10,000
crore for the jailed Sahara Group Chief Subrata Roy.
* TCS-Mitsubishi JV: Tata Consultancy Services (TCS) and
Japan’s Mitsubishi plan to join together to form a US$ 600 mn
Joint Venture to bring their IT services operations under a
single unit; TCS will own 51% share in the JV with Mitsubishi
owning the rest. This will give TCS a strong foothold in Japan
– the second biggest IT services market.
* Top Global IT Services Co: TCS (with US$ 10.1 bn estimated
IT services revenues in 2013) has been ranked 10 on the list of
the Global IT Services Companies list based on estimated
revenues in 2013; it w as ranked 13th in 2012. The top ranked
company for 2013 is IBM with US$ 54.4 bn IT services revenue.
The list was compiled by US-based independent analyst
authority HfS Research.
LEGAL:
SC on transgenders: India has about 2 million transgender. SC
has made a landmark judgement recognising them as the third
gender. It has also directed the govt. to include them among the
socially and educationally backward classes.
Economy:
Online Retail: According to Internet and Mobile Association of
India (IAMAI), online retail in India was worth US$ 12.6 bn or
Rs.62,967 crore in 2013. It was US$ 9.5 bn or Rs.47,349 crore in
2012.
15 16 Banking & Finance
Exporter of Steel: India was a net exporter of steel in 2013-14 with FII *** (into equity) US$ 4.78 bn
5.59 Million Tonnes (MT) of exports and 5.44 MT of imports. India SENSEX@ 22688
is the world’s fourth largest steel manufacturer. NIFTY@ 6782
ECBs: Indian companies raised US$ 4.3 bn in External Commercial RS/$@ 60.60
Borrowings (ECBs) in February 2014 compared to US$ 1.79 bn in GOLD/10 g@ 28898
January 2014. SILVER/kg @ 42577
 Black Money: The Supreme Court has asked the Finance Forex Reserves# US$ 309.41 bn
Ministry to explain why details of black money hidden Current Account Deficit as a % of GDP^ 0.9
in foreign countries submitted to India by a German Industrial Output^^ -1.9%
bank have not been published. In the meanwhile, India
* March 2014
has offered the US information on accounts of US tax
evaders available with it within its shores to help it (US) ** January 2014
*** January 1 to April 20 2014
fight tax evasion.
 CRISIL’s Growth Forecast: Rating agency CRISIL has @ As on April 25 2014
# As on April 18 2014
stated that if India gets a stable government, growth
rate will average 6.5% over 5 years whereas with a ^ in the Oct-Dec 2013 quarter
^^ February 2014
fractured verdict, growth could remain at 5%.
 Monsoons: The Indian Meteorological Department
(IMD) has predicted 95% of Long Period Average National:
 Polio-free Nation: India has officially been declared a polio-
rainfall or below average rainfall for the June-Sep 2014
free nation by the World Health Organisation (WHO). 11
monsoon. The El Nino effect is expected to adversely
affect the rains in India this year. This will in turn cause countries in the South-east Asia region have been declared
free of the virus.
issues in food inflation and agricultural production. El
 Industrial Performers: According to the latest Annual
Nino, associated with warmer temperatures in the Pacific
Survey of Industries by the Central Statistics Office (CSO),
Ocean is likely to disrupt global rainfall patterns,
including parts of Asia and Australia. Maharashtra tops in industrial performance in terms of net
 Gold Consumption: About 1/3rd of the global demand value added; it is followed by Karnataka and Gujarat.
 PSLV C24 Launch: The Polar Satellite Launch Vehicle
for gold jewellery is India’s (Rs.1.34 lakh cr). It is about
(PSLV) C24 that was carrying regional navigational satellite
2% of India’s GDP. 11 of the top 20 jewellery retailers
are in the South which accounts for about 40% of the IRNSS 1B. This is PSLV’s 25th successful launch.
 Richest Candidate in National Elections: Nandan
sales. India consumed 974.8 tonnes of gold is 2013. It
stood second; the first being China. Nilekani, former Chairman of Unique Identification
Authority of India from Congress has declared assets worth
 Table of Key Statistics:
CRR 4% Rs.7,710 crore; this makes him the richest candidate in these
SLR 23% elections.
 SC on Transgenders: The Supreme Court (SC) has
REPO 8%
REVERSE REPO 7% recognised transgenders as the third gender and asked
MSF 9% the Central and State Governments to include them as part
BANK RATE 9% of Other Backward Classes (OBCs).
 SC on Maternity Leave: A Central Government woman
INFLATION (WPI)* 5.7%
FDI** US$ 2.18 bn employee is entitled to get 2 years’ uninterrupted leave

JS Digest of Banking and Finance Apr.- 14 17 18 Banking & Finance

 for childcare according to the Supreme Court.
 National Icons: The Election Commission (EC) has signed
up actor Aamir Khan, shuttler Saina Nehwal, cricket captain
M S Dhoni, boxer M C Mary Kom and former President A
P J Abdul Kalam to be its national icons. These icons will
encourage people to vote in the general elections.
 CAG Audit of Telecom Companies: The Supreme Court
has allowed the Comptroller and Auditor General (CAG)
to audit the books of private telecom companies; this is to
ensure that the Government gets its share of revenue for
allowing them to use a valuable natural resource - spectrum.
 Rules for Auditors: The Government has issued rules for
auditors effective from April 1 2014. Unlisted public
companies with a paid up share capital of Rs.10 crore or
more, private limited companies with a paid up share capital
of Rs.20 crore or more, and companies with public
borrowings from financial institutions, banks or public
deposits of Rs.50 crore or more have to comply with the
auditor rotation requirement.
 India’s First Double-decker Flyover: Mumbai has opened
India’s first double-decker flyover – the Santacruz
Chembur Link Road measuring 3.5 km and the 1,096 m
Amar Mahal junction flyover.
 Iron-ore Extraction Allowed in Goa: The Supreme Court
has allowed extraction of iron-ore again in Goa; mining
will only be allowed when fresh leases are issued. The ban
on extraction and mining caused by rampant corruption in
issuance of leases had led to unemployment and fall in
exports.
 Audit on Padmanabha Swamy Temple: The Supreme Court
has asked former Comptroller and Auditor General (CAG)
Vinod Rai to audit the property of Sree Padmanabha
Swamy Temple to help protect the “larger interests of the
public and the interest of the temple”.
International:
 IIMA-Harvard-MIT-Berkeley Joint Research: Indian
Institute of Management, Ahmedabad is joining together
with Harvard University, Massachusetts Institute of
Technology (MIT) and University of California, Berkeley
to work on research projects to develop field water quality
JS Digest of Banking and Finance
testing and filtration equipment, ambient pollution
measuring products and mobiles technologies for health
purposes in and around Ahmedabad and Gandhinagar,
Gujarat.
 Saudi Equates Atheists to Terrorists: According to Human
Rights Watch, Saudi Arabia has formulated a set of laws
that equate atheism with terrorism; it has also banned
political dissent and protests that could interfere with law
and order in the nation. This is seen as an attempt to ensure
that the Arab spring revolution that has toppled
Governments in other nations does not enter its borders.
 BofA Settlement: Bank of America (BofA) has agreed to
settle claims that it sold faulty mortgage bonds to Fannie
Mae and Freddie Mac for US$ 9.3 bn.
 IMF’s Aid to Ukraine: International Monetary Fund (IMF)
has offered aid in the form of loans of US$ 14-18 bn to
Ukraine to spur its economy. The European Union (EU) is
expected to offer more aid amounting to US$ 10 bn.
 Forbes’ List of Venture Capitalists: In Forbes’ 2014 list of
100 best venture capital investors, there are 11 Indian
Americans. Aneel Bhusri co-Chief Executive Officer of
Workday, a human capital management and financial
management software vendor, is ranked 17 th . Sequoia
Capital’s Jim Goetz tops the list.
 Social Progress Index: India ranks 102 nd out of 132
countries on the Social Progress Index; this is a measure of
well-being that goes beyond economic measures.
 G20 Central Bankers’ Meet: Central bankers from all over
the world met in Washington in the G20 meet that included
RBI Governor Raghuram Rajan, Federal Reserve’s Chair
Janet Yellen and former Chair Ben Bernanke and European
Central Bank’s President Mario Draghi. The developed
nations committed to communicate their policy decisions
effectively and on time so that the effects of their actions
do not adversely affect developing nations; the Indian
Governor had made such a specific request earlier.
 China’s Bitcoin ATM: BTC China, a leading bitcoin
exchange in China, has installed the country’s first bitcoin
ATM.
 European Bank Job Cuts: Europe’s largest banks cut 3.5%
of their workforce or about 80,000 people in the last year.
Apr.- 14 19 20 Banking & Finance
 Government Requests to block FB Content: Between July
and December 2013, the Indian Government made the
maximum number of requests (4,765) to social networking
site Facebook to block content that violated its local laws.
Turkey (2,014) and Pakistan (162) followed India.
 Chile Earthquake: An earthquake measuring 8.2 on the
Richter scale hit Chile causing a small tsunami; 6 people
died.
 Avalanche in Mt. Everest: An avalanche in Mt. Everest
killed 12 sherpas while they were fixing ropes for the
upcoming climbing season.
 Egyptian Polls: Egypt will go to polls to elect a new
President on May 26-27 2014. In June 2013, the country’s
first democratically elected President Mohamed Morsi was
ousted and the country has been in a state of turmoil.
 Afghanistan Polls: Afghanistan went to polls. The country
has voted to replace outgoing Hamid Karzai who has
already served the maximum two terms. Counting of
results is currently under way.
 Human Rights Resolution: India abstained from voting
on a US-sponsored resolution on human rights in Sri Lanka.
 Nancy Powell Retirement: US’ Ambassador to India Nancy
Powell announced her retirement from her post from May
2014. India and US have had troubled diplomatic relations
since the visa fraud allegations against Indian diplomat
Devyani Khobragade surfaced.
 India-Korea Tensions: The Supreme Court has asked
Samsung Electronics Chairman Lee Kun-hee to personally
appear in a Ghaziabad trial court on charges of cheating,
fraud and criminal conspiracy. The case relates to US$ 1.4
mn payment that was filed in 2002 by an Indian supplier
JCE Consultancy. There has been some tension between
India and South Korea because of this.
 South Korean Ferry Sinks: A South Korean ferry Sewol
carrying 462 passengers sank off the Southern coast. The
captain and 2 members of the crew have been arrested for
negligence. 240 people are still missing – 64 people are
confirmed dead.
 Ukraine Crisis: Pro-Russian separatists have declared an
East Ukraine region as independent and taken control of
10 cities in the East. There are ongoing clashes between
JS Digest of Banking and Finance
Ukrainian authorities, who are carrying out “anti-terrorist”
operations, and pro-Russian protestors. Earlier, Russia was
suspended from the G8 group of countries for annexing
Crimea.
 China’s Growth Rate: China grew by 7.4% in the first
quarter of 2014 as compared to the year-ago period.
 Black Money: India has claimed that Switzerland has not
provided adequate information regarding black money in
Swiss bank accounts under the Double Tax Avoidance
Convention (DTAC). Finance Minister P Chidambaram has
written to his Swiss counterpart regarding the same.
Switzerland has stated that it cannot provide the
information sought by Indian authorities since the source
of information is based on stolen data.
 Wipro Hiring in USA: Wipro plans to recruit 150 frontline
sales staff in the USA over the next 3-5 months.
Technology:
 Facebook Acquisition: Facebook plans to purchase
California-based Oculus VR for US$ 2 bn; it is a company
that works on virtual reality headset for video games.
 Google Fined by CCI: The Competition Commission of
India (CCI) has penalised search giant Google for not
providing documents and information as demanded by the
Director General. The CCI is exploring if Google is unfairly
using its dominant position to promote itself in the
advertising and search business.
 Google Penalised by Italian Regulator: Search giant
Google was penalised 1 mn Euros for not ensuring that
the cars used to record images on Italian roads were easily
recognisable; this pertains to a 2010 case.
 Twitter Acquisition: Social networking site Twitter has
acquired Gnip, a company that provides social data and
was founded in 2008.
 Galaxy S5: Samsung has released its latest version of
Galaxy – S5.
 Microsoft Phone: Microsoft has unveiled Windows Phone
8.1 and Windows 8.1 updates at its developer conference,
Build 2014 in San Francisco.
Apr.- 14 21 22 Banking & Finance
Dates, Anniversaries: that will investigate N Srinivasan’s role, if any, in the
 April 7 – May 12 2014 – Indian Lok Sabha Elections spot-fixing scandal.
 April 8 – Microsoft has stopped technical support to its * T20 World Cup: In the T 20 World Cup finals, Sri Lanka
operating system Windows XP beat India in Bangladesh to become the champions.
 April 22 – Earth Day India has however become the top ranked Twenty20
team replacing Sri Lanka.
Personalities: * ICC World T20 Team: MS Dhoni is the captain of the
 Gabriel Garcia Marquez (87): The Spanish-language author 2014 ICC World Team of the Tournament. Virat
from Columbia passed away. He has won a Nobel Prize Kohli, Rohit Sharma and Ravichandran Ashwin are
for Literature in 1982. His best known novels include Love also part of the team.
in the Time of Cholera and One Hundred Years of Solitude. * IPL-7: It has started in UAE. It will be held in India
 Carl Lewis (52): The American track and field athlete is after May 2 2014.
expected in India in May as the event ambassador of the
 Formula One: British Lewis Hamilton driving the Mercedes
TCS World 10 K Bangalore on May 18 2014; he has won 10
won the Malaysian, Bahrain and Chinese Grand Prix 2014.
Olympic medals including 9 gold medals.
Spain’s Sergio Perez driving Vijay Mallya-co-owned Sahara
Force India finished 3rd in the Bahrain Grand Prix. This is
Sports:
the third time that Force India’s drivers have won points
 Laureus World Sports Awards: Formula One World
for the team.
Champion Sebastian Vettel of Germany and Olympic medal
 Golf: America’s Bubba Watson won the Masters Title 2014
winning swimmer Missy Franklin of USA won the World
– his second in 3 years.
Sportsman and Sportswoman of the Year awards
 S.C. on IPL spot fixing: SC has asked the J Mudgal
respectively at Laureus World Sports Awards in Kuala
Committee whether it would continue the probe against
Lumpur, Malaysia.
IPL spot fixing and betting scandal.
 Chess: India’s Viswanathan Anand won the 2014
Candidates Tournament held in Russia. Consequently, he
Awards/Recognitions:
will play against World No. 1 Magnus Carlsen of Norway
 Miss India: Koyal Rana from Delhi won the fbb Femina
in a rematch later this year. The last time they played in
Miss India 2014 title; the runners-ups were Jhataleka
Chennai, Anand was beaten by Carlsen. As a result of this
Malhotra from Mumbai and Gail Da Silva from Goa.
victory, Anand is now World No. 3, up from No. 8 earlier.
 Business Standard Annual Awards 2013: The Business
 Cricket:
* BCCI President: N Srinivasan has given up his position Standard Annual Awards 2013 were given to the following:
as President of the Board of Control for Cricket  CEO of the Year: N Chandrasekaran, Chief Executive
(BCCI) while investigations are going on regarding Officer (CEO) and Managing Director (MD) Tata
match fixing allegations in Indian Premier League Consultancy Services (TCS)
(IPL) – 6; this is after the Supreme Court (SC) had  Company of the Year: Dilip S Shanghvi, MD, Sun
suggested that his role as President would be an Pharmaceutical
impediment in the investigations. BCCI has since  Most Innovative Company of the Year: Phanindra Sama,
appointed 2 interim Presidents - Sunil Gavaskar to Chief Executive Officer, redBus.in
ensure fair play in this year’s IPL, and BCCI vice-  PSU of the Year: S Varadarajan, Chairman and MD,
president Shivlal Yadav for all the other affairs. The Bharat Petroleum Corporation
Supreme Court has asked the BCCI to set up a panel

JS Digest of Banking and Finance Apr.- 14 23 24 Banking & Finance

  Star MNC: Sanjiv Mehta, CEO and MD, Hindustan
Unilever
 Banker of the Year: Aditya Puri, MD and CEO, HDFC
Bank
 Star SME: Sandeep Engineer, MD, Astral Poly
Technik
 Fund Managers (Debt): Umesh Sharma and Sachin
Padwal-Desai, Franklin Templeton AMC
 Fund Managers (Equity): S Naren and Mittul
Kalawadia, ICICI Prudential AMC
 KBE Award to Ratan Tata: Tata Group’s retired Chairman
Ratan Tata was conferred the rank of Knight Commander
of the Most Excellent Order of the British Empire (KBE)
by the Queen of Britain, Queen Elizabeth – II.
 HDFC Bank’s Blood donation drive: Has entered the
Guinness Book of World Records as the largest blood-
donation drive on a single day in multiple locations.
 National Film Awards: The 61st National Film Awards for
2013 were awarded to the following:
* Best Popular Film: Bhaag Milkha Bhaag
* Best Feature Film: Ship of Theseus
* Best Director: Hansal Mehta, Shahid
* Best Actor: Raj Kumar, Shahid and Suraj
Venjaramoodu, Perarivathavar
* Best Actress: Geethanjali Thapa, Liar’s Dice
 Pulitzer Prize: Washington Post and The Guardian US
shared the Pulitzer for public service for writing about
Snowden.
Miscellaneous:
 Books:
* The Accidental Prime Minister – The Making and
Unmaking of Manmohan Singh by Sanjaya Baru
(former Media Adviser of the PM).
* Crusader or Conspirator? Coalgate and Other
Truths – by former Coal Secretary, P C Parakh.
 HDFC Chairman: He has stated that he found that his name
is not in the voter’s list at the polling booth where he has
been voting for 20 years.
Appointments:
 New Revenue Secretary: Rajiv Takru the Financial Services
Secretary is to take over as Revenue Secretary.
 CII President: Chairman and Senior Managing Director of
DCM Shriram Ltd., Ajay Shriram will be the new President
of Confederation of Indian Industries (CII).
 Navy Chief: Admiral Rabinder Kumar Dhowan has been
appointed the new Indian Navy Chief.
 Principal Economic Advisor: Ila Patnaik has been
appointed principal economic advisor to the Finance
Ministry replacing Dipak Dasgupta.

 Dadasaheb Phalke Award: Poet, director, and lyricist

Gulzar was chosen to be the 45th winner of the Dadasaheb
Phalke Award for 2013. The award is conferred for
outstanding contribution to the growth and development
of Indian cinema.
 Pulitzer Prize: India-born American poet Vijay Seshadri
won 2014 Pulitzer Prize in the poetry category for his
collection 3 Sections.
 Ridenhour Prize: Former US NSA contractor Edward
Snowden and Laura Poitras the filmmaker who enabled
him to broadcast documents on the US Government’s
surveillance programme were awarded the Ridenhour
Prize for truth-telling. The prize is named after American
Ronald Ridenhour who served in the Vietnam War.

JS Digest of Banking and Finance Apr.- 14 25 26 Banking & Finance

 RECENT BANKING DEVELOPMENT:
P B BUSINESS
DROP BOX: ACKNOWLEDGEMENT FOR INSTRUMENT
DEPOSITED AT THE COUNTER:
The customers should not be compelled to drop the cheques in the
drop-box. In this regard the branches have to invariably display
on the cheque drop-box itself that “Customers can also tender the
cheques at the counter and obtain acknowledgment on the pay-in-
slips”. The above message is required to be displayed in English,
Hindi and the concerned regional language of the State.
SAVINGS BANK. CUSTOMERS INELIGIBLE FOR OPENING
SAVINGS BANK ACCOUNT:
Reserve Bank of India has prohibited opening of Savings Bank
account in the name of Government Departments/Bodies
depending upon Budgetary Allocations for performance of their
functions/Municipal Corporations or Municipal Committees/
Panchayat Samitis/State Housing Boards/Water and Sewerage/
Drainage Boards/State Text Book Publishing Corporations/
Societies/Metropolitan Development Authority / State/ District
Level Housing Co-operative Societies, etc. or any political party
or any trading/business or professional concern, whether such
concern is a Proprietary or a Partnership Firm or a Company or an
Association.
However, the prohibition will not apply to the following
institutions.
a) Primary Co-operative Credit Society which is being
financed by the bank.
b) Khadi and Village Industries Boards.
c) Agriculture Produce Market Committees.
d) Societies registered under the Societies Registration Act,
1860 or any other corresponding law in force in a State
or a Union Territory except societies registered under the
State Co-operative Societies Acts and specific state
enactment creating Land Mortgage Banks.
e) Companies governed by the Companies Act, 1956 which
have been licensed by the Central Government under
Section 25 of the said Act, or under the corresponding
provision in the Indian Companies Act, 1913 and permitted,
JS Digest of Banking and Finance
not to add to their names the words ‘Limited’ or the words
‘Private Limited’.
f) Institutions other than those mentioned in clause 2.26(n)(i)
and whose entire income is exempt from payment of
Income-tax under the Income-Tax Act, 1961.
g) Government departments / bodies / agencies in respect
of grants/ subsidies released for implementation of various
programmes / Schemes sponsored by Central Government
/ State Governments subject to production of an
authorization from the respective Central / State
Government departments to open savings bank account.
h) Development of Women and Children in Rural Areas
(DWCRA).
i) Self-help Groups (SHGs), registered or unregistered, which
are engaged in promoting savings habits among their
members.
j) Farmers’ Clubs – Vikas Volunteer Vahini – VVV.
EDUCATION LOANS: RELIEF ON INTEREST OUTSTANDING
COMPONENT AS ON 31.12.2013 FOR ALL EDUCATIONAL
LOANS SANCTIONED/ AVAILED UPTO 31.03.2009 &
OUTSTANDING AS ON 31.12.2013. SUBMISSION OF CLAIMS.
A consolidated claim will be uploaded by Corporate Centre in
Canara Bank’s portal. Circles to submit the claims to the Corporate
Centre not later than 15.6.2014.
LAUNCH OF SAVINGS BANK ACCOUNT OPENING USING–
TABLET (TAB):
It has been decided to launch Savings Bank Account opening
facility through TAB (online mode) to facilitate sourcing and
opening of SB accounts. TAB based account opening facility has
been made available by IT Dept, GITC to enable our officials to
open Savings Bank accounts at the premises of the customers
without the need for the customer to visit the branch. The launch
of this tech driven and customer friendly facility will significantly
help in reducing customer footfall at the branches for the purpose
of Savings Bank account opening. Features of the product: This
facility has been developed on the lines of Online SB account
opening facility. However, in account opening facility using TAB,
the customers need not visit the branch with the KYC documents.
An authorised Bank officer will be visiting the customer at his/
her convenient place (residence or office) and obtain the customer
Apr.- 14 27 28 Recent Banking Developments
details, photograph and copy of KYC documents (refer process LTV Ratio (Stipulated by RBI):
flow) in a TAB. The photograph and scanned image of KYC
Loan Am ount LTV Ra tio
documents will be uploaded using the TAB.
The proposed process will be an ‘online’ process and can be used Up to Rs.20 la cs 90%
at all those locations where 3 G connectivity is available. The Bank’s
visiting officer will require to use his PF Index number and HRMS Above Rs. 20 la cs and upto R s.75 lacs 80%
password for accessing the TAB application. Circle INB admin will
enable the user’s PF ID for accessing the TAB application based on Above Rs. 75 la cs 75%
the request of the branch through the RBO. Arrangements for the
supply of Tablet devices (hardware) and provision of connectivity 3. The following changes have been made for arriving at the
thereof are being made. maximum permissible Home Loan amount, as under:
REAL ESTATE, HABITAT & HOUSING DEVELOPMENT: i. The LTV Ratio (as mentioned in Table-II) will be
HOME LOANS. LOAN TO VALUE: MAXIMUM PERMISSIBLE reckoned for calculation of both the margin as well as
BANK FINANCE. the loan amount. The loan amount will be arrived at
taking into account the stipulated LTV ratio. For this
1. The maximum permissible Home Loan amount is now
purpose, lower of the market value of the property or
assessed on the basis of the lowest value arrived at from
agreement to sale value will be considered. The
eligibility criteria mentioned hereunder:
remaining amount of market value of the property or
i. Project cost which includes cost of land, house/flat, agreement to sale value of the property i.e., 10% or
cost of additional amenities related with said 20% or 25% (based on the loan value) will be
house/flat, registration charges, stamp duty, cost considered as the applicant’s margin. The norms
of Solar Photo Voltaic Home Lighting system, relating to separate calculation of Home Loan margins
property insurance, service tax and other statutory (as mentioned in Table-I) will henceforth be
dues, if any, less applicable margin; withdrawn.
ii. Permissible EMI/NMI Ratio; ii. The maximum permissible Home Loan amount will be
iii. Maximum permissible LTV Ratio (stipulated by the assessed on the basis of the lowest value arrived at
RBI) based on the valuation report by the from undernoted eligibility criteria:
empanelled valuer; • Maximum permissible LTV Ratio based on lower
of the two values:
iv. Loan amount applied for.
a. Value mentioned in agreement to sale, and
2. The current Margin and LTV Ratio stipulated for sanction b. Current Market value as per the latest
of Home Loans are as under: valuation report.
Loan A mount Property under R eady pos session • Permissible EMI/NMI Ratio,
cons truction Property • Loan amount applied for.
In case of construction of individual house, where the plot is
U pto Rs .75 Lacs 2 0% 15 % already owned by the borrower, the LTV will be calculated on
the estimated cost of construction, duly vetted by the empanelled
Above Rs.75 Lac 2 5% 15 % valuer, plus the current market value of the plot(as per the latest
valuation report). However, the maximum loan amount will be
restricted the estimated cost of construction.

