Registration RNI No.

67802/98
Postal Regn. No.CHD/0001/2015-17
Posted at - MBU Chandigarh on 7th/10th
Volume - XIX No.04 April 2016

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events

Contents of this Issue

BANKING POLICY : 2
• Interest Rates : Small Savings
• Basel-3 Capital regulation
• Recovery of excesss payments
• NEFT charges
• Risk weights by NBFCs

BANKING FEATURES : 4-8, 20

• Revival framework for MSMEs
• Start Up and Stand UP India
• Education Loan subsidy scheme
• PM Fasal Bima Yojna
• Monetary Policy Committee
DIARY OF EVENTS : Mar-2016: 9
Those who win, are those, who think they can • Policy, Economy
• Banking Developments
Corporate & Distribution Office • Capital Markets & Insurance
1008, Sector 45-B, Chandigarh
Phone 0172 2665 623 General Awareness : 13
eMail - bankingupdate123 @ gmail.com
Multi-Option questions:15-18
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bankingindiaupdate Data Bank : 20

Elearning class for for Online Mock Tests

Promn/JAIIB/CAIIB e-Learning CDs
(Ongoing -See page 3) Details- Page no.7 www.nstoorbankingonline.com

Executive Editor - S. Chand Singh, Editor in Chief - Sh. N S Toor

2 ♦ Banking events updatE ♦ April 2016

B ANKING Interest Rates on Small Saving Schemes • revaluations are realistic, in accordance with Indian
POLICY for 1st Quarter of 2016-17 Accounting Standards.
From the year 2012-13, the interest rates on various Small Savings Schemes • valuations are obtained, from two independent
(SSS) are recalculated and notified in the month of March every year, for valuers, at least once in every 3 years;
the next financial year. This is being done in line with the recommendations • the external auditors of the bank have not expressed
of the Shyamala Gopinath Committee to ensure that the interest rates of a qualified opinion on the revaluation of the property;
Small Savings Schemes are market linked. Treatment of foreign currency translation
As notified on 16th February, 2016, instead of annual resetting of interest reserve (FCTR) : Banks may, at their discretion, reckon
rates for the next financial year, the interest rates from now on, will be foreign currency translation reserve arising due to
reset every quarter based on the G-Sec yields of the previous three months. translation of financial statements of their foreign
Consequently, the interest rates for various Small Savings Schemes were operations in terms of Accounting Standard (AS) 11 as
recalculated with reference to the G-Sec yields of equivalent maturity for CET1 capital at a discount of 25% subject to meeting
the months December 2015 to February 2016. Based on this calculation, the following conditions:
the interest rates on various Small Savings Schemes for the 1st quarter of
• the FCTR are shown under Schedule 2: Reserves &
2016-17 are as under:
Surplus in the Balance Sheet of the bank;
Instrument Existing Rate New Rate
Savings Deposit 4.0 4.0 • the external auditors of the bank have not expressed
a qualified opinion on the FCTR.
1 Year Time Deposit 8.4 7.1
2 Year Time Deposit 8.4 7.2 Treatment of deferred tax assets (DTAs)
3 Year Time Deposit 8.4 7.4 (i) Deferred tax assets (DTAs) associated with
accumulated losses and other such assets should be
5 Year Time Deposit 8.5 7.9
deducted in full from CET1 capital.
5 Year Recurring Deposit 8.4 7.4
(ii) DTAs which relate to timing differences (other than
5 Year Senior Citizens Savings Scheme 9.3 8.6
those related to accumulated losses) may, instead of
5 year Monthly Income Account Scheme 8.4 7.8 full deduction from CET1 capital, be recognised in the
5 Year National Savings Certificate 8.5 8.1 CET1 capital up to 10% of a bank’s CET1 capital, at the
Public Provident Fund Scheme 8.7 8.1 discretion of banks [after the application of all regulatory
Kisan Vikas Patra 8.7 7.8 adjustments].
(mature in 110 months) (iii) Further, the limited recognition of DTAs as at (ii)
Sukanya Samriddhi Account Scheme 9.2 8.6 above along with limited recognition of significant
Further, the additional interest rate spreads which the Government allows investments in the common shares of unconsolidated
on Small Savings Schemes like PPF, Senior Citizen Savings Scheme, Sukanya financial (i.e. banking, financial and insurance) entities
Samridhi Scheme, NSC etc. are being continued. The additional spread for taken together must not exceed 15% of the CET1
these Schemes are 25 basis points for PPF, 100 basis points for Senior capital, calculated after all regulatory adjustments.
Citizen Savings Scheme, 75 basis points for Sukanya Samridhi Scheme, 25 Banks shall ensure that the CET1 capital arrived at after
basis points for five year time deposit, 25 basis points for National Savings application of 15% limit should in no case result in
Certificate and 25 basis points for Monthly Income Scheme. These additional recognising any item more than the 10% limit applicable
interest rate spreads are being continued and are included in the rates individually.
