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Banking Flashcards

1
Q

Is FDI allowed in ARC?

A

Yes. 51%

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2
Q

What is Securitisation?

A

Converting documents that are basis for loans into security and sell into market

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3
Q

What is stress test?

A

Simulation financial / economic stress - stock market plunge, rupee swing, deflation, growth crash.
Bank ability to deal with it.

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4
Q

Main pillars in Basel norms?

A

Risks
Role of Banking supervisors
Higher disclosure on Capital Adequacy, Asset Quality and Risk Mgt

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5
Q

What is Basel I?

A

Minimum CAR. Focus entire Credit Risk

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6
Q

What is Basel III?

A

Start 2013. Till 2019. Total CAR 11.5%. Earlier 9pc.

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7
Q

What is Basel II?

A

Start 2001. More risk and remedies

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8
Q 
Small Finance Banks are -
registered under?
licensed under? 
governed under?
established as?
A

Registered under Companies Act.
Licensed under Banking Act
Governed under RBI Act by RBI
Public limited company

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9
Q

Is foreign investment allowed in Small Finance Bank

A

Yes.

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10
Q

Do SFB keep CRR and SLR and do Prudential Norms apply to them?

A

Yes.

Yes.

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11
Q

Can SFB set up subsidiary to take NBFC functions?

A

No.

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12
Q

Do SFB have restrictions like RRB and LAB

A

No.

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13
Q

SFB can be promoted by?

A

Individuals, Corporate, trusts.
Minimum paid up capital of 100crore.
Promoters must have 10 years experience in banking

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14
Q

What is condition on SFB for PSL and Unbanked area

A

Minimum 25% branches in unbank rural area
No restriction but beginning preference to unbank area clients
75% credit to PSL required. atleast 50% upto 25 Lakh

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15
Q

SFB were recommended by?

A

Raghuram Rajan Committee

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16
Q

Payment banks are estb under and licensed under

A

Companies act

BRA

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17
Q

Minimum Deposit for Payments bank

A

1 lakh. Can have more provided that at end of day it is 1 Lakh

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18
Q 
Can Payment Bank - 
FD
RD
Lending
Debit Card
Credit Card
ATM
BCs
DD
Utility Bills
NRI Deposits 
Net and Mobile Banking 
Mutual Funds 
Cross border remittance transactions 
Subsidiary for NBFC
A 
No
No
No
Yeas
No
Yes
Yes
Yes
Yes
No 
Yes
Yes
Yes 
No
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19
Q

Minimum eligibility for Payment banks

A

100 crore paid up capital

25% branch in unbank areas

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20
Q

Are deposits under Payment Bank eligible for DICGC

A

Yes. Max 1 lakh

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21
Q

Condition on Payment Banks wrt SCB

A

Maximum 25% in Current and Time Deposits with other SCBs

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22
Q

Do Payment Banks have to comply with CRR and SLR

A

Yes. Have to keep CRR + 75% securities in T-Bills having one year maturity and are eligible under SLR

