Important Banking and Financial Awareness Key Points for Upcoming IBPS PO/Clerk/RRB Exams 2016:
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1. Currency Devaluation takes place when one Country’s currency is reduced in value in comparison to other currencies. A deliberate downward adjustment to the value of a country's currency, relative to another currency, group of currencies or standard. It results in increased exports and improvement in Balance of payment. Devaluation causes a country's exports to become less expensive, making them more competitive on the global market. This in turn means that imports are more expensive, making domestic consumers less likely to purchase them.
2. Banking which involves mobilizing large part of the deposits in risk free assets such as G-sec is called Narrow Banking.
3. REER – Real effective Exchange Rate: This exchange rate is used to determine an individual’s country’s currency value relative to the major currencies in the index, as adjusted the effects of inflation.
4. NABARD maintains the Rural Infrastructure Development Fund (RIDF).
5. Ministry of Finance formulates the Fiscal Policy.
6. Credit which is available at low rates of interest is defined as Cheap Money.
7. Finance Commission– It is a statutory body. It is constituted under Article 280
8. Regional Rural Banks (RRB’s) includes
a) 50% Central Government
b) 15 % State Governments
c) 35% Sponsor Bank / Lead Bank
9. Stagflation refers to High Inflation in periods of High unemployment. It is a condition of slow economic growth & relatively high unemployment. Stagflation is the term for an economic period of slow growth, relatively high unemployment and rising prices. Other indicators of stagflation are reductions in gross domestic product and other productivity measures.
10. The Objective of introducing Base Rate System by RBI is enhancing transparency in lending rates of banks, Enable better assessment of transmission of Monetary Policy.
11. Commercial Papers– Short term and unsecured promissory notes issued by corporations with high credit standing. These are Money Market Security issued by large banks & Corporations.
12. 91,182 & 364 days are the maturity period of Treasury Bills (T-Bills) issued by Government of India. These are instruments of Short term borrowings by the Central / State Government.
13. Money issued by the Central Bank of the country is High Powered Money.
14. Balance of Payments (BOP)– When the difference in the value of Imports and Exports of all the three items i.e. Visible, Invisible and Capital Transfers is taken into accounts, it is called Balance of Payments(BOP).
15. When more than one bank is allowing credit facilities to one party in coordination with each other under a formal arrangement, the arrangement is called Consortium.
16. Near Money– is a term used in economics to describe highly liquid assets that can be easily converted into Cash
17. A Banking System in which a big bank has a number of branches in different parts of the country is known as Branch Banking.
18. A Banking System where all operations are conduct to a Single Office is known as Unit Banking. The Unit Banking System is prevalent in USA.
19. Soft Patch is a period of economic slowdown in the middle of large trend of Economic Growth.
20. Disguised Unemployment generally relates with Agriculture Sector. Disguised unemployment is a condition where productivity is low and where too many workers are filling too few jobs.