JS Digest of Banking and Finance Apr.- 14 29 30 Recent Banking Developments

 iii. The one-time cost of additional amenities and other costs the ‘agreement to sale’ or ‘market value’ based on latest
related to the said property, which are permanent in nature valuation report.
and add-up to the realizable value of the security/property,
viz. Township Corpus Fund, One time maintenance fund / SME BUSINESS:
deposit / corpus, Development Charges, Electrical fittings,
one time Generator Charges, Club House Membership CREDIT GUARANTEE FUND TRUST FOR MICRO AND
charges, Electricity/Water/Sewerage Board one time SMALL ENTERPRISES (CGTMSE). PAYMENT OF
charges/deposits, VAT & Service Tax, etc. will be permitted GUARANTEE FEE (GF) THROUGH RTGS/NEFT.
to be included in the cost/agreement to sale value for MODIFICATION IN EXISTING PROCEDURE:
arriving at the Home Loan eligibility through LTV method.
The payment of Guarantee Fee (GF) based on the demands raised
iv. Stamp duty, Registration Charges and other documentation
by CGTMSE upon approval of Guarantee is made by the Bank by
charges will not be permitted to be included in the value
means of Demand drafts. In the light of the problems associated
of the property/agreement to sale for arriving at the loan
with dealing in physical instrument and with a view to further
eligibility as these charges are not realizable. The RBI has
improve the guarantee issue process, CGTMSE has now decided
also advised the Banks to exclude these charges while
that all the payments towards guarantee fee would now be made
calculating the cost of the property.
by respective Nodal/Operating offices of the Bank by means of
v. Under SBI Realty Scheme (loans for purchase of plots),
RTGS/NEFT only.
where stipulated margins are higher than the Home Loans,
2. While remitting the GF through RTGS, Nodal/Operating offices
the LTV Ratio will be aligned with the current margin norms
must indicate Receipt / Payment (RP) No. as generated by the
as per the directives received from CPPC. The current
CGTMSE system, once the allocation is made by the Nodal/
margin and the proposed LTV ratio for calculation of the
Operating Offices against the respective demands made by
loan amount/margin will be as under for loans under SBI.
CGTMSE for payment of GF,in the remark column of RTGS
transmission message.The RP No., being a unique no., would
Realty Scheme:
enable CGTMSE to appropriate the receipts against the respective
Loan amount Existing Margin Proposed LTV guarantee fees as per the allocation done by Nodal/Operating
Norms Ratio offices. With a view to avoid human error, RP No., as generated
by the CGTMSE system, may be copied and pasted in the remark
<=Rs.75 Lac 20% 80%
column of RTGS message. Further, the UTR No. generated after
>Rs.75 Lac and <= 25% 75% remitting the proceeds through RTGS, must be mentioned by the
Rs.1.00 Crore Nodal/Operating offices at the appropriate place in CGTMSE portal
>Rs.1.00 Crore 25% for the loan 75% for loan in place of instrument number.
amount up to Rs. amount up to It may be noted that the guarantees in respect of those RTGS
1.00 Crore, plus Rs.1.00 Crore, plus payments would not be issued by CGTMSE where RP No. and
UTR No. are either not mentioned or incorrectly mentioned at the
50% for loan 50% for loan
respective places indicated above and the proceeds so received by
amount in excess amount in excess
CGTMSE, would be remitted back to the originating Nodal/
of Rs.1.00 Cr. of Rs.1. 00 Cr. Operating offices.Hence, it may be ensured that the bank account
used for remitting the GF through RTGS/NEFT should necessarily
vi. Under SBI Realty Scheme also the loan eligibility will be be enabled for inward remittance also, to enable CGTMSE to refund
arrived at on the basis of lower of the value mentioned in the proceeds to the same bank account in the light of the
circumstances explained above.
JS Digest of Banking and Finance Apr.- 14 31 32 Recent Banking Developments
The revised procedure of payment of GF shall come into effect
from 21.04.2014 onwards. Any payment made by Nodal offices/
Operating offices in the form of demand drafts in respect of GF
payment allocated on or after 21.04.2014 would not be accepted
by CGTMSE and shall be returned by them in case received.
However, the existing procedure with regard to payment of Annual
fees i.e. Annual Service Fee and Annual Guarantee Fee remain
unchanged.
FOREIGN EXCHANGE:
FCNR (B) DEPOSITS:
Hitherto maintained in 10 currencies W.e.f 1.4.2014, FCNR (B)
deposits in four currencies have been discontinued - (CHF, DKK,
NZD, SEK).
INWARD REMITTANCE UNDER MONEY TRANSFER
SERVICE SCHEME (MTSS) DIRECT TO ACCOUNT FACILITY:
The Reserve Bank of India, has advised that funds received under
MTSS should not be credited to Non Resident External (NRE)
accounts as at present and in addition, it should not be credited to
Non Resident Ordinary (NRO) accounts also.
RISK MANAGEMENT AND INTER BANK DEALINGS:
Under extant guidelines relating to hedging of currency risk of
probable exposures based on past performance by residents,
a) Exporters are allowed to hedge currency risk on the
basis of a declaration of an exposure up to an eligible
limit computed as the average of the previous three
financial years’ (April to March) actual export turnover
or the previous year’s actual export turnover, whichever
is higher.
b) Importers are allowed to hedge up to an eligible limit
computed as 25 percent of the average of the previous
three financial years’ actual import turnover or the
previous year’s actual import turnover, whichever is
higher.
c) All forward contracts booked under this facility by both
exporters and importers are required to be on fully
deliverable basis. In case of cancellation, exchange gain,
if any, should not be passed on to the customer.
JS Digest of Banking and Finance
Henceforth, contracts booked up to 75 percent of the eligible limit
mentioned at paragraph (a) and (b) above may be cancelled with
the exporter/importer bearing/being entitled to the loss or gain
as the case may be. Contracts booked in excess of 75 percent of the
eligible limit mentioned at paragraph (a) and (b) above shall be on
a deliverable basis and cannot be cancelled, implying that in the
event of cancellation, the exporter/importer shall have to bear the
loss but will not be entitled to receive the gain.
FOREIGN PORTFOLIO INVESTOR - INVESTMENT UNDER
PORTFOLIO INVESTMENT SCHEME, GOVERNMENT AND
CORPORATE DEBT:
The extant guidelines for Portfolio Investment Scheme for Foreign
Institutional Investor (FII) and Qualified Foreign Investor (QFI)
have since been reviewed and it has been decided by RBI to put in
place a framework for investments under a new scheme called
‘Foreign Portfolio Investment’ scheme.
The salient features of the new scheme are:
 The portfolio investor registered in accordance with SEBI
guidelines shall be called ‘Registered Foreign Portfolio
Investor (RFPI)’. The existing portfolio investor class,
namely, Foreign Institutional Investor (FII) and Qualified
Foreign Investor (QFI) registered with SEBI shall be
subsumed under RFPI;
 RFPI may purchase and sell shares and convertible
debentures of Indian company through registered broker
on recognised stock exchanges in India as well as purchases
shares and convertible debentures which are offered to
public in terms of relevant SEBI guidelines/ regulations.
 RFPI may sell shares or convertible debentures so acquired
* In open offer in accordance with the SEBI
(Substantial Acquisition of Shares and Takeovers)
Regulations, 2011; or
* In an open offer in accordance with the SEBI
(Delisting of Equity shares) Regulations, 2009; or
* Through buyback of shares by a listed Indian
company in accordance with the SEBI (Buy-back of
securities) Regulations, 1998.
 RFPI may also acquire shares or convertible debentures in
any bid for, or acquisition of, securities in response to an
offer for disinvestment of shares made by the Central
Apr.- 14 33 34 Recent Banking Developments
 Government or any State Government; or in any transaction
in securities pursuant to an agreement entered into with
merchant banker in the process of market making or
subscribing to unsubscribed portion of the issue in
accordance with Chapter XB of the Securities and Exchange
Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009.
 The individual and aggregate investment limits for the
RFPIs shall be below 10% (per cent) or 24% (per cent)
respectively of the total paid-up equity capital or 10% (per
cent) or 24% (per cent) respectively of the paid-up value of
each series of convertible debentures issued by an Indian
company. Further, where there is composite sectoral cap
under FDI policy, these limits for RFPI investment shall
also be within such overall FDI sectoral caps;
 RFPI shall be eligible to open a Special Non-Resident Rupee
(SNRR) account and a foreign currency account with
Authorised Dealer bank and to transfer sums from foreign
currency account to SNRR account at the prevailing market
rate for making genuine investments in securities. The
Authorised Dealer bank may transfer repatriable proceeds
(after payment of applicable taxes) from SNRR account to
foreign currency account;
 RFPI shall be eligible to invest in government securities
and corporate debt subject to limits specified by the RBI
and SEBI from time to time.
 Any foreign institutional investor who holds a valid
certificate of registration from SEBI shall be deemed to be
a registered foreign portfolio investor (RFPI) till the expiry
of the block of three years for which fees have been paid
as per the Securities and Exchange Board of India (Foreign
Institutional Investors) Regulations, 1995. A QFI may
continue to buy, sell or otherwise deal in securities subject
to the SEBI (FPI) Regulations, 2014 for a period of one year
from the date of commencement of these regulations, or
until he obtains a certificate of registration as foreign
portfolio investor, whichever is earlier.
RISK MANAGEMENT & INTER-BANK DEALINGS:
BOOKING OF FORWARD CONTRACTS – LIBERALISATION:
With a view to further liberalising the existing facilities, RBI has
JS Digest of Banking and Finance
decided to allow all resident individuals, firms and companies,
who have actual or anticipated foreign exchange exposures to book
foreign exchange forward contracts up to US$ 250,000 on the basis
of a simple declaration without any requirement of further
documentation. The existing facilities in terms of the
aforementioned circular for Small and Medium Enterprises (SMEs)
having direct and/ or indirect exposures to foreign exchange risk
permitting them to book/ cancel/ roll over forward contracts
without production of underlying documents to manage their
exposures effectively subject to conditions specified therein shall
remain unchanged.
RUPEE DRAWING ARRANGEMENT – ‘DIRECT TO
ACCOUNT’ FACILITY:
In order to facilitate receipt of foreign inward remittances directly
into bank accounts of the beneficiaries, it has been decided by RBI
to allow foreign inward remittances received under Rupee Drawing
Arrangement (RDA) to be transferred to the KYC compliant
beneficiary bank accounts through electronic mode, such as, NEFT,
IMPS, etc. The procedure to be followed for the purpose will be as
under: Foreign inward remittances received by the AD Cat-I Bank
(termed as ‘Partner Bank’) having RDA with Non Resident
Exchange Houses may be credited directly to the account of the
beneficiary held with a bank other than the AD Cat-I Bank (termed
as ‘Recipient Bank’) electronically, subject to the following
conditions:
(i) The Recipient Bank will credit the amount transferred
by the Partner Bank only to the KYC compliant bank
accounts.
(ii) In respect of the bank accounts which are not KYC
compliant, the Recipient Bank shall carry out KYC/CDD
of the recipient before the remittance to such account is
credited or allowed to be withdrawn.
(iii) The Partner Bank (i.e. the AD Cat-I Bank receiving
foreign inward remittance through non-resident
exchange houses under RDA) shall appropriately mark
the direct-to-account remittances to indicate to the
Recipient Bank that it is a foreign inward remittance.
(iv) The Partner Bank shall ensure that accurate originator
information and necessary beneficiary information is
included in the electronic message while transferring
Apr.- 14 35 36 Recent Banking Developments
 the fund to the Recipient Bank. This information should
be available in the remittance message throughout the
payment chain, i.e., the Non Resident Exchange House,
the Partner Bank and the Recipient Bank. The Partner
Bank should add an appropriate alert in the electronic
message indicating that this is a foreign inward
remittance and should not be credited to a KYC non-
compliant account.
(v) The identification and other documents of the recipient
shall be maintained by the Recipient Bank as per the
provisions of Prevention of Money Laundering
(Maintenance of Records) Rules, 2005. All other
requirements under KYC/AML/CFT guidelines issued
by the Reserve Bank of India from time to time shall be
adhered to by the Partner Bank.
(vi) The Recipient Bank may seek additional information
from the Partner Bank and shall report suspicious
transactions to the FIU-IND with details of the Partner
Bank through which they received the remittances.
MERCHANTING TRADE TRANSACTIONS - REVISED
GUIDELINES:
RBI has issued revised guidelines. Gist:
i) For a trade to be classified as merchanting trade following
conditions should be satisfied;
a. Goods acquired should not enter the Domestic Tariff
Area and
b. The state of the goods should not undergo any
transformation;
Both the legs of a merchanting trade transaction are routed through
the same AD bank. The bank should verify the documents like
invoice, packing list, transport documents and insurance
documents (if originals are not available, Non-negotiable copies
duly authenticated by the bank handling documents may be taken)
and satisfy itself about the genuineness of the trade;
The entire merchanting trade transactions should be completed
within an overall period of nine months and there should not be
any outlay of foreign exchange beyond four months; Merchanting
traders may be allowed to make advance payment for the import
leg on demand made by the overseas seller. In case where inward
remittance from the overseas buyer is not received before the
JS Digest of Banking and Finance
outward remittance to the overseas supplier, AD bank may handle
such transactions by providing facility based on commercial
judgement. It may, however, be ensured that any such advance
payment for the import leg beyond USD 200,000/- per transaction,
the same should be paid against bank guarantee / LC from an
international bank of repute except in cases and to the extent where
payment for export leg has been received in advance;
Letter of credit to the supplier is permitted against confirmed export
order keeping in view the outlay and completion of the transaction
within nine months;
Payment for import leg may also be allowed to be made out of the
balances in Exchange Earners Foreign Currency Account (EEFC)
of the merchant trader;
AD bank should ensure one-to-one matching in case of each
merchanting trade transaction and report defaults in any leg by
the traders to the concerned Regional Office of RBI, on half yearly
basis in the format as annexed, within 15 days from the close of
each half year, i.e. June and December;
The merchanting traders have to be genuine traders of goods and
not mere financial intermediaries. Confirmed orders have to be
received by them from the overseas buyers. AD banks should
satisfy themselves about the capabilities of the merchanting trader
to perform the obligations under the order. The overall
merchanting trade should result in reasonable profits to the
merchanting trader.
TECHNOLOGY:
RETAIL INTERNET BANKING (RINB); INTERNET BANKING
REQUEST APPROVAL THROUGH ATM (IRATA):
Some of the activities for which an RINB user is required to visit
the home branch are;
i. Immediate activation of third party and availing full
third party transfer limit of Rs.5 lacs instantly (Instead
of a cooling period of 5 days from the normal limit
Rs.50,000/-)
ii. Resetting of login password in the event when the
customer has forgotten the profile password.
iii. Unlock User Access
Users find it difficult to visit home branch for performing above
tasks, specifically when the customer is away or settled at a place
Apr.- 14 37 38 Recent Banking Developments
far off from his home branch. In order to obviate inconvenience to Reserve Bank of India has advised that the maximum limit for
the customer and to popularize the usage of internet banking investment in Inflation Indexed National Savings Securities-
channel, an alternate process ‘Internet Banking Requests Approval Cumulative has been increased to Rs. 10 lakh per annum for eligible
through ATM (IRATA)’ to approve the requests (i) to (iii) through individual investors and Rs. 25 lakhs per annum for Institutions
ATM has been deployed. In the first stage the process has been such as HUFs, Charitable Trusts, Education Endowments and
implemented for approval of request No.(i). The requests No.(ii) similar institutions which are not pro-profit in nature. The
to (iii) will be implemented subsequently. subscription will close on March, 31 2014.
SMART MONEY BACK GOLD:
GOVT. BUSINESS:
“SMART MONEY BACK GOLD” is an Individual, Non-Linked
TDS DEDUCTION AND REMITTANCE TO THE
with Profit endowment assurance product. The policy provides
GOVERNMENT:
for Survival benefits of 110% of the Sum Assured paid till maturity,
As the monthly auto sweep is being carried out on the last date
under 4 options.
stipulated for the tax deposit to Govt. A/c, the branches, which
fail in auto sweep, have to bear one month interest on account of Prime benefit to 1. The policy provides payment of fixed
delayed deposit of tax. Therefore, it has been decided to advance policy holders percentage of basic sum assured at specific
the date of aforesaid auto sweep to 28th April 2014 instead of 30th intervals during the term of policy.
April 2014 (for TDS deducted from 28th March 2014 to 31st March 2. The death benefit, however, comprises
2014), to enable the branches/offices concerned to transfer the
the full sum assured without deducting any
amount manually before the stipulated date, i.e. 30th April 2014,
of the survival benefit instalments, along
in case of failure of the auto sweep for any reason.
Similarly, the date of monthly auto sweep shall be advanced to with Vested Simple Reversionary Bonus
6th of every month, (instead of 7th) so that the branches/offices, and terminal bonus, if any, un der the
where the auto sweep fails, shall be in a position to remit the amount policy.
manually on 7th of every month. 3. Options to choose from four riders
namely-Preferred Term, Accidental Death
HUMAN RESOURCES: Benefit, Accidental Total & Permanent
LEAVE TRAVEL CONCESSION / HOME TRAVEL
Disability Benefit and Criti Care 13 Non-
CONCESSION (LTC/HTC). VISITING FOREIGN
DESTINATIONS ENROUTE: linked Rider.
It has been decided that the officers / employees shall not be Age Age at Entry: Age at Maturity:
entitled to visit overseas countries / centres as part of LTC/HTC. Options 1 & 2 15 years Min:27 &
The revised instructions will come into force with immediate effect. Max 70 years
Options 3 & 4 14 years DO
GENERAL:
Policy term 12 / 15 / 20 / 25 years under Options 1 /2 /3
RATE OF INTEREST ON 5 YEAR SENIOR CITIZEN SAVINGS
SCHEME – (2004): /4 respectively subject to condition that
W.e.f. 1.4.2014: 9.20% pa. Rate of interest on PPF – (1968): 8.70% maturity age should be minimum 27 years
(w.e.f. 1.4.2014). and policy term is equal to the premium
INFLATION INDEXED NATIONAL SAVINGS SECURITIES- paymen t term
CUMULATIVE, 2013: Premium amount Minimum: Rs.4500/- per annum
& Maximum: No Limit.
JS Digest of Banking and Finance Apr.- 14 39 Mode
40 ofBanking
Recent payment Yearly/Half-yearly/Quarterly/Monthly.
Developments
Sum Assured Minimum: 75,000 (in multiples of
Rs.1000/-)
 Premium amount Minimum: Rs.4500/- per an num such as Furniture Stores, Departmental Stores, Optical Stores,
& Maximum: No Limit. Medicine Shop etc. and all other business activities which were
not included earlier for the purpose of extended pre-approved
Mode of payment Yearly/Half-yearly/Quarterly/Monthly. MDRs (excluding Petrol Pumps) subject to fulfillment of eligibility
Sum Assured Minimum: 75,000 (in multiples of norms. This enlargement of scope of the circular is aimed at
Rs. 1000/-) providing additional enabler for the marketing staff for sourcing
Maximum: No Limit more and more new terminals as well as targeting improved
Death benefit In the event of death of life assured, if the activity rate and increased CASA balances from the existing
policy is in force:- merchants wherein our POS is installed.
Higher of A or B is paid to the nominee FOREIGN INVESTMENT IN INDIA IN GOVERNMENT
A. Sum Assured on death + Vested Simple SECURITIES:
On a review, to encourage longer term flows, it has now been
Reversionary Bonus + Terminal Bonus, if
decided by RBI that foreign investment by all eligible investors
any. [Sum Assured on death = Higher of including RFPIs shall henceforth be permitted only in Government
Basic Sum Assured or a multiple of dated securities having residual maturity of one year and above
annualized premium where multiple is 10 and existing investments in T-bills and Government dated
or 7 for age at entry below 45 or above 45 securities of less than one year residual maturity shall be allowed
years] to taper off on maturity/ sale.
B. Minimum Death Benefit which is equal
to 105% of all th e premiums paid. Instrument/s Limit Eligible Investors Remarks
Maturity Benefit On maturity, Final Survival Benefit Government USD RFPIs (including Existing in vestment
installment + Vested Simple dated 30 existing FIIs and in Tbills and
ReversionaryBonus + Terminal Bonuses, if securities - billion QFIs) and Long Gov ernment dated
any will be paid. Securities term investors securities of less
Tax Ben efits Tax benefits will be available u/s 80C: on having registered with than one year
under the policy. premium paid amount AND u/s 10 (10D) : residual SEBI – SWFs, residual maturity
for the Maturity/Death/Surrender maturity of Multilateral sh all be allowed to
proceeds received. on e year and Agencies, taper off on
above. Pen sion/ maturity/sale.
MERCHANT ACQUIRING BUSINESS (MAB).ENLARGEMENT
OF SCOPE OF PRE-APPROVED MDR FOR SME POWER In surance/ No fresh
ACCOUNTS: Endowment investment in T-
Pre-Approved MDR for select merchant business activities was Funds and bills and
provided subject to fulfillment of certain conditions like:- foreign Central Gov ernment dated
 Merchants need to maintain a daily average balance of Banks securities of less
Rs.1,00,000/- in the current account than one year
 Merchants need to provide a monthly volume of at least
residual maturity
Rs.1,50,000/- on the POS
It has been decided to enhance the scope to other business activities allow ed.

