banks

India outlook stable: Moody’s
• Rating agency Moody pegged India’s credit outlook as ‘stable’ on account of its strong economic growth
and high savings and investment rates.
• In its ‘Credit analysis on India’, Moody’s pointed out that even as the country’s ‘Baa3’ sovereign rating is
supported by credit strengths — a large, diverse economy, strong GDP growth, savings and investment
rates —and there were numerous credit challenges which constrained this rating.
• Towards this end, although the government has announced a number of measures to speed up
infrastructure development and liberalise foreign direct investment (FDI) norms, the rating agency
appears to be circumspect about the impact.



2010---INTERBANK MOBILE PAYMENT SERVICE

Banks to introduce new CTS-2010 by December 31, 2012

Credit Linked Capital Subsidy Scheme
• The Credit Linked Capital Subsidy Scheme for technology upgradation of Micro, Small and Medium
Enterprises in the country provides for capital subsidy at 15% of value of plant & machinery is provided
on loans upto Rs.1 crore.
• The scheme is implemented through 11 Nodal Banks/agencies.
• The beneficiaries eligible under the Scheme include sole Proprietorships, Partnerships, Co-operative
societies, Private and Public Limited companies in the Micro and Small Enterprises sector.







SIDBI to procure ECBs
• Small Industries Development Bank of India (SIDBI) has been permitted to avail of External Commercial
Borrowings for on-lending to MSME Sector as defined under the Micro, Small and Medium Enterprises
Development (MSMED) Act, 2006 subject to certain conditions.
• ECB has been made for low cost affordable housing projects by project developers as well as for low
cost/affordable housing units by NHB and Housing Finance Companies, though Government is against
SIDBI diverting the funds to Housing sector.



who among the following has appointed as the new Chairperson and
Managing Director of the Bank of India?

[C]Vijayalakshmi R. Iyer








the following has appointed as the new country head for the
Singapore-headquartered United Overseas Bank's India operations?
[C]P.V. Ananthakrishnan

Banks all over India are in the process of issuing fresh-look cheques with more security and standardized features to all its customers by December 31, 2012.

From January 1, 2013, cheques which do not conform to CTS-2010 standards would not be entertained by banks.

What is Cheque Truncation?

• We go to a bank and sign a Cheque … now, “Truncation” is the process of stopping the need for movement of the physical cheque (paper cheque leaves) from one bank’s branch to other bank’s branch.
• In its place an electronic image of the cheque is transmitted to the drawee branch by the clearing house, along with relevant information like data on the MICR band, date of presentation, presenting bank, etc.

What is Cheque Standardization and what does CTS 2010 Standard mean ? What are the benefits of adopting CTS-2010 ? How would be the uniqueness of a physical cheque be captured and imparted to the cheque image ? How are the images of cheques taken ? What are the modes in which banks can participate in CTS ?

What is Cheque Standardization and what does CTS 2010 Standard mean ?

• Growing use of multi-city and payable-at-par cheques for handling of cheques at any branches of a bank, introduction of Cheque Truncation System (CTS).
• CTS-2012 is a set of benchmarks towards achieving standardization of cheques issued by banks all over India.
• The benchmark prescriptions are collectively known as "CTS-2010 standard".
• These include provision of mandatory minimum security features on cheque forms such as quality of paper, watermark, bank’s logo in invisible ink, void pantograph and standardization of field placements on cheques.
• Indian Banks Association (IBA) and National Payments Corporation of India (NPCI) are co-ordinating with the banks on implementation of the new standard.
• The benchmark prescriptions known as ‘CTS-2010 standard’ are to be implemented by December 31, 2012.

Benefits of adopting CTS-2010

• The security features in cheque forms will assist  the presenting banks to identify the genuineness of the drawee banks’ instruments while handling them in the image-based scenario.
• The homogeneity in security features will act as deterrent against frauds.
• The fixed field placement specifications will facilitate straight-through-processing at drawee banks’ end through the use of optical/image character recognition technology.

What are the benefits of CTS to customers of banks?

