1. What is a Life settlement contract?

Compared to the initial days where we had the options of either surrendering the policy back to the
insurance company for its cash value or letting the policy lapse.
Life settlement contract is sale of an existing life insurance policy to a third party for more than its
cash surrender value, but less than its net death benefit.
Reasons to sell vary from:
a. Policy owner no longer wanting the policy.
b. Wishing to purchase a different kind of life insurance policy.
c. Payment of the premium may not be affordable or the person may need immediate money.
2. What happened to ABN AMRO Bank in 1999 which gave it scale?
Anticipating the emergence of retail banking in India, the bank acquired the retail business of the
Bank of America in 1999 covering acquisition of this line of business in India, Taiwan and Singapore.
The consumer banking business of Bank of America to be acquired by ABN Amro bank included
consumer lending, deposit mobilisation, auto finance and mortgage activities.
3. Find about Hedge Funds, Private Equity Funds and Asset Management Companies?
Both hedge funds and private equity funds appeal to high net worth individuals (many require
minimum investments of $250,000 or more), traditionally are structured as limited partnerships and
involve paying the managing partners basic management fees plus a percentage of profits.
Hedge funds provide the highest investment returns possible as quickly as possible and hence are
primarily high liquid assets. This enables to make profits quickly on one investment and then shift
funds into another investment that is more immediately promising. Hedge funds invest in virtually
anything and everything individual stocks (including short selling and options), bonds, commodity
futures, currencies, arbitrage, derivatives whatever the fund manager sees as offering high potential
returns in a short period of time. The focus of hedge funds is on maximum short-term profits.
Private equity funds more closely resemble venture capital firms in that they invest directly in
companies, primarily by purchasing private companies, although they sometimes seek to acquire
controlling interest in publicly traded companies through stock purchases. The focus here is on longterm potential of the portfolio of the companies. Private equity funds look to improve the company
through management changes, streamlining operations or expansion, with the eventual goal of selling
the company for a profit, either privately or through an initial public offering in a stock market.
In hedge funds, investors can usually cash out their investments in the fund at any time. In contrast,
the long-term focus of private equity funds usually dictates a requirement that investors commit their
funds for a minimum period of time, usually at least three to five years, and often from seven to 10
years.
There is also generally a substantial difference in risk level between hedge funds and private equity
funds. While both practice risk management by combining higher-risk investments with safer
investments, the focus of hedge funds on achieving maximum short-term profits necessarily involves
accepting a higher level of risk.
4. Find the year in which brokers were allowed to let customer sell their ETFs on BSE, NSE.
They were allowed to do so from October, 2013.

5. Find about Octopus Card?

Used in Hong Kong, the "Octopus" is a reusable, rechargeable and contactless 'smart card' used on
most forms of public transport as well as settling payments at all major convenience stores.
Octopus fares are sometimes between 5% and 10% cheaper than ordinary fares on most trips made on
the MTR network, while reductions could apply for transits of specific bus services.
It is the second contactless smartcard in the world after the Korean Upass.

6. How many Demat Accounts are there in India?

Demat accounts crossed 20 million in May,2012.
The total number of demat accounts in the country is now 2.30 crore. (Feb 2014)

Additionally, by 2014 NSDL- 10.4 million accounts while CSDL had 10 Million such accounts
7. Which of the following is ICICI affliated to CDSL or NSDL?
ICICI has affiliation to both the CSDL as well as NSDL.
8. What is Mis-selling and Financial Repression?
Financial mis-selling refers to the deliberate false statements made by individual, usually a financial
organization representative to sell-off their products or services usually not profound to the customer.
Financial repression describes measures by which governments channel funds to themselves as a form
of debt reduction.
It can include measures as directed lending to the government, caps on interest rates, regulation of
capital movement between countries and a tighter association between the government and the banks.
It includes:
a.
b.
c.
d.
e.

Caps or ceilings on interest rates.

Government ownership or control of domestic banks and financial banks.
Creation or maintenance of a captive domestic market for government debt.
Restrictions on entry to financial industry.
Direct credit to certain industries.