Operational risk high so CRR is more than other Banks

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23
Q

Payment Banks recommended by

A

Nachiket Mor Committee

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24
Q

India post payment bank recommended by

A

TSR Subramaniam Committee

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25
Govt role in India post payment bank
it is under Dept of Post | 100% govt equity in IPPB
26
Nature of IPPB
Public limited company | 90% in rural areas
27
Mudra Bank is estb under?
Companies Act | Later as NBFC under RBI
28
Mudra bank is subsidiary of?
It is wholly owned subsidiary of SIDBI
29
Mudra bank operate thru?
MFI FI SHG Credit coop societies
30
Mudra banks loan to?
NBFC and MFI - loan to final needy | Priorty to underprivileged
31
Credit guarantee in Mudra?
Yes. Under NCGTC for Credit guarantee
32
What are Development banks and give some examples
they are financial institutions giving long term credit to agri and industries Egs IFCI IDBI ICIC NABARD SIDBI EXIM NHB
33
Difference b/w Commercial Banks and Development Banks
Commercial banks - short term credit | Development Banks - long term credit
34
SR Khan Committee
Transfer DFIs to universal committee
35
First Development Banks
IFCI in 1948 - IFCI act
36
What are cooperative banks
specialize in agri and housing. earlier non agri only | Earlier mostly small buz, now wider
37
Cooperative banks get help from>
Fianncial and other help from NABARD RBI SG CG
38
Cooperative bank funds from
Money market + capital Market
39
Cooperative banks loan?
Short term + long term | LDB only long term
40
Do cooperative banks need CRR and SLR
Yes
41
Types of cooperative banks
Schedule | Non Schedule
42
What are shadow banks
FI function like banks - raise deposits, float equity, bonds But not covered under strict bank rules Lax conduct - led to sub prime crisis
43
What is Bank Run
People not confident of bank capacity to honour commitment Fear insolvency Large number customers want withdraw deposit at same time
44
What is countercyclical buffer?
Part of Basel III Keep aside capital that can be used later when cycle turns down Due to slowdown or recession and loans turn Bad
45
What is Bank of international settlements
Banks for central Banks International Financial institution owned by CBs international monetary and financial cooperation
46
What is Hair cut
Bank parlance. asset value reduced as it cant be fully realised Types - Write down - cant recover fully Write off - cant recover at all
47
WHat is Twin Balance sheet challenge
Balance sheet of borrowing and lending companies both under pressure
48
What are Public sector asset reconstruction agency
Proposed in ES 2017 Raise money by govt bonds to buy big bad loans of PSB Kind of bad bank
49
What was PK Nayak Committee
``` Set up by RBI for Bank governance issue Recommended - Govt decrease PSB holding Board apt professionalise Fix 5 year Ch and MD and 3 year for whole term directors ```
50
What is Indradhanush Scheme
``` Revive NPA burdened PSB started in 2017 Apt professionals bank Board Bureau Capitalise banks Non govt interference Accountability framework Governance reforms Gyan sangam ```
51
What is bank board bureau
Autonomous board recommed Apt of PSB FI heads recommend on PSB consolidation
52
What do you understand by Differentiated banking
Diff types of bank - diff aims, clients, mode of working
53
Brown label ATM
3rd party non banking logo of bank
54
White label ATM
Third party | not logo of bank but logo of third party
55
What are holding companies
invest in other comapnies aka subsidiaries | not involve in day to functions
56
What are types of holding company
pure holding company - non operative, solely investing, hold voting share, income from dividend General / operational holding company - income from selling GnS Pyramid holding company - own controlling interest is subsidiaries with less invested capital
57
Urjit patel committee recommednations
CPI C be used for inflation target 4=-2 MP committee fix fiscal deficit to gdp by dec to 3.0%
58
WHat was nachiket mor committee
``` set up by RBI for financial inclusion universal bank account licensing, lower barriers risk based supervision reorient NABARD SIDBI NHB ```
59
Basel norm india
started 1992
60
Disclosed reserve
total liquid cash and SLR of bank that may be used at a time part of core capital i.e. Tier I
61
Undisclosed reserves
unpublished hidden reservese not appear on public available document but are assets part of core cpaital that is Tier 2
62
What is stock of money
2nd WG on MS | M1 M2 M3 M4
63
What are Narsimhan I committee recommendations
direct investment dec CRR PSL phase out, redefine ARC set up to tackle NPA IR structure - market force, RBI role simiplify reorganise bank structure - PSB reduce, Dual control of RBI and MoF end
64
Narsimhan committee II recommendations?
``` Three tier bank strucutre higher norms of CRAR PSB budget recapitalise legal framework for loan recovery - SARGESI net NPA below 5% Depoliticize Bank boards ```
65
New pvt banks opened in india when
1993
66
What are provision of SARFESI act
``` crackdown wilful defaulter power to bank to issue notice take possession of security take over management apt person to mng sell security to ARC set on lines of USA ```

Economy (8 decks)

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