Study Material –2017

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Compiled by

Santosh D. Bagale.
AGM, Regional Office, Mumbai-I.

Mobile No.- 9969573721.

e-mail – sdbagale3@yahoo.com

( For Private Circulation only )

(Information, Data collected from various Books, Magazines, News papers, Reading Material & Websites)
Recent GoI Initiatives and RBI Guidelines-2016-17

Make in India –
The Make in India initiative was launched by Prime Minister in September 2014 as part of a
wider set of nation-building initiatives. Devised to transform India into a global design and
manufacturing hub, Make in India was a timely response to a critical situation: by 2013, the
much-hyped emerging markets bubble had burst, and India’s growth rate had fallen to its lowest
level in a decade. The promise of the BRICS Nations (Brazil, Russia, India, China and South
Africa) had faded, and India was tagged as one of the so-called ‘Fragile Five’. Global investors
debated whether the world’s largest democracy was a risk or an opportunity. India’s 1.2 billion
citizens questioned whether India was too big to succeed or too big to fail. India was on the brink
of severe economic failure.

Stand Up India- The objective of the Stand Up India scheme is to facilitate bank loans between
Rs.10 lakh and Rs.1 Crore and to at least one Scheduled Caste (SC) or Scheduled Tribe (ST)
borrower and at least one woman borrower per bank branch for setting up a greenfield enterprise.
This enterprise may be in manufacturing, services or the trading sector. In case of non-individual
enterprises at least 51% of the shareholding and controlling stake should be held by either an
SC/ST or Woman entrepreneur.

Start UP India- Startup means an entity, incorporated or registered in India :

 Not prior to five years,

 With annual turnover not exceeding INR 25 crore in any preceding financial year, and
 Working towards innovation, development, deployment or commercialization of new
products, processes or services driven by technology or intellectual property

Provided that such entity is not formed by splitting up, or reconstruction, of a business already in
existence. Provided also that an entity shall cease to be a Startup if its turnover for the previous
financial years has exceeded INR 25 crore or it has completed 5 years from the date of
incorporation/ registration. Provided further that a Startup shall be eligible for tax benefits only
after it has obtained certification from the Inter-Ministerial Board, setup for such purpose.

CLCSS- Credit Linked Capital Subsidy Scheme (CLCSS) for technology upgradation of Micro
and Small enterprises in the country. Under the scheme, 15 per cent capital subsidy, limited to
maximum of Rs.15 lakh is provided to the eligible MSEs for upgrading their technology with the
well-established and improved technology as approved under the scheme. 48 products/sub-
sectors have been approved under the CLCSS till date.

Peer-to-Peer Lending (P2P)- Peer-to-peer lending is a form of crowd funding which can be
defined as the use of an online platform that matches lenders with borrowers in order to provide
un secured loans. It involves lending of money to individuals or businesses particularly through
online services. It is also known as social lending or market place lending.

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Credit Guarantee Scheme (CGS)-

The Trust shall cover credit facilities (Fund based and / or Non fund based) extended by Member
Lending Institutions (MLIs) to a single eligible borrower in the Micro and Small Enterprise's
Sector for credit facility (i) not exceeding 50 lakh (Regional Rural Banks / Financial Institutions)
and (ii) not exceeding 200 lakh (Scheduled Commercial Banks and select Financial Institutions)
by way of term loan and / or working capital facilities, without any collateral security and / or
third party guarantee.

Any credit facility which has been sanctioned by the lending institution with the maximum
interest rate not more than 14% p.a. (including cost of guarantee cover) would be eligible for
coverage under CGS. This supersedes the existing guidelines of CGTMSE on ceiling of interest
rate that could be charged by MLIs on guaranteed loans. The revised guidelines on ceiling on
Interest Rate that could be charged for the guarantee covered credit facilities would be applicable
also to those MLIs who would not be eligible for enhanced credit guarantee coverage from 100
lakh to 200 lakh.

Extent of guarantee -The Trust shall provide guarantee as under:

Category Maximum extent of Guarantee where credit facility is

Upto 5 lakh Above 5 lakh upto 50 Above 50 lakh and upto

lakh 200 lakh
Micro Enterprises 85% of the amount in 75% of the amount in 50% of amount in default
default subject to a default subject to a subject to a maximum of
maximum of 4.25 lakh maximum of 37.50 lakh 100 lakh
Women 80% of the amount in default subject to a
Entrepreneur's/Units maximum of 40 lakh.
located in North East
Region (including
Sikkim) (other than
credit facility upto 5
lakh to micro
enterprises)
All other category of 75% of the amount in default subject to a
borrowers maximum of 37.50 lakh.

All proposals for sanction of guarantee approvals for credit facilities above 50 lakh upto 200 lakh
will have to be rated internally by the MLI and should be of investment grade. Proposals
Sanctioned by the MLIs on or after January 01, 2017. The enhancements in existing guarantee
cover beyond 100 lakh in respect of working capital facilities, where such enhancements are
approved on or after January 01, 2017, would also be eligible for the enhanced coverage up to
200 lakh provided the proposal meets the guidelines of CGS.

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Interest rates on small savings schemes-

A finance ministry notification said investments in public provident fund (PPF) scheme will
continue to fetch an annual interest rate of 8 per cent, the same as 5-year National Savings
Certificate.

Kisan Vikas Patra (KVP) investments will continue to yield 7.7 per cent and mature in 112
months.

The one for girl child savings, Sukanya Samriddhi Account Scheme, will continue to give out 8.5
per cent annually while it will be the same as 8.5 per cent for the 5-year.

GST is a uniform indirect tax levied on goods and services across a country-

The main objectives of GST would be to eliminate excessive taxation. Central and state agencies
often calculate taxes based not on the original cost of the product, but over and above the several
layers of tax already levied on the product. This negatively affects the Gross Domestic Product
of a nation.

GST is also expected to disincentivize tax evasion, lower tax rates, and make business operations
easier.

Central Taxes- GST would replace Central Excise Duty, Service Tax, Additional Duties of
Excise & Customs, Special Additional Duty of Customs, and cesses and surcharges on supply of
goods and services.

State Taxes -GST would replace VAT, Central Sales Tax, Purchase Tax, Entry Tax,
Entertainment Tax, taxes on advertisements, lotteries, betting and gambling, and state cesses and
surcharges.

Demonetization-
The sudden move to demonetize Rs 500 and Rs 1,000 currency notes is not new. Rs 1,000 and
higher denomination notes were first demonetized in January 1946 and again in 1978.

The highest denomination note ever printed by the Reserve Bank of India was the Rs 10,000
note in 1938 and again in 1954. But these notes were demonetized in January 1946 and again in
January 1978.
Advantage of Demonetization
1. The biggest advantage of demonetization is that it helps the government to track people
who are having large sums of unaccounted cash or cash on which no income tax has been
paid because many people who earn black money keep that money as cash in their houses

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 or in some secret place which is very difficult to find and when demonetization happens all
that cash is of no value and such people have two options one is to deposit the money in
bank accounts and pay taxes on such amount and second option is to let the value of that
cash reduced to zero.

2. Since black money is used for illegal activities like terrorism funding, gambling, money
laundering and also inflating the price of major assets classes like real estate, gold and due
to demonetization all such activities will get reduced for some time and also it will take
years for people to generate that amount of black money again and hence in a way it helps
in putting an end this circle of people doing illegal activities to earn black money and using
that black money to do more illegal activities.

3. Another benefit is that due to people disclosing their income by depositing money in their
bank accounts government gets a good amount of tax revenue which can be used by the
government towards the betterment of society by providing good infrastructure, hospitals,
educational institutions, roads and many facilities for poor and needy sections of society.

RBI allows NRIs to exchange old banknotes up to 30.06.2017-

Non-resident Indians (NRIs) can exchange old Rs 500 and Rs 1000 notes till June 30,
2017.However, Indian citizens in Nepal, Bhutan, Pakistan and Bangladesh cannot avail this
facility. Resident Indian citizens who were abroad during November 9, 2016 to December 30,
2016 can avail this facility up to March 31, 2017 and Non Resident Indian citizens who were
abroad during November 9, 2016 to December 30, 2016 can avail this facility upto June 30,
2017.
RBI added that “while there is no monetary limit for exchange for the eligible Resident Indians,
the limit for NRIs will be as per the relevant FEMA Regulations”. The existing regulations allow
NRIs to carry Rs 25,000 overseas.

Scheme for Sustainable Structuring of Stressed Assets (S4A)-

The RBI had launched S4A scheme to help resolve the corporate debt problem and strengthen
the lenders’ ability to deal with stressed assets. Under this scheme, a company’s debt is
bifurcated into two parts sustainable and unsustainable based on the cash flows of the company’s
project. The sustainable debt cannot be less than 50% of existing debt and will have to be
serviced over the same terms as that of existing facilities. The unsustainable debt can be
converted into equity, Optionally Convertible Debentures or Redeemable Optionally Convertible
Preference Share with clearly spelt out terms. Banks can sell this stake or equity to a new owner
who will have the advantage of getting to run the business with a more manageable debt. Banks
or lenders will formulate the resolution plan and implement the same along with necessary
internal approvals. RBI mandated advisory body called Overseeing Committee (OC) will be
constituted, which will review the resolution plans submitted by the Banks.

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Sector wise FDI Limits-

Sector FDI Limit Entry Route & Remarks

Agriculture & Animal Husbandry
• Floriculture, Horticulture, Apiculture and
Cultivation of Vegetables & Mushrooms under
controlled conditions
• Development and Production of seeds and
planting material
• Animal Husbandry(including breeding of
dogs), Pisciculture, Aquaculture
• Services related to agro and allied sectors 100% Automatic
Civil Aviation – Airports
Green Field Projects & Existing Projects 100% Automatic
Industrial Parks 100% Automatic
Cash & Carry Wholesale Trading 100% Automatic
Asset Reconstruction Companies 100% Automatic
Automatic up to 49%
Banking- Private Sector Above 49% & up to 74% under
74% Government route
Banking- Public Sector 20% Government
Credit Information Companies (CIC) 100% Automatic
Infrastructure Company in the Securities
Market 49% Automatic
Insurance-• Insurance Company 49% Automatic

Pension Sector 49% Automatic

Power Exchanges 49% Automatic
White Label ATM Operations 100% Automatic
Non-Banking Finance Companies (NBFC) 100% Automatic

DEFINITION of 'Bad Bank'-

A bank set up to buy the bad loans of a bank with significant non-performing assets at market
price. By transferring the bad assets of an institution to the bad bank, the banks clear
their balance sheet of toxic assets but would be forced to take write downs.

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The Insolvency and Bankruptcy Code, 2016 - Key Highlights-

The Insolvency and Bankruptcy Code passed by the Parliament is a welcome overhaul of the
existing framework dealing with insolvency of corporates, individuals, partnerships and other
entities. It paves the way for much needed reforms while focussing on creditor driven insolvency
resolution.

Corporate Debtors: Two-Stage Process-

To initiate an insolvency process for corporate debtors, the default should be at least INR
100,000/- (which limit may be increased up to INR 10,000,000 by the Government). The Code
proposes two independent stages:

Insolvency Resolution Process, during which financial creditors assess whether the debtor's
business is viable to continue and the options for its rescue and revival; and

Liquidation, if the insolvency resolution process fails or financial creditors decide to wind down
and distribute the assets of the debtor.

(a) The Insolvency Resolution Process (IRP)-The IRP provides a collective mechanism to lenders
to deal with the overall distressed position of a corporate debtor. This is a significant departure
from the existing legal framework under which the primary onus to initiate a reorganisation
process lies with the debtor, and lenders may pursue distinct actions for recovery, security
enforcement and debt restructuring.

A financial creditor (for a defaulted financial debt) or an operational creditor (for an unpaid
operational debt) can initiate an IRP against a corporate debtor at the National Company Law
Tribunal (NCLT).

(b) Liquidation-Under the Code, a corporate debtor may be put into liquidation in the following
scenarios:

(i) A 75% majority of the creditor's committee resolves to liquidate the corporate debtor at any
time during the insolvency resolution process;

(ii) The creditor's committee does not approve a resolution plan within 180 days (or within the
extended 90 days);

(iii) The NCLT rejects the resolution plan submitted to it on technical grounds; or

(iv) The debtor contravenes the agreed resolution plan and an affected person makes an
application to the NCLT to liquidate the corporate debtor.

Once the NCLT passes an order of liquidation, a moratorium is imposed on the pending legal
proceedings against the corporate debtor, and the assets of the debtor (including the proceeds of
liquidation) vest in the liquidation estate.

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Insolvency Resolution Process for Individuals/Unlimited Partnerships-

For individuals and unlimited partnerships, the Code applies in all cases where the minimum
default amount is INR 1000/- and above (the Government may later revise the minimum amount
of default to a higher threshold). The Code envisages two distinct processes in case of
insolvencies: automatic fresh start and insolvency resolution.

Under the automatic fresh start process, eligible debtors (basis gross income) can apply to the
Debt Recovery Tribunal (DRT) for discharge from certain debts not exceeding a specified
threshold, allowing them to start afresh.

The insolvency resolution process consists of preparation of a repayment plan by the debtor, for
approval of creditors. If approved, the DRT passes an order binding the debtor and creditors to
the repayment plan. If the plan is rejected or fails, the debtor or creditors may apply for a
bankruptcy order.

The adjudicating authority for corporate insolvency and liquidation is the NCLT. Appeals from
NCLT orders lie to the National Company Law Appellate Tribunal and thereafter to the Supreme
Court of India. For individuals and other persons, the adjudicating authority is the DRT, appeals
lie to the Debt Recovery Appellate Tribunal and thereafter to the Supreme Court.

The Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous
Provisions (Amendment) Bill, 2016-

Amendments to the SARFAESI Act: The SARFAESI Act allows secured creditors to take
possession over a collateral, against which a loan had been provided, upon a default in
repayment. This process is undertaken with the assistance of the District Magistrate, and does
not require the intervention of courts or tribunals. The Bill provides that this process will have to
be completed within 30 days by the District Magistrate.

The Bill provides that secured creditors will not be able to take possession over the collateral
unless it is registered with the central registry. Further, these creditors, after registration of
security interest, will have priority over others in repayment of dues.

The Bill increases the retirement age of Presiding Officers of Debt Recovery Tribunals from 62
years to 65 years. Further, it increases the retirement age of Chairpersons of Appellate Tribunals
from 65 years to 67 years. It also makes Presiding Officers and Chairpersons eligible for
reappointment to their positions.

NBFC-A total of 196 systematically important NBFCs, with assets of Rs.500 crore or more as
per their last balance sheets have been notified as ‘secured lenders’ under the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI
Act). SARFAESI powers for facilities above Rs1 crore only.

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Bank Board Bureau- Chairman-Vinod Rai, HQ- Mumbai.

Functions of BBB-
-Give recommendations for appointment of full-time Directors as well as non-Executive
Chairman of PSBs.
-Give advice to PSBs in developing differentiated strategies for raising funds through innovative
financial methods and instruments and to deal with issues of stressed assets.
-Guide banks on mergers and consolidations and also ways to address the bad loans problem
among other issues.

Service Tax Rates Wef 01.06.2016.

Service Tax 14%

Swachh Bharat Cess 0.5%

Krishi Kalyan Cess 0.5%

Total 15%

Brexit: Brexit is an abbreviation of “British exit”, which refers to the June 23, 2016 referendum
by British voters to exit the European Union. The referendum roiled global markets, including
currencies, causing the British pound to fall to its lowest level in decades.

Marginal Cost of Funds based Lending Rate (MCLR)-

As per RBI guidelines, all floating rate rupee loans sanctioned and credit limits renewed wef
April 1, 2016 are priced with reference to the Marginal Cost of Funds based Lending Rate
(MCLR).

Banks may calculate all operating costs as a percentage of marginal cost of funds for computing
MCLR.

A short term borrowing means borrowing of tenor up to but less than one year.

The components of the spread i.e. business strategy and Credit risk premium shall have either a
positive value or be zero. In other words, the spread components cannot be negative.

Banks have to set five benchmark rates for different tenure or time periods ranging from
overnight (one day) rates to one year. Whenever the RBI is changing the repo rate, it was
verbally compelling banks to make changes in their lending rate.

MCLR Calculation: The MCLR norm describes different components of marginal costs. A
novel factor is the inclusion of interest rate given to the RBI for getting short term funds – the
repo rate in the calculation of lending rate.

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Following are the main components of MCLR.

1. Marginal cost of funds;

2. Negative carry on account of CRR;
3. Operating costs;
4. Tenor premium

Negative carry on account of CRR: is the cost that the banks have to incur while keeping
reserves with the RBI. The RBI is not giving an interest for CRR held by the banks. The cost of
such funds kept idle can be charged from loans given to the people.

Operating cost: is the operating expenses incurred by the banks

Tenor premium: denotes that higher interest can be charged from long term loans

MCLR V/s Base Rate-

The base rate is calculated on the basis of the following factors:

1. Cost for the funds (interest rate given for deposits),

2. Operating expenses,
3. Minimum rate of return (profit), and
4. Cost for the CRR (for the four percent CRR, the RBI is not giving any interest to the banks)

MCLR is comprised of the following are the main components.

1. Marginal cost of funds;

2. Negative carry on account of CRR;
3. Operating costs;
4. Tenor premium

It is very clear that the CRR costs and operating expenses are the common factors for both base
rate and the MCLR. The factor minimum rate of return is explicitly excluded under MCLR.

Payment Banks-

Payment Banks were conceptualized as a means to expand financial inclusion. They can accept
deposits up to Rs.1 lakh ($1,500) and provide payments and remittance services. They can’t
issue credit cards and most importantly, cannot lend money. Nachiket Mor committee
recommended to set up payment Banks.

• The minimum capital requirement is Rs.100 crore.

• For the first five years, the stake of the promoter should be 40% minimum.
• Foreign share holding will be allowed in these banks as per the rules for FDI in private banks in
India.

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• The voting rights will be regulated by the Banking Regulation Act, 1949. The voting right of
any shareholder is capped at 10%, which can be raised to 26% by Reserve Bank of India (RBI).
• Any acquisition of more than 5% will require approval of the RBI.
• The majority of the bank’s board of director should consist of independent directors, appointed
according to RBI guidelines
• 25% of its branches must be in the unbanked rural area.

Small Finance Banks & Payment Banks-The Capital Adequacy Framework (CAR)
requirements for both SFBs and PBs are:-

Minimum Capital 15 per cent

Requirement
Common Equity Tier 1 6 per cent
Additional Tier I 1.5 per cent
Minimum Tier I capital 7.5 per cent
Tier 2 capital 7.5 per cent
Capital Conservation Not Applicable
Buffer
Counter-cyclical capital Not applicable
buffer
Pre-specified Trigger for CET1 at 6 per cent up to March 31, 2019, and 7per cent thereafter
conversion of AT1

The Union Government has proposed setting up Financial Data Management Centre (FDMC)
based on recommendation of a committee set up under the Department of Economic Affairs
(DEC). The Committee was headed by Ajay Tyagi, Additional Secretary in Union Finance
Ministry and has submitted its report and a draft bill titled The Financial Data Management
Centre Bill, 2016.

The Reserve bank of India (RBI) has increased the per month limit of Prepaid Payment
Instruments (PPIs) to Rs. 20,000 from Rs. 10,000 and to Rs. 50,000 for merchant bank.

The Reserve Bank of India (RBI) has extended the period of enhanced Prepaid Payment
Instruments (PPI) limit of Rs 20,000 as part of efforts to promote digital payments. The limit has
been extended till the completion of review of the PPI guidelines. However, the balance in such
PPIs cannot exceed Rs 20,000 at any point of time and the merchants can transfer funds from
such PPIs to their own linked bank accounts up to Rs 50,000 per month, without any limit per
transaction.

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Micro ATM: It work with minimal power and connect to central banking servers through a
GPRS network. It enables the un-banked rural population to access banking services in their
villages or towns. It offers facilities of deposit, withdrawal, balance enquiry, issuance of mini-
statement and funds transfer.

The banks should inform, at least one month in advance, the existing account holders of any
change in the prescribed minimum balance and the charges that may be levied if the prescribed
minimum balance is not maintained. With effect from May 6, 2014, banks are not permitted to
levy penal charges for non-maintenance of minimum balances in any inoperative account.

Fixed/Term deposit accounts are opened with operating instructions ‘Either or Survivor’, the
signatures of both the depositors need not be obtained for payment of the amount of the deposits
on maturity. However, the signatures of both the depositors may have to be obtained, in case the
deposit is to be paid before maturity. If the operating instruction is ‘Either or Survivor’ and one
of the depositors expires before the maturity, no pre-payment of the fixed/term deposit may be
allowed without the concurrence of the legal heirs of the deceased joint holder. This, however,
would not stand in the way of making payment to the survivor on maturity.

In case the mandate is ‘Former or Survivor’, the ‘Former’ alone can operate/withdraw the
matured amount of the fixed/term deposit, when both the depositors are alive. However, the
signature of both the depositors may have to be obtained, in case the deposit is to be paid before
maturity. If the former expires before the maturity of the fixed/term deposit, the ‘Survivor’ can
withdraw the deposit on maturity. Premature withdrawal would however require the consent of
both the parties, when both of them are alive, and that of the surviving depositor and the legal
heirs of the deceased in case of death of one of the depositors.

Banks should ensure that any remittance of funds by way of demand drafts/mail transfers /
telegraphic transfers or any other mode and issue of travellers cheques for value of Rs.50,000 /-
and above is effected only by debit to the customer’s account or against cheques or other
instruments tendered by the purchaser and not against cash payment .

Banks should ensure that demand drafts of Rs.20,000/- and above are issued invariably with
account payee crossing. Duplicate draft, in lieu of lost draft, up to and including Rs.5,000/- may
be issued to the purchaser on the basis of adequate indemnity and without insistence on seeking
non payment advice from drawee office irrespective of the legal position obtaining in this regard.
Banks should issue duplicate Demand Draft to the customer within a fortnight from the receipt
of such request.

Banks are required to implement the recommendation of the Goiporia Committee that
dishonoured instruments are returned / dispatched to the customer promptly without delay, in any
case within 24 hours.

Banks should settle the claims in respect of deceased depositors and release payments to
survivor(s) / nominee(s) within a period not exceeding 15 days from the date of receipt of the
claim subject to the production of proof of death of the depositor and suitable identification of
the claim(s), to the bank's satisfaction.

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With a view to encourage availability of affordable housing to economically weaker sections
(EWS) and low income groups (LIG) borrowers, the Reserve Bank issued instructions on March
5, 2015 that in cases where the cost of the house/dwelling unit does not exceed Rs.10 lakh,
banks may add stamp duty, registration and other documentation charges to the cost of the house/
dwelling unit for the purpose of calculating Loan to Value (LTV) ratio.

The Reserve Bank, on June 1, 2015, permitted all banks authorised to deal in foreign exchange/
all authorised money changers (AMCs) / full-fledged money changers (FFMCs) to allow
remittances by a resident individual up to USD 250,000 per financial year for any permitted
current or capital account transaction or a combination of both.

The Reserve Bank, on July 15, 2015, announced the constitution of a Committee (Chairman-
Shri Deepak Mohanty, Executive Director) with the objective of working out a medium-term
(five year) measurable action plan for financial inclusion.

As part of the endeavour to smoothen the liquidity management operations, the Reserve Bank,
on July 27, 2015 introduced Straight Through Processing (STP) in fixed rate Liquidity
Adjustment Facility (LAF) Repo, fixed rate LAF Reverse Repo and Marginal Standing Facility
(MSF) operations.

The Central Government on August 20, 2015, declared the second and the fourth Saturday of
every month as public holiday for banks in India, whether or not such banks are included in the
Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934), with effect from
September 1, 2015. Banks will, however, function full time as on any working day on first, third
and fifth Saturday of every month.

The Reserve Bank announced the designation of State Bank of India and ICICI Bank Ltd. as
Domestic Systemically Important Banks (D-SIBs) on August 31, 2015.

The Reserve Bank, on October 22, 2015 directed all scheduled commercial banks (excluding
regional rural banks) on implementation of the Gold Monetisation Scheme, 2015 (GMS)
notified by the Central Government.

The Reserve Bank, on November 24, 2015, granted ‘in principle’ approval to the National
Payments Corporation of India (NPCI) to function as the Bharat Bill Payment Central Unit
(BBPCU) in Bharat Bill Payment System (BBPS).

The Reserve Bank on December 17, 2015, announced the Marginal Cost of Funds
Methodology for Interest Rate on Advances. All rupee loans sanctioned and credit limits
renewed with effect from April 1, 2016 will be priced with reference to the Marginal Cost of
Funds based Lending Rate (MCLR) which will be the internal benchmark for such purposes.

Master Direction of RBI - Liberalised Remittance Scheme (LRS) of USD 2,50,000 for resident
individuals.

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Under the Liberalised Remittance Scheme, Authorised Dealers may freely allow remittances
by resident individuals up to USD 2,50,000 per Financial Year (April-March) for any permitted
current or capital account transaction or a combination of both. The Scheme is not available to
corporates, partnership firms, HUF, Trusts, etc.

PMJDY Scheme Details-

Pradhan Mantri Jan-Dhan Yojana (PMJDY) is National Mission for Financial Inclusion to ensure
access to financial services, namely, Banking/ Savings & Deposit Accounts, Remittance, Credit,
Insurance, Pension in an affordable manner.
Account can be opened in any bank branch or Business Correspondent (Bank Mitr) outlet.
PMJDY accounts are being opened with Zero balance. However, if the account-holder wishes to
get cheque book, he/she will have to fulfill minimum balance criteria.
Documents required to open an account under Pradhan Mantri Jan-Dhan Yojana-

1. If Aadhaar Card/Aadhaar Number is available then no other documents is required. If

address has changed, then a self certification of current address is sufficient.
2. If Aadhaar Card is not available, then any one of the following Officially Valid
Documents (OVD) is required: Voter ID Card, Driving License, PAN Card, Passport &
NREGA Card. If these documents also contain your address, it can serve both as “Proof
of Identity and Address”.
3. If a person does not have any of the “officially valid documents” mentioned above, but it
is categorized as ‘low risk' by the banks, then he/she can open a bank account by
submitting any one of the following documents:
a. Identity Card with applicant's photograph issued by Central/State Government
Departments, Statutory/Regulatory Authorities, Public Sector Undertakings,
Scheduled Commercial Banks and Public Financial Institutions;
b. Letter issued by a gazette officer, with a duly attested photograph of the person.

Special Benefits under PMJDY Scheme-

a. Interest on deposit.
b. Accidental insurance cover of Rs.1.00 lac
c. No minimum balance required.
d. Life insurance cover of Rs.30,000/-
e. Easy Transfer of money across India
f. Beneficiaries of Government Schemes will get Direct Benefit Transfer in these accounts.
g. After satisfactory operation of the account for 6 months, an overdraft facility will be
permitted
h. Access to Pension, insurance products.
i. Accidental Insurance Cover, RuPay Debit Card must be used at least once in 45 days.
j. Overdraft facility upto Rs.5000/- is available in only one account per household,
preferably lady of the household.
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Kerala and Goa have become the first states in the country to provide one basic bank account to
every household, as per the Pradhan Mantri Jan Dhan Yojana (PMJDY).

Pension Fund Regulatory & Development Authority (PFRDA) is the prudential Regulator for the
National Pension System (NPS). PFRDA was established by the Government of India, Ministry
of Finance to promote old age income security.

CRA- Central Record Keeping Agency

Stock Holding Corporation of India Limited acts as custodian of investment under NPS.

PFRDA have appointed AXIS Bank as its Trustee Bank with effect from 01st July 2013 for
functioning as NPS Trustee Bank.

Our Bank has entered into an agreement with the Pension Fund Regulatory & Development
Authority (PFRDA) to function as Aggregator. The Capital Market Service (CMS) Branch,
Mumbai, [BIC: 5076] is the Oversight Office for NPS- Lite operations of our Bank.

Swavalamban Scheme- It will be applicable to all citizens in the unorganised sector who join
the NPS administered by the Pension Fund Regulatory and Development Authority (PFRDA).

Under the scheme, Government will contribute 1000 per year to each NPS account opened after
FY 2010-11 up to FY 2016-17. The benefit will be available only to persons who join the NPS
with a minimum contribution of 1000 and maximum contribution of 12000 per annum.

PAHAL- Pratyaksh Hanstantrit Labh-- DBTL- Direct Benefit Transfer-LPG

TUFS- Technology Upgradation Fund Scheme- is scheme flagship of Ministry of

Textiles(MOT) was introduced in 1999 to catalyze investment in all the sub sectors of Textile
Industry for Technology upgradation of the machinery by way of interest reimbursement. On
receipt of subsidy from MOT, Banks has to transfer the amount of subsidy into beneficiaries
account with in a period of 3 days.

D-ISB- Domestic Systemically Important Banks (D-SIBs).

The Reserve Bank advised banks that a minor of any age could open a savings/fixed/recurring
bank deposit account through his/her natural or legally appointed guardian; Minors above the age
of 10 years should be allowed to open and operate savings bank accounts independently, if they
so desire. On attaining majority, the minor should confirm the balance in his/her account and if
the account is operated by the natural guardian/legal guardian, fresh operating instructions and
specimen signature of the erstwhile minor should be obtained and kept on record for all
operational purposes.

The nomenclature of Special Ways and Means Advances granted to the State Governments was
changed as Special Drawing Facility from June 23, 2014.

15
The Reserve Bank advised banks to accept e-Aadhaar downloaded from the website of the
Unique Identification Authority of India (UIDAI) as an officially valid document subject to
certain conditions. Banks were also advised to note that physical Aadhaar card/letter issued by
UIDAI containing details of name, address and Aadhaar number received through post and e-
KYC process, would continue to be accepted as an ‘Officially Valid Document’.

The Government has replaced Planning Commission with a new institution named NITI Aayog
(National Institution for Transforming India). The institution will serve as ‘Think Tank’ of the
Government-a directional and policy dynamo. NITI Aayog will provide Governments at the
central and state levels with relevant strategic and technical advice across the spectrum of key
elements of policy, this includes matters of national and international import on the economic
front, dissemination of best practices from within the country as well as from other nations, the
infusion of new policy ideas and specific issue-based support.

The government has announced the launch of 'Sukanya Samriddhi Account' a new small
savings instrument for the girl child. The instrument will cater to the requirements of education
and marriage of the girl child. The account can be opened and operated by the natural or legal
guardian of a girl child till she attains the age of 10 years, after which she can herself operate it.
The deposits in the account may be made by the guardian or any other person or authority. An
account can be opened with Rs.1,000. It will require a minimum deposit of Rs.1,000 and a
maximum deposit of Rs.1.5 lakh in a financial year. Interest at the rate, to be notified by the
Government, compounded yearly shall be credited to the account till the account completes
fourteen years.

RBI has released guidelines for setting up Trade Receivables System (TReDS), which will
facilitate financing of trade receivables of Micro, Small and Medium Enterprises (MSMEs) from
large corporates and other buyers, including government departments and PSUs through multiple
financiers.

Borrowers unwilling to repay bank loans despite the ability to do so, run the risk of being
classified as non-cooperative. Aimed at clamping down on errant borrowers, this move of RBI
will ensure that companies classified as non-co-operative will not get fresh funds. A non-co-
operative borrower is one who deliberately stonewalls legitimate efforts of lenders to recover
their dues. On an additional note, RBI has also prescribed norms for classifying / declassifying a
borrower as non-cooperative and reporting information on such defaulters to the 'Central
Repository of Information on Large Credits' (CRILC).

RBI has issued new regulations to align NBFCs closer to bank rules. Companies with an asset
size of more than Rs.500 crore, and all the deposit taking NBFCs will have to raise minimum
Tier-1 capital to 8.5% by the end of March 2016 and 10% by the end of March 2017. RBI has
also revised the threshold to Rs.500 crore from Rs.100 crore for defining systemic significance
for NBFCs. Further, RBI has tightened the regulatory framework for NBFCs. Like banks, they
will be subject to 90-day overdue norms for identification of bad loans; will be required to make
higher provisioning for non-standard assets; and will need to have 'fit and proper criteria' for
directors.

16
In order to strengthen the financial sector, enhance the adoption of technology, and with an
increase in complexities of services offered by NBFCs, RBI has made it mandatory for all
NBFCs to attain a minimum Net Owned Fund (NOF) of Rs.2 crore by the end of March 2017.

Investments in trading book are held for generating profits on the short term differences in prices
/ yields. Held for trading (HFT) and Available for sale (AFS) category constitute trading book.

New Private Sector Banks- RBI Guidelines-

1) Minimum Capital required Rs.500 crores

2) Bank must maintain minimum CAR of 13% of its risk weight assets for at least 3 years.
3) New Banks must get listed with in 3 years of commencement of business.
4) At leat 25% new bank’s branches must be opened in unbanked rural centre.
5) At least 50% of Directors of non operative holding company must be independent.
6) Promoters through holding company must hold 40% share (Minimum Rs.200 crore) in
new bank for 5 years. Further, Promoters stake must be cut to 20% in 10 years and 15%
in 12 years.
7) An Individual belonging to the Promoter Group along with his relatives can hold up to
10% of the total voting equity share of holding company.
8) Aggregate NRI (FDI,NRI,FII) holding in new bank will be capped at 49% for 5 years
from the date of licensing.

Deposit Insurance Scheme –

DICGC has to settle all the claims with in 2 months from the date of receipt of claim from the
Liquidator. Maximum Rs.1 lac deposit is covered including principal & interest through DICGC.
Deposits in different branches are totaled. All deposits that you hold in your name in the same
bank are clubbed together to apply maximum cover.
For deposit with different banks or in difference capacities, Rs.1 lac cover applied separately for
each of them. Deposit insurance is mandatory and no bank can withdraw from it. If bank fails to
pay the premium for 3 consecutive period, the DICGC can withdraw its cover.

RBI has increased investment limit in Inflation Indexed Bond for Individuals from Rs.5 lacs to
10 lacs and also for HUF, Trusts, Education & similar Institutions which are pro-profit in nature
has been increased from Rs.5 lacs to 25 lacs p. a.

17
Investing in overseas The limit of an Indian company investing in overseas unincorporated
entities in the energy and natural resources sectors, under the automatic
route, reduced from 400 per cent to 100 per cent of its net worth as on
the date of the last audited balance sheet.
JL Banks advised that while granting advance against the security of
specially minted gold coins sold by them, they should ensure that the
weight of the coin(s) does not exceed 50 grams per customer.
Pledge Loans The limit of loans to farmers against pledge/hypothecation of
agricultural produce (including warehouse receipts) for a period not
exceeding 12 months increased from Rs.25 lakh to Rs.50 lakh both
under direct and indirect agriculture.The limit of loans to dealers/sellers
of fertilisers, pesticides, seeds, cattle feed, poultry feed, agricultural
implements and other inputs raised to Rs.5 crore per borrower from Rs.1
crore.
Bank Rate All penal interest rates on shortfall in reserve requirements, which are
specifically linked to the bank rate.
Term Deposits Banks can pay term deposit interest at less than quarterly intervals.
IRF RBI has launched Interest Rate Futures contract to help investors hedge
interest rate risks while investing in Govt. Bonds.
KYC Data RBI directed to banks that they would be required to update KYC data
only one time in 2 years for high risk entities and once in 10 years for
low risk clients. Medium risk individuals & entities at least every 8
years.
Cash Management CMBs are short term instruments that enables the Govt. to meet short
Bills term mismatches.
Infrastructure RBI brings three more sectors under Infrastructure. Telecom &
Telecommunication Services, Slurry Pipelines & Capital Dredging.
Acceptance of Cash RBI clarified that there is no restrictions regarding acceptance of cash
deposits from customers provided PAN/FORM NO.60/61 is obtained in
case of deposit above Rs.50,000/- and CTR Report filed with FIU-IND
for transactions above Rs.10 lacs.
Mobile Banking The Reserve Bank has advised that for mobile banking transactions, the
cap of Rs. 50,000 per customer per day for both funds transfer and
transactions involving purchase of goods/services has now been
removed. Banks should, however, place per transaction limits based on
their own risk perception with their Board’s approval.
NEFT - Penal Interest The Reserve Bank has reiterated that banks should strictly adhere to the
for Delayed extant instructions of paying penal interest at the stipulated rate to the
Credit/Refunds customers suo-moto, without waiting for a claim from the customers
(under the extant guidelines, banks are required to pay penal interest at
the current RBI LAF Repo Rate plus two per cent for the period of
delay/till the date of refund, as the case may be, to the affected
customers.
Marginal Standing Banks permitted to avail themselves of funds from the Reserve Bank on
Facility (MSF) overnight basis under Marginal Standing Facility (MSF), against their
excess SLR holdings.

18
Validity of Cheques The Reserve Bank has, in public interest and in the interest of banking
policy, reduced the period within which cheques/ drafts/pay
orders/banker’s cheques are presented for payment, from six months to
three months from the date of such instrument.
SB Interest Rate Savings bank deposit interest rate for resident Indians deregulated from
October 25, 2011. Banks given the freedom to determine their savings
bank deposit interest rate.
Individual Residents Individual residents in India permitted to include nonresident close
relative(s) as joint holder(s) in their resident bank accounts, as also, in
exporter earners’ foreign currency (EEFC) and residents’ foreign
currency (RFC) accounts on ‘former or survivor’ basis. Non-resident
Indian close relative(s), however, would not eligible to operate the
account during the life time of the resident account holder.