• Speeds up the process of settlement.
• No fear of loss of instruments in transit.
• Further, limitations of the existing clearing system in terms of geography or jurisdiction can be removed.
• Use of images obviates the need to handle and move physical cheques at different points. The scope for frauds inherent in paper instruments is, thus, greatly reduced.
• If required, an image replacement document can be printed by a Government Department itself.

The benefits from CTS could be summarized as follows –

• Shorter clearing cycle
• Superior verification and reconciliation process
• No geographical restrictions as to jurisdiction
• Operational efficiency for banks and customers alike
• Reduction in operational risk and risks associated with paper clearing

How would be the uniqueness of a physical cheque be captured and imparted to the cheque image ?

• To ensure only images of requisite quality move in the CTS processing cycle, there is a rigorous quality check process at the level of the Capture Systems and the Clearing House Interface (of the presenting bank). The solution encompasses Image Quality Assessment (IQA) at different levels.
• Further, the new cheque standard "CTS-2010" prescribes certain mandatory and optional security features to be available on cheques, which will also add to the uniqueness of the images.

How are the images of cheques taken ?

• Images of cheques are taken using scanners.

How the image and data transmitted over the network is secured ?

• CTS is protected via a comprehensive Public Key Infrastructure (PKI).
• CTS is compliant to the requirements of the IT Act, 2000.

What are the modes in which banks can participate in CTS ?

There are two modes in which banks may participate in CTS –

1. Direct membership: Banks may participate as direct member provided they have a settlement account with the settlement bank and have put in place necessary infrastructure for participating in CTS.
2. Indirect / Sub-membership: Banks may become sub-members / indirect members of the direct members by using the infrastructure and / or settlement services of the direct members. The settlement for such indirect / sub-member could be done either directly (if such banks have settlement accounts with the settlement bank) or through the direct member through whom they are participating.

As per the recent data released by the National Payments Corporation (NPCI),
India's banking system has reached a landmark of 1 lakh ATMs (automated teller
machines) at the end of October 2012. Out of the total, what fraction of ATMs are
operated by SBI and its five subsidiaries?
[A]44 per cent
[B]49 per cent
[C]54 per cent
[D]59 per cent
59 per cent
The NPCI, which has been promoted as an umbrella organisation for retail
payments by the Reserve Bank and banks, said as of October-end the total number
of ATMs stood at 1,04,500.The State Bank Group, comprising the largest lender SBI
and its five subsidiaries, has a network of 61,500 cash vending machines which
help it account for a majority 59 per cent share in the ATMs.



BANK RATE------
REPO RATE---
REVERSE REPO RATE----
INTEREST RATE------




YES BANK IS NOT DER IN INDIA


WHICH ONE OF THE FOLLOWING IS THE PUBLIC SECTOR BANK---IDBI    
 NOT THESE  ----, ICICI, HDFC, AXIS-

FIRST BANK TO INTRODUCE CREDIT CAR IN INDIA------CENTRAL BANK OF INDIA
IN WORLD------

TO INTRO DEBIT CARD-----



LEAD BANK SCHEME INTRODUCED DURING--------1969


BASEL II IS ASSOCIATED WITH CAR

Bank of India (BOI) and United Bank of India (UBI) on 5 July 2012 reduced the rate of interest by 0.25 percent and 1.75 percent. BOI slashed the rate on fixed deposits where as UBI reduced the rate for farm loans.

BOI slashed interest rate on fixed deposit of 2-3 years by 0.25 percent to 9 percent and for 1 to 111 days the term deposit will be 9.10 percent beside 9.30 percent. The new rates are effective from 2 July 2012. While the interest rates on other maturities remain unchanged.

The other bank UBI slashed interest rate on various categories of farm loans by up to 1.75 per cent. It will offer crop loans, investment credit and loans up to 50 thousand rupees at base rate only. The revised interest rates are effective from 1 July 2012. Currently, UBI base rate or bank lending rate is 10.50 percent.