JS Digest of Banking and Finance Apr.- 14 41 42 Recent Banking Developments

SBI LIFE: RETIRE SMART (NEW POLICY): SBI LIFE: SARAL PENSION:
Natu re of Policy “RET IRE SM ART ” is an Ind ivid ual, Nature of SARAL PENSION is an Individual, Non -unit
and the flexibilities Non-particip atin g, Unit L inked Pu re Policy & Life Linked, Participating and Traditional Pen sion
Pen sion P rod uc t. Risk Coverage Plan.
Prim e ben ef it to 1. T he policy provid es a gu arantee, which
polic y hold ers is equ al to1 01% O R 105% of t otal Prime ben efits 1. The Plan provides Guaranteed simple
prem iu m s pa id on m aturity/vest ing O R to customers revisionary bonuses for first 5 years, at 2.50%
on earlier death res pect ively. for first 3 years and 2.75% for the n ext two
2. T erm inal Ad d ition would be @ 1.50% of years, of the Sum Assured amount.
the Fund Value at M atu rity / vesting of
2. Th e policy has the option for additional live
the policy or on earlier d eath.
cover through “SBI Life-Preferred Term Rider
3. Gu aranteed Ad dition @ 10% of A nnual
(UIN: 111BO14V02)”
Prem iu m starting from the end of 15th
Policy year till m atu rity/ vesting. 3. The policy has the option to buy an
Age A ge at E n try: immediate annuity or commute on e th ird of
Age a t Matu rity/Vestin g: the policy proceeds and buy annuity with the
Minim um : 30 yea rs rest.
40 years 4. The policy has the option to defer the
Max im u m : 70 years vesting date up to the age of 70 years or
80 years extend the accumulation / deferment period
Polic y t erm 10 years, 15 to 35 years (both inclusive) of th e policy.
Prem ium am ount & Min im um : Rs.24,0 00/- (Regu lar)
Age
Mod e of paym ent Rs.40, 000/- (L PP T) M axim um : N o Lim it.
Yearly/ Half-yearly/ Q uarterly/ M ont hly. Age Minimum Maximum
Death benefit In the event of d eath of life as sured :- At Entry On Base
High er of Fund V alue Plus Term inal Product
Ad dition or 105% of the p rem ium s paid
Regular 18 years 60 years
till t he dat e of d eath.
Single 18 years 65 years
Ma turit y B enefit On m aturity the policy hold er would be
paid Higher of t he Fu nd Va lu e inc lu sive Premium
of Gu aranteed A d ditions P lu s Term inal At Vesting 40 years 70 years
Ad dition OR 101% of the p rem ium s paid Policy term
shall be pa id in a lu mp sum or as p er th e
settlem ent op tion.
Plan Type Policy Term
Tax B en efits und er Tax ben efits will be available u/ s 80C : on Regular Prem ium 10 years
the policy. prem iu m pa id am ou nt A ND u/ s 10 (1 0D) Single Premium 5 years – Not
: for th e Ma turity/D ea th/S urrend er approved for sale
proceed s received.
Mode & Mode of Premium Payment: Single or Annual
Amount of Plan Type Minimum Maximum
JS
JSDigest
Digestof
ofBanking
Bankingand
andFinance
Finance Jan.-
Apr.- 14 43 44 Recent Banking Developments
Premium
Regular 7,500/- No Limit
payment
Premium
 Mode & Mode of Premium Payment: Single or An nual
Amount of
Plan Type Minimum Maximum
Premium Regular 7,500/- No Limit
payment
Premium
Single 89,000/-
Premium
Death benefit Higher of the following:
(a) Total premiums paid accumulated at an
interest rate of 0.25% pa compounded
annually plus vested reversionary bonus plus
terminal bonuses, if any OR (b) 105% of Total
Premiums paid
Sum Assured Minimum: Rs.1,00,000/- an d Maximum: No
Limit
Maturity The fun d value shall be paid in a lump sum
Benefit OR As per settlement option.
Tax Benefits Subject to condition, tax exemptions are
available under, Income tax Act 1961, Section
80 CCC on premiums, 10 (10A) on th e
commuted value and 10(10D) on the maturity
(vesting) / death proceeds under the policy.
OPERATIONAL RISK MANAGEMENT BUSINESS
CONTINUITY PLANNING (BCP) POLICY AND MANUAL:
OPERATIONAL GUIDELINES FOR USERS:
As per RBI & Basel Guidelines, all Banks are required to take
proactive measures to respond to business discontinuities and
ensure uninterrupted availability of key business processes.
Accordingly, Bank has drawn BCP Policy and Manual in the light
of Guidelines of RBI and National Disaster Management Authority
(NDMA), Bank’s Uttrakhand experience, changed environment
and best practices. The BCP Manual is placed in State Bank Times
> Departments 2 > Operational Risk Management> BCP Manual.
BCP Policy will however be placed in SBI Times on its approval.
Branches/units/offices, their controllers and OR Managers at
JS Digest of Banking and Finance
Circles and Business Groups are advised to go through the contents
of the BCP Manual. Major additions/modifications are as follows:
a. Provisions of National Disaster Management Act (NDMA),
2005 are now incorporated with a view to deal with the
instances of large scale/wide spread natural disasters
effectively in coordination with the Government
Authorities.
b. The list of the districts prone to natural calamities such as
cyclone wind, flooding and earthquakes, etc. as identified
by NDMA is placed in the Manual for information and
initiating preventive measures.
c. Bank-wide inventory of branches/units/offices prone to
natural calamities is also placed in the Manual.
d. CM (Admin/GB) and OR Managers at Circles and Business
Groups should keep close liaison/rapport with the
concerned authorities at State and District levels with a
view to deal with the instances of large scale/wide spread
natural disasters in a timely and effective manner in
coordination with the Government authorities.
e. Circles and Business Groups are also expected to look for
alternate and safer sites, to the extent possible, for the
existing branches/units/offices that are prone to natural
calamities. This aspect should also be kept in mind while
selecting new premises.
f. Roles and responsibilities of various functionaries are
detailed in the Manual.
g. BCP Plan in case of newly opened branches/units/offices
should be drawn and approved within 15 days from the
date of opening. The existing BCP Plans are now required
to be reviewed and approved as on 30th June every year.
BANK’S OUTSOURCING POLICY – 2013: GUIDELINES ON
MANAGING RISK AND CODE OF CONDUCT IN
OUTSOURCING FINANCIAL, CREDIT AND IT SERVICES:
The RBI guidelines on IT Outsourcing have been integrated with
the Bank’s Outsourcing Policy. BOD will be the nodal Department
to monitor and control outsourced activities at whole Bank level
and also to report to the regulator regarding its compliance through
Compliance Department.
While integrating the IT Outsourcing policy, the Outsourced
functions related to technology infrastructure management,
Apr.- 14 45 46 Recent Banking Developments
maintenance and support, application development and testing,
etc. have been included. Further, in order to have a technical
oversight, the Outsourcing Vetting Committee (OVC) has been
constituted separately for IT Outsourcing.
Appropriate audit structure of outsourced activities has also been
put in place. The periodic risk assessment and review of outsourced
activities are to be carried out by Inspection and Management Audit
(I&MA) and Information Security Department (ISD) during their
audit and review has also been put in place.
Bank will not outsource the following functions:
I. Core Management functions including internal audit
(excluding concurrent audit);
II. Compliance function;
III. Decision-making functions like determining compliance
with KYC norms for opening deposit/loan accounts;
IV. Management of investment portfolio;
V. Activities of Sanction and Disbursement of Loan;
VI. Monitoring and Follow –up of loan.
SBUs/Circles/Departments will not outsource any activity, which
would result in the internal controls, business conduct or reputation
of the Bank being compromised or weakened.
In terms of RBI’s instructions, an overall assessment of Service
Provider and outsourcing agreements are also to be undertaken
in terms of risk perception on a scale of 1 to 4 (Annexure-VI).
1) Signifying the highest criticality and risk perception;
2) Fair Risk;
3) Moderate Risk;
4) Low Risk.
The rating/grading of service providers as indicated above on a
Scale of 1 to 4, may be assessed on the basis of following parameters:
• Incidence of failure & losses,
• Probability of failure,
• Cost involved in the event of failure/disruption
(including loss of reputation for the bank) in the activity
of the service provider.
The Bank should ensure that its business continuity preparedness
is not adversely compromised on account of outsourcing. Service
providers should develop and establish a robust framework for
documenting, maintaining and testing business continuity and
recovery procedures.
JS Digest of Banking and Finance Apr.- 14
CONCEPT BRIEF – I
Bi-monthly Policy Statement 2014-15
RBI released its first bi-monthly policy statement for 2014-15 on
April 1 2014. The main features of the policy are:
 Policy Rates: The repo rate was left unchanged at 8%.
Consequently, the reverse repo rate is 7% while the
Marginal Standing Facility (MSF) and the bank rate are
9%.
 Reserve Ratios: The Cash Reserve Ratio (CRR) was also
unchanged at 4% of Net Demand and Time Liabilities
(NDTL); the Statutory Liquidity Ratio (SLR) is 23% of
NDTL.
 Liquidity: The liquidity available under the 7-day and 14-
day term repos has been increased from 0.5% to 0.75% of
NDTL while under the overnight repo, it has been reduced
from 0.5% to 0.25%. This will mean Asset-Liability
Management (ALM) of banks must be better managed.
 Global Scenario: Growth in the US, UK, Euro area and Japan
has slowed down while the emerging economies have
shown subdued growth. This is expected to improve over
the coming year.
 Growth Forecast: Real GDP is expected to be 5.5% in 2014-
15 from sub 5% levels in 2013-14.
 Risks to growth: There is a downside risk to the expected
growth rate as lead indicators do not point to revival of
industrial or service growth. Agricultural growth also
hangs on the balance because of the uncertainty of the
2014 Southwest monsoons caused by the El Nino effect.
 Inflation: RBI’s stance remains firmly disinflationary. RBI
aims to achieve a Consumer Price Index (CPI) or retail
inflation target of 8% by January 2015 and 6% by January
2016. Retail inflation has been on the descent because of
falling fuel and food prices. However excluding these 2
items inflation has been at 8%. Upside risk to CPI inflation
arises because of uncertain monsoons this year as well as
unpredictability in setting of administered prices of fuel,
fertiliser and electricity and minimum support prices of
47 48 Concept Brief
 agricultural products. Vegetable prices have reached a low
and are not expected to soften further.
 CAD: The narrowing trade deficit has led to a reduction
in the Current Account Deficit (CAD) to 0.9% of GDP in
the Oct-Dec 2013 period. Recently, there has been a
slowdown in export growth because of lack of demand in
exporting nations. CAD is expected to be 2% of GDP in
2013-14.
 External Financing: There has been a constant flow of
Foreign Direct Investment (FDI) and Foreign Institutional
Investment (FII) as well as External Commercial
Borrowing (ECB) into the country that has kept the
external financing stable.
 Forex: Repayments of foreign currency obligations to the
RBI by the public sector Oil Marketing Companies (OMCs)
have led to an increase in forex reserves.
 Liquidity: Banks have resorted to year-end ‘window
dressing’ and this has led to a deficit of liquidity in the
system. RBI has been conducting term repos and keeping
the Marginal Standing Facility (MSF) window open as and
when required to ensure adequate liquidity in the system.
Developmental and Regulatory Policies: RBI has been considering
a number of proposals for financial inclusion, customer-protection,
encouraging foreign investors, widening the bond and G-sec
market base and dealing with financial distress. These are:
* Advising banks to stop levying penalty on non-maintenance
of balance in savings bank and inoperative accounts; banks
may consider reducing the services such accounts will be
entitled to, till they maintain the required balance.
* Simplifying Know Your Customer (KYC) norms for Foreign
Portfolio Investors (FPIs) and allowing them to hedge their
coupon receipts with maturity falling in the next year
* Allowing banks to offer partial credit enhancements to expand
the corporate bond market
* Making the Inflation-indexed bonds more attractive for
investors
* Enhancing the Business Correspondent (BC) base, including
new entities and relaxing existing distance requirements to
achieve the objective of Financial Inclusion (FI)
* Making effective the comprehensive framework to help banks
reduce their Non Performing Assets (NPAs)
JS Digest of Banking and Finance
CONCEPT BRIEF – II
Indian Economy Roundup – April 2014
The Indian economy has been anticipating a clear mandate in the
ongoing general elections that will encourage much-needed pro-
growth reforms in the nation. This is reflected in the inflows of
foreign investment, the stock markets and the appreciating Indian
currency. However, in terms of hard facts, the industrial output
and trade data have not been encouraging.
Growth Forecast: Asian Development Bank (ADB) has forecasted
that India will grow by 5.5% in 2014-15 and by 6% in 2015-16. The
International Monetary Fund (IMF) has estimated that India’s GDP
growth for 2013-14 will be 4.6%; it has predicted that India will
grow by 4.4% in 2013 and by 5.4% in 2014. IMF Director Christine
Lagarde has attributed the decline in growth in India to internal
factors. Federation of Indian Chambers of Commerce and Industry
(FICCI) expects the Indian economy to grow by 5.5% in 2014-15
spurred by 3.3% growth in industrial output. C Rangarajan,
Chairman of the Prime Minister’s Economic Advisory Council
(PMEAC), has stated that India has the potential to achieve 7.5-
8% growth given its high savings (30%) and investment (34%) rates.
Auto Sales: 8 of India’s leading automobile makers registered a
decline in automobile sales dropped for the first time in 10 years.
Their sales reduced 4.4% in 2013-14 and 1.6% in March 2014.
According to Society of Indian Automobile Manufacturers (SIAM)
data, sales of passenger vehicles declined by 6.05% in 2013-14. This
is the first time there is a decline in 12 years. The reason attributed
to this is the prevailing economic conditions, high interest rates
and increasing fuel prices. SIAM has estimated that this decline in
auto sales will lead to loss of 2 lakh jobs.
Trade: Exports were US$ 312.35 bn in 2013-14 compared to US$
300.4 bn in 2012-13 growing by 4%. The Government was unable
to achieve its target of US$ 325 bn for FY14. Imports were US$
450.92 bn in 2013-14 as compared to US$ 490.73 bn in the previous
year registering a fall of 8.11%. The resultant trade deficit decreased
by 27% to US$ 138.6 bn in 2013-14 as compared to the previous
year. In March 2014, exports decreased 3.2% to US$ 29.58 bn while
imports declined 2.1% to US$ 40.09 bn compared to the year-ago
Apr.- 14 49 50 Concept Brief
period. The trade deficit was at a 5-month high of US$ 10.5 bn.
Industrial Output: Industrial production as measured by the Index
of Industrial Production (IIP) contracted 1.9% in February 2014; in
January 2014 it had increased by 0.8%. Manufacturing declined by
3.7% in this period.
Monsoons: There is an all-round expectation of a weak monsoon
because of the El Nino effect this year. RBI has also mentioned it
in its bi-monthly policy statement. This will adversely affect
inflation and economic growth.
Inflation: The Wholesale Price Index (WPI) inflation was at a 3-
month high of 5.7% in March 2014 compared to 4.68% in February
2014. Retail inflation was 8.31% in March 2014 up from 8.03% in
February 2014 – the rise has been caused by rising prices of
vegetables and fruits.
Stock Markets: The Sensex closed at 22764 while the NIFTY closed
at 6817 on April 21 2014. With FIIs investing heavily in Indian
equity, the markets have been rising strongly.
Gold Prices: Gold closed at Rs.28,462 per 10 g while silver closed
at Rs.42,056 per kg on April 21 2014.
Currency Markets: The Indian Rupee breached the Rs.60 level on
the back of strong selling of the Dollar – RBI stepped in to halt the
rapid appreciation as it is detrimental to exports and hence the
deficit figures. The Rupee closed at Rs.60.59 against the Dollar on
April 21 2014.
Reforms in PSBs: RBI has suggested that the Government reduce
its stake in Public Sector Banks (PSBs) given the deteriorating
quality of assets in their portfolio and ratings downgrades. It had
suggested other reforms such as market-based remuneration to
heads of Public Sector Banks (PSBs) and 5-year terms for Chief
Executive Officers (CEOs) in a bid to improve their governance.
Foreign Flows:
 Foreign Investment in Debt: RBI has barred foreign
investors from buying Government debt that has maturity
of lesser than 1 year; this is to encourage longer term debt
flows into the nation. It has however allowed them to
hedge their currency exposure.
 FIIs: Foreign Institutional Investors (FIIs) bought Indian
debt worth US$ 5.75 bn or Rs.35,000 crore in the quarter
ended March 2014. Since liberalisation in 1992-93, FIIs have
invested US$ 151 bn or Rs.7.12 lakh crore in Indian equity
JS Digest of Banking and Finance
according to Securities and Exchange Board of India (SEBI).
In the calendar year so far, FIIs have invested US$ 4.78 bn
or Rs.28,979 crore into Indian equities. In the first 17 days
of April alone FIIs have invested US$ 1.3 bn or Rs.6,800
crore in anticipation of a stable Government at the Centre.
11.7% of foreign assets in February came through
Participatory Notes (Rs.1.73 lakh crore) as investors need
not go through registration.
 Forex Reserves: Forex reserves increased US$ 2.79 bn to
US$ 309.44 bn as on April 11 2014 as compared to the
previous week; the forex reserves crossed US$ 300 bn for
the first time in 2 years in the week ended March 28 2014.
This has been boosted by the Government’s 9% stake sale
of Axis Bank and buyback of forex given to oil companies
last year.
 NRI Remittances: According to UAE Exchange, remittances
to India were US$ 7.18 bn in 2013 – 10% of the World Bank’s
estimate of total global remittances in 2013 - US$ 71 bn.
Non Resident Indians (NRIs) remittances increased by
6.44% with Kerala receiving the bulk of it.
 Additional Outlets: Walmart plans to open 50 more outlets
in addition to its 20 existing cash-and-carry ones over the
next 4-5 years. This is despite the uncertainty of the next
Government’s policy on Foreign Direct Investment (FDI)
in Multi Brand Retail (MBR).
Fiscal Deficit: India’s Fiscal Deficit between April 2013 and
February 2014 was Rs.5.99 lakh crore- this is 114.3% of the
Budgeted Estimate in the last year.
Government Borrowings: In the current fiscal the Government is
expected to borrow Rs.3.68 lakh crore for the period between April
and September 2014 - 61.5% of its total budgeted borrowing for
2014-15.
Tax Collections: Indirect tax collections for the April-February
period of 2013-14 were up 5.6% to Rs.4.41 lakh crore as compared
to the year-ago period.
External Debt: India’s total external debt as at end December 2013
was US$ 426 bn; this is 5.2% more than the figure at end March
2013. External debt to GDP ratio was 23.3% at end December 2013
as opposed to 21.8% as at end March 2013.
Non Performing Assets (NPAs): The Finance Ministry has set up a
committee to keep an eye on the monitoring system of state-run
Apr.- 14 51 52 Concept Brief
banks for large loans because of the rising Non Performing Assets MODEL TEST BASED ON APRIL-14
(NPAs).Banks including State Bank of India (SBI) have sold
Rs.10,000 crore of their bad loans to Asset Reconstruction
INFORMATION
Companies (ARCs) in March 2014. Total NPAs in the system stood
at 4.4% of loans as of September 2013. SBI, with 5.73% NPAs as of 1) Which organisations received an in-principle approval from
December 2013, has sold about Rs.3,500 crore of NPAs to ARCs RBI for banking licences?
for the first time. 2) The WHO has declared India a _____ -free nation.
3) Which sport does Candidates’ Tournament relate to?
The results of the general elections will determine whether the
4) The maximum value of prepaid instruments that can be
momentum in the stock and currency markets will rub off on
issued according to the RBI is _____.
economic data and lead to a fundamental improvement in India’s
5) The new President of CII will be _____.
macroeconomic variables such as inflation and deficit figures.
6) In which city has SBI launched the scheme SIB 75+?
7) RBI has fixed the ceiling on the interest rates that can be
quoted by a MFI to its borrowers. How is the rate fixed?
8) Deadline for the implementation of Basel III has been
extended by RBI to_____.
9) Who has been appointed as Dy. Governor of RBI recently?
10) RBI has fixed the Ways and Means Advances of the Central
Govt. at Rs._____ cr for the half- year April 14 to Sep 14.
11) Who won the Femina Miss India contest 2014?
12) Who was conferred the Banker of the Year Award by
Business Standard?
13) Who was chosen for the Dadasaheb Phalke award for 2013?
14) Which film won the Best Popular film National award for
2013?
15) Recently the Queen of Britain conferred the KBE award on
an Indian industrialist. Name the industrialist.
16) Which company plans to take over pharmaceutical company
Ranbaxy Laboratories?
17) Recently an RBI panel suggested measures to make the
pricing of credit transparent and fair to all borrowers. Who
headed the panel?
18) Who wrote The Accidental Prime Minister?
19) Microsoft has recently withdrawn all technical support to
its _____ operating system.
20) The new Naval Chief is _____.
21) RBI had set up a committee to ensure proper governance of
financial benchmarks under the chairmanship of _____.
22) April 22 is observed as _____.
23) REER stands for _____. It represents a country’s _____.
24) The current BCCI President is _____.

JS Digest of Banking and Finance Apr.- 14 53 54 Model Test

25) Who won the 2014 T20 World Cup finals?
26) Love in the Time of Cholera was written by______.
ESSAY -1
27) In 2014 monsoons are expected to be affected by the _____ Customer Retention is Better than Customer Acquisition.
effect.
‘Customer Acquisition’ means getting a new customer. With
Answers:
increasing competition, walk-in customers have dwindled. In fact,
1) Infrastructure Development Finance Co (IDFC), Chennai,
the competition in banking industry and the high level of general
and Bandhan Financial Services Ltd, Kolkata.
awareness among the youth and tech-savvy people has made the
2) Polio
task of getting new customers very challenging. This is applicable
3) Chess
to all segments of business.
4) Rs.50,000
5) Ajay Shriram Also, the cost of customer-acquisition has gone up considerably.
6) Kolkata Every step in the acquisition of the customer – identifying
7) This rate is fixed based on the average of the base rates of 5 prospects, informing them about our products and services,
of the largest commercial banks on the last working day of persuading them to bank with us and enhancing their value to the
March multiplied by 2.75 times. bank and retaining them – has become complex and costly. Well–
8) 31.3.2019 designed strategies have to be developed and employed to get
9) R.Gandhi customers. In the case of a new customer, till we deepen our
10) Rs.35,000 cr bondage with him, the chances of a competitor snatching him away
11) Koyal Rana from Delhi from us are very much real.
12) Aditya Puri, MD & CEO, HDFC Bank It is against this background that retaining a hard-won customer
13) Lyricist Gulzar becomes crucial. How do we retain a customer? It is by developing
14) Bhaag Milkha Bhaag trust in him about us - about our straight-forward and honest
15) Ratan Tata dealings and about our efficiency. If we are able to retain the
16) Sun Pharmaceuticals customer-trust, we can easily up-sell and cross-sell products to
17) Former Deputy Governor Anand Sinha him. A trust-building, customer-caring culture can win customer
18) Sanjaya Baru loyalty. We have to produce customer-delight on as many occasions
19) Windows XP as possible so that the customer sees more value over the costs in
20) Admiral Rabinder Kumar Dhowan dealing with us.
21) P Vijaya Bhaskar Thus, if we are able to retain the customer and deepen our
22) Earth Day relationship with him, our business volumes will surge resulting
23) Real Effective Exchange Rate; international competitiveness in higher profitability. The costs of data acquisition, marketing
24) Former cricketer Sunil Gavaskar and BCCI Vice President efforts to market our products to our existing customers, would
Shivlal Yadav be significantly less than the cost of acquiring new customers.
25) Sri Lanka beating India
When customer retention reaches perfection, it results in ‘zero
26) Gabriel Garcia Marquez
customer defection’.
27) El Nino
A firm does not make money from a customer by selling him a
single product. It is by selling him the product repeatedly, selling
many different products and selling higher value products that
the firm makes its money, e.g: Car loan customer  Approach

JS Digest of Banking and Finance Apr.- 14 55 56 Essay

him to offer new car loan for upgrading the car when the old loan
is almost repaid or he is promoted in his organization with better
emoluments.
Building customer trust is important. To win back lost customers,
find out the reasons and take action.
A trust-building, customer-caring culture can win customer loyalty.
Customer retention is the ultimate goal of any organisation.
CRM (Customer Relationship Management) lays greater emphasis
on retaining the existing customers. It rests on the reality that it is
less costly, smarter and more profitable to retain an existing
customer than to add a new one. The smart company retains its
customers and builds relationships with them. Business and profit
come as a by-product. Of course, it selects the customers who
deserve to be cultivated and concentrates on retaining them.
JS Digest of Banking and Finance
ESSAY -2
Cross-selling for Improving Business and
Profitability of the Bank.
The main function of a banker is accepting deposits for the purpose
of lending and investment and the major source of profit for a
bank is the net interest income - the difference between interest
earned on advances and the interest paid on deposits. The net
interest income of Banks is declining due to reducing growth of
fund-based advances due to disintermediation. The borrowers who
were mainly dependent upon banks for their credit needs are
increasingly resorting to capital market and money market for
raising resources by issuing shares, commercial paper, bonds,
debentures etc. Therefore banks are taking vigorous efforts to
augment the business levels through conscious efforts. Cross-
selling is an effective mechanism to augment the business and
profitability.
Cross-selling is selling additional useful products from our portfolio
to an existing customer so that he/she does not need to think of
any other bank for his/her financial needs. The advantages of cross-
selling are:
i) Customer is happy as his needs are met at a single point
and saves him time and energy in looking for alternate
providers of financial services;
ii) Bank is able to retain the customer by anticipating and
fulfilling the customer’s needs;
iii) No extra cost for the bank involved in cross–selling –
the existing staff can be used for this purpose; it is said
that it costs banks five times less to cross-sell on existing
customer than to acquire a new one.
iv) Business level and profits can be increased at nil or
minimal additional cost.
Banks normally cross-sell products like Life Insurance, General
Insurance, Credit Cards, Mutual Funds etc. Banks can cross sell
car loans, education loans etc. to a customer who has come for,
say, availing a Housing Loan. Also products like locker facility,
Remittance facility covering RTGS/NEFT, Wealth Management etc.
could be offered by way of cross-selling. It is important that staffs
Apr.- 14 57 58 Essay
are well equipped to cross-sell products. They must know the
salient features of the various products, pricing, etc., thoroughly
to cross-sell them effectively. Banks provide incentives to staff to
boost sales through cross selling and improve profits for the Bank.
Proper training needs to be imparted to staff who undertake cross-
selling for better performance. Cross selling of various products
of our Bank as also our Non-Banking subsidiaries is undertaken
by the Bank. The following products of our subsidiaries are sold
by the Bank and a good income is earned thereon.
1. SBI General Insurance Co Ltd: General Insurance
Products
2. SBI Life Insurance Co Ltd: Life Insurance Products.
3. SBI Fund Management Ltd: Mutual Funds Products.
4. SBI Cards and Payment Services (P) Ltd: Credit Card.
Cross-selling would make customers happy and make them remain
loyal to the Bank besides helping in increasing the volume of
business and profit for the Bank.
JS
JSDigest
Digestof
ofBanking
Bankingand
andFinance
Finance Jan.-
Apr.- 14
ESSAY -3
Vigilance Mechanism in Banks
Banks play an important role in the economy. They mobilize the
savings from the public and lend to various sectors such as
agriculture, Micro, Small and Medium enterprises, large scale
industries, infrastructure, information technology, Services etc.
They also lend in a significant way to personal segment borrowers
towards Housing loans, car loans, educational loans, overdrafts
for personal requirements etc.
There are more than 100000 bank branches in the country. The
aggregate deposits and advances of scheduled commercial banks
in the country amounted to Rs.74,25,170 cr and 56,58,860 cr
respectively as at Nov 2013.
It needs no emphasis that the huge public funds dealt with by
banks have to be safe guarded through proper mechanism lest the
public at large should lose their hard-earned money. Hence RBI,
as a regulator of banks, plays a key role by laying down various
rules, regulations and systems & procedures to be followed by
banks in the conduct of accounts. They have prescribed capital
adequacy norms, mechanism for inspection of banks, licensing for
branch opening etc. They have also laid emphasis on vigilance
mechanism in banks to check against noncompliance of the rules
and regulations stipulated by them for suitable disciplinary action
against the staff concerned. Banks have taken several measures to
strengthen the internal control mechanism for complying with
various instructions of RBI and orderly conduct of banking
business. They have also introduced preventive, detective and
punitive vigilance mechanism towards fraud prevention and
monitoring besides strengthening internal control mechanism to
achieve this end.
Preventive vigilance:- The following systems and procedures have
been laid down by banks to prevent frauds.
Deposit Accounts:-
i. Strict compliance with KYC norms for opening
various types of a/cs.
ii. Monitoring high value/spurious transactions.
59 60 Essay
 iii. Ensuring safety of the Account opening forms/ The Bank is arranging for enquiry and investigation of the matter
specimen signature sheets / photographs safely for wherever warranted through the laid down procedure where-after
easy reference. suitable disciplinary proceedings are initiated for levying
iv. Dealing with inoperative accounts with diligence. appropriate penalty.
v. Conduct of accounts relating to Trusts / operations It is important that greater awareness is brought about among
by power of Attorney holders etc with diligence. staff to maintain vigil to avoid mal practices frauds. The following
steps have been put in place in the Bank to achieve this end:-
Advance Accounts:-
i. Vigilance Committee: This has been set up at all branches
i. Screening the borrower thoroughly by reference to
to review and follow up of laid down systems and
CIBIL Report, I-probe in the Bank, wilful defaulters
procedures of the Bank.
list of RBI, market enquires etc.
ii. Vigilance Awareness week: This is observed in the first
ii. Proper appraisal and sanction by the appropriate
week of November every year and staff take oath on
authority.
this day for follow up of Bank’s laid down systems and
iii. Identifying various warning signals in the a/c for procedures.
taking appropriate timely corrective measures.
iii. KYC compliance and Fraud Prevention Day is observed
iv. Ensuring that all documents are current and in force on 1st August every year.
and are legally enforceable.
Thus vigilance is given importance by the Bank to ensure that
General areas of vigilance for follow up:- Banking operations are carried on smoothly by observing the laid
1. Ensuring that various deficiencies in the systems of down systems and procedure for the soundness and safety of
procedures and other major irregularities pointed out banks.
in various inspection reports have been rectified and
ensured against their recurrence.
2. Job rotation, for staff/officers are done at stipulated
intervals.
3. Life style of the employees is not disproportionate to
their earnings.
4. Ensuring that all that are required to be done as per
banks instructions are carried on by all without
deviation through check list/Daily list etc.
5. All Banks are now under technology platforms. The
staffs are advised to maintain vigil in the observation
of various security norms preserved by banks against
frauds.
Detective and Punitive Vigilance:-
Bank has constituted Preventive Vigilance Committee (PVC) and
put in place whistle Blower scheme to enable staff members to
advise the unethical practices if any being indulged in by staff
for appropriate action.