9. What are NCDs

Non-convertible debentures 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.
NCDs are the investment instrument that offers high returns with moderate risk while giving the
flexibility of choosing between short and long tenures. An NCD can be both secured as well as
unsecured.
For secured debentures, which are backed by assets, in case the issuer is not able to fulfil its
obligation, the assets are liquidated to repay the investors holding the debentures.
Secured NCDs offer lower interest rates compared with unsecured ones. If you want a regular income
from NCDs, you can pick those that pay interest on a monthly, quarterly or annual basis. If you just
want to grow your wealth, you can opt for cumulative option where the interest earned is reinvested
and paid at maturity.
Companies seeking to raise money through NCDs have to get their issue rated by agencies such as
CRISIL, ICRA, CARE and Fitch Ratings. NCDs with higher ratings are safer as this means the issuer
has the ability to service its debt on time and carries lower default risk.
10. Which are the common Investment Products and Where do they fall-EEE, EET or ETE?
Exempt, Exempt, Exempt (EEE)
Here, the first exempt means that your investment is allowed for a deduction. So, one dont have to
pay tax on part of the salary that equals the invested amount.
The second exempt implies that one doesnt have to pay any tax on the returns earned during the
accumulation phase.
The third and final exempt means that the income from the investment would be tax-free in your
hands at the time of withdrawal. EEE status is generally enjoyed by long-term investment vehicles,
such as Public Provident Fund, Employees Provident Fund, ELSS, Sukanya Samriddhi Yojana (SSY)
enjoy the EEE status.
Exempt, Exempt, Taxed (EET)
EET, the first E indicates that the original investment is exempt from tax. The second E denotes that
returns or income or accumulation on the investment are not taxed. Here T, indicates that any maturity
amount or withdrawals are subject to tax depending on the tax slab of the individual. Investments
which fall under EET are Unit Linked Pension Plans, National pension Schemes, insurance-cuminvestment plans, Atal Pension Yojana. Since your accumulationprincipal plus returnis taxed at
the time of withdrawal, your returns from such instruments come down, depending on your tax slabs.
For instance, if you fall in the 20% tax bracket and the rate of return on your investment is 8%, you
will lose out 20% of that return and make only 6.4% on your investment.
Exempt, Taxed, Exempt (ETE)
Bank Tax saving fixed deposits and NSCs are best example for this, where tax is exempt on amount
you invest as FD, the interest is taxed and at the Third E, indicates that principal amount is tax free.
So before investing for tax purpose one needs to understand all these terms and make a wise decisions
based on tax slabs which he falls.

There are other similar terms too like TTE (Fixed deposits), TEE (Stocks and Equity Funds if kept for
more than 1 year).
11. Read about Komal Jeevan Policy?
LICs Komal Jeevan Plan is a childrens moneyback policy in which the premium is returned on the
policy anniversary after the child attains 18 years, 20 years, 22 years and 24 years. If the child dies
within the policy tenure after risk commencement, then the Sum Assured along with Guaranteed
Additions are paid and the policy is terminated.
Key Features of LIC Komal Jeevan Plan

This plan can be taken by the childs parents or grandparents for a child between 0 to 10 years
Premium needs to be paid till the child is 17 years old.
Risk starts to commence after 2 policy years or the child is at least 7 years old, whichever is
later.
No medical examination is required under this plan.
Loyalty or Terminal Bonus is payable on death or maturity.
An Additional Premium Waiver Benefit rider can be taken along with this plan.
There is a Guaranteed Addition of Rs. 75 per thousand Sum Assured for each completed year.

Benefits you get from LIC Komal Jeevan Plan

Death Benefit Sum Assured + Bonuses after commencement of risk. Otherwise, the sum of basic
premiums are paid back
Maturity Benefit Guaranteed Additions along with Loyalty additions is payable in a lumpsum.
Survival Benefit
When child is 18 years of age - 20% of the Sum Assured
When child is 20 years of age - 20% of the Sum Assured
When child is 22 years of age - 30% of the Sum Assured
When child is 24 years of age - 30% of the Sum Assured
Income Tax Benefit Premiums paid under life insurance policy are exempted from tax under
Section 80 C and maturity proceeds are exempted from tax under Section 10 (10D)

12. What are RFC?

RFC accounts (Resident Foreign Currency) are bank accounts that can be maintained by resident
Indians in foreign currency. These accounts are especially useful for Non Resident Indians (NRI) who
return to India and would like to bring back foreign currency from their overseas bank accounts.
An RFC account can be opened if one returns to India permanently after residing abroad for a
continuous period of one year or more. In order to calculate this continuous period, any short trips to
India for personal visits would be ignored.
An RFC account can be opened in any freely convertible foreign currency. These are foreign
currencies that can be exchanged easily with other currencies and are recognized by the international
market.