notified. (iv) The amount of DTAs which are to be deducted from
The quarterly revision of interest rates will ensure that the interest rates CET1 capital may be netted with associated deferred
under Small Savings Schemes are more dynamically related to the current tax liabilities (DTLs) provided that:
market rates, thereby enabling the Banks to move their interest rates in line • both the DTAs and DTLs relate to taxes levied by the
with current money market rates. same taxation authority and offsetting is permitted by
Basel III Capital Regulations - Revision the relevant taxation authority;
The treatment of certain balance sheet items, as per the extant regulations • the DTLs permitted to be netted against DTAs must
of RBI on banks’ capital, differs from what is prescribed by the Basel exclude amounts that have been netted against the
Committee on Banking Supervision (BCBS). RBI reviewed (on Mar 01, 2016) deduction of goodwill, intangibles and defined benefit
the position and decided to align the current regulations with the BCBS pension assets; and
guidelines, as under: • the DTLs must be allocated on a pro rata basis
Treatment of revaluation reserves : Revaluation reserves arising out between DTAs subject to deduction from CET1 capital
of change in the carrying amount of a bank’s property consequent upon its as at (i) and (ii) above.
revaluation may, at the discretion of banks, be reckoned as CET1 capital at (v) The amount of DTAs which is not deducted from
a discount of 55%, instead of as Tier 2 capital under extant regulations, CET1 capital (in terms of para (ii) above) will be risk
subject to meeting the following conditions: weighted at 250% as in the case of significant
• bank is able to sell the property readily at its own will and there is no legal investments in common shares not deducted from bank’s
impediment in selling the property; CET1 capital.
• the revaluation reserves are shown under Schedule 2: Reserves & Surplus Grant of EDF Waiver for Export of Goods
in the Balance Sheet of the bank; Free of Cost
In terms of circular dated 26.04.2003, GR waiver to
(COMPILATION- SAPANDEEP TOOR & MANJOT TOOR, in Sydney, Australia - on the basis of information available on RBI Website)
 Banking events updatE ♦ April 2016 ♦ 3
exporters for export of goods free of cost was enabled. The facility was extended to
the Status through Foreign Trade Policy 2004-2009, in terms of which Status Holders
were entitled to export freely exportable items on free of cost basis for export promotion CORRESPONDENCE
subject to an annual limit of Rs 10 lakh or 2% of average annual export realization
during preceding three licensing years, whichever is higher. COURSE
Government of India on June 4, 2015, notified that the Status Holders shall be entitled
to export freely exportable items on free of cost basis for export promotion subject to
an annual limit of Rs 10 lakh or 2% of average annual export realization during preceding PROMOTION EXAM
three licensing years whichever is lower. AD Category – I banks can consider requests Based on latest trends of IBPS exam. A large
from Status Holder exporters for grant of Export Declaration Form (EDF) waiver, for no. of bankers already succeeded by using
export of goods free of cost based on the revised norm. the course material. If unable to attend class
Recovery of excess payments made to pensioners room program, this is the best option.
RBI received complaints from pensioners stating that the recovery of excess/wrong Course Kit : The course kit include:
pension payments are being made in a manner that is not in keeping with the extant (a) subject-wise basic study material,
guidelines. RBI reiterated (17.03.16) these guidelines (dated 18.4.91 and 6.5.91) as (b) assignment to improve retention
below: (c) objective type practice exercise
As soon as the excess/wrong payment made to a pensioner comes to the notice of the (d) recalled questions
paying branch, the branch should adjust the same against the amount standing to the (e) mock test papers.
credit of the pensioner’s account to the extent possible including lumpsum arrears Fee : May differ from bank to bank. May be
payment. checked before remittance). Fee to be paid
If the entire amount of over payment cannot be adjusted from the account, the in advance.
pensioner may be asked to pay forthwith the balance amount of over payment. How to enrol : To enrol, advise (a) name,
In case the pensioner expresses his inability to pay the amount, the same may be (b) address for correspondence (c) Email
adjusted from the future pension payments to be made to the pensioners. For recovering address, (d) bank name, (e) scale for which
the over-payment made to pensioner from his future pension payment in instalments appearing, (f) phone / Cell number and (f)
1/3rd of net (pension + relief) payable each month may be recovered unless the details of subjects for the exam (relevant
pensioner concerned gives consent in writing to pay a higher installment amount. course material, other than internal bank