JS Digest of Banking and Finance Apr.- 14 61 62 Essay

 RECENT RATIONALE 18. SB a/c can be opened in P Segment with Zero initial deposit.
19. SBI Fleet Finance Scheme has been introduced.
Rationale: 20. A cadre of ‘Customer Assistants’ has been created.
21. External Credit rating is mandatory for units with exposures
1. RBI has decided to withdraw bank notes issued prior to of above Rs. 10 Cr.
2005. 22. A modified policy on sexual harassment of women at work
2. No scribbling / writing on currency notes is permissible. place has been issued by the Bank.
3. Equitable mortgages have to be registered with CERSAI. 23. The Transfer price for various businesses/schemes/products
4. It has been decided that banks should obtain a couple of are revised periodically.
CTS-2010 compliant cheques from borrowers as security 24. The advance value against gold ornaments is being changed
cheques in addition to the ECS mandate. frequently now.
5. A new clause is to be added to the guarantee issued by the 25. RBI has reiterated the imperative need for carrying out KYC
Bank restraining the beneficiary from transferring assigning diligence before opening bank accounts for customers.
the guarantee. 26. Guarantees have to be classified correctly.
6. Financial transactions should not be put through by the 27. Depreciation is added to Net Profit for arriving at the cash
branch based on email request of NRI/domestic customers. accruals.
7. Sabbatical leave is granted to both Women/men employees 28. Margin is stipulated for advance against stocks/assets
subject to conditions. charged to bank.
8. Student Plus Advantage Card has been launched by SBI. 29. Vehicle financed by the Bank is insured in the name of the
9. The Govt. of India has provided relief for all educational borrower only.
loans. 30. Moratorium period is given for repayment of term loans.
10. Rent Plus Scheme (SME) has been revised. 31. We should not rely solely upon Balance sheet while financing
11. SBI Asset Backed Loan has been introduced. firms.
12. Publication of names and photographs of defaulted 32. Merchant establishments prefer cards to cash for payment.
borrowers has to be done with due care. 33. Import LC bills are crystallized on the 10th day of the receipt
13. Special Scheme for OTS of AUCAs and other written-off of the bill.
accounts has been introduced from 10.03.2014 to 31.05.2014. 34. Cash back scheme has been introduced.
14. Size and Colour-code of Pay-in Slips/Withdrawal Forms have 35. Birthday greetings in minor accounts are being sent to minors
been made recently. attaining majority.
15. ‘Report of Default’ has to be submitted to ECGC in respect 36. Pre-printed INB Kits are delivered to customers.
of defaulted Packing Credit/Post Shipment Credit (PC/PS)
granted to exporters.
Answers to Rationale:
16. GR/PP Form has been replaced by Export Declaration Form
(RBI) (Nov’13). 1. Notes printed from 2005 have more security features; and
therefore, it is difficult to produce fake notes of these notes.
17. Cash withdrawal can now be made with Debit Card up to Fake notes have been found in the pre-2005 notes. This step
Rs.1000/- on SBI POS terminals. will help in getting rid of the fake notes.

JS Digest of Banking and Finance Apr.- 14 63 64 BankingRationale

Recent & Finance
2. RBI has advised banks that cashiers should not scribble /
write on the currency notes; such notes will be treated as
soiled notes. The instruction has been issued under Clean
Note Policy guidelines.
3. CERSAI is a company set up under S 25 of the Companies
Act, 1956. Equitable mortgages have to be registered with
CERSAI through e-filing. The objective of CERSAI is to create
a common registry wherein details of all mortgages by
deposit of title deeds and other data regarding secured
transactions. The prospective lenders can verify whether any
charge has been created on the property already.
4. Earlier, it was decided that wherever ECS (debit) was
available, we need not obtain PDC from borrowers for EMI
payment. The matter was examined by IBA/RBI. RBI has
now permitted banks to take a few additional cheques as
security. The reason is if we proceed against the borrower
against ECS mandate failure, the Bank may have to file
separate compliant for each instance of dishonor. This will
result in huge delays/additional cost.
5. Also any notice / revocation has to be sent to us only by the
beneficiary and not by any other person like assignee,
transferee, or agent. This will ensure that the Bank is not
involved in any unnecessary litigation and avoid multiple
assignment / transfer of the guarantee to third parties.
6. A number of frauds have been unearthed as miscreants who
stole the email id/password etc have been able to send fake
mails to the Bank. The Bank has been put to loss. Hence, as
a measure of preventive vigilance, no financial transactions
would be initiated based on emails received from customers.
7. It is a new type of leave facility to women employees/single
men; maximum of 2 years leave can be availed during service
for reasons such as medical ground, care of family members,
higher studies, visit to spouse etc. It is granted without pay
and not counting for service only Single men with aged
parents/children are eligible for this leave.
8. It is the SBI Card for Education Loans. As students study in
colleges located for away from their homes, the card will
provider them additional means of financing their
expenditure. This product will strengthen our relationship
JS Digest of Banking and Finance
with the younger generation students who aspire for better
opportunities and jobs.
9. The Govt. of India will take over the interest outstanding as
on 31.12.2013 for all education loans sanctioned up to
31.3.2009 and which are outstanding as on 31.12.2013. The
interest liability of economically weaker sections (annual
gross income: Rs.4.5 lacs) from sch. Banks/RRBs will be taken
over. This has been done as employment opportunities have
been severely affected between 2009 and 14 on account of
global recession and domestic economic problems. With the
economy picking up, it is expected that educated youth will
get employment now and hence would be able to pay interest
w.e.f.1.1.2014.
10. (i) Hitherto only residential/commercial buildings rented
to MNCs/Banks, L&M size corporates were covered under
the scheme. Now, buildings rented to Central / State Govts
are also covered. (ii) Now, the scheme is restricted 120 select
branches only where potential is good.
11. It is a modification of SME Easy Loan against Property;
Drop-line overdraft (combined OD & DL) facility is
provided. The scheme provides loans for those who are
unable to furnish detailed financial data, but are in a position
to offer property as collateral. LTV ratio is 60% up to loan of
Rs. 10 Cr. and 50% for loans between Rs. 10 Cr and Rs. 20
Cr. Earlier the loan was meant only for trading units and
now it also covers units under Manufacturing & Services
sector.
12. The publication is useful in cautioning the public in general
and the fellow banks in particular. It is of great help in dealing
with borrowers who avoid/ evade our notices. It is to be
resorted to only for loans of Rs.25 lacs and above who are
wilful defaulters. Advance notice of at least 15 days has to
be provided. In each case, CGM’s approval has to be obtained
after prior vetting by the Law Dept. However, Photographs
names of students who have failed to repay educational loans
should not be published.
13. It is a non-discretionary and non-discriminatory scheme. All
AUCA and other written-off a/cs which are more than 2
years old as on 31.12.2013 with outstanding less than Rs.1 cr
Apr.- 14 65 66 BankingRationale
Recent & Finance
 and where no primary and collateral securities are available
are eligible. The settlement amount will be 25% of the
outstanding to be paid within 3 months. If it is not paid, the
OTS will stand automatically cancelled. A minimum of 5%
has to be paid upfront on receipt of the OTS after letter.
14. Major paper mills are not manufacturing colour paper on
account of environmental pollution concerns. Also, due to
implementation of CTS-2010 Pay-in slips have to be
compatible for scanning under CTS-2010 standards.
Accordingly, the Pay-in slips / Withdrawals forms have been
redesigned. The specifications regarding type of paper, size,
thickness & colour code of printing ink have to be complied
with.
15. Report of Default must be sent to ECGC within 1 month of
the date of calling up the advance or within 4 months from
the due date of the payment of PC/PS. Otherwise, ECGC
will reject the claim on technical grounds. ECGC has to be
convinced that the bank has followed all due procedures for
the recovery of the loan.
16. It is now a common form to declare export of all types of
goods from Non-EDI ports and a common “Softex Form to
declare single and bulk software exports. EDF has replaced
the GR/PP form. All export transactions including those for
less than USD 25000 have to be declared.
17. Activation of such facility at maximum number of merchants
outlets has multiple benefits for the Bank, Merchants as well
as the Card Holders e.g., Additional CASA income, fee based
income, activation of State Bank Debit Cards, additional
revenue to the Merchants, convenience of cash withdrawal
and shopping at one place etc. The customer charges have
since been waived. Now, No Fee at cash @ POS.
18. It is a historical practice to open an account with initial cash
deposit. We can say that the collecting bank’s protection will
be available once an account is opened after strict compliance
with all KYC requirements. The customer will have the option
to fund his account through cash, transfer, from another a/
c of his, NEFT, RTGS or by own cheque. This will speed up
the process of opening of accounts.
19. Aimed at existing Fleet owners who want to increase the
level of their operation. A specialised credit scoring matrix
JS Digest of Banking and Finance
has been developed for appraisal under the scheme. Margin
and repayment period are linked to the credit score. A
tracking device may be fixed to the vehicle which will enable
the Bank to know its location at any point of time.
20. It will help unlock the potential of younger and well-educated
junior staff by empowering them more. They have passing
powers also.
21. i) It will enable the Bank to price the risks accurately and
charge interest as per the risk of the account. ii) Capital
provision will also come down
22. The Sexual Harassment on Women at Work Place Act 2013
has come in to force. The Supreme Court has made many
observations regarding prevention and redressal of such
offences. There is a heightened awareness of this evil in India
and appropriate and effective administrative system has to
be brought into force to eliminate this. The official in charge
of an establishment will be responsible for the due
observance of the various measures.
23. The market conditions/cost of inputs/services undergoes
change periodically. To bring the various rates in alignment
with the market rates. To ascertain the true profitability of
operating units and to provide suitable incentives to the
operating units.
24. The price of gold has been coming down drastically in line
with the price in international markets. To ensure that the
outstanding is covered by the advance value at all times.
The margin on loans has also been revised upwards to 30%.
(Note: During the present campaign: 25%).
25. RBI has observed many short-comings in banks in respect of
KYC compliance; it was revealed in the RBI audit of banks
following cobra post.com revelations that many branch
officials were helping customers in money laundering. KYC
compliance is an important exercise to ensure that banks do
not help people to do money laundering, do not finance
terrorism etc.
26. The Bank has to provide for capital adequacy for guarantees.
Financial guarantees attract 100% credit conversion factor
while performance guarantees attract 50% CCF. Hence,
correct classification is essential.
Apr.- 14 67 68 BankingRationale
Recent & Finance
27. Depreciation is non-cash expenditure and as such a notional the liability is converted into rupee liability. (ii) Also the
expense. The cash remains in the business and hence the ‘cash importer is obliged to retire the documents promptly. (iii)
accruals’ is arrived at by adding all non-cash expenses (e.g.: FEDAI instructions.
Depreciation, Investment Allowance etc.) to the Net Profit. 34. The percentage of POS transactions through ATM cards has
Hence repayment of instalments is linked to cash accruals. been very marginal vis a vis cash withdrawals from ATMs.
28. Margin is a cushion against deterioration in value and The ‘cash back offer’ will serve as an incentive for increasing
obsolescence of stocks. If no margin is maintained the bank’s POS transactions. Incentive schemes are favoured by young
advance would not be covered by market value in case of customers.
decrease in price. It also indirectly ensures borrower’s stake. 35. A Minor on becoming major will be our bank’s potential
29. If the insurance is done in the joint names of the Bank and customer. Hence a greeting is sent as a gesture of goodwill.
the borrower, third party claims may be made against the Also to establish a long standing relationship with him.
Bank as a co-owner in case of accidents. Also, the Bank Further, the bank can market its products like educational
Interest clause incorporated in the policy is sufficient to loans, mobile banking services etc. that would suit his future
protect the interest of the Bank in case of damage to loss of requirements. There is scope for attracting valuable business
the vehicle. on their becoming major getting gainful employment etc.
30. A unit requires adequate time for acquisition of land, 36. (a) INB kit would enable the person who opens the bank
construction of factory building, erection of machinery and account to operate his account immediately. (b) The kit
trial production. It will work above the BEL (Break Even consisting of temporary user-id and password is provided
Level) only when it achieves commercial production. Hence, to the account holder and the internet banking account
during the construction period, no repayment should be activated generally within 2 working days. This is used to
stipulated. Otherwise, the unit’s working capital a/c will log-in to internet banking for the first time by the customer;
become irregular. The projects require generally 12 to 24 both the user-id and password are to be changed on first
months for achieving commercial level of operations. At this usage.
level only, it can make profit and the repayment can
commence.
31. The basic parameters in a credit decision are honesty and
integrity; the other vital parameters are the need for the
advance, overall viability, reasonable stake etc. Also credit
needs have to be assessed bearing in mind the future
prospects for the business.
32. The Bank can avoid unproductive Cash handling work as
also the associated risks. The merchant establishment can
obtain prompt reimbursement from the bank. Cards induce
spot purchases thereby increasing sales leading to higher
profits. MEs are entitled to commission from the card issuers.
33. (i) Our Nostro A/c maintained abroad would have been
debited when the bill under our LC was negotiated by the
exporter’s bank. By this procedure the Bank is able to avoid
the risks of adverse fluctuations of the foreign currency as

JS Digest of Banking and Finance Apr.- 14 69 70 BankingRationale

Recent & Finance
 FOREIGN EXCHANGE RATIONALE usually extends export credit against the LC bills.
6. R Returns have to be submitted to RBI promptly and
regularly.
1. Adding confirmation to the Letter of credit is not done at
R.
the branch level but the proposal needs to be referred to
i. R-Returns are the principal source of data for RBI for
GMUK.
computing the BOP data.
R. On account of the volatile international situation, the present
ii. RBI can monitor/oversee the forex transactions put
standing/position of many banks especially in Africa, Asia,
through by ADs and ensure that ADs have exercised
and South America will not be known to the branch. GMUK
the powers delegated to them correctly. Any delay /
will be able to take a decision about the risk in confirmation.
non-submission would attract RBI’s adverse action.
(Varies from bank to bank).
7. The Bank does not undertake forex transactions on
2. ‘Direct Rate’ method of quotation is followed in India.
Saturdays OR
R.
The Bank does not undertake forex transactions for large
I. It is easy to understand the exchange rate.
amounts on Saturdays.
II. Calculations are relatively simple and therefore quick.
R.
III. Relative rates for various currencies can be easily
i. International markets are closed on Saturdays; hence,
compared.
the Bank cannot cover these transactions. The Bank’s
3. T.T Buying rate is applied for cancelling a draft (or a Sale
position will become vulnerable due to exchange
Transaction is cancelled by applying TT Buying rate).
fluctuations if these are not covered.
R. Issue of a draft is a sale transaction and would have been
ii. RBI/FEDAI directions also prohibit them.
covered by a purchase transaction. As the Bank has got the
8. TT buying rate is quoted for foreign inward remittances
forex funds already at the time of cancellation, the best rate
where cover has already been provided for or TT rates are
viz. TT buying rate is applied.
more favourable to customers.
4. TT selling rate is applied for cancelling a purchase
R.
transaction.
i. As forex funds have already been credited to our Nostro
R. At the time of the purchase, the transaction would have been
A/c the Bank is not out of Funds; hence, the best rate is
covered by the sale of foreign exchange. Actually the buying
quoted. (TT rates are the basic rates from which other
rate would have been quoted based on the selling rate in
rates are derived).
the market adding our profit margin. Hence, the best rate
ii. Also there is no risk of non-payment as the funds have
viz. TT selling rate is quoted to the customer.
already been received.
5. LC and other documents are to be scrutinized carefully
9. The Bank has to exercise great caution while confirming
when an export bill is received for negotiation.
an ‘export’ letter of credit than while merely ‘advising’ a
R.
credit.
i. To ensure that the LC is in order and valid. Also to
R. When a bank ‘confirms’ a credit, it is bound to negotiate the
ensure that the documents are drawn strictly in
documents under the L.C provided they comply with the
conformity with the terms of the LC. Otherwise, the
credit terms strictly. In case of opening bank’s failure to
documents may be returned by the opening bank.
honours the bills under the credit, the ‘confirming’ bank’s
ii. To ensure that the bill is not dishonored as the bank
liability is absolute. Hence confirmation will be added only

JS Digest of Banking and Finance Apr.- 14 71 72 BankingExchange

Foreign & FinanceRationale
 to irrevocable letters of credit established by first class
banks. An ‘advising’ bank merely advises the credit; it is
not bound to negotiate the bills under the credit.
10. Letter of Credit liabilities are treated as contingent
liabilities.
R.
i. The Bank undertakes to honour documents drawn
under the credit provided they conform to the terms of
the credit strictly.
ii. If the applicant (importer) does not honour them, the
bank is bound to reimburse the negotiating bank etc.
11. Opening a Letter of Credit is considered a credit decision.
R. The documents covering imports under the L.C. have to be
paid for within a short time after their receipt. If the opener
is unable to pay for them, the Bank has to honour its
commitment; it will be saddled with the liability.
12. No local credits are permitted in NRE account.
R. NRE account balances are freely repatriable and hence only
foreign remittances are credited to the account. If a local
credit is accepted, the local funds may be repatriated by
oversight. Hence, RBI has prohibited any local credits in NRE
accounts, except permitted current income after meeting tax
liabilities.
13. Cash Flow Statement is studied while opening a LC.
R. The bank has to ensure that the borrower has the ability to
generate adequate funds to effect payment of bills drawn
under the LC when they are received for payment. If he is
unable to pay, it would result in devolvement of such
payments on the bank.
15. The Bank should undertake forex transactions only in
respect of bona fide/good customers.
R. The obligations under the Exchange Control, Import Control,
and Export Benefit Schemes etc. are very stringent. The Bank
will also be liable for any lapses on its part. The bank’s
responsibilities are also high in respect of LC transactions.
16. Crystallization of export / import bills is done if they are
not paid within a stipulated period.
R. Import bills are crystallised as our Nostro a/c would have
been debited when the bill under our LC was negotiated by
the negotiating bank. Hence, there is no need to carry the
liability of the importer in foreign currency. This procedure
helps avoid bank’s exposure to the risks of adverse exchange
rate fluctuations. The forex liability of export customer in
case of negotiated bills is converted into rupee liability with
the stipulation that overdue interest has to be paid by him.
The bank will be able to utilize foreign funds abroad when
the bill is paid. The bank will be able to protect itself against
forex fluctuations. It is in line with international practice.

14. Claused bill of lading should not be accepted for

negotiation under a letter of credit.
R. In terms of ICC UCP 600 (2007) a foul (claused) bill of lading
is not a good tender as it would contain notations in which
the defective conditions of goods / packages are expressly
stated. Acceptance of such documents is risky and the
negotiating bank will be put to loss as the opening bank is
not bound to accept the same.