RFC accounts can be opened as savings or term deposit accounts and can be held singly or jointly in
the names of those who are eligible. No loans are available against the RFC account.
Interest is credited quarterly and is taxable. However, if one is a Resident but not an Ordinary
Resident, then they will be able to avail of a tax exemption on the interest on RFC accounts for the
two year period when one holds this status.
There are two types of RFC products- Resident and Non-Resident. Currently RFC term deposit rates
are in the range of 2.5-3.5% for terms over 1 year for the US dollar. Interest rates vary by term and by
currency.
13. What is the maximum that a bank can extend for Loan against Shares?
The amount of loan generally does not exceed Rs.20 lakh per borrower. As per RBI guidelines loans
against security of shares, convertible bonds, convertible debentures and units of equity oriented
mutual funds should not exceed the limit of Rs.10 lakh if the securities are held in physical form and
Rs.20 lakh per individual if the securities are held in demat form.
For subscribing to IPOs, loans given to individuals will not exceed Rs.10 lakh.
Banks may extend finance to employees for purchasing shares of their own companies under ESOP to
the extent of 90% of the purchase price of the shares or Rs. 20 lakh, whichever is lower.

14. Who invented Credit Card? Where and how did it begin?
According to the Diner's Club, the idea of the credit card came to Frank McNamara in 1949 while he
was having dinner at a restaurant in New York City.
When it was time to pay the bill, McNamara realized he had forgotten his wallet.
What happened next depends on whom you ask: According to "The Dollar Code," McNamara
negotiated his way out of washing dishes to pay for his dinner by signing for it instead and promising
to pay the restaurant back. He had to call his wife and ask her to deliver some cash.
According to Jonathan Levine's 2008 "Credit Where It Is Due: A Social History of Consumer Credit
in America," this dinner - apparently known in the industry as "the first supper" - is a parable that
didn't actually happen.

15. What did C B Bhave do as SEBI Chariman?

C B Bhave, 60, took on the high and mighty without fear or favour, be it Anil Ambanis Reliance
group or Subroto Roys Sahara group; acted against HDFCs mutual fund arm for front running
charges, brought to light nexus between companies and brokers in the price rigging charges against
firms such as Ackruti City, Welspun Gujarat and Murli Industries
His term also saw countless investor-oriented reforms he has done in the capital markets. Most noted
would be a new system, which allowed investors to apply for public issues with their money
remaining in their accounts till they get share allotment. He also brought institutional investors on par
with retail investors by asking the former to pay upfront the entire 100 per cent at the application
stage itself up from a nominal 10 per cent earlier.

Similarly, his term also saw the first Indian depository receipts (IDR) issue, though the concept
was first
Bhave, who, at National Securities Depository, before joining Sebi, spread the concept of paperless
shareholdings in the demat form, also waged the battle on behalf of retail investors against corporates
practice of allotting preferential shares to themselves. Sebi hiked the advance payment to be made by
promoters in preferential allotments from 10 per cent to 25 per cent, and said they would have to
forfeit the advance amount if they did not subscribe to the issue.
Bhaves term also had a fair share of controversies. The tiff between Sebi and insurance regulator Irda
over Unit-linked insurance policies and the ban on entry loads for mutual funds generated quite a lot
of bad publicity for the 1975-batch IAS officer.
Another criticism against the outgoing Sebi boss is that he favoured National Stock Exchange (NSE)
by stopping the entry of MCX-SX into the stock exchange business. But to be fair to him, Bhave was
just playing by the rules, which clearly stated that no single investor, other than financial institutions
and banks, should not own more than 5 per cent stake.( Krishna Notes:Bhave allowed MCX to
function as a full-fledged private stock exchange.)
Bhaves term also increase in trading hours by 55 minutes in the morning, including pre-open session.
The pre-open session, in fact, will most probably end the sight of markets hitting circuit breaker
within seconds of opening.

