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INDIAN ECONOMY > 8.Commercial Banks > Flashcards

8.Commercial Banks Flashcards

1
Q

What is the ownership percentage of the government in a Public Sector Bank?

A

51%.

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2
Q

Which is the largest government bank?

A

The State Bank of India (SBI).

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3
Q

When was the State Bank of India nationalized?

A

The State Bank of India was nationalized in 1955.

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4
Q

How does the State Bank of India rank globally among banks?

A

It is the 53rd largest bank across the globe.

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5
Q

When were 14 private banks nationalized?

A

In 1969, 14 private banks with deposits of more than 50 crore rupees were nationalized.

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6
Q

When were six more private banks nationalized?

A

In 1980, six more private banks with deposits of more than 200 crore rupees were nationalized.

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7
Q

Under which act was the State Bank of India constituted?

A

The State Bank of India Act, 1955.

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8
Q

When was the Bank of Calcutta founded?

A

The Bank of Calcutta was founded on June 2, 1806.

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9
Q

What was the Bank of Bengal renamed to?

A

The Bank of Bengal was renamed in 1809.

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10
Q

Which banks were amalgamated to form the Imperial Bank of India?

A

The Bank of Bombay and the Bank of Madras were amalgamated with the Bank of Bengal to form the Imperial Bank of India in 1921.

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11
Q

Why was the control of the Bank taken over by the government in 1955?

A

It was based on the recommendations of the All India Rural Credit Survey Committee.

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12
Q

When was the State Bank of India formed?

A

The State Bank of India was formed on July 1, 1955.

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13
Q

What enabled the State Bank of India to take over seven former State-associated banks?

A

The State Bank of India (Subsidiary Banks) Act, passed in 1959.

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14
Q

How many subsidiaries does the State Bank of India have?

A

The State Bank of India has 7 subsidiaries.

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15
Q

Which bank was acquired by the State Bank of India?

A

Bharatiya Mahila Bank was acquired by the State Bank of India.

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16
Q

Under which act was the nationalisation of banks implemented?

A

The nationalisation of banks was implemented under the Banking Companies (Acquisition and Transfer of Undertakings) Act of 1970.

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17
Q

What were the reasons for the nationalisation of banks?

A

Lack of bank branches in the country.

*Providing an opportunity to open banks in rural areas.
*Improved accessibility with fewer people per branch.
*Increased employment opportunities.
*Boosted people’s trust in banks and investment activities.

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18
Q

What was the situation regarding bank branches before nationalisation?

A

In 1965, one branch was serving approximately 65,000-66,000 citizens.

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19
Q

How did nationalisation address the lack of bank branches in rural areas?

A

After nationalisation, the government opened many branches in rural areas.

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20
Q

How many people were served by a branch after nationalisation?

A

By 1991, one branch served around 14,000 people.

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21
Q

What was one major benefit of bank nationalisation?

A

People’s trust in banks increased, providing a boost to investment activities in the country.

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22
Q

Which banks were merged into Punjab National Bank?

A

Oriental Bank of Commerce (OBC) and United Bank of India (BOI) were merged into Punjab National Bank.

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23
Q

Which banks were merged together?

A

Canara Bank and Syndicate Bank were merged.

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24
Q

Which banks were merged into Union Bank of India?

A

Andhra Bank and Corporation Bank were merged into Union Bank of India.

25
Q

Which bank merged with Indian Bank?

A

Allahabad Bank merged with Indian Bank.

26
Q

Which banks were merged with the Bank of Baroda?

A

Vijaya Bank and Dena Bank were merged with the Bank of Baroda.

27
Q

What is an advantage of bank mergers?

A

An increase in the assets of the banks, which can provide more funds for investment activities in the country.

28
Q

How does bank merger enable diversification of activities?

A

Bank mergers allow banks to diversify their activities, expanding their market access.

29
Q

What is an advantage of bank mergers in terms of efficiency and risk?

A

Bank mergers can increase the efficiency of banks and lower the risks of bankruptcy.

30
Q

What does financial inclusion mean?

A

Financial inclusion means that everyone in the country should be able to get the benefit of banking facilities.

31
Q

What is the goal of financial inclusion in terms of households?

A

The goal is to have at least one account with each and every household in the country.

32
Q

What are the benefits of having a bank account?

A

Having an account can lead to savings and can be used for the purpose of investment.

33
Q

What is a No frills account?

