Q.1. What are the salient features of Indo-Nepal Remittance Facility Scheme?

Ans : Indo-Nepal Remittance Facility is a cross-border remittance scheme to transfer funds from India to Nepal, enabled under the NEFT Scheme. The scheme was launched to provide a safe and cost-efficient avenue to migrant Nepalese workers in India to remit money back to their families in Nepal. A remitter can transfer funds up to Indian Rupees 50,000 (maximum permissible amount) from any of the NEFT-enabled branches in India..The beneficiary would receive funds in Nepalese Rupees. Q.2. Is it necessary for the remitter to maintain an account with a bank branch in India? Ans : No, this is not a mandatory requirement. Under the Scheme, even a walk-in customer can transfer funds upto Rs 50,000 by depositing the cash at the remitting bank branch. Q.3. Does the beneficiary need to maintain an account with a bank branch in Nepal? Ans : No, even this is not mandatory. It would, however, be ideal if the beneficiary maintains an account with a bank branch in Nepal to which the credit could be afforded. In Nepal, the Indo-Nepal Remittance Facility Scheme is handled by Nepal SBI Ltd. (NSBL). If the beneficiary does not have a bank account with NSBL or resides in a locality/ area in Nepal not serviced by a NSBL bank branch, an arrangement has been entered into by NSBL with a money transfer company in Nepal (called Prabhu Money Transfer) who would make arrangements for delivery of cash (in Nepalese Rupees) to the beneficiary. 26. What is cash profit? And what is diff b/w cash flow and cash profit? Cash flow and profit are different. Cash flow is the money that flows in and out of the firm from operations, financing activities, and investing activities. Profit, also called net income, is what remains from sales revenue after all the firm's expenses are subtracted. 27. What is meant by Liquidity Adjustment Facility (LAF)? Liquidity adjustment facility (LAF) is a monetary policy tool which allows banks to borrow money through repurchase agreements. LAF is used to aid banks in adjusting the day to day mismatches in liquidity.LAF consists of repo and reverse repo operations. Repo or repurchase option is a collaterised lending i.e. banks borrow money from Reserve bank of India to meet short term needs by selling securities to RBI with an agreement to repurchase the same at predetermined rate and date. The rate charged by RBI for this transaction is called the repo rate. Repo operations therefore inject liquidity into the system. Reverse repo operation is when RBI borrows money from banks by lending securities. The interest rate paid by RBI is in this case is called the reverse repo rate. Reverse repo operation therefore absorbs the liquidity in the system. 28. What is meant by RTGS System? The acronym 'RTGS' stands for Real Time Gross Settlement, which can be defined as the continuous (real-time) settlement of funds transfers individually on an order by order basis (without netting). 'Real Time' means the processing of instructions at the time they are received rather than at some later time.'Gross Settlement' means the settlement of funds transfer instructions occurs individually (on an instruction by instruction basis). Considering that the funds settlement takes place in the books of the Reserve Bank of India, the payments are final and irrevocable. more about RTGS click link below... http://www.rbi.org.in/scripts/FAQView.aspx?Id=65 29. What is meant by Bancassurance? An arrangement in which a bank and an insurance company form a partnership so that the insurance company can sell its products to the bank's client base. This partnership arrangement can be profitable for both companies. Banks can earn additional revenue by selling the insurance products, while insurance companies are able to expand their customer base without having to expand their sales forces or pay commissions to insurance agents or brokers. 30. What is meant by Wholesale Price Index (WPI)? An index that measures and tracks the changes in price of goods in the stages before the retail level. Wholesale price indexes (WPIs) report monthly to show the average price changes of goods sold in bulk, and they are a group of the indicators that follow growth in the economy. Although some countries still use the WPIs as a measure of inflation, many countries, including the United States, use the producer price index (PPI) instead 31. What is meant by Consumer price Index (CPI)?

