Bank Lending, Banking Sector Reforms, and Trends Flashcards
When did modern banking in India begin?
Modern banking in India started with the establishment of the Bank of Hindustan in 1770.
What were the Presidency Banks established in India?
The Presidency Banks were the Bank of Bengal, Bank of Bombay, and Bank of Madras.
What significant banking institution was formed in 1921?
The Imperial Bank of India was formed in 1921.
What did the Imperial Bank of India become in 1955?
The Imperial Bank of India became the State Bank of India (SBI) in 1955.
What was the aim of the nationalization of banks in 1969 and 1980?
The aim was to increase financial inclusion.
What major change occurred in the Indian banking sector in 1991?
Liberalization allowed private and foreign banks to operate in India.
What are recent trends in banking post-2010?
Recent trends include digital banking, fintech partnerships, and neo-banking.
What do KYC norms help banks to do?
KYC norms help banks verify customers’ identities and prevent money laundering.
List key KYC requirements.
- Identity Proof (Aadhaar, PAN, Passport, Voter ID)
- Address Proof (Utility bills, rental agreements)
- Financial Transactions Monitoring (Source of income)
- Periodic KYC Updates (Re-KYC for existing customers)
What are some key banking sector reforms in India?
- Narasimham Committee (1991 & 1998)
- RBI’s Banking Regulation Reforms
- Basel Norms
- SARFAESI Act (2002)
- Insolvency and Bankruptcy Code (2016)
- Digital Banking Push
What is the focus of Basel I, II, and III?
- Basel I (1988): Focus on capital adequacy
- Basel II (2004): Risk-based framework
- Basel III (2010): Strengthens capital requirements, introduces liquidity coverage ratio
What is digital banking?
Digital banking refers to the transformation in banking through online and mobile platforms.
List benefits of digital banking.
- Convenience (24/7 access)
- Cost Reduction (lower operational costs)
- Security (encrypted transactions)
- Faster Transactions (real-time fund transfers)
What is home banking?
Home banking is internet-based banking for fund transfers and bill payments.
Fill in the blank: Payment banks offer ______ banking services like deposits and remittances.
restricted
What does NEFT stand for?
National Electronic Funds Transfer.
Define an NPA.
A loan is classified as an NPA if interest or principal remains unpaid for 90+ days.
What are the types of NPAs?
- Substandard Assets
- Doubtful Assets
- Loss Assets
What does the SARFAESI Act (2002) allow banks to do?
It allows banks to recover NPAs without court intervention.
What is the role of the Insolvency & Bankruptcy Code (IBC, 2016)?
It fast-tracks resolution of bad loans.
What does CRR stand for?
Cash Reserve Ratio.
What are the two types of capital according to Basel norms?
- Tier 1 Capital
- Tier 2 Capital
What is bancassurance?
Bancassurance refers to banks selling insurance products to customers.
What is asset-liability management (ALM)?
Managing bank assets and liabilities to reduce risks.
True or False: AML Compliance prevents legal money transactions.
False.
What is the conclusion regarding the evolution of the Indian banking sector?
The Indian banking sector has evolved significantly with reforms, digital innovations, and regulatory measures.