JS Digest of Banking and Finance Apr.- 14 73 74 BankingExchange

Foreign & FinanceRationale
 HINTS FOR ANSWERING OBJECTIVE
QUESTIONS -1
Banking & Finance (Jan 14 to Mar 14)
1. P.Pradeep Kumar, appointed new MD of SBI in charge of
Corporate Banking.
2. Email-based transactions: SBI has issued a circular to its
branches not to act upon e-mails sent by Non Resident
Indians (NRIs). This is because of the increasing frauds taking
place leading to account holders contesting the transactions
made on their behalf. This has since been extended to
domestic accounts also.
3. SBI capital to be increased: SBI held a General Meeting of
shareholders to get approval to increase the issued share
capital up to Rs.11, 500 cr by way of QIP/FPO or by any
route as approved by GOI.
4. Charges for use of ATM of other banks: If SBI customer
uses another Bank’s ATM for withdrawal of cash, SBI has to
pay Rs.17 to the other bank.
5. SBI Bond Issue: The Employees Provident Fund Organisation
(EPFO) has subscribed to all of SBI’s Tier II bond issue of
Rs.2, 000 crore at a rate of 9.69% (Jan 14).
6. ethics @work: RBI’s Governor, Raghuram G Rajan has
introduced a code of ethics named ethics @ work with the
objective of reinforcing existing values and inculcating a more
ethical, self-governing internal culture.
7. Reassigned Risk Weights for Loans: RBI has assigned 0%
risk weight for the guaranteed portion of loans granted by
Non Banking Finance Companies (NBFCs) and Micro Finance
Institutions (MFIs) to low income housing covered by Credit
Risk Guarantee Fund Trust for Low Income Housing
(CRGFTLIH) – the Government’s new credit guarantee fund.
The portion of the loan that is not guaranteed by the fund
will attract a risk weight as per existing norms. CRGFTLIH
for urban areas has been set up by the Centre in June ’12.
Corpus: Rs.1000 cr, contributed by Govt, the settlor of the
Fund. The Fund is managed by National Housing Bank.
8. The Reserve Bank of India has selected the Clearing
JS Digest of Banking and Finance
Corporation of India Ltd (CCIL) to act as a Local Operating
Unit for issuing globally compatible unique identity codes
to entities which are parties to a financial transaction in India.
The unique identity code called Legal Entity Identifier (LEI)
is a 20-character code assigned by a local operating unit
(LOU).
9. Investment in GDRs: RBI had included investment in GDRs
in the foreign equity ceiling. This has resulted in a few banks
breaching the investment ceiling.
10. ‘Merchanting’ eligible for short-term credit: The Reserve
Bank of India has advised that short-term credit either by
way of suppliers’ credit or buyers’ credit will be available
for intermediary trade transactions also referred to as
merchanting. Merchanting or intermediary trade transaction
involves purchase of goods by Indian residents from non-
residents and then reselling them to another non-resident
directly without the goods touching Indian ports. The
merchanting transactions will include the discounting of
export leg Letter of Credit by a bank authorised to deal in
foreign exchange, as in the case of import transactions. The
entire process of intermediary trade transactions should be
completed within an overall period of nine months and there
should not be any outlay of foreign exchange beyond four
months.
11. Urjit Patel Committee: The Urjit Patel (presently Dy.
Governor, RBI) Committee was formed to revise and
strengthen the existing monetary policy framework. Its
recommendations include:
a. Setting up a Monetary Policy Committee (MPC) headed by
RBI Governor; it will be responsible for achieving the inflation
target and will be answerable if the targeted inflation is not
achieved for 3 consecutive quarters. Members of the MPC
will include the RBI Governor, a deputy Governor, an
executive director and 2 external members. These members
must meet once in 2 months and their term will be 3 years.
b. Consumer price inflation must replace Wholesale Price Index
(WPI) inflation as the main inflation figure. This is because
it reflects the cost of living.
c. CPI inflation target will be 4% plus or minus 2%; this is to be
achieved in 3 years - 8% in 12 months, 6% in 24 months and
thereafter 4%.
Apr.- 14 75 76 Hints for Answering
d. The Government must bring the Fiscal Deficit down to 3%
of GDP by FY17; it must also discard administered prices,
wages and interest rates.
12. Pre-2005 Currency Notes: RBI has stated that it will
withdraw all pre-2005 currency notes from circulation from
March 31 2014 in its attempts to rid the market of fake notes.
Notes printed from 2005 have more security features; the
pre-2005 notes do not have the year of printing on them.
The last date has since been extended.
13. New Deputy Governor: Dr. Urjit Patel has become RBI’s
Deputy Governor for a term of 3 years; the other 2 are Dr. K
C Chakrabarty and Shri Harun R. Khan. A new Deputy
Governor is to be appointed in place of Shri Anand Sinha
who has just retired from this post.
14. New Committee to Review Governance of Bank Boards: RBI
has set up a new committee to review the governance of the
Boards of banks in India. The committee will review
functioning of the boards of banks and examine “fit and
proper” criteria for directors. It will also review the strategy
and regulatory compliance of the Boards among other issues.
This will be chaired by former Chairman and Chief Executive
Officer (CEO) of Axis Bank, Shri P J Nayak.
15. Revised Code of BCSBI: According to the revised code of
commitment of the Banking Codes and Standards Board of
India (BCSBI) that is to come into effect in January 2014:
a. Banks will have to prove that customers have compromised
their User ID or Password in case of a fraud in electronic
transactions. This makes banks liable in case of loss to the
customer through internet banking.
b. They should offer door-step service to senior citizens and
disabled people.
c. There should be a simplified process for opening of a basic
account and every branch must offer these basic accounts.
d. Any errors of Business Correspondents (BCs) are also the
responsibility of banks.
e. Banks must not force customers to buy third party products
like insurance to meet their sales targets.
f. These changes are because there was a 11% rise in frauds to
Rs.854 crore in 2012-13 over the previous year.
16. Dore: Semi-pure alloy of gold and silver.
JS Digest of Banking and Finance
17. Development Credit Bank Ltd.: name changed as DCB Ltd.
18. Shortage of Mid-level Managers in PSBs: About 150,000 mid-
level managers are expected to retire from Public Sector
Banks (PSBs) over the next 3 years. Banks will be hard-
pressed to fill these positions with promotions and lateral
recruitments.
19. SBI has the maximum amount of NPAs –
20. LIC is the most consumer – friendly insurance company
(IRDA).
21. Life Insurance penetration has fallen to 3.96% while insurance
density stood at $53.2 for 2012 (IRDA). These two measures
reflect the level of development of the sector. Insurance
penetration is measured as the percentage of insurance
premium to GDP. Insurance density is calculated as the ratio
of premium to total population (in USD). General Insurance
has recorded a marginal increase in both.
22. Int. rate for EPF deposit: 8.75% (2013-14).
23. New P-note norms of SEBI: Participatory notes, or offshore
derivative instruments are used by foreign investors wishing
to invest in the Indian markets without registering with SEBI.
SEBI has allowed only ‘regulated’ entities to issue/subscribe
to P-notes, ensuring that such entities can be easily reached
through foreign regulators.
24. Sensex comprises 30 shares; Nifty: 50 shares.
25. Tesco: British Retailer; tying up with Tata’s Trent Hypermark.
26. Flipkart: India’s largest e-commerce player. Co-founders:
Sachin Bansal and Binny Bansal.
27. POSCO’s Environmental Clearance: South Korean steel
company POSCO has finally received environmental
clearance to build its Rs.52,000 crore steel plant in Odisha.
28. Pension to Workers: The Finance Ministry has approved a
minimum pension of Rs.1, 000 to workers in the organised
sector. This is expected to benefit 2.7 mn workers.
29. 12 January – National Youth Day (Swami Vivekananda’s
Birthday).
30. NASSCOM President: R Chandrashekhar has taken over as
President of National Association of Software and Services
Companies (NASSCOM). Formerly, he was secretary of
Telecom Ministry.
31. Report on Comprehensive Financial Services for Small
Business and Low Income Households (Nachiket Mor
Apr.- 14 77 78 Hints for Answering
 Committee). Highlights of the recommendations are:
• Bank Account for All: All Indians over 18 years of age must
be provided with a full-service, electronic bank account by
January 1, 2016. Aadhaar cards may be used for account
opening.
• Accessibility: Everyone must have access to deposit and
withdrawal facility at a distance of 15 minutes’ walk from
his/her residence.
• Payments Banks for taking deposits and making payments
to small businesses and low income households. They will
not be allowed to provide any credit. These could include
mobile phone companies, Business Correspondents (BCs),
Post Office system and consumer goods companies; existing
Scheduled Commercial Banks (SCBs) may also open them as
subsidiaries.
• Wholesale Banks – they are meant to primarily provide credit
to the low income households and small businesses – these
are not meant to accept retail deposits; they can only accept
deposits over Rs.5 crore. They may also act as Business
Correspondents (BCs) for other full-service banks.
• PSL Target: The Priority Sector Lending (PSL) target should
be increased to 50% from the current 40%.
• SLR: The Statutory Liquidity Ratio (SLR) must be done away
with over time as it has outlived its usefulness.
32. Duplicate Draft; no surety up to Rs.1 lac (SBI).
33. Book: “The Hindus: An Alternative History”: Wendy
Doniger; Published by penguin, but withdrawn from
circulation due to a court case.
JS Digest of Banking and Finance
HINTS FOR ANSWERING FOR OBJECTIVE
QUESTIONS – 2
1. QIP means Qualified Institutional Placement.
2. SBI’s Social Media Presence: SBI strengthened its social media
presence with the launch of its channel on the video-sharing
website You Tube; it will soon launch its handle on the micro-
blogging site Twitter.
3. Working Paper on Indian Banks’ Competitiveness: According
to a RBI working paper series, if Indian banks achieve 100%
Net Stable Funding Ratio (NSFR) they will become more
competitive. The Basel Committee on Banking Supervision
(BCBS) introduced NSFR; it is a liquidity ratio that may be
defined “as percentage ratio of available stable fund to
required stable fund.” It should be greater than 100.
4. Supervisory Colleges for BoI and BoB: RBI had set up
supervisory colleges for Bank of India (BoI) and Bank of
Baroda (BoB). Earlier, RBI had set up these colleges for SBI
and ICICI Bank.
5. White Label ATMs: RBI has authorised 4 non-bank entities
to set up White Label ATMs (WLAs) – Tata Communications
Payment Solutions Ltd., Prizm Payment Services Pvt Ltd.,
Muthoot Finance Ltd. and Vakrangee Ltd. The first 3 have
already launched their services. White label ATMs are those
ATMs not set up or owned by banks but by non-banking
entities.
6. Cap on Lending to Group Companies: Banks must not have
exposures of over 20% of their paid-up capital and reserves
in all group entities. For non-financial and unregulated
financial services companies this cap is 10%.
7. Plastic Re 10 notes to be issued by RBI: Minister for State
has said in Parliament that one billion plastic notes will be
issued on a trial basis in 5 cities – Kochi, Mysore, Jaipur,
Shimla and Bhubaneswar, in the second – half of 2014. Plastic
notes have average life of 5 years and are difficult to
counterfeit. Plastic Currency notes will be cleaner. 20% of
paper notes become unusable after 1 year. They were
introduced first by Australia.
8. RBI on MFIs: MFIs should arrive at the lending rate by
calculating their cost of funds plus a max. of 10% margin or
Apr.- 14 79 80 Hints for Answering
 the average base rate of the 5 largest commercial banks by
assets multiplied by 2.75 times, whichever is lower.
9. Average settlement time by Banking Ombudsman: 3 months.
10. ATM Withdrawals without Bank Account: RBI has approved
a new payment system that will help persons without a bank
account get access to funds. The depositor must authorise
the person to whom he is remitting the funds to withdraw
money from his account through an ATM. The recipient will
get a code via SMS from the intermediary bank with which
he can withdraw money. This is part of RBI’s larger vision
of including the unbanked in the financial system – the
unbanked population constitutes approximately 40% of the
population.
11. United Bank of India: The Bank had opted for a forensic
audit of its books after the first quarter results which were
dismal.
12. Govt.’s proposed capital infusion in PSBs: For the year ended
Mar’14: Rs.14000 cr; For year ended Mar’15: Rs.11200 cr.
13. Internal Ombudsman: OBC & PNB have appointed internal
Ombudsman.
14. Foreign Investment limit in a private bank: Total Foreign
Investment limit in a private bank is 74%; the FII investment
shall not be more than 49% of equity.
15. SEBI Chairman: U.K.Sinha (up to Feb 16).
16. SEBI on Mutual Funds
o Mutual fund net worth requirement raised to Rs 50 crore
o Fund houses will have to put in up to Rs 50 lakh of own
money in the open-ended schemes it offers to investors
o Recommends PSUs be allowed to invest in non-PSU MFs.
17. Surcharge on Super Rich: The surcharge on those earning
more than Rs.1 crore has been maintained at 10% for the
next fiscal in the interim budget (Feb ’14).
18. Maruti has decided to stop production of Maruti 800 cars.
19. UTI Completes 50 years (Feb’14).
20. The number of subsidized LPG cylinders has been increased
to 12 per year per family.
21. India’s first monorail is in Mumbai.
22. Sikkim is the first state to have 100% sanitation.
23. Vote on Account (Centre) is generally valid for 2 months;
but may go up to 6 months.
24. Forex earnings through tourists: USD 18 b (2013).
JS Digest of Banking and Finance Apr.- 14 81
25. India Post ATMs: India Post rolls out ATMs for the first
time for its SB a/c holders, at New Delhi, Chennai and
Bangalore
26. National Pension Scheme: Originally launched in 2004 for
Central Govt. employees joining the service after 1.1.2004.
In 2008, it was opened to any person between the ages of 18
and 55 years. Swawlamban is a variant of the scheme for
unorganised sector.
27. India Inclusive Innovation Fund (IIIF): Govt. launches India
Inclusive Innovation Fund (IIIF) with corpus of Rs.500 cr;
the SME Ministry has contributed Rs.100 cr. It will invest in
innovative ventures which address social needs like health
care, food, etc.
28. Life Expectancy:
2001-05 2011-15
Men 62.3 67.3
Women 63.9 69.6
29. Gold Consumption: According to the World Gold Council
(WGC) China was the top gold consumer in 2013 overtaking
India. Chinese consumers purchased 1,066 tonnes of gold
products in 2013 while Indian consumers purchased 975
tonnes.
30. Facebook Acquisition of WhatsApp: Social networking giant
Facebook plans to acquire text-messaging company
WhatsApp for US$ 19 bn. Co-founders of WhatsApp are
Ukrainian Jan Koum and American Brian Acton; it has 315
mn users. Facebook has over 750 mn users.
31. Feb 4: World Cancer Day.
32. Ms. Arundhati Bhattacharya: Chairman, SBI is the only
woman banker in the Fortune 500 list of companies.
33. UN award: Kerala Tourism wins UN award for innovative
initiatives. Kerala got the award for its sustainable
development initiative.
34. Best Trade Finance Bank Award SBI gets Best Trade Finance
Bank Award-2014 in the Global Finance World’s Best Trade
Finance Provider Awards 2014.
35. IBA Awards: The Indian Banks’ Association (IBA) Banking
Technology Award was given to Karnataka Bank for ‘Best
Use of Mobiles Technology in Banking’ for 2012-13. It was
second runner-up in Public Sector Banks (PSBs) category.
Karnataka Bank won second runner up in Customer
82 Hints for Answering
 Management Initiative under private sector bank category. HINTS FOR ANSWERING OBJECTIVE
SBI won in 7 out of 9 categories including Best Technology QUESTIONS -3
Bank of the Year, Best Internet Bank, Best Customer
Management Initiative, Best Use of Technology in Financial Banking - Based on Mar’ 14 Information
Inclusion, Best Use of Technology in Training and E-learning
and Best Use of Business and Intelligence and Best Use of 1. Information on Retail Gold Loan campaign 15.2.2014 to
Mobility Technology awards. 16.6.2014. Deviation approved exclusively for the campaign:
36. Microsoft CEO: Indian Satya Nadella is the new Chief
Executive Officer (CEO) of Microsoft. Parameters Extant Instructions Revised Instruction
37. Estimated Food grains production (2013-14): 263 mT. for Campaign
38. Exports (estimate 2013-14) USD 326 billion.
39. Highest allocation of funds in 2014-15 budget: Rural Max Loan Amount Rs.10,00,000 Rs.20,00,000
Development Ministry.
40. Food, Fertilizer and Fuel subsidy (2014-15): Rs.2, 46,397 cr. Margin 30% 25%
41. Highest Subsidy to food.
42. Target for agri. credit: Rs.8 lakh cr.
43. Budget Estimates: The advance value of gold will be centrally advised by the
Plan Expenditure: Rs.5,55,322 crore Precious Metals Department and the same will be uploaded
Non-plan Expenditure: Rs.12,07,892 crore on State bank times.
Revenue Deficit: 3.3% of GDP in 2013-14 and 3% of 2. Car Loans: Agriculturists: Min NAI Rs.4,00,000/-.
GDP in 2014-15 3. For Car loans
Fiscal Deficit: 4.6% of GDP in 2013-14 and 4.1% of a. NMI for salariat: Gross Salary minus statutory deductions
GDP in 2014-15. like IT, EPF etc only.
b. Self-employed, professionals, proprietary & partnership firms
and businessmen: NAI will be Net Profit or Gross taxable
income of Rs.4,00,000/- as per ITR after adding back
depreciation.
c. LTV Ratio up to Rs.10 lacs: 85% on road price.
d. Max cost of accessories: 5% Ex-showroom price or Rs.
50,000/- whichever is lower.
4. Banks may accept e-Aadhaar downloaded from UIDAI
website as an officially valid document subject to conditions.
5. 5. PB Seg: Rent Plus Scheme:
a) Repayment Period: 10 years or the residual lease period
whichever is less.
b) Margin: 25%
c) Valuation of property: Once in 3 years
d) Scale of finance: Lowest of:
 75% of realisable value of the property mortgaged (as per
latest valuation report of the Bank’s approved valuer).

JS Digest of Banking and Finance Apr.- 14 83 84 Hints for Answering

 Maximum permissible under the Scheme.
 75% of [total rent receivable for the residual lease period or
loan period, whichever is lower minus total of advance
deposit, estimated amount of property tax, service tax, TDS
and other statutory dues for the period].
e) The properties may be rented or already rented to MNCs/
Banks/Large and Medium sized corporates. However, the
property should not be or have been leased to Schools,
Colleges, Orphanages, Hospitals, Old Age Homes, Nursing
Home or any other such Social Sector Infrastructure.
6. Loans against Immovable Property:
Loan Limit:
a) Max: Rs 2.00 Cr For Tier I and Tier II Cities (as per list)
b) Max : Rs 1.00 Cr Rest of India.
c) Max Rs: 50 lacs for Bhubaneswar, North East and Bengal
Circles (excluding those cities which are covered under Tier
I and II cities). In all the cases overall loan ceiling will be
subject to EMI/NMI Ratio not exceeding 50%. [As per Bank’s
approved valuer’s report not more than 3 months old.]
d) Equitable mortgage of non-encumbered residential house/
flat, non-agricultural urban landed property, commercial or
industrial property in the name and possession of the
borrower, i.e. either self-occupied or vacant. The property,
however, should not be part of any social infrastructure such
as schools/ colleges, hospitals, orphanages/ old age homes
etc.
e) Land/ plot should be non-agricultural only.
f) The property, however, cannot be leased to Schools,
Colleges, Orphanages, Nursing Homes, Hospitals, Old Age
Homes etc or any other Social Sector Infrastructure.
g) The property should be SARFAESI compliant.
h) Repayment Period: With check off: maximum of 120 months
[or date of retirement, whichever is earlier]. Without
out check off: 72 months. Where check off is not available,
ECS/PDCs should be obtained. (Sanctioning Authority may
permit longer repayment period up to 84 months.
i) Income: Min. NMI of Rs.25000/ for salaried; Minimum NAI
of Rs.3.00 lacs in case of all others.
JS Digest of Banking and Finance
7. Student Plus Advantage Card (SBI Card for Education
Loans): It is similar to’ Advantage Plus Card. Target group:
Students, parents, co-borrowers. As students study in
colleges located far away from their homes, the card will
provide them additional means of financing their
expenditure. This product will strengthen our relationship
with the younger generation students who aspire for better
opportunities and employment/gainful pursuits.
8. Relief on interest outstanding component in Educational
Loans: The Government of India will take over the entire
liability of the interest outstanding as on 31.12.2013 for all
education loans sanctioned up to 31.3.2009 and which are
outstanding as on 31.12.2013, by students belonging to
Economically Weaker Sections from Scheduled Banks/RRBs
for pursuing any of the approved courses of studies in
technical and professional streams from recognized
institutions in India. The borrower would have to pay
interest for the period from 01.01.2014. For cases which are
NPAs & outstanding as on 31.12.2013, the interest during
the moratorium period (the capitalized interest) OR the
interest outstanding as on 31.12.2013, whichever is less, will
be eligible for relief. Annual gross parental/family income
upper limit of Rs 4.5 lacs per year (from all sources) i.e.
persons from economically weaker sections as on date/at
the time of availing loan. The interest subsidy is only for
interest debited on account of fees paid, and not on any
other debits such as insurance premium etc. The entire
exercise for all eligible outstanding cases shall be completed
by 30th June, 2014.
9. Home Loans: EMI/NMI Ratio has now been linked to NAI;
there are 5 brackets EMI/NMI ratio should be 20% for NAI
up to Rs.1.20 lac; 70% for NAI exceeding Rs.10 lacs.
10. As per extant instructions for Savings Bank account of a minor
(accounts in the sole name of the minor), the minor has to
complete the below mentioned formalities on attainment of
majority. In the absence of completion of these formalities,
the Core Banking Solution (CBS) does not permit debit or
credit in the account. The required formalities are:
Apr.- 14 85 86 Hints for Answering
a) Confirm the balance in his/her account. additional interest is paid only to Residents.
b) Submit fresh specimen signature and photograph 16. NRO deposits of staff not eligible for additional interest of
c) Provide a declaration with the proof of majority for activation 1% as given to staff.
of the account as a major Account. 17. Penalty for premature withdrawal of deposits below Rs.15
d) Obtain the copy of PAN Card or Form 60/61(whichever is lacs for all tenors: 0.50%.
applicable) 18. Single deposit of Rs.15 lacs and above: No penalty for
11. SME Car Loan: Eligibility: Gross Taxable Income: Rs.4,00,000 premature withdrawal for tenors below 1 year provided
and above. these have remained with the bank for at least 7 days.
12. Weavers Credit Card: Int. rate 6% for 3 years. Interest 19. Publication of photographs of loan defaulters:
subvention by Govt. of India through NABARD: Max 7%. a) Applicable to loans of Rs.25 lacs and above only.
Margin Money Assistance: 20% of project cost; Max. Rs.10,000 b) Applicable to wilful defaulters only.
per weaver. c) Photographs of students who have availed educational loans
13. SBI Fleet Finance Scheme: Eligibility: should not be published.
a) Existing Fleet Operators (Goods or Passenger) having d) An advance notice in the prescribed format has to be sent
experience of 2 years or more in the same line. before 15 days to borrowers/guarantors.
b) Fleet operator having existing fleet of minimum 10 vehicles. e) Each case has to be vetted by the Law Deptt.; and CGM’s
c) SRTOs will not be eligible. approval obtained.
d) Requirement of minimum 10 new vehicles or minimum loan 20. Special Scheme for One Time Settlement (OTS) of AUCAs &
amount Rs.50 Lacs Other Written Off accounts (AUCA & Other WO A/cs-OTS-
e) Average Gross DSCR: minimum 1.50. (below 1.50, special 2013-14):
approval from authority one step higher than sanctioning a)
authority) i. The scheme will be operational from 10.03.2014 to 31.05.2014.
f) Borrower has to get min 35% score under scoring model to ii. Last date of receipt of application: 31.05.2014.
be eligible for SBI Fleet Finance Scheme. iii. Last date for conveying sanction: 15.06.2014.
g) Collateral Security: Min 20% tangible collateral including b) Cases covered: The scheme will be applicable to AUCA &
unencumbered vehicles in the existing fleet (current resale Other Written-off a/cs which are more than 2 years old as
value to be taken) (In case, the borrower has scored 60% on 31.12.2013 with outstanding less than Rs. 1.00 cr, and
and above under the scoring model, sanctioning authorities where there are no primary & collateral securities
may allow for ‘Nil Collateral’ with additional 25 bps in available. Notices are to be sent to all eligible Borrowers in
interest rate, as specified below). the prescribed format.
h) For Nil Collateral: the borrower has to score minimum 60% c) Settlement Formula:
and above under the scoring model and agrees to pay 25 i. The settlement amount will be 25% of the amount outstanding
bps in addition to above applicable interest rates for any in the AUCA & Other Written-off accounts as on 31.12.2013.
loan amount. Any amount paid by the Borrower after 31.12.2013 till
14. SME Rent Plus Scheme: Now, buildings rented out to Govt. submission of OTS offer will be included in the settlement
Depts. (both Central/State) are also covered. Scheme in amount.
operation in 120 centres. ii. If the entire settlement amount is not paid within 3 months
15. Senior Citizen fixed deposits for 1 year and above: 0.25% from the date of conveying the approval to the Borrower,