NRI • NRIs permitted to open non-resident (external) rupee account scheme/

foreign currency (non-resident) account (banks) scheme {FCNR(B)}
accounts with their resident close relative(s) on ‘former or survivor’
basis. The resident close relative would be eligible to operate the
account as power of attorney holder during the life time of the NRI/PIO
account holder.
Resident individuals Resident individuals permitted to make a rupee gift to a NRI/PIO who is
a close relative by way of crossed cheque/electronic transfer to the non-
resident (ordinary) rupee account (NRO) of the NRI/PIO.
• A person resident in India permitted to give to a person resident
outside India, by way of gift, any security/shares/debentures of up to
USD 50,000 in value per financial year without the Reserve Bank's
approval.

The Reserve Bank reiterated its stance to banks that all demand drafts,
mail transfers, telegraphic transfers and travellers cheques for Rs,50,000
and above should be issued by banks only by debit to the purchaser's
account or against cheques or other instruments tendered by the
purchaser and not against cash payment.

NBFC All deposit taking NBFCs advised to maintain a minimum capital ratio
consisting of Tier I and Tier II capital, of not less than 15 per cent of
their aggregate risk weighted assets on balance sheet and risk adjusted
value of off-balance sheet items from March 31, 2012.

Advances against Loans/ advances granted to individuals against the security of shares,
Shares debentures and PSU bonds should not exceed Rs.10 lakh and Rs.20 lakh,
if the securities are held in physical form and dematerialized form
respectively. The maximum amount of finance that can be granted to an
individual for subscribing to IPOs is Rs.10 lakh. However, the bank
should not provide finance to companies for their investment in IPOs of
other companies. Banks can grant advances to employees for purchasing

19
 shares of their own companies under Employees Stock Option Plan
(ESOP) to the extent of 90% of purchase price of shares or Rs.20 lakh
whichever is lower.

A uniform margin of 50% has been stipulated for all advances against
shares/ /financing of IPOs/issue of guarantees for capital market
operations. Within this 50 percent margin, a minimum cash margin of 25
percent should be maintained in respect of guarantees issued by banks
for capital market operations.

Proprietary Concerns The following documents included in the indicative list of required
documents for opening accounts of proprietary concerns (i) complete
income tax return (not just the acknowledgement) in the name of the
sole proprietor where the firm's income is reflected, duly
authenticated/acknowledged by the income tax authorities; and (ii)
utility bills, such as, electricity, water, and landline telephone bills in the
name of the proprietary concern.

Banks cannot accept interest free deposits other than in current account.

With effect from October 25, 2011, SB interest rate stands deregulated. Accordingly, banks are free
to determine their savings bank deposit interest rate, subject to the following two conditions:

(a) First, each bank will have to offer a uniform interest rate on savings bank deposits up to Rs.1
lakh, irrespective of the amount in the account within this limit.

(b) Second, for savings bank deposits over Rs.1 lakh, a bank may provide differential rates of
interest, if it so chooses, subject to the condition that banks will not discriminate in the matter of
interest paid on such deposits, between one deposit and another of similar amount, accepted on the
same date, at any of its offices. Banks can pay interest on savings bank accounts at quarterly or
longer rests.

Differential rates of interest can be paid on single term deposits of Rs.15 lakh and above and not on
the aggregate of individual deposits where the total exceeds Rs.15 lakh.

The profit making banks may make donations during a financial year, aggregating up to one
percent of the published profit of the bank for the previous year.
Loss making banks can make donations up to Rs.5 lakh only in a financial year.
Banks can sanction bridge loans to companies for a period not exceeding one year against the
expected equity flows/ issues as also the expected proceeds of non-convertible Debentures,
External Commercial Borrowings, Global Depository Receipts and/ or funds in the nature of
Foreign Direct Investments, provided the bank is satisfied that the borrowing company has made
firm arrangements for raising the aforesaid resources/ funds. Bridge loans extended by a bank will
be included within the ceiling of 40% of net worth prescribed for banks’ aggregate exposure to the
capital market.

20
Non-resident Indians (NRIs) as defined in the Foreign Exchange Management (Deposit)
Regulations, 2000, as amended from time to time, now eligible to transfer funds from non-resident
ordinary (NRO) account to non-resident external (NRE) account within the overall ceiling of USD
one million per financial year subject to payment of applicable tax.

Agency banks advised to compensate an investor in relief/savings bonds, for the financial loss due
to late receipt/delayed credit of interest warrants/maturity value, at a fixed rate of 8 per cent p. a.

Joint accounts of 2 illiterate persons can be opened. No cheque book shall be issued for accounts
of illiterate persons.

In the case of joint accounts and partnership firms, all the joint depositors and partners should join
in granting the Power of Attorney. For Joint Hindu Families, the ‘Karta’ or ‘Ejaman’ should
execute the Power of Attorney. Powers of Attorney can be granted by Limited Companies if the
Articles of Association permits it.

Trustees cannot delegate their powers by means of a Power of Attorney unless they have clear
authority under the Trust Deed to do so. If delegation of power is permitted under the Trust Deed,
all the trustees should join in executing the Power of Attorney.

A minor can be admitted to the benefits of the partnership firm with the consent of all the partners.

Large Corporate Model (RAM)-Above 5.00 crores or 3 years average annual turnover above
50.00 crores (irrespective of limit)

Real Estate Developer Model under RAM – Real Estate Activity-Irrespective of exposure.

Process note along with LRF are submitted to the reviewing authority immediately on sanction of
the facility in respect of sanctions of above 5.00 Lakhs (other than Staff Loans, JL, LD and ODD).

If the customer has suffered any financial loss incidental to return of a cheque or failure of direct
debit instructions due to insufficiency of balance on account of the unauthorized / erroneous debit,
the Bank will compensate the customer upto 10% of the amount of the returned cheque or the
amount of debit instruction, both however subject to monetary ceiling of 1 lakh (cumulative if
more than one cheque / debit instruction are involved) only if the amount of the cheque / debit
instructions would have been covered by the balance in the account but for unauthorized /
erroneous debit.

Duplicate draft will be issued within a fortnight from the receipt of such request from the
purchaser thereof. For delay beyond the above stipulated period, interest at the rate applicable
for Fixed Deposit of corresponding period will be paid as compensation to the customer for such
delay.

21
Bank would return to the borrowers all the securities/ documents/ title deeds to mortgaged property
within 15 days of repayment of all dues agreed to or contracted.

It is mandatory for bank to reimburse the customer, the amount wrongfully debited on account of
failed ATM within a maximum period of 7 working days from the receipt of the complaint. For
any failure to re-credit the customer’s account within 7 days from the date of receipt of the
complaint, bank shall pay compensation of 100/- per day to the aggrieved customer.

Pensioners should get their pension, hike in Dearness Relief/ Allowance etc., announced by Govt.
in succeeding month’s pension payment itself. If there is delay in disbursement of pension /
pension arrears aggrieved pensioners are to be compensated for the delayed period beyond the due
date, at a fixed interest rate of 8% per annum on such delays.

The currency notes, which are found to be deliberately cut, torn, altered or tampered with, if
presented for payment of exchange value should be rejected.

The coins of denomination of 25 paise and below, issued from time to time, ceased to be legal
tender for payments as well as account with effect from June 30, 2011.

Bank Assets purchased worth less than 5000/- need not be capitalized.

Provision for Standard Asset-

Provision for Standard Assets is computed at Corporate Office, branches need not compute or
recommend provision for Standard Assets.

Direct Advances to Agricultural and Small & Micro Enterprises (SMEs) 0.25%
Advances to Commercial Real Estate sector (CRE) 1.00%
Advances to Commercial Real Estate-Residential Housing Sector (CRE-RH) 0.75%
Restructured accounts classified as non-performing advances, when upgraded to 5.00%
Standard category, in the first year from the date of upgradation.
Housing loans at teaser rates- 2.00%
(To be reverted to 0.40% after 1 year from the date on which the rates are reset at
higher rates if the accounts remain ‘standard’.)
Restructured accounts classified as standard advances in the first two years from the 5.00%
date of restructuring. In cases of moratorium on payment of interest/principal after
restructuring, for the period covering moratorium and two years thereafter.
All other loans and advances not included above. 0.40%

In case of Restructured Accounts classified as Performing Assets: Provision has to be made to an extent
of 100% on the balance outstanding in the FITL account.

In case of Restructured Accounts classified as Non Performing Assets: i. Provision has to be made to an
extent of 100% on the balance outstanding in the FITL accounts. ii. 100% provision is required to be made
in case the interest has been booked as income on FITL NPA accounts.

22
Imp. BC Circulars-2011-
Cir No. Imp. Contents

355-2011-BC Syndicate Bank has entered into strategic tie up arrangement with one among
the leading stock broking players in India M/s Asit C. Mehta Investment
Interrmediates Ltd (ACMIIL) for offering Synd e-Trade - Online Share
Trading Facility (3 in 1 Account) to SyndicateBank customers who invest or
trade in securities.

313-2011-BC The RBI, on being satisfied that in public interest and in the interest of the
Banking Policy, has decided that it is necessary to reduce the period within
which cheques/drafts/pay orders/banker’s cheques are presented for payment
from six months to three months. Accordingly, RBI has, vide their Circular
No. DBOD.AML.BC No.47/14.01.001/2011-12 dated November 4, 2011, in
exercise of the powers conferred by Section 35A of the Banking Regulation
Act, 1949, directed that with effect from 01.04.2012, Banks should not make
payment of cheques/drafts/pay orders/banker’s cheques bearing that date or
any subsequent date, if they are presented beyond the period of three months
from the date of such instrument.

147--2011-BC It has been decided to raise the minimum amount to be accepted from Rs.100/-
to Rs.1000/- under fresh VCCs as well as renewal of existing / Matured VCCs
w.e.f. 01.06.2011. SB Int rate wef 03.05.2011 is enhanced to 4% from 3.50%.

161-2011-BC Branches / offices shall continue to levy additional interest of 1% over the
applicable rate for the respective category on ad-hoc limits (other than export
finance).

271-2011-BC SYND JAI KISAN” -Quantum of Loan (Maximum 5.00 lac)

Repayment period: maximum period of 7 years.
The loa nsa nc tione d unde r the s c he m e sha llbe r e pa y a ble withi n

287-2011-BC SCHEMES FOR FINANCING MICRO AND SMALL ENTERPRISES (MSEs)-

“SyndMSE”- Renewal once in two years.

Micro and Small enterprises sector will include credit to:

1. Manufacturing Enterprises :

(a) Micro (manufacturing) Enterprises:

Enterprises engaged in the manufacture/production, processing or
preservation of goods and whose investment in plant and machinery
(original cost excluding land and building) does not exceed 25 lakh,
irrespective of the location of the unit.
(b) Small (manufacturing) Enterprises:
Enterprises engaged in the manufacture/production, processing or
preservation of goods and whose investment in plant and machinery
(original cost excluding land and building ) is more than 25 lakh but does
not exceed 5 crore, irrespective of the location of the unit.

23
 2 Service Enterprises
(a) Micro (service) Enterprises:
Enterprises engaged in providing/rendering of services and whose investment in
equipment (original cost excluding land and building and furniture, fittings and other
items not directly related to the service rendered) does not exceed 10 lakh, irrespective of
the location of the unit.
(b) Small (service) Enterprises:
Enterprises engaged in providing/rendering of services and whose
investment in equipment
[original cost excluding land and building and furniture, fittings and other
items not directly related
to the service rendered ) is more than 10 lakh but does not exceed 2 crore,
irrespective of the location of the unit.

Imp. BC Circulars-2012-
BC Cir No. Important contents
003/2012/BC As per RBI guidelines, no interest is payable in case of NRE Term Deposits of
less than one year. (Para 2.2A (ii) of RBI Master Circular on Domestic, NRO
and NRE Deposits - minimum tenor of NRE Deposits is one year).

Accordingly, in case of premature withdrawal / premature renewal of NRE

Term deposits, no interest is payable where the period for which the deposit
held with the Bank is less than one year.
008/2012/BC The Reserve Bank of India has set up a Working Group on Information
Security, Electronic Banking, Technology, Risk Management and Cyber
Frauds (Chairman: Shri G. Gopalakrishna, Executive Director, RBI).

009/2012/BC All sanctions of above 1.00 crore is to be vetted by Law Officer of Regional
Office in centers where Regional Office is located. In other centers, vetting has
to be done by Panel Lawyer, who should be a reasonably Senior Advocate and
not by the same panel Lawyer, who has given opinion on chain of title and
encumbrance.
011/2012/BC Additional interest of 0.50% is payable to Resident Indian Senior Citizens on
Domestic Term Deposits of less than Rs.5 crore and the maturity tenor of one
year and above only.

Employees / eligible Ex-employees are eligible for an additional interest of 1%

over the above rates irrespective of the amount and tenor of deposit.

Eligible ex-employees, who are Senior Citizens and are eligible for the above
additional interest are also eligible for an additional interest of 0.50% payable
to Resident Indian Senior Citizens on domestic term deposits of less than Rs.5
crore & maturity tenor of one year and above only.

24
012/2012/BC PAYMENT OF PENAL INTEREST FOR DELAYED CREDIT/REFUNDS
OF NEFT TRANSACTIONS. Branches are required to pay penal interest at
the current RBI Repo Rate plus two percent for the period of delay / till the
date of refund as the case may be to the affected customers without waiting for
a claim from the customers.

013/2012/BC Bank has now entered into MOU with another rating agency, viz, Brickwork
Ratings India Pvt Ltd, for rating our Micro and Small Enterprises borrowers.
Brickwork Ratings India Pvt Ltd, is recognized by National Small Industries
Corporation (NSIC) besides SEBI.

018/2012/BC In case of foreign tourists, copies of passport containing identification

particulars and address may be accepted as documentary proof for both
identification as well as address. Further, a copy of the visa of non-residents,
duly stamped by Indian Immigration authorities may also be obtained and kept
on record.

019/2012/BC DRI Scheme-

Limit of the loan per borrower is increased from 6500/ to 15000/- for general
purpose and from 5000/- to 20000/- for housing purpose.
Annual family income is increased from 6400/- in rural areas to 18000/- and
from Rs.
7200/- in semi-urban & urban areas to Rs.24000/- .
031/2012/BC Prepayment penalty charges will not be levied on Retail Loans (such as
SyndNivas, SyndSaral, SyndSenior, SyndVahan, SyndMSE,SyndVyapar
Improved and any other Synd Products) when they are closed other than by
way of TAKEOVER. A penalty of 2% on outstanding balance shall be levied
if these loans are taken over by other Banks/FIs.
034/2012/BC Branches are permitted to accept NRE Term Deposits up to a maximum period
of 10 years instead of existing period of 5 years w.e.f. 07.02.2012.
045/2012/BC The Financial Action Task Force (FATF) is the global standard setting body
for anti-money laundering and combating the financing of terrorism
(AML/CFT).

075-2012-BC Need based credit against the indebtedness of the farmer from money lender
with a maximum of 1.00 lac per farmer with Nil margin.

106-2012-BC Nomination facility is available in respect of:

(i) Articles entrusted to safe custody:
The facility of nomination is available only in the case of individual depositors
and not in respect of persons jointly depositing the articles for safe custody.
(ii) Safe Deposit Lockers:
(a) Individuals (including non-resident Indians) who is sole hirer of a locker.
(b) Two or more individuals (including non-resident Indians) jointly hiring a
locker.

25
109-2012-BC PMEGP-Locking up of margin money subsidy for three years period. No
interest to be paid by Bank on the TDR amount of Margin money subsidy and
no interest will be charged by Banks on loan to the corresponding amount of
TDR.
The first installment of bank loan should be at least equal if not more than the
TDR / Margin Money subsidy amount.
121-2012-BC Inclusion of following documents in the indicative list of required documents
for opening accounts of proprietary concern:
1) The complete Income Tax Return (not just the acknowledgement) in the
name of the sole proprietor where the firm’s income is reflected duly
authenticated / acknowledged by the Income Tax Authorities.
2) Utility bills such as electricity, water and landline telephone bills in the
name of the proprietary concern.
140-2012-BC NRI shall be eligible to transfer funds from NRO account to NRE account
within the overall ceiling of USD one million per financial year subject to
payment of tax, as applicable.
166-2012-BC In addition to the existing four approved external rating agencies, viz.,
CRISIL, ICRA, CARE and FITCH, Reserve Bank of India has now accredited
BRICKWORK Ratings India Private Limited (Brickwork) for the purpose of
risk weighting the banks’ claims for capital adequacy purposes, taking the total
number of approved rating agencies to five.
177-2012-BC It has been decided to waive the service charges on NEFT outward
transactions up to 1.00 lakh with immediate effect. Maximum Rs.25/-
exclusive of service tax.
178-2012-BC RBI, in order to protect the customer interest, have advised All Scheduled
Commercial Banks to display on their respective websites the names and
addresses of all those accounts inoperative/inactive/unclaimed for 10 years and
above w.e.f. 30th June 2012.

185-2012-BC Revised the rate of interest on fresh advances of 25 lakhs and above against
Term Deposits as under.
LD : 1.00% above the deposit rate.
ODD: 1.50% above the deposit rate.
The revised rates of interest as above are not applicable to the advances
against third party deposits.
The interest rate on advances of less than 25 lakhs against Term Deposits
remains unchanged, i.e, 2% above deposit rate.

189-2012-BC RBI has decided to permit Non-Bank Entities incorporated in India under
Companies Act 1956, to set up, own and operate ATMs in India. Such ATMs
will be in the nature of White Label ATMs (WLA) and would provide ATM
services to customers of all Banks based on the card issued by the banks.
Maximum Loan of 5.00 lac/ATM repayable within maximum period of 60
months with maximum moratorium of 6 months@ 25% margin.

26
203-2012-BC JOINT LENDING ARRANGEMENT (JLA)- In case of borrowers enjoying
aggregate credit limits below 150 crore from more than one bank, where
further enhancement would take the aggregate limits to 150 crore or more,
should be Considered jointly by the financing banks concerned and the bank,
which takes up the largest share of the limits, shall be deemed to be the leader
of the formalized JLA. The JLA will have Common Documentation and
Common Asset Classification.
206-2012-BC De-duplication of Customer IDs for identification of customers having
multiple Customer IDs.

290-2012-BC S B accounts are exempted from cash handling charges as per the existing
guidelines and cash handling charges applicable to Current/Overdraft a/c .

293-2012-BC “Shell Bank”- Banks should refuse to enter into a correspondent relationship
with a “Shell Bank” (i.e. a bank which is incorporated in a country where it
has no physical presence and is unaffiliated to any regulated financial group).
Shell Banks are not permitted to operate in India.

Suspicious Transaction Reports (STR)- (STR) should be furnished within 7

days of arriving at a conclusion that any transaction, whether cash or non-cash,
or a series of transactions integrally connected are of suspicious nature.
294-2012-BC “SYND NAVARATNA” SAVINGS DEPOSIT SCHEME-

Resident Individuals (singly / jointly), employed permanently in Multinational

Companies/Corporations (MNC) Blue Chip Companies, reputed Private
Organizations and Government/Semi-Government Undertakings are eligible to
open this account. The savings bank account opened shall have the ZERO
BALANCE facility at any given point of time. There shall be a minimum of 25
employees per organization to be eligible for drawing their salary through
Synd Navaratna savings bank account. Regional Managers may use their
discretion and relax the number of employees to 10 in deserving cases.
Free Funds transfer facility through RTGS/NEFT up to Rs.1.00 lakh.
At par Demand drafts/pay orders (six instances in a year up to ceiling of salary
credited per instance).
Temporary overdraft facility for a period of 15 days to meet any urgent
requirements subject to payment of interest. Amount restricted to the extent of
one month’s net salary (exclusive of allowances of a temporary nature). The
overdraft facility may be made available after six months continuous salary
credit by the employer.
301-2012-BC SKCC- The limit under SKCC is valid for 5 years and it is subject to annual
review.
RuPay Kisan Cards will be issued to the existing as well as new SKCC
holders.
Crop Insurance is mandatory. Personal Accident Insurance Scheme (PAIS)
shall be made available to all eligible farmers on compulsory basis.

27
305-2012-BC Prior permission of RBI is not required to open a bank account in India of a
foreign student – as a foreign student studying in India would be considered a
“Person Resident in India”.

327-2012-BC Bank has acquired Certificate of Registration from Association of Mutual

Funds In India (AMFI. AMFI registration number (ARN) 36031 is valid from
29.06.2012 to 28.06.2015. Under sub-broker code, branch BIC is to be
mentioned.
328-2012-BC Password structure and Management in our Bank
Maximum Password Age – 30 Days
Minimum Password Length – 8 Characters
Account Lockout – 3 invalid attempts
338-2012-BC In case of death of an employee as a result of or during Bank robbery or
attacks by terrorists, including left-wing extremism on Bank employees, the
family of deceased will be given compensation by the Bank as follows:
In case of death of Officers : 20 Lacs
In case of death of Clerical/Sub staff : 10 Lacs

In respect of the persons other than the Bank employee who may get killed as
a consequence of or during robberies and/or attack of terrorists, the Bank will
pay a lumpsum compensation of 3 Lacs to the family of the deceased.

In case of Bank employees / customers / members of public who actively

resists Bank robberies and terrorist attacks on Banks, the Bank may consider a
cash reward not exceeding 2 Lacs.

Circular No.114- The limit of loans to farmers against pledge/hypothecation of agricultural

2013-BC-PSCD-12 produce (including warehouse receipts) for a period not exceeding 12 months
stands increased from Rs.25 lakh to Rs.50 lakh.

Imp. Circulars-2013

Cir. No. Particulars

Circular No. 007- As per extant RBI guidelines, Savings / Current Account shall be treated as
2013-BC Inoperative / Dormant if there are no transactions in the account for over a period
of 2 years. (only transaction induced at the instance of customers and third party
shall be considered. Service Charges levied by the Bank or interest credited by
the Bank shall not be considered).

Circular No. 009- SCHEME FOR FINANCING FARMERS FOR PURCHASE OF LAND FOR
2013-BC AGRICULTURAL PURPOSE. “Direct Agricultural Advance”.
Maximum loan amount permitted for purchase of land is 10.00 lakh. No margin
is stipulated for loans up to 1,00,000/- For loans above 1,00,000/- a minimum
margin at 10% of the project cost shall be met by the borrower. Loan is to be
repaid in 7-10 years in half yearly / yearly installments including a maximum
moratorium period of 24 months.

28
Circular No.020- CREDIT GUARANTEE SCHEME-Gist of the Modifications is as under:
2013-BC-
01. The “third party guarantee" is more clearly defined under the scheme, which
shall not include guarantee of Sole-Proprietor, Partners, Trustees, Karta,
Coparceners and Promoter Directors.

02. In the place of existing Guarantee Fee and Annual Service Fee, a Composite
all in Annual Guarantee fee (AGF) payable.

Annual Guarantee Fee (AGF) [% p.a.]

Credit Facility Women, Micro Enterprises and units Other

in North East Region (incl. Sikkim)
Upto 5 lakh 0.75 1.00
Above 5 lakh and up to 0.85 1.00
100 lakh

03. The time limit for lodging claim is increased to 2 years from the date of NPA
or within 2 years of expiry of lock in period whichever is later.
04. The initiation of legal proceedings as a precondition for invoking of
guarantee is waived for credit facilities up to 50,000.
05. The Second installment of 25% of the guaranteed amount will be paid on
conclusion of recovery proceedings or after three years of obtention of decree of
recovery, whichever is earlier. The Trust shall pay 75 per cent of the guaranteed
amount on preferring of eligible claim by the lending institution, within 30 days,
subject to the claim being otherwise found in order and complete in all respects.

Circular No.021- HL-MAXIMUM PERIOD OF REPAYMENT (TENOR)- 30 years subject to 75

2013-BC years of age of the borrower inclusive of moratorium & total repayment period.

Circular No. 026- SPECIAL REFINANCE SCHEME FOR URBAN LOW INCOME HOUSING
2013-BC OF NATIONAL HOUSING BANK (NHB)—REVISION IN LOAN LIMIT-
NHB has revised the loan limit ceiling from the current limit of 5.00 lacs to
10.00 lacs.

Circular No. 049- SYNDKISAN TATKAL- Minimum 1000/- or 50% of SKCC limit or 25% of
2013-BC annual income subject to a maximum of 50000/-. Repayable within 5 years in
half yearly / yearly instalments based on income generation to the farmer. SKCC
holders having satisfactory track record of at least two years are eligible.

Circular No. 054- THE ENFORCEMENT OF SECURITY INTEREST AND RECOVERY OF

2013-BC DEBTS LAWS (AMENDMENT) ACT, 2012-
*Section 13, Sub Section 3(A) deals with borrowers right of objections and the
reply to be given by the Bank within 7 days. As per the amendment, the reply by
the Bank is to be given within 15 days, thus enhancing the time limit for reply by
the Authorized Officer.

29
 *Section 13(9) earlier provided that in the case of financing by more than one
secured creditor or joint financing, rights under the Act could be exercised only
if secured creditors representing 75% in value of the amount outstanding as on
record date agree for such action. This has been reduced to 60% in value of the
amount outstanding as on record date.
*Bank cannot hold attached property, except such as is required for its own use,
for any period exceeding seven years.

Circular No. 085- JOINT LENDING ARRANGEMENT (JLA-

2013-BC The scheme shall be applicable to all lending arrangements, by a single
borrower, with aggregate credit limits (both fund based and non-fund based) of
150 crore and above, involving more than one Public Sector Bank. The scheme
is also applicable to all non-investment grade borrowers (External Credit Rating
below BBB or equivalent), irrespective of the amount of exposure.
To keep JLA size manageable, the minimum share of a member must be 10% of
the aggregate working capital limits for aggregate working capital exposures (FB
& NFB) under 1,000 crore. For working capital exposures of 1,000 crore and
above, the minimum participation in the working capital JLA should be at least
100 crore.
Circular No. 104- Authorized Branches are permitted to open NRO accounts of individual/s of
2013-BC Bangladesh nationality without the approval of the Reserve Bank of India.
For opening of NRO accounts by entities of Bangladesh ownership, individuals/
entities of Pakistan Nationality/Ownership branches shall continue to obtain
prior approval of Reserve Bank of India.
Circular No.114- Agriculture:
2013-BC (i) The limit of loans to farmers against pledge/hypothecation of agricultural
produce (including Warehouse Receipts) for a period not exceeding 12 months
stands increased from 25 lakh to 50 lakh both under direct and indirect
agriculture.

Circular No.115- CREDIT RISK GUARANTEE FUND SCHEME FOR LOW INCOME
2013-BC HOUSING IN URBAN AREAS-
NHB has communicated vide their letter No. NHB/CRGFTLIH/6741/2013 dated
April 19, 2013 that RBI has accorded Zero’ Risk Weight and ‘Nil’ Provisioning
for the guaranteed portion of eligible housing loans by CRGFTLIH
Circular No.119- TDS ON INTEREST ON DEPOSITS - SUBMISSION OF FORM NO
2013-BC 15G/15H-For non deduction of tax on Interest Paid to all category of depositors
except Limited Companies, Partnership Firms and Non Residents, where
credit/payment of interest exceeds 10,000/- p. a depositors can submit Form No
15G (in Triplicate) duly quoting PAN subject to interest paid/ credited at the
branch is below the basic exemption limit. Senior Citizens of 60 years and above
have to submit Form No.15H (in triplicate) duly quoting PAN for non deduction
of tax at source on interest on their deposits without any limit.
Failure to submit the copy of Form 15G/ 15H to the Income Tax Department
attracts penalty of 100/- per day u/s 272A (2)

30
Circular No.281- COLLATERAL FREE LOANS TO MICRO AND SMALL ENTERPRISES
2013-BC (MSE) –
Credit facilities up to 10.00 lac: Collateral security shall not be obtained and
eligible accounts shall be covered under CGMSE.
• Credit facilities above 10.00 lac up to 100.00 lac eligible for coverage under
CGMSE:Collateral security shall not be obtained and all accounts shall be
covered under CGMSE.
• Credit facilities above 10.00 lac under MSE not eligible for coverage under
CGMSE: Sanctioning authority shall explore the possibility of obtaining
Mortgage of Property /Other collateral security of appropriate value, in addition
to primary security, which shall cover at least 110% of the value of the limit.
Circular No.335- PRIORITY SECTOR CREDIT – CLASSIFICATION OF LENDING TO
2013-BC MICRO, SMALL & MEDIUM ENTERPRISES (MSMES) SECTOR.
Definition of Micro, Small and Medium Enterprises:
(a) Manufacturing Enterprises i.e. Enterprises engaged in the manufacture or
production, processing or preservation of goods as specified below:
(i) A Micro Enterprise is an enterprise where investment in Plant and Machinery
does not exceed 25 lakh;
(ii) A Small Enterprise is an enterprise where the investment in Plant and
Machinery is more than 25 lakh but does not exceed 5 crore; and
(iii) A Medium Enterprise is an enterprise where the investment in Plant and
Machinery is more than 5 crore but does not exceed 10 crore.
(b) Service Enterprises i.e. Enterprises engaged in providing or rendering of
Services and whose investment in Equipment (original cost excluding Land and
Building and Furniture, Fittings and other items not directly related to the
Service rendered or as may be notified under the MSMED Act, 2006) are
specified below.
(i) A Micro Enterprise is an enterprise where the investment in Equipment does
not exceed 10 lakh;
(ii) A Small Enterprise is an enterprise where the investment in Equipment is
more than 10 lakh but does not exceed 2 crore; and
(iii) A Medium Enterprise is an enterprise where the investment in Equipment is
more than 2 crore but does not exceed 5 crore.

Circular No.341-
JAWAHARLAL NEHRU NATIONAL SOLAR MISSION -The subsidy is back
2013-BC ended with a lock in period of 3 years and the administration of subsidy and
refinance for the pre-approved models is done by NABARD.
Circular No.345- Bank has decided to enhance the Fee payable to the Credit Verification
2013-BC Agencies from 120/- presently to 750/- per case.
Circular No.373- NATIONAL RURAL LIVELIHOOD MISSION (NRLM) – AAJEEVIKA –
2013-BC GUIDELINES FOR INTEREST SUBVENTION SCHEME DURING 2013-14.
150 most backward districts eligible for Interest Subvention Scheme
All Women SHGs are eligible to avail credit up to 3 lakhs at 7% p.a. with
interest subvention. But, SHGs which have availed capital subsidy under SGSY
in their existing loans will not be eligible for benefit for their subsisting loan
under this scheme.

31
Circular No.006- Interest subvention of 2 % p.a. will be made available to Public Sector Banks
2014-BC (PSBs) and Private Sector SCB (in respect of loans given by their Rural and
Semi-urban Branches) on their own funds used for short-term crop loans up to
3,00,000/- per farmer provided the lending institutions make available short term
credit at the ground level at 7% per annum to farmers. This amount of interest
subvention will be calculated on the crop loan amount from the date of its
disbursement/drawal up to the date of actual repayment of the crop loan by the
farmer or up to the due date of the loan fixed by the Banks whichever is earlier,
subject to a maximum period of one year.
2. Besides, an additional interest subvention @3% will be available to the
prompt paying farmers from the date of disbursement of the crop loan up to the
actual date of repayment by farmers or up to the due date fixed by Bank for
repayment of Crop Loan, whichever is earlier, subject to a maximum period of
one year from the date of disbursement. This means the prompt paying farmers
would get short term crop loans @4% per annum during the year 2013-14.

138/2014/BC Key Elements of the KYC Policy

Following are four key elements of our KYC policy:
1. Customer Acceptance and Customer Severance Policy
2. Customer Identification Procedures;
3. Monitoring of Transactions;
4. Risk Management

207-2014-BC All Regional Offices are permitted to empanel the Credit Verification Agencies
for verifying, validating and certifying vital details of Credit Information on
individuals applying for loans as per extant guidelines.

215-2014-BC Benefits of additional interest to Bank’s staff members or retired staff members
is available only in the case of the staff member or retired staff members has an
account singly or jointly with family member where the staff member/retired
staff member is the Principal Account Holder.
Payment of additional interest of 1% to the spouse of the deceased staff member
is in vogue in our bank as per guidelines in Manual of Instructions, Vol. VII,
Para 7.2.26(c). This guideline to pay additional rate of interest of 1% to the
spouse of the deceased staff is as per RBI directives in which RBI has given the
discretion to individual banks.

220-2014-BC RENEWAL / CREATING OF VCC LESS THAN 1,000/- .

Though, the product parameter permits renewal of deposits with maturity value
less than 1000/- and fresh deposits of less than 1000/-, Branches are permitted to
utilize the following options of 1 and 2 given below only in respect of
beneficiaries of Court cases and Government deposits.

32
 1.Branches can renew the matured deposits or create new deposits with a
minimum amount of deposit 100/- and above in VCC product number 405,
where the maximum term is 120 months.
2. Branches can renew the matured deposits or create new deposits with a
minimum amount of deposit 100/- and above in VCC product number 411,
where the minimum term is above 120 months.

238-2014-BC “Subsidy Amount” received in respect of Govt. Sponsored schemes

PMRY/KVIC-REGP/PMEGP and other Back-ended subsidy schemes, the
subsidy amount should be kept as FD (No Interest) under product code 413. In
such instances, interest to be charged on the loan amount shall be less by an
amount equal to the amount of subsidy kept as FD.

302-2014-BC All loan accounts of 5.00 crore and above where property is taken as security are
to be subjected to Legal Audit by getting the title deeds re-verified by another
empanelled advocate (other than the one who has given original opinion
confirming genuineness of the title deeds) once in 2 years at the time of annual
review of the loan accounts, till the loan is fully closed.

342-2014-BC COMPANIES ACT, 2013-The Act contains 470 Sections, divided into 29
Chapters with 7 Schedules.

Memorandum and Articles of Association of the Company is to be verified to

ascertain whether the Company is empowered to borrow or give guarantee or
provide security.

Memorandum and Articles of Association and Board resolution as explained in

Section 180 (1) (a), 180 (2) and 180 (4) of the Companies Act 2013, is to be
verified, for determining the borrowing powers of the Company.

Creation of charge is to be done by the branches within 30 days of date of

agreement or modification in Form No. CHG 1 (for other than Debentures) or
Form No. CHG 9 (for debentures including rectification) by branches.

Section 180 of the Companies Act, 2013, deals with restrictions on powers of
Board and Branches/ Offices to examine the same before entertaining proposals.

e-Voting compulsory for Listed and Companies with more than 1000
shareholders.

Section – 149 (1) - Every Company shall have a Board of Directors consisting of
Individuals as Directors and shall have –
(a) a minimum number of 3 Directors in the case of a Public Company, 2
Directors in the case of a Private Company and one Director in the case of a One
Person Company; and

33
 (b) a maximum of 15 Directors; Provided that a company may appoint more than
15 Directors after passing a Special Resolution;

A person can be a Director in maximum of 20 Companies out of which only 10

can be Public Companies.

Each Listed Public Company to appoint Independent Directors with a maximum

2 terms of 5 years each.

All companies to have uniform financial year -1st April to 31st March.

A company cannot give any guarantee or provide any security in connection with
any loan taken by its director or by any other person in whom the director is
interested.

421-2014-BC 1. ATM / Debit Card to be issued to the Karta / Ejaman only of the HUF.
2. A Separate application form duly signed by Karta / Ejaman and all other
coparceners shall be obtained.
3. On receipt of notice of death of the Karta, operation in the account to be
stopped and ATM/Debit Card is to be taken back for cancellation.
4. Branch to ensure to obtain necessary documents / Memorandum from the
minor after they become major in the HUF.
5. For issuance or renewal / duplicate card, request from all members of HUF is
to be obtained.

6. In case of lost card, request for blocking of the card can be obtained from any
member of the HUF. Blocked cad can be reactivated only after obtaining request
from all the members of the HUF.

427-2014-BC RBI has advised Public Sector Banks not to charge any penalty for non
maintenance of minimum balance in respect of inoperative/dormant accounts.

458-2014-BC It has since been decided to advance RTGS business hours to 8.00 hours from
9.00 hours and extend closing time of RTGS to 20.00 hours on week days. RTGS
business window will be open from 8.00 hours to 15.30 hours on Saturdays.

036-2015-BC Competent Authority has waived the annual fee to be collected for issue of ATM
Cards for the accounts opened under Synd Balashakthi, to bring in the ‘Gen
Next’ segment of the Society into our fold and as a gesture of earning goodwill
from youth of our Nation.

34
Summary of Imp. BC Cir 2015

Fund Transfer transaction limit including IMPS for Mobile Banking users is enhanced from
Rs.25,000/- to Rs.50,000/- per day.

‘Strategic Debt Restructuring (SDR) converting part of loan dues to equity shares.