16. What is One Rank One Pension(OROP) all about?

In simple terms, OROP implies that uniform pension be paid to the Armed Forces personnel retiring
in the same rank with the same length of service, regardless of their date of retirement. Future
enhancements in the rates of pension would be automatically passed on to the past pensioners. This
implies bridging the gap between the rate of pension of current and past pensioners at periodic
intervals," said Defence Minister ManoharParrikar while making the announcement
"Under this definition, it has been decided that the gap between rate of pension of current pensioners
and past pensioners will be bridged every 5 years," he said. We take a look at six salient features of
the OROP scheme, as announced by Parrikar:
1. The benefit will be given with effect from 1st July, 2014. The present government assumed office
on 26th May, 2014 and therefore, it has been decided to make the scheme effective from a date
immediately after.
2. Arrears will be paid in four half-yearly instalments. All widows, including war widows, will be paid
arrears in one instalment.
3. To begin with, OROP would be fixed on the basis of calendar year 2013.
4. Pension will be re-fixed for all pensioners retiring in the same rank and with the same length of
service as the average of minimum and maximum pension in 2013. Those drawing pensions above the
average will be protected.
5. Personnel who voluntarily retire will not be covered under the OROP scheme.
6. In future, the pension would be re-fixed every 5 years.

17. What does the Sumit Bose report on MIs Selling of Financial Products by Sumit Bose say?
The key recommendation of the Committee is that regulation of financial products must be seen in
terms of the product function and not form. These functions are Insurance, Investment and Annuity.
The lead regulator, according to function, should fix the rules.
In bundled products, the rules of each component should be set by the lead regulator. For example, in
a bundled insurance product, the rules on the investment component should be set by the investment
regulator, while the rules on insurance should be set by the insurance regulator. This will help remove
distortions that result in investment oriented products from insurance being relatively expensive and
opaque. The committee has suggested specific steps to create a level-playing field between all
products, steps that are essential to curb mis-selling.
Improved disclosure
The Committee recommends that the way in which returns is computed should be standardised and
should be a function of the amount invested. The norms of this disclosure for investment products
should follow the rules set by the lead regulator. All disclosures should be machine readable. These
measures are designed to help consumers compare products objectively and make appropriate choices.
Commissions and charges
Investment products and investment components of bundled products should have no upfront
commissions. All investment products, and investment portions of bundled products, should move to
an AUM based trail model. Upfront commissions on pure insurance products and pure risk portions of
bundled products should be allowed, and should be decided by the lead regulator since pure risk is a
difficult product to sell.
Common distributor regulation
Regulators should create a common distributor (including employees of corporate agents) regulation.
Each regulator may add rules specific to products regulated by them. Regulators should create a single
registry of all distributors. Anybody facing the customer should be registered. These steps will enable
tracking of distributor actions across products and improve enforcement actions.

18. What is Servuction model?

A model used to illustrate the four factors that influence the service experience, including those that
are visible to the consumer and those that are not.
The servuction model consists of four factors that directly influence customers service experiences:
1. The Servicescape (visible)
2. Contact personnel/service providers (visible)
3. Other customers (visible)
4. Organizations and systems (invisible)
The first three factors of the servuction model are plainly visible to customers.
In contrast, organizations and systems, although profoundly impacting the customers experience, are
typically invisible to the customer.