guidelines shall be sent).
If the over payment cannot be recovered from the pensioner due to his death or
discontinuance of pension then action has to be taken as per the letter of undertaking
given by the pensioner under the scheme.
The pensioner may also be advised about the details of overpayment/wrong payment CAIIB/
and mode of its recovery.
NEFT – Customer Service and Charges – Adherence to Procedural
Guidelines and Circulars
JAIIB
As per circular dated 21.01.14, banks were advised by RBI to submit data pertaining Course is based on exam pattern of IIB&F. A
to NEFT transactions by walk-in customers (those not having an account with the bank) large no. of candidate have succeeded in all 3
starting from quarter ended March 31, 2014. RBI decided (17.03.16) to discontinue papers in first attempt with our study material.
the submission of this report by member banks, from the quarter ending March 31,
Course Kit : The course kit include:
2016. RBI may call for adhoc reports regarding the data for NEFT transactions by walk-
in customers. Hence, banks may continue to maintain such data at their end. (a) subject-wise basic study material,
(c) objective type practice exercise
Risk weights to be assigned by NBFCs to sovereign debt
(d) mock test papers.
In terms of the extant directions, deposit accepting NBFCs, systemically important
Fee : Fee differs for different papers. Fee
non-deposit taking NBFCs, all NBFC-MFIs and all NBFC-IFCs shall maintain a minimum
payable in advance, for which details may be
capital ratio consisting of Tier I and Tier II capital which shall not be less than 15 per
obtained by calling 01722665623 .
cent of its aggregate risk weighted assets on-balance sheet and of risk adjusted value
How to enrol : To enrol, advise name,
of off-balance sheet items.
address for correspondence, eMail id, mobile
RBI (on 10.03.16) made the following changes phone, bank name, subjects for enrolment.
A) Exposures to Central Government
fund based and non-fund based claims on the Central Government will attract a zero
risk weight.
Central Government guaranteed claims will attract a zero risk weight.
B) Exposures to State Government DS Institute of Banking
i.Direct loan/ credit/ overdraft exposure and investment in State Government securities
will attract zero risk weight. Office:SCO No.32, Sector 33-D,
ii.State Government guaranteed claims, which have not remained in default, will attract Chandigarh 160 020
20 per cent risk weight. However, if the loans guaranteed by the State Government Phone: 0172-2665623, 09988221167
email - banking121@gmail.com
have remained in default for a period of more than 90 days, a risk weight of 100%
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bankingindiaupdate
should be assigned.
•
4 ♦ Banking events updatE ♦ April 2016
Framework for Revival & Rehabilitation
of Micro, Small & Medium Enterprises
Ministry of Micro, Small and Medium Enterprises, Government of
India, on May 29, 2015 notified the ‘Framework for Revival and
Rehabilitation of Micro, Small and Medium Enterprises’. After making
it compatible with the existing regulatory guidelines on ‘Income
Recognition, Asset Classification and provisioning pertaining to
Advances’ RBI circulated the revised Framework on March 17,
2016, to be made operative by banks not later than June 30,
2016. It supersedes earlier framework dated 01.11.2012.
Amount ceiling : The revival and rehabilitation of MSMEs having
loan up to Rs.25 crore will be in terms of these instructions and
restructuring of loan accounts with exposure of above Rs.25
crore will be governed by the extant guidelines on Corporate
Debt Restructuring (CDR) / Joint Lenders’ Forum (JLF) mechanism.
Framework for Revival and Rehabilitation of Micro,
Small and Medium Enterprises
1. Eligibility: The provisions are applicable to MSMEs having loan
limits up to Rs.25 crore, including accounts under consortium or
multiple banking arrangement (MBA).
2. Identification of incipient stress :
1. Identification by banks – Banks should identify incipient
stress by creating 3 sub-categories under the Special Mention
Account (SMA) category based on early warning signals, i.e.:
SMA-0 : Principal or interest payment overdue for >30 days
SMA-1: Principal/interest overdue between 31-60 days
SMA-2 : Principal or interest overdue between 61-90 days
Reference : The branch maintaining the account should forward
the stressed a/c with aggregate loan above Rs.10 lakh to
Committee within 5 working days for a suitable Corrective
Action Plan (CAP). Forwarding the a/c to the Committee will be
mandatory for accounts reported as SMA-2.
2. As regards accounts with aggregate loan up to Rs.10 lakh
identified as SMA-2, the a/c should be examined for CAP by branch
itself under authority of branch manager / such other official as
decided by bank. The cases, where the branch decided the option
of recovery under CAP instead of rectification or restructuring,
should be referred to the Committee for their concurrence.