RRR- REVIVAL, REFORM AND RESTRUCTURING-

The decision on invoking the SDR by converting the whole or part of the loan into equity shares
should be taken by the Joint Lenders‟ Forum (JLF) as early as possible but within 30 days from the
above review of the account. Such decision should be well documented and approved by the majority
of the JLF members (minimum of 75% of creditors by value and 60% of creditors by number);

Post the conversion, all lenders under the JLF must collectively hold 51% or more of the equity
shares issued by the company.

SyndGuide - a mobile app for everyone to know about bank's products & services, interest rates,
Branch locator etc.

300/2015/BC - The minimum amount of deposit into/withdrawal from currency chest will be
Rs.1,00,000/- and thereafter, in multiples of Rs.50,000/-.

Penal interest shall be levied at the rate of 2% over the prevailing Bank Rate for the period of delayed
reporting/wrong reporting/non-reporting /inclusion of ineligible amounts in chest balances. Penal
interest will be calculated on T+0 basis.

Soiled note remittances to RBI /diversion to other currency chest/s should not be shown as
withdrawal by chest/s / link offices. In case such remittances are wrongly reported as 'withdrawals', a
penalty of Rs.50,000/- will be levied irrespective of the value of remittance and period of such wrong
reporting.

RPA- (Reserve Pending Appropriation)

Central Govt. has declared second and fourth Saturday of every month as public holiday for Banks in
India in exercising power conferred by section 25 of the N I Act 1881 wef 01.09.2015.
This is applicable to banks included or not included in second schedule of RBI Act 1934.

A new overdraft product 148 is created for SyndMUDRA Card.

Jeevanpramaan- Seeding of Aadhar numbers of Pensioners.

PAIS-Personal Accident Insurance Scheme- arrangement with United India Insurance Co Ltd Rs.13/-
per head, Card holder up to age 70 are eligible
SKCC/SKSCC- share of Bank-Rs.8.65, Borrower Rs.4.35
SSCC- share of Bank-Rs.6.50, Borrower Rs.6.50

35
Standard Rates of Annual Guarantee Fees.-

Women, Micro Enterprises Others

and units in North East
Region (including Sikkim)
Up to Rs.5 Lakhs 0.75% 1.00%
Above Rs. 5 Lakhs up to 0.85% 1.00%
Rs.100 Lakhs

The differential rates of ASF/AGF are applicable depending upon NPA levels of MLIs of the Trust.
NPA level of 12% and below Standard Rates of Annual Guarantee Fees are applicable.

Our Bank has been conferred with the highest “Rajbhasha Keerti Puraskar” for the year 2015-16
among other Nationalized Banks and Financial Institutions in Region ‘C’ for effective
implementation of Official Language Policy.

Section 20(1) of the Banking Regulation Act, 1949 lays down the restrictions on loans and advances
to the directors and the firms in which they hold substantial interest. Purchase of or discount of bills
from directors and their concerns, which is in the nature of clean accommodation, is reckoned as
loans and advances for the purpose of Section 20 of the Banking Regulation Act, 1949.

Solar pumping system up to 10 HP are eligible for subsidy under the NABARD scheme.

FCNR Deposits- Maximum period- 5 years. Minimum-1 year. Compounding effect on interest can
be given only if deposits are kept for a minimum period of one year and one day.

Reserve Bank of India has suggested implementing “checking at multiple levels of cheques with
threshold limit of 5.00 lakhs.

Additional interest of 0.50% over the card rate is payable to Resident Indian Senior Citizens on
Domestic Term Deposits of less than Rs. 5 Crore and the maturity tenor of one year and above
only. (Not applicable ` deposits).

The Supreme Court upheld transgender person’s right to decide their self-identified gender and
directed the Centre and State Government to grant legal recognition of their gender identity such as
male, female or as third gender.

UAM- Udyog Aadhaar Memorandum

Full KYC exercise will be required to be done at least every two years for high risk individuals and
entities, at least every ten years for low risk and at least every eight years for medium risk
individual and entities.

‘Time Deposits’ to include recurring deposits within its scope for the purposes of deduction of tax
under section 194A of the IT Act, 1961. TDS has to be effected in the Recurring Deposits also
where Interest on TD exceeds 10,000/- unless declaration in Form15G/H is submitted.

36
Circular No.292-2015-BC-POLICY ON COLLECTION OF CHEQUES / INSTRUMENTS-

Branches/extension counters of the bank will consider providing immediate credit for outstation
cheques / instruments up to the aggregate value of 15000/- (rupees fifteen thousand only) tendered for
collection by individual account holders subject to satisfactory conduct of such accounts for a period
not less than 6 months.

The facility of immediate credit would also be made available in the case of instruments denominated
in U.S. Dollars and other foreign currencies provided the rupee equivalent of such instruments is not
more than 15000/- subject to the same norms as applicable to domestic cheques.

For cheques and other instruments sent for collection to centers within the country the following time
norms shall be applied:
(a) Cheques presented at any of the major Metro Centres (New Delhi, Mumbai, Kolkata and
Chennai) and payable at any of the other three centers: Maximum period of 7 days*.
(b) Other Metro Centres and State Capitals (other than those of North Eastern States and Sikkim):
Maximum period of 10 days*.
(c) In all other Centres: Maximum period of 14 days*.
(d) Cheques drawn on foreign countries: Such instruments are accepted for collection on the „best of
efforts‟ basis. Bank may enter into specific collection arrangement with its correspondent bank for
speedy collection of such instruments. Bank would give credit to the party on credit of proceeds to
the bank‟s Nostro Account with the correspondent bank after taking into account cooling periods as
applicable to the countries concerned. Maximum time period (inclusive of cooling period) for
affording the credit shall be 45 days.
* Holidays are to be excluded for the purpose of reckoning the collection Period prescribed above.

Interest for delayed collection shall be paid at the following rates:

Domestic instruments:
(a) Savings Bank rate for the period of delay beyond 7/10/14 days* as the case may be in collection
of outstation cheques.
(b) Where the delay is beyond 14 days, interest will be paid at the rate applicable to term deposit for
the respective period.
(c) In case of extraordinary delay. i.e. delays exceeding 90 days, interest will be paid at the rate of
2% above the corresponding Term Deposit rate.
(d) In the event the proceeds of cheque under collection were to be credited to an overdraft / loan
account of the customer, interest will be paid at the rate applicable to the loan account. For
extraordinary delays, interest will be paid at the rate of 2% above the rate applicable to the loan
account.

Frequent Dishonour of Cheques of the value of 1.00 crore and above:

In the event of Dishonour of cheques of the value of 1.00 crore or more, on four occasions during a
financial year for reasons like „Funds insufficient‟, „Exceeds arrangement‟ etc., no fresh cheque
book will be issued to the customer and the Branch may even consider closing the account at its
discretion after giving notice of one month.

37
If a cheque of the value of 1.00 crore or more is Dishonoured for a third time on any account for the
reasons specified above, a cautionary advice shall be issued to the account-holder indicating the
consequential stoppage of cheque facility or the bank‟s intention to close the account, as applicable,
if there is one more such instance of Dishonour during the year.

Frequent Dishonour of Cheques of the value of less than 1.00 crore:

In the event of Dishonour of cheques of the value of less than 1.00 crore on six occasions during the
financial year for reasons like „Funds insufficient‟, „Exceeds arrangement‟ etc., no fresh cheque
book will be issued to the customer and the Branch may even consider closing the account at its
discretion, after giving notice of one month.
If cheques of the value of less than 1.00 crore are Dishonoured for a fifth time in any account, a
cautionary advice shall be issued to the account-holder indicating the consequential stoppage of
cheque facility or bank‟s intention to close the account, as applicable if there is one more instance of
such Dishonour during the year.

If ECS (Debit) mandate on the account of a customer are Dishonoured four times in a financial year
due to reasons like „Balance insufficient‟ and „Not arranged for/Exceeds arrangement‟, the Branch
concerned shall write to the User institution and the Sponsor Bank to delete the account holder‟s
name from the list sent to the Clearing House under ECS or even consider closing the account at its
discretion after giving notice of one month.

As soon as the number of instances of Dishonour of ECS (Debit) mandates for the specified reasons
in a financial year reach three, a cautionary advice indicating the steps proposed in the event of
one more instance of such Dishonour during the year, shall be issued to the account holder.

Credit Policy and Credit Risk Policy-

Clearance of New Business Group Committee at Corporate Office shall be obtained for new
proposals of new borrowers only seeking credit facilities above 35.00 Crs and Clearance accorded
by NBG Committee shall be valid for a period of 120 days only.

Term Loan‘ is a loan which has a specified maturity which is payable in installment or in bullet
form.

Infrastructure Finance-Prior clearance of ALCO shall be obtained for exposures above 50 crores
with repayment period of 12 years and above.

Sensitive Sector refers to advances to Real Estate, Capital Market and Commodity Sector.

Structured Financial Messaging System (SFMS)

Premature withdrawal of NRE/FCNR (B) Deposits shall not be available where loans against such
deposits are to be availed.

38
Insisting on external Bank loan rating for exposures of 5.00 crores and above and/or having annual
turnover of 50.00 crores and above for all borrowers except MSE, Finance against Rent Receivables
and Agriculture.

Micro & Small Enterprises are exempted from external rating for exposures up to 10.00 crores.
For borrowal proposals of above 10.00 crores, external rating need not be a pre-condition for
sanction. However, such accounts should be externally rated within six months of takeover.

Cover all advances granted to Micro and Small Enterprises up to 100.00 lakhs under CGMSE
without any exception.

In order to give focused attention to the credit needs of corporate enjoying limits of over 5.00 crore
up to 100.00 crore a separate vertical called Mid Corporate Department is established at Corporate
Office level.

Branches have to obtain minimum 2 valuation report for properties valued at 10 crore and above.
However, in respect of Housing Loans, for loan amount of 100 lakhs and above, valuation report
has to be obtained from 2 independent valuers.

Takeout Financing Arrangement: Take out financing structure is essentially a mechanism designed
to enable banks to avoid asset liability maturity mismatches that may arise out of extending long
tenor loans to infrastructure projects. Under the arrangements, banks financing the infrastructure
projects will have an arrangement with IDFC or any other financial institution for transferring to the
latter the outstanding in their books on a pre-determined basis.

Loans/advances to individuals from the banking system against security of shares, convertible bonds,
convertible debentures, units of equity oriented mutual funds and PSU bonds shall not exceed the
limit of 10 lakh for subscribing to IPOs. Advances other than for IPOs to individuals from the
banking system against security of shares, convertible bonds, convertible debentures and units of
equity oriented mutual funds held in physical and Demat form shall not exceed 10 lakh and 20 lakh
respectively.

A uniform margin of 50 per cent shall be applied on all advances/financing of IPOs/issue of

guarantees and Co-acceptances for capital market operations. A minimum cash margin of 25 per
cent (within the margin of 50%) shall have to be maintained in respect of guarantees issued by banks
for capital market operations.

Branches/Offices shall return the securities to the customer within 15 days of closure of all his direct
and indirect liabilities.

The minimum hurdle rate shall be Synd 5 in respect of all exposures including Retail Loans, below
which no exposure is permitted to be taken. In case of exposures to sensitive sectors, including Real
Estate Sector, and NBFC- including NBFC-NDSI, the hurdle rate shall be SYND-4. For takeover
accounts also, hurdle rate shall be SYND-4. However, in the case of Synd Nivas & Synd Vahan
Retail Product, the hurdle rate shall be Synd 6.

39
Hurdle rating for Takeover of accounts (other than financing against Rent Receivables & MSME) is
SYND 4. For financing against Rent Receivables & MSME borrowers, it is SYND 5.

In case of finance to Public Ltd Companies, it should be ensured that if the facilities sanctioned and
the existing facilities, taken together, are in excess of paid-up capital and free reserves of the
borrower company, a resolution under Section 180 of the Companies Act, 2013 authorizing the
borrowing has to be obtained.

Working Capital assessment computed on the basis of 20% of projected annual turnover for MSE
borrowers up to Credit limits of 5.00 crores for both new and existing loans.

In the case of credit limits of above 2.00 crore for IT & software industry, cash budget method to be
adopted for assessment of working capital limit.

All NBFCs with exposures of 10.00 crore and above, assessment shall be based on Cash Budget
method.

Prior clearance of ALCO shall be obtained for taking term loan exposures above 50 crores with
repayment period of 12 years and above.

An overall exposure ceiling of 20% of gross credit and non SLR investments has been fixed in
respect of all exposures under Real Estate.

Within the overall ceiling, a sub ceiling of 7.50% of gross credit and non SLR investments has been
fixed for commercial real estate exposures, including CRE-RH and LRD.

Exposures under CRE & CRE-RH, other than LRD shall not exceed 4.50%.

Margin in respect of CRE proposals-Minimum margin of 50% (including Owner‘s fund in the
project and advances from buyers) of the project cost shall be maintained.

Exposures to NBFCs including MFI shall not exceed 22% of total gross credit and non SLR
investment.

Branches can sanction & issue guarantees, performance or financial for a maximum period of 3 years.

Beyond 3 years up to 10 years, request for Bank Guarantee shall be examined and considered /
sanctioned by the Regional Managers (RLCAC I) or FGMLCAC. Any Guarantee with maturity of
more than 10 years shall be considered / sanctioned only by CO-CCD.

365-2015-BC- “It has been decided to allow State Level Bankers’ Committee / District Level
Consultative Committee/ Banks to take a view on rescheduling of loans if the crop loss is 33% or
more. Banks may allow period of repayment of upto 2 years (including the moratorium period of 1
year) if the loss between 33% to 50%. If the crop loss is 50% or more, the restructured period for
repayment may be extended to a maximum of 5 years (including the moratorium period of one
year)”.

40
Circular No.393-2015-BC-Renewal of Deposits:

1. Renewal of overdue domestic Term Deposit:

a) Whenever overdue term Deposits are renewed, they must be renewed for a minimum period of 7
days plus overdue period.

b) In case of premature refund of the renewed Deposit, which has not completed 7 days from the
actual date of renewal, no interest is payable on the Deposit for the overdue period even though the
deposit was with the bank for more than 7 days.

2. a) If the Deposits are renewed within 7 days from the date of maturity, interest rate prevailing on
the date of maturity is payable.
b) Where the overdue period from the date of maturity exceeds 7 days, the rate of interest payable on
the overdue term deposits shall be the applicable rate of interest (for the period of renewal) prevailing
on the date of maturity or on the date of renewal, whichever is less.
3. If the 7th day falls on a Sunday/holiday, the Deposit should be renewed on the previous working
day itself.

Circular No.500-2015-BC-
Powers to be exercised by the various Authorities for settlement of claims to the assets of the
deceased customers. [Net asset value after deducting direct/indirect liability].
1) Branch Head in Scale I (not being Prob. Officer)- Rs.75,000/-
2) Branch Head in Scale II-Rs.1,50,000/-
3) Branch Head in Scale III-Rs.2,50,000/-

Micro Units Development and Refinance Agency Ltd (MUDRA)-

Non- farm enterprises in manufacturing, trading and service sector whose credit needs are below
10.00 lakhs and loan given to income generating activities disbursed on or after April 08, 2015, will
be known as MUDRA loans.

Eligible beneficiaries pursuing micro enterprises can be issued SyndMUDRA Card up to a card
limit of 25000/- to meet working capital needs. New overdraft product 148 is created for
SyndMUDRA Card.

“SKILL LOAN SCHEME” –

1. The loan will be in the range of 5000/- to 150000/-.

2. Uniform Rate of Interest at Base Rate + 1.50 % p. a. i.e., 11.20 % at present.
3. The loan will have maximum tenure up to 7 years.
4. No collateral security required for Skill Loan. Credit Guarantee of National Credit Guarantee
Trust Company Ltd (NCGTC) covering 75% of the outstanding loan amount is available once the
arrangement with NCGTC by the Bank is operational.

41
 Where the cost of House/Flat/Dwelling unit does not exceed 10.00 lakhs, Stamp Duty, Registration
charges and other Documentation charges may be included to the cost of the House/Flat/Dwelling
unit for the purpose of calculation of LTV.

Branches are advised to grant to eligible borrowers belonging to SCs / STs such advances to the
extent of not less than 40 percent of total DRI advances.

Under the DRI scheme, the eligibility criteria that size of land holding should not exceed 1 acre of
irrigated land and 2.5 acres of unirrigated land is not applicable to SCs / STs. Moreover, members of
SCs / STs satisfying the income criteria of the scheme can also avail of Housing Loan up to 20,000/-
per beneficiary over and above the individual loan of 15,000/- available under the scheme.

“CREDIT ENHANCEMENT GUARANTEE SCHEME FOR SCHEDULE CASTES

(CEGSSC)”-

The Government of India initially allotted a corpus of 200.00 Crores for the scheme. Industrial
Finance Corporation of India Limited (IFCI) has been appointed as the Nodal Agency for the
Scheme and also entrusted with the responsibility of managing the scheme. IFCI, under the aegis of
Department of Financial Services (DFS) shall provide guarantee to Public Sector Banks for providing
assistance to SC Entrepreneurs. The Member Lending Institution (MLI) shall enroll as member of
IFCI Ltd., in order to avail guarantee under the scheme. The guarantee cover shall be ranging from
15.00 lakh to 5.00 Crore.

Government of India’s notification dated April 08, 2015, where in they have reduced the criterion of
crop loss from 50% to 33% for providing input subsidy (compensation) to the farmers affected by
Natural Calamities.

CREDIT MONITORING POLICY-

All credit limits classified as performing assets and secured by inventory and / or book debts
including Working Capital Demand Loans of 5 crore and above in SYND-1 to SYND-4 and 1 Crore
and above in other rated accounts are to be subjected to stock audit once in a financial year.

Stock and Receivable (Book Debt) Audit shall be completed in all eligible accounts by 30th
November every year and the audit report shall be closed by 31st January of the succeeding year.

In the case of NPAs, all accounts including suit filed / DRT cases with real account balance of 5
Crores and above where hypothecation of stock and / or book debts taken as security and the same is
available, Stock Audit at annual intervals shall be conducted.

Units shall be compulsorily visited by Regional offices, starting from exposure of 5.00 crores
and above.

CRILC -Reserve Bank of India (RBI) has set up a Central Repository of Information on Large
Credits (CRILC) to collect, store, and disseminate credit data to lenders.

42
 Any sanction of either Working Capital or Term Loan (fresh/enhancement) that may take the total
exposure to 5.00 crore and above (Fund based and non fund based) to any borrower shall be subject
to Credit Audit.

Summary of Imp. BC Cir 2016-

47/2016/BC-Education Loan.-
Minimum Cut Off rating for extending Education loan is Synd 5.
Classification under Priority Sector lending - Loans to individuals for Educational purposes including
Vocational courses up to 10.00 lakhs irrespective of the sanctioned amount will be considered as
eligible for Priority Sector.
Repayment Tenor - 15 years from the date of commencement of repayment, for all categories.
Repayment Holiday/ Moratorium- Course Period+1 Year

Circular No.190-2016-BC- our Bank to change the periodicity of Savings Bank interest application
from half yearly to quarterly i.e March, June, Sept and December every year.

Circular No.191-2016-BC- DISHONOUR OF CHEQUES FOR 1.00 CRORE AND ABOVE AND
DISHONOUR OF CHEQUES IN FAVOUR OF STOCK EXCHANGES IRRESPECTIVE OF
AMOUNT- Branches to issue notice to the account holders that on recurrence of such instances, the
Bank would close the account without any fresh notice”.

Circular No.192-2016-BC- permissible time limit for remittance of Government Receipts collected
through branches situated in the State of Chattisgarh stands reduced to T+5 days instead of T+12
calculated on working days basis (excluding the put through date and ‘T’ is the date when money is
available to the branch).

Circular No.193-2016-BC- National Rural Livelihood Mission (NRLM) is renamed as Deendayal

Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM).

Circular No.202-2016-BC- As per Section 12 of Consumer Protection Act, the copy of the complaint
is to be served upon the opposite party and as per the Section 13 of the Act, the opposite party has to
file its reply/ version to the complaint within a period of 30 days from the date of receipt of the copy of
the complaint. There is a further provision in Section 13(2) (a) of the Act that the District Forum may
extend the period, not exceeding 15 days, to the opposite party for giving its/his version. Thus as per
the Act, an upper cap of 45 days was available for filing version of the opposite party.

Circular No.204-2016-BC- Rupay Card. For Accident or PTD. With New India Assurance company.
Insurance Cover for Premium Cards- Rs.2,00,000/- and Insurance Cover for Non-Premium Cards-
Rs.1,00,000/-.Claim intimation should be made within 90 days from the date of accident. Claim
will be settled in 10 working days.

Circular No.211-2016-BC- Amount of 250/-+ Service Tax is to be remitted to the NSDL, developer
of Vidya Lakshmi Portal in respect of each sanctioned application received through Vidya Lakshmi
Portal as service charges. It is decided by the Department to remit the amount of service charges to
NSDL by debiting the loan account of the customer through NEFT to NSDL.

43
 Circular No.213-2016-BC- In FP 502, under Interest Servicing options during moratorium
period is available. Account level moratorium period is to be given while opening loan account
directly in CBS under FP 502 which is validated with product level minimum and maximum
moratorium period parameter.

Circular No.216-2016-BC- changes in CBS to reduce current threshold limit of 10,000/- to 1/- for
sending SMS alerts, not to charge for SMS alerts on PMJDY accounts, staff accounts and for renewal
of term deposits.

Circular No.229-2016-BC -Govt. of India has levied Krishi Kalyan Cess, on any or all the taxable
services at the rate of 0.50% of the value of taxable services with effect from 1st June, 2016 as per
Finance Bill 2016.

Circular No.239-2016-BC- Amendment in PMJJBY: The following lien clause has been incorporated
in the rules of PMJJBY with effect from 1st June, 2016, i.e. “Claims for deaths which occur during the
first 45 days from the date of enrollment will not be paid, effectively meaning that the risk cover will
commence only after the completion of 45 days from the date of enrollment into the scheme by the
member”. However deaths due to accidents will be exempt from the Lien Clause.

Circular No.240-2016-BC- Our Bank is the only Bank in the country to relax security norms for
financing Solar Pump sets for irrigation purposes upto 5.00 lakh without collateral securities. This
farmer friendly initiative of the Bank is highly appreciated by MNRE, GoI.

Circular No.246-2016-BC-
Quarter ending Due dates for quarterly Due date of filing quarterly
furnishing of Form 15G/H return (24Q, 26Q& 27Q) wef
declarations received from 01.06.2016
Customers- wef 01.04.2016
QE 30th June 15th July 31st July

QE 30th September 15th October 31st October

QE 31st December 15th January 31st January

QE 31st March 30th April 31st May

Circular No.257-2016-BC- Education Loans under Synd Super Vidya Scheme- Rate of Interest
shall be at MCLR.

Circular No.261-2016-BC- Valid up to 31.03.2017.

Service charges to Authorized Four Wheeler Dealers -

]
Service Charges @ 1.00% of the Four Wheeler loan with a cap of 50000/- per loan to Authorised
Four Wheeler Dealers against the loan amount disbursed from the leads directed by them and
converted to real business.
44
 Service Charges to Sales Executives- Payment of Service Charges at 0.25% of the Four wheeler loan
with a cap of 2000/- per loan to the Sales Executive of Authorized Dealer against the leads directed
by them and converted into real business.

Circular No.302-2016-BC- “Activities allied to Agriculture”, e.g. Pisciculture, Beekeeping, Poultry,

Livestock, Rearing, Grading, Aggregation Agro Industries, Dairy, Fishery, Agriclinics and
Agribusiness Centers, Food & Agro-processing, etc. (excluding Crop loans, Land improvement such as
canals, irrigation, wells) and services supporting these, which promote livelihood or are income
generating shall be eligible for coverage under PMMY in 2016-17.

Circular No.311-2016-BC-Acceptance of deposits of 5.00 Crore and above is at the discretion of the
Bank. For accepting or renewing Term Deposits of 5.00 Crore and above, Branches have to get prior
permission of CO: P&D through respective ROs.

Premature withdrawal of Bulk Term Deposits of 5.00 Crore and above is at the discretion of the Bank.
General Manager (P&D) is authorized to permit Branches in this regard. Regarding pre mature closure
of bulk term deposits.

Circular No.313-2016-BC-Deendayal Antyodaya Yojana- No margin money should be taken for

loans up to 50000/- and for loans ranging from 50000/- – 10 lakhs, preferably 5% should be taken as
margin money and it should in no case be more than 10% of the Project cost. The group should have
minimum 5 members with a minimum of 70% members from urban poor families.

Circular No.314-2016-BC- Housing Loans sanctioned to EWG (Not exceeding 1,00,000/- income
per annum)/LIG borrowers (1,00,001/- to 2,00,000/- income per annum) in urban areas for the loans of
up to 8,00,000/- in respect of houses which are not exceeding carpet area of 430 Sqft (40Sqm),
sanctions made on or after 24.06.2012 are eligible to cover under CREDIT RISK GUARANTEE
FUND SCHEME (CRGFS).

Circular No.316-2016-BC- Interest Subvention Scheme for Short Term Crop Loans up to 3.00 lakh

Interest Subvention of 2% per Annum for Short Term Crop Loans up to 3.00 lakh per Farmer would
be available, provided Short Term Credit is made available at the Branch level @ 7% per Annum to
Farmers.

An additional Interest Subvention @ 3% will be available to the prompt payee Farmers from the date
of disbursement of the Crop Loan up to the actual date of repayment by Farmers or up to the due date
fixed by the Bank for repayment of the Crop Loan, whichever is earlier, subject to a maximum period
of one year from the date of disbursement. This also implies that the Farmers paying promptly would
get Short Term Crop Loans @ 4% per annum during the year 2016 – 17.

Circular No.336-2016-BC- Pocket expenses of 100/- per day to Officer Employees for attending any
Court Work relating to the Bank involving stay outside the Branch/Office and could not return to their
respective Branch/Office before Lunch Hours.

45
Circular No.340-2016-BC-Branches with total business of minimum 50 crore and having total
advances of minimum 20 crore excluding DRI Deposits, Food Credit, JL, LD & ODD shall be
considered for the purpose at the discretion of HO: Inspection so as to achieve a minimum of 70% of
Coverage of Business under Concurrent Audit.

RBIA, Credit Audits & RBI Inspection reports of branches -Closure to be done within 60 days.
Compliance Audit - Closure to be done within 30 days

Circular No.350-2016-BC-Public Financial Management System (PFMS) which was formerly

called as Central Plan Scheme Monitoring System (CPSMS), is a Financial reform initiative from
Ministry of Finance (MoF), Govt. of India (GOI), which monitors the programme in the social sector
and tracks the funds for disbursement.

Circular No.358-2016-BC- All women SHGs will be eligible for interest subvention on credit upto 3
lakhs at 7% per annum. SHG availing capital subsidy under SGSY in their existing credit outstanding
will not be eligible for benefit under this scheme. Banks shall lend to all the women SHGs at the rate of
7% in the 250 Districts. Our Bank will get interest subvention at 3.25% p.a. being the difference
between the Weighted Average Interest Charged (MCLR plus 1.50% p.a. i.e.; 10.25% p.a. for our Bank
at present) and 7% p.a. in these 250 Districts. Further, the SHGs will be provided with an additional 3%
subvention on the prompt repayment of loans. For the purpose of Interest Subvention of additional 3%
on prompt repayment.

Circular No.366-2016-BC- Reserve Bank of India has advised that “delayed period interest” as
stated here below will be imposed on the Banks for the period of delay on the part of the Banks in
remittance of Government Receipts.
a) The period of delay in a transaction of 1Lakh and above shall attract delayed period interest at Bank
rate +2%. The Bank rate will be the rate as being notified by the RBI from time to time.
b) For the transaction below 1Lakh each, the delayed period interest shall be levied only at the Bank
rate for delays up to 5 calendar days and above 5 calendar days at the Bank rate + 2% for the full period
of delay. The Bank rate will be the rate notified by the RBI as applicable at the time of transaction.

Circular No. 378-2016-BC-

Policy for valuation of Bank owned properties-The exercise of valuation shall be done once in 3 years
Second and subsequent valuation of Bank owned assets shall be called re-valuation of Bank owned
properties. Such re-valuation shall be got done once in 3 years,
As per the extant guidelines on Capital Adequacy, Banks are permitted to include revaluation reserves
at a discount of 55% reckoned as CET I capital.

Bank has been providing depreciation on buildings at 5% p.a. on the original cost excluding cost of
land and such depreciation is chargeable to Profit & Loss A/c of the Bank. Likewise, depreciation on
re-valued portion of the properties is being calculated at 5% p.a. and such depreciation is debited to Re-
valuation Reserve Account (instead of Profit & Loss A/c)

Circular No.381-2016-BC- “Pradhan Mantri Weavers MUDRA Scheme”-The loan will be

sanctioned as composite loan covering working capital and term loan. Minimum sanctioned loan
amount will be 50,000/- for cotton products and for silk weaving, it will be around 1,00,000/-.

46
There will be maximum margin money of 10,000/- for loan amount up to 1,00,000/- which will be paid
by Ministry of Textiles. For loan amount above 1,00,000/-, the margin will be as per MUDRA norms.
10,000/- will be paid by Ministry of Textiles and rest of the amount to be arranged by the beneficiary.

Loans will be provided at the interest rate of 6%. The quantum of interest to be borne by Ministry of
Textiles will be limited to the difference between the actual rate of interest as applicable /charged by
the Banks. However, the maximum interest subsidy would be capped at 7%.

Circular No.399-2016-BC- Credit Enhancement Guarantee Scheme for Schedule Castes- The
Scheme is an initiative of Ministry of Social Justice and Empowerment, Government of India and IFCI
is the Nodal Agency for the same. The objective of the scheme is to encourage entrepreneurship in the
lower strata of the society resulting in job creation besides creating confidence in Schedule Castes.

Circular No.402-2016-BC -“New Products Approval Committee- Convener of Committee should be

the General Manager of the CO: Planning & Dev. Department. Further, as all products have to be
introduced in the system, attendance of General Manager, DIT should be made compulsory in all such
meetings.

Circular No.405-2016- As per the Sachar Committee recommendations, the Public Sector Banks are
required to step up lending to Minority Communities to reach the level of 15% of PSA.

Circular No.408-2016-BC- SyndConnect Scheme

Quantum of Loan-15 times Gross monthly salary with a maximum cap of 20.00 lakhs whichever is
less and repayable in 72 EMI.

Provisioning Norms for NPA Accounts-

Substandard Asset-
(on the balance outstanding without making any allowance for Guarantee cover or securities
available)
Secured Exposure under SSA (on entire outstanding book balance) 15%
Unsecured Exposure under SSA (on entire outstanding book balance) 25%
Unsecured Exposure under SSA in respect of advances to Infrastructure 20%
Sector where appropriate mechanism of escrow accounts available and
branch has a clear and legal first claim on these cash flows.
Doubtful Asset -
On Secured liability-
Doubtful assets upto 1 year (DA 1) 25%
Doubtful assets 1 to 3 years (DA 2) 40%
Doubtful assets more than 3 years (DA 3). 100%
On unsecured liability covered by DICGC claim received or ECGC/ Nil
CGTMSE/CRGFTLIH claim received/ lodged/ cover available
On unsecured liability not covered by DICGC claim received or ECGC/ 100%
CGTMSE/CRGFTLIH claim received/lodged/cover available.
Loss Asset 100%
47
 Deposit products-
Our various Deposit 1. Synd Silver Current Account – Monthly Minimum Average
products Balance – Rs.25,000/-
2. Synd Platinum Current Accounts – Monthly Minimum Average
Balance - Rs.2,00,000/-
3. SyndFlexi Platinum Current Account-Monthly Minimum
Average Balance- Rs.1,00,00,000/-
4. Multicity SB Accounts – Monthly Minimum Average Balance -
Rs.25,000/-

PRODUCTS WITH SWEEP-IN SWEEP-OUT FACILITIES

PREMIUM SAVINGS PREMIUM SAVINGS ACCOUNT
ACCOUNT  Minimum Average Monthly Balance of Rs.10,000/-
 Balance in excess of Rs..10,000/- gets swept out into Fixed
Deposit for 180 days in units of Rs.1,000/-
 In case of shortfall in balance to meet payment of cheques etc,
drawn on the Savings Account, the Fixed Deposit is broken
prematurely without any penalty in required number of units of
Rs.1,000/- and swept back into the Savings account.

SYND FLEXI PREMIUM Minimum monthly average balance - Rs.100.00 lakh-

CURRENT ACCOUNT  Amounts available in the account in excess of Rs.100.00 lakh
will get automatically swept-out into a fixed deposit for 7 to
14 days (minimum 7 days & maximum of 14 days) in units of
Rs.100.00 lakh, once in a week.

 Rate of interest - As applicable to Bulk domestic term

deposits of the tenor of 7 – 14 days.

 The customer has to opt for the specific tenure for which the
amount shall be swept out to be placed in fixed deposit, within
the prescribed range of 7 to 14 days while opening the a/c

 Rate of interest - As applicable to Bulk domestic term

deposits of the tenor of 7 – 14 days .

SAVINGS BANK is aimed at the day-to-day savings need of ordinary individuals and
ACCOUNT fetches interest on daily product basis payable on half yearly basis.

CURRENT ACCOUNT can be opened by individuals, partnership firms, private and public limit
companies, HUFs, societies, trusts etc.

48
SYNDSAMANYA - No Frills (Zero Balance) Account aimed at persons below poverty line,
SAVINGS BANK students etc.
ACCOUNT SCHEME Eligibility
 Minimum Balance: Zero Balance

 Rate of Interest: 4.00% p.a. (at present)

 No. of Cash withdrawals permitted absolutely free of service

charges at Branch Counter: 50 PER YEAR

 No restrictions on number of transactions on Bank’s ATM

FIXED DEPOSIT A flexible interest earning term deposit with minimum deposit amount of
Rs.1,000/- for periods ranging from 7 days to 10 years.
SOCIAL SECURITY An ideal monthly income plan wherein you receive monthly interest (at
DEPOSIT discounted rate) or quarterly interest on the deposit. All you need to do is
to invest a minimum amount of Rs.1000/- for a fixed term, ranging from
12 months to 120 months.
VIKAS CASH Fetches you interest compounded quarterly along with principal at the
CERTIFICATE time of maturity of deposit. Minimum amount accepted is Rs.1000/- and
thereafter in multiples of Rs.100/-. Term of the deposit could be for
periods ranging from 6 months to 120 months.
SYNDICATE SUVIDHA A Fixed Deposit with partial withdrawal facility. A flexible and
DEPOSIT convenient scheme whereby a deposit made for a fixed period can be
withdrawn in multiples of Rs.1,000/- when needed without penalty.
Accepted for periods ranging from 15 days to 120 months. The scheme
balances the needs of high returns and liquidity.
SYND CORPORATE Minimum amount accepted is Rs.500 lakh and thereafter, in multiples of
SUVIDHA DEPOSIT Rs.100 lakh. Period could range from 7 days to 180 days. Partial
SCHEME withdrawals in multiples of Rs.100 lakh permitted subject to prior notice
of one day and the balance outstanding after withdrawal should not go
below Rs.500 lakh in any case.
SYNDTAXSHIELD The scheme is drawn on the lines of the Union Government’s
DEPOSIT SCHEME notification on Bank Term Deposit Scheme, 2006 for the purpose of
Sec 80C(2)(xxi) of the Income Tax Act.
Eligibility- Individuals / HUF eligible to open an account with the Bank.

 Minimum Deposit - Rs.100/- and multiples thereof

 Maximum Deposit - Rs.1,00,000/- per person per annum.

 Term – Minimum 5 years

 Rate of Interest – As applicable to normal deposits.

 Premature withdrawal not permitted.

49
RECURRING DEPOSIT An ideal scheme to save in monthly instalments designed for salaried
persons, professionals, businessmen etc. Minimum monthly instalment
payable is Rs.100/- and the period could range from 12 months to 120
months.

PIGMY 1928 SCHEME This flagship product of the Bank is inspired by the truth that it is the
little drops of water which make a mighty ocean. The depositors can
deposit amounts as low as Rs.5 on a daily / weekly / monthly basis
through the Bank’s authorised agent at their doorstep. The period of the
deposit is 63 months.

PIGMY PLUS 2007 A variant of Pigmy 1928 scheme. Minimum contribution accepted is
Rs.5 per occasion. The period of the deposit is 72 months.
RESIDENT FOREIGN Resident Indians and NRIs who have returned to India for permanent
CURRENCY [RFC] residence can open RFC accounts in select foreign currencies at branches
ACCOUNT nominated for the purpose. The opening of the accounts and operations
thereon are subject to rules laid down by Reserve Bank of India. RFC
Deposits can be opened in SB as well as Term Deposits.
Non-Resident (External) These accounts are designed to help NRIs place their savings in a branch
{NRE} Savings Bank of their convenience in India. The credits in the account can only be out
deposits of remittances from abroad/Travellers Cheques/Foreign Currency
notes/Transfers from NRE/FCNR accounts/ proceeds of certain permitted
investments made out of remittances from aboard. The accounts earn
interest @ 4.00% on daily product basis. The balance in the account is
repatriable. The interest earned on the account is exempted from Income
Tax.