A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care. The CPI is calculated by taking price changes for each item in the predetermined basket of goods and averaging them; the goods are weighted according to their importance. Changes in CPI are used to assess price changes associated with the cost of living. Sometimes referred to as "headline inflation." 32. What is meant by Venture Capital? Money provided by investors to startup firms and small businesses with perceived long-term growth potential. This is a very important source of funding for startups that do not have access to capital markets. It typically entails high risk for the investor, but it has the potential for above-average returns. 33. What do you mean by Treasury Bills? A short-term debt obligation backed by the U.S. government with a maturity of less than one year. T-bills are sold in denominations of $1,000 up to a maximum purchase of $5 million and commonly have maturities of one month (four weeks), three months (13 weeks) or six months (26 weeks). T-bills are issued through a competitive bidding process at a discount from par, which means that rather than paying fixed interest payments like conventional bonds, the appreciation of the bond provides the return to the holder 34. What do you mean by Subsidy? A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy is usually given to remove some type of burden and is often considered to be in the interest of the public. Politics play an important part in subsidization. In general, the left is more in favor of having subsidized industries, while the right feels that industry should stand on its own without public funds. 35. What is meant by Banking Ombudsmen Scheme? -> The Banking Ombudsman Scheme enables an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by banks. -> The Banking Ombudsman is a senior official appointed by the Reserve Bank of India to redress customer complaints against deficiency in certain banking services. -> All Scheduled Commercial Banks, Regional Rural Banks and Scheduled Primary Co-operative Banks are covered under the Scheme. 36. What is meant by Debenture? A debenture is a document that either creates a debt or acknowledges it, and it is a debt without collateral. In corporate finance, the term is used for a medium- to long-term debt instrument used by large companies to borrow money. In some countries the term is used interchangeably with bond, loan stock or note. A debenture is thus like a certificate of loan or a loan bond evidencing the fact that the company is liable to pay a specified amount with interest and although the money raised by the debentures becomes a part of the company's capital structure, it does not become share capital.[1] Senior debentures get paid before subordinate debentures, and there are varying rates of risk and payoff for these categories. 37. What are the types of debentures? There are two types of debentures: 1) Convertible debentures- which are convertible bonds or bonds that can be converted into equity shares of the issuing company after a predetermined period of time. "Convertibility" is a feature that corporations may add to the bonds they issue to make them more attractive to buyers. In other words, it is a special feature that a corporate bond may carry. As a result of the advantage a buyer gets from the ability to convert, convertible bonds typically have lower interest rates than non-convertible corporate bonds. 2) Non-convertible debentures- which are simply regular debentures, cannot be converted into equity shares of the liable company. They are debentures without the convertibility feature attached to them. As a result, they usually carry higher interest rates than their convertible counterparts. 38. What do you mean by hedge fund? An aggressively managed portfolio of investments that uses advanced investment strategies such as leveraged, long, short and derivative positions in both domestic and international markets with the goal of generating high returns (either in an absolute sense or over a specified market benchmark).

Legally, hedge funds are most often set up as private investment partnerships that are open to a limited number of investors and require a very large initial minimum investment. Investments in hedge funds are illiquid as they often require investors keep their money in the fund for at least one year. 39. What is meant by FCCB? Foreign Currency Convertible Bond - A type of convertible bond issued in a currency different than the issuer's domestic currency. In other words, the money being raised by the issuing company is in the form of a foreign currency. A convertible bond is a mix between a debt and equity instrument. It acts like a bond by making regular coupon and principal payments, but these bonds also give the bondholder the option to convert the bond into stock. 40. What is meant by Capital Account Convertibility (CAC)? Capital account convertibility is a feature of a nation's financial regime that centers on the ability to conduct transactions of local financial assets into foreign financial assets freely and at country determined exchange rates.[1] It is sometimes referred to as capital asset liberation or CAC. 41. What is meant by Current Account Convertibility? "the freedom to convert the local financial assets into foreign financial assets and vice-versa at market determined rates of exchange. It is associated with the changes of ownership in foreign/domestic financial assets and liabilities and embodies the creation and liquidation of claims on, or by the rest of the world. " (Report of the Committee on Capital Account Convertibility, RBI, 1997) Thus, in simpler terms, it means that irrespective of whether one is a resident or non-resident of India one's assets and liabilities can be freely (i.e. without permission of any regulatory authority) denominated (or cashed) in any currency and easily interchanged between that currency and the Rupee. Difference between capital account convertibilty & current a/c convertibility Current account convertibility allows free inflows and outflows for all purposes other than for capital purposes such as investments and loans. In other words, it allows residents to make and receive trade-related payments receive dollars (or any other foreign currency) for export of goods and services and pay dollars for import of goods and services, make sundry remittances, access foreign currency for travel, studies abroad, medical treatment and gifts etc. On the other hand Capital account convertibility means free inflows and out flows on capital accounts too, like investments and loans, both ways to and fro the country at the market determined exchange rates. 42. What is meant by Arbitrage? The simultaneous purchase and sale of an asset in order to profit from a difference in the price. It is a trade that profits by exploiting price differences of identical or similar financial instruments, on different markets or in different forms. Arbitrage exists as a result of market inefficiencies; it provides a mechanism to ensure prices do not deviate substantially from fair value for long periods of time. 43. What do you mean by Capitalism? A capitalist economy is one in which the government rarely interferes with the economy. It is rather those who have the capital funds (and thus capitalism) set up firms to offers services. In this someone produces a good and sells it for a price, which would include the production cost and profit. 44. What is meant by Socialism? Socialism is a fundamental reconstruction of society as to make economics an affair of government, so as to organize society with the goal of social equality. Surely, the lofty goals of Social Justice and Equality sound great on the surface. 45. Explain prepayment and default risk? This paper provides the first detailed empirical study on the use of prepayments by firms. Using large panels of firms, we find evidence supporting the production continuation theory of prepayment according to which customers prepay their suppliers when these would otherwise delay production and input supply. We also find that cash advance payments occur in both domestic and international transactions as a response to corporate default risk. Our results show that both firm characteristics (profitability, liquidity, bank loans, and size) and industry characteristics (the type of traded goods and industry concentration) influence the volume of prepayments.