JS Digest of Banking and Finance Apr.- 14 87 88 Hints for Answering

 Deposits Max. Rs.2, Rs.1000/- Min Rs.1000/-
00,000/- per day. Rs.10/- Min Rs.50/-
the OTS will stand automatically cancelled and the borrower ‘P’ Segment Cash Free Free
shall be liable to pay the entire outstanding dues.
with drawal (Self only)
d) Sanctioning Authority:
max. Rs.50,000/- per
i. The Sanctioning Authority will be the Head of the Branches/
Processing Cells and sanction is to be accorded without going day
through the Screening Committee process. ‘SME’ Segment Cash Up to Up to
e) Payment:
W ith drawal (self only) Rs.50,000/- Rs.50,000/-
i. Borrower has to deposit minimum 5 % of the outstanding as
Max. Rs.1, 00,000/- per Free; Above Free; Above
upfront amount along with the OTS offer letter, and the
day. Rs.50,000/- and Rs.50,000/-
remaining OTS amount to be deposited within 3 months from
up to and up to
the date of conveying the approval.
f) Processing of the Application: Rs.1,00,000/- Rs.1,00,000/-
Rs.2/- per Rs. Rs.2/- per
i. The application will be processed and sanctioned within 15
days from the date of receipt of OTS offer letter & upfront 1000/- Min Rs.1000/-
amount. Sanction is to be accorded in a specified format. Rs.10/- per Min Rs.50/-
21. Govt. Commission: Quarterly entries will be passed centrally transaction per
from CBS w.e.f 31.3.2014. Branches should not pass the transaction
entries through Adjusting A/c.
22. Green Remit Card: per transaction limit increased to
Rs.25,000; monthly transaction limit per remitter: Rs.1 lac. 24. SGSY: Replaced by NRLM w.e.f 1.4.2013. Interest subvention
23. Non-home transactions: is provided for loans up to Rs.3lacs.
a) Max. limit for cash deposit Rs.25,000 per day for P segment; 25. Debit Card holders can withdraw cash up to Rs.1000 per
Rs.2 lacs per day for SME segment. card per day at SBI POS terminals; no fee i.e. at par now.
26. Male staff also eligible for sabbatical leave now.
b) In both cases; Charges: Rs.2 per thousand; Min: Rs.50/-.
27. SBI Asset Backed Loan for Commercial Real Estate: Similar
c) P Seg cash withdrawal:
to SBI ABL.
Sl. Type of Transactions Existing Revised a) OD with monthly Limit Reduction Prog.
No. Charges charges b) Repayment: up to 96 months.
(inclusive of c) Introduced in 120 branches
Service Tax) d) Purpose: Creation/acquisition of real estate such as office
buildings, retail space, residential buildings, industrial or
‘P’ Segment Cash Rs.2/- per Rs.2/- per warehouse space, multiplex, hotels, restaurants, gymnasium,
Deposit Rs.1000/- Min Rs.1000/- amusement parks, cold storages, education institutions etc
Max.Rs.25,000/- per Rs.10/- Min Rs.50/- where the prospect for repayment would generally be lease
day or rental payment or sale of asset.
e) Type of loan: Drop-line Overdraft facility.
‘SME’ Segment Cash Rs.2/- per Rs.2/- per f) LTV%: Immovable property: 60% of the realizable value.
Deposits Max. Rs.2, Rs.1000/- Min Rs.1000/- g) Loan Amount: Minimum loan amount: Rs.10 lacs.
00,000/- per day. Rs.10/- Min Rs.50/- h) Maximum loan amount:
‘P’ Segment Cash Free
JS Digest of Banking and Finance
Free
Apr.- 14 89 90 Hints for Answering
with drawal (Self only)
max. Rs.50,000/- per
a. Tier I Branch: Rs.50 Crores HINTS FOR ANSWERING OBJECTIVE
b. Tier II, III Branch: Rs.20 Crores QUESTIONS - 4
c. Tier IV, V, VI Branch: Rs.5 Crores
i) Assessment of Limits:
Banking & Finance
a. Working Capital: Based on projected cash flow.
1. SBI’s 15000th branch: Sooranam village, Sivaganga Dt, T.N
b. Fixed Asset: Based on project cost (after deducting various 2. Raghuram Rajan, RBI Governor: was Chief Economic Adviser
advances/deposits received /receivable. to PM earlier
j) Stock Statement: 3. Islamic Banking in Kerala: RBI has given a Non Banking
a. Second Qr and last Qr. Finance Company (NBFC) in Kerala approval to commence
b. DP is not linked to stock statement; stock statement is Islamic banking. Financial institutions that follow Islamic
obtained to confirm the level of activity. Stock audit is not banking do not charge interest on loans or give interest on
mandatory. No renewal of limit; but, annual review. deposits - they will also not fund institutions involved in
k) Inspection: Half-yearly. activities related to liquor, gambling, speculation or tobacco
l) General: Quarterly progress report to be obtained. activities.
m) Margin: 25% margin on project cost for fixed asset 4. Cash Management Bills: These are short term bills issued by
requirement. RBI on behalf of Govt. to meet Govt’s temporary cash flow
n) Repayment: Drop-line Overdraft: Limits can be sanctioned mismatches. CMBs have the generic character of Treasure
Bills. The period is less than 91 days.
for period of 12 months to 96 months with either Equated
5. Import duty on Gold: 10%; Silver :10%
Reduction in limit or customized reduction in limit
6. If there are writings /scribblings on bank notes: they are
depending upon the cash accruals as per projections. treated as soiled notes (RBI’s Clean Note policy.)
Moratorium under the scheme should not be more than 18 7. Ceiling on ODI: reduced to 100% of net worth (RBI)
months based on activity. Interest to be serviced monthly 8. Limit for remittances by residents under Liberalised
in case of moratorium. Remittance Scheme reduced to USD 75000 per financial year.
o) The drawing power shall be reduced so as to have the 9. Remittance under LRS for purchase of immovable property
overdraft liquidated at the end of the period. abroad is now prohibited.
p) Regular transactions are permitted up to drawing power 10. FCNR (B)/NRE deposits - exemption from maintenance of
available. CRR/SLR and exclusion from ANBC for Priority Sector
q) No over-drawings permitted. Lending: With effect from fortnight beginning August 24,
r) Penal Interest: 1%, if overdue for more than 30 days 2013, incremental FCNR (B) deposits as also NRE deposits
s) Primary Security: Charge on assets created out of Bank with reference base date of July 26, 2013, and having maturity
finance. of three years and above, mobilised by banks will be exempt
from maintenance of CRR and SLR. Further, advances
t) Collateral: Immovable property in the form of Equitable
extended in India against the incremental FCNR (B) / NRE
Mortgage of land and buildings, by way of first charge.
deposits qualifying for exemption from CRR/SLR
requirements as above, will also be excluded from Adjusted
Net Bank Credit for computation of priority sector lending
targets.
11. Buyback Norms: Securities and Exchange Board of India
(SEBI) has notified buyback norms by which companies must

JS Digest of Banking and Finance Apr.- 14 91 92 Hints for Answering

 now buyback at least 50% of their offer; they must also
complete their buyback offer within 6 months down from
12 months currently.
12. Temasek: It is Singapore Govt’s investment company.
13. Interest subvention for exports: raised to 3%.
14. Trade Deficit: Physical Imports-Physical Exports.
15. FDI in Multi Brand Retail: The Government has relaxed 3
conditions that it mentioned as riders to foreign investment
in Multi Brand Retail (MBR):
 30% sourcing from Small Industries: The definition of micro,
small and medium enterprises has been expanded to include
those companies with investment in Plant and Machinery of
up to US$ 2 mn. This limit may be exceeded at a later date –
but as long as the retailer sources from this enterprise it
shall be included in the 30% bracket.
 50% investment in backend infrastructure: Companies must
invest 50% of only the first tranche of minimum investment
- US$ 100 mn in backend infrastructure; any other investment
made by the retailer does not carry this rider.
 Investment in Cities that have more than 1 mn population:
Retailers may set up stores in all States that have agreed to
MBR even if the cities in those States do not have over 1 mn
population provided those States have no city with over 1
mn population. 12 States have so far agreed to MBR.
16. Companies must now spend 2% of their Average Net Profit
over the preceding 3 years in activities related to Corporate
Social Responsibility (CSR). Those companies that fail to do
this must explain reasons for shortfall. These norms pertain
to those companies with net worth of Rs.500 crore or more,
or turnover of Rs.1,000 crore or more, or a net profit of Rs.5
crore or more during the past three financial years.
17. FOOD SECURITY BILL 2013: On 26th August 2013 the Lok
Sabha approved the landmark Food Security Bill which
seeks to provide cheap food grains to 67 % of the nation’s
population (82 crore people ) . The food security programme
will be the largest in the world and would require 62 million
tonnes of food grains annually. Salient Features:
* Will annually impact the country’s budget with an amount
of Rs. 1, 30,000 Cr ($20 billion).
* Will guarantee 5 kg of rice, wheat and coarse cereals per
month per person at a fixed price of Rs 3, 2, 1, respectively.
JS Digest of Banking and Finance
* About 24.3 million poorest of the poor families covered under
the Antyodaya Anna Yojana (AAY) scheme under PDS (Public
Distribution System) would get legal entitlement to 35 kg of
food grains per family per month.
* The Bill also ensures the following to pregnant women,
lactating mothers & children up to 14 Years age:
* Every lactating mother/pregnant woman is entitled to a meal
free of charge during pregnancy and 6 months after the child
birth, to meet the nutritional standards, through local
anganwadi.
* Maternity benefit of not less than Rs. 6000.
* Appropriate meal to meet nutritional standard to all children
in the age group of 6 months to 6 Years of age through the
local anganwadis.
* One midday meal free of charge every day, except on school
holidays for, children up to class VIII in all schools run by
Govt, local bodies, and aided schools or children in the age
group of 6years to 14 years.
18. Asylum for US Whistle-blower: Russia has offered temporary
asylum to American whistle-blower Edward Snowden for a
year. He has moved out of the Russian airport.
19. IISc among Global Top 500: The Indian Institute of Science
(IISc) is the only Indian institute in the top 500 of the 2013
Academic Ranking of World Universities (ARWU) list.
20. Money Mules: RBI has also advised that “Money Mules” can
be used to launder the proceeds of fraud schemes (e.g.
phishing and identity theft) by criminals who gain illegal
access to deposit accounts by recruiting third parties to act
as “money mules.” In some cases these third parties may be
innocent while in other they may be having complicity with
the criminals. In a money mule transaction, an individual
with a bank account is recruited to receive cheque deposits
or wire transfers and then transfer these funds to accounts
held on behalf of another person or to other individuals,
minus a certain commission payment. Money mules may be
recruited by a variety of methods including spam e-mails,
advertisements on genuine recruitment web sites, social
networking sites, instant messaging and advertisements in
newspapers. When caught, these money mules often have
their bank accounts suspended, causing inconvenience and
potential financial loss, apart from facing likely legal action
Apr.- 14 93 94 Hints for Answering
 for being part of a fraud. Many a times the address and
contact details of such mules are found to be fake or not up
to date, making it difficult for enforcement agencies to locate
the account holder. The operations of such mule accounts
can be minimized if RBI guidelines are followed diligently.
It is necessary to adhere strictly to the guidelines on KYC/
AML/CFT issued from time to time and to those relating to
periodical updation of customer identification data after the
account is opened and also to monitoring of transactions in
order to protect themselves and their customers from misuse
by such fraudsters.
21. Air India-SBI Cards Card: Air India and SBI Cards have
joined together to issue a distinct travel credit card for
customers.
22. Resident individuals can now take maximum of Indian rupees
10000 while going abroad; also, Rs.10000 can be brought into
India by them.
23. Bulk deposit: A single deposit of Rs.1 cr and above is treated
as Bulk deposit.
24. Higher Borrowing Limit: RBI had raised the current foreign
borrowing limit for banks from 50% to 100% of unimpaired
Tier I Capital – banks were also allowed to swap such
borrowings with RBI at a concessional rate of 100 bps below
the swap rate in the market. RBI has stated that only those
banks with Capital Adequacy Ratio (CAR) of at least 12%
can avail of this higher borrowing facility.
25. Infant Mortality Rate: India’s infant mortality rate improved
from 44 deaths per 1000 live births in 2011 to 42 deaths per
1000 live births in 2012.
26. Brown-labelled ATMs are normally installed in rural and
semi-urban areas. In ‘Brown label’ (BL) ATMs, hardware is
owned by a service provider. Cash management and
connectivity to banking networks is provided by a sponsor
bank whose brand is used on the ATM. BL ATM is mid-way
between bank-owned ATMs and ‘white label’ ATMs. Of late,
there is a visible shift in the way banks look at the ATM
business. Banks used to buy outright the ATM machines and
bear the cost of service. Now they are preferring brown
label ATMS in which the machine and service is outsourced.
RBI has permitted setting up White Label ATMs also.
27. White Label ATM: RBI has permitted non-banking companies
JS Digest of Banking and Finance
to set up, own and operate ATMs to accelerate the growth
and penetration of ATMs in the country. Such ATMS are
known as White Label ATMs and would provide ATM
services to customers of all banks. Such ATMs do not carry
the label of any specific bank.
28. India stands first in the inflow of foreign remittances; China:
Second
29. US Fed Reserve Chairperson: Ms. Janet Yellen
30. E-corners: SBI has opened 24/7 electronic branches called e-
corners. These branches include ATMs with cash-deposit
machines, self-service kiosks and coin vending machines.
Some of the other services that customers can avail of include
opening fixed deposits, depositing cheques, generating
statements, paying bills, reprinting passbooks and
transferring funds.
31. ATMs: SBI plans to have ATMs in all its branches by March
2014.SBI currently has 17,804 onsite ATMs and 13,945 offsite
ones. According to Managing Director (MD), SBI Krishna
Kumar, the cost of transacting at the branch is Rs.40 while at
the ATM it is Rs.20 per customer.
32. Preferential Rates for Women Self-Help Groups: RBI directed
Public Sector Banks (PSBs) to lend to women self-help groups
at a rate of 7% so that they can avail of the benefits of the
interest subvention scheme under Swarnajayanti Gram
Swarozgar Yojana Aajeevika (SGSY) scheme. PSBs will be
reimbursed the difference between weighted average
interest and 7% subject to a maximum of 5.5%.
33. Women’s Bank: The Bharatiya Mahila Bank, a fully owned
initiative of the Government of India to empower women,
commenced operations with 7 branches (at Kolkata, Mumbai,
Lucknow, Guwahati, Chennai, Bangalore and Ahmedabad)
on November 19, 2013. It plans to open 25 branches by March
2014. Its initial paid-up capital is Rs.1,000 crore. There is a
plan to open 771 branches by 2020 with a business mix
(deposits and advances) of Rs.60,000 crore. Its first Chief
Executive Officer (CEO) is Usha Ananthasubramanian.
34. Most Powerful Indian Businesswoman: Fortune Magazine
has ranked ICICI Bank Managing Director (MD) and Chief
Executive Officer (CEO) Chanda Kochhar as the most
powerful Indian businesswoman for the third consecutive
time. Axis Bank’s Shikha Sharma and Capgemini India’s
Apr.- 14 95 96 Hints for Answering
 Aruna Jayanthi were ranked second and third respectively. banks. Banks are not in favour of such moves due to recent
35. CHOGM Meet held at Colombo (Nov’13). invocation of BGs and devolution of LCs on issuing banks
36. Foreign Direct Investment: Max 74% of the capital of a owing to lax monitoring of non-fund based facilities,
private bank allowed; PSB: 20% possibility of fraud by customers approaching many banks
37. Survey on Customer Satisfaction: SBI plans to hire advisors for such facilities, and possible unhealthy poaching of business
to gauge the level of customer satisfaction across 600 branches by competitors.
and 300 ATMs to determine shortcomings in its products 43. Quantitative easing is a monetary policy tool used by central
and processes. The results of the 3-6 month long survey will banks to stimulate the economy wherein they buy financial
be used as in devising the bank’s business strategy for 2014- assets with newly created money.
15. 44. Nelson Mandela, former South African President and Nobel
38. Revised Guidelines for Reporting on GCC Credit Schemes: Laureate died.
RBI has directed banks to report only entrepreneurial credit 45. Virtual Currency: Reserve Bank of India seeks to define
in the General Credit Card (GCC) schemes under the Virtual currency as ‘a type of unregulated, digital money,
Financial Inclusion Plans (FIPs); this is to ensure that all which is issued and usually controlled by its developers,
productive activities under the Priority Sector get credit. and used and accepted among the members of a specific
Credit cards such as Artisan Credit Card and Swarojgar virtual community’. Virtual currencies include bitcoins,
Credit Card may be included under GCC as they cater to litecoins, bbqcoins and dogecoins. Their value is determined
non-farm entrepreneurial credit. It has also stated that by the users based on its acceptability and applicability in
consumption credit must be reported separately under the payment system.
Overdraft or Consumption Credit under the FIP reporting
format of the RBI.
39. PIN Mandatory at POS: From December 1 2013, debit card
customers must use their Personal Identification Numbers
(PINs) at the Point of Sale (POS) units in merchant
establishments. Credit card customers must enter their PINs
for international and internet transactions.
40. RBI’s CPI-linked Bonds: RBI launched its Inflation Indexed
National Savings Securities-Cumulative (IINSS-C) bonds for
retail investors on December 23, 2013. Sale of these bonds
will close on December 31, 2013. The interest rate is 1.5%
above the Consumer Price Index (CPI). Individuals may
invest a minimum of Rs.5, 000 and a maximum of Rs.5 lakh
per annum. Interest will be compounded half-yearly. The
tenor will be 10 years. (RBI auctioned inflation-indexed bonds
that are linked to the Wholesale Price Index – WPI - on
November 26, 2013.)
41. Indian Banks Association: New CEO, M.V.Tanksale (former
CMD, Central Bank of India)
42. BGs, LCs to non-customers: RBI had sought feedback from
the banks on the possibility of sanctioning non-fund based
Bank Guarantee and Letters of Credit to non-customers by

JS Digest of Banking and Finance Apr.- 14 97 98 Hints for Answering

 FOREIGN EXCHANGE OBJECTIVE TYPE 12. Packing Credit can be granted for a maximum period of
_______.
QUESTIONS a) 90 b) 180 c) 270 d) 365 days
13. Export bills should be delivered to the Authorised Dealer
1. Export finance risk in respect of SME units is covered by the within:
Bank with a) 11 b) 21 c) 31
a) D.I.C.G.C. b) ECGC c) Exim Bank. d) 41 days of shipment.
2. Charges in respect of foreign Letter of Credit/Guarantees 14. X is going to Jeddah for employment. He has a S.B. a/c with
are to be recovered as per. the branch. His S.B. a/c should be converted into
a) IBA regulations b) FEDAI rules c) UCP a) NRO a/c b) FCNRB a/c c) NRE a/c
d) none of these 15. While cancelling a foreign draft issued by the branch
3. Foreign Trade Policy is announced by ministry of a) T.T. buying rate is applied. b) D.D. buying rate
a) finance b) external affairs c) commerce is applied. c) D.D. selling rate is applied.
d) overseas Indians affairs 16. Uniform Customs and Practice for Documentary Credits
4. A stale bill of lading is one, which is submitted to the bank (UCP) has been issued by
a) within 14 days b) after 14 days a) WTO b) IMF c) Basel Committee d) ICC
c) within 21 days d) after 21 days from shipment 17. Banks have to scrutinize the documents received under an
5. Which of the following is a forex purchase transaction? LC within
a) import bill b) issue of foreign currency a) 7 days b) 7 working days c) 5 working days
c) loading in traveller card d) collection of export bill d) 5 days after receipt
6. Forward rate at a premium is advantageous to 18. When a bank gives its customer foreign currency in exchange
a) importers b) exporters for Indian Rupees, the transaction is a
c) bank d) not advantageous to any one a) Purchase transaction b) Sale transaction c) Customer
7. NRE (Rupee) accounts are opened with transaction.
a) Deposits/remittances from abroad 19. A foreign currency is called a commodity because.
b) Local remittances. a) the value of the currency fluctuates frequently
c) conversion of existing resident accounts b) it can be bought and sold like any other commodity subject
8 Foreign Trade Policy is categorizing the goods for export to R B I regulations etc
and import under c) it cannot be treated as hard cash.
a) 2 b) 3 c) 4 d)5 categories 20. Under a confirmed L.C, who is liable if the issuing Bank
9. FCNR (B) deposits are maintained in SBI in fails to honour the bill drawn under the credit?
a) 6 b) 8 c) 10 a) Confirming bank b) Negotiating bank c) Advising
d) all currencies bank.
10. Remuneration earned on Foreign Exchange transactions is 21. In the case of imports from Nepal and Bhutan the permitted
credited to Currency for payment is
a) interest b) exchange a) Indian Rupee b) U.S. Dollars c) £ sterling
c) commission account 22. In a deemed export
11. G.R forms are used in connection with a) goods are not sold b) goods are sold abroad
a) imports b) exports c) LC transactions c) goods are sold within India
d) none of these

JS Digest of Banking and Finance Apr.- 14 99 100 Forex Objective

23. UCP 600 has 34. Ceiling for outward remittance under liberalized remittance
a) 29 b) 39 c) 49 facility per financial year is
d) 59 Articles a) $200000 b) $100000 c) $250000
24. What rate is applied to encash a cheque in USD for credit of d) $75,000
a/c of an NRI customer?
a) T.T. buying rate b) T.T. Selling rate c) Personal Answers to Objective Questions (Foreign Exchange)
cheques rate (others in SBI)
25. Payment for import bills should be made within 1 b 2 d (Banks are free to fix the rates)
a) 45 days b) 90 days c) 120 days 3 c 4 d
d) 6 months from shipment 5 d 6 b
26. The ceiling for bringing in foreign currency by a traveler 7 a 8 b
visiting India without reporting under CDF is 9 c 10 b
a) $5000 b)$ 10000 c) $20000 d) $25000 11 b 12 d
27. A claused bill of lading is one, which contains remarks 13 b 14 a
regarding 15. a 16 d
a) voyage b) delivery of goods 17 c 18 b
c) quality of goods d) quality of packaging the goods 19 b 20 a
28. If the price of one USD increases from Rs55.62 to Rs55.70, it 21 a 22 c
will benefit 23 b 24 c
a) India’s forex reserve b) forex reserve of US c) exporter 25 d 26. a
in India d) importer in India 27. d 28. c
29. A direct quote is called so because, 29. c 30. b
a) the quotes take place directly between the traders 31. d 32. a
b) foreign currency is allowed to fluctuate 33. c 34. d
c) home currency is allowed to fluctuate
d) none of the above
30. Software exports in non physical form are declared in
a) GR form b) SOFTEX Form c) PP Form
d) SDF form
31. Card rate is applied to small value transactions, where the
rupee equivalent does not exceed
a) Rs100000 b) Rs200000 c) Rs500000
d) Rs.10.00.000
32. Which of the following has to be submitted as evidence for
export under Exchange Control Regulations?
a) GR Form (now called Export Declaration Form)
b) Bill of Lading c) Bill of entry
33. How is a foreign spouse of an NRI treated for the purpose
of opening an NRI A/c?
a) as an Indian resident b) as a foreigner
c) as a Person of Indian Origin d) as an NRI

JS Digest of Banking and Finance Apr.- 14 101 102 Forex Objective

 MODEL TEST 10. Revised code of commitment to customers of BCSBI has come
in to effect from ….
TRAINEE OFFICERS’ WRITTEN EXAMINATION a. July 2013. b. Oct 2013 c. Jan 2014
d. March 2014
PART I 11. The present MSF rate is……
SECTION A: General Awareness/ KYC/Legal Issues a.10 % b. 9.5 % c. 9.25% d. 9%
1. The Chairman of Bhrathiya Mahila Bank is……….......... 12. In the Year 2014 the following have completed 50 years
a. V. Panse b. Usha Anantha subramanian a. LIC b. GIC c. UTI d. None of these
c. Deepali Panth d.V.Sasikala 13. Companies, either with a net worth of Rs 500 crore or has a
2. The Chairman of IBA is turnover of Rs 1,000 crore or with a net profit of Rs 5 crore
a. K.R.Kamath b.M.V.Nair c.M.V. Tankasale are required to spend …..% of their net profit on Corporate
d.U.K.Sinha Social Responsibility.
3. The Award given by IDRBT for Financial Inclusion (IT-RB), a. 5% b. 3% c. 2% d. 1%
Electronic Payment (INB, MB &W, ATM, PSG) and CRM&BI 14. Foreign investmentin MSME is limited to ……..% paid up
(DWP)for 2013 (Large Banks) is awarded to equity capital
a. ICICI Bank b. HDFC Bank c.SBI a. 24% b. 26% c. 30% d. 50 %
d.Axis Bank 15. RBI proposes to issue Plastic notes on a trial basis in 5 cities in
4. Foreign invest ment in Axis Bank was recently increased to a. 2016 b. Second quarter of 2014
…….% from the existing 49% c. 2015 d. Second half of 2014
a. 51% b. 55% c.60 % d. 62% 16. RBI has stipulated that MFIs lending rate should be
5. The Chief of Federal Reserve of US is a.Cost of Funds Plus max of 10 % margin
a. Christine Lagarde b. Ms. Jenet Yellen b. 2.75 times the Average base rate of 5 largest Banks
c.Karnit Flug d. none of these c. least of a & b d. none of these
6. Total number of Deputy Governorsin RBI is………. 17. During the Year 2014-15 Govt proposes to infuse capital to
a. 4 b. 3 c. 5 d. none of these PSBs to the tune of…..
th
7. India’s Forex Reserve as on 14 Feb 2014 was US$ a. Rs. 14,000 Crb. Rs.11,200 Crc. SRs. 10,000Cr
a. 293.78 bn b.300 bn c.285 bn d. Rs. 8000 Cr
d. none of these 18. RBI had set up Supervisory colleges for the following Banks
8. Apart from Tata Communications Payment Solutions Ltd., a. BOI b. Bank of Baroda c. neither a nor b
License to set up White Label ATMs is given to…… d. Both a & b
a. Prizm Payment Services P(ltd) 19. In India Basel III capital regulation would be fully
b. Muthoot Finance Ltd., implemented as on
c. Vakarangee Ltd., d. All of these a. 31.12.2017 b. 31st March 2019 c. 30.6.2017
9. For the financial Year 2013-14 Current Account Deficit is d. 31.12.2018
expected to be ……..of GDP 20. Under Base III norms a minimum Capital to Risk weighted
a. 4 % b. 3.5 % c. 2.5% d. 2 %