Non-Resident (External) NRIs can also invest their savings in term deposits with the Bank. The
{NRE} Term Deposit. Bank offers both schemes, which offers simple interest and those, which
fetch compound interest. The interest rate on these deposits is on par
with the domestic deposits. Provisions relating to eligible credits into the
account, repatriability of funds and exemption from Income Tax are same
as in the case of NRE Savings Bank deposits.

Foreign Currency Non These accounts are denominated in the following select foreign
Resident Accounts currencies: U.S. Dollar, Great Britain Pounds, Euro, Canadian Dollar and
(FCNR-B) Australian Dollar. The interest rates on these deposits are subject to RBI
directives. Provisions relating to eligible credits into the account,
repatriability of funds and exemption from Income Tax are same as in the
case of NRE Term Deposits/ Savings Bank deposits. Exchange risk is
born by bank.

Non-Resident (Ordinary) Besides all credits permitted in NRE A/cs, all legitimate dues in India can
Account {NRO) be credited to NRO A/cs. The accounts can be maintained in the form of
Savings, Current, Recurring or Fixed deposit A/cs. The accounts can be
jointly held with residents. The fund held in NRO a/c is repatriable as per
RBI guidelines issued from time to time. Presently, it is permissible to
remit or transfer to NRE A/c an amount not exceeding USD one million,
50
 per financial year (April- March), subject to an undertaking by the
remitter in the form 15CA (in duplicate) and a certificate by Chartered
Accountant in form 15CB (in Duplicate) as prescribed by CBDT,
certifying that the amount proposed to be remitted is eligible for
remittance and that applicable taxes have been paid/provided for. Tax is
applicable on the income earned in the account i.e. by way of interest and
the same is taxable as per DTAT.

INTEREST PAYABLE In the event of death of the depositor before the date of maturity of
ON TERM DEPOSIT IN deposit and amount of the deposit is claimed after the date of maturity,
DECEASED ACCOUNT the Bank shall pay interest at the contracted rate till the date of maturity.
From the date of maturity to the date of payment, the Bank shall pay
simple interest at the applicable rate obtaining on the date of maturity, for
the period for which the deposit remained with the Bank beyond the date
of maturity.

However, in the case of death of the depositor after the date of maturity
of the deposit, the bank shall pay interest at savings deposit rate obtaining
on the date of maturity from the date of maturity till the date of payment.

Deduction in respect of Section 80TTA has been introduced from this Financial Year [2012-13]
interest on deposits in and it allows to an employee from his gross total income if it includes
savings account (Section any income by way of interest on deposits (not being time deposits) in a
80TTA): savings account a deduction amounting to :
(i) in a case where the amount of such income does not exceed in
the aggregate ten thousand rupees, the whole of such
amount; and
(ii) in any other case, ten thousand rupees.
If such savings account is maintained in a
(a) banking company to which the Banking Regulation Act, 1949 (10 of
1949), applies (including any bank or banking institution referred to in
section 51 of that Act);
b) co-operative society engaged in carrying on the business of banking
(including a cooperative land mortgage bank or a co-operative land
development bank); or
(c) Post Office as defined in clause (k) of section 2 of the Indian Post
Office Act, 1898 (6 of 1898)

“Either or Survior” Term Deposit with “Either or Survior” or “Former or Survior” mandate,
banks are permitted to allow premature withdrawal of the deposit by the
surviving joint depositors on the death of other, only if , there is joint
mandate from the joint depositors to this effect.

Deposit Insurance Each depositor in a bank is insured upto a maximum of Rs.1,00,000

(Rupees One Lakh) for both principal and interest amount held by him in
the same capacity and same right as on the date of
liquidation/cancellation of bank’s licence or the date on which the
51
 scheme of amalgamation/merger/reconstruction comes into force. The
DICGC is liable to pay to each depositor through the liquidator, the
amount of his deposit up to Rupees one lakh within two months from the
date of receipt of claim list from the liquidator.
Coins The Government of India decides the quantity of coins to be minted on
the basis of indents received from the Reserve Bank.
NBFC All NBFCs – ND with an asset size of 100 crore and more as per the last
audited balance sheet will be considered as a systemically important
NBFC – ND. (NBFC SI -Non-deposit taking Systemically important
NBFC)
Capital Market The aggregate exposure of the bank to the capital markets in all forms
(both fund based and non fund based) should not exceed 40 per cent of its
net worth as on March 31 of the previous year.
Return of Securities Branches/Offices shall return the securities within 15 days of closure of
all direct and indirect Liabilities.
Currency Swaps Currency swaps are derivative instruments.

General Banking-
A Document executed outside India should be stamped- within 3 months of receipt of document
in India.
In terms of provision contained in Sec 26 of banking regulation act every banking company is
required to submit an annual return to the RBI within 30 days after close of calendar year
containing details of accounts which have remained inoperative for a period of -10 years.
The limitation period for a Decree is -12 years.
The limitation period in case of pledge is – No limitation.
If a property/goods worth Rs1 lakh is insured for Rs 80000/- and the loss occurred is to the
extent of Rs 60000/-then insurance company is liable to pay-Rs.48,000/- (80% of the property /
goods value is insured- Hence claim also at 80%)
Customer is having a current account and the minimum balance required is Rs.2000/. The
present balance is Rs.2500/-.A cheque is presented in clearing for Rs 2500/- - pass the cheque.
Current account opened on 01.01.2016 and cheque dated 25.12.2015 presented in the clearing on
25.01.2016 - pass the cheque.
Customer of a bank issues a cheque for Rs.50,000/- to Prime Ministers Relief Fund as donation.
The cheque was returned unpaid with reasons “Funds Insufficient”- No criminal complaint can
be filed as the cheque was not issued for any discharge of liability.
Subhash is having a saving account and he is also power of attorney holder for saving account
holder Ramesh. You receive the notice of death of Mr. Subhash. Two cheques signed by Satish
one in his saving account and the other one in the account of Ramesh are presented in clearing-
pass the cheque of SB account Ramesh and return the cheque of Subhash’s SB account.
In terms of sec 138 of N.I act 1881, the payee should give notice within 30 days of receipt return
of cheque for insufficient balance
The term "Blue chip " means- shares of progressive, soundly run public limited companies with
excellent dividend record.

52
 “Bulls & Bears” term is used in- stock exchange- Share Market.
In a securitization deal, the role of a Special Purpose Vehicle (SPV) is to manage the acquired
loans for the purpose of realization or holds them as investment till maturity.
As per FIMMDA’s guidelines, the Mid-Office is responsible for Risk Management.
The regulator for Mutual Funds in India is SEBI.
Banker’s lien is not barred by law of limitation.
In a Garnishee Order, the banker on whom garnishee order served is Judgement Debtor’s
Debtor
Sec 131 of NI Act,1881 extends protection to the Collecting Banker.
Our bank’s customer XYZ Ltd, enjoys a SOD limit of Rs.1,00,000.00. The SOD account shows
a credit balance of Rs,10,205.00. The relationship between your bank and XYZ Ltd is:
Debtor/Creditor.
In respect of Regional Rural Banks, the share holding pattern is Central Government 50%,
State Government 15% and Sponsoring Bank 35%.
The Capital Adequacy Ratio is presently at 9%.
All cheque forms should be printed in Hindi and English. The customer may, however, write
cheques in Hindi, English or in the concerned regional language.
An instrument written in Hindi having date as per Saka Samvat calendar is a valid instrument.

MUDRA – Micro Units Development & Refinance Agency Ltd.

Shishu : covering loans upto Rs.50,000/-
Kishor : covering loans above Rs.50,000/-and upto Rs.5 lakh.
Tarun : covering loans above Rs.5 lakh and upto Rs.10 lakh.
Subrogation- Person taking the rights of another person. Example: Guarantor stepping into the shoes
of the creditor.
In case of KYC for SHG, KYC verification for office bearers would suffice.
Time intervals for updation of KYC.
Low risk-10 years, Medium risk-8 years and High risk-2 years.
For Foreign students, one month time is allowed to submit proof of local address.
In case Low risk customers are not able to submit KYC for Genuine reasons, then 6 months time
from the date of opening can be given to them to submit documents.
Opening an account of a person who has lost both his hands-Toe mark can be accepted as signature.
Ultra vires –beyond the powers of the company.
A blind person can open a current account but an illiterate cannot open a current account.
In HUF, senior male coparcener is Karta.
Banking Regulation Act -Sec 11 -Paid up Capital & Reserve requirement - For Domestic banks-
minimum paid up capital & reserve -Rs.5 lacs. Foreign bank-Min Rs.15 lacs & Min Rs.20 lacs if
bank has place of business in Mumbai &/or Kolkata.
Banking Regulation Act-Section 24 -Maintenance of SLR - SLR can be max 40%.
RBI Act-Sec 42(1)- Cash Reserve Ratio- no minimum or maximum limit for CRR. Further, RBI does
not pay interest on balance held for CRR purpose by the banks.
NI Act - Sec 5 -Bills of exchange - is an instrument in writing, signed by the maker containing an
unconditional order directing a person to pay certain sum to bearer.

53
NI Act -Sec 6 -Cheque - is a bill of exchange drawn on specified banker to be paid only on demand.
NI Act -Sec 18- Difference in words & figure-when there is difference in amount in words & figure,
the amount in words is to be treated as the amount ordered by the drawer to pay.
Cheque having impossible date like 31/09/2015 presented on 30/09/2015- pass the cheque.
Cheque dated prior to date of account opening – Pass the cheque.
Cheque drawn in different inks, such as blue, red, green-Pass the cheque.
Usufructuary Mortgage- In this type of mortgage the creditor (Mortgagee) is placed in possession
of the property and he is entitled to enjoy the income generated by the property (e.g., rent) and
appropriate the same towards the interest and principal of the mortgage money. In this mortgage the
physical possession is given to the mortgagee and the mortgagee can retain the possession until the
payment of mortgage money.
Mortgage by conditional sale-in a mortgage by conditional sale, the mortgagor ostensively sells the
mortgaged property, on a condition that, the sale will become absolute on a certain agreed date if the
mortgagor fails to repay the mortgage money and the sale will become void if the money is repaid as
per the terms and conditions. Sometimes, the condition would such that in case of payment of
mortgaged money as per the agreement, the buyer (Lender) will resale the property to the seller
(Borrower).
English Mortgage - is a registered mortgage by which the entire property gets transferred in the
name of the mortgagee and upon repayment of the debt on certain date appointed date, the property
will be re-conveyed to the Mortgagor.
Indian Contract Act- came into effect on 01/09/1872. Not applicable to J and K.
Section 124 –Contract of Indemnity.
Section 126-Contract of Guarantee.
Section 130 – Assigment.
Section 148-Bailment.
Section 170/171 –Lien
Section 172-Pledge (Bankers lien is an implied pledge)
Consumer Protection Act -Limitation period-2 years from the date of cause of action
Jurisdiction- for claims-
Claims up to Rs 20.00 lacs -District forum
Rs.20 to 100 Lacs -State commission
Above 100 Lacs -National commission. COPRA is not applicable to J and K.
Right to Information Act- 2005- Not applicable in Jammu & Kashmir.
Fee prescribed for application is Rs.10/-. No fee is payable by person below the poverty line.
The public Information Officer should furnish the information within 30 days of receipt of
application (for life or liberty of a person within 48 hours)
Penalty Rs.250/-per day maximum of Rs.25000/-.
Any person can appeal (First) within 30 days from receipt of decision or expiry period. Second
appeal can be made within 90 days from receipt of decision of first appeal or expiry.
Exemption from disclosure of information is available in terms sec 8 and for rejection as per sec9
Damodharan Committee- Removal on foreclosure charges on Housing Loans.

The maximum amount of ECB which can be raised by a corporate other than those in the hotel,
hospital and software sectors, and corporate in miscellaneous services sector is USD 750 million or
its equivalent during a financial year.

54
Corporate in the services sector viz. hotels, hospitals and software sector and miscellaneous services
sector are allowed to avail of ECB up to USD 200 million.

Zero coupon Bond: is a bond bought at rate below the face value (Discount Rate) and on maturity
the face value will be paid.

Risk weight for Housing loan sanctioned to staff members is 20%.

Green shoe option: Where the underwriter sells the shares more than the original determined by the
issuer. In simple terms it refers to Over allotment option. It provides additional price stability

Excess money supply leads to –Inflation.

Digits in IFSC-11 - IFSC-Indian Financial Sector Code.

Deposits received from public are invested in Govt. securities is called “Narrow banking”

FATF-Financial Action Task Force.

Parri Passu Charge: Security will be shared by banks in the ratio of outstanding amount.

CAMELS is the rating model done by RBI for public sector banks.
C-stands for Capital Adequacy.
A-stands for Asset Quality
M-stands for Management Quality/effectiveness.
E –stands for Earnings
L-stands for liquidity.
S-sensitivity to market risk.

Factoring–Financing short term receivables.

Lok Adalat-Cases involving amount up to Rs. 20.00 lacs

55
 Banking Law & Mannual of Instruction –
Limited Liability Limited Liability Partnership Act 2008. Implemented wef 09-01-2009 as per
Partnership recommendations of Naresh Chandra Committee 2003 & Irani Committee
2005.
As it is a separate legal entity, it is liable to the full extent of its assets and
liability of Partners would be limited to their agreed contribution of the LLP.
Any two persons can form LLP & there is no upper limit on the number of
Partners in LLP. LLP Act also permits Foreign Residents ( Individuals &
Body Corporates ) to became Partner in LLP in India. Change of Partners will
not affect the existence, Rights or Liability of LLP. The LLPs need
Registration with Registrar of Companies (ROC).
Net Interest Margin Net interest margin is the net interest income divided by average interest
earning assets.
Nostro accounts Foreign currency settlement accounts that a bank maintains with its overseas
correspondent banks. These accounts are assets of the domestic bank.
Off-Balance Sheet Off-Balance Sheet exposures refer to the business activities of a bank that
exposures generally do not involve booking assets (loans) and taking deposits. Off-
balance sheet activities normally generate fees, but produce liabilities or
assets that are deferred or contingent and thus, do not appear on the
institution's balance sheet until or unless they become actual assets or
liabilities.
Option An option is a contract which grants the buyer the right, but not the
obligation, to buy (call option) or sell (put option) an asset, commodity,
currency or financial instrument at an agreed rate (exercise price) on or before
an agreed date (expiry or settlement date). The buyer pays the seller an
amount called the premium in exchange for this right. This premium is the
price of the option.
Risk The possibility of an outcome not occurring as expected. It can be measured
and is not the same as uncertainty, which is not measurable. In financial
terms, risk refers to the possibility of financial loss. It can be classified as
credit risk, market risk and operational risk.
Risk Weights RW is the portion of loans that is counted towards total assets against which
banks have to maintain statutory reserves. High Risk Weights discourages
lending by increasing the capital requirement for the lenders. Basel II sets out
a risk-weighting schedule for measuring the credit risk of obligors. The risk
weights are linked to ratings given to sovereigns, financial institutions and
corporations by external credit rating agencies.
Subordinated debt Refers to the status of the debt. In the event of the bankruptcy or liquidation
of the debtor, subordinated debt only has a secondary claim on repayments,
after other debt has been repaid.

Joint depositors Where the deposit has been made in the names of two or more persons, the
name of one or some of them can be deleted or substituted at the request of all
the joint depositors including the person whose name is proposed to be

56
 deleted; such deposit shall continue till maturity without any alteration in the
other original terms. At least one of the original depositors should continue to
be a depositor.

Where the deposits are encumbered/attached and the like, addition/deletion/

substitution should not be permitted.

In the case of deposits standing in the name of a minor, no addition of name

should be allowed. Deletion/substitution of minor's name also should not
be allowed except in the case of death of minor.

Current A/c No interest shall be paid on Current Account balances as per the Reserve
Bank of India Directive on Deposit Interest rates. However, interest at the
rate allowed on SB Account shall be paid on balances held under accounts of
Regional Rural Banks and the deceased individuals, as per SB rules. In case
of minor's account, whether self-operated or otherwise, nomination should be
made by a person lawfully entitled to act on behalf of the minor.

Joint Deposits If there are no such conditions regarding repayments the deposit shall be
deemed to be the property of all of joint holders and is repayable to all of
them jointly.

Overdue Deposits No interest can be allowed for the overdue period of any term deposit if the
deposit is not renewed with effect from the date of maturity.

Other assets Other assets like Suspense debit, unadjusted items under Sundry assets,
Unreconciled debits will attracts 100% provision to be made by bank.
Approved Valuer “Approved valuer” under SARFAESI Act means a person registered as a
valuer under section 34AB of the Wealth-tax Act, 1957, and approved by the
board of directors or board of trustees of the secured creditor, as the case may
be.
Unclaimed Deposit Balance in cumulative deposit accounts, which have ceased to be such
deposits in terms of the rules governing such deposits. Excess Pigmy
Collections received after maturity of the relative deposit- ‘are to be treated
as 'Unclaimed Deposits'.
Banker- Customer Relationship between bank and customer in case of goods left by mistake in
Relationship custody of the bank- Trustee & beneficiary.
Partnership firm Partnership firm of more than 10 persons in banking business and more than
20 in trading firm is not a legal partnership and not valid in law. Partnership
Act 1932 provides registration of firm with Registrar of Firms.

All the three partners only (not a minor ) will sign the account opening form
for opening a current account in case of a partnership firm where the firm has
three partners and a minor, aged 17, has been admitted to the firm for benefits
of partnership.

57
Minor in Minor can be admitted to the benefit of partnership firm. At any time, six
Partnership firm months of the minor attaining majority or obtaining the knowledge that he has
been admitted to benefit of partnership which ever is later.
Recurring Deposit Penalty may be set off against payment of equal number of advance
installments.
Date of maturity is postponed by exactly one month from the date of
payment of last installment in case
SCSD Senior Citizen Security Deposit . Age required above 60 years.
No additional interest is payable to Sr. Citizens on the domestic term deposit
of Rs.5.00 Cr and above.

Minors Until person completes 18 years is regarded as minor. However before

Indian Majority Act completion of 18 years if guardian of a person or property is appointed by a
1875 under Section court, the minority extends to the age of 21 years.
3
Old Records Banks to preserve records of Suspicious transaction for a period of minimum
10 years from date of transaction. Record of documents to be kept for
minimum 10 years from date of termination of relationship.
Direct Quotation Sell high, Buy Low. Say 1 USD = Rs. 48.50
Foreign Currency is constant and Home Currency is variable.
Indirect Quotation Buy High, Sell Low . Say Rs.100. = USD 2.06
Home Currency is constant and Foreign Currency is variable.
Forward Contract A forward contract is an agreement between two parties to buy or sell an
agreed amount of a commodity or financial instrument at an agreed price, for
delivery on an agreed future date.
Hedging - Taking action to eliminate or reduce exposure to risk.
Mitra Committee Has suggested that a legal compliance certificate needs to be mandated in all
transactions. In the case of exercise of credit sanctioning powers, it is to be
ensured that all due diligence has been taken.
Bank Mergers Gangadharan Committee.
Bank Guarantee In view of the changed scenario of the Banking Industry where banks extends
long term loans for a period longer than 10 years for various projects, RBI has
decided to allow banks to issue BG for period beyond 10 years. In all other
cases, banks can issue BG up to 10 years only.
Basel Committee Basel is a beautiful place in Switzerland. The Basel Committee usually meets
every three months at the Bank for International Settlements (BIS) in Basel,
where its permanent Secretariat is located. The Bank for International
Settlements (BIS) was established in 1930.
The Basel Committee, popularly known as BCBS (Basel Committee on
Banking Supervision) was established at the end of 1974.

Basel-I Capital Basel-I Capital Accord introduced in India in 1992-93 on recommendations

Accord of Narasimham Committee. All commercial banks (other than RRBs) in India
are required to maintain minimum 9% capital on risk weighted assets as per
RBI guidelines.

58
Basel – II Accord The Basel committee issued a detailed document on capital measurement and
capital standards on 26th June 2004 known as Basel II recommendations
covers Operational Risk and residual risk in addition to credit and market
risk.

Capital to Risk This is the capital ratio, which denotes the financial soundness of the bank. It
Assets Ratio is calculated as the ratio of capital to risk weighted assets.
(CRAR) It is also called as Capital Adequacy Ratio.

CRAR = capital (Tier I and Tier II capital)/total risk weighted assets x 100.
Banks are required to maintain a minimum Capital to Risk-weighted Assets
Ratio (CRAR) of 9% as per RBI guidelines.

Base Rate Deepak Mohanty ( ED of RBI) Chairman of RBI Panel to review BPLR
structure, recommended introduction of base rate system. Base rate will be
new Benchmark Rate replaces BPLR. Banks are free to charge a risk
premium ( spread ) over the base rate. However, they can not lend below the
base rate.
DRI Advances, LD/ODD & Staff Loans are exempted from Base Rate
application.

KYC Guidelines KYC guidelines have been issued by RBI u/s 35-A of B R Act.

Banks to keep a record of cash transactions of Rs.10 lac and above.

Under Know Your Customer guidelines of RBI, for 5 years period the records
are required to be maintained.
External rating For Basel II purposes, the following only four external rating agencies are
agencies which are approved by RBI/SEBI.
approved by RBI ICRA
CRISIL - A Standard & Poor Company.
CARE
FITCH
Advances to Self Classified as Advances to the Weaker Section.
Help Groups (SHG)

DRI Scheme Under the scheme, financial assistance is extended at concessional interest @
4% p.a. to customers belonging to selected low income groups for productive
purpose. Now, RBI have enhanced the limit of the loan per beneficiary under
DRI Scheme from Rs.6500/- to
Rs.15000/- for general purposes and from Rs.5000/- to Rs.20000/- for
housing purpose.
The ceiling on family income of the customer under the scheme is revised to
Rs. 18000/-p.a. in rural areas and Rs.24000/- p.a in semi urban and urban
areas.

59
 The land holding criteria applicable to customers remains either
“landless” or “owning not more than one acre of irrigated land or not more
than 2.5 acres of dry land”. Land holding criteria does not apply to SC/ST
customers.
Bank is required to lend at least 1% of the previous year’s outstanding
advances under DRI scheme.
Settlement of Death While settling the claim amount up to Rs.25,000/- branches need not insist on
Claims production of legal heir ship certificate or any other documents from the
Cir.181/2007/BC claimants. However, branches shall obtain proof of death and ensure that the
identity of the claimants is established to the satisfaction of branch.

Death claims must be settled with in maximum time of 15 days from the date
of receipt of death claim.
For opening the account in the name of ‘Executor’ of will, Probate is
required. Probate is a Certificate issued by Court for settlement of property of
deceased.
Garnishee Order The bank received garnishee order on saving bank account of Mr. A at 11.0
a.m., who deposits Rs. 40000 at 1.0 p.m. i.e. after service of the order. It may
be noted that the garnishee order will not apply to this amount of Rs.40000
received after service of the garnishee order. Garnishee Order is not
applicable on un-used cash credit or overdraft limit because funds available in
the OD limit are not owned by the party.
“Budgetary “Budgetary allocation” means the allocation of funds by the Government
Allocation” made through the budget, wherein all the government’s expenditure is
reflected. Any institution, irrespective of the fact that it is a Government
Department, Semi-Government or Quasi-Government Body, which receives
grants, loans or subsidies from the Government is said to depend on
budgetary allocation.
Payment of interest In respect of a term deposit maturing for payment on a Sunday or a holiday or
on term deposit a non-business working day, the bank should pay interest at the originally
maturing on contracted rate on the deposit amount for the Sunday/holiday/non-business
Sunday/holiday/non working day, intervening between the date of the expiry of the specified term
-business working of the deposit and the date of payment of the proceeds of the deposit on the
day. succeeding working day.
Scheduled Bank Net demand and time liabilities should be above Rs.100.00 crores as per RBI
act 1934. Schedule II.
UCPDC 600 Implemented wef 01.07.2007.Rules framed by ICC (International Chamber of
Commerce) Paris, France.
Total 39 Articles are there in UCPDC 600 against 49 in UCPDC 500.
Reasonable time for acceptance or refusal of documents by a definite period
of 5 banking days only.
Under UCPDC 600, if quantity is not specified to be exceeded or reduced, it
should not exceed the tolerance level of 5.00%.
N I Act Third party a/c payee cheques shall not be collected on behalf of Coop.
Societies. Protection under section 131 of N I Act is available to bankers
only.

60
Second NRW Can be availed only after 5 years from availing first NRW.
Bearer Demand Can not be issued as per section 31 of RBI Act.
Draft
Safe Custody In single name- only one nominee allowed.
In Joint Name- Nomination facility not available. Use EoS facility.
Relationship between Banker and Customer in case of safe custody is Bailee-
Bailer.
Lockers Single Name- One Nominee
Joint names EOS- Nomination not available.
Joint names joint operations- one or more nominations.
Safe Deposit Lockers are not available to Blind persons, Minors and Trust.
Deposit account If by mistake two nominees obtained for single deposit account, pay to both if
depositor dies as per Supreme Court Judgment.

Warehouse receipt Not Negotiable Instrument.

Demand Draft If original and duplicate DD presented in clearing on same day- Duplicate DD
can be paid and Origional to be returned with memo-“ Duplicate since issued
and paid.”
Depreciation Rates Furniture- 10%
Equipments and Electrical Fittings- 15%
Motor Vehicles- Bicycles - 20%
Electronic Equipment & Security Gadgets -40%
Depreciation on Land- Nil
Method of charging Written Down Value (WDV)-Fixed percentage every year
Depreciation Amount of depreciation decreases every year in WDV method.
Straight Line Method (SLM)- Fixed amount every year.
Amount of depreciation is constant every year in SLM.
Pre mature The Finance Ministry has relaxed encashment norms for joint holder type
withdrawal for Joint term deposits under the Tax Saving Bank Term Deposit Scheme. In the event
Tax Saving Term of the death of the first holder, CBDT has allowed the joint holder to encash
Deposit. the term deposit before its maturity. Hitherto, the scheme did not permit any
encashment of term deposits before the expiry of five years.
Bankers Cheque Is not Negotiable Instrument.
(PO)
Photo of Depositor Banks should obtain photographs in deposit accounts has been recommended
by : Ghosh Committee.

Minors Joint Two minors approach a bank to open a joint account. The account cannot be
account opened.
Banker’s right of set Can be exercised when debt must be due and in same capacity.
off Limitation only bars the legal remedy. However, it does not extinguish the
right of set off.

Initial deposit for Initial deposit for opening SB a/c should always be in cash to get the
opening SB a/c protection u/s 131 of NI Act to the collecting banker.

61
If Power of Cheques drawn by them prior to death must be paid.
Attorney holder or
Director of the
company reported
to be deceased
Cheques made Can be paid in cash only to the drawer.
payable like pay to
cash or order
Crossed cheques Cash should not be paid over the counter for crossed cheques except to the
bankers.
Lien Right to retain goods and securities in the normal course of business.

Negative Lien Is an undertaking given by the borrower not to sell, mortgage or otherwise
encumber any particular property or assets with out prior consent of the bank.

Pre-mature Deposit should be continued to be held for a longer period than the remaining
Renewal of Term period of the original contract after allowing pre mature renewal of deposit.
Deposit
Ship – Security Ship which is registered in India with Registrar of Shipping can be Mortgaged
creation under Merchant Shipping Act.

Advances against No advance against security of partly paid shares.

Shares Advances against primary security of shares should not be granted to
Proprietary Concerns, Partnership Firms and HUF.
Registering of our In case of Pledge of shares & Govt. Securities and Pledge of Goods, our
charges with ROC charges need not be required to be registered with ROC.
in case of advances
to the companies.
Death Claims Maximum 15 days time limit given for the banks to settle the claims in
respect of a deceased depositor and release payments to the
survivors/nominees.
Red Clause LC Which provides for advance payment to beneficiary prior to shipment of
goods for purchasing raw material, processing and packing purpose.
NOSTRO A/C A/c maintained by a domestic bank with foreign bank in foreign currency.
Our a/c with you.

VOSTRO A/C A/c maintained foreign bank in inland bank in local currency. You’re a/c with
us.

Revaluation of Increase in external value of currency.

currency
Devaluation of Reduction in external value of currency.
currency
Loan on LIC Policy No loans to be granted against Money Back Policy, an LIC policy u/s 6 of
Married Women's Property Act. Preferred policy for granting loans is
Endowment Policy.

62
Minor Widow Girl The natural guardian of a minor widow girl is father and after father's death,
her mother.
QMD Overdraft facility up to 80% of the deposit.
Assignment When Debt is in the form of Actionable claim, the charge applicable is
Assignment.

Certificate of Is required only in case of Public Ltd Company. But as per new Companies
commencement of Bill 2012, required for all the companies.
business
Muslim depositors No interest free deposit can be accepted other than by way of current account.
request not to pay Try to convince the Muslim depositor to invest the amount in the current
interest on their account where no interest is payable.
deposits as
Mohammedan Law
prohibits receipt of
interest.

General Ledger Are to be preserved permanently. It is permanent record.

Book, Indemnity
Bonds and Claim
files.
Death of Trustee Branch shall act according to the provisions made in this regard in the trust
deed. Cheque signed by the trustee can be paid.
If there is dispute Pay to nominee only and obtain valid discharge from nominee. Legal heirs
between Nominee may be advised to approach court of Law to solve the dispute.
and legal heirs
regarding payment
of deposit after
death of depositor...
Basel III Guidelines Basel III measures aim to: improve the banking sector's ability to absorb
shocks arising from financial and economic stress, whatever the source
improve risk management and governance strengthen banks' transparency and
disclosures.

The final guidelines on Basel III capital regulations would become effective
from April 1, 2013 in a phased manner. Implementation of the capital
adequacy guidelines on the Basel III capital regulations will began on 01-
April-2013.

The Basel III capital ratios will be fully implemented as on March 31, 2018.
Capital Conservation Buffer: Another key feature of Basel III is that now
banks will be required to hold a capital conservation buffer of 2.5%.

63
Take out Finance Under this arrangement, the bank financing the infrastructure projects will
have an arrangement with any financial institution for transferring to the latter
the outstanding in respect of such financing in their books on a pre
determined basis.

RAM software for A product of CRISIL, Credit Rating Information Services of India Ltd.
credit rating by our
Bank is
Student going Is also treated as NRI .
abroad for
education purpose.
Chelliah Committee Chelliah Committee of 1992 deals with the overhauling of our Tax System.

Revalidation of DD Can be done only once. Request of drawee can be considered

If Rs.10 lac HL is Housing Loan Sanctioned-Rs.10.00 lacs
sanctioned, how Say 50% Risk Weightage - Rs.5.00 lacs
much capital we Capital Adequacy at 9%
have to provide? 5,00,000 x 9 = 45,000/- capital is to be maintained.
100
(This is only example)
DRT / SARFAESI If a borrower wants to file an appeal with DRAT against the decision of DRT
under SARFAESI Act, 50% amount it will be required to deposit.

If a borrower wants to file an appeal with DRAT against the decision of DRT
under DRT Act, 75% amount it will be required to deposit.
Kite Flying Kite Flying is a bill is drawn without consideration by seller of goods on
buyer of goods.
Minimum Interest Minimum Interest: Interest shall be collected for a minimum period of 7 days
if the loan/OD is closed within 7 days subject to a minimum of Rs.10.00.
However, this rule is not applicable in the case of following transactions:
a) LD/ODD. d) BG/DGP/LC paid accounts.
b) Drawing against clearing effects. e) Export Finance.
c) Debit balance in SB and Current Accounts.

Open Interest Open Interest - In derivative trading open interest or OI Is the total number of
outstanding futures or options contracts in a market at a given point of time.
Immediate Credit of Up to Rs.15000/-
outstation cheques.
HUF The liability of a minor co-parcener in an HUF, for the acts of a Karta is to
the extent of his share in the family property.
Missing Person RBI has issued directives on 12.05.2008. As per section 107/108 of Indian
Evidence Act, if any person is missing continuously for 7 years, he can be
declared as Dead and claim can be settled accordingly. First FIR must be
lodged and if person is not traceable with in 7 yrs, relatives of the missing
person can approach Court and obtain order to that effect for settlement of
their claim.

64
 In respect of borrower, bankers can lodge FIR not as missing but Absconding
because after words borrower can not plead as he has not received notice or
he has not been informed.
Introduction Introducer is liable only if account holder is impersonate.
Clayton’s Rule Right of Appropriation. Appropriation of payments
SARFAESI Act 15 days time period under SARFAESI Act for replying to borrower if he
raises objection for possession of Assets.
FX Transactions Basic buying rate is TT buying rate.
Negative lien Loans granted on the basis of Negative Lien are treated as
a) Secured b) Unsecured c) Partly Secured d) None.
Ans - is b)
De- Duplication De- Duplication-Clubbing of many customer IDs of same customer into one
single ID.
Documentation Not to be collected in respect of Agriculture Advances.
Charges
Counterfeit notes Counterfeit notes should be preserved for a period of 3 years from the date of
receipt from the police authorities.

Counterfeit notes may thereafter be sent to concerned issue office of RBI with
full details.

Counterfeit notes which are subject matter of litigation in the court of law,
should be preserved with the branch concerned for three years after
conclusion of court case.

Investment Investment fluctuation reserve would be classified by a banks as Tier I capital

Fluctuation Reserve fund for the purpose of capital adequacy ratio.

Allonge’ refers to `allonge’ refers to A plain sheet appended to a negotiable instrument for the
purpose of making endorsement thereon.

Issue DDs, MTs Banks to issue DDs, MTs and TTs for Rs.50000 and above only by debit to
and TTs customers' account and not by accepting cash.

Documentation Loan agreement is executed but it is not stamped properly-

It can be stamped later on after payment of penalty as per provision of

respective State Stamp Acts and can be treated as a valid document, after
obtaining permission of the collector of stamps.
Articles of Borrowing power of Board of Directors is described in Articles of
Association. Association.

Usufructuary Mortgagee enjoys the income of the mortgaged property in case of

mortgage Usufructuary mortgage.

65
Off Balance Sheet Aggregate domestic off balance sheet exposures including forward contacts
Exposures and derivatives of the bank shall not exceed 12 times the capital funds of the
bank.
Vetting of In case of fresh credit limits of Rs.1.00 crore and above, branches shall
Documents forward copies of the documents executed by the borrowers/guarantors to
ROs for vetting.
Minority Jain Community is now classified as Minority Community.
Community
CDR system As per the CDR system introduced by RBI, problem borrowal accounts under
multiple banking/syndication/consortium arrangement with outstanding fund
based and non fund based exposure of Rs.10 crore and above can be
considered for restructuring subject to fulfillment of the norms laid down.
Sweat Equity Sweat Equity is a new equity instrument which was floated in the Companies
(Amendment) ordinance 1998 (u/s 79A of the companies act 1956. It refers to
the shares issued at discount to the employees and directors and shares issued
for consideration other that cash for providing intellectual property rights,
know how , value additions to the company or similar contributions.
Banking Customer can file his complaint before the Banking Ombudsman if the reply
Ombudsman is not received from the bank within a period of one month. The complaint
should, however, be made before expiry of period of one year after the cause
of action has arisen.

If the award is acceptable to the complainant, he is required to send to the

bank concerned, a letter of acceptance of the award in full and final settlement
of his complaint, within a period of 15 days from the date of receipt of the
copy of the award by him.

The appellate authority is the Deputy Governor in the Reserve Bank of India.

Either party aggrieved by the award may, within 45 days of the date of receipt
of the award, appeal against the award before the appellate authority. The
appellate authority may, if he is satisfied that the applicant had sufficient
cause for not making an application for appeal within time, also allow a
further period not exceeding 30 days.
CRISIL CRISIL's leadership position continues with over a 70% share of the Indian
ratings market.

CRISIL's majority shareholder is Standard & Poor's, the world's foremost

provider of independent credit ratings, indices, risk evaluation, investment
research and data.
ICRA ICRA Limited (formerly Investment Information and Credit Rating Agency
of India Limited) was set up in 1991 by leading financial/investment
institutions, commercial banks and financial services companies as an
independent and professional Investment Information and Credit Rating
Agency. The international Credit Rating Agency Moody’s Investors Service
is ICRA’s largest shareholder. ICRA and its subsidiaries together form the

66
 ICRA Group of Companies (Group ICRA). ICRA is a Public Limited
Company, with its shares listed on the Bombay Stock Exchange and the
National Stock Exchange.

FITCH Fitch Ratings is a global rating agency committed to providing the world's
credit markets with independent and prospective credit opinions, research,
and data.

Fitch Ratings is headquartered in New York and London and is part of the
Fitch Group.