3. Identification by Borrower - A borrower may voluntarily
initiate proceedings, if it apprehends failure of business or inability
or likely inability to pay debts or there is erosion in the net worth
due to accumulated losses to the extent of 50% of its net worth
during the previous accounting year, by making an application to
the branch or directly to the Committee. When such request is
received, the account with aggregate loan above Rs.10 lakh should
be referred to the Committee. The Committee should convene its
meeting at the earliest but not later than 5 working days to
examine the account for a suitable CAP. The accounts with
aggregate loan up to Rs.10 lakh may be dealt with by the branch
manager / designated official for a suitable CAP.
3. Committees for Stressed MSM Enterprises:
1. Banks shall constitute a Committee at each District where they
are present or at Division level or Regional Office level, depending
upon the number of MSME units financed. These Committees will
be Standing Committees and will resolve the reported stress of
MSME accounts of the branches falling under their jurisdiction.
2. For MSME borrowers having credit facilities under a consortium
of banks or multiple banking arrangement (MBA), the consortium
leader, or the bank having the largest exposure to the borrower
under MBA, as the case may be, shall refer the case to its
Compilation : Arundeep Toor (Sydney - Australia) (Source RBI Website).
BANKING FEATURES
Committee, if the account is reported as stressed either by the
borrower or any of the lenders. This Committee will also coordinate
between the different lenders.
3. The Composition of the Committee shall be as under:
(a) The Regional or Zonal Head of the Convener Bank, shall be the
Chairperson of the Committee;
(b) Officer-in-charge of MSME Credit Department of the convener
bank at the regional or zonal office level, shall be the member and
convener of the Committee;
(c) One independent external expert with expertise in MSME
related matters to be nominated by bank.
(d) One representative from concerned State Govt. or a retired
executive of another bank of rank of AGM and above.
(e) In case of a/c under consortium or MBA, senior representatives
of all banks / lenders having exposure to the borrower.
4.The decisions of the Committee will be by simple majority
(Chairperson shall have the casting vote, in case of a tie). For
under consortium / MBA, lenders should sign an Inter-Creditor
Agreement (ICA) on the lines of (JLF) Agreement.
5. All eligible stressed MSMEs shall have access to the Committee
for resolving the stress in these accounts.
4. Application to Committee for a Corrective Action Plan
1. Any lender on identifying an MSME account as SMA-2 or suitable
for consideration under the Framework or on receipt of an
application from the stressed enterprise, shall forward the cases
having aggregate loan above Rs.10 lakh to the Committee for
immediate convening of meeting and deciding on a CAP. Stressed
enterprises having aggregate loan limits above Rs.10 lakh can
also directly file an application for CAP to the Committee or to the
largest lender for onward submission under advice to all its lenders.
IBA may prescribe suitable application formats for this purpose.
2. Where an application is filed by a bank / lender and admitted by
the Committee, it shall notify the concerned enterprise about
such application within 5 working days and require the enterprise
to respond to the application or make a representation. If the
enterprise does not respond, Committee may proceed ex-parte.
3. On receipt of information of liabilities, Committee may send
notice to statutory creditors disclosed by borrower, informing them
about the application and permit them to make a representation
before the Committee within 15 working days of receipt of such
notice. The information is required for determining the total liability
and not for payments of the same by the lenders.
4. Within 30 days of convening its first meeting for a specific
enterprise, the Committee shall take a decision on the option and
notify the enterprise about decision, within 5 working days.
5. If the CAP envisages restructuring, the Committee shall conduct
the detailed Techno-Economic Viability (TEV) study and finalise
the terms of restructuring within 20 working days (for accounts
having aggregate exposure up to Rs.10 crore) and within 30
working days (for accounts having aggregate exposure above
Rs.10 crore and up to Rs.25 crore) and notify the enterprise
about such terms, within 5 working days.
6. On finalisation of the terms of CAP, the implementation shall be
completed by the bank within 30 days (if CAP is Rectification) and
within 90 days (if CAP is restructuring). If recovery is considered
as CAP, recovery measures should be initiated at the earliest.
5. Corrective Action Plan by the Committee
1. While Techno-Economic viability of each account is to be decided
by the concerned lender/s before considering restructuring as