19. What is the relation of Vishnu Deuskar with ABN AMRO Art Fund
ABN AMRO announces the creation of an Art Investment Advisory group, which will provide the
Private Banking sector with a wide range of art investment services that can be offered to their clients.
Working with Seymour Management (Seymour's), the independent fine art advisors and valuers, ABN
AMRO will offer investment advice on the wide variety of art funds available in the market, as well
as creating a Fund of Funds and, over time, its own ABN AMRO Art Fund.
The Bank will also provide bespoke advice for those putting together or managing private collections
and make available the full range of services to its own private banking clients. Ariel Salama, Global
Head, Private Banks at ABN AMRO's Wholesale Clients business, will head the group.
Through ABN AMRO's Art Investment Advisory group, private banks will be able to offer these
services, either on a white labelled or syndicated basis." Art is a maturing asset class; for many years
it has been used as an anti-inflationary tool, offering long-term returns that compare favourably with
those from equity and bond markets. Since 1950 art has returned between 11.5 and 12.5 per cent on a
compound annual basis.
The bear market in equities and increasing uncertainty across global financial markets has led to a
renewed focus upon art as a strong medium and even short-term investment. There are now around 20
Art Funds covering a wide spectrum of fields, with varying structures and degrees of liquidity.
Returns are primarily made from the increasing value of the underlying assets held.
As with all investments, understanding the various complexities involved is vital. Due diligence
would typically include considerations such as fund size, the expertise, reputation and access to the
market of managers, the types and values of purchases, investment horizon and exit strategies
20. What is TV Banking?
The Television Banking enables customers to conduct banking business with television and TV settop box as the terminal and remote control for the operational tool based on the cable TV broadband
network. Compared with online banking, television banking is closer to the life of everyone.
Television banking enables customers to complete banking transactions through the television, have
access to financial products and industry information, and experience a more fashionable and
convenient wealth management approach.
A sample implementation could be as follows: a dedicated digital channel for banking purposes can
be provided with a split-screen feature. The input for the account holder will be provided in two steps
using a TV remote to enter the account number and unique PIN. While one of the split screens will
have the options of possible transactions like PIN change, balance enquiry, balance transfer, and so
on, the other part of would be dedicated to an interactive interface with a correspondent (pre-

recorded) helping the account holder in the local language. A voice recognition interface with pre-set
voice commands would be provided for the same.
Moreover, with the advent of rapid penetration of smart and internet-enabled TVs, real-time
processing of queries could be enabled through cloud-based speech recognition software in the near
future. The input provided by the user will be sent to the TV server, which will retrieve information
from the respective banking server.
There are several advantages of TVB for financial inclusion. The use of the local language will enable
a more interactive environment for banking, and would help in increasing trust in the system in sharp
contrast to BCs who are perceived as temporary salespersons because of the high attrition rate.
Doing TVB in the comfort of the home will increase the overall adoption of banking habits, making
financial inclusion viable.
21. What is a Gold monetisation scheme?
The government, in a bid to reduce imports of the gold, has proposed the gold monetisation scheme
that aims to bring domestically held gold into circulation by encouraging individuals to get the metal
melted, deposit it with banks and also earn interest on it.
The gold monetisation scheme is aimed to mobilise the surplus gold holdings held with Indian
households and institutions as deposits. Under the scheme, gold lying idle with people can be
deposited in banks and generate interest. The return from these deposits is totally tax free.
The deposited gold will be melted and make available for jewellers as raw material so as to restrict the
increased dependence of imported gold.
Below are the three important aspects of the scheme.
1) Interest rate: The new scheme which is on the lines of GDS 1999 seeks to offer a higher interest
rate. While the 1999 scheme offered interest between 0.75 per cent and 1 per cent for tenures between
three to five years, the new scheme can offer up to 2 per cent.
2) Minimum deposit and tenor: The scheme would allow individuals to deposit a minimum of 30
grams of gold bullion in the account and it can be deposited for a short-term (one to three years);
medium-term (five to seven years) and long-term (12-15 years).
3) Gold deposit and redemption: Jewellery and coins held by individuals will have to be taken to the
purity testing centre and will have to be melted before they can be deposited into the gold account.
While redemption in case of short term deposits can be done in either cash or gold, in case of medium
and long term it would be only cash.

GDS - SBI had fixed interest rates for 3 years to be 0.75%, whereas for 4 years and 5 year tenurs, it
was 1%