CARE Credit Analysis & Research Ltd. (CARE Ratings) is a full service rating
company that offers a wide range of rating and grading services across
sectors. CARE has an unparallel depth of expertise. CARE Ratings
methodologies are in line with the best international practices.
CARE was promoted by major Banks/FIs (financial institutions) in India. The
three largest shareholders of CARE are IDBI Bank, Canara Bank and State
Bank of India.
CIBIL The Credit Information Companies (Regulation) Act, 2005, and various Rules
and Regulations issued by Reserve Bank of India has empowered CIBIL or
(Credit Information Bureau (India) Ltd to collect the data from various types
of credit grantors (i.e. lenders). and then share the same within the group.
The legislation has enabled banks to submit data to CIBIL without obtaining
borrower consent. This has enabled CIBIL to tracks repayment history of
bank customers loans, credit cards and further banking finances. The access
to this database is usually available only to officials of banks.

At present CIBIL is maintaining the database of Suit-Filed accounts of Rs.1

Crore and above and Suit-Filed accounts (willful defaulters) of Rs. 25 Lacs
and above. The establishment of CIBIL is an effort made by the Government
of India and the Reserve Bank of India to improve the functionality and
stability of the Indian financial system by containing NPAs while improving
credit grantors’ portfolio quality. CIBIL provides a vital service, which allows
its Members to make informed, objective and faster credit decisions.

State Bank of India (SBI), Housing Development Finance Corporation

Limited (HDFC), Dun & Bradstreet Information Services India Private
Limited (D&B) and TransUnion International Inc. (TransUnion) signed
Shareholders’ Agreement on January 30, 2001, with a view to establish the
Credit Information Bureau (India) Limited (CIBIL). D&B and TransUnion,
are also the technology partners and are well-known in the credit information
businesses worldwide.

Consumer Establishment of consumer disputes redressal forum at district level, state

Protection Act level and central levels known as “District Forum”, “State Commission” and
“National Commission”.

67
 Court. District forum, State Commission or National Commission shall not
entertain any appeal filed after expiry of 2 years from the date on which the
cause of action has arisen. However, the forums have the power to condone
the delay in preferring appeals within such time limit if sufficient cause is
shown for not filing the appeal within the prescribed time limit. What is
“sufficient cause” will depend on the facts and circumstances of every
particular case.
There is no fee for filing a complaint before the District Forum, the State
Commission or the National Commission.
Senior Citizens The cap on term deposits of Senior Citizens for getting the benefit of
additional interest of 0.50% will stand revised upward from less than Rs.1
crore’ to ‘less than Rs.5 crore’.
Additional interest of 0.50% is not payable to Senior Citizens on domestic
Term Deposits of Rs.5 crore & above & minimum period of one year.

Minority GOI/RBI has set up a target of 15% State wise Minority Community lending
Community under over all Priority Sector Lending. Maximum Loan limit is not exceeding
Rs.1.00 lacs per borrower & Rate of Interest shall be minus 0.50% of
applicable rate subject to the minimum of Base Rate.
Education Loan Interest Subsidy Scheme would be available to loans disbursed on or after
01.04.2009 (Amount sanctioned earlier but released after 01.04.2009 also to
be covered). Income criteria specified under the scheme for EWS is Rs.4.50
lacs p. a. decided by Ministry of HRD.
Canara Bank has been nominated as Nodal Bank for implementation by
Ministry of HRD, GoI.
Debit Balance in Interest at Base Rate plus 6.75% from the date of allowing debit balance up to
CA/SB the stipulated period of 30 days for SB and 15 days for current accounts and
overdue interest shall be added thereafter.
Banking Frauds A) Rs.3.00 Crore & above but below 15.00 Crore: Where staff involvement is
200-2012-BC prima facie evident: Report to CBI (Anti Corruption Branch)

Where staff involvement is prima facie not evident: Report to CBI Economic
Offences Wing)

B) Rs.15.00 Crore and above:

Report to Banking Securities and Fraud Cell of the respective centre, which is the
specialized cell of the Economic Offences Wing of the CBI, for major bank fraud
cases.

C) Less than Rs.3.00 Crore:

Report to Local police / State police.

68
 Fraud cases to be referred to local police: Cases with amount involved less than 3.00
Crore.
1. Cases of financial frauds with value of 1.00 lakh and above which involve
outsiders (private parties) and bank staff, should be reported by the Regional Head of
the Bank to a senior officer of the State CID/Economic Offences Wing of the
concerned state.
2. For cases of financial fraud below the value of 1.00 lakh but above 10,000, the
cases should be reported to the local police by the Bank branch concerned.
3. All fraud cases of value below 10,000, involving bank staff should be referred to
the Regional Head of the Bank, who would scrutinize each case and then direct the
Bank branch concerned on whether it should be reported to the local police for
further action.

Penal Interest For credit limits not exceeding Rs.5000/- in case of general advances and not
exceeding Rs.25,000/- in case of priority sector advances penal interest for
non submission/delayed submission of stock statement, non
submission/delayed submission of renewal proposal and non
submission/delayed submission of CCR Forms shall not be charged.
White-Label ATM Most automated teller machines (ATMs), or machines that dispense cash, are
owned by banks. But ones that are owned and operated by non-banking
companies are called while-label ATMs (WLAs). They function just the same
way as any other bank-run ATM.
Cross Selling Cross selling means offering more than one product to each customer. Cross
selling is just not product offering. It is building of relationship.

Cross selling can be for liability as well as asset products. Cross selling
reduces operational cost besides other benefits.

Restructured As per recent RBI Guidelines banks should henceforth disclose in their
Accounts published Annual Balance Sheets, under "Notes on Accounts", information
relating to number and amount of advances restructured, and the amount of
diminution in the fair value of the restructured advances.
Exposure to capital The aggregate exposure of the bank to the capital markets in all forms (both
market fund based and non fund based) should not exceed 40 per cent of its net worth
as on March 31 of the previous year.
Hot Money Money that is moved by its owner quickly from one form of investment to
another, as to take advantage of changing international exchange rates or gain
high short-term returns on investments.
Recovery Pension cannot be attached in execution of decree. If Judgment Debtor has
gross salary of Rs.10,000/-, maximum amount of attachment is Rs.3,000/-.
During auction of attached property, Bank can bid with the permission of the
court.

69
 Present Position - -

Bank Rate - Rate at which RBI purchases or rediscounts bills 6.75%

of exchange of commercial banks.

SLR-Statutory Liquidity Ratio. 20.50%

CRR- is the percentage of deposit that banks must keep as 4.00%
cash with RBI. By reducing CRR, RBI infuses liquidity in the Rate of interest payable by RBI on CRR
Banking system. balances – Nil.

Repo Rate- this is the rate at which RBI adds fund to 6.25%
money market.

Reverse Repo Rate- this is the rate at which the RBI 5.75%
absorbs fund from money market.

Base Rate of our bank (w.e.f. 11.07.2016) Base Rate 9.60%

SB Interest Rate- Wef 01.04.2010, SB interest payable on 4.00% wef 03.05.2011.

daily balances on half yearly basis.
i-e Sep & March. SB Interest Rate deregulated by RBI from
25.10.2011.

Marginal Standing Facility (MSF) -6.75% Banks permitted to avail themselves of

funds from the Reserve Bank on overnight
basis under Marginal Standing Facility
(MSF), against their excess SLR holdings.

MCLR - One year MCLR 8.75% wef 10.01.2017

Overnight MCLR- 8.30% One month MCLR- 8.35%
Three month MCLR 8.40% Six month MCLR- 8.60%
BPLR 13.85%

Priority Sector Advances -

Categories under priority sector-

(i) Agriculture
(ii) Micro, Small and Medium Enterprises
(iii) Export Credit
(iv) Education
(v) Housing
(vi) Social Infrastructure
(vii) Renewable Energy
(viii) Others

70
Agriculture sector is now classified into following 3 sub-sectors (which was hitherto classified
as Direct and Indirect Agriculture)
i) Farm Credit
ii) Agriculture Infrastructure and
iii) Ancillary activities.

Farmers with landholding of up to 1 hectare are considered as Marginal Farmers. Farmers

with a landholding of more than 1 hectare and upto 2 hectares are considered as Small
Farmers.

Small and Marginal Farmers: A target of 8 percent of ANBC or Credit equivalent amount of
Off-Balance Sheet Exposure, whichever is higher, has been prescribed for Small and Marginal
Farmers within agriculture

Construction of storage facilities/Cold Storage Units: Loans for construction of storage

facilities (warehouses, market yards, godowns and silos) including Cold Storage Units/Cold
Storage chains designed to store agriculture produce/products, irrespective of their location up
to 100 Crores will form part of Agriculture.

Medium Enterprises, Social Infrastructure and Renewable Energy will form part of Priority
sector.

Sr. No. Category Targets

1 Total Priority
Sector
2 Agriculture
40 percent of Adjusted Net Bank Credit [(ANBC) defined in
sub paragraph (iii)] or Credit Equivalent Amount of Off-
Balance Sheet Exposure, whichever is higher.
18 percent of ANBC or Credit Equivalent Amount of Off-
Balance Sheet Exposure, whichever is higher. Within the 18
percent target for agriculture, a target of 8 percent of ANBC
or Credit Equivalent Amount of Off- Balance Sheet Exposure,
whichever is higher is prescribed for Small and Marginal
Farmers, to be achieved in a phased manner i.e., 7 per cent by
March 2016 and 8 per cent by March 2017.

3 Micro 7.5 percent of ANBC or Credit Equivalent Amount of Off-

Enterprises
4 Advances to
Weaker Sections
5 DRI Advances
Balance Sheet Exposure, whichever is higher to be achieved
in a phased manner i.e. 7 per cent by March 2016 and 7.5 per
cent by March 2017.
10 percent of ANBC or Credit Equivalent Amount of Off-
Balance Sheet Exposure, whichever is higher.
1.0% of previous year‘s total credit

6 Advances to women 5.0% of Adjusted Net Bank Credit

beneficiaries

71
Priority Sector Advances-

-The Export Credit extended as per the details below would be classified as priority sector.
Incremental export credit over Corresponding date of the preceding year, up to 2 percent of
ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher,
effective from April 1, 2015 subject to a sanctioned limit of 25 crore per borrower to units
having turnover of up to 100 crore.

-Loans to individuals for educational purposes including vocational courses up to 10 lakh

irrespective of the sanctioned amount will be considered as eligible for priority sector.

-Loans to individuals up to 28 lakh in metropolitan centres (with population of ten lakh and
above) and loans up to 20 lakh in other centres for purchase/construction of a dwelling unit per
family provided the overall cost of the dwelling unit in the metropolitan centre and at other
centres should not exceed 35 lakh and 25 lakh respectively. The housing loans to banks‟ own
employees will be excluded. As housing loans which are backed by long term bonds are
exempted from ANBC, banks should either include such housing loans to individuals up to 28
lakh in metropolitan centres and 20 lakh in other centres under priority sector or take benefit of
exemption from ANBC, but not both.

Loans for repairs to damaged dwelling units of families up to 5 lakh in metropolitan centres
and up to 2 lakh in other centres will be considered as eligible for priority sector.

Bank loans to any governmental agency for construction of dwelling units or for slum clearance
and rehabilitation of slum dwellers subject to a ceiling of 10 lakh per dwelling unit will be
considered as eligible for priority sector.

The loans sanctioned by banks for housing projects exclusively for the purpose of construction of
houses for economically weaker sections and low income groups, the total cost of which does not
exceed 10 lakh per dwelling unit. For the purpose of identifying the economically weaker
sections and low income groups, the family income limit of 2 lakh per annum, irrespective of
the location, is prescribed.

Bank loans to Housing Finance Companies (HFCs), approved by NHB for their refinance, for
on-lending for the purpose of purchase/construction/reconstruction of individual dwelling units
or for slum clearance and rehabilitation of slum dwellers, subject to an aggregate loan limit of
10 lakh per borrower. The eligibility under priority sector loans to HFCs is restricted to five
percent of the individual bank‟s total priority sector lending, on an ongoing basis.

Outstanding deposits with NHB on account of priority sector shortfall will be considered as
eligible for priority sector.

Social infrastructure-Bank loans up to a limit of 5 crore per borrower for building social
infrastructure activities namely schools, health care facilities, drinking water facilities and
sanitation facilities in Tier II to Tier VI centres will be considered as eligible for priority sector.

72
Renewable Energy -Bank loans up to a limit of 15 crore to borrowers for purposes like solar
based power generators, biomass based power generators, wind mills, micro-hydel plants and for
non-conventional energy based public utilities viz. street lighting systems, and remote village
electrification. For individual households, the loan limit will be 10 lakh per borrower.

Others -Overdrafts extended by banks up to 5,000/- under Pradhan Mantri Jan-DhanYojana

(PMJDY) accounts provided the borrowers household annual income does not exceed 100,000/-
for rural areas and 1,60,000/- for non-rural areas will be considered as eligible for priority sector.

WEAKER SECTIONS –

Priority sector loans to the following borrowers will be considered under Weaker Sections
category:

1. Small and Marginal Farmers

2. Artisans, village and cottage industries where individual credit limits do not Exceed Rs.
1 lakh
3. Beneficiaries under Government Sponsored Schemes such as National Rural Livelihoods
Mission (NRLM), National Urban Livelihood Mission (NULM) and Self Employment
Scheme for Rehabilitation of Manual Scavengers (SRMS)
4. Scheduled Castes and Scheduled Tribes
5. Beneficiaries of Differential Rate of Interest (DRI) scheme
6. Self Help Groups
7. Distressed farmers indebted to non-institutional lenders
8. Distressed persons other than farmers, with loan amount not exceeding 1 lakh per borrower
to prepay their debt to non-institutional lenders
9. Individual women beneficiaries up to 1 lakh per borrower
10. Persons with disabilities
11. Overdrafts upto 5,000/- under Pradhan Mantri Jan-DhanYojana (PMJDY) accounts,
provided the borrowers‟ household annual income does not exceed 100,000/- for rural
areas and 1,60,000/- for non-rural areas
12. Minority communities as may be notified by Government of India from time to time

Time Limit for disposal of Loan Applications-

All loan applications up to a credit limit of 25,000/- should be disposed of within a fortnight and
those for over 25,000, within 8 to 9 weeks.

All loan applications for Micro and Small Enterprises up to a credit limit of 25,000/- should be
disposed of within 2 weeks, above 25,000/- to 5.00 lakh within 4 weeks and above 5 lakh within
8 to 9 weeks, provided the loan applications are complete in all respects and are accompanied by
a 'check list'.

73
In the case of proposals from SC/ST, rejection should be at a level higher than that of Branch
Manager.

No education loan is to be rejected by the Branch Managers without concurrence of next higher
authority.

No penal interest should be charged for loans under priority sector upto 25,000/-.

No loan related and adhoc service charges / inspection charges shall be charged on priority sector
loans up to 25,000/-.

No processing charges to be levied for Micro and Small Enterprises for loans upto 5.00 lakh.

Loans extended to Micro, Small and Medium Enterprises(MSME) as per the definition under
manufacturing sector irrespective of the loan amount shall be treated as priority sector.

Loans upto 5.00 crore per borrower / unit to Micro and Small Enterprises and 10.00 crores to
Medium Enterprises engaged in providing or rendering of services and defined in terms of
investment in equipment under MSMED Act 2006 are eligible to be classified under Priority
Sector.

Short fall if any in meeting the target under PSA or Agriculture Advances to be deposited in
Rural Infrastructure Development Fund RIDF (NABARD) by the banks.

Balance sheet Analysis- (With solved problems).

Standard format of the balance sheet to be remembered for solving the various problems
related to Balance Sheet Analysis.

Sources of Fund Liabilities Assets Uses of Fund

Capital Fixed Assets Long term uses of
Long term sources of fund
fund Reserves

Term Liability (B)

Investment or NCA
Current Assets ( D) Short term uses of
Short term sources of Current Liability (C) funds
fund
Total Liabilities Total Assets

Current Assets can be created out of short term sources and partly out of long term sources of
funds.

TOTAL ASSETS = TOTAL LIABILITIES ( always use while solving problems )

74
Current Ratio = Current Assets Please refer to D in the above balance sheet
Current Liability C

Gross Working Capital = Current Assets ( D)

Net Working Capital = Current Assets - Current Liability = D - C= NWC

Capital + Reserves = Own Funds or Net worth

Capital + Reserves less intangibles = Tangible Net worth =A

Debt Equity Ratio = Long Term Debts = B

Tangible Net Worth A

Total Outside liabilities = Term Liability (B) + Current Liability (C)

TOL/TNW = Total Outside liabilities = Term Liability (B) + Current Liability (C)
Tangible Net Worth Tangible Net Worth (A)

DSCR Denotes repaying capacity of the borrower can be calculated

Debt Equity Ratio
as follows.
Net Profit + Depreciation + Interest on term loan
Term loan installments + Interest on term loan
How Term Loan is to be serviced out of projected cash flow
of the company.
Denotes Promoters contribution or Margin in the project
Long Term Debts
DER = Tangible Net Worth

Break Even Point Where there is no profit and no loss. Beyond this point unit
starts earning profits.

Cash Loss Cash Loss is loss before depreciation

Net Loss Net Loss is loss after depreciation

Cash generation is Net profit plus depreciation

Intangible Assets Goodwill, preliminary expenses, earlier period losses.

Working Capital Gap Current Assets less Current liabilities excluding bank
borrowings.
Pre paid expenses-- -- Classified as Current Asset (CA)

75
Outstanding Charges-- -- Current Liability (CL)

Pre-operative or Classified as Intangible assets or Factitious Assets

Preliminary expenses
Contingent liabilities are
shown in the balance sheet
as
Accumulated losses are
appearing in the balance
sheet of the company as
If Bonus shares are issued
by the company, which of
the following ratio will be
changed.
Foot note to the balance sheet. Contingent liabilities are not
part of balance sheet. Acceptances, endorsements and
guarantees are shown as contingent liabilities.
Assets Side of the Balance Sheet of the company.
Current Ratio. 2) Solvency Ratio. 3) DSCR
4) Debt Equity Ratio 5) None
Answer- 5) None.
Bonus shares are issued out of accumulated Reserves and not
from Revaluation Reserves.

Current Ratio implies : Liquidity position. Capacity of the firm to repay or liquidate
the current liabilities.

Margin requirement on 40% For Medium Enterprises. However, margin at 30% in

second hand machinery. case of Micro & Small Enterprises.

C R is 3:1 & CA is 30, that Current ratio of a unit is 3:1 and quick ratio is 1:1. The level
means CL is 10. As Quick of current assets is Rs.30 lac. What is the amount of quick
Ratio is 1:1, Quick Assets assets? Current Liabilities are common here.
are also 10 lacs only. Answer is Rs.10.00 Lacs. ( it means stock of Rs.20 lacs)

Balance sheet analysis If DER is 2:1, CL are 40 and Total Assets are 100, what are
the Term Liabilities?
1) 80 2) 60 3) 40 4) 20 5) None Ans- 3)

Calculation of TNW
(Take only paid up capital)
NWC = CA-CL
Authorised capital is Rs.10 lac, issued capital is Rs.8.00 lacs
and Paid up capital Rs.6 lac. The loss of previous year is Rs.1
lac. Loss in current year is Rs.2 lac. The tangible networth is :
= 6 - (1+2 )= Rs.3 lacs .
Suppose Current Ratio is 4:1 & Current Assets are 40000,
what is NWC?
As CR is 4:1 and CA is 40000, CL can be 10000
NWC = CA-CL i-e 40000( - ) 10000 = 30,000.

Current Ratio What should be the current ratio if NWC is Nil

Current ratio will be 1:1 i-e Current assets equals to Current
Liabilities. Therefore CA less CL = 0

Net working capital is CA-CL=80000 & CA/CL=3 i-e CA=3 CL

Rs.80000. Current ratio is 3CL- CL = 80000 i-e 2CL = 80000 & CL = 40000

76
3:1. The current assets are
?
If the net worth of the
business is Rs.500, fixed
assets are Rs. 500, current
assets Rs.300, investments
Rs.300, current liabilities
Rs. Nil, what is the amount
of claim to outsiders?
Cash profit is equal to
Break Even Point
Example of BEP
Equity Share Capital
Negative NWC
Quasi Capital
Investment in partly paid
IRR
Goodwill
Live stock
Gold is treated as
Present value
Yield to Maturity (YTM)
When CA=3CL, CA= 3 x 40000 = 1,20,000
Total Assets= FA 500+ CA 300 + Investment 300 =1100
Total Liabilities=500 + CL nil + amount of claim to outsiders
= 1100
Therefore , answer is 600. Please broadly remember.
Assets = FA + CA + NCA (Investment) + Accumulated
Lossess if any.
Liability = Capital + Reserves + TL + CL & Provisions
Net profit before Depreciation.
Total Fixed Cost
Unit sale price – Unit variable cost .
A manufacturer sells his product at Rs.30 each. Fixed cost is
Rs. 5000 and the variable cost is Rs.10 each. Calculate the
Break Even Point.
5000 = 5000 = 250
30-10 20
Is permanent source of finance.
Means current liabilities are more than current assets.
Funds infused by Directors/Share holders/Relatives of long
term nature can be considered as part of Net Worth if the
same is not withdrawable during the tenure of loan.
Shares is to be considered as Contingent Liability.
Internal Rate of Return is that discount rate at which project
Net Present Value (NPV) is zero.
Is intangible asset as per Indian Accounting Standards.
Is fixed asset for the company.
Investment whereas Silver is treated as other assets.
Future amount Multiplied by Discount Factor.
is that discount rate at which all future cash flows equal to
present market value.
77
Overvaluing the inventory Window dressing of current ratio is possible by this mode.

Projected Turn Over

Method for Assessment of Working capital requirement of MSE units up to Rs.5.00
Working Capital crores = 20% of projected turnover.
Please refer 336/2014/BC.

Holistic Method It is a Simplified method in case of a borrowers seeking fund

based working capital limits of less than Rs.25 lakh
Working capital requirement = 125% of value of security.

Regulatory Exposure 15% of Bank’s Capital for single borrower and 40% for group
Ceiling borrowers.

Long Term uses = Fixed The balance sheet of a firm has shown total assets of Rs.40
Assets.FA+CA=40&FA=22, lacs. The long term uses are Rs.22 lacs and the current ratio is
i-e CA=18 & as CR is 1.50, 1.5:1. What is the amount of current liabilities? Answer is
CL can be worked out = 12 Rs.12.00 lacs.

Dividend are usually paid on Paid up capital of the company.

Solvency Certificate Should be issued only to the extent of Tangible Net Worth of
Individual or Organization.

Please try to solve this Mr. A commenced his business on 1st April, 2009 with Capital
problem by using balance of Rs.1,00,000. He did good business during the year and
sheet format ( by totaling earned handsome profit. At the end of 31st March, 2010, his
assets & liability side). financial position was: Fixed Assets Rs.1, 20,000 and bank
However, answer is given balance of Rs.33000 and Creditors Rs. 17000. What was his
for cross checking. net profit for the year 09-10?
Net Profit for the year 2009-10 was Rs.36,000/-

A new company cannot issue shares----- at discount.

Quick Ratio = CA-Stock A firm has quick ratio of 1.5:1 with current liabilities at
CL Rs.200.00. It’s current assets being Rs.350, what will be the
350–Stock =1.50, amount of stocks/inventories if there are no prepaid expenses
200 or loans or advances in the current assets.
Therefore Stock = 50 (Answer is 50)

What does a high current More of stock.Quick Ratio = C A-Stock & C R = CA

ratio with low quick ratio CL CL
indicate? Disproportionately high investment in stocks.

Debt equity ratio is 2:1 and Total Assets =20 = FA 8 + CA, therefore CA = 12
owned funds is Rs.4 lacs.

78
Amount of total assets is Total liabilities =20 as Assets equal to Liabilities as above.
Rs.20 lacs. What is the Own funds are 4 and debt is double the amount of own funds .
current ratio if the fixed
assets are of Rs.8 lacs? Total liabilities =20 = 4 + 8 + CL , therefore CL= 8
Current Ratio = CA/CL= 12/8 = 1.50:1.
Depreciation A fixed portion of fixed assets is written off every year by
way of Depreciation.
Maximum permissible The Tandon Working Group introduced the concept.
Bank Finance (MPBF)
Current Assets High Current Assets couples with low quick ratio is an
indicator of High Inventory. Very high current ratio also
indicates position of more long term funds than required.

Book Debts Realization of Book Debts will not affect current ratio of the
company. Book Debts are only converted in to cash & cash is
also classified as current asset.
Bonus Shares If bonus shares issued by the company, its TNW & DER will
not change.

Important Acts and Sections related to Banking-.

Hypothecation is Section 2 of SARFAESI Act.
defined in Possession with the borrower and ownership with bank. Hypothecation
can be converted in to pledge.

Mortgage Defined in Section 58 of Transfer of Property Act.

Pledge Defined in Section 172 of Contract Act.

Bailment of goods is Pledge. Possession as well as ownership with the

Bank.

Lien Defined in Section 171 of Contract Act

Bailment Defined in Section 148 of Contract Act
Indemnity Defined in Section 124 of Contract Act
Guarantee Defined in Section 126 of Contract Act
Negotiable Section 26 regarding minors
Instrument Act- Section 85 protection to paying bankers
1881 Section 131 protection to collecting bankers
Section 138 bouncing of cheques
Section 25 declaration of holidays under NI Act by State Govt.

Consumer Quasi –Judicial Authority to provide speedy and simple redressal to

Protection Act 1986 consumer dispute.

79
Time barred debt As per section 25 (3) of Indian Contract Act after obtaining ASD-19
can be revived along with ASD-1(DPN).

Under stamped Can not be ratified as per Indian Stamp Act 1899. They are invalid if
DPN, AOD and they are under stamped.
Usance Bill of
Exchange

Cash Reserve Ratio Maintained with RBI as per Section 42 of RBI Act 1934.
(CRR) Interest payable on CRR balances- Nil.

Statutory Liquidity Maintained with RBI as per section 24 of Banking Regulation Act
Ratio (SLR) 1949. Cash in hand is counted for SLR.

Stapling of RBI has prohibited stapling of currency notes by a directive issued

currency notes under Section 35 A of B R Act.1949.

Nomination defined In Section 45 Z of Banking Regulation Act 1949.

Sec 19(2) of Banks cannot hold shares in a company beyond 30% of company's
Banking Regulation paid-up capital or 30% of bank's paid-up capital plus reserves
Act-1949. whichever is less.

Section 20(1) of BR Section 20(1) of BR Act, banks cannot grant loans against its own
Act 1949 shares.

Garnishee Order is Civil Procedure Code.

issued under

Right to issue u/s section 22 of RBI Act 1934

currency notes
Minors defined u/s 3 of Indian Majority Act 1875
18 years , court defined 21 years

Branch License Banking Regulation Act 1949 u/s 22 allows RBI to issue of license for
banks.

Under Bankers The terms ‘ Judge’ refers to ‘ Judge of High Court’

Book Evidence Act

DRT Bank employee committed fraud resulting in recovery of Rs.20.00 lacs.

The amount is not treated as ‘ Debt’ and recovery through the DRT is
not possible.

80
Registration As per the provisions of the Registration Act,1908, a registered
Act,1908 document operates, not from the date of its registration , but from the
time of its execution. Thus a Mortgage document executed earlier,
though registered later than another, has priority over the documents
executed later.

Mortgages The limitation period for filing a suit for sale of mortgaged property is
12 years from the date the mortgage debt becomes due.
The limitation period for filing suit for foreclosure is 30 years from the
date the money secured by mortgage becomes due.

Unclaimed Deposit As per the provisions of the Banking Regulation Act, a banking
company to file within 30 days of the close of each financial year a
return of unclaimed deposits.

Agriculture Advances-

Tractor Loan Estimated yearly use (EOU) should be minimum 1000 hours, then
only tractor loan proposal can be considered as economically
viable. Tractor Loan is repayable in Minimum 5 years and
maximum 9 years.
Poultry Farming Debecking and layer farming (production of eggs) terms are used.
Broilers used for meat purpose and Layers for egg production.
Minor Irrigation White area- water utilized below 65% - Go ahead for financing.
(New Wells) Gray area- water utilized 65-85 % - caution for financing.
Dark area- water utilized above 85% - no finance to be granted.
200 Meter Minimum distance between two dug wells to be maintained and
verified while financing to new dug wells.
Crop Loan/ SKCC Scale of finance for Crop Loan/ SKCC is decided by District
Consultative Committee (DCC) which is also called District
Technical Committee.
Lactation period Cow-300 days
( Milking) Buffeloes-280 days.
Dry days Cow-60 days
Buffeloes-120 days.
Breeds of Cow Exotic Breeds-Holstein, Brownswiss,Jersy.
Indigenous Breeds- Tharparkar, Gir, Sahiwal, Red Sindhi.
Breeds of Buffaloes Mehsana, Jafarabadi,Pandharpuri,Surati, Nagpuri and Murrah,
Bhadwari.
CACP Commission for Agricultural Cost and Pricing declares minimum
support prices of agri commodities and Central Govt. procures agri
commodities at MSP.
Produce Marketing Repayable in period not exceeding 12 months. No Limit but for
Loan Scheme classification of PSA, Loans up to Rs.50 Lacs are eligible.

81
Gobar Gas Produces “Methane” gas.
Apiculture Apiculture relates to : Bee-keeping
Sericulture Silk Production. Cultivation of Silk worms is called Sericulture.
Power Tiller One Power Tiller can replace at least 8 pairs of work animals.
LAMPS Large Sized Multipurpose Primary Society.
NABARD National Agricultural Bank for Rural Development. Has celebrated
recently its Silver Jubilee.
UNIT Cost Region wise Unit costs in respect of Agriculture and allied activities
(except crop loan/ SKCC) are approved by NABARD.
Mixed Farming Mixed Farming means Undertaking cultivation and allied activities.
Agariculture Agariculture is the study of herbs.
Small farmer Small farmer is one , who has land holding above 1.25 acres
with maximum of 2.5 acres in irrigated area or above 2.5 acres
with maximum 5.00 acres in non irrigated area.

Marginal Farmer Marginal Farmer is one who has land holding upto 1.25 acres
in irrigated area or 2.5 acres in non irrigated area.
Power Tiller Estimated yearly use (EOU) should be minimum 600 hours, then
only power tiller loan proposal can be considered as economically
viable.
Vermiculture Rearing of earth worms for preparing organic manure from
farm waste.
Organifarming Farming without use of pesticides and chemicals and by using
organic inputs such as bio fertilizers.
Gobar Gas Maximum size 25 cubic meter. Requires cow dung of 450 kg.
Minimum size 2 cubic meter. Requires cow dung of 40 kg.
Proportion of dung and water should be 4:5.
Agricultural Advance Loans to small and marginal farmers for purchase of land for
agricultural purposes is to be classified as Direct Agricultural
Advance .
BIS Standards For financing a pump set, BIS standards will be taken into account
No Dues Certificate No dues certificate in case of agricultural advances is exempted up
to a loan of Rs.50000/-

Parameters While processing big Agri proposals, following parameters shall be

complied with.
Benefit – Cost Ratio should be more than one.
IRR should be more than lending rate.
Net Present Value should be positive.

SKCC No Maximum limit & valid for 5 years.

T M Bhasin Working Group on Electronic Kisan Credit Cards- T M Bhasin.
Jatropha In recent times Jatropha (Jatropha curcas L.) has received much
attention as a source of renewable oil for the production of
sustainable and affordable bio-fuels.

82
Shivraman Committee On the recommendation of committee was NABARD established

Financial Inclusion ‘Swabhiman’, the financial inclusion scheme, comes under the
purview of Finance Ministry.
Food Grains Food grain production for 2015-16 is estimated at 253.16 million
tonnes (MT); higher by 1.14 MT over the production of 252.02 MT
during 2014-15.
India's foodgrain production increased marginally to 252.23 million
tonnes in the 2015-16 as per third advance estimate.
CFMTTI The Central Farm Machinery Training and Testing Institute
(CFMTTI), Budni, M.P issues test certificate for various makes of
the tractor. The maximum repayment period is 9 yrs as the usual
life of a tractor is 10,000 hrs.
‘Doubling Farmers’ The strategy to achieve the goal of doubling farmers’ income by
Income by 2022’ – 2022, inter-alia, include,
Measures-by GOI • Focus on irrigation with large budgets with the aim of “per drop,
more crop”;
• Provision of quality seeds and nutrients based on soil health of
each field;
• Investments in warehousing and cold chains to prevent post-
harvest crop losses;
• Promotion of value addition through food processing;
• Creation of a national farm market, removing distortions and
develop infrastructure such as, e-platform across 585 stations;
• Strengthening of crop insurance scheme to mitigate risks at
affordable cost;
• Promotion of ancillary activities like poultry, bee-keeping and
fisheries.

Important Agriculture activities-

1)Aquaculture- Shrimp/Prawn farming

2)Apriculture- Mushroom cultivation
3)Apiculture- Bee keeping
4)Floriculture- Flower production
5)Horticulture- vegetable,fruits,flowers
6)Olericulture- Vegetable production
7)Moriculture- Mulberry cultivation
8)Pisciculture- Fish farming
9)Sylviculture- Forest tree cultivation
10)Vermiculture- Rearing of Earthworm
11)Sericulture- Silk Production
12)Tissue Culture- Plant propagation

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Important Revolutions in India:

1)Blue- Fish production

2)Green- Food production
3)Red- Meat production
4)Yellow- Oil seeds production
5)Black- Rubber production
6)Brown- Cocoa production
7)Rainbow- Flower production
8)White- Milk production

Ground Water Availability:

a) White Blocks- exploitation of ground water is less than 66% of the available water.
b) Grey Blocks - 66% to 85% of the available water has already been exploited.
c) Dark Blocks – More than 85% of the available water is already over-exploited.

Spacing norms for wells :

a) Between two dug wells – 180 meters

b) Between two dug wells with pump sets – 180 meters
c) Between two bore wells with pump sets –250 meters
d) Between a dug well and a bore well –215 meters

SELF HELP GROUPs: Recommended by Kalia Committee.

-A voluntary association of 10-20 persons with common interest to improve their economic and
social status. The minimum number of members in an SHG may be reduced to 5 in case of
difficult areas, disabled persons and minor irrigation schemes. The concept of weaker sections
was evolved by Ghosh Committee. A bank will be eligible for 100% refinance by NABARD.
Concept of Self Help Groups originated from Bangladesh.

Service Area Approach had been recommended by the Ojha Committee in 1989. Now it is
applicable to Government sponsored schemes only.

PRODUCE MARKETING LOAN –

Objective: To help farmers avoid distress sale of their produce. To offer the facility of loan
against the stocks stored in farm houses, in addition to loan against warehouse receipts.

Eligibility: Farmers who have availed crop production loans from the branch or from other Bank
or who have not availed crop loan from any Bank.

Loan up to Rs.50.00 lac given to the eligible farmer can be classified as “ Agriculture Finance”
under Priority Sector Advance.

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JOINT LIABILITY GROUPS OF TENANT FARMERS (JLG) –

Objectives: To augment flow of credit to tenant farmers cultivating land either as oral lessees or
sharecroppers and small farmers who do not have proper title of their land holding through
formation and financing of JLGs. An informal group compromising preferably 4 to 10
individuals (may be considered upto 20) engaged in similar economic activity like crop
production, coming together for purpose of availing bank loan either singly or through group
mechanism against mutual guarantee. Purpose of loan: crop production, consumption, marketing
and other productive needs.

Syndicate Kisan Credit Card-

a)SKCC limit Up to Rs.2.00 lakh-

a) Hypothecation of crops
b) Charge on land wherever State acts provide for creation of charge on lands
c) Third party guarantee need not be insisted

b)SKCC limit above Rs.2.00 lakh-

a) Hypothecation of crops
b) Mortgage of land
c) Third party guarantee need not be insisted

c)SKCC limit Up to 3.00 lakh, in case of tie-up arrangements (with sugar factory, Tobacco Board
etc)

a) Hypothecation of crops
b) No mortgage of land
c) Third party guarantee acceptable to the Bank

While granting limits under SKCC, the scale of finance, is prepared by District Level Technical
Committee (DLTC)

While granting limits under SKCC, the scale of finance, is approved by District Consultative
Committee

While financing SKCC/Crop Loan by adopting scale of finance (SOF) no separate margins are
required.

Agriculture Contributes to around 14% percent of the GDP providing employment to nearly 60
percent of the population

Agriculture sector is now classified into following 3 sub-sectors (which was hitherto classified
as Direct and Indirect Agriculture)
i) Farm Credit
ii) Agriculture Infrastructure and
iii) Ancillary activities.

85
Foreign Exchange-
Holiday: Holidaying abroad may require spending in foreign currency for hotel accommodation,
tour arrangements, shopping, etc. Under this category, an individual is allowed to draw foreign
exchange up to $10,000 in a year for one or more private visits abroad.

Business trip: If you are going abroad for business travel, attending conference or specialised
training, you can apply to your bank for release of foreign exchange up to $25,000.

Employment: RBI has allowed drawing foreign exchange up to $100,000 for taking up
employment abroad.

Education: You can draw up to $100,000 equivalent per academic year for studying abroad.
Studying abroad covers all expenses relating to education including admission fee, tuition fee
and purchase of study material. However, if you require funds in excess of $100,000, you need to
produce an estimate from the institute you intend to study to the concerned bank.

