Regional Rural Bank - Model QP

1.Which of the following was the capital of 'Kuru' Mahajanapada

Mathura Indraprastha Videha Mithila

2.Out of the following remains excavated in Indus Valley, which one indicates the commercial and econimic development?

Pottery Seals Boats Houses

3.Which of the following is not an example of literature of Vedic tradition?

Vedas Puranas Vedangas Purvas

4.The Indian king who opposed Alexander was

Ambhi Porus Dhananand Mahapadmananda

5.Who laid the foundation of the city Patliputra?

Udayan Ashoka Bimbisara Mahapadmananda

Micro, Small and Medium Enterprises (MSME)

MICRO, SMALL AND MEDIUM ENTERPRISES (MSME)

In accordance with the provision of MSMED Act, 2006, the Micro, small and Medium Enterprise are classified as follow:

1. Manufacturing Enterprises – The enterprise engaged in the manufacturing of goods pertaining to any industry specified in the first schedule to the industries (Development and regulation Act,1951) or employing plant and machinery in the process of value addition to the final product having a distinct name or character or use. The manufacturing Enterprise is defined in terms of investment in Plant & Machinery.

2. Service Enterprises: The enterprise engaged in providing or rendering of services and are defined in terms of investment in equipment.

                                                         Manufacturing Sector

Enterprises	Investment in Plant & Machinery
Micro Enterprises

 Does not exceed 25lakhsSmall Enterprises

Technology Used in ATMs, Debit & Credit Cards

Automated Teller Machine (ATM)

Automated Teller Machine (ATM) is a computerized machine that provides the customers the facility of checking balance, withdrawing and transferring the funds without visiting the branch of the bank

Important Points to Remember:

Technology Used: Broadband Integrated Service Digital network (BISDN)

Operating systems used in ATMs Primarily: Windows XP Professional and Windows XP Embedded

Communication Mode: Both Data and Voice

Operates on: layer 2 in OSI Model (Data Link Layer)

Connection Mode: Point-to-Point

Size of ATM Cells: 53 Bytes (48 bytes of data and 5 bytes of header information)

Facilities available at ATMs

• Account Information
• Cash Deposit
• Regular bills payment
• Purchase of Re-load Vouchers for Mobiles
• Mini/Short Statement
• Loan account enquiry

There are two types of cards supported by ATM

• ATM Debit Card
• Credit Card

ATM Debit Card:

ATM Debit Card is card given by bank to access your account easily using a machine called Automated Teller Machine (ATM). Debit cards can be used for shopping purposes, without carrying the money. You can use Debit cards while purchasing, but you must have money in your account. Purchased amount will be deducted immediately from your account.

Fund Transfer Systems in Banking (RTGS, NEFT and IFSC)

FUND TRANSFER SYSTEMS

There are two ways for transferring funds

• RTGS (Real Time Gross Settlement)
• NEFT (National Electronic Fund Transfer)

Real Time Gross Settlement (RTGS)

• RTGS is one of the fastest mode of fund transfer in India through banking channel
• RTGS is nothing but transferring of money in real time on gross basis from one bank to other without netting. This RTGS is mainly used for large transactions, Minimum amount to be remitted through this RTGS is 2 Lakhs and there is no any upper limit
• Through RTGS system, money will be remitted for beneficiary account within 2 hours of receiving the fund transfer message
• Main  advantage of fund transferring through RTGS is remitting bank will receive the conformation message from RBI that money have been transferred to beneficiary’s account

Timings for Transferring Funds through RTGS:

Normal Days: 09:00 hours to 16:30 hours

Week Days: 09:00 hours to 14:00 hours

Processing/Service Charges for RTGS Fund Transfer

Inward Transactions: No Charge

Outward Transactions: Rs.2lakhs to Rs.5lakhs:  Rs.30/-

Above Rs.5lakhs: Rs.55/-

Essential Information for RTGS Fund Transfer

• Amount to be remitted
• Remitting Customer’s account number which is to be debited
• Name of the beneficiary bank and branch
•  Name of the beneficiary customer
•  Account number of the beneficiary customer
• Sender to receiver information
• IFSC (Indian Financial System Code) of the receiving branch

National Electronic Fund Transfer (NEFT)

NEFT is an electronic fund transfer system on DNS (Deferred Net Settlement) basis through netting. This NEFT will be done in 12 settlements

Timings for Transferring Funds through NEFT:

Normal Days: 08:00 am to 07:00 pm

Week Days: 08:00 am to 01:00 pm

Financial and Banking Sector Reforms in India

Objectives of Financial sector reforms in India.