Niryat Bandhu category for banks, the winners were Canara Bank which got gold trophy followed by Bank of India and Punjab National Bank getting silver and Bronze trophy respectively.







Anup Sankar Bhattacharya is the new Director of IBPS






Govt to set up ‘Spice Parks’ in India to promote export of spices
By the end of year 2012, Government to set up 10 spice parks across the most strategic locations in India. The decision
to this effect was taken by the Spice Board of India, the nodal organization under the
Ministry of Commerce and Industry. Spice parks consists of units like processing,
packaging and certification. Spice Board of India, the nodal organization of the
Ministry of Commerce and Industry, has taken a decision to this effect.
Objective: To promote export of spices. The projects on Spices Park are primarily intended to benefit the growing
community through quality improvement, grading, packing, warehousing, etc for value addition which would lead to
better price realization of their produce.
Some of the centres where the Spices Parks are proposed:-







COMMON WEALTH BANK OF AUSTRALIA IN AUGUST 2010 OPENED ITS FIRST BRANCH IN INDIA IN MUMBAI




the following banks of India has recently
announced formation of an Indian Mortgage Guarantee Company, India's first
mortgage guarantee entity? [A]State Bank of India [B]ICICI [C]National Housing Bank
[D]HDFC
National Housing Bank The National Housing Bank (NHB) has announced formation
of an Indian Mortgage Guarantee Company, a joint venture with US-based financial
security company Genworth, the Asian Development Bank and the International
Finance Corporation. This is the first mortgage guarantee company in India. Its aim
is to offer credit risk coverage in the form of guarantees to housing finance
companies and banks in case of borrowers defaulting. This would help mortgage
lenders avoid piling bad debts in their books.





Now a days, we read in the newspapers that many banks have
revised the deposit rates downwards on FCNR accounts with maturity of two to five
years. The FCNR Accounts refer to ___? [A]Foreign Currency Non-Resident
Account








Ahead of the monetary review of the Reserve Bank of India
(RBI), State Bank of India (SBI) has reduced its lending rates between 0.5
percentage point to 3.5 percentage points mainly for --Small and Medium
Enterprises(SMEs) and Agriculture Sector

Marcus Agius, chairman of Barclays

The Libor scandal is a series of fraudulent actions connected to the Libor (London Interbank Offered Rate) which the resulting investigation and reaction. The Libor is an average interest rate calculated through submissions of interest rates by major banks in London. The scandal arose when it was discovered that banks were falsely inflating or deflating their rates so as to profit from trades, or to give the impression that they were more creditworthy than they were.^[3] Libor underpins approximately $350 trillion in derivatives. It is controlled by the British Bankers' Association (BBA)

On 27 June 2012, Barclays Bank was fined $200 million by the Commodity Futures Trading Commission,^[29] $160 million by the United States Department of Justice^[30] and £59.5 million by the Financial Services Authority^[31] for attempted manipulation of the Libor and Euribor rates.^[32] The United States Department of Justice and Barclays officially agreed that "the manipulation of the submissions affected the fixed rates on some occasions".^{[33][34] [35]}

Barclays manipulated rates for at least two reasons. Routinely, from at least as early as 2005, traders sought particular rate submissions to benefit their financial positions. Later, during the 2007–2012 global financial crisis, they artificially lowered rate submissions to make their bank seem healthy.

Following the interest rate rigging scandal, Marcus Agius, chairman of Barclays, resigned from his position.

The Libor scandal is a series of fraudulent actions connected to the Libor (London Interbank Offered Rate) which the resulting investigation and reaction. The Libor is an average interest rate calculated through submissions of interest rates by major banks in London. The scandal arose when it was discovered that banks were falsely inflating or deflating their rates so as to profit from trades, or to give the impression that they were more creditworthy than they were.^[3] Libor underpins approximately $350 trillion in derivatives. It is controlled by the British Bankers' Association (BBA)

the following banking giants of England was
recently making news in context with the Libor interest rate scandal? Barclays







Qualified Foreign Investors who wish to invest in India
should be compliant with the standards set by ___? [C]Financial Action Task Force

Axis Bank ties up with Ahli United Bank for remittance

Axis bank, the 3rd largest private sector lender tied up

with Bahrain's Ahli United Bank for inward remittances.