Medical treatment: An individual willing to travel abroad for getting medical treatment is
allowed to withdraw foreign exchange up to $100,000 based on self-declaration of essential
details without providing any estimate from a doctor or hospital. However, if the individual
wishes to take money over the prescribed limit, s/he will have to provide an estimate from a
hospital or doctor. In addition, a maintenance expense of up to $25,000 is allowed.

Emigration facilities: RBI has allowed drawal of foreign exchange for emigration facilities up
to $100,000 based on self-declaration or an amount prescribed by the country of emigration.

Liberalised Remittance Scheme (LRS): In addition to these limits there is a scheme known as
Liberalised Remittance Scheme in force since 2004 which allows resident individuals to draw
foreign exchange up to a specified limit. The remittance limits under LRS keep changing and
under the present limit an individual can draw up to $250,000 per year for the transaction
permissible under the scheme. Under this scheme, an individual can freely acquire and hold
shares, debentures, units of mutual funds, venture capital funds, unrated debt securities,
promissory notes or any other instrument of like nature. Further, the resident can invest in such
securities out of the bank account opened abroad under the Scheme. He can also set up a
company, enter into joint venture or buy immovable properties abroad provided the law of the
host country allows such transactions. Apart from the above, this scheme allows an individual to
make remittance as gift or loan to his relative abroad who is a non-resident Indian i.e. an Indian
Citizen who resides outside India. Further, where an individual has availed of a loan at a time
when he was non-resident, he can take the benefit of this scheme to make remittance for
repayment of loans.

Exchange Earners' Foreign Currency Account (EEFC): The balance in this account
represents earnings in foreign exchange and can be utilised towards current and capital account
transactions like private visits, business visits, purchase of property, and payment of custom
duty. There is no restriction on withdrawal in rupees of funds held in an EEFC account.

86
However, the amount withdrawn in rupees shall not be eligible for conversion into foreign
currency and for re-credit to the account.

Resident Foreign Currency Account: An individual can open, hold and maintain with a bank
in India a Foreign Currency Account, known as a Resident Foreign Currency (RFC) Account,
out of foreign exchange received as pension, gift, proceeds from sale of property outside India,
maturity proceeds of insurance policy, etc. The funds in this account are free from all restrictions
towards utilisation including investments.

Resident Foreign Currency (Domestic) Account: Resident individuals have another option by
opening and operating an account with a bank known as Resident Foreign Currency (Domestic)
Account. The credits in this account are allowed to be out of foreign exchange acquired in the
form of currency notes, bank notes and travellers' cheques while on a visit to any place outside
India by way of payment for services, gift from close relatives or unspent amount of foreign
exchange acquired for travel abroad. The balance held in this account can be utilised for
permissible current and capital account transactions like private visits, business visits, and
purchase of property.

Documentation: RBI has not prescribed any documents except self-declaration satisfying the
banker that the foreign exchange will be utilised only for the transaction for which request to the
banker for the release of foreign exchange is made and Form A2.

87
Current Financial Awareness -

Key Features of Union Budget 2015-2016-

GDP growth in 2015-16, projected to be between 8 to 8.5%.

Financial Inclusion - 12.5 crores families financially mainstreamed in 100 days.

CPI inflation projected at 5% by the end of the year, consequently, easing of monetary policy

Housing for all - 2 crore houses in Urban areas and 4 crore houses in Rural areas

Electrification of the remaining 20,000 villages including off-grid Solar Power- by 2020

To make India, the manufacturing hub of the World through Skill India and the Make in India
Programmes.

Government firm on journey to achieve fiscal target of 3% of GDP.

Rs.25,000 crore in 2015-16 to the corpus of Rural Infrastructure Development Fund (RIDF) set
up in NABARD.

Target of Rs.8.5 lakh crore of Agricultural Credit during the year 2015-16.

Micro Units Development Refinance Agency (MUDRA) Bank, with a corpus of Rs.20,000
crores, and credit guarantee corpus of Rs.3,000 crores to be created.

NBFCs registered with RBI and having asset size of Rs.500 crore and above may be considered
for notifications as ‘Financial Institution’ in terms of the SARFAESI Act, 2002.

Pradhan Mantri Suraksha Bima Yojna to cover accidental death risk of Rs.2 Lakh for a premium
of just Rs.12 per year.

Pradhan Mantri Jeevan Jyoti Bima Yojana to cover both natural and accidental death risk of Rs.2
lakh at premium of Rs.330 per year for the age group of 18-50.

Atal Pension Yojana to provide a defined pension, depending on the contribution and the period
of contribution. Government to contribute 50% of the beneficiaries’ premium limited to Rs.1,000
each year, for five years, in the new accounts opened before 31st December 2015.

National Investment and Infrastructure Fund (NIIF), to be established with an annual flow of
Rs.20,000 crores to it.

Forward Markets commission ( now attached to Fin Ministry) to be merged with SEBI.

88
Foreign Trade Policy (FTP)-2015 to 2020-
-Increase exports to $900 billion by 2019-20, from $466 billion in 2013-14.

-Raise India's share in world exports from 2% to 3.5%.

-Merchandise Export from India Scheme (MEIS) and Service Exports from India Scheme (SEIS)
launched.

-Higher level of rewards under MEIS for export items with High domestic content and value
addition.

-Incentives extended to units located in SEZs.

-Export obligation under EPCG scheme reduced to 75% to promote domestic capital goods
manufacturing.

-FTP to be aligned to Make in India, Digital India and Skills India initiatives.

-Duty credit scrips made freely transferable and usable for payment of custom duty, excise duty
and service tax.

-Export promotion mission to take on board State Governments

-Unlike annual reviews, FTP will be reviewed after two-and-Half years.

-Higher level of support for export of defence, farm Produce and eco-friendly products.

Income Tax – Normal Rates of tax: FY 2016-17 (AY 2017-18)

1. Where the total income does not exceed Rs. Nil

2,50,000/-.
2. Where the total income exceeds Rs.
2,50,000/- but does not exceed Rs. 5,00,000/-.
3. Where the total income exceeds Rs.
5,00,000/- but does not exceed Rs. 10,00,000/-.
4. Where the total income exceeds Rs.
10,00,000/-.
10 per cent of the amount by which the total
income exceeds Rs. 2,50,000/-
Rs. 25,000/- plus 20 per cent of the amount by
which the total income exceeds Rs. 5,00,000/-.
Rs. 1,25,000/- plus 30 per cent of the
amount by which the total income
exceeds Rs. 10,00,000/-

Rates of tax for every individual, resident in India, who is of the age of sixty years or more but less
than eighty years at any time during the financial year: Where the total income does not exceed
Rs. 3,00,000/- -Nil.
In case of every individual being a resident in India, who is of the age of eighty years or more at
any time during the financial year- Where the total income does not exceed Rs. 5,00,000/- -Nil
Education Cess on Income Tax at the rate of three percent of the income-tax.

89
Section 80C, entitles an employee to deductions for the whole of amounts paid or deposited in
the current financial year in the schemes such as insurance, PF, etc, subject to a limit of
Rs.1,50,000/-.

Senior citizen” means an individual resident in India who is of the age of sixty years or more at
any time during the relevant previous year.

Very (Super) senior citizen means an individual resident in India who is of the age of eighty
years or more at any time during the relevant previous year .

The income tax rebate is increased by Rs 3000. In the FY 2015-16, it was Rs 2000, now the tax
rebate is Rs.5000. This rebate is available to those whose taxable income is below 5 lacs. It
means, that the tax liability of such people would come down by Rs.5000. Because of this
provision, those who earns up to Rs. 3 lacs are not required to pay any tax. Rather, if a person
uses the all available deductions, the income up to Rs.5 lacs can become tax-free.

More Deduction on Home Loan Interest-

The home buyer would have the opportunity to claim more tax deduction. The budget 2016 has
increased the tax deduction for home loan interest by 50 thousand. This extra deduction of
50,000 would be available over and above the 80C limit of Rs 1.5 lac. It means, your total tax
deduction under section 80C can go up to Rs 2 lacs provided you are paying at least 50,000 as
home loan interest. This extra tax deduction is available to those homebuyers who buy a home in
the financial year 2016 – 2017. The cost of the house should be more than 50 lacs and home
loan amount should not be more than 35 lacs.

Commercial Banking in India.-

History Commercial Banking in India.

First in Banking First India bank Got ISO : Canara Bank

First Governor of RBI : Mr. Osborne Smith
First Indian governor of RBI : Mr. C D Deshmukh
First Bank to Introduce ATM in India : HSBC
First Bank to introduce savings : Presidency bank in 1833
First Bank to Introduce Cheque system : Bengal Bank 1784
First Bank to introduce Internet Banking : ICICI BANK
First Bank to introduce Mutual Fund : State Bank of India
First Bank to introduce Credit Card : Central Bank of India
First Bank Set Up in India : Bank of Hindustan in 1770
First Joint Stock Bank of British India : State Bank of India
First Joint Stock Bank of India : Allahabad Bank
First Bank that is oldest Public Sector Bank in India : Allahabad Bank
First national bank that is merged with Punjab National Bank : New Bank of
India in 1993.

90
 First Indian bank to open branch outside India in London in 1946 : Bank of
India.
First Regional Rural Bank name Prathama Grameen Bank - Was started by :
Syndicate Bank.
First Bank to launch branch in foreign was "Bank of India" in 1946 in
London UK.
First bank to Introduce Credit card in India was Central Bank of India With
"Central Card" 1980.
First Bank to introduce Debit Card in India was Citi Bank In Bangalore in
1987 .
The first bank to be given an ISO 9002 certificate for one of its branches --
Canara Bank.

RBI Classification Population Population Group

of Area applicable 0-10,000 Rural
to Branches 10,000-1,00000 Semi-Urban
1,00000-10,00,000 Urban
Above 10,00,000 Metropolitan

Nachiket Mor RBI Panel for Comprehensive Financial Services- Banking Services to all
by Jan 2016. Recommended for Priority Sector Credit to enhanced from
40%.

About our Syndicate Bank – 20.10.1925.

Syndicate Bank is the first nationalized bank to implement the Core Banking Solution (CBS) in
our country.

SyndBank Services Ltd incorporated on 25.01.2006 with Authorised Capital of Rs.10 crores and
its paid up capital as on 31-03-2009 was Rs.25 lacs.

SyndNavaratna’ Savings Account has been launched for improving its CASA base. The
product caters well for the salaried class employed with MNCs/Blue chip companies/reputed
private organizations/Government and semi-government undertakings

E-Lounge/Self Banking Facilities like Pass Book Printing, Internet Banking, ATM, Self
Serviced Kiosk for Cash and Cheque Deposit etc are being extended at select centers.

Bank had signed a Memorandum of Understanding (MOU) with M/s SBI Life Insurance Co.
Ltd. on 30th March 2015 for providing Group Life Insurance cover to Education Loan
Borrowers of the Bank.

Bank had signed a Memorandum of Understanding (MOU) with LIC for implementation of
“Pradhan Mantri Jeevan Jyoti Bima Yojana”. In this, LIC will provide life insurance cover of
Rs. 2 lakh in case of death of the insured person at nominal premium of Rs. 330 per annum.

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SyndGuide - a mobile app for everyone to know about bank's products & services, interest rates,
Branch locator etc.

Synd Delight: Bank has launched a hassle free loan product “SyndDelight” to existing Housing
Loan customers, who have demonstrated satisfactory repayment record of 3 years or more, to
meet any of their genuine personal credit needs.

Our Bank has been conferred with the highest “Rajbhasha Keerti Puraskar” for the year 2015-
16 among other Nationalized Banks and Financial Institutions in Region ‘C’ for effective
implementation of Official Language Policy.

SSGVY- SYND SAMGRA GRAM VIKAS YOJANA- Our bank has adopted 26 villages in
our Lead Districts across the country for all-round development.

REGIONAL RURAL BANKS- • Presently, we have three RRBs - Andhra Pragathi Grameena
Bank, Karnataka Vikas Grameena Bank and Prathama Bank, under our sponsorships.

Bank has been awarded Certificate of Commendation from Ministry of New and Renewable
Energy Government of India for Collateral Free Farmers Friendly Initiatives for financing
Renewable Energy projects (during February, 2015 to March, 2016).

Bank has received “Skoch Order-of-Merit” award for facilitating Online Collection of Light dues
from vessel / cargo consignments by Directorate General of Light Houses & Light Ships,
Ministry of Shipping, Govt. of India.

SyndicateBank has been awarded with the prestigious Skoch Awards 2016 for providing
outstanding information technology products in India.

PRODUCT INNOVATION & BPR-Our Bank has launched a large scale transformation
program, “Project Ananya’ in our constant endeavor to improve customer service, operational
efficiency and sustainable growth. The project is already under implementation in seven pilot
Regions. Highlights of the projects are as below:

Ananya, the Product Innovation and Business Process Re-engineering project is expected to add
significant value for the Bank by way of –

nd launching new capabilities such as Analytics

The project will be carried out by M/s. Boston Consultancy Group (India) Pvt. Ltd. This
project will help the Bank to achieve excellence in the following key Business areas, both
quantitative as well as qualitative.

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 -engineering

BRANCH TRANSFORMATION - Branch transformation in pilot branches is underway to

improve and standardize branch layout, increase service consistency, higher sales focus and
higher e-transactions. This will improve branch navigability, standardization of look, enhanced
customer experience, new roles to support technology, sales and marketing at branches.

INSTANT ACCOUNT OPENING PROCESS- Instant account opening process for Savings
Bank product has been introduced to ensure single customer visit and activation of account and
alternate channels within 24 hours followed by SMS to customer. The process has been launched
in 10 branches and instant kit with debit card &pin, internet banking pin, cheque book are now
being provided to customers when they apply for a new savings bank account.

RETAIL ASSET HUBS- Bank is in the process of introducing Retail Asset Hubs to eliminate
inconsistencies and ensure standardization by centralization of home loan process. These hubs
will act as both sales and service centers.

CONTACT CENTRE-Bank is working on launching a Contact Centre to provide a wide array of

services and will provide an omni-channel experience to the customers. It will help in resolving
customer queries related to bank’s products & services.

Performance of our Bank as on 31.03.2016-

Particulars 31.03.2016

Global Business 468184 Cr

Provision Coverage Ratio 53.73%
Net Profit -1643 Cr
CRAR (as per Basel III) 11.16%
Global NIM : 2.28%
Gross NPA 6.70%
Net NPA 4.48%
Global deposits 261735 Cr
Global Advances 206449 Cr
Cost of Deposits 6.27
Yield on Advances 8.63
Return on Assets -0.56%
Earnings Per Share Rs. -24.82
Book Value Per Share Rs.175.41
Total ATMs as on 31.03.2016 3730
Total branches as on 31.03.2016 3766 including London branch.
New branches opened during 2015-16 251

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All about Scheduled Commercial Banks (SCB)-

Sr. No. Particulars Details

1 Total Number of Scheduled Commercial Banks 149
Out of which Regional Rural Banks(RRBs) 56
2 Total branches of Scheduled Commercial Banks in India as 1,32.587 (100%)
on 31.03.2016
Out of which-Rural Branches 46577 (35%)
Out of which-Semi Urban Branches 36464 (27%)
Out of which- Urban Branches 23867 (18%)
Out of which- Metro Branches 25679 (20% )
3 Performance of Scheduled Commercial Banks in India as
on 31.03.2016
Credit Deposit (CD) Ratio 77.90%
Growth in Aggregate Deposit 9.00%
Growth in Gross Bank Credit 11.34%
Aggregate Deposit 96599681 Cr
Gross Bank Credit 75209287 Cr
4 Performance of Nationalized Banks in India as on
31.03.2016
Total branches 65955
Aggregate Deposit 46680540 Cr
Gross Bank Credit 34919113 CR

BANKS – PUNCHLINES -
01. Allahabad Bank – A tradition of trust
02. Andhra Bank – For all your needs
03. Bank of Baroda – India‘s International Bank
04. Bank of Maharashtra – One family one bank
05. Bank of India – Relationship beyond banking
06. Canara Bank – Together we can
07. Central Bank Of India – Build a better life around us
08. Corporation Bank – Prosperity for all
09. Dena Bank – Trusted Family Bank
10. Indian Bank – Your tech friendly Bank
11. Indian Overseas Bank – Good people to grow with
12. Oriental Bank of Commerce – Where every individual is committed
13. Punjab National Bank – The name you can bank upon
14. Punjab and Sind Bank – To strive to achieve excellence in customer service
15. Syndicate Bank – Faithful and friendly
16. United Commercial Bank – Honours your trust
17. Union Bank of India – Good people to bank with
18. United Bank of India – The bank that begins with ―U‖

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 19. Vijaya Bank – A friend you can bank on
20. State Bank of India – With you all the way
21. State Bank of Hyderabad – Modern Innovative dependable
22. State Bank of Mysore – Working for a better tomorrow
23. State Bank of Patiala – Blending modernity with tradition
24. State Bank of Travancore – Since 1945 – a long tradition of trust
25. ICICI Bank – Hum Hai Na
26. IDBI Bank – Banking for all
27. HSBC bank – World‘s local bank
28. HDFC Bank – We understand your world
29. Bank of Rajasthan – Together we prosper
30. Federal Bank – Your perfect Banking partner
31. Yes Bank – Experience our expertise
32. Jammu and Kashmir Bank – Serving to empower
33. Lakshmi Vilas Bank Limited – The changing face of prosperity
34. Karur Vysya Bank – Smart way to Bank
35. Deutshe Bank – A passion to perform
36. South Indian Bank Limited – Experience Next Generation Banking

Current Financial Awareness- 2016-17

HDFC Bank MD and CEO Aditya Puri, winner of the FE Best Banks Lifetime Achievement Award-2016.
ID nking Technology Excellence Awards 2016-Best Bank in Banking Technology Excellence for the yea
.HDFC Bank wins Dun & Bradstreet Corporate Award 2016 in the Banking sector.

Asia Money FX Poll 2016- HDFC Bank ranked No. 1 in the Best Domestic Provider for FX Products and
Services in India.

Axis Bank has won the 'Best Performing Private Bank' award at the Financial Advisor Awards 2015-16

Asia Money Best Domestic Bank in India awards 2016-AXIS BANK

Bank of the Year in India - The Banker awards 2016- AXIS BANK.

Best Bank in India for Quantitative Research-EuroMoney FX Survey 2016-AXIS BANK.

ICICI Bank won CNBC TV 18's Financial Inclusion Award 2016 for Banks/NBFCs in 'Impactful Financial
Inclusion Through Innovation & Processes' category.

ICICI Bank's corporate office at Bandra Kurla Complex was awarded 'Platinum' rating by Indian Green
Building Council.

ICICI Bank recognized as 'Best Foreign Exchange Provider' in India by Global Financial magazine.

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ICICI Bank has won the ‘Best Private Sector Bank ’ award under the Global Businesses category at Dun &
Bradstreet Banking Awards 2016.

State Bank of India (SBI) win the Anti-Money Laundering (AML) Technology Implementation of the Year
2016 Asian Banker Award .

The Corporation Bank has bagged the Best MSME Bank Award 2016 instituted by the Associated
Chambers of Commerce and Industry of India (ASSOCHAM).

The Karnataka Bank Limited has bagged “Best MSME Bank Award (Private sector) 2016” instituted by
The Associated Chambers of Commerce & Industry of India (ASSOCHAM).

Oliver Hart and Bengt Holmstrom Win Nobel Prize for 2016 in Economics for Work on Contracts.
India currently ranks 136 out of 189 countries in the World Bank's index on the ease of resolving
insolvencies.

India's savings rate is among the highest in the world and is projected to reach 39% by 2017.

The government's plan to provide 'Banking for all' by 2018.

3.40% % of users making payment from Credit Card in India

Per Capita Bank Credit in India Rs.50089/- in 2016

EPFO fixes 8.65% interest rate for PF deposits, cut from 8.8%

Online transactions- New Delhi is No.1

In 2014-15, the Gross NPAs of the PSU banks had surged from 5.43% (Rs 2.67 lakh crore) to 9.32% (Rs
4.76 lakh crore) in 2015-16 of the total advances.

Akodara village in Sabarkantha district of Gujarat has earned the coveted tag of becoming India’s first
digital village in India.

The village was adopted by ICICI Bank under its Digital Village Project in 2015 and made cashless by
adopting digital technology.

Airtel Payments Bank Limited or Airtel Bank became the first payments bank in the country to launch live
banking services in Rajasthan.

As many as 16 of 22 public sector banks skipped paying dividends to Government in fiscal 2015-16 due to
issue of mounting bad loans.

Profit-making PSBs have to pay a minimum dividend of 20% of their equity or 20% of their post-tax profit,
whichever is higher.

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Special Task Force led by SS Mundra formed to recalibrate ATMs.

India’s first banking robot named Lakshmi was launched by the Kumbakonam-based City Union Bank
(CUB) in Chennai, Tamil Nadu. Lakshmi will be first on-site huamanoid (robot) in India.

Lakshmi is artificial intelligence powered robot. It can speak English, gesture and engage in a life-like
manner in conversations. The robot can interact with customers on more than 125 subjects including
account balance and interest rates on loans.

Artificial intelligence is the branch of computer science concerned with making computers behave like
humans.

Hedging is an investment mechanism to cut the risk of adverse price movements in an asset

Hindustan Construction Company (HCC) became India’s first company to get debt recast under RBI’s new
Scheme for Sustainable Structuring of Stressed Assets (S4A).

The Reserve Bank of India (RBI) has permitted startups to raise external commercial borrowings (ECBs) of
up to $3 million in a financial year for three year tenure

ECB is different from FDI-

In case of Foreign Direct Investment, the foreign money is used to finance the Equity Capital. But in case
ECBs, foreign money is used to finance any kind of funding other than Equity.

Additional Tier 1 (AT1) Bonds- AT1 bonds are the hybrid bonds that combine debt and equity elements.
They are also called as contingent convertible capital instruments (CoCos). AT1 or Cocos bonds have their
roots in financial crisis when governments were forced to bail out banks. They are the riskiest debt issued
by banks and do not have any set maturity date.

State Bank of India (SBI) has announced the opening up its foreign branch in Yangon, the capital city of
Myanmar. With this, SBI became the first domestic bank of India to open a branch in Myanmar.

Monetary Policy Committee (MPC)- Urjit Patel: RBI Governor (Chairperson).

ICICI Bank has successfully deployed ‘Software Robotics’ for power banking operations. With this, it
becomes first bank in the country and among few globally to deploy ‘Software Robotics’. ICICI Bank has
deployed Software Robotics to over 200 business processes across various functions.

The National Payments Corporation of India (NPCI) has announced that Unified Payments Interface (UPI)
application has become operational.

Union Government has appointed Urjit Patel (52) as new Governor of Reserve Bank of India (RBI). He is
24th Governor of RBI. He will have tenure of three years .

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The India Post Payments Bank Limited (IPPBL) has received the Certificate of Incorporation from the
Registrar of Companies, Ministry of Corporate Affairs under the Companies Act 2013. IPPBL would be the
first PSU under the Department of Posts (DoP).

The State Bank of India’s (SBI’s) board of directors has approved merger of its five associate banks and
Bharatiya Mahila Bank (BMB) with itself.

The Reserve Bank of India (RBI) has constituted Dr. Tarun Ramadorai committee to study various facets of
household finance in India.

The Union Government has set an inflation target of four per cent for the next five years i.e. till March 31,
2021.

The Reserve Bank of India (RBI) has launched a website (sachet.rbi.org.in) to curb illegal and unauthorised
pooling of funds by unscrupulous firms.

Seven Indian companies have made it to the latest Fortune 500 list of the world’s biggest corporations in
terms of revenue.

7 Indian companies are: Indian Oil Corporation (161st), Reliance Industries (215th), Tata Motors (226th),
State Bank of India (232nd), Bharat Petroleum (358th), Hindustan Petroleum (367th) and Rajesh Exports
(423rd).

The Reserve Bank of India (RBI) has set up an inter-regulatory Working Group to study the regulatory
issues relating to Financial Technology (Fintech) and Digital Banking in India The inter-regulatory
Working Group will be headed by RBI’s Executive Director Sudarshan Sen

State Bank of India (SBI) recently had launched SBI Mingle, a social media banking platform for Facebook
and Twitter users.

Axis Bank has launched India’s first internationally-listed certified green bond to finance climate change
solutions around the world at London Stock Exchange (LSE).

The New Development Bank (NDB) of the BRICS countries is set to issue its first yuan-denominated bonds
to finance sustainable development projects.

Saudi Arabia’s Islamic Development Bank (IDB) has decided to open its first branch in India at
Ahmedabad, Gujarat.

The RBL Bank (formerly Ratnakar Bank) became the first private sector bank in India to open dedicated
branch for startups.

DCB Bank has launched an India’s first of its kind Aadhaar-based Automatic Teller Machine (ATM) usage
facility. Currently, this ATM has been placed in pilot site at DCB Bank at Peninsula Business Park, Lower
Parel, Mumbai.

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India's share in global merchandise trade stood at 2.0% (2015)

GDP growth of India-

2015-16 7.6
2014-15 7.2
2013-14 6.6

Country’s GDP growth is estimated to slow down to 7.1 per cent in current fiscal, from 7.6 per cent in
2015-16, mainly due to slump in manufacturing, mining and construction sectors, the government data
showed today without factoring in ‘volatile’ post-demonetisation figures.
World Real GDP Growth Rate-2016-2.40%
Per capita income of the country jumped 7.3 per cent to Rs 93,231 in 2015-16 from Rs 86,879 in 2014-15.

Sector wise share in GDP-2015-16 at constant prices-

Agriculture Sector 53.40%

Industry Sector 31.20%
Services Sector 15.40%
Total 100.00%

Maharashtra has highest share in GDP. Maharashtra contributes 14.42% of total India's GDP with gross
state domestic product around of 1,510,132 crore INR at current prices.

The Government of India on July 8, 2016 authorised the Central Registry of Securitisation Asset
Reconstruction and Security Interest of India (CERSAI) to act as, and to perform the functions of the
Central KYC Records Registry (CKYCR).

The provisions of the RBI Act relating to Monetary Policy were brought into force through a Notification in
the Gazette of India Extraordinary on June 27, 2016. Subsequently, the Government, in consultation with
RBI, notified the inflation target in the Gazette of India Extraordinary dated August 5, 2016 for the period
beginning from the date of publication of this notification and ending on the March 31, 2021, as under-

Inflation Target-4%
Upper tolerance level-6%
Lower tolerance level-2%

As per the provisions of the RBI Act, out of the six Members of Monetary Policy Committee, three
Members are from the Reserve Bank and the other three Members of MPC are appointed by the Central
Government.

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The Reserve Bank on September 12, 2016, has issued a licence to Equitas Small Finance Bank Limited to
carry on the business of small finance bank (SFB) in India.

The Reserve Bank on September 29, 2016 has issued guidelines to all scheduled commercial banks and all
India financial institutions to prevent the publishing of photographs of defaulting borrower/ guarantor in
an indiscriminate manner in newspapers.

The Reserve Bank operationalised a Central Fraud Registry (CFR) with effect from January 20, 2016.

RBI ON June 23, 2016 placed the “Payment and Settlement Systems in India: Vision-2018” on its website
(www.rbi. org.in). The Vision-2018 aims at building best of class payment and settlement systems for a
‘less-cash’ India.

The Reserve Bank on August 4, 2016 notified that the Government of India has approved the
implementation of the Interest Subvention Scheme for the year 2016-17 for short term crop loans upto Rs 3
lakh.

The Reserve Bank on July 28, 2016 allowed Demat Account Holders of National Securities Depository
Limited (NSDL) and Central Depository Services (India) Limited (CDSL) to put through trades in
Government Securities on the Negotiated Dealing System – Order Matching (NDS-OM) platform.

EXPORTS (including re-exports)

Exports during March, 2016 were valued at US$ 22718.69 million (Rs.152264.96 crore) which was 5.47 per cent lower
in Dollar terms (1.45 per cent higher in Rupee terms) than the level of US$ 24032.55 million (Rs.150082.80 crore)
during March, 2015. Cumulative value of exports for the period April-March 2015-16 was US$ 261136.80 million
(Rs.1708841.43 crore) as against US$ 310338.47 million (Rs.1896348.40 crore) registering a negative growth of 15.85
per cent in Dollar terms and 9.89 per cent in Rupee terms over the same period last year.

IMPORTS-

Imports during March, 2016 were valued at US$ 27789.56 million (Rs.186250.88 crore) which was 21.56 per cent
lower in Dollar terms and 15.82 per cent lower in Rupee terms over the level of imports valued at US$ 35428.72
million (Rs.221251.65 crore) in March, 2015. Cumulative value of imports for the period April-March 2015-16 was
US$ 379596.17 million (Rs.2481367.22 crore) as against US$ 448033.42 million (Rs.2737086.58 crore) registering
a negative growth of 15.28 per cent in Dollar terms and 9.34 per cent in Rupee terms over the same period last year.

SCB- priority sector registered a strong growth of 16.0 per cent during 2015-16 as compared to 9.3 per cent
in the previous year.

Government of India continued to maintain more than the statutory minimum shareholding of 51 per cent
in all PSBs.

Growth in the number of outstanding debit cards decelerated sharply to 19.6 per cent in 2015-16 from 40.3
per cent in the previous year.

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Amount recovered by all SCBs during 2015-16 reduced to 227.68 billion as against 307.92 billion during
the previous year.

Priority sector lending compliance to be monitored on a ‘quarterly’ average basis from 2016-17.

Separate targets of 8 per cent for small and marginal farmers (within the agriculture target of 18 per cent)
and 7.5 per cent for micro enterprises to be achieved by 2017. After a review in 2017, these targets will be
made applicable to foreign banks with 20 branches and above from 2018.

Educational loans (including loans for vocational courses) up to 10Lakhs irrespective of the sanctioned
amount made eligible for the priority sector.

Foreign banks with less than 20 branches required to achieve the total priority sector target of 40 per cent of
ANBC in a phased manner by 2020.

Economic Indicators 2015-16 (Source- RBI Data)

1 Real Sector (% Change)

1.1 GDP/GVA at Basic Prices 7.2
1.1.1 Agriculture 1.2
1.1.2 Industry 8.8
1.1.3 Services 8.2
1.1a Final Consumption Expenditure 6.6
1.1b Gross Fixed Capital Formation 3.9
1.2 Index of Industrial Production 2.4
2 Money and Banking (% Change)
2.1 Scheduled Commercial Banks
2.1.1 Deposits 9.00
2.1.2 Credit 11.34
2.1.2.1 Non-food Credit 10.9
2.1.3 Investment in Govt. Securities 5.4
2.2 Money Stock Measures
2.2.1 Reserve Money (M0) 13.1
2.2.2 Broad Money (M3) 10.1
3 Ratios (%)
3.1 Cash Reserve Ratio 4.00
3.2 Statutory Liquidity Ratio 20.50
3.3 Cash-Deposit Ratio 4.8
3.4 Credit-Deposit Ratio 77.90
3.5 Incremental Credit-Deposit Ratio 89.8
3.6 Investment-Deposit Ratio 28.1
3.7 Incremental Investment-Deposit Ratio 16.9
4 Interest Rates (%)

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4.1 Policy Repo Rate 6.25
4.2 Reverse Repo Rate 5.75
4.3 Marginal Standing Facility (MSF) Rate 6.75
4.4 Bank Rate 6.75
4.5 Call Money Rate (Weighted Average) 7.35
5. Inflation (%)
5.1 All India Consumer Price Index 4.9
5.2 Consumer Price Index for Industrial Workers 5.6
5.3 Wholesale Price Index -2.5
5.3.1 Primary Articles 0.2
5.3.2 Fuel and Power -11.6
5.3.3 Manufactured Products -1.1

Finance Minister of independent India was R. K.Shanmukham Chetty, who also presented its first Budget.
Present Finance Minister of India is -Arun Jaitley.

RBI Governer- Mr. Urjit Patel.

IBA Chairman- Shri Rajeev Rishi – Central Bank of India.

Upendra Kumar (U K ) Sinha is the present chairman of SEBI.

Jim Yong Kim, is the President of the World Bank .

IMF Managing Director-Christine Lagarde.

Takehiko Nakao- President/Chairman of Asian Development Bank (ADB)

Vice Chairman of NITI Ayog - Mr. Arvind Pangariya.

IRDA Chairman – Mr. T S Vijayan

PFRDA Chairman- Mr. Hemant Contractor.

The Government of India has accepted the recommendation of the 14th Finance Commission which was
headed by Dr. Y.V. Reddy. The share of states in the centre's tax revenue is increased from 32% to
42%.Chairman – Dr. Y.V. Reddy (former Governor of Reserve Bank of India)

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Fiscal deficit Fiscal deficit means the government’s total expenditure (excluding the
money it’s borrowed) exceeds its revenue.

Budget deficit Budget deficit is normally known as national debt. A country’s fiscal
deficit is usually calculated as a percentage of its gross domestic product.
Gross domestic product (GDP) means the market value of all the finished
goods produced or services rendered within the domestic boundary of the
country excluding imports occur within a defined territory.

Reasons of Fiscal Deficit -Subsidy on rising crude oil import along with increasing global oil prices.

-Demand for gold has contributed to weaken the rupee rate against $
which makes the import costlier & thereby increasing the subsidy burden
resulting widen fiscal deficit.

-Fertilizer subsidy.

-Increase in government expenditure towards unproductive areas like

interest payment cost.

-Higher fiscal deficit leads to higher level of inflation in the economy

especially in Indian economy as compared to other developed nations like
U.S.

-Due to high fiscal deficit & lower growth, there’s always a risk of
downward rating by global rating agencies.

Minority Community Jain community is now included in Minority community.

Bangaluru City- Wifi IT capital Bangalore has become the first Indian city to provide free wifi
services to its citizens. The state government initiative 'Namma wifi'
covers 5 crucial locations in the city and aims to be extended to other
areas in the coming months as well.

Bharat Mobile Scheme The name given to a newly announced scheme under which a free mobile
handset will be provided to one member of every rural household who has
completed 100 days of work under MGNREGA.
Special National Union Govt. on 2 August 2013 gave its approval for setting up of a fund
Investment Fund (SNIF) to help six PSUs, to make them compliant with the 10% minimum public
holding norm of market regulator SEBI. Six sick PSUs which will be
covered under this proposed fund are – HMT, ITI, Scooters India Limited,
Andrew Yule, Fertilizer and Chemical Limited (Travancore) and
Hindustan Photo Films Limited.
Arundhati Bhattacharya She is appointed as the first woman Managing Director (MD) of State
Bank of India (SBI) on 3 August 2013.

103
M-Pesa Telecommunication major Vodafone has recently launched a unique
money transfer and payment service “M-Pesa” in Bihar and Jharkhand
where banking network and financial penetration is inadequate,
particularly in rural areas. ICICI Bank is the banking partner of Vodafone
in this service.
Tax Administration Parthasarathy Shome is heading the seven- member Tax Administration
Reform Commission Reform Commission (TARC), which was constituted by the Union Govt.
(TARC), on 26 August, 2013 to have a comprehensive review of existing tax laws
and suggest a stable tax administration.
Cheraman Financial Cheraman Financial Services Limited (CFSL), became the first Islamic
Services Limited (CFSL), financial services company to be launched in India, started its operations
in Kerala state.
IIM, Kashipur This IIM of the country recently launched a first-of-its-kind management
development programme on Islamic Banking and Finance.
Brown Label' ATM Brown label ATMs are those Automated Teller Machines where hardware
and the lease of the ATM machine is owned by a service provider, but
cash management and connectivity to banking networks is provided by a
sponsor bank whose brand is used on the ATM.
Swarn Jayanti Rojgar Swarozgar Yojana & Swarn Jayanti Rojgar Yojana comes under which
Yojana department – Ministry of Rural Development (GraminVikas Mantralaya)
RBI Approval Prior approval of Reserve Bank is required for acquisition of 5 per cent or
more of shares or voting rights in a banking company by any person.
“Small Company” Under ‘‘small company’’ means a company, other than a public company,—
Companies Act 2013
(i) paid-up share capital of which does not exceed fifty lakh rupees or such
higher amount as may be prescribed which shall not be more than five
crore rupees; or

(ii) turnover of which as per its last profit and loss account does not
exceed two crore rupees or such higher amount as may be prescribed
which shall not be more than twenty crore rupees:

For qualifying as a small company, it is enough if either the capital is less

than rupees fifty lakhs or turnover is less than rupees twenty crores. It is
sufficient if either one of the requirement is met without meeting the other
requirement. However, these limits may be raised but not exceeding
rupees five crores in case of capital and rupees twenty crores in case of
turnover. Only a private company can be classified as a small company.
Kisan Diwas Kisan Diwas - observed in India on 23rd December.
Chairman of NABARD Chairman of NABARD – Dr. Harsh Kumar Bhanwala.
CRR If RBI reduces CRR than what happens—Credit Supply increases.
NIM Net interest margin (NIM) = Net Interest Income / Total Assets.
Justice Sodhi Committee Justice Sodhi Committee on Insider Trading Regulations is appointed by
SEBI.