1. Reforms Financial repression that existed earlier

2. Create an efficient productive and profitable Financial sector industry

3. Enable price discovery particularly by the market determination of interest rates that then helps in efficient allocation of resources

4. Provide operational and function autonomy to institutions

5. Prepare the Financial system for increasing international Competition

6. Open the external sector in a calibrated fashion

Narasimham committee report 1991 &1998

The narasimham committee was set up in order to study the problems of the indian Financial system and to suggest some recommendations for improvement in the efficiency and productivity of the Financial institution

The committee had given the following major recommendations:

1. Reduction in SLR and CRR : The committee recommeded the Reduction of the higher proportion of the statutory liquidity ratio and cash reserve ratio . Both of these ratios were very high at that time. The SLR the was 38.5 percent and crr was 15 percent . This high percentage of SLR and CRR meant locking the bank resources for govt uses. SLR was recommeded to be from 38.5 to 25 percent and CRR from 15 percent and 3.5 percent

2. Phasing out of directed Credit programme : in india since Nationalization directed Credit programmes were adopted by the Government . The committee recommed Phasing out of this programme.  This programme compelled banks to earmark their Financial resources for the needy and poor sectors at concessional rates of interest

3. Interest rate determintaion: The committee felt that the interest rates in india were regulated and controlled by the authorities . The committee recommeded eliminating Government controls on interest rates and Phasing out the concessional interest rates for the priority sector.

4. Structural re organizations of the banking sector: The committee recommeded that the actual number of public sector banks need to be reduced. Three to four large banks including SBI should be developed as international banks. Eight to ten banks having nationwide presence should concerntrate in the National and unverisal banking services.

Local banks should concerntrate on region specific banking . Regarding RRBs it recommeded that they should focus on agr culture and rural financing

5. Establishment of the ARF and tribunal: The proporation of bad debts and non performing assets of the public banks and Development Financial institute was veey alarming in those days. The committee recommeded the Establishment of an assets reconstruction fund . This fund would take over the proporation of the bad and doubt ful debts from the banks and Financial institutes. It would help banks to get rid of bed debts.

6. Removal of dual control : The committee recommeded the stopping of this system.  it considered and recommeded that the RBI should be the only main agency to regulate banking in india

 7. Banking autonomy : The committee recommeded that the public sector banks should be free and autonomous. Banking technology upgradation would thus be easy.

Indian Currency – RBI Role

Indian Currency

Name of the Indian Currency: The Indian Currency is called the Indian rupee and the coins are called paisa. One rupee consists of 100 paisa.

Present denominations of bank notes in India: At Present notes in India are issued in the denomination of Rs.5, 10, 20, 50, 100, 500 and 1000. These notes are called bank notes as they are issued by the RBI. The printing of notes in the denominations of Rs.1 and Rs.2 has been discontinued as these denominations have been coinised. However such notes issued earlier are still in circulation. The printing of notes in the denomination of Rs.5 had also been discontinued however it has been decided to reintroduce these notes in order to meet the gap between the demand and supply of coins in this denomination.

Present available denomination of coins in India: Coins in India are available in denominations of 50 paisa,  one rupees , two rupees , five rupees and ten rupees up to 50 paisa are called small coins and coins of rupee one and above are called rupee coins.

Can bank notes and coins be issued only in these denominations: Not necessarily. The RBI can also issue notes in the denominations five thousand rupees and ten thousand rupees or any other denomination that the central Government may specify. There cannot through be notes in denominations higher than ten thousand rupees in terms of the current provisions of the RBI act 1934. Coins can be issued up to the denomination of Rs.1000

The role of the RBI in Currency management: The RBI manages Currency in India. The Government on the advice of the RBI decides on the various denominations. The RBI also coordinates with the Government in the designing of bank notes including the security features. The RBI estimates the quantity of notes that are likely to be needed denomination wise and places the indent with the various security presses through the Government of India. The notes received from the security presses are issued and a reserve stock maintained. Notes received from banks and Currency chests are examined. Notes fit for circulation are reissued and the others are destroyed so as to maintain the quality of notes in circulation. The RBI derives its role in Currency management on the basis of the RBI act 1934.