A

A No frills account is an account where the minimum balance is not required to be maintained.

34
Q

What was the name changed to in 2014 under the Pradhan Mantri Jan Dhan Yojana?

A

The name was changed to Jan Dhan Account.

35
Q

What did the establishment of Small Finance Banks and Payment Banks contribute to?

A

The establishment of Small Finance Banks and Payment Banks contributed to financial inclusion.

36
Q

Which committee was set up by the government to ensure financial inclusion?

A

The Nachiket Mor Committee was set up by the government to ensure financial inclusion.

37
Q

What was one recommendation of the Nachiket Mor Committee?

A

The committee recommended the establishment of new banks in the country.

38
Q

How should a small finance bank be registered?How should a small finance bank be registered?

A

A small finance bank should be registered as a public limited company under the Companies Act, 2013.

39
Q

What is the minimum paid-up equity capital requirement for small finance banks?

A

The minimum paid-up equity capital for small finance banks is Rs. 200 crores.

40
Q

What are the primary operations of a small finance bank?

A

Small finance banks primarily engage in fundamental banking operations such as deposit acceptance and lending to unserved and underserved populations.

41
Q

What is the requirement for opening branches in rural areas for small finance banks?

A

25% of their branches should be opened in rural areas within a year.

42
Q

What financial ratios must small finance banks maintain?

A

Small finance banks must maintain the Cash Reserve Ratio (CRR) and the Statutory Liquidity Ratio (SLR).

43
Q

What percentage of their Adjusted Net Bank Credit (ANBC) should small finance banks offer to priority sector lending?

A

Small finance banks are expected to offer 75% of their Adjusted Net Bank Credit (ANBC) to sectors qualifying for priority sector lending. Out of this, 50% of loans should be given to the MSME sector.

44
Q

Can small finance banks transform into universal banks?

A

Yes, small finance banks can transform into universal banks if they meet the minimum paid-up capital/net worth standards of universal banks.

45
Q

Can small finance banks work as a Business Correspondent (BC) for another bank?

A

No, small finance banks are not permitted to work as a Business Correspondent (BC) for another bank. However, they can have their own BC network.

46
Q

How should a payment bank be registered?

A

A payment bank should be registered as a public limited company under the Companies Act, 2013, and licensed under Section 22 of the Banking Regulation Act, 1949.

47
Q

What is the minimum paid-up equity capital requirement for a payment bank?

A

The minimum paid-up equity capital of a payment bank shall be Rs. 100 crores.

48
Q

How does a payment bank operate compared to other banks?

A

A payment bank operates on a smaller scale without involving any credit risk.

49
Q

What banking operations can a payment bank carry out?

A

A payment bank can carry out most banking operations, such as accepting demand deposits, offering remittance services, mobile payments/transfers/purchases, and providing other banking services like ATM/debit cards, net banking, and third-party fund transfers.

50
Q

What are the limitations of a payment bank?

A

A payment bank cannot advance loans or issue credit cards.

51
Q

What types of deposits are payment banks permitted to accept?

A

Payment banks are permitted to accept demand deposits (up to Rs 1 lakh), including current deposits and savings bank deposits from individuals, small businesses, and other entities.

52
Q

How are the “demand deposit balances” of a payment bank required to be invested?

A

Apart from amounts maintained as Cash Reserve Ratio (CRR) with RBI on its outside demand and time liabilities, a payment bank is required to invest a minimum of 75 percent of its “demand deposit balances” in Government securities/Treasury Bills.

53
Q

Under which department and ministry was India Post Payments Bank (IPPB) established?

A

India Post Payments Bank (IPPB) has been established under the Department of Posts, Ministry of Communication.

54
Q

When was IPPB launched?

A

IPPB was launched in 2018.

55
Q

What is the vision behind the establishment of IPPB?

A

The vision is to build the most accessible, affordable, and trusted bank for the common man in India.

56
Q

How is a payments bank different from traditional banks?

A

A payments bank is a differentiated bank that offers a limited range of products.

57
Q

What products does IPPB offer?

A

IPPB offers a range of products such as savings and current accounts, money transfers, direct benefit transfers, bill and utility payments, and enterprise and merchant payments.

58
Q

Can payment banks like IPPB set up subsidiaries for non-banking financial services activities?

A

No, payment banks cannot set up subsidiaries to undertake non-banking financial services activities.

INDIAN ECONOMY (35 decks)

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