104
Inflation Indexed Saving RBI has launched an Inflation Indexed Saving Bonds that offers
Bonds protection to Retail Investors from price rise.
Trustee & Beneficiary Relationship between bank and customer in case of goods left by mistake
in custody of the bank is “ Trustee & beneficiary”.
Charge on Shares For obtaining loan against shares, the Charge created on shares is Lien.
Govt. Shareholding Govt. shareholding in public sector banks cannot be below : 51%
Selling of NPA To sell an NPA, the account must remain in the books of seller bank : for
24 months as NPA.
Self Help Group The no. of members in a SHG in SGSY in normal cases : 10 to 20
The Bank International The Bank International Indonesia (BII) launched its operations in India by
Indonesia (BII) opening a branch in Mumbai.
Basel III Indian banks would need Rs 3,90,000-5,00,000 crore capital over the next
six years in the wake of Basel III capital regulations announced by the
RBI.
Chairman of 7th Pay Justice Ashok Kumar Mathur.
Commission
CEO of Microsoft India born, Mr. Satya Nadella
MICR Code 9 Digit Number
RTGS/NEFT Code 11 Digit Number
Aadhar Card Code 12 Digit Number
EPFO The Employees Provident Fund Organization has decided to pay interest
rate on PF deposits for 2016-17 at 8.65%.
IDRBT, Hyderabad The Banking Technology Excellence awards were instituted by Institute
for Development and Research in Banking Technology (IDRBT)
Hyderabad.
Unclaimed Dividend After 7 years, the companies are required to transfer the amount of
unclaimed dividend to the Investor Education and Protection Fund (IEPF)
of the Ministry of Corporate Affairs (MCA).
CACP Commission for Agricultural Cost & Prices
Intersol Charges Charges levied by the banks to cover the cost of extending services to
customers by using the CBS/Internet/Intranet platform.
Women a/c Only 33% of women in India have a bank account.
ATM PIN-4 Digit ATM PIN is mandatory wef 01.12.2013 while you shop with card. Card
transactions are more secure & frauds can be avoided.
e-insurance Wef 01.04.2014, all sold insurance policy documents will become digital
and paperless.
B N Shrikrishna Head of Financial Sector Legislation Reforms Commission
New Pvt Sector Banks Minimum Paid up Ccapital-Rs.500 crores. Promoters should be “Fit &
Proper” with 10 years of successful track record. 25% branches in
unbanked rural area. Cap on foreign investment at 49%. Bimal Jalan to
head panel on New Bank Licenses.
Rajat Gupta Former Goldman Sach Director convicted for insider trading.
Bulk Deposit Over Rs.1 crores constitutes bulk deposit
Bulk Deposit Cap 15% of total deposits

105
Bitcoin Bitcoin is virtual currency or digital currency. Internationally recognized
currency code for Bitcoins is BTC. 1 Bitcoin is divided in to smaller units
called Satoshis. Ripal, LightCoin, MasterCoin ,NXT & DojCoin are
digital currencies. In India “Laxmicoin“ is e-currency.

LIC SyndicateBank ink pact with with LIC to act as “Corporate Agent”.
Insurance 10% Indians have life insurance cover and 9.60% Indians have non-life
insurance covers.
Interest Rate Subsidy For export raised to 3% from 2%.
Ratnakar Bank Ratnakar Bank also called as NH4 Bank acquired RBS India assets.
Recently entered in capital market with IPO.
IRDA IRDA stipulated that not more than 25% of insurance business handled by
bank as broker can be placed with the Insurance Company floated by it.
e-KYC e-KYC initiated by UIDAI. Paperless KYC permitted by RBI.
ARC RBI increased ceiling for FDI in ARC from 74% to 100%
White Label ATM First White Label ATM by Muthoot Finance Ltd-NBFC.
Rajiv Awas Yojana For Urban Poors residing in Slum area.
HUF HUF or its Karta cannot be designated as a partner in LLP.
World’s Largest Economy 1) US 2) China 3) Japan

DBT Direct Benefit Transfer first introduced in Gas

ACU Common settlement currency of ACU is US$.
CAMELS Rating of Banks by RBI. Capital Adequacy, Asset Quality, Management,
Earnings, Liquidity, Systems & Controls.

Ministry of Housing and Urban Poverty Alleviation, Government of India has set up the Credit
Risk Guarantee Fund Trust for Low Income Housing (CRGFTLIH). Banks may assign zero risk
weight for the guaranteed portion. In case the advance covered by CRGFTLIH guarantee
becomes non-performing, no provision need be made towards the guaranteed portion.

Abhijit Sen committee- Committee recommended the change in the base year of the Wholesale
Price Index.

2010 is the base year of the New Consumer Price Index Series. Since January 2011 the C.S.O.
(Central Statistical Office) has started new CPI series.

With which among the countries has India signed a Comprehensive Economic Partnership
Agreement (CEPA)? India has signed a CEPA (Comprehensive Economic Partnership
Agreement) with Japan and South Korea. India has signed CECA (Comprehensive Economic
Cooperation Agreement) with Singapore and Malaysia.

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Safety Net- Safety Net is a scheme where a company promoters assure that they will pay back
shares from retail investors at the IPO price if its stock falls sharply during first 6 months after
listing. Use of safety net shows confidence of a company in pricing the company.

Name & Shame Policy- To publish the photographs and other details of willful loan defaulters
in news papers.

Finance Ministry has asked PSBs to limit their reliance on CDs to 10% of their total deposits
while the combined cap on bulk deposits and CDs were kept at 15% of their total deposits.

CAD- Current Account Deficit-Difference between inflows and outflows of foreign currency.

Presently right to make monetary policy decisions vests with RBI Governor instead of
Committee.

As per IRDA Guidelines, no denial of new health insurance up to the age of 65 years.

Chairman of 14 th Finance Commission- Mr. Y V Reddy. (Former RBI Governor)

CDR- at least 75% of creditors by Value and 60% of creditors by number should agree for
implementation of CDR Scheme.

Agency Commission rate structure wef 01.07.2012 decided by RBI is as under:-

Sl. No. Type of transaction Unit Existing Revised

Rate Rate
1 Receipts – Physical mode Per transaction Rs. 45 Rs. 50
Receipts – e-mode Per transaction Rs. 45 Rs. 12
2 Pension Payments Per transaction Rs. 60 Rs. 65
3 Payments other than Per Rs. 100 9 paise 5.5 paise
Pension turnover

Nationalized banks, with more than Rs 3 lakh crore of business, are to get the additional ED-
Three Executive Directors.

Basel III measures aim to:

 improve the banking sector's ability to absorb shocks arising from financial and
economic stress, whatever the source
 improve risk management and governance
 strengthen banks' transparency and disclosures.

The basic structure of Basel III remains unchanged with three mutually reinforcing pillars.

Pillar 1 : Minimum Regulatory Capital Requirements based on Risk Weighted Assets (RWAs) :
Maintaining capital calculated through credit, market and operational risk areas.

107
Pillar 2 : Supervisory Review Process : Regulating tools and frameworks for dealing with
peripheral risks that banks face.

Pillar 3: Market Discipline : Increasing the disclosures that banks must provide to increase the
transparency of banks

Under the CDR system, if a suit filed account is to restructured, the consent of creditors is
required having : 75% share by value and 60% by number of banks.

CTR- monthly reporting to FIU-IND by the Corporate Office with in 15 Days.

MICR - Magnetic Ink Character Recognition. 9 Digits Code.

In terms of Section 20(1) of the Banking Regulation Act, 1949, a bank cannot grant any loans
and advances- On the security of its own shares.

Form 15G can be submitted by individual below the Age of 60 Years while form 15H can be
submitted by senior citizens i.e. individual’s above the age of 60 years. (60 Years from 1st July
2012).

Form 15G can be submitted by Hindu undivided families but form 15H can be submitted only by
Individual above the age of 60 years. ( 60 Years from 1st July 2012).

Bombay Stock Exchange (BSE) – Number one in the world in terms of number of listed
companies

MCX-SX gets recognized Stock Exchange status. Third Stock Exchange in India.

Ministry of Agriculture has planned to double the food production in 5 years.

Grand Fathering Provision- All tax benefit given under that contract in Life Insurance Policy.
Existing provision will continue even after that particular tax provision withdrawn or amended

Nair Committee- on Priority Sector Advances

Gold Debit card- Rs.1.00 Lacs withdrawal permitted.

e – lounge – 24 hour self operating unit.

HSBC Head Quarter- in UK

12 th Five Year Plan- 2012-13 to 2016-17 target of GDP Growth at 8.20%.

Direct electronic cash transfer of subsidies on Aadhar based bank accounts is implemented wef
01.01.2013.

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New CDR Norms-
Promoter’s contribution upped to 25% from 10%.
Promoter’s must pledge 100% shares
Unconditional Promoter’s Guarantee
Lead Bank can appoint Director when necessary.
Concessional rate of interest can’t be less than Base Rate.

As per RBI under BASEL-II norms minimum 9% CRAR is to be maintained

11 th Five year plan ( 2007-12) - GDP Growth rate achieved-7.90%.

Tata Consultancy Services (TCS) is India’s biggest software company.

BHEL & GAIL gets Maharatna status by Govt. of India.

Kisan Credit Card is in the nature of revolving cash credit facility

BASEL-III implemented wef 01.04.2013. Banks to assess liquidity risk under BASEL III.

Banks (SCB) can now become a member of stock exchanges as per SEBI to undertake
proprietary transactions in the corporate bond market.

Sick MSEs- A MSE is considered sick when any of the borrowal account of the enterprise
remains NPA for 3 months or more, or if the net worth gets eroded due to accumulated losses to
the extent of 50% of the net worth. Now , RBI has removed the stipulation that the unit should
have been in commercial production for at least 2 years.

The Reserve Bank has advised banks to waive margin/security requirements for agricultural
loans up to Rs. 2,00,000.

There would be an overall cap of USD 5 billion for raising of capital by issuance of IDRs by
eligible foreign companies in Indian markets.

Baltic Exchange -An exchange that handles the trading and settlement of both physical contracts
and derivatives relating to shipping and maritime transportation.

Appreciation and Depreciation of Currency-

• A currency is said to appreciate when it buys more of a foreign currency.

– An appreciation of a nation’s currency will make foreign goods cheaper.
– This would likely cause an increase in imports and a decline in exports.

• A currency is said to depreciate when it buys less of a foreign currency.

– A depreciationwill make foreign goods more expensive.
– This would likely cause a decrease in imports and an increase in exports.

109
Internal Rate of Return- IRR is calculated for Project Finance.
Bank Staff welfare facilities ceiling 3% of net profit of previous year ending.

Rapco Bank – Govt of India Enterprise.

VaR means - Value at Risk

The asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value.

In view of fragile economic recovery, Plan panel has decided to lower annual average economic
growth rate to 8.2% in the 12th Five Year Plan (2012-17) from 9% envisaged earlier.

Hong Kong - The most economically free nations in the world.

The call money market is an integral part of the Indian Money Market, where the day-to-day
surplus funds (mostly of banks) are traded. The loans are of short-term duration varying from 1
to 14 days. The money that is lent for one day in this market is known as "Call Money", and if it
exceeds one day (but less than 15 days) it is referred to as "Notice Money". Term Money refers
to Money lent for 15 days or more in the Inter Bank Market

CDs are short-term borrowings in the form of Usance Promissory Notes having a maturity of not
less than 15 days up to a maximum of one year. CD is subject to payment of Stamp Duty under
Indian Stamp Act, 1899 (Central Act). These are issued in denominations of Rs.5 Lacs and Rs. 1
Lac thereafter. Bank CDs have maturity up to one year. Minimum period for a bank CD is fifteen
days. Financial Institutions are allowed to issue CDs for a period between 1 year and up to 3
years.

Treasury bills are actually a class of Central Government Securities. Treasury bills, commonly
referred to as T-Bills are issued by Government of India against their short term borrowing
requirements with maturities ranging between 14 to 364 days. The T-Bill of below mentioned
periods are currently issued by Government/Reserve Bank of India in Primary Market 91-day
and 364-day T-Bills. All these are issued at a discount-to-face value. For example a Treasury bill
of Rs. 100.00 face value issued for Rs. 91.50 gets redeemed at the end of it's tenure at Rs.
100.00.

The Coupon rate is simply the interest rate that every debenture/Bond carries on its face value
and is fixed at the time of issuance. For example, a 12% p.a coupon rate on a bond/debenture of
Rs 100 implies that the investor will receive Rs 12 p.a. The coupon can be payable monthly,
quarterly, half-yearly, or annually or cumulative on redemption

Coupon rate: the interest rate paid by the issuer to the bondholder.zero coupon bond-no coupon -
issuing value is under the face (nominal) value.Zero Coupon Bonds Pay No Periodic Interest.

110
Commercial Paper is a ‘money market instrument. CP shall be issued in denominations of 5 lakh
and multiples thereof. CP shall be issued at a discount to face value as may be determined by the
issuer. CP shall be issued for maturities between a minimum of 7 days and a maximum of up to
one year from the date of issue.

Fixed Income Money Market and Derivatives Association of India (FIMMDA)

Committee on Financial Inclusion- Mr C Rangarajan,

Committee on Micro Finance Institution-Y H Malegam

Committee on PSA Lending & Related issues- M V Nair

SEBI has decided to enhance minimum investment amount per client managed by Portfolio
Managers to Rs.25 Lacs from Rs.5.00 Lacs.

GAAR - General Anti Avoidance Rules-which aims to check tax evasion by foreign investors
has been deferred & will be implemented as recommended by Parthasarathi Shome panel.

“Bombay House” is HQ of TATA Group located at Mumbai.

Natarajan Chandrasekaran, is named after Ratan Tata as CEO of TATA Group.

Petrol cheaper in Delhi and costly in Mumbai. Cheaper in Venezuala at $ 0.02.

Zero Date is date of commencement of project implementation

Airtel launched 4 G services first time in India in Kolkata City.

Buy back of shares by the company-

Floor Price-Minimum buy back price offered by the company.
Quoted Price- Actual price of shares on stock exchange
Discounted price- Actual price paid to the investors by the company after buy back of shares.

Validity of cheques/DDs/PO is now reduced to 3 months wef 01-04-2012 i-e from the date of
instrument to be presented for payment.

SOPA- Stop Online Piracy Act.

SUUTI: Specified Undertaking of the Unit Trust of India.

Best destination to do business in the world is Singapore.

United Stock Exchange is associated with currency futures.

111
Damodaran Committee was set up for Customer Service.-Prepayment Charges.
.
Rupee Symbol was suggested by D. Uday Kumar, IITan in July 2010.

USB- Ultra Small Branches under financial inclusion

FRBM- Fiscal Responsibility and Budget Management Act

Only Salaried individuals with taxable income of less than Rs 5 lakh will not have to file
income-tax returns.

The Reserve Bank allowed domestic companies to issue shares against import of capital goods
and machineries, making it easier for them to expand.

“All such conversions of import payables for capital goods into FDI should be completed within
180 days from the date of shipment of the goods”, RBI said. Earlier, an Indian company was
only allowed to issue shares to a foreigner in lieu of technology or technical know-how and
against royalty and lumpsump fees.

Equities could also be issued under the FDI norms against pre-operative expenses like payment
of rent. The central bank has said that for conversion of shares for payments of imported capital
goods, the company has to pass a special resolution.

Currency of China- Yuan (Renminbi)

Best e-governed State in India- Delhi

“Revolution 2020” is a book written by Chetan Bhagat

CSO- Central Statistical Organization conducts Economic Census of India

According to Supreme Court Judgement dated 19-02-2008 in the case of Thiruvengada Pillai
vs. Navaneethammal and Anr., the stamp papers do not have any expiry period.

Goa topped the list of states with highest per capita income in the country with a total per capita
income of Rs.1,92,652. Per Capita Income means earnings of each Indian if the national income
is evenly divided among the Country’s population.

SPV- Special Purpose Vehicle - SPVs are legal entities created mostly by companies to execute a
particular Project for a special purpose.

Rajiv Awas Yojana - Central Govt. Scheme for affordable Housing for slum dwellers ( urban
poors)

SEBI rejected the recommendation of Bimal Jalan Committee of not allowing Stock Exchanges
to be listed on Stock Exchanges.

112
Microsoft has launched its educational portal “ Unlimited Potensial” in India.

Bangala Desh is considered as the Originator of the concept of “Micro Finance”.

NHB- National Housing Bank is the Housing Finance Regulator.

Annual investment ceiling in PPF has been increased to Rs.1.00 Lac from Rs.70,000/-

ADB-67 Member at present.

Syndicate Bank Employee can now contribute any % of pay as additional EPF (Earlier cap-20%
of pay)

Reimbursement of premium under SyndArogya policies is restricted to 50% of premium paid

for policies up to Rs.1.00 Lac.

Core Banking Solutions was introduced in our bank in the year 2001. ABB Facilities were
introduced wef 01.11.2002. Multicity Cheque Book facility was introduced wef 01.04.2004.

India's first fund with SIP in Gold- Reliance Gold Saving Fund.

Bank Board Bureau- Chairman-Vinod Rai, HQ- Mumbai.

Chairman of SEBI- Mr. U K Sinha, Ex CMD of UTI AMC.

UIDAI- Dr. Ajay Bhushan Pandey Chief Executive Officer (CEO)

UIDAI- J. Satyanarayana- Chairman (Part Time)

The President-elect of the United States - Donald Trump.

“e-post office”, the e-Commerce portal of India Post. The portal will enable the customers to
transact postal business any time.

NALCO is the first PSU to offer Employees Stock Options (ESOPs)

Honkong - Real Estate highest prices in the world ( Mumbai 6 th )

Presently, China has become the second largest economy in the world.

Oldest Stock Exchange in Asia- Bombay Stock Exchange, Mumbai.

eTHIC- software is used by our bank for RBIA developed by 3i Infotech.

113
Net interest margin is defined as the total interest earned less total interest paid

Burden is defined as the total non-interest expenses less total non-interest income.

The name of ABN Amro Bank N. V. was changed to Royal Bank of Scotland N. V. wef
19.03.2010.

India at 5 th spot in Global Economic Power list. First USA, Second China, Third Japan, Fourth
Germany and Fifth India. China has became second larest economy in the World against third as
earlier. India moved to fifth spot in 2009 from 10 th in 2000.

Dutch Auction Method (DAM) -Under the DAM, Investors are required to put in bids for
quantum of shares and the price they are willing to pay. The last or lowest price at which all
shares are assigned becomes the issue price of the shares provided it is not lower then the floor
price. Investors are allotted shares at the issue price.

Example: Where X Co. Ltd., offered 10000 shares and bids were received for 2500 shares at Rs
500/ – per share; further 3500 shares at Rs 475/- per share; another 3000 shares at Rs 400/- per
share and 1000 shares at Rs 375/-. At Rs 375/- which is the lowest for the 10000 shares becomes
the issue price. Book Building Method is based on the Dutch auction method where the issuer
determines a price band within which bids are invited to determine the price and the lowest price
offered is considered the issue price.

French Auction Method (FAM) -Under FAM issuing company sets a floor price (ibid) which
investors place their bids. On a price-priority basis, allotments are made. Investors are issued
shares at the prices they have indicated and not the cut off price as is the system under DAM.
Investors are bound to pay the price they have stated in their applications. NTPC & REC issued
shares under this method.

NSDL is National Securities Depository Limited - the largest depository of Indian stocks

CDSL is Central Depository Securities Ltd

Reserve Bank of India
Insurance policy
Financial Inclusion
( FI)
The Reserve Bank of India started functioning on April 1, 1935,
making April 1, 2009 to March 31, 2010 its 75th year. Bank’s
Platinum Jubilee Year. RBI Nationalised in 1948.
Insurance policy is contract of indemnity.
Financial inclusion is delivery of the banking facilities
/services to all the people in fair, transparent and equitable
manner at affordable cost.

Finacial Inclusion- is providing or ensuring banking services at

affordable costs to weaker sections of the society or unbanked
segment which does not have access to formal banking systems.

114
United Western Bank In IDBI Bank
merged
Bank of Madura was With ICICI Bank
merged
Global Trust Bank has Merged with OBC.
been
Suvarna Sahakari Bank Merged with IOB wef 01.02.2009
MD & CEO of Axis Shikha Sharma.
Bank
MD & CEO of ICICI Chanda Kochar wef 01.05.2009.
Bank K V Kamath is now Non Executive Chairman of the ICICI Bank.
Application Supported This facility is available while applying for initial public offer
By Blocked Amount (IPO) instead of paying through cheques.
(ASBA )
Commonwealth Bank Australia’s leading financial institution Commonwealth Bank will
be opening its first branch in India (in Mumbai)
Bank mergers Finance Ministry has appointed Global Consultants Mc Kinsay &
Co. and Ernst & Young to suggest possible PSU Bank candidates
that could be amalgamated to form bigger & strong banks.
Insurance Regulatory T.S. Vijayan (Ex LIC Chairman)
& Development
Authority (IRDA) -
Chairman
RBI Governor Mr. Urjit Patel.
Healthy merger in Times Bank and HDFC Bank. Proposed Bhartiy Mahila Bank with
banking industry SBI
Chairman of NITI Prime Minister is ex-officio chairman of NITI Ayog.
Ayog

Provision Coverage Provision Coverage Ratio- PCR is a measure of funds that banks
Ratio have to set aside from their profits to protect against losses from
some loan going bad. Higher PCR denotes good financial health.

Conversion of shares Is called “Rematerialisation”

into physical form from
electronic form.

Reverse Mortgage – A reverse mortgage enables older homeowners (60+) to convert

part of the equity in their homes into tax-free income without
having to sell the home, give up title, or take on a new monthly
mortgage payment. The reverse mortgage is aptly named because
the payment stream is “reversed.” Instead of making monthly
payments to a lender, as with a regular mortgage, a lender makes
payments to you.

115
Rs.1/- Revenue Stamp For receipt up to Rs.5000/- exempted as per Indian Stamp Act. For
to be affixed as per issuing receipt above Rs.5000/-, one rupee revenue stamp must be
Indian Stamp Act. affixed.

Consumer Protection District Forum- Subject to the other provisions of this Act, the
Act 1986 District Forum shall have jurisdiction to entertain complaints where
the value of the goods or services and the compensation, if any,
claimed does not exceed rupees Twenty lakhs.

State Forum- complaints where the value of the goods or services

and compensation, if any, claimed exceeds rupees Twenty lakhs
but does not exceed rupees 100 lakhs;

National Forum- ) complaints where the value of the goods or

services and compensation, if any, claimed exceeds rupees 100
lakhs;
Limitation period is two years from the cause of action.
Chairman of National Minister of Consumer Affairs is ex – officio chairman of National
Consumer Council Consumer Council.

Rajbhasha Division in Ministry of Home Affairs and not Finance Ministry.

Central Govt. is
associated with
Commodity Exchanges MCX- Multi Commodity Exchange of India. Country’s first
electronic exchange for commodities market. NMCE- National
Multi Commodity Exchange at Ahmedabad. NCDEX-National
Commodity and Derivatives Exchange at Mumbai.

FEMA -1999 Foreign Exchange Management Act -1999 . It extends to the whole
of India. FERA 1973 is replaced by FEMA 1999. FEMA come into
force on the 1st day of June, 2000.

Rupee is strong – Importers Gain and Exporters loss

(Moving from say Rs.45
per USD to Rs.44 to 43
to 42 to 41 …….. etc.)
Rupee is weak Exporters gain and Importers loss
(Moving from say Rs.40
per USD to Rs.41 to 42
to 43 to 44 …….. etc.)
Regulators RBI regulates the money market, SEBI regulates the capital market
and IRDA regulates the insurance sector.

116
Govt holding in Public 51%
Sector Banks should
not fall below ---- at
any time
Micro credit - SHG Bangladesh Grameena Bank is topper in the world for providing
Financing micro credit to SHG. Head of the Bank – Mohmmed Yunus.

Certificate of Deposit Minimum Rs.1.00 lac and in multiples of Rs.1.00 lacs

Not less than 7 days and not more than 1 year.
Freely transferable by endorsement and delivery.

Right to Information Implemented Wef 12.10.2005, Fee of Rs.10/- payable along with
Act application is must otherwise do not give information.
ATM operations are exempted from RTI Act.

Securitization - It referes to act of making a loan or mortgage in to tradable security

by issuing bill of exchange or other negotiable paper in place of a
loan.

In simple- selling of loan assets.

Import Export (IE) Given by DGFT, Director General of Foreign Trade.

Codes
DICGC- Deposit Premium 10 Paisa for every deposit of Rs.100 payable half yearly
Insurance and premium is exempted from service tax.
Claim Rs1,00,000/- per bank ( Principle + Interest)
Individual accounts and Joint accounts with others- separate
protection of Rs.1,00,000/- is available.

Days 15- March- Consumers Day

15- June- World Environment Day
7- April- World Health Day
8- March- International Womens Day.
31-Oct- World Saving Day
23-Dec –Farmers Day in India
HDFC Bank, Centurion HDFC Bank approved the acquisition of Centurion bank of Punjab
Bank of Punjab seal (CBOP) for Rs.9, 510 Crore in the largest merger in the financial
largest banking merger: sector in India.

SEZ or Industrial Park Can be classified as Infrastructure Sector.

Fair Practices Code for Formulated by RBI and not by IBA.
Lenders
Participatory Note (PN) Is associated with Foreign Institutional Investor. FII.
Participatory Notes are Derivatives. “Participatory Notes are
offshore derivative instruments issued by overseas investor who
have no access direct to the Indian Capital Markets”

117
“Finacle” banking Developed by Infosys Technologies Ltd used by most of the banks
software is in India and world.
Oldest Stock Exchange Bombay Stock Exchange (BSE) – year 1875
in Asia
SENSEX refers to Sensitive Index of shares prices of 30 scrips listed at BSE.

BANKEX refers to Sensitive Index of shares prices of banking scrips listed at BSE.
Introduced wef 01.01.2002.
NIFTY refers to Sensitive Index of shares prices of 50 scrips listed at NSE.

Dynamic Provisioning The Reserve Bank of India ( RBI) stressed on the importance of
or expected loan loss dynamic or expected loan loss provisioning in order to maintain
provisioning to maintain financial stability. “Dynamic or expected loan loss provisioning can
financial stability contribute to financial stability by recognising the losses early in
the cycle at the time of loan origination by building up buffers in
good times that can be used in bad times, thereby limiting the
consequences during a downturn.

Options It is contract that provides a right but does not impose any
obligation to buy or sell a financial instrument.

Call option : The owner i.e. the buyer, has the right to purchase and
Call option the seller has to obligation to sell, a specified no. of instruments say
shares at a specified price during the time prior to expiry date.

Put option : Owner or the buyer has the right to sell and the seller
Put Option has the obligation to buy during a particular period.

Futures The futures are the contracts between sellers and buyers under
which the sellers (termed ‘short’) have to deliver, a pre-fixed
quantity, at a pre-fixed time in future, at a pre-fixed price, to the
buyers (known as ‘long’). It is a legally binding obligation between
two parties to give/take delivery at a certain point of time in future.
Factoring and Factoring -- financing against bills / invoices of a trading firm
Forfeiting (mostly of exporters) by a financial institution. It is selling of
receivables to the purchaser who is the factor. If the factor is unable
to receive the amount from the purchaser, he has to suffer loss as
there is no recourse to the seller (exporter). When instead of selling,
the receivables are discounted, it is called forfeiting.

Value Added Tax Implemented wef 01/04/2005

(VAT) First time implemented in Haryana.
BANCS Core Banking Solution developed by TCS ( Tata Consultancy
Services)

118
AML 3 i Infotech developed Anti Money Laundering Solutions for Bank
of India.
First Indian Bank to be ICICI Bank
listed on New York
Stock Exchange.
Tier-II capital cannot 100% of Tier-I capital.
exceed
Revaluation Reserves Only 45 % of value can be taken for Tier-II capital once in five
years.
SyndShakti SyndShakti- First implemented in Bellary district (K S) wherein
each customer is given a smart card - a biometric enabled
multifunction card. Each customer would be identified uniquely by
finger prints.
First bank to launch HDFC
mobile banking in India
Oldest Public Sector Allahabad Bank
Bank
Regulatory Authority Securities and Exchange Board of India (SEBI)
for Capital Market in
India
IRDA Insurance Regularity and Development Authority. Regularity
Authority for Insurance Sector.
Investment Fluctuation Can be treated as Tier-I capital
Reserve
Ad Valorem stamp duty In proportion to the value of the instrument. Or as % of value of
means the Instrument.
GETF- Gold Exchange Traded Fund
Gold in demat form and minimum unit of one gm. Pure Gold
99.70% or 99.95% available.
GDR- Global Depository Receipt- Tool used by Indian companies to raise
funds from Foreign Bourses.

IDR - Indian Depository Receipt- Tool used by Foreign companies to

raise funds from Indian Bourses and SEBI is the regulator.
COFEPOSA deals with economic offences.
Green Shoe Option Provision of retention of amount in excess of subscription of
public issue of shares/Debentures/Bonds etc.

Plastic Money Credit Card, Debit Card, Smart Card, SKCC, SKSCC, SLUCC,
SSCC Cards
Our HO Security Dept Is first among all public sector banks to get ISO 9001-2000
certification.
Banks in Insurance If CRAR is more than 10%, then only Banks can enter into
Sector Insurance Sector.

119
Mr. A. K. Khandelwal The Government–appointed High Powered Committee headed by
Committee the Former Bank of Baroda Chairman, Mr. A. K. Khandelwal to
come out with strategies on planning of recruitment and succession
as well as retention of best performers through performance-
linked incentives and grooming such officials for leadership roles.
Black Gold Oil
White Gold Cotton
Yellow Revolution Production of Oil Seeds and Pulses.
Credit Card Central Bank of India is first among Indian Bank to introduce credit
card.
DSB Return To be submitted by HO to RBI under Off Site Supervision
Mechanism.
Declaration of Dividend Bank is expected to transfer to statutory reserve fund 25% of profits
by Banks before dividend declaration.

Regulatory Authority Securities and Exchange Board of India (SEBI).

for Credit Rating
Agencies
National Spot Exchange Online Trading of Agri Produces all over in India. Physical
delivery allowed only in three States i-e Maharashtra, Gujarat and
Karnataka. Promoted by Financial Technologies and NAFED.

Pension Fund The Pension Fund and Regulatory Development Authority

(PFRDA) unveiled a savings account scheme under the New
Pension Scheme (NPS) which would allow investors to enter and
exit at will.
Business Facilitators or As per recent RBI guidelines dtd 24.04.2008 ex staff along with
Business defense personnel & Govt Employees can be appointed as Business
Correspondents Facilitators or Business Correspondents.

The Payment and The Payment and Settlement Systems Act, 2007 (PSS Act, 2007)
Settlement Systems Act, came into force with effect from Aug 12, 2008 with a objective to
2007 provides for the regulation and supervision of payment systems in
India and designates RBI as the authority for that purpose.

Frauds and failure of Is the example of Operational Risk.

CBS system
State Bank of India First Bank to generate captive wind power (Green Energy).

UIDAI- UIDAI- Unique Identification Authority of India- UID Card will

“ADHAR” is Brand be issued by UIDAI. This will help banks for KYC compliance.
Name
ICICI Bank ICICI Bank is the second Indian Bank ( after SBI ) to get a full
fledged banking license in Singapore. Singapore has given an in
principle clearance to ICICI Bank recently to operate as qualified
full bank (QFB) in the country.

120
Financial Stability and Central Govt. has set up a Financial Stability and Development
Development Council Council whose job would be to monitor conglomerates & improve
(FSDC) condition among financial regulators with a view to prevent future
financial crisis. The FSDC will be super regulator in the financial
sector. Meetings of FSDC are chaired by Finance Minister of India.

Central Electronic Central Electronic Registry-CER- E-Registry of mortgaged home

Registry loans. Establishment of CER has been envisaged under SARFAESI
Act 2002. HL frauds can be avoided.

SEBI, the capital market regulator hikes retail investor limit in initial public offering to Rs.2.00
lacs from Rs.1.00 lacs .

Banks are permitted to use the floating provisions only for contingencies under extraordinary
circumstances for making specific provisions in impaired accounts after obtaining Board’s
approval and with prior permission of RBI.

IRDA has stipulated that the mandatory ceding by every general insurer in the country to
National Insurer-GIC will stay put at 10%.

UK Payment council has said that to make payments more efficient no cheques will be issued
or honored in Britain from Oct 2018.

Zeta Analysis is a model for identifying the bankruptcy risk of companies.

Tobin Tax – is tax on foreign exchange transactions that would be applied uniformly by all
major countries to deter speculation on currency fluctuations.

NPV- Net Present Value – NPV gives time value of money. Value of tomorrow’s money as if
stands today.

Number of US banks failure has surpassed the 100 mark.

Largest bike maker in the world - Hero Honda.

Direct Taxes- IT, Wealth Tax, STT .

Indirect Taxes- Customs, Excise & Service Tax

All the companies must reserve 35% of shares for retail investors while coming out with IPO as
per SEBI guidelines. IPO should be finalized within 12 days from the date of closing and to be
listed on Stock Exchanges within 7 days from the date of allotment. For Retail Investors, limit
has been increased to Rs.2.00 Lacs from earlier Rs.1.00 lacs by SEBI and first public issue was
MOIL.

121
Prime task for Finance Commission is to decide on the distribution of net taxes of the center
between Union & States. Finance Commission is appointed by President of India.

10% people in India have an insurance cover. 13% have debit cards & only 3% have credit
cards.

PIPE - It stands for private investments in public equity (PIPEs). It involves buying stakes by
private equity funds in listed companies. PIPEs have generated extraordinary returns by
applying private equity principles to public investing.

RBI has increased threshold limit for RTGS transactions from Rs.1.00 lacs to Rs.2.00 lacs.

The Reserve Bank of India was nationalized in 1948.

“Euro” is the currency of European Union. England is out of EU now.

“Growth and Finance” Book written by Dr. C Rangarajan, Ex-Chairman, Prime Minister's
Economic Advisory Council.

Mobile Number portability first implemented in Haryana State.

FSDC meetings are chaired by Finance Minister of India.

United Stock Exchange is associated with Currency Futures.

SyndArogya policies up to Rs.5.00 lacs shall be issued by UIICL with out any medical check
up up to entry age of 65 years and all existing renewals shall be done by UIICL up to age of 80
years with out any medical examination.

Under Financial Inclusion, RBI Permission is not required for opening the branches.

Finance Commissions set up by the President of India decides the distribution of tax incomes
between the Central and State Govts.

The merger of which of the following two Indian companies took place in recent past which is
termed as “Largest ever merger in India’s Corporate History” ? Reliance Industries and
Reliance Petroleum Ltd.

‘SEPA’. What is the full form of the term - Single Euro Payments Area

Working Group to Review the Business Correspondent Model - Shri P Vijaya Bhaskar Rao

The Govt. of India allowed the Income Tax Department to set up its centralized IT processing
center in Bangalore.

122
The Govt. of India introduced Money Laundering Bill 2009. Under the bill which agencies is
empowered to search the premises after the offence is committed and a case is filed ?
Enforcement Directorate.

What is our FDI policy ? Under the extant policy, investments into most sectors fall under the
automatic route. Such investments require no prior permission of the government or any
regulator and the Indian company receiving the foreign investment is only required to intimate
the RBI of any such investment. But some sectors still require prior government approval and
most sectors that require government approval fall within the ‘sensitive’ category.

The following are the instruments of Credit Control in the hands of the RBI - Lowering or
raising the minimum cash reserves maintained by the commercial banks.

Which of the program was launched to further improve the facilities of irrigation in rural India
? National Watershed Development Programme.

Subscribe to the Public Provident Fund any amount not less than Rs. 500 and not more than
Rs. 1,00,000 in a year. Non Resident Indians are not eligible to open an account under the
Public Provident Fund Scheme. Close PPF a/c any time after the expiry of 15 years from the
end of the year in which the initial subscription was made by him,

EL NINO - A warming of the ocean surface off the western coast of South America that
occurs every 4 to 12 years when upwelling of cold, nutrient-rich water does not occur. It causes
die-offs of plankton and fish and affects Pacific jet stream winds, altering storm tracks and
creating unusual weather patterns in various parts of the world

La Nino- It follows an El Nino. It is anti El-Nino or simply a cold event. It is the cooling of
water in the Pacific Ocean.

World’s first zero waste city is under construction in Abu Dhabi called Masdar City. It is to be
completed by 2016 and will be world’s first carbon neutral, zero waste city completely powered
by renewable energy.

The Payment of Gratuity Act, 1972 has been amended first to cover teachers in educational
institutions and again to enhance the ceiling on gratuity from Rs.3.5 lakh to Rs.10 lakh.

The Ministry of Corporate Affairs is the nodal Ministry in the matter of convergence of
International Financial Reporting Standards (IFRS) and has decided that Indian Accounting
Standards currently followed by the companies in a phased manner as part of the G20
commitment.

ALCO of the Bank takes care of Market risk.

123
Annual Stock Audit is mandatory for NPA accounts secured by stock and book debts with the
Real Account balance of Rs 5 crores and above.

