banking

Question 1

1. Which of the following banks are insured by the Deposit insurance and credit guarantee corporation (DICGC)?
2. Foreign banks functioning in India
   Regional rural banks
   Primary cooperative societies
   Local area banks

Answer 1

1. Commercial Banks: All commercial banks including branches of foreign banks functioning in India, local area banks and regional rural banks are insured by the DICGC.
   Cooperative Banks: All State, Central and Primary cooperative banks, also called urban cooperative banks, functioning in States / Union Territories which have amended the local Cooperative Societies Act empowering the Reserve Bank of India (RBI) to order the Registrar of Cooperative Societies of the State / Union Territory to wind up a cooperative bank or to supersede its committee of management and requiring the Registrar not to take any action regarding winding up, amalgamation or reconstruction of a co-operative bank without prior sanction in writing from the RBI are covered under the Deposit Insurance Scheme. At present all co-operative banks are covered by the DICGC.
   Primary cooperative societies are not insured by the DICGC.

Question 2

e-RUPI is developed by

Answer 2

The e­RUPI platform, developed by the
National Payments Corporation of India (NPCI),
The e­RUPI system is accessible to
anyone with a mobile phone, even if the recipient does not have a bank account.
The contactless prepaid payment system can be issued by
both government agencies and corporate entities
it is non transfarable

Question 3

what is financial inclusion index

Answer 3

The index incorporates details of banking, investments, insurance, postal as well as the pension sector in consultation with the government and respective sectoral regulators.
The index captures information on various aspects of financial inclusion in a single value ranging between 0 and 100, where 0 represents complete financial exclusion and 100 indicates full financial inclusion.
The FI-Index comprises three broad parameters, including access, usage and quality with each of these consisting of various dimensions computed on the basis of on several indicators.
It has been constructed without any ‘base year’.

Question 4

1. Consider the following statements, with reference to the ‘Fully Accessible Route’ (FAR):
2. It enables non-resident investors to invest in certain specified categories of Central Government securities.
3. It is operationalized by the Reserve Bank of India.

Answer 4

The Reserve Bank, in consultation with the Government of India, introduced a separate channel, called the ‘Fully Accessible Route’ (FAR), to enable non-residents to invest in specified Government of India dated securities.
FAR operation is carried out by the Reserve Bank of India (RBI).Voluntary Retention Route (VRR) is a channel introduced by the Reserve Bank of India (RBI) to enable Foreign portfolio Investors (FPIs) to invest in debt markets in India. Any entity registered as an FPI with SEBI is eligible to invest through this channel.

Question 5

With reference to the recently seen in news G-SAP, which of the following statements is correct?

(a) The Central Bank aims to purchase government bonds from the secondary market through this initiative.
(b) It will harden the long-term bond yield and increase the borrowing cost for centre and states.
(c) G-SAP aims to act as an umbrella of all the Open Market Operations undertaken by RBI.
(d) G-SAP lacks to promise a specific amount of purchase of G-Secs in the market.

Answer 5

G-SAP 1.0 is a distinct kind of Open Market Operation wherein the RBI promises to buy the securities from the market of a specific amount which is Rs. 1 lac crore in Q1 of FY 2021-22

Question 6

Recently, the Central Government has launched the Special Liquidity Scheme to improve the liquidity position. Which of the following banks are
included under the Scheme?
1. Non-Banking Financial Companies
2. Housing Finance Companies
3. Commercial Banks
4. Exim Bank

Answer 6

Intending to improve the liquidity position of NBFCs, as well as HFCs, the Union Minister for Finance & Corporate Affairs, had launched a Special
Liquidity Scheme of Rs. 30,000 crores. RBI will provide funds for the Scheme by subscribing to government-guaranteed special securities issued by the
Trust. The total amount of such securities issued outstanding shall not exceed Rs. 30,000 crores at any point of time.The government of India will provide
an unconditional and irrevocable guarantee to the special securities issued by the Trust. The Scheme is being launched on 1 July 2020 through a Special
Purpose Vehicle in SLS Trust set up by SBI Capital Markets Limited (SBICAP). So, only options 1 and 2 are correct.
Eligibility Criteria:
• Compliance with RBI regulations on Capital adequacy
• Net NPA is less than 6% as on 31.03.2019
• Net profit in at least one of the two preceding financial years
• Rated as investment grade by a rating agency
• It is not reported under the SMA-1 or SMA-2 category by any bank for their borrowing during the period one year before 01.08.2018
The Scheme will remain open for three months for making subscriptions by the Trust. The period of lending (CPs/NCDs of NBFCs/HFCs for a short
duration of up to 90 days) by the Trust shall be for a period of up to 90 days. The financing would be used by the NFBCs/HFCs only to repay existing
liabilities and not to expand assets. Further, those market participants looking to exit their standard investments with a residual maturity of 90 days may
also approach the SLS Trust.