CAPs, for accounts with aggregate exposure of Rs.10 crore and
BANKING FEATURES
above, the Committee should conduct a detailed Techno-Economic Viability study
before finalising the CAP.
2. The options under CAP by the Committee may include:
(a) Rectification:– Obtaining a commitment from the borrower to regularise the
account or providing need based additional finance which should be repaid or
regularised within a maximum period of 6 months.
(b) Restructuring:– Consider the possibility of restructuring the account, if it is
prima facie viable and the borrower is not a wilful defaulter.
(c) Recovery:– If option (a) and (b) are not feasible, due recovery process may be
resorted to, including legal and other recovery options.
Majority criteria : The decisions agreed upon by a majority of creditors (75% by
value and 50% by number) in the Committee would be considered as the basis for
proceeding with the restructuring of the account and will be binding on all lenders.
Time-lines : In case of non-availability of information on statutory dues of the
borrower, the Committee may take additional time up to 30 days for deciding CAP and
preparing the restructuring package.
Additional Finance
1. Additional finance should be matched by contribution by promoters which should
not be less than the proportion at the time of original sanction of loans. Additional
funding will have priority in repayment over repayment of existing debts.
Failure to perform : If the account fails to perform as per the agreed terms under
these options, the Committee shall initiate recovery.
10. Restructuring by the Committee
1. Eligibility : (a) Cases shall be taken up by the Committee for Standard, Special
Mention Account or Sub-Standard by one or more lenders of the Committee.
(b) Committee may consider restructuring, if account is doubtful with one or two but
it is Standard or Sub-Standard with majority of other lenders (by value).
(c) Wilful defaulters, Frauds and Malfeasance cases are ineligible for restructuring.
2. Viability : The viability shall be determined based on viability benchmarks on Debt
Equity Ratio, Debt Service Coverage Ratio, Liquidity or Current Ratio, etc.
3. Conditions : The restructuring package shall stipulate the timeline during which
certain viability milestones such as improvement in certain financial ratios after a
period of 6 months may be achieved.
Prudential Norms on Asset Classification and Provisioning
The extant asset classification and provisioning norms will be applicable.
Review : If the Committee decides that recovery action is to be initiated, such
enterprise may request for a review of the decision within 10 working days from the
date of receipt of the decision. A review application shall be decided by the Committee
within 30 days from the date of filing and if as a consequence of such review, the
Committee decides to pursue a fresh corrective action plan, it may do so.
SMA-0 Signs of Stress
Illustrative list of signs of stress for categorising an account as SMA-0:
1. Delay of 90 days or more in (a) submission of stock statement / other stipulated
operating control statements or (b) credit monitoring or financial statements or (c)
non-renewal of facilities based on audited financials.
2. Actual sales / operating profits falling short of projections accepted for sanction
by 40% or more; or a single event of non-cooperation / prevention from conduct of
stock audits by banks; or reduction of Drawing Power by 20% or more after a stock
audit; or evidence of diversion of funds for unapproved purpose; or drop in internal
risk rating by 2 or more notches in a single review.
3. Return of 3 or more cheques (or electronic debit instructions) issued by borrowers
in 30 days on grounds of non-availability of balance/DP in the account or return of 3
or more bills / cheques discounted or sent under collection by the borrower.
4. Devolvement of DPG instalments or LCs or invocation of BGs and its non-payment
within 30 days.
5. 3rd request for extension of time for creation of securities or for compliance with
any other terms and conditions of sanction.
6. Increase in frequency of overdrafts in current accounts.
7. The borrower reporting stress in the business and financials.
8. Promoter pledging/selling their shares in borrower company due to financial stress.
Banking events updatE ♦ April 2016 ♦ 5
Start Up India Scheme
The Start-up India initiative was launched on
Jan 16, 2016 as an action plan for developing
an ecosystem to promote and nurture
entrepreneurship in India. This is based on an
action plan aimed at promoting bank financing
for start-up ventures and encourage startups
with jobs creation.
Start up entity : To be categorized such Entity,
following requirements need to be fulfilled:
1. The entity should be a company, partnership
or limited liability partnership.
2. It should be
(a) in existence at least for 5 years,
(b) its turnover should not be above Rs.25 cr
and it should not be formed by splitting up or
reconstruction of existing entities.