MIBOR refers to Mumbai Inter Bank Offer Rate

ASD 8 is a document format for securing advances of the bank and is Confirmation letter for
depositing the original title deeds for securing a loan facility. Always AD 8 is to be stamped
before execution.

A bank issuing a LC has a maximum of 5 Banking days to verify if the documents

presented comply with the terms of the LC.

Indian rupee is freely convertible on current a/c transactions.

Forex Remittances for investment in immovable property is a Capital a/c transaction

ESOP means - Employee Stock Option Plan.

The version of Uniform Customs and Practices for Documentary Credits now in force is UCP
600.

SHADOW BANKING -The term refers to the practice of banking-like activities performed by
non-banking finance companies, which are not subject to strict regulation. However, these
institutions function as intermediaries between the investors and the borrowers, providing credit
and generating liquidity in the system. Although these entities do not accept traditional.

Public Provident Fund-(PPF)-

The minimum deposit amount is Rs. 500 per annum and the upper ceiling limit is Rs. 1,00,000
per annum. A penalty of Rs. 50 will be levied per year of default, if the customer doesn’t
deposit the minimum deposit amount of Rs. 500 on the completion of the financial year. The
current rate of interest on Public Provident Fund (PPF) is 8.00%, which is compounded
annually. A Public Provident Fund (PPF) account gets matured after the completion of 15 years
from the end of the year in which the account was opened.

A customer can extend the tenure of a Public Provident Fund (PPF) investment for a block
period of 5 years beyond the maturity period by submitting Form H within one year from the
date of maturity. No premature withdrawal is allowed for Public Provident Fund (PPF)
accounts. Only in the case of the death of a customer, their nominee /legal heir can close the
account. Customer can make one withdrawal every year, from the 7th financial year, of an
amount that does not exceed 50% of the balance of the customer credit at the end of the fourth
year immediately preceding the year of withdrawal or the amount at the end of the preceding
year, whichever is lower.

124
White revolution is associated with Milk production (Late Dr. Verghese Kurien).

Syndicate Bank commenced the Rs. 8000/- (400 shares having paid up value of Rs.20/-.
business with a capital of Authorised Capital Rs.1 lac )

International Bank for Reconstruction and

World Bank Development. IBRD opened wef 01.07.1944
HQ at Washington DC.

Cheque Truncation System Cheque Truncation is an efficiency enhancement

CTS-2010 - Standard" for Cheque initiative in the Payments Systems area, initiated by
Forms – Specifications issued by RBI. RBI.

Truncation is the process of stopping the flow of the

physical cheque, to the drawee bank branch. The
physical instrument is truncated (i.e. movement of
paper cheque is stopped) at some point, en-route to the
drawee branch and an electronic image of the cheque
is sent, along with the relevant information, like the
MICR fields, date of presentation, presenting banks
etc.

By amending Sec 6 of NI Act, the physical image of a

truncated cheque and electronic cheques, have been
recognised equal to a paper cheque.

FSDC Financial Stability and Development Council, India’s

apex body of the financial sector.

The main objectives of FRBM Act To reduce fiscal deficit.

are To adopt prudent debt management.
To generate revenue surplus

125

Business Correspondent
Financial Stability Unit (FSU)
ATM Debits
IDBI Bank
Gross National Product: It is the
total market value of the finished
goods and services manufactured
within the country in a given financial
year, plus income earned by the local
residents from investments made
abroad, minus the income earned by
foreigners in the domestic market.
Fiscal Deficit : This is the gap
between the government's total
spending and the sum of its revenue
receipts and non-debt capital receipts.
It represents the total amount of
borrowed funds required by the
government to fully meet its
expenditure.
Maharatna Status
Acquiring of shares
Return of Capital to Govt of India
Business Correspondent is an agent who works on
behalf of banks on an outsourcing basis for taking
banking services to the hitherto non-banked centers.
Idea has its origin in Brazil.
Financial Stability Unit (FSU) RBI has set up FSU on
17.07.2009 to conduct macro prudential surveillance
of the financial system on an ongoing basis.
Banks have to reimburse erroneous debit arising out of
failed ATM transactions within 7 working days from
the date of receipt of a complaint. If bank failed to do
so, fine of Rs.100 per day is payable.
Wef 01.10.2004 became Commercial Bank.
Earlier it was Financial Institution.
Non - Plan Expenditure : It consists of Revenue and
Capital Expenditure on interest payments, Defense
Expenditure, subsidies, postal deficit, police, pensions,
economic services, loans to public sector enterprises
and loans as well as grants to State governments,
Union territories and foreign governments.
Budget deficit : It is the excess of total expenditure
over total receipts, with borrowing not included among
receipts. This deficit is funded by borrowing. In other
words, it is the amount by which planned expenditure
is greater than the expected income for a particular
period/ project.
Mega public sector undertakings of the country have
now got greater financial and operational autonomy
after the government accorded the “Maharatna” status
to these firms to help them emerge as global giants.
The PSUs that would benefit from the decision include
ONGC, IOC, SAIL,BHEL,GAIL and NTPC.
A banking company can acquire shares in a company
subject to ceiling not exceeding 30% of the paid up
capital and reserves of the bank or 30% of the capital
of the company whichever is lower.
First bank to return capital to the Central Government
is Punjab National Bank.
126
Official language policy
Banking Codes & Standards Board This Board has been set up as per recommendations of
of India (BCSBI)
Tata Consultancy Services
P J Nayak
China
Barack Obama
M. S. Swaminathan
“Imagining India”
Mobile Phones
As per Official language policy for B region, branch
target to reply in Hindi letter received in Hindi is
100%.
S S Tarapore Committee.
TCS is coordinating with Government of India in
Passport Seva Project .
Global financial services major Morgan Stanley has
appointed former Axis Bank Chairman P. J. Nayak as
its new country head and Chief Executive Officer for
India.
has now became the second Largest Economy of the
World .
is the author of the Book “Dreams from My Father : A
Story of Race and Inheritance” .
is the author of the book entitled, “To a Hunger-free
World”.
Book is written by Mr. Nandan Nilekani .
Today 53% India’s population is using mobile Phones.

BASEL Banks are required to maintain a minimum 5.5% in common equity (as against the
current 3.6%) by March 31, 2015 for credit risk + market risk + operational risk on an ongoing
basis (progressively increasing from 4.5% from 1st April 2013), thus by March 31, 2018, banks
have to maintain CRAR of 11.50% (including CCB and Tier 2 capital)

Banks to create a capital conservation buffer (CCB) of 2.5% by 31st March 2018 (starting from
31st March, 2015 at the rate of 0.625% of RWA every year there onwards) with certain
restrictions on pay out of dividends, if not adhered to this ratio.

Tier 1 capital must be at least 7% of RWA on an ongoing basis. Thus within the min Tier 1
capital, Additional Tier 1 capital can be admitted maximum at 1.5% of RWAs by the year
2018.Total Capital (Tier 1 Capital plus Tier 2 Capital) must be at least 9% of RWAs on an
ongoing basis. Thus, within the minimum CRAR of 9%, Tier 2 capital can be admitted max up
to 2% by the year 2018.

FRBM Act 2003:

Fiscal Responsibility and Budget Management act was enacted by the Parliament of India to
institutionalise financial discipline, reduce India’s fiscal deficit, improve macroeconomic
management and the overall management of the public funds by moving towards a balanced
budget.

127
The main objectives of FRBM Act are:-

1. To reduce fiscal deficit.2. To adopt prudent debt management.3. To generate revenue

surplus.

OMO: Open Market Operations. The buying and selling of government securities in the open
market in order to expand or contract the amount of money in the banking system. Open market
operations are the principal tools of monetary policy. RBI uses this tool in order to regulate the
liquidity in economy.

CAC: Capital Account Convertibility. It is the freedom to convert local financial assets into
foreign financial assets and vice versa. This means that capital account convertibility allows
anyone to freely move from local currency into foreign currency and back, or in other words,
transfer of money from current account to capital account.

‘Swabhiman’, the financial inclusion scheme, comes under the purview of which ministry?
Ministry of Finance.

Which among the following does the RBI not decide? (a) CAR (b) CRR (c) Base Rate
(d) Bank Rate. - Base rate is decided by commercial banks, not the RBI.

Which of the following organizations is the Mutual Fund Market regulator?

(a) AMFI (b) SEBI (c) CIBIL (d) CRISIL. SEBI is also known as Capital regulator or Mutual
funds regulator or Market regulator. SEBI is also created investors protection fund and SEBI is the only
organization which regulate the credit rating agencies in India such as CRISIL and CIBIL.

What is understood by Fiduciary Issue of currency?- The issue of currency notes without
keeping gold or silver as deposit.

‘Fiat Money’ is the currency that a government has declared to be legal tender, despite the fact
that it has no intrinsic value and is not backed by reserves. Historically, most currencies were
based on physical commodities such as gold or silver, but fiat money is based solely on faith.

Collateralized Borrowing and Lending Obligation (CBLO) –

CBLO is an RBI approved money market instrument which can be issued for a maximum tenor
of one year. CBLO as a product has been conceived and developed by Clearing Corporation of
India, CCIL, for the facilitating deployment in a collateralised environment.

Customs Duty is a type of indirect tax levied on goods imported into India as well as on goods
exported from India.

Palakkad district in Kerala was the first district in the country to achieve total financial
inclusion.

Infosys is the first Indian company to trade on NYSE Euronext London and Paris Markets.

128
BRICS Brazil, Russia, India, China, South Africa.

CAGR - Compounded Annual Growth Rate.

SX40 – Index of India- SX40 is the flagship Index of MCX-SX. A free float based index of 40
large cap - liquid stocks representing diversified sectors of the economy. SX40 is designed to
measure the economic performance with better representation of various industries and sectors
based on ICB®, leading global Industry Classification system from FTSE. The Index is devised
to offer cost-effective support for investment and structured products such as index futures and
option, index portfolio, exchange traded funds, Index funds, etc
SX40 is designed to be a performance benchmark and to provide for efficient investment and
risk management instrument. It would also help in structuring passive investment vehicles.
Index Launch: February 11, 2013. Base Date: March 31, 2010, Base Value:10,000
Index Basket Recasting: Semi-Annually.

US Federal Reserve- Central Bank of Chairman –Janet Yellen ( First Women)

USA recently in news regarding Sub –
Prime Crisis

Multi Commodity Exchange (MCX)

has recently received in principle Launches Currency Futures and equity trading.
sanction from SEBI for

Charge to be created for demat Lien

shares offered to the bank as
security

British Government has recently ‘Bradford & Bingley ‘ (B&B)

announced nationalization of

Contribution of services sector in 60% approximately.

GDP
State Bank of Indore & The Bank State Bank of Indore (merged with SBI) and Bank of
of Rajasthan Ltd. – Rajstan (merged with ICICI Bank) has been recently
excluded from second schedule of RBI Act.

IFRS IFRS-Innovative Financial Reporting Standards- is a

set of accounting standards developed by the
International Accounting Standards Board (IASB).
Global Standards for preparation of financial
statements of public companies.

Wal Mart Wal Mart is top Retail chain in USA.

Samsung Samsung is a Korean electronics company.

129
Ikea Is Swidish Furniture Company entering in India.

Issue of No-Objection Certificate In case of receipt of request for transfer of borrowal

account, either from the borrower or from a bank /
financial institution, which proposes to take over the
account, the consent or otherwise i.e. objection of the
Bank, if any, will be conveyed within 21 days from the
date of receipt of request.
SWIFT Society for Worldwide Interbank Financial
Telecommunication. It operates a worldwide financial
messaging network which exchanges messages
between banks and other financial institutions.

Tobin tax Suggested by Nobel Laureate economist James Tobin,

was originally defined as a tax on all spot conversions
of one currency into another.

Net owned funds of Rs. 300 crore or above

Infrastructure Finance Companies
minimum credit rating ‘A’ or equivalent of CRISIL,
FITCH, CARE, ICRA or equivalent rating by any
other accrediting rating agencies iv) CRAR of 15
percent (with a minimum Tier I capital of 10 percent).

Minimum of 75 per cent of its total assets should be

deployed in infrastructure loans.

Failed Investment Banker due to Lehmen Brothers

financial crisis in USA

First Asset Reconstruction ARCIL, Sponsored by SBI, IDBI and ICICI Bank.
Company in India
No minimum and maximum limit for doing the
NEFT fund transfer transactions.

State Bank of Saurashtra has been On 13/08/2008

merged with SBI.
If total business of the PSB is more RBI has permitted to appoint three Executive Directors
than 3 lac crores. (ED)
‘Alang’ is associated with Ship Breaking Industry- Place in Gujarat

‘Pipavav’ is associated with Ship Building Industry- Place in Gujarat.

130
Share holding pattern of Regional Central Govt. 50%
Rural Bank (RRB) State Govt. 15%
Sponsoring Bank 35%.
UREM State Govt. notifies the places for deposit of original
title deeds for creation of UREM.

Memorandum of Association Company’s charter defining scope and object of the

company.

Articles of Association Bye Laws or Regulations which controls internal

SB a/c Interest
Deregulated wef 25.10.2011
Banking Ombudsman
If interest rate increased during the Falls or decreases.
year, the current market value of
existing Govt. Security
One rupee note is signed by
Securitization
management and specify powers of the Directors /
Authorised Officers of the company.
It is notified by RBI that payment of interest on
savings bank accounts by scheduled commercial banks
would be made on a daily product basis with effect
from April 1, 2010. However, periodicity for payment
of SB interest will remains same. i-e Half yearly -
March & Sept.
Limitation of one year from cause of action.
Secretary, Ministry of Finance & issued by GoI.
Securitization is not applicable to Pledge, unpaid
vendors, Aircraft / Vessels and Agri Land.

Stamp duty on sale certificate is applicable as per

respective State Stamp Act Rules.
District Consumer Council Collector is ex –Officio Chairman and minimum two
(is different from Consumer meetings to be held in a year.
Forum)
Director of Bank and CMD Director of the Banking Company can hold office not
more than 8 years. CMD 5 years.
Lok Adalat Civil disputes can be settled under Lok Adalat
mechanism and monetary ceiling is Rs.20/- lacs.
Unclaimed dividend Unclaimed dividend remaining unpaid or unclaimed
for a period of 7 years from the date of such transfer
shall have to be transferred to ‘ Investor Education
and Protection Fund’ .
Railway Is the biggest Public Sector unit/employer in India.

Banking Amendment Bill 2012
The cap on voting rights for investors in private sector
lenders will consequently rise to 26 per cent from 10
per cent. In public sector banks (PSU) banks, the cap
on voting rights has been raised to 10 per cent from 1
per cent.

131
 The Competition Commission of India to decide on
mergers and acquisitions.

Life Insurance Corporation To mop up resources through disinvestment, the

finance ministry has upped the limit for the state-run
Life Insurance Corporation (LIC) to buy equity stakes
in companies up to 30%. notification was issued to
allow LIC to hold up to 30% in listed/unlisted
companies against the current cap of 10%. Paid up
capital of the company.

Computer Awareness -
“Please refer to CBS Fast Paths and various Product Codes without
fail.”
IDBRT Awards IDRBT Banking Technology Excellence Awards 2016-Best Bank in
Banking Technology Excellence for the year 2015-16-HDFC Bank.

Latest Developments UPI- Unified Payment Interface

BHIM-. Bharat Interface for Money.
BHIM is a digital payments solution app based on Unified Payments
Interface (UPI) from the National Payments Corporation of India
(NPCI).
USSD (Unstructured Supplementary Service Data) is a Global System
for Mobile(GSM) communication technology that is used to send text
between a mobile phone and an application program in the network.
Applications may include prepaid roaming or mobile chatting.
Online transactions- New Delhi is No.1.

QR Code QR code ( Quick Response Code) is the trademark for a type of matrix
barcode (or two-dimensional barcode) first designed for
the automotive industry in Japan. A barcode is a machine-readable
optical label that contains information about the item to which it is
attached. A QR code uses four standardized encoding modes
(numeric, alphanumeric, byte/binary, and kanji) to efficiently store
data.

Li Fi LiFi is the use of the visible light portion of the electromagnetic

spectrum to transmit information at very high speeds. This is in
contrast to established forms of wireless communication such as Wi-
Fi which use traditional radio frequency (RF) signals to transmit data.

Li Fi is a wireless optical networking technology that uses light-

emitting diodes (LEDs) for data transmission.

132
 Benefits of LiFi:
 Higher speeds than Wi-Fi.
 10000 times the frequency spectrum of radio.
 More secure because data cannot be intercepted without a clear
line of sight.
 Prevents piggybacking.
Cyber Forensic India’s first Cyber Forensic Laboratory (CFL) was inaugurated on 11
Laboratory August, 2013. This CFL has been established at Tripura High Court
at Agartala.
Guardian Microsoft India introduced “Guardian” a new safety application.
Finacle 11E A new Advanced universal banking solution that simplifies banking
operations launched by Infosys is “ Finacle 11E”.
KitKat KitKat is the name given to the new Android 4.4 operating system.
Byte Eight digit binary number is called a byte.

BASIC Basic can be used for scientific and commercial purpose. FORTRAN
is not a programming language.
Which software giant Microsoft
is to buy Nokia
Company?
Blue tooth 'Blue tooth' technology allows - Wireless communication between
equipments.
Meghraj is cloud computing project by Govt. of India.
Android Android is a operating system.
Windows New version “Windows 8.1”
e-inclusion Computer Literacy of Rural Women and SC Women

Twitter & Face Book Twitter” the popular phenomenon of social networking, has been
named the “Top English Word” of the year 2009. In 2010 “ Face Book
‘ has became most popular social networking website.
Operational Risk Risk arising from failure of computer system and loss of data is
operational risk.
Nano ‘Nano’ stands for one billionth part.
Bug An error in software designing which can even cause a computer to
crash is called “bug”.
Debugging The process of eliminating pro-gramming faults is called “debugging.

Data Encryption Data encryption means protecting data in data communication system.
COBOL Is a business language
AKSHARA Is a Hindi software
ALU Part of processor which performs mathematical calculations.

5th Generation Feature is artificial intelligence

Computers

133
Spam The unwanted or non-requested e-mails are called “spam”.

Hacking Cyber crime.

Black hats – Professionals who spend all their time attacking other
systems.
White hats – Specialists defending systems
Grey hats – Non professionals who hack as hobby and out of
patriotism.

Firewall Technology Software that restricts the access to and from network and is designed
to protect from outside intrusion is called ‘ Firewall Technology ‘.

In computer system , Securing the Data.

security is important
for
SMARTQUILL is Computer Pen

PIN in ATM is Personal Identification Number, 4 Digit

ISDN Integrated Services Digital Network

IDRBT Institute for Development & Research in Banking Technology at

Hyderabad.

PARAM series of The super computer manufactured in India by CDAC, Pune is

Super Computers PARAM, PARAM 10000 and PARAM Padma . Now, they are
developing Maha Param Padma.

Digital signatures A coded confirmation in electronic form attached to an electronic

means: record.

Cheque TruncationImages of cheques to be preserved for 8 years. A centralised agency

per clearing location will act as image warehouse for banks. Physical
Dr. R. B. Barman cheque is truncated within collecting bank -- at which point within the
Committee bank is left to the discretion of the bank -- it is the responsibility of the
collecting bank to verify that physical cheque is prima facie a genuine
one.

e-Commerce Sale and purchase effected through Internet.

Phishing Phishing are attempts made by Individuals to obtain confidential

information from you by falsifying their identity.

134
 FINO is Biometric Smart Card introduced by Financial Information
FINO and Network Operations Ltd.
Biometric means where the security uses the fingerprints of the person
to allow access to the machine or room.

Debit Card Buy now and pay now. Immediately a/c is debited.
Credit Card Buy now and pay later.

GSM Global System for Mobile Communication

CDMA Code Division Multiple Access

The majority of Insiders

computer crimes are
committed by.
The common name Spoofing .
for the crime of
stealing passwords is
Malicious Software is as Malware
known
Trojan Horse A program that performs a useful task while simultaneously allowing
destructive acts is called as Trojan horse.

Cracking Refers to electronic trespassing or criminal hacking

Biometrics is the measurement of things such as fingerprints and retinal scans

used for security access.

Spybot is the name of an application program that gathers user information

and sends it to someone through the Internet.

3G/4G Third Generation / Fourth Generation

IFSC Code Stands for ‘Indian Financial System Code’ 11 Digit Code.

GEFU Stands for ‘Generic External File Upload’

Search Engine Programs that help in locating a website

UTR number Denotes ‘Unique Transaction Reference number’.
Modem Modem stand for Modulator demodulator
“RUPAY” “RuPay” is the name given to ATM Card to be launched by National
Payment Corporation of India (NPCI) for no frill a/c holders in
association with Banks.
Travel Cards a prepaid card in various currencies issued by banks
Kim Jong –II Kim Jong –II is a Malware in the name of North Korian Leader.

135
 Information Information Technology Act came into existence in 2000.
Technology Act
World’s first Scientists in the US claim to have developed the world’s first
‘biological biological computer that is made from bio-molecules and can decipher
Computer- images encrypted on DNA chips.

The K Computer A Japanese supercomputer has broken its own record as the world’s
fastest machine by performing 10 quadrillion calculations per second.
The K Computer, which has more than 88,000 central processing
units—the computer’s brain—compared with fewer than four in the
average desktop, smashed its own record of just over 8 quadrillion
calculations during an experiment in October 2011.

‘Caffeine’ Google unveiled a new version of its search engine called ‘ Caffeine’.

IMPS Immediate Payment Service is an instant interbank electronic fund

transfer service through mobile phones. Both the customers must have
MMID (Mobile Money Identifier Number).

Various Important Committees-

Saraf Committee RTGS payment system
Kapoor Committee Simple application for SSI
R V Gupta Committee Agriculture and SKCC
C B Bhave Committee Dematerialization
K B Shere Committee Electronic Fund Transfer
C Rangarajan Committee Computerization
Chairman: Shri Deepak Mohanty The Working Group on Balance of Payments
Manual for India
Vaghul Committee Money Market
Goiporia Committee Customer Service
Narsimhan Committee Debt Recovery Tribunals (DRT)
Gangadharan Committee Bank Mergers
Mitra Committee Due Diligence and Legal Compliance and Bank
Frauds.
Malegam Committee was appointed by the RBI, is looking into the
regulation of Micro Finance Institutions.
Rajan Committee On financial reforms
Ghosh Committee Recommended for obtaining photo of depositors
Shetty Committee Syndication of Advances.
Dr. R B Barman Committee Cheque Truncation
S S Tarapore Committee Capital Account Convertibility
Abhijeet Sen Committee Modalities of Commodity Trading

136
Dr. S A Dave Committee
Raghuram Ranjan Committee
Deepak Mohanty Committee
Naresh Chandra Committee 2003 & Irani Limited Liability Partnership Act 2008 .
Committee 2005.
Mr. A. K. Khandelwal Committee
P. Vijaya Bhaskar Rao
Shri V. K. Sharma Committee
Shri P. Vijaya Bhaskar
Dr. K. P. Krishnan
Title
SEBI Mutual Fund Advisory Committee
On Financial inclusion
Chairman of RBI Panel to review BPLR
structure, recommended introduction of base
rate system.
Implemented wef 09-01-2009 as per
recommendations of these committees
Recruitment and succession as well as retention
of best performers through performance-linked
incentives and grooming such officials for
leadership roles.
Working Group to Review the Business
Correspondent Model.
Interest Rate Futures. And also
Working Group to Review the Credit Guarantee
Scheme of the
Credit Guarantee Fund Trust for Micro and
Small Enterprises.
Branch Authorisation Policy.
Report of the Committee on Comprehensive
Regulation of Credit Rating Agencies.
Chairman

Report of the Working Group to Review the existing prudential

Shri B. Mahapatra
guidelines on restructuring of advances by banks/financial institutions

Report of the High Level Steering Committee for Review of

Dr. K.C. Chakrabarty
Supervisory Processes for Commercial Banks

Report of the Working Group on Savings during the Twelfth Five-Year

Dr. Subir Gokarn
Plan (2012-13 to 2016-17)

Report of the Committee to Re-Examine the Existing Classification

and Suggest Revised Guidelines with Regard to Priority Sector Shri M V Nair
Lending Classification and Related Issues

Report of the Expert Committee on Licensing of New Urban Co-

Shri Y.H. Malegam
Operative Banks

Working Group on the Issues and Concerns in the NBFC Sector Usha Thorat

Report of the Committee to Review the Facilities for Individuals under

K. J. Udeshi
Foreign Exchange Management Act (FEMA), 1999

Report of the Committee on Customer Service in Banks M. Damodaran

137
Report of the Working Group on Securing Card Present Transaction Gowri Mukherjee

Report of the Working Group on Reporting of OTC Interest Rate and

Shri P Krishnamurthy
Forex Derivatives

Report of the Working Group on Introduction of Financial Holding

Smt. Shyamala Gopinath
Company Structure in India

Report of the Working Group on Operating Procedure of Monetary

Shri Deepak Mohanty
Policy

High Level Committee for Preparation of the Information Technology

Dr K C Chakrabarty
Vision Document 2011-2017

Report of the Internal Group on Introduction of Credit Default Swaps

R.N. Kar
for Corporate Bonds

Working Group on information security, electronic banking,

Shri G. Gopalakrishna
technology risk management, and cyber frauds

Report of the Working Group on Balance of Payments Manual for

Shri Deepak Mohanty
India

Report of the Working Group to Review the Credit Guarantee Scheme

Shri V. K. Sharma
of the Credit Guarantee Fund Trust for Micro and Small Enterprises

Report of the Committee on Comprehensive Regulation of Credit

Dr. K.P. Krishnan
Rating Agencies

Report of the Group to review the extant Branch Authorisation Policy Shri P.Vijaya Bhaskar

Report of the Working Group on Benchmark Prime Lending Rate

Shri Deepak Mohanty
(BPLR)

Report of the High Level Committee to Review Lead Bank Scheme Usha Thorat

Report of the Working Group to Review the Business Correspondent Shri P Vijaya Bhaskar
Model Rao

Report of the High Level Group on Systems and Procedures for

Currency Distribution Usha Thorat

Report of G20 Working Group on Enhancing Sound Regulation and Dr. Rakesh Mohan and
Strengthening Transparency Mr. Tiff Macklem

Report of the Committee on Financial Sector Assessment Dr. Rakesh Mohan

138
Report of the High Level Committee on Estimation of Savings and
Dr. C. Rangarajan
Investment

Report of the Technical Advisory Group on Development of Housing

Prof. Amitabh Kundu
Start-Up Index in India

Report of the Committee on the Global Financial System (CGFS) on

Dr. Rakesh Mohan
Capital Flows and Emerging Market Economies

Task Force For Diamond Sector Shri A.K. Bera.

Report of the Working Group on Defraying Cost of ICT Solutions for

Shri G. Padmanabhan
RRBs

Report on Interest Rate Futures Shri V.K. Sharma

Report of the Internal Working Group to Study the Recommendations

Shri K.U.B. Rao
of the NCEUS Report

Report of Working Group on Rehabilitation of Sick SMEs Dr. K. C. Chakrabarty

Report of the Working Group to Examine the Procedures and

Shri. C.P. Swarnkar
Processes of Agricultural Loans

Report of The Working Group on Preparing Guidelines for Access to

Shri. R. Gandhi
Payment Systems

Report of the Committee on Fuller Capital Account Convertibility S.S. Tarapore

Latest Committees in 2016-

A K. Pandey-Working Group on Import Data Processing and Monitoring System-2016

Sumit Bose-Advisory Committee on Ways and Means Advances to State Governments-2016

H R Khan - committee on corporate bond market 2016

P. G. Apte-Working Group on Interest Rate Options-2016

Ratan Watal Committee- for Digital Payments.

139
The following are the recollected questions from IBPS-2016 –Test-
(Please update the answers whereever required due to recent changes)

1) Married women’s policy

2) PMSBY premium
3) RTGS—DLN time
4) PMJDY-life cover
5) SAARC-which country is not in—WTO/WHO/WB
6) Agent died—pass cheque
7) PA holder-Principal died—return cheque
8)Repo rates and reverse repo rates
9)Agriculture loans-hypothecation–
10)Agri term loans no third party guarantee where assets are created—what is the limit
11) Minimum capital for small banks ….%
12) Provision for Std CRE-
13)CBDT direction for money laundering-cash transactions-what is the limit—
14)TDS applicable to NRO accts(other options—NRESB,NRE-TD, FCNR)
15)Whether a Private Limited Co can be a Partner in partnership firm
16)No of credits in a year in a pension account can be—12
17)If in a pension account 14 crs are made then in the 15 th time what is the T/O commission
18)Provision for STD SSA(6 mths)i.e—Dt of NPA-30.9.14—Bal Rs. 50 lacs, Sec Rs. 40 lacs,-
provision for 31.03.15
19)BEP-capacity utilization in II and III year—55 and 50—but actually—II and III year-52 and
54—what the profit/ loss—II yr loss and III profit
20)Product codes for SB, Synd Samaya, FD no int, CA premium accts were asked— 8 questions
21)DSCR?-NPAT-Rs. 100 lacs, Tax-Rs 40 lacs, Depn. Rs50 lacs, Instalment-Rs.75 lacs int Rs.
50 lacs
22)Small Manufacturing and service sector—Rs. 5 crs and Rs. 2.00
23)DRI Income-Rural and semi urban—18000 and 24000
24)Synd Professional max loan amount —Rs.5.00 cr
25)Who can do Charge creation for laons-Creditors
26)Form 15 G/H- super senior citizen- where interest exceeds Rs. 10000, exemption limit for
acceptance
27)Material alteration related question
28)Budget related one / two questions
29)Credit audit limit Rs 5 crs and above

140
Recalled questions of previous years exams-
(Please update the answers whereever required due to recent changes)

award within : 30 days.

: Systemic risk and settlement

risk

borrower / owner of charged assets within _____ days, otherwise action will be initiated u/s
13(2) of the Act : 60 days

by which Act : It is a practice

the transferee : Not negotiable

India are costly because : Funds are idle and

there is fluctuation risk

le instrument, what is the time period for payment of stamp duty,

if the document is executed outside India : 3 months

an advance up to : Rs.20 lac

deposit can be accepted by banks in ____ currencies : 6

??%
Rs.1.40 lac at 30% margin. It wants to avail the limit fully.
How much will be the value of security : Rs.2 lac

Banking Regulation Act 1949

oan that can be allowed to a dealer in cattle feed / poultry feed,
within priority sector : ??
-resident
Ordinary.
eposits in a bank : Assignment

of liquidity to control inflation

-used cash credit or overdraft limit
eriodicity for submission of R-Returns to RBI : Fortnightly

Non-individual
`

141
 ly after his
death. What type of account he should open : Former or survivor

b-
target for weaker section is : 25%

of the account holder is alive

to tangible net worth ratio implies : Long term solvency of the firm
or capacity of the firm to pay long term debt.

t through : Short term sources

and surplus of long term sources over long term uses

e Court judgement : HUF

-standard, can remain
: 12 months

include small amounts also : Electronic Clearing Services – Credit (ECS-Credit)

-writings and different inks : It will be paid

-resident accounts by _____ has been allowed by RBI : RRBs

mortgage : Equitable
general crossing : When name of bank is written within or without
parallel lines.

where these have been used, is called : Funds flow statement

Basel II recommendations it is ___ % : 9%, 8%

account has died and a cheque signed by him is presented
for payment after his death : The cheque shall be paid, if not dated subsequent to date of
death or prior to the date of mandate.
ion of the cheque for a
different person. This is called : Conversion

the bank should do : To be impounded and not to be returned in any circumstances.

ide term loans and deferred payment guarantee to finance capital assets like
plant and machinery. What is the difference between these two : Outlay of funds.

sed by adjusting the impact of inflation, this is called _____

: Real rate of Interest

142
notified by : State Govt.
ares on the basis of : Price-earning (PE) ratio

ccount jointly with: with

spouse, to be operated as either or survivor.

CGFTMSE scheme : Rs.100 lac

-keeping
inks and handwriting is presented, for payment : it will be
paid if otherwise in order

years : Form 15 G

____ is above Rs.2 cr and up to Rs. _____: equipment, 5 cr.

required to be sent to the owner of the securities: 60 days

receives an endorsed cheque. What type of crossing would be required : Not-negotiatiable

crossing.
ssing on a cheque is required to be cancelled. Who can do so: Drawer

paying bank do : Cheque will be paid in normal course if it is not dated subsequent to date of
his death.

with it for ____ month as NPA : 24

Order is not applicable

In educational loan no collateral security or 3rd party guarantee will be obtained, if the
amount of loan is maximum up to: Rs.4 lac.
-standard after remaining
special mention account for a period of : two crop seasons

loan up to Rs. ____ lac in agriculture is allowed by banks at ____ % rate of interest to
farmer: 3 lac, 7%
e scheme what is the maximum amount that can be remitted
by a resident person abroad for unspecified person: $ 2.50 lac in a financial year.

called : Financial inclusion

_____ days of date of ____: 30 days, receipt of acceptance from the customer.

143
FMR 1
que is written differently in words and figures and amount written in
words is higher of the two : Amount written in words will be paid.

Why ? : As evidence of payment

-1, what type of loan accounts are eligible : Standard & sub-standard.
btor-turnover, efficiency of
collection of debtors.

B region, branch target to reply in Hindi letter

received in Hindi is : 100%
Provision for standard accounts in agriculture and SME accounts is to be made at : 0.25%
tain
premature payment and not raise loan against the security of such term deposit

hed
under directions provided by : SEBI

the bank: Trustee & beneficiary

Priority sector target for foreign banks having less than 20 branches for 2015-16: 32% of
ANBC

these NSCs : Will have priority

tatus of nominee is that of a : Trustee for legal heirs

majority. How much time is available to him to do so : 6 months from date of majority or 6
months from date of information to him that he was admitted for benefits, whichever is later.

(c) in the name of minor (d) in the name of father : in the name of father
ot be a partners (a) HUF (b) illiterate (c) Blind person (d) company : HUF

insane : can be deposited with consent of the family members (i.e. guardian)
s the income of the mortgaged property in case of which mortgage :
Usufructuary

borrower.

There is excess cash with the cashier while closing the cash balance in the evening. It is to
be deposited in : Sundries account excess cash received account (credit balance).
b) pledge
agreement (c) Hypothecation agreement : Mortgage deed

144
above 100000 : Above 100000
eath of any of them,
the money should not be paid to any legal heir, what mode of operation should be opened :
Either or any of them.

ctors is described in: Articles of Association.

which it is not authorized to undertake as per its Memorandum of Association

l cases : 10-20

lac. Loss in current year is Rs.2 lac. The tangible networth is : Rs.3 lac
nt assets are : 120000

(b) share of same bank(c) surrender value of Life Policy. Loan can be given against :
Surrender value of Life Policy.

Transfer of Property Act (c) Sec 137 of Transfer of Property Act (d) Sale of Goods act : C

Act (c) Indian Contract Act : C

arcener in case of loan raised by HUF is : Restricted to his share in HUF

property/assets

where the amount deposited in the account is restricted to (a) Rs.50000 (b) Rs.1 lac : Rs.1 lac

servicing (b) small manufacturing enterprises (c) manufacturing medium enterprises : C

e under CGTMSE : Rs.100
lac

NPA
Rs. 39.56 (b) one pound = Rs. 89.56, (c) one
yen = Rs. 0..30 (d) Rs.100 = $ 2.60 : D

negotiable : B
account (a) NRI (b)
Resident (c) Erstwhile NRI now resident (d) none : C

and by 3rd partner on June 29. The period of limitation will start from : June 30, 2007
CAMLES, the word C stands for : Capital Adequacy Ratio

(b) has implied authority to retire (c) has to give public notice (d) can retire when desired by
him by giving notice to other partners : A

145
as per recommendations of : VS Vyas Committee

l enterprise, the value of _____ is excluded while calculating the value

of plant and machinery or equipment : Land & building.

because (a) they can file suit against them (b) creditors can file suit against them (c) they can
file suit against their debtors : C

has
appealed (b) complaint is of frivolous nature : B

and signs on behalf of the company and requests for preparation of a demand draft : Cannot
be prepared.
al rate of return is : A discount rate, at which the net present value of a project is
Zero.

By Keeping For How Many Days : 2 Years

– If AD satisfied, these can be made
on the request of the depositor.

ted to : Private sector contribution to defence sector

Agriculture indebitedness.

count is satisfactory for a

period of : one year

come under which type of risk : Settlement Risk

Internal risk assessment based

directly treated as loss asset : <10 %

Adhoc PCL : Same Rate Of Normal PCL
- What is the repercussion: Firm can sue the others

paid to nominee after death of

depositor

RBI

year.
l Treatment, how much amount can be remitted freely : USD
100000

146
 “YOU ARE REQUESTED TO SEND THE” RECOLLECTED
QUESTIONS” BY E-MAIL FOR THE BENEFIT OF OTHERS”.

Santosh D. Bagale

AGM, Regional Office Mumbai-I

Mobile-09969573721 ,

e-mail – sdbagale3@yahoo.com

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