The role of Government of India: The responsibility for coinage vests with Government of India on the basis of the coinage act 1906 as amended from time to time. The designing and minting of coins in various denominations is also attended to by the Government of India.

Who decides on the volume and value of bank notes to be printed and on what basis: The RBI decides upon the volume and value of bank notes to be printed. The quantum of bank notes that needs to be printed broadly depends on the annual increase

In bank notes required for circulation purposes replacement of soiled notes and reserve requirements.

Who decides on the quantity of coins to be minted: The Government of India decides upon the quantity of coins to be minted.

How does the reserve bank reach the Currency to people: The RBI manages the Currency operations through its offices located at Ahmedabad, Bengaluru, Bhopal, Bhubaneswar, Jaipur, Kanpur, luck now, Mumbai, Nagpur, New Delhi, Patna, and Thiruvananthapuram? These offices receive fresh notes from the note presses. Similarly the RBI offices located at Kolkata, Hyderabad, Mumbai and New Delhi initially receive the coins from mints. These offices then send them to the other offices of the reserve bank. The notes and rupee coins are stocked at the Currency chests and small coins at the small coin depots. The bank branches receive the bank notes and coins from the Currency chests and small coin depots for further distribution among the public.

What is a Currency chest: To facilities the distribution of notes and rupee coins the RBI has authorized select branches of banks to establish Currency chests . These are actually storehouses where bank notes and rupee coins are stocked on behalf of the reserve bank. At Present there are over 4422 Currency chests. The Currency chest branches are expected to distribute notes and rupee coins to other bank branches in their area of operation.

What is a small coin : Some bank branches are also authorized to establish small coin depots to stock small coins. There are 3784 small coin deposits spread throughout the country.

What happens when the notes and coins return from circulation: Notes and coins returned from circulation are deposits at the offices if the reserve bank. The reserve bank then separates the notes that are fit for reissue and those which are not fit for reissue. The notes which are fit for reissue are sent back in circulation and those which are unfit for reissue are destroyed after processing and shredding. The same is the case with coins. The coins with drawn are sent to the mints for melting

From where can the General public obtain bank notes and coins: Banks notes and coins can be obtained at any of the offices of the reserve bank and at all branches of banks maintaining Currency chests and small coin deposits.

Why are Rs.1, Rs.2, and notes not being printed: volume wise the share of such small denomination notes in the total notes in circulation was as high as 57 percent but constituted only 7 percent in terms of value. The average life of these notes was found a year. The cost of printing and servicing these notes was thus not commensurate with their life. Printing of these notes was therefore discontinued. These denominations were Therefore coinised However it has been decided that notes in the denomination of Rs.5 be re-introduced so as to meet the gap between the demand and supply of coins in this denomination.

Soiled and mutilated notes: soiled notes are notes which have become dirty and limp due to excessive use. Mutilated notes are notes which are torn disfigured burnt, washed, eaten by white ants etc. A double numbered note cut into two pieces but on which both the numbers are in fact is now being treated as soiled note.

e banking

E-Banking 

        E- banking refers to electronic banking. It is like e-business in banking industry. E-banking is also called as virtual banking or online banking. E-banking is a Result of the growing expectations of bank customers. E-banking involves information technology based banking. Under this IT system the banking services are delivered by way of a computer-controlled system. This system involves direct interface with the customers. The customers need not to visit bank premises

Popular services covered under E-banking

1. Automated teller machine

2. Credit card

3. Debit card

4. Smart card

5. Electronic funds Transfer system

6. Cheque truncation system

7. Mobile banking

8. Internet banking

9. Telephone banking

Automated teller machine

         ATM is designed to perform the most important function of bank.  it is operated plastic card with its special features. The plastic card has replaced cheque Personal attendance of the customer banking hours restrictions and paper based verification. These are debit cards. An ATM is an electronic funds Transfer terminal capable of handling cash deposits Transfer between accounts balance enquires, cash withdrawals and pay bills. It may be online or Offline. Any customer processing ATM card issued by the shared payment network system can go to any ATM linked to shared payment networks and perform his transactions

