RBI

Question 1

origin of RBI

Answer 1

in 1926 hilton young commission recommended
set up as private share holder’s bank in 1935
nationalized in 1949

Question 2

need for RBI

Answer 2

Independent apex monetary authority 
regulates banks
provide important financial services like storing of foreign exchange reserves 
monetary policy report
financial inclusion

Question 3

organization structure of RBI

Answer 3

central board of directors
governor (grade J)
deputy governor
executive directors

Question 4

supervision of banks

Answer 4

carried out by BFS ( board for financial supervision )
Through CAMELS and CALCS system
for commercial banks, FIs, NBFCs, Urban Cooper Banks and Primary dealers

Question 5

CAMELS

Answer 5

capital adequacy
is capital adequate to cover the risk
checked through capital adequacy ratio or
capital to risk weighted assets ratio
Tier 1 capital + Tier 2 capital / risk weighted assets

Asset Quality
Quality of loans provided by banks
Management
ability to react to financial stress
safe operation of the bank
Earnings
company’s growth
stability
valuation allowances
net interest margin
net worth level
quality of the company’s existing assets
liquidity
interest rate risk sensitivity
availability of assets which can easily be converted to cash
dependence on short term volatile financial resources
ALM technical competence
sensitivity
management of credit concentrations
how lending to specific industries affect an institution

Compliance : for foreign banks

Question 6

CALCS

Answer 6

capital adequacy bank
is capital adequate to cover the risk
checked through capital adequacy ratio or
capital to risk weighted assets ratio
Tier 1 capital + Tier 2 capital / risk weighted assets

Asset Quality
Quality of loans provided by banks

liquidity
interest rate risk sensitivity
availability of assets which can easily be converted to cash
dependence on short term volatile financial resources
ALM technical competence

Compliance : for foreign banks

sensitivity
management of credit concentrations
how lending to specific industries affect an institution

Question 7

Board for regulation and supervision of payment and settlement system
BPSS

Answer 7

online as well as offline

NECS- debit and credit 
EFT
NEFT and RTGS
CCIL
NPCI 2009 retail payment working fine

NECS - national electronic clearing system
regular payment like salary
EFT - electronic fund transfer
RTGS - above 2 lakh
gross transactions
no waiting period
NEFT - netting takes place
waiting is there

Question 8

CCIL

Answer 8

clearing corporation of india limited

novation
individual (india) ——> CCIL ————-> bank

taking over of counter party risk