9 Oct 2016

Important Banking and Financial Awareness Key Points for Upcoming IBPS PO/Clerk/RRB Exams 2016

Important Banking and Financial Awareness Key Points for Upcoming IBPS PO/Clerk/RRB Exams 2016 Set-2:
Dear Readers, Many of our website followers were requesting us to provide Banking/Financial Awareness Study Materials which was most important topics for upcoming IBPS PO/Clerk/RRB Exams 2016, and we have planned to provide Important Banking and Financial Awareness Key Points on daily basis, kindly make use of it.

1). The Base Rate of each bank is to be reviewed after Every Quarter (3 Months).

2). A Bank included in 2nd Schedule of RBI Act 1934 is meant by a Scheduled Bank.

3). KYC [Know Your Customer] Guidelines have been issued by RBI under the provision of Banking Regulation Act, 1949.

4). Special Drawing Rights (SDR) - SDR is known as the Paper Gold. It is an international unit of account. The IMF pays interest on all holding of all SDR’s kept in the SDR Account and charges interest at the same rate on allocations to participants.

5). Regional Rural Banks (RRB’s) – are required to assist the weaker sections, Have free access to liberal financial assistance from NABARD. It has a limited area of operation.

6). Primary Deficit is obtained by Subtracting Interest Payments from fiscal deficit. I.e.Fiscal Deficit – Interest Payments.

7). The Union Budget of the Government presented Every Year contains
a.    Estimates for the Following Year
b.    Revised Estimates for the Current Year
c.    Actual Figures of Last Year.

8). Difference between all receipts and expenditure of the Government, both Capital and Revenue it is called Revenue Deficit.

9). Rs. 1, 00,000 per Depositor across all banks is the maximum Deposit amount insured by Deposit Insurance Credit Guarantee Corporation (DICGC).

10). Structured Financial Messaging System (SFMS) is a secure messaging standard developed to serve as a platform for intra bank and inter bank applications. It is an Indian Standard similar to SWIFT (Society for Worldwide Inter bank Financial Tele Communications) which is the international messaging globally. SFMS can be used practically for all purpose of secured communications within the bank and between banks.

11). Real Time Gross Settlement (RTGS) Systems are funds transfer systems where transfer of money or securities take place from one bank to another on a real time and on grass basis. Settlement in real time means payment transactions are settled as soon as they are processed. Gross Settlement means the transaction is settled on one to one basis without bunching or netting with any other transaction. Once processed payments are final and irrevocable.

12). The Banking Ombudsman Scheme 2006 enables an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by banks. The Banking ombudsman scheme is introduced under section 35A of the Banking Regulation Act, 1949 by RBI with effect from 1995. All Scheduled Commercial Banks, RRBs and Scheduled Primary Cooperation Banks are covered under the scheme.

13). With effect from March 31, 2005, an asset would be classified as doubtful if it has remained Non Performing Assets (NPA) for a period of 12 months or more.

Doubtful (up to 12 months)
Doubtful (More than 12 months & up to 3 years)
Doubtful (More than 3 years)

14). In banking terminology Bad Advances of Banks are known as Non-Performing Assets (NPA) that refers to loans that are injeopardy of default. Once the borrower has failed to make interest or principal payments for 90 days the loan is considered to be a Non Performing Asset.

15). An Electronic Clearing Service (ECS) transaction gets bounced and you are unable to recover your money from your customer. Under payment and settlement Act.

16). Muhammed Yunus is a Bangladesh Banker, Economist and Nobel Peace Prize recipient.As a professor of Economics, he developed the concepts of Micro Credit & Micro Finance.

17). Invisible Export means Export of Services like Shipping & Insurance which can earn foreign exchange without the transfer of goods from one country to another.

18). Cash Reserve Ratio (CRR)– Scheduled Commercial Banks (SCB’s) in India are required to hold a certain portion of their Demand and Time liabilities with RBI as per section 42(1) of Reserve Bank India Act 1934.

19). The Holidays for the Banks are declared as per Negotiable Instrument Act.

20). The Base Rate is the Minimum interest rate of a bank below which it cannot lend, except in cases allowed by RBI. The Base Rate System has replaced the BPLR (Benchmark Prime Lending Rate) w.e.f July 1, 2010.