22. What are Capital Gains and Capital Gains Bonds?

The conventional method of dealing with such a liability is to simply invest in capital gains bonds. If
you sell any capital asset (like a house property), a capital gains tax liability can arise on the same. If
the asset (property in this case) has been sold within 36 months from the date of purchase, it amounts
to short-term capital gains. Conversely, if the asset is held for a period of more than 36 months, a
long-term capital gain arises. In case of assets like mutual funds, the holding criterion for determining
long-term or short-term is reduced to 12 months. So if you hold the security for over 12 months, it
qualifies for a long-term gain.
Capital gains bonds are issued by specified institutions and tax benefits are available under Section
54EC of the Income Tax Act.For the purpose of claiming tax benefits, investments should be made
within a period of 6 months from the date when the capital asset was sold. Similarly, investors are
required to stay invested in the bonds for a period of 36 months from the date of investment.
Redemption before completion of the 36-month period will negate the tax benefits.
23. What are Family Offices?
Family offices are private wealth management advisory firms that serve ultra-high net worth
investors. Family offices are different from traditional wealth management shops in that they offer a
total outsourced solution to managing the financial and investment side of a affluent individual or
family.
For example, many family offices offer budgeting, insurance, charitable giving, family-owned
businesses, wealth transfer and tax services.
There are two types of family offices- single family offices and multi-family offices sometimes
referred to as MFOs. Single family offices serve one ultra-affluent family while multi-family offices
are more closely related to traditional private wealth management practices, seeking to build their
business upon serving many clients.
India has a handful of family offices, including Azim Premji's PremjiInvest, Ajit Khimji's Khimji
Family Office, N R Narayana Murthy's Catamaran and the Ambani Family.
24. What are Registrar or transfer agents?
They are the trusts or institutions that register and maintain detailed records of the transactions of
investors for the convenience of mutual fund houses.
Mutual fund investors do a number of transactions, like buying, selling or switching units. They could
request for a change in bank details or address. Each such request is a transaction by itself.
Mutual fund houses have to maintain records of each such transaction. Mutual fund houses may not
want to invest in these processes nor would they have the skilled expertise to handle these huge
transactions on a professional basis.
An R&T agent has a wide network of branches across the country, helping investors get forms of fund
houses, complete their transactions and even obtain their account statements. It acts as single-window
system for investors.

An R&T agent also helps investors with information and details on new fund offers, dividend
distributions or even maturity dates in case of FMPs (fixed maturity plans). While such details is also
available from fund houses, an R&T agent is a one-stop shop for all the information. Investors
can get information about various investments in different schemes of different fund houses at a single
place. From a mutual fund's perspective, R&T agents provider greater reach and help save costs.
The mutual fund house pays money for the services offered by the R&T agent. The charges would
depend on the volume of transactions done for the mutual fund. The mutual fund, charges such
expenses to the expense ratio of the fund. As an investor, while doing transactions at the R&T agents
office, you do not have to pay any charges.
25. What is an Estate Tax?
When someone in a family dies and the property of the deceased transfers to the younger generation,
the federal government imposes an estate tax on the value of all that property.
The final net taxable estate value is subject to a tax reduction in an amount equal to the remaining
balance of the unified credit. The tax laws provide every taxpayer a unified credit amount that
exempts from the estate tax the tax on all lifetime gifts and property transfers at death that do not
exceed a specified value.
Only the value of the tax on all transfers that exceed the unified credit amount is due. Only when the
tax on the net taxable estate exceeds your remaining balance of the unified credit does the estate need
to remit a tax payment to the IRS.
26. What is Opium Trade? How did it affect China?
By 1690, the British East India Company had trading centres (known as 'factories') all along the West
and East coasts of India. The main centres were at Madras, Calcutta and Bombay. The Company
started to protect its trade with its own armies and navies - very different from most companies today.
London also became an important trading centre, where goods were imported, exported and
transferred from one country to another. The Company would have liked to pay for all its import
goods with silver, but traders in England wanted them to export English manufactured goods.
From China, the Company bought tea, silk and porcelain but there was correspondingly little demand
in China for Europes manufactured goods and other trade items. Consequently, Europeans had to pay
for Chinese products with gold or silver.
Over the next 100 years tea became a very popular drink in England, and there was a fear that too
much silver was leaving the country to pay for it. To stop this happening, the Company became
involved in a triangular trade by smuggling opium (a highly addictive and illegal drug) from India
into China.
The Company grew opium in India. They were looking for something that the Chinese would accept
instead of silver, to pay for the goods they bought at Canton. Opium was a valued medicine which