So,Any person having an a/c with Bahrain’s Ahli United Bank can transfer money to a bank account holder in India using the Internet banking platform.

If the recipient account holder is an Axis customer, the amount will be credited the same day but if the account is in any other bank branch covered under the NEFT network, it can take up to two days.

Customers can initiate transactions of up to BHD 5,000 (Rs 732,000 roughly)a day.

Govt to infuse Rs. 1500 cr in public sector banks
Finance Minister Mr. Pranab Mukherjee held that the Government will infuse nearly Rs 1,500 crore in the public sector
banks during the current fiscal in order to enhance their financial strength. He held that the Indian Banking system is
under restraints for some time and to ameliorate the capital adequacy of the public sector banks, the government is
going to provide around Rs 1,500 crore in 2012-13 because banks should have enough capital to vie.









Govt. amends rule, payments above Rs 25K to be credited directly in
accounts of payees
The Finance Ministry has amended the rules to enable all the Ministries and Departments to facilitate payments by
direct credit to the bank accounts of the payees.
Objective of this move:
 This will assist bring transparency in payment system and removal of corruption in India. The go-ahead will
rationalize the process of making payment by government departments whilst minimizing the interface of the
payees with government offices to receive their dues.
The order to this effect has also been issued by the CAG. Under the new rules:
 All payments above Rs 25,000 to suppliers, contractors and loanee institutions will be directly credited to their
bank accounts.
 Yet, the government servants shall carry on having the option to receive their salaries by cash or cheques. They
can also opt to receive their salaries by direct credit to their bank accounts.
Current Affairs Published on www.gktoday.in from January 1, 2012 to
September 10, 2012
 All payments towards the settlement of retirement benefits of the government servants will also be directly
credited to their bank accounts.





Banks to Create “Unique Customer Identification Code”
The RBI has asked all banks to generate a Unique Customer Identification Code (UCIC) for each of their customers.

Objective: The Unique Identification Code will fortify Know Your Customer (KYC), Anti-Money Laundering (AML) and
Combating the Financing Of Terrorism (CFT) instruments.
Since it will take a long time to generate entire KYC Registry, banks are instructed to immediately commence creating
the UCIC and allot the code whilst making any new customers. RBI has suggested banks to provide UCIC to existing
individual customers by end-May 2013
As per RBI, the UCIC will:
 Help banks to identify customers
 Help to track the facilities accessed & monitor financial transactions
 Empower banks with a better approach while risk profiling their customers

Reduction in the validity of cheques, bank drafts to 3 months comes
into effect
Banks will now stop honouring cheques and drafts if they are not presented within 3 months of the
date of issue as against 6 months earlier. The decision to reduce the validity of cheques, bank drafts and
other instruments to 3 months, declared by the RBI came into effect.
Why this decision was taken?
The directive followed complaints that some persons were taking undue advantage of the 6-month validity period and
circulating these instruments like cash.

Banking sector growth contingent on Innovative

delivery model: PwC

According to a report by PwC (PricewaterhouseCoopers):

· Innovative service delivery models, including mobile banking and

ATMs, and the ability to satisfy customers will drive the growth of

banking sector in the near future

· The concerns over data security and lack of regulation clarity seeks urgent govt attention in order to encourage innovation in banking technology

· Alternate channels of banking, especially internet banking and ATMs, have achieved deeper penetration

· Mobile banking is burgeoning as a strong delivery channel

· Cost optimization has been the primary factor in green banking. Major Green banking initiatives have all basically dependent on cost savings, including paperless customer communication, electronic payments etc. These have resulted in a lower branch footfall through enhanced acceptance of alternate delivery channels.


PricewaterhouseCoopers (trading as PwC) is a multinational professional services firm headquartered in London, United Kingdom. It is the world's largest professional services firm and the largest of the "Big Four" accountancy firms measured by 2012 revenues