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Economy - UPSC 2019 > Bank Consolidation > Flashcards

Bank Consolidation Flashcards

1
Q

Which 3 banks were amalgated ?

A
  1. Bank of Baroda
  2. Vijaya Bank
  3. Dena Bank
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2
Q

This new entity is at which position in terms of Indian bank sizes ?

A

3rd

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3
Q

Were these banks amalgated or merged ?

A

Amalgated

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4
Q

Which committee recommended restructuring of Indian banks ?

A

Narasimham committee, 1991

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5
Q

Which committee suggested that government should privatise some PSBs ?

A

P J Nayak committee, 2014

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6
Q

In 2017, government approved the merger of which banks ?

A

Five associate SBI banks

BMB

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7
Q

What is BMB bank ?

A

Bharatiya Mahila Bank

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8
Q

Which Panel was made to look into merger proposals of public sector banks in 2017 ?

A

Alternative Mechanism Panel

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9
Q

Who headed the Alternative Mechanism Panel ?

A

Minister of Finance and Corporate Affairs, Arun Jaitley

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10
Q

What is EASE ?

A

Enhanced Access and Service Excellence

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11
Q

What were first 3 themes of EASE reform ?

A
  1. Customer Responsiveness
  2. Responsible Banking
  3. Credit Off take
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12
Q

What are other 3 themes of EASE reform ?

A
  1. PSB as Udyami Mitra
  2. Deepening Financial Inclusion
  3. Developing Personnel for PSB
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13
Q

What framework has RBI introduced to check banks’ financial health ?

A

PCA

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14
Q

What is full form of PCA ?

A

Prompt Corrective Action

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15
Q

What are the prohibitions to banks under PCA ?

A
  1. Distributing Dividends
  2. Remitting Profits
  3. Expanding Branch networks
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16
Q

What autonomous body did government set up in 2016 ?

A

Banks Board Bureau (BBB)

17
Q

What does BBB recommend ?

A

Heads of PSBs and Financial Institutions

18
Q

Which code has helped banks recover through liquidation of assets ?

A

Insolvency and Bankruptcy Code (IBC)

19
Q

How much money did the government commit as capital infusion to PSBs ?

A

2.11 Lakh Crores

20
Q

What was Sunil Mehta Committee set up to do ?

A

Faster resolution of stressed assets

21
Q

What was the name of the five-pronged strategy suggested by Sunil Mehta Committee ?

A

Project Sashakt

22
Q

What were some of the arguments against consolidation of 3 banks with regards to corporate governance ?

A
  1. Majority stakeholder dictates terms

2. Strong banks shares nosedive

23
Q

How does consolidating banks become a setback to financial inclusion ?

A
  1. Large scale shutting down of overlapping branches

2. Regional audience is lost

24
Q

What was the challenge with regards to the work culture ?

A

HR policies vary from each bank

25
Q

What was the challenge with regards to technology ?

A

The banks operate on different technologies

26
Q

Will the consolidation help the health of the banks in the long run ?

A

No, unless reforms in functioning of PSUs are made

27
Q

How does the government’s burden of recapitalising the public banks reduce with consolidation ?

A

Greater capital and liquidity

28
Q

How does the human resource expertise help the smaller banks ?

A

They imbibe the best practices

29
Q

How does consolidation help in employee welfare ?

A
  1. No job loss

2. Disparity in wages reduces

30
Q

How does consolidation help in cost cutting ?

A
  1. Duplicate operations are rationalised

2. Excessive manpower removed in long run

31
Q

How does consolidation lead to increase in business ?

A
  1. Customer base
  2. Market reach
  3. More services and products
32
Q

How does the RBI expect the consolidation to resolve the NPA issue ?

A

Stronger banks absorb strain on weaker banks

33
Q

How does consolidation help India on a global scale ?

A

Allows Indian banks to compete with global counterparts

34
Q

What government reforms are required ?

A
  1. Independence from political interference

2. More regulatory power to RBI over PSB

35
Q

Who runs PSBs ?

A

Their professional boards

36
Q

What are some of the other things that should happen ?

A
  1. Training for HR
  2. Create Healthy Entity
  3. Allow Non-Risky Failure

Economy - UPSC 2019 (33 decks)

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