could deaden pain, assist sleep and reduce stress. But it was also seriously addictive and millions
Chinese became dependent on the drug.
Although opium smoking was a subject of fascinated horror for Europeans, the Company actually
encouraged people to use the drug in China - sales of opium were extremely lucrative. As a result,
millions of Chinese would die from opium addiction, and the very fabric of Chinese society was
threatened.
After the Company's trade monopoly was abolished in 1834, smuggling of opium into China by
European private traders intensified. The Chinese state was deeply disturbed at this and threatened
force. Britain was prepared to defend 'free trade' and, in 1840, they went to war. These 'Opium wars'
led to a humiliating defeat of the Chinese and a trade treaty which ceded Hong Kong to the British
27. What is IOB Case all about?
Reserve Bank of India (RBI) has initiated a prompt corrective action on IOB to improve internal
controls and consolidate its business activities.The shares of the bank have slumped 41.3 per cent so
far this year. IOB team have said that that the action will not have any material impact on the
performance of the bank.
A decision to initiate prompt corrective action is typically taken because of a surge in bad loans at a
bank or in cases where the banks capital adequacy levels have fallen below levels prescribed by the
regulator.RBI has specified certain regulatory trigger points, as a part of prompt corrective action
(PCA) framework, in terms of three parameters -- capital to risk weighted assets ratio (CRAR), net
NPA and Return on Assets (RoA), for initiation of certain structured and discretionary actions in
respect of banks hitting such trigger points.
In the case of IOB, the bank reported a surge in bad loans in the June ended quarter which led to a
slump in profits.As of 30 June, the banks gross non-performing assets (NPAs) stood at Rs.16,451
crore, up nearly 60% from Rs.10,350 crore reported in the year-ago period. As a ratio of total loans,
gross NPAs stood at 9.4% at the end of the April-June quarter as compared with 5.84% in the same
quarter a year ago.For the April-June period, the banks net profit was Rs.14.76 crore down 95% from
the same period a year ago due to large provisions against bad loans made during the quarter.In the
last five years, IOBs advances have grown at a compounded annual growth rate (CAGR) of 16.8%
fromRs.78,999.16 crore to Rs.1.717 trillion. Over the same period, gross NPAs have grown at a
CAGR of 32.8% from Rs.3,611.08 crore to Rs.14,922.45 crore.As of June, the capital adequacy ratio,
an indicator of financial strength expressed as a ratio of capital to risk-weighted deposits, stood at

9.75%. Of this, Tier I capital or core capital made up 6.3%.According to Basel III norms, banks are
required to have a total capital adequacy ratio of 9%, of this a minimum of 7% should be in the form
of Tier I capital starting from the financial year 2015-16.

28. How many Ultra-High Net Worth Individuals are present in India?
India now has 2,083 ultra-high-net-worth individuals with more than $50 million net wealth, 3%
higher than 2014. It has 2,54,000 members of the top 1 per cent of global wealth holders.The number
of USD millionaires in India is projected to rise by 65 per cent in the next five years to reach 3,05,000
in 2020, compared to the current 1,85,000.
29. Ponzi Scheme
Fraudulent Investment Operation where operator pays returns to investors from new capital paid to
operators by new investors, rather than profit earned by operator. Occasionally begins as a legitimate
business until business fails to achieve returns expected.
30. Bernard Madoff
Bernard Madoff was convicted of fraud and also used Ponzi Scheme. He was the admitted operator of
Ponzi Scheme
31. Michael Milken
Michael Milken was related to Junk Bonds fraud. He had felony charges for violating U.S. Securities
Laws. He was indicted for racketeering and securities fraud in 1989.
32. Ivan Boesky
Ivan Boesky was indicted for insider trading scandal in 1980s in US. Michael Milken provided
information about M&A to Boesky to invest thus indulging in insider trading.
33. Shivraj Puri
He was indicted in 400 crore Citibank Scam. He gave a fake circular from RBI to investors and also
got blank cheques signed and deposited the money into his personal accounts as well as familys
accounts
34. Minimum Interest Rate on Savings Account
Banks are free to determine the interest rates as they want from 25/10/11 but under following
conditions:

(a). Upto 1 lakh, have to charge a uniform rate

(b). Above 1 lakh, differential rates could be charged
35.What is the source of funds for HDFC?
HDFC funds in total were 2,08,599 crores.
Out of them
13% - Loans
56% - Commercial papers, NCDs, Bonds etc., and
31% - Deposits in FDs, RDs.
36. Minimum and maximum period for FDs
Minimum period is 7 days and maximum period is 10 years for FD but there is an exception of 20
years FD where the rate is around 7.75%