Credit card/ Debit card

         The Credit card holder is empowered to spend wherever and whenever he wants with his Credit card within the limits fixed by his bank. Credit card is a post paid card. Debit card considered as a prepaid card with usage facility limited to the balance in the linked deposit  account of the cardholder. An individual has to open an account with the issuing bank which gives debit card with a Personal identification number. When he makes purchases he enters his pin on shops pin pad. When the card is slurped through the electronic terminal it dials the acquiring bank system -either master card or VISA that validates the pin and finds out can never overspend because the system rejects any transactions which exceeds the balance in his account. The bank never faces a default because the amount spent is debited immediately from the customers account.

Smart card

           Banks are adding chips to their current magnetic stripe cards in order to enhance security and offer new services that are called smart cards. Smart cards allow

Thousands of times of information storable on magnetic stripe cards. In addition these cards are highly secure, more reliable and perform multiple functions. They hold a large amount of Personal information ranging from medical and health history to Personal banking and personal preferences.

Services of E-banking

E-banking provides a multitude of services that are as follows

 1. Bill payment service

              E-banking facilitates the payment of electricity bills, telephone bills, Credit card, and insurance premium bills. And the bank does not charge customers for online payments

2. Fund Transfer

              You can Transfer any amount from one account to another of the same or any another bank. Customers can send money anywhere in India.

3. Credit card customers

              With internet banking customers cannot only pay their credit card bills online but also get a loan on their cards. In case of loss of the credit card an online reporting can be done.

4. Investing through internet banking

              Now, FD can be opened on line through funds Transfer and investors with interlinked demit account and bank account can easily trade in the stock market.

5. Recharging prepaid mobile

              By just selecting the operator name entering the mobile number and the amount of Recharge the mobile phones can be back in action within few minutes.

6. RTGS fund Transfer

             RTGS is an inter Bank funds Transfer system. Where are Transferred as end when the transactions are tiggered.

Banking Awareness

List of Banks in India

Banks are of three types

(1)   Public Sector Banks

(2)   Private Sector Banks

(3)   Foreign Banks

Under Public sector banks

(1)   Nationalized Banks

(2)   State Bank of India and their subsidiaries

(3)   Regional Rural Banks

Important Details about Nationalized Banks in India

Sl.NO	Name of the Bank	Chairman	Head Office	Year of Commencement
1	Allahabad Bank	Shubhalakshmi Panse	Kolkata	1865
2	Andhra Bank	B.A. Prabhakara	Hyderabad	20th November, 1923
3	Bank of Baroda	S.S. Mundra	Baroda (Vadodara)	20th July, 1908
4	Bank of India	V R Iyer	Mumbai	7th September, 1906
5	Bank of Maharashtra	Narendra Singh	Pune	1935
6	Canara Bank	Rajiv Kishore Dubey	Bangalore	1906
7	Central Bank of India	Shri. Rajeev Rishi	Mumbai	21 December, 1911
8	Corporation Bank	Shri S.R. Bansal	Mangalore	1906
9	Indian Bank	T.M. Bhasin	Chennai	1907
10	Indian Overseas Bank	Shri M. Narendra	Chennai	February 10th, 1937
11	Oriental Bank of Commerce	Shri S.L. Bansal	New Delhi	February 19th, 1943
12	Punjab National Bank	Shri K.R Kamath	New Delhi	1895
13	Punjab & Sind Bank	SH. Devinder Singh	New Delhi	1908
14	Syndicate Bank	Shri Sudhir Kumar Jain	Mani pal	1925
15	UCO Bank	Shri Arun Kaul	Mumbai	6th January, 1943
16	Union Bank of India	Shri D. Sarkar	Kolkata	11th November, 1919
17	United Bank of India	Ms. Archana Bhargava	Kolkata	1950
18	Vijaya Bank	Shri. H.S. Upendra Kamath	Bangalore	1931
19	IDBI bank	Mr. M.S. Raghavan	Mumbai	July, 1964
20	Dena Bank	Shri. Ashwani Kumar	Mumbai	1938
21	ECGC	Shri N Shankar	Mumbai	30th July, 1957