narrow money- A category of money supply that includes all physical money like coins and currency along with demand deposits and other liquid assets held by the central bank. broad money- broad money is a measure of the money supply that includes more than just physical money such as currency and coins (also termed narrow money). It generally includes demand deposits at commercial banks, and any monies held in easily accessible accounts. Components of broad money are still very liquid, and non-cash components can usually be converted into cash very easily. Different types of Banking @ Universal Banking : When Banks and Financial Institutions are allowed to undertake all types of activities related to banking like acceptance of deposits, granting of advances, investment, issue of credit cards, project finance, venture capital finance, foreign exchange business, insurance etc. it is called Universal Banking. @ Virtual Banking: Virtual banking is also called internet banking, through which financial and banking services are accessed via internet's World Wide Web. It is called virtual banking because an internet bank has no boundaries of brick and mortar and it exists only on the internet. @ Wholesale Banking: Wholesale banking is different from Retail Banking as its focus is on providing for financial needs of industry and institutional clients. @ Parabanking ; Para Banking is a kind of banking wherein money is accepted for the purpose of saving from an individual as in case of a normal banking function. The acceptance of money under Para Banking is scheduled daily, monthly, quarterly, half yearly, yearly and even for fixed period for more than 01 year. @ Offshore banking: An offshore banking is a bank located outside the country of residence of the depositor, typically in a low tax jurisdiction (or tax haven) that provides financialand legal advantages. @ Onshore banking: Onshore banking is banking within the country of which you are a resident. @ Retail banking: banks provides facilities to normal customers that is retail banking @ Merchant banking: When banking facilities are given to industries then it is considered as merchant banking. Lien :- A lien is the right to retain property in its possession till its bankers dues are cleared by the borrower. Lien gives banker only a right to retain the possession of the goods and not the power to sell. Pledge:- placing of owned property by a debtor (the pledger) to a creditor (the pledgee) as a security for a loan or obligation. The pledgee has an implied right to sell the pledged property to satisfy his or her claim in case of a default. Mortgage:- A mortgage is the transfer of interest in a specific immovable property by one person to another for the purpose of securing a loan or advance of money. The main point to be noted is that, in a mortgage, the mortgaged property is not transferred to the mortgagee. It usually remains with the borrower or mortgagor. Only interest in the mortgaged property is transferred from the mortgagor (borrower) to the mortgagee (the banker). On repayment of the loan, the interest in the property is re-transferred to the mortgagor (borrower). However, when the borrower fails to repay the loan dues, the mortgagee (banker) gets the right to sell the property and recover his loan dues from the sale proceeds of the property. Hypothecation:- Hypothecation is mortgage of movable.the borrower retains the ownership of the security. Possession remains with the borrower, but the ownership of the property remains with the banker till the loan is closed in full. NPA (NON PERFORMING ASSETS) Commercial Banks assets are of various types. All those assets which generate periodical income are called as Performing Assets (PA). While all those assets which do not generate periodical income are called as Non-Performing Assets (NPA). If the customers do not repay principal amount and interest for a certain period of time then such loans become nonperforming assets (NPA). Thus non-performing assets are basically non-performing loans. NPA have been divided or classified into following four types:-

1) Standard Assets :A standard asset is a performing asset. Standard assets generate continuous income and repayments as and when they fall due. Such assets carry a normal risk and are not NPA. in the real sense. So, no special provisions are required for Standard Assets. 2) Sub-Standard Assets : All those assets (loans and advances) which are considered as non-performing for a period of 12 months are called as Sub-Standard assets. 3) Doubtful Assets : All those assets which are considered as non-performing for period of more than 12 months are called as Doubtful Assets. 4) Loss Assets : All those assets which cannot be recovered are called as Loss Assets. Causes of NPA NPA arises due to a number of factors or causes like:1) Speculation : Investing in high risk assets to earn high income. 2) Default : Willful default by the borrowers. 3) Fraudulent practices : Fraudulent Practices like advancing loans to ineligible persons, advances without security or references, etc. 4) Diversion of funds : Most of the funds are diverted for unnecessary expansion and diversion of business. 5) Internal reasons : Many internal reasons like inefficient management, inappropriate technology, labour problems, marketing failure, etc. resulting in poor performance of the companies. 6) External reasons : External reasons like a recession in the economy, infrastructural problems, price rise, delay in release of sanctioned limits by banks, delays in settlements of payments by government, natural calamities, etc. The Foreign Exchange Management Act (1999) or in short FEMA has been introduced as a replacement for earlier Foreign Exchange Regulation Act (FERA). FEMA became an act on the 1st day of June, 2000. FEMA was introduced because the FERA didnt fit in with post-liberalisation policies. it was formulated to promote the orderly development and maintenance of foreign exchange market in India. The FEMA head-office, also known as Enforcement Directorate is situated in New Delhi and is headed by a Director. The Directorate is further divided into 5 zonal offices in Delhi, Mumbai, Kolkata, Chennai and Jalandhar and each office is headed by a Deputy Director. Each zone is further divided into 7 sub-zonal offices headed by the Assistant Directors and 5 field units headed by Chief Enforcement Officers.FEMA is the regulatory enactment for all foreign exchange transactions. RBI is the regulatory authority for the Act. According to FEMA, only those entities can deal in foreign exchange, who are authorized to do so by the RBI.