JS Digest of Banking and Finance Apr.- 14 103 104 Model Test

 Assets Ratio (CRAR) of ….is to be maintained.
a. 9% b. 8% c. 10% d. 7%
Section B: Passage based questions
Passage No.1
1) M/s Jai Raghuveer enterprises is engaged in the
manufacturing of brass wares . The unit approaches our Badohi
branch for a term loan for procuring Machinery valued at Rs.
60 lakhs . The unit is not having any loans with other banks/
FIs The units investment in P&M is Rs 75 lakhs . The branch
decides to process the loan under SME smart score .
a. Is the unit eligible for finance under the scheme?
b. For what purpose the loan can be sanctioned?
c. How much loan can be sanctioned?
d. What margin do you insist on?
e. What is the moratorium and repayment period stipulated
under the scheme for term loans?
f. How the WC loan is continued after one year of sanction?
Passage No.2
1. A new Accountant has assumed charge at the Branch. He has
observed that a number of items relating to unclaimed items
in the locker room are held as safe deposit articles in the joint
custody of Accountant and Manager (Cash). Articles left by
customers outside the locker are also found in these items.
He suggests that the items be disposed of by auctioning and
reasonable charges recovered for the ‘safe keeping’ of the
items.
a) Whether the items can be auctioned as suggested by the
Accountant?
b) What is the Bank’s status in regard to articles left by
customers outside the locker?
c) Whether Bank can be charged of misappropriation in
taking custody of items?
d) What are ‘reasonable means’ and what ‘reasonable time’
in such cases is?
e) What the branch should do now?
JS Digest of Banking and Finance
Passage No.3
Mr Santosh a customer of your branch lodges a complaint with
you, regarding his unsuccessful ATM transaction. The complaint
dated 05.02.2013 states that he went to draw Rs 20000/- from the
branch ATM on 25.12.2012 at 10.00 P.M. Even though he provided
all the details properly and confirmed the ATM withdrawal
transaction he did not get the money from the ATM, but his account
was debited. As he left for outstation the same day and returned
only on 1st February, he submitted the complaint on his return on
05.02.2013. The branch promptly lodged the complaint in CMS
and after processing the complaint and verification of JP log etc
credited the amount of Rs 20000/- on 20.02.2013 to his account
and advised him accordingly. The customer came to the branch
and complained that he has not been paid the penalty of Rs 100/-
per day even though the bank has taken more than 7 days to settle
the claim. The customer wants clarifications on the following;
a) Why penalty is not paid as per RBI directions?
b) When did the revised instructions from RBI regarding
payment of penalty came into effect?
c) Why he cannot be reimbursed at least SB interest rate from
the date of transaction as he would have otherwise got from
his account if he had not made the ATM transaction?
d) As Branch Manager what suggestion you offer him to ensure
against such delay in lodgment of complaint?
e) By whom the guidelines regarding time norms for lodgment
of complaint, to be eligible for penalty, is advised?
f) What is the time norm prescribed for complaint lodgment
with regard to third party ATM transaction?
Passage No.4
. One current account customer, Mr.Rajendran has retired a
documentary bill on 21.12.12 by making cash payment of
Rs.23000. While you are delivering the bill you have observed
that the RR is missing. However, you observe that the number
and date of the RR is noted in the LSC Register and in CBS.
You request the customer to come the next day to receive the
Apr.- 14 105 106 Model Test
 RR. But the customer is demanding immediate release of the Lac d. Rs 2.00 Lac
RR as he is in urgent need of the goods. Besides, he says that 2. SBI recently closed some schemes. Which scheme is not closed?
any delay will result in payment of demurrage. a. Big Buy Scheme b. Computer Loan c. Teacher
a) Has the RR been received by the collecting branch? Plus d. Festival Loan
b) What the collecting branch should do now? 3. Minimum amount in SBI Annuity Deposit Scheme is
c) What the branch should do if the RR is not traced? a. Rs 1.00 Lac b. Rs 2.00 Lac c. Rs 25000/
d) Who has to bear the cost of demurrage if any? d. Rs 50000/-
e) What is the position if the customer approaches consumer 4. What is the maximum eligible amount under SME credit plus
court seeking huge penalty? a. Rs. 25lakh b. Rs. 50,lakh c. Rs. 75,lakh
d. Rs. 100 lakh
Passage No.5 5. POWER JYOTHI Account is opened for:
Mr ‘X’ an employee of ABC Ltd who visits the ABC Bank frequently a. Collecting Donations b. Collecting Fee
for deposits and payments in respect of the company a/cs withdrew c. Collecting Bills d. collecting taxes
a sum of Rs. 1 lakh on 16.5.2000 from your branch. On 17.5.2000 Mr 6. SBILife Saral MahaAnand is ……..
‘D’ ,director of the Co. comes to the bank and informs you that the a. ULIP plan b.Annuity plan
employee Mr. ‘X’ was removed from service on 12.5.2000.The c. Protection plan d. Whole life plan
company denied that it had issued the cheque for Rs. 1 lakh that was 7. ASBA scheme is related to purchase of
paid by your branch on 16.5.2000. On scrutiny, you have noticed a a. CD b. CP c. IPO
slight difference in the signature of the director in the cheque. The d. Shares with secondary market
director demanded for the refund of the money. You have tried to 8. Age of the key person of the unit in SME Smart Score is
satisfy the customer stating that it was a small amount and the cheque between
was paid in good faith. The customer is not satisfied and insists for a. 21 to 60 yrs b. 18 to 60 yrs c. c. 21 to 65
refund of the amount. yrs d. 18 to 65 yrs
a) What is the position if the employee is well known to the 9. Minimum Loan amount in NRI Housing Loan is
Bank and is a known agent of the company? a. Rs 1.00 Lac b. Rs 2.00 Lac c. Rs 3.00 Lac
b) What is the status of a forged cheque? d. No Minimum
c) What is the position if the removal of the employee was 10. The age of the spouse when loan is granted in single name in
advised to the Bank? Reverse Mortgage Loan scheme is
d) As Bank was not advised about the removal of X what is a. above 58 yrs b. 60 yrs c. 62 yrs
the legal position in the instant case? d. No required
e) Whether the cheque was paid in good faith is tenable? 11. Olericulture refers to................
a. growing earth worms b. growing vegetables c.
Section C: Knowledge about the products of Bank fishery d. growing fruits
1. Maximum loan amount eligible for subsidy in ISHUP scheme 12. Minimum Balance required in SME Sahaj is
(Interest Subsidy Scheme for Housing for the Urban Poor): a) 10000 b) Rs. 2500 c) Rs. 1000 d) Nil
a. Rs 60,000/- b. Rs 1 Lac c. Rs 1.60

JS Digest of Banking and Finance Apr.- 14 107 108 Model Test

13. Basic Savings Bank Deposit Account (Fully KYC compliant) d. All of these
has ….......feature of the following f: 4. Number of digit in UTR No is
a. No minimal Balance b. ATM cum Debit Card a. 10 b. 12 c. 14 d. 16
issued free of cost 5. The Fixed Assets Management software in SBI is known as
c. Including ATM withdrawals maximum 4 withdrawals a. Iasset b. eAsset c. IFAM
in a month d. All of these d. e_FAM
14. Sylviculture refers to 6. The full form of OLTAS is .............
a. Cultivation of forest trees b. Mushroom a. Online Tax Accounts Solutions
cultivation c. Organic farming d. Egg cultivation b. Onetime Tax Accounting system
15. Under “Agri Clinic and Agri Business Centre scheme” , the c. Online Tax Accounting systemd. Online Total Accounting
maximum loan amount that may be sanctioned for Group System
activity is Rs…......... 7. What is a Black Card?
a. 50 lakhs b. 100 lakhs c. 150 lakhs a. Special Cards offered to Super rich Account Holders
d. 200 lakhs b. Hot listed cards
16. Minimum DSCR under SBI Fleet finance scheme is………. c. Cards Offered to No frill account holders
a. 2 b. 1.75 c. 1.5 d. None of these d. None of these
17. As per the modified car loan scheme in “P” segment Minimum 8. Service Provider for ATM services is
Net Annual Income(NAI) for salaried employee is Rs……….. a. Mahindra Satyam b. FSS c. CMS d. TCS
a. 2.5 lakhs b. 3lakhs c.4 lakhs 9. DRS system for ATM Switch Centre is located in
d. 6lakhs
a. Belapur b. Pune c. Chennai d. 1Hyderabad
18. The balance in “Small Deposit Scheme” Account “at any point
10. CBS software used at CDC is…………
should not exceed Rs…..........
a. Finance 1 b. Base 24 c.B@ncs24 d.B@ncsLink
a. 50,000 b. 25,000 c. 10,000 d. 5,000
11. Media used for State Bank Connect is………..
19. With effect from 1.4.2013, the loans sanctioned under SGSY
a. VSATs b. Leased Lines c.Dial up ISDNT
(for SHGs) will be covered under the ambit of….......
a. SRLM b. SULM c. NRLS d. NRLM d. all of these
12. Who Publishes “IT Forum” in the Bank ?
20. Maximum repayment period under Rent Plus scheme is
a. SBIICM, Hyderabad b. GITC, Mumbai c. ERD
a.5 Years b. 7years c.10 years d. 12 years
dept d. None of these
13. Minimum amount under RTGS R 42 transaction is:
SECTION D: CBS/Technology
a. No limit b. 1lakh c. 1.5 lakh
1. CBS Login password requires a minimum of ………characters
d. more than Rs.2lakhs
a. 4 b. 6. c. 8 d.10
14. How Much depreciation is allowed on Computer Systems ?
2. The software that was recently integrated with CBS is……
a.33.33%b. 20 % c. 50 % d. 10%
a) Kubera b. LOS. c.OLTAS
15. Signtrieve package enables………
d.None of these
3. The Card Issued by NPCI is known as a. Signature retrieval b. Signature scanning
c. Signature of officers d. None of these
a. Rupay Card b.Visa card c. Mastero card

JS Digest of Banking and Finance Apr.- 14 109 110 Model Test

16. SWIFT stands for d. 25lakhs
a. SWIFT Transmission b. Software information c. Social 5. Virtual Cards can be generated by GPRS based application “
Welfare Initiative For Trade d.Society for Worldwide State Bank freedom –Premium” for any value between Rs 100
&
Inter Bank Financial Tele Communication
a. Rs.50,000 b. Rs.75000 c. Rs.100,000
17. Core Banking software is supported by
d. None of these
a. Microsoft b. TCS c. Kindle, Ireland 6. Daily Transaction limit of “State Bank Smart Payout card “
d.Infosys is……..
18. Head of the IT department in the Bank is a. Rs. 50,000 b. Rs. 25,000 c. Rs. 10,000
a. DMD (IT) b. DMD(S&T)) c. DMD & CIO d.Rs.5,000
d.DMD & CDO 7. Under CINB Vyapaar Transaction limit is …………
19. SBI EZ- Trade offers which of the following services ? a.Rs. 100,lakhs b.Rs. 50,lakhs c.Rs. 25,lakhs
a. SB Account b. DEMAT Account c. On Line d. Rs. 10 lakhs
Trading d.All the three 8. Limit for request for Drafts under CINB Vistaar is.
20. CTS Stands for a. Rs.100 lakhs b. Rs. 50 lakhs c. Rs. 25 lakhs
a. Cheque Truncation System b. Cheque Transmission d. Rs. 10 lakhs
System c. Cheque Transfer System d. None of these 9. State Banks Partner for SBI Mobi cash is
a. TCS b.M/s Oxygen Services (India) Pvt. Ltd,
c. Kindle d. Oracle
SECTION E: Alternate Delivery Channels
10. A penalty @ Rs.100/- per day is payable by the bank if ATM
1. . ……..campaign was launched to increase the acquiring ATM
complaints are not resolved with in …………. Working days.
transactions and to decrease issuing ATM transactions to make
a. 7days b. 10 days c. 14 days
the Bank net acquirer.
d. 16 days
a. ATM Vijay b. ATM Champion c. e_Booster d.
11 If the INB customer suspects security threat any time during
ATM Power the INB session he/she can lock the user screen by pressing
2. How many variants of ATM cards are issued ? switches “Alt & O”. This is known as
a. 1 b.2 c.3 d.4 a. Deadman’s switch b. Block out c. Log out
3. Eligibility criteria for issuing State Bank Global debit card is d. None of these
……. 12. Maximum amount under ASBA is :
a.Maintaining QAB of Rs. 1akhs & more in SB/CA a. Rs. 1lakh b. Rs. 1.5 Lakh c. Rs. 2 lakhsd. None
b. Maintaining a Term deposit of more than Rs. 5lakhs of these
c. Having a Home loan of more than Rs. 10lakhs Or Car 13. Inter Change Charges payable to NPCI for third party ATM
loan of more than 3 laks transactions is…….Non financial transactions & ………….for
d. Requested for an international debit card but or not Financial Transactions
eligible for issue of a Gold/ Platinum card a. Rs.5 & Rs.10b. Rs.6 & Rs.17 c. Rs.5 & Rs.17
4. Fund transfer limit to own account through RINB has been d. Rs.5 & Rs.15
enhanced to Rs.…....... 14. Blocking an ATM card operationimmediately is known as
a. 60 lakhs b. 10 lakhs c. 99,99,999 a. Blocking b.Hot listing c. Black Listing

JS Digest of Banking and Finance Apr.- 14 111 112 Model Test

 d. Barring 6. The Central Management Committee of the Bank consists
15. Brown Label ATMs are ATMs of……
a. Without any Colour b. Set up by RBI 7. Registered office of SBI is located at………
8. State Bank celebrated its bicentenary in the Year……
c. Set up by IBA
9. What is the Net NPA & Net NPA percentage of SBI as on
d. Set up and maintained by non-banking entities but 31.03.2013?
without specific bank’s label 10. Who is the MD of Associate Banks & Subsidiaries Banking
16. For Internet Banking Services SBI has a tie-up with Group?
a. Mahendra Satyam b. Airtel c. Tata Telecom a. S.Viswanathan b. P. Pradeep Kumar c. H.G.
d. None of these Contractor d. A. K.Kumar
17. Under Balance enquiry through ATMs, Mini statement 11. What is the market share of SBI in deposits as on 31.3.2013?
Contains.............no of latest txns. 12. SBI has its presence in…….countries.
13. Loans beyond Rs 5 Cr are now required to be sanctioned
a. 5 b. 10 c. 15
by…….
d. 3 a. Regional office Credit Committee b. Zonal office
18 The first white label ATM (WLA) of the country was Credit Committee
launched at c. Circle Credit Committee II d. Circle Credit
a. Chandrapada, Maharastra b. Hissar, Haryana Committee I
c. Sarnam, Tamil Nadu d. Sri Harikota, Andhra Pradesh 14. Regional Office Credit committee is headed by?
19. Maximum deposit that can be made through CDM using SBI a. DGM(B&O) b. Regional Manager c. AGM(Cr)
SME insta deposit card is d. None of these
a. Rs.25,000 b. Rs.40,000 c. Rs.45,000 15. Risk Management Department at the Corporate Centre reports
d. Rs. 49,900 to
20. SBI Achiever Card is meant for a. DMD & CFOb.DMD & CIO c. DMD & CCRO
a. HNI Customers b. SBI Employees c. Scholor d. DMD(Ops)
16. Maximum loan that can be sanctioned by ECCB is ….
Loanees d. All the three
a. Rs. 250 Cr b. Rs. 500 Cr c. Rs. 1000
Cr. d. unlimited
SECTION F: Financial results/performance indicator/
17. SBUs reporting to Managing Director & GE(A&S)
Organisational structure
is……..…
1. No. of Branches as on 31.12.2013
a. Associate Banks b.Domestic Joint ventures
2. What was the percentage share of Govt holding in SBI as on
c. Domestic Subsidiaries d. All the three e. a&b
31.03.2013?
18. Total Advances of SBI as on 31. 03.2013 were…..
3. Which of the following is not a part of Business Group?
19. What was NIM of the Bank as on 31.3.2013?
a. DMD&CIO b. DMD(NB&CS) c. DMD (SAMG)
20. SBI is disclosing Capital Adequacy Ratio as per Basel III in
d. DMD (Global Market)
the results from:
4. How many full time Directors are there on SBI board
a. 31.03.2013 b. 30.06.2013 c.31.09.2013
a. 5 b.4. c.3. d.None of these
d.31.12.2013
5. What is the Authorised capital of SBI?

JS Digest of Banking and Finance Apr.- 14 113 114 Model Test

PART II : Essay Writing: *14816 as on 31.03.2013
1. Ambience of branches PART I
2. Cash Deposit Machines SECTION B:
3. Cross selling Passage No.1
a. Yes. Under SME Smart score Scheme, small and medium
ANSWERS enterprise units engaged in Manufacturing, Trade or services
PART I can be financed.
b. Working Capital requirements & Purchase of fixed assets like
Section A Section C Section D Section E Section F
land, building, plant & machinery.
Q A Q A Q A Q A Q A c. The loans can be sanctioned as under :
1 b 1 b 1 c 1 d 1 15,297*  For manufacturing units, maximum limits up to Rs 50 lac
2 a 2 d 2 b 2 d 2 62.31%
 For trade & services units, maximum limits up to Rs 25
lakhs.
3 c 3 c 3 a 3 d 3 a
d. 25% for working capital and 33% for Term Loan
4 d 4 a 4 d 4 c 4 a
e. Term loan to be repaid in 5 years excluding moratorium not
5 b 5 b 5 c 5 a 5 Rs. 5000 Cr exceeding 6 months
6 a 6 a 6 c 6 c 6 Chairman, MDs f. Working Capital loan to be renewed every two years and
& DMDs reviewed annually subject to satisfactory conduct of account.
7 a 7 c 7 a 7 b 7 Kolkata Passage No.2
a) Apparently, we do not know the owners of these items.The
8 d 8 d 8 b 8 a 8 2006
branch has to take every effort to trace the true owners of the
9 c 9 d 9 b 9 b 9 Rs. 21956 articles and return these to them. As it is, there are no precise
Cr&2.1%
instructions on the subject and hence the matter has to be
10 c 10 a 10 c 10 a 10 a referred to the CA in every case.
11 d 11 b 11 d 11 d 11 16.46% b) Under the Indian Contract Act (S71) the bank is treated as
12 c 12 c 12 a 12 c 12 36
finder of lost goods in these cases. S169 of the Act permits
sale of such goods if:
13 c 13 d 13 d 13 d 13 b
i. With reasonable diligence the owner cannot be found,
14 a 14 a 14 a 14 b 14 b
or
15 d 15 b 15 a 15 d 15 c ii. Upon demand the owner refuses to pay lawful charges
16 c 16 c 16 d 16 a 16 d
of the finder, or
iii. The item is in danger of perishing or of losing the greater
17 b 17 b 17 b 17 b 17 d
part of its value, or
18 d 18 a 18 c 18 a 18 Rs.11,83,723 Cr iv. When the lawful charges of the finder in respect of the
19 b 19 d 19 d 19 d 19 3.66%
items found amount to two thirds of its value.
c) Under Sec 403 of Indian Penal Code (IPC) a person who finds
20 a 20 c 20 a 20 b 20 b property not in possession of any other person and takes such
property for the purpose of protecting it for or of restoring it

JS Digest of Banking and Finance Apr.- 14 115 116 Model Test

 to the owner, does not take or misappropriate it dishonestly
and is not guilty of an offence. However, he is guilty of
criminal misappropriation of the property, if
i. he misappropriates it to his own use when he knows or
has the means of discovering the owner.
ii. he has not kept the property for a reasonable time to
enable the owner to claim it.
d) What are ‘reasonable means’ and what is a ‘reasonable time’
in such a case is a question of fact. It is not necessary that the
finder should know who the owner of the property is or that
any particular person is the owner of it. It is sufficient, if, at
the time of appropriating it, he does not believe it to be his
own property, or in good faith, believes that the real owner
cannot be found. However, it would be advisable to give
notice of the same to the police under Section 176 of the Indian
Penal Code. In terms of Banking Companies (period of
preservation of records) Rules 1985, RBI’s permission will be
required for sale / disposal of the unclaimed articles as the
above mentioned Rules also include safe custody / lockers.
e) Corporate Centre has referred the matter to IBA some time
ago with a request to take up the issue with RBI for finalising
a procedure for disposal of the unclaimed safe deposit articles.
Since it is a long drawn process the branches should follow
the extant instructions till LHO issues specific instructions for
disposal of such items. Meanwhile, if considered appropriate,
individual cases may be examined by the Law Department at
the LHO before taking any action.
Passage No.3
a) Penalty is not applicable if the complaint is received after 30
days of ATM transaction. In the instant case the complaint is
lodged after 42 days from the transaction date. The Bank is
right in not paying penalty to the party though the complaint
is not resolved within 7 working days.
b) RBI revised the instruction effective from 01.07.2011 reducing
the number of working days for resolution of ATM/POS
complaints from 12 working days to 7 working days.
c) There is no provision for payment of SB interest on delayed
settlement in terms of RBI/NPCI guidelines. It is therefore in
order for not considering any such requests of the customer.
JS Digest of Banking and Finance Apr.- 14
d) The Branch Manager can explain the provisions and guidelines
regarding lodgment of complaint. The Manager should also
advise the customer that the process of lodgment of ATM
complaint is centralized by the Bank and the customer has
the option to lodge his complaint in any of the branches of
SBI even while he is away from his place and it is not necessary
to lodge the complaint only in his home-branch.
e) The NPCI, the corporate authorized by RBI for managing all
the retail payments in India, has issued the guidelines
regarding time norms for lodgment of ATM complaints.
f) The penalty clause and time norms for lodgment of complaints
relating to third party ATM is also the same as in the case
customer Bank ATMs. However, any complaint relating to
third party ATM has to be lodged within 120 days of the
transaction for resolution. Complaints lodged after this
stipulated time will not be valid and the bank will not entertain
such complaints.
Passage No.4
a) As the number and date is noted in the Branch Books, it is
clear that the RR has been received at the branch but
misplaced.
b) The bank will be held liable if the RR and other documents
are not handed over to the customer, immediately against
payment. RR should be traced immediately and handed over
to the drawee.
c) If the RR cannot be traced, an indemnity should be executed
by the bank favouring the Railways which should be handed
over to the drawee along with an authorization letter for
delivery to him. Every effort should be made to trace the
missing RR.
d) The collecting branch is responsible for the misplacement and
has to incur the cost of demurrage.
e) Bank should accept the mistake and explain all the steps taken
by the Bank to release the goods and reimburse the cost of
demurrage. The position has to be explained to the court
through Bank’s advocate for not imposing any penalty.
Passage No.5
There is no doubt that Mr. ‘X’ is the known agent of the company
117 118 Model Test
for making deposits, withdrawing money etc. However, it should
be remembered that the company is the Bank’s customer and the
Bank can only pay as per the ‘mandate’ of the company.
b) Forgery in the cheque means that there is no mandate to pay
the cheque. Forgery is nullity in law.
c) The bank would have been put on guard if the company had
advised about his removal from service earlier.
d) Not advising the removal of X, is an omission but it does not
affect the legal position.
The bank is liable to the company for having paid a forged cheque.
e) The bank’s stand that the amount was small and that it was
paid in good faith is not tenable. The signature is forged. Hence
there is no mandate to pay and the bank is liable.
Part II : Essay writing
1. Ambience of branches
Introduction : In the present environment there is need to table
all out steps to attract and retain customers. Good ambience attracts
customers, generates enthusiasm, radiates energy, improves
efficiency and enhance professional image Bank has formulated
an ambience policy applicable to the whole Bank to have a
uniformity of approach to issues related to ambience system and
ensure excellent maintenance of premises and furniture and create
an awareness among the staff in this regard. Based on certain
criteria all branches are categorized in to 4 categories viz. Platinum,
Gold, Silver & Bronze.
Criteria for Categorisation :The categorisation of branches are
made taking into consideration maintenance of the branch premises
& locker room , Indication boards, stationery arrangement ,
maintenance of records and over all look
Categorisation: Based on the above criteria, all branches are
classified into the following four categories:
 Platinum Branch : Excellent Gold Branch : Good
 Silver Branch : Tolerable Bronze Branch : Unacceptable
Need for better ambience : With the opening up of economy many
new generation private sector banks and Foreign Bank branches
have come up. These Banks have very good ambience. Customers
have many options today and expect convenience in a branch apart
from other things to do business. They are tempted to migrate to
JS Digest of Banking and Finance Apr.- 14
such branches with better ambience. Further , staff will feel good
to work in a good ambience their self-esteem will be high when
they work in a good ambience, which in turn will enable the staff
to perform better . This results in increased staff productivity. A
better ambience will certainly appeal to a new customer and
everything being equal, ambience will be the deciding factor. In
order to give boost to ambience, all branches are air conditioned
and larger space is made available for customers in the Banking
hall of the branch. Further amenities like water cooler, convenient
sitting chairs, various types of vouchers, name boards, token
display systems etc have been made to take the customer feel
comfortable.
In view of the competition, productivity of staff, retaining the
existing customers, attracting new business as well as the resultant
improved profitability the branches should be given the requisite
importance for the convenience of customers& business growth.
2. CASH DEPOSIT MACHINE (CDM)
As a part of enhancing customer convenience State Bank of India
has introduced Cash Deposit Machines (CDM. It has also enabled
the Bank in utilising the human resources for up-selling and cross-
selling of other products. Customers with an ATM-cum-Debit Card
or SME Insta Deposit Cards are allowed to deposit the cash to
their mapped account(s). The deposit of Cash is through a bunch
of loose notes up to a maximum of 200 pieces at any one instance
(50 pieces in case of certain CDMs). The machine scans for quality
(genuineness) and quantity (counts Note piece by piece ) of notes
deposited. Customer is allowed to deposit up to a maximum of
Rs.49900/- per transaction. The machine accepts cash in
denominations of Rs.1000/-, Rs.500/- and Rs.100/- notes only. The
Cash deposited through this machine is credited to the customer’s
account immediately. The customer will get an immediate response
indicating the credit to the linked account if the account to which
the transaction is made is enabled with SMS facility.
CDMs work on sensor technology. Cash deposited are counted,
authenticated and the quantity and value are displayed. Only when
the customer confirms that the quantity and value are correct, the
cash is sent to the vault /cash box, else, the cash is returned. The
escrow facility provided allows the customer to cross check his
transaction before the notes reach the vault / cash box. Suspect
119 120 Model Test
notes are detected by the CDM and are not deposited . These are
held in the machine in a separate box. Apart from depositing cash,
the customers can also carry out other functions like Balance
Enquiry, Mini Statement and PIN Change. The benefits of this
initiative are being used as an USP for marketing Bank’s liability
products.
The joint custodians of the branch will be provided with a password
to operate the safe of CDMs, who will evacuate the cash at regular
intervals during the day to avoid overflowing of the cassettes and
resultant stoppage of CDMs. Physical cash is reconciled with the
supervisory slip and BGL account balance before accounting. If
any difference is observed, the same should be dealt with
immediately. If any suspect note is detected, joint custodians will
verify the genuineness of the same. If in the process, any counterfeit
note is found, instructions issued by RBI on detection and
impounding of counterfeitare to be followed.
Customers and their movements and the events in the cash box in
respect of all transactions are recorded through video cameras
.The customer can be identified by his / her card number, time of
deposit, record of rejection (denomination) in the transaction log,
electronic Journal (eJ ) report and the sequence in which such notes
are placed in the reject bin. All the CDMs are adequately insured
for the value of the asset and also their contents. Cash verification
is done every quarter and CDM Cash verification certificate is
made as part of the quarterly / half yearly / yearly closing exercise.
It is necessary to ensure optimum utilization of CDMs in view of
the high cost involved. CDMs are installed at branches , with a
large Debit Card base, where large number of cash deposit
transactions are performed & where cash deposit transactions in
GCC are more. Wherever feasible, CDMs are installed in the on-
site ATM room / lobby. CDMs are placed in such a manner that
they are visible and easily accessible. In order to provide hand
holding support to the customers, branches have to identify one
active resource person to hand hold the customers and also create
confidence amongst them for usage of CDM.CDMs are boon for
both Bank and the customer. CDMs will enable the customers 24X7
days service to deposit cash. The Bank can concentrate on business
development as the footfall of the customers will come down.
JS Digest of Banking and Finance
3. Cross-selling for improving business and profitability of
the bank
The main function of a banker is accepting deposits for the
purpose of lending and investment and the major source of
profit for a bank is the net interest income - the difference
between interest earned on advances and the interest paid
on deposits. The net interest income of Banks is declining
due to reducing growth of fund-based advances due to
disintermediation process. The borrowers who were mainly
dependent upon banks for their credit needs are increasingly
resorting to capital market and money market for raising
resources by issuing shares, commercial papers, bonds,
debentures etc. Therefore banks are taking vigorous efforts
to augment the business land profits of the Bank through
conscious efforts. Cross-selling is an effective mechanism to
achieve this end.
Cross-selling is selling additional useful products from our
portfolio to an existing customer so that he/she does not need
to think of any other bank for his/her financial needs. The
advantages of cross-selling are:
i) Customer is happy as his needs are met at a single point
and saves him time and energy in looking for alternate
providers of financial services;
ii) Bank is able to retain the customer by anticipating and
fulfilling the customer’s needs;
iii) No extra cost is involved for the bank in cross–selling –
the existing staff can be used for this purpose; it is said
that it costs banks five times less to cross-sell an existing
customer than to acquire a new one.
iv) Business level and profits can be increased at nil or minimal
additional cost.
Banks normally cross-sell products like Life Insurance, General
Insurance, Credit Cards, Mutual Funds etc. Banks can cross sell
car loans, education loans etc. to a customer who has come for,
say, availing a Housing Loan. Also products like locker facility,
Remittance facility covering RTGS/NEFT, Wealth Management etc.
could be offered by way of cross-selling. It is important that staff
are well equipped to cross-sell products. They must know the
salient features of the various products, pricing, etc., thoroughly
to cross-sell them effectively. Banks provide incentives to staff to
Apr.- 14 121 122 Model Test
boost sales through cross selling and improve profits for the Bank. QUESTIONS RELATED TO SBI
Proper training needs to be imparted to staff who undertake cross-
selling for better performance. Cross selling of various products S l. Q u est i on A nsw e r R ef
of our Bank as also our Non-Banking subsidiaries is undertaken No
by the Bank. The following products of our subsidiaries are sold 1 W h a t is th e R u r a l i ni tia t iv e o f S B I K a A p n a G a on MMG
S BI ? III
by the Bank and a good income is earned there on. 2 0 09
1. SBI General Insurance Co Ltd: General Insurance Products 2 O ffi cia l sit e of SB I for In ter n e t O nl in e sbi .com MMG
2. SBI Life Insurance Co Ltd: Life Insurance Products. B a nk in g III
3. SBI Fund Management Ltd: Mutual Funds Products. 2 0 09
3 C on ta ct C e n tr e s of SB I a r e B a ng a lo re & B a r od a MMG
4. SBI Cards and Payment Services (P) Ltd: Credit Card. l oca t e d a t III
Cross-selling would make customers happy and make them remain 2 0 09
4 N a m e of th e St a te B a nk ’s S ta te B a n k F re e d oM MMG
loyal to the Bank besides helping in increasing the volume of M ob ile B a n ki n g Se r vi ce III
business and profit for the Bank. 2 0 09
5 W h ic h o f th e A s so c ia te B a nk s S ta te B a n k o f TO
t h a t ha v e a lr ea d y m e r ge d w it h S a u ra st r a & St a te Exam
S ta te B a n k o f In d i a u p to n o w B a nk of In d or e 2 0 07
?
6 SB I is a l low e d Fo re i gn Sh a r e 20% TO
H o ld i n gs u p to … . Exam
2 0 07
7 IT M a ga z in e P u bl is h e d by SB I K s h it iz TO
is Exam
2 0 07
8 W h a t is th e d e cl a re d sh a re 1915 TO
v a lu e of S B I a s o n 3 1.0 3 .2 0 1 4 ? Exam
2 0 07
9 C h ie f V ig il a nc e O f fi ce r o f SB I C h ai r m a n MMG
r e p or ts to II 2 0 0 8
10 H e a d qu a r t e rs of I & M A H y d e ra b a d JM G
d ep a r tm e nt i s loc a te d a t .. 2 0 07
11 G o vt Sh a r e h o ld i ng in SB I is … .. 6 2 .3 1 % (a s p er JM G
an nual 2 0 07
r e p or t 3 1 .0 3 .2 0 1 3 )
12 T he C G M o f a C ir cl e r ep or ts t o M D ( NB G) JM G
… … .. 2 0 07
13 P r e ve n tiv e V ig il a nc e co m m it tee S ta ff o f 20 p e op l e o r JM G
i s re q u ir ed t o be fo r m e d in m or e 2 0 07
B ra n ch e s wi th … … … .
14 W h o i s th e C V O in SB I S hr i . P .J. J o y , MMG
o n d ep u ta t i on f ro m III 2 0 0 8
C a n ar a B a n k
15 N a m e of th e H i n d i M a g z in e P ra y a s JM G
p u bli sh ed b y S B I is.. 2 0 08
16 W h e re w a s th e 1 00 0 0 t h B r a n ch P u d u va y a l i n JM G
o f SB I op e n e d ? S hi va g a n ga D i s t, 2 0 08
T a m il na d u
17 In w h ich o f th e A s s oc ia te B a n k s S B H & SB P MMG
S B I h as 1 0 0 % sh a re h old in g ? II 2 0 0 8
18 W h o i s ha v i ng the m a x i m u m GO I MMG
share in S BI ? II 2 0 0 8

JS Digest of Banking and Finance Apr.- 14 123 124 Questions Related to SBI
 19 In SB I G uruk ul refer s to S tate Bank MMG 39 R e ce ntly SB I foraye d in to M e rc han t TO
A cade my, Gur g oan II 2008 w hic h b usin e ss ? Acq uisi tion E XAM
20 W hat is the name of the U mang 2010
m agazine publishe d by STU ? 40 F ull Fo rm of SM E BU S mall & M e dium TO
21 IT For um is pub lished b y S BIICM MMG E nte rpri ses Bu siness E XAM
III 2008 U nit 2010
22 C ertification o btaine d by SBI B S7799 MMG 41 F ull Fo rm of R EH & H D BU R e al Estate H ab ita t
fo r its T ec hno log y und er Britis h III 2008 & Ho using
S tandard Sy stem is … .. D e v elopm en t
B usin es s U nit
23 C G M Risk M anag em ent re ports D M D & CCRO JM G 42 S BI Ca rds JV w ith G E CAPS TO
to 2009 E XAM
24 C hairm an of the R isk S enio r m ost M D JM G 2011
M anag em ent Co mmittee 2009 43 W ho is th e joint v enture p artn er B NP Parib as Cardiff
25 W ho heads the A LC O of the D M D & CF O o f SBI in SB I L ife Insuran ce
B ank ? c ompa ny Ltd. ?
26 W hat is SBI’ s mark et share in 16.58% (31.12.2013) MMG 44 S BI G ene ral Insuran ce is a JV IA G A ustralia MM G
De po sits ? II 2009 w ith II 201 1
27 W hat is the m ark et shar e in 16.53% 45 C onsultants for BPR ini tiativ es M cKinse y & Co TO
A dvance s ? (31.12.2013) o f State Ban k is E XAM
28 In RBO setup w ho is Re gional M anag er MMG 2011
re sponsib le for disc iplinary II 2009 46 W ho w as the co nsultan t fo r th e IIM A hm ed abad
proc ee ding s of staff ? i ntrod uctio n o f M odu lar
29 Paid up capital of SBI is… Rs. 684.03 Cr S TP TO structure in the Ba nk
2008 47 S BI’s R eg iste re d O ffi ce is K olkata TO
S l. Q uestion A nsw er R ef l ocate d at E XAM
No 2011
30 C A SA De posits of SBI 46.50 % 48 B ank ’s Adm inistrati v e H q M umbai
31 In SM E CC w ho w ill loo k after A cc ount MMG (C orporate Ce ntre ) is locate d
the early warning sig nals of M ainte nance Offic er II 2009 at
asse ts be com ing NPA 49 W hic h B ank con du cted G o v t. Im perial Ban k of TO
32 In RBO setup W ho is Re gional M anag er MMG B usin es s b e fore formati on of India E XAM
re sponsib le for Co mpliance of II 2009 R BI 2011
RF IA reports 50 T otal numb er of b ran ch e s of 2 0325 (31.03.2013) TO
33 H o w m any A ssoc iate B ank s are 5 TO S tate Bank G roup : E XAM
the re in SBI ? E XA M 2011
2010 51 T otal numb er of S BI bra nches 1 5,297 (31.12.2013 )
34 H o w m any Ci rc le s ar e the re i n 14 TO 52 W he re w as the 15000 t h Branch S ooranam v ill age in
S BI ? E XA M o f SBI ope ne d S hivag anga Dist.
2010 T am ilnad u
35 H o w m any SBUs ar e the re 5 S l. Q uesti on A nsw e r Ref
under NB G ?
No
36 B ase r ate of S BI 10 % TO 53 W hic h A pex T rg institutio n of S tate Bank Staff MM G
E XA M
the Bank ce le brated its G ol den C olle ge , Hy de rab ad III 2011
2010 Jub ilee
37 Re ce ntly the Gov t re duce d the 51% TO
54 Pu nc h lin e of SBI B ank e r to e v ery MM G
Go vt’s m inimum stake in S BI E XA M
Indian II 201 0
to …. 2010
55 S hare of Insurance Australia 26 % S TP
38 Go vt stake in SB I w as r ed uced S BI A ct A me ndment TO
G roup i n SBI G e ne ral In suranc e T Os
from 60 % by 2010 E XA M
C o. is 2010
2011

JS Digest of Banking and Finance Apr.- 14 125 126 Questions Related to SBI
56 S BI’s share in SBI L ife i s… 74 % 77 B udge tin g & Per form an ce 1972
57 T he cap o n F or e ig n E quity 20 % re view sy ste m w as in tr odu ced
H o ldi ng in SB I i s in SBI in th e Y e ar
58 C om p u te r Se cu rity D ay is 30 t h N ov e m be r S TP 78 C A G w as se tup in 1994 as part C re dit d elaye rin g
o bse r ve d in Th e Bank o n T Os o f ….. p ro cess
2010 79 S BI Ce le bar ated its 2006
59 A t c en tre s w ithou t C A G M or e than Rs. Rs. 50 S TP b ic en ten ary in th e ye ar… …
b ranche s M C acc ou nts are those C r an d up to Rs. 500 T Os S l. Q uestion A nsw er R ef
w ith an A nnu al Tu rn ov er i n Cr 2010 No
the ran ge of … .. 80 M em be rs o f th e Cir cle C G M & G M s of
60 N um be r o f JVs of S BI is 7 M an ag em en t Co m m itte e are N e two r k
61 A lady office r in SBI can av ail T wice MM G 81 E nv iro nm en tal d ata o f a b ran ch B ran ch do ssie r
m ate r nity l ea v e …… … dur in g E xam is available in ……
h e r e ntire se r vice 2012 82 W h at are the classificati on of P latin um , G o ld,
62 G r ahak M itr a is to b e C ustom e r ser v ice TO b ran ch e s un de r Am bi en ce S ilv e r & Bro n ze .
p o sitio n ed in … ….. ar ea o f th e ar e a 2012 po licy o f the Ban k ?
b ranch 83 S oftwar e used by C ur re n cy K ube ra
63 T otal n umb er of e mp loy ee s 2,23,675 (31.12.2013) TO A dm in istratio n Ce ll i s
w o rk ing in SBI 2012 84 S BI’s 11,111 t h Bran ch is located S on apur , K am rup
64 T otal adv ances o f SBI as on R s.11,83,7 23C r(31.12 TO at d ist, A ssam
31.03.2012 .2013) 2012 85 T he on l y In dian Ban k liste d S BI
65 T otal D e p osi ts o f SBI as on R s.39,49,9 40C r(31.12 TO w ith w or ld ’s bi gg e st 2000
31.032012 .2013) 2012 c om pan ies b y F orbe s is
66 W h o is the R BI nomi nee o n S BI D r . U rjit Patel 86 S BI Life sch em e fo r S B I staff S u per sur aksh a
b oard m em bers is… .
67 H o w m any dire ctor s are th er e 12 di recto rs o the r 87 C apital ade qu ac y ratio o f SBI as 12.92%
o n SBI bo ard th an fu ll ti me o n 31.03.2013 is
d irec to rs 88 N et Pro fit of SBI as o n R s. 14105 Cr
68 A s p er SBI A c t how o fte n the 6 ti me s 31.03.2013
full b oard is r eq u ire d to me e t in 89 N et in ter est M argin as on 31.03 3.66 %
a y ear 2013
69 W h o is the hig hest sanctio n ing E CCB 90 G r oss N PA % as on 31.03 2013 4.75 %
au thor ity in SBI ? 91 N et NPA % as o n 31.03 2013 2.10 %
70 W h at is the A u tho rised c apital R s. 5000 Cr 92 Di vi dend d eclared by S BI as on 415%
o f SBI 31.03.2013
71 S trateg ic Trai nin g uni t o f SBI is M um bai MM G 93 R e turn o n A ssets as on 0.91%
l ocate d at III 2010 31.03.2013
72 B ran ch e s ar e re q uir ed to subm it A fortn igh t MM G 94 R e serv es ( Exc ludin g R s.1083222 C r
c om plian ce on th e co n tro ller s III 2010 R e val uation R e serv es)
v isi t re p ort w ith in… … … 95 N o . C A G bran ch es as o n 7
73 S tandi ng co m mitte e on C ir cle CG M MM G 31.03.2013
c u sto me r se r vice is he ad ed b y III 2010 96 N o . o f M CG b ran ch e s as o n 60
74 S BI (SB) A ct w as passed i n 1959 TO 31.03.2013
w hic h y e ar E XA M 97 W h at is th e so ftw are u se d b y L oan or ig in atio n
2013 R A C P C for ge n e ratio n of H om e S oftw ar e
75 W h ic h w or k can no t be A p plication MM G loan d oc um e n ts an d tr ackin g
o utsour ce d by Bank ? p ro cessin g & III 2010 th e status o f l oan applicatio n ?
D o cum entatio n 98 W h at is th e so ftw are u se d b y L oan m on itor in g
R A C P C for m o n itor in g a loan so ftware
76 S BI was fo rm ed o n the A .D . Go rw al a TO
ac coun t?
r e com m e nd a tion of w hic h C om mitte e (als o E XA M
c om m ittee ? k n ow n as A ll I nd ia 2013

JS Digest of Banking and Finance Apr.- 14 127 128 Questions Related to SBI
99 N o . o f SBI ATM s as o n 32752 116 Global Link Services is a True
31.03.2013 (43515 as on
31.03.2014)
specialised outfit which carries
100 N o . o f Fo reig n offic es 186 in 34 co untries , on collection/remittance of
(as o n 31.03.2014 192 foreign bills /instruments
i n 36 c ountries) (True/False)
101 N um ber o f Zo nal In spec tion 13 117 Green Remit Card is principally POS (preferably a
o ffices used for making remittances GCC terminal)
102 C redit A udit critically examin e R s. 10 Cr & abo ve from ……..
i ndividual large co mmercial
118 The Bank has formed a JV with Private Equity
l oan s w ith exp osures o f …… .
103 C ircle audi t is a deleg ated au dit B etw een tw o audits
Macquire Group of Australia Financing
and c overs lo w risk areas and is for…..
c onducted… … 119 For RFIA all Bank branches 3 groups
104 “K Y C co mplian ce & Fraud 1 s t Aug ust have been grouped in to …
preventio n Day ” is ob serv ed 120 Business per Employee of SBI Rs. 9.44 Cr
b y the Bank every year on the (2012-13)
…….
121 Net profit per employee (2012- Rs. 6.45 lakhs
105 N ame the sub sidiary w hich is S BI DFH I Ltd.,
o ne o f the largest standal one 13)
primary dealer in th e country ? 122 Number of Apex Training 5
106 W hic h is the Asset S BI Funds Institutes in SBI
M anag em ent Co mpany o f SBI M anag em ent (P) ltd. 123 In which city a new Apex Kolkata
M utual Fund Training is being put up
107 T otal numb er of M Ds in SBI 4
124 In 2012-13 SBI has set aside 1
108 In the B ank , who h eads the C GM(ex o ffici o)
…..% of its net profit for CSR:
L ocal B oards at circles
S l. Q uestion A nsw er Ref 125 SBI Cap securities Limited is SBI Capital Market
No the subsidiary of …. Ltd.,
109 GM U (Glob al Market Unit) K olkata 126 Who is the Chairman of SBI Smt. Arundati
l ocated at Bhattacharya
110 C orporate Bank ing Group T ransactio n Bank ing 127 VISION Of SBI is  My SBI
c onsists of 3 Strateg ic B usiness U ni t & Pro jec t
 My Customer
U ni ts (S BUs)they are Co rpo rate F in ance & Leasin g
A ccounts Group, ............ First
111 F arm er’s C lub s are formed for S BI Ka Apn a Gaon  My SBI First in
fo stering continued sc heme. Customer
relatio nship with farmers satisfaction
under… …. 128 Number of circles that were 3
112 E xpand RS ETI R ural Self there at the time of formation of
E mplo ym ent
SBI
T rainin g Institute
113 S BI’s market share in Banki ng 26%
sectors H om e loans is
114 S MECC C can grant loans to 1 Cr
S ME un its up to… ..
115 N ext to Asia, in w hic h A frica
c ontinent SB I has the larg est
n um ber o f branches ?

JS Digest of Banking and Finance Apr.- 14 129 130 Questions Related to SBI
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STP-POs / TOs / JMGs Rs. 7500/- Rs. 927/- Rs. 8427/-

JS Digest of Banking and Finance Apr.- 14 131 132

 INTENSIVE CLASS-ROOM PROGRAMMES
i) Banking Guide (Feb’14):
Screening Test Programme for TOs - 2014
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New Edition.
 Are you due for promotion as STP MMII in the year 2014?
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Please subscribe for 1 year from Sep’13 to faculty.
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iii) Recollected Questions Compendium (SBI  Mock Interview, free of cost for selected candidates, is an added
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IC -STP- POs/TOs/JMGs Programme
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iv) MM Special Guide (Mar’14 ed)
09-06-2014 To 20-06-2014
For STP/MMII/MMIII and Ass. Banks
(Gr A & B):
IC - TOs Programme (2014)
The books will help you to master the syllabus and 05-05-2014 To 16-05-2014 19-05-2014 To 30-05-2014

focus on the questions asked in the TO/STP etc.

exams. They are comprehensive and are tailored to IC - Ass. Bks. Gr. (A&B) / MM II

meet the needs of the exams. 05-05-2014 To 16-05-2014 19-05-2014 To 30-05-2014

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 G O O D IMPORTANT
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JS Digest of Banking and Finance Apr.- 14 135 136

 II IMPORTA

IMPORTANT
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While transferring funds from your RECOLLECTED QUESTIONS

COMPENDIUM
account, please check ‘No Fees’ box,
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Our New Account
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J.S. INSTITUTE

137 138
 Postal Regn. No. RNP / KA / BGS / 2107 / 2014–2016
Posted at MBC, GPO, Bangalore-560 001 on 5th of every month
Licensed to Post with out prepayment, License No.WPP-113
Regd. with Registrar of Newspaper for India Under RNI No. KARENG / 2006 / 20140
Pages : 140

The Institute
ESTABLISHED in 1991 as J.S.Institute of Banking and Careers. It has
been renamed as J.S.Institute of Banking and Finance Pvt. Ltd. w.e.f
1.4.2004. It essentially caters to ambitious bankers, guiding them through
all the promotional exams and processes in the banking hierarchy.
Top class faculty and core competency have now entrenched JS Institute
as one of the premier centres of banking excellence in the country. Apart
from conducting intensive coaching classes, the Institute publishes books,
journals and guides that are indispensable for thousands of bankers
across India.
The Institute was associated with ICICI Bank Ltd., Times Bank
Ltd.,Karnataka Apex Co-operative Bank Ltd., Infosys Ltd., Valtech (I) Ltd.,
I-Flex Solutions Ltd. University of Agriculture Sciences, GKVK, B’lore, M.P.
Birla Institute of Management, B’lore etc. in their training programmes.
It is also accredited to IIBF, Mumbai.
J. S. Publications
• Banking Guide for SBI Group Promotion Exams
• Banking Digest
• MM Special Guide
• Nationalised Banks (Objective Questions Digest)
• Interview Mastermind
• Objective Questions Digest: JAIIB / CAIIB Exams
J. S. Programmes
Intensive classes for : TO, MM II to Scale V, JMG, STP for POs / TOs / JMGs,
(Systems) Exams of SBI Group & Nationalised Banks and for JAIIB / CAIIB
Exams.

The Editor
G.Subramanian, Director, JS Institute of Banking and Finance (Pvt) Ltd,
has acquired valuable experience in different facets of banking during his
22-year tenure with S.B.I. Joining the Bank as a Probationary Officer, he
has worked at branches, Zonal Office, Head Office and Corporate Centre
covering diverse fields as SSI financing, credit, foreign exchange, inspection
and audit. He was also a senior faculty member at the Bank’s Apex Staff
College, Hyderabad, and later in his career did a stint as Training Officer,
Zambia National Commercial Bank. He has authored books on Foreign
Exchange, Management Accounting and Finance for SSI.
Printed, Published and Edited by G. Subramanian, on behalf of J. S. Institute of Banking
and Finance Pvt. Ltd., Printed at Raja Printers, No. 59, Gangadharappa Block, 4th Cross,
Lalbagh Road, K. S. Garden, Bangalore-560 027, and Published at J. S. Institute of
Banking and Finance Pvt. Ltd., Ramanashree Park View”, 2nd Floor, 2462, 24th Cross
Road, Banashankari 2nd Stage, Bangalore - 560 070. Editor: Mr.G.Subramanian.
140