Money Market- A segment of the financial market in which financial instruments with high liquidity and very short maturities are traded. The money market is used by participants as a means for borrowing and lending in the short term, from several days to just under a year. Capital Market- A market in which individuals and institutions trade financial securities. Organizations/institutions in the public and private sectors also often sell securities on the capital markets in order to raise funds. Thus, this type of market is composed of both the primary and secondary markets.

process of crisil ratingstep 1: CRISIL receives the completed rating agreement/application form along with rating fee. step 2: CRISIL representatives visit the enterprise. step 3: CRISIL analysts have a discussion with the management of the enterprise. step 4:CRISIL prepares the rating report, assign a rating and sends the report the enterprise with a copy to the NSIC. step 5: the rating is published on CRISIL's website after taking the consent of the enterprise. Duration for Small Scale Industries The whole process takes about three to four weeks after CRISIL receives complete information.

RBI asserted restrictions on bank advances against some specified sensitive commodities.This sensitive commodities includes >Food grains i.e cereals pulses etc >Cotton textiles >Certain oil seeds >Sugar n derivative products of it >Raw cotton All these commodities, as would be observed, are of mass consumption and Govt makes all efforts to ensure adequate supply of these commodities in the free market. Selected credit control imply direct restriction in certain kinds of bank lending.It prevent credit from particular channels which are considered as undesirable and less essential.In developing economies SCC is primarily intended to prevent antisocial use of credit which is associated with speculative hoardings of strategic commodities and to bring down its prices or to check any unwanted increase in its price. Latest Developments on FDI (all sectors including retail):2011 December : (i) The Indian government removed the 51 percent cap on FDI into single-brand retail outlets and thus opened the market fully to foreign investors by permitting 100 percent foreign investment in this area. 2012 - September : The government approved the (a) Allowed 51% foreign investment in multi-brand retail, (b) Relaxed FDI norms for civil aviation and broadcasting sectors. FDI cap in Broadcasting was raised to 74% from 49%; (c) Allowed foreign investment in power exchanges 2012 October: In the second round of economic reforms, the government cleared amendments to raise the FDI cap (a) in the insurance sector from 26% to 49%; (b) in the pension sector it approved a 26 percent FDI; Now, Indian Parliament will have to give its approval for the final shape," 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. What is Balance of Payment? Have you heard about Basel 2? What is the importance of Basel 2 in the present banking environment? What do you mean by Fiscal Deficit? What is meant by Revenue deficit? What is meant by SDR? What is meant by Open Market operations (OMO)? What is meant by Micro Credit? What is cash profit? What is meant by Liquidity Adjustment Facility (LAF)? What is meant by Wholesale Price Index (WPI)? What is meant by Consumer price Index (CPI)? What is meant by Venture Capital? What do you mean by Treasury Bills? What is meant by Banking Ombudsmen Scheme? What is meant by Debenture? What are the types of debentures? What do you mean by hedge fund? What is meant by FCCB? What is meant by Capital Account Convertibility (CAC)? What is meant by Current Account Convertibility?

22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43.

What is meant by Arbitrage? What do you mean by Capitalism? What is meant by Socialism? Explain prepayment and default risk What is meant by ULIP? NBFC's & how are they diff from banks CASA ratio capital adequacy ratio, CRAR balance sheet finance secretary IBRD and IDA (world bank) priority sector What is debit and credit? Purpose of making balance sheet. What is bad debts? Bond & securities What is NABARD? Its functions. What is SEZ. Why it forms? What factors prominantly effecting indian economy. If value of Rs. Go down suddenly, what might be the immediate steps by RBI? What is hyper threading (HT technology)? Which programming language would you choose to make accounting software and why?

BANKING LAWS(AMENDMENT) BILL