(c) The entity should aim to develop and
commercialise, a new product or service or
process or a significantly improved existing
product or service or process, that will create
or add value for customers. Products, services
or process, which do not have potential for
commercialisation or is undifferentiated or have
no or limited incremental value are not eligible.
Certification : To be considered eligible as
startup, the entity should be supported by a
recommendation with regard to innovative
nature of business, in a format specified by DIPP,
from an Incubator recognized by Govt.
Funding :
1. Rs 10,000 crore fund: Govt. will develop a
fund with an initial corpus of Rs 2,500 crore
(total corpus of Rs 10,000 crore over 4 years)
to support upcoming start-up enterprises. LIC
of India will play a major role in developing this
corpus. A committee of private professionals
selected from start-up industry will manage it.
2. National Credit Guarantee Trust
Company : NCGTC is being set up with a budget
of Rs 500 crore per year for the next 4 years to
support the flow of funds to start-ups.
3. The loans are available from Rs.10 lac to
Rs.1 cr under the scheme.
Advantages :
1. Income Tax exemption is available for 3 years
after certification by Inter-Ministerial Board.
2. Self certification : Start-ups will adopt self-
certification to reduce regulatory liabilities for
payment of gratuity, labour contract, provident
fund management, water pollution acts.
3. In patent costs, it can claim an 80% rebate.
4. Govt. is launching a Mobile App and a portal
that will allow companies to register in a day.
5. An All-India Hub will be created as a single
contact point to help the entrepreneurs to
exchange knowledge and access financial aid.
6. Startups in manufacturing sector exempted
from the criteria of prior ‘experience/ turnover’
without any relaxation in quality standards or
technical parameters in public procurement.
6 ♦ Banking events updatE ♦ April 2016
Interest Subsidy on Educational Loans for
Other/Economically Backward Classes
Scheme name : Dr Ambedkar Central Sector Scheme of
Interest Subsidy on Educational Loans for Overseas
Studies for Other Backward Classes (OBCs) and
Economically Backward Classes (EBCs)
Objective : To provide interest subsidy to meritorious
students belonging to the Other Backward Classes and
Economically Backward Classes to provide better
opportunities for higher education abroad and enhance
their employability.
Scope : It is a Central Sector Scheme to provide interest
subsidy for students belonging to the OBCs and EBCs on
the interest payable for the period of moratorium.
Conditions for Interest Subsidy
1. The interest Subsidy shall be linked with the existing
Educational Loan Scheme of Indian Banks Association (IBA)
and restricted to students enrolled for course at Masters,
M.Phil and Ph.D level.
2. The interest subsidy shall be available to the eligible
students only once (not be available to students who
discontinued the course or who are expelled).
3. The benefits shall not be given if he gives up Indian
citizenship during the tenure of the loan.
4. The nodal bank will maintain a separate account and
records relating to the funds received from the Ministry
and these will be subject to inspection/audit by the
officers of the Ministry, or any other agency designated
by the Ministry and C&AG.
5. The Scheme will be evaluated at regular intervals.
Eligibility :
1. The students should have secured admission in the
approved courses at Masters, M.Phil or Ph.D levels abroad
for the approved courses.
2. He/She should have availed loan from a scheduled
bank under the Education Loan Scheme of the Indian
Banks Association (IBA) for the purpose.
3. For the candidate applying under the OBC category,
OBC Caste certificate in the prescribed Performa must
be taken by the Banks.
Income Ceiling
1. For OBC candidates, total income from all sources of
the employed candidate or his/her parents/guardians in
case of unemployed candidate shall not exceed Rs.3.00
lakh per annum.
2. For EBC candidates, total income of the employed
candidate or his/her parents/guardians in case of
unemployed candidate shall not exceed Rs.1.00 lakh p.a.
3. Income certificate produced by the student for availing
Educational Loan viz. ITR/Form 16/Audited Accounts/
Income certificate issued by the authority of State
Government/UT Administration is acceptable to
determining Income ceiling.
Recommendatory Committee
1. Recommendatory Committee headed by Joint
Secretary in-charge of Backward Classes Division with
representatives of Finance Division, representative of
Compilation : Sapandeep Toor (in Sydney - Australia) (Source GOI Website).
BANKING FEATURES
Nodal Bank and concerned Director/Deputy Secretary
as convener will examine and recommend the applications
for award of interest subsidy on quarterly basis.
2. Out of the total outlay in a year, a minimum of 50%
amount will be earmarked for Interest Subsidy to the girl
candidates.
Rate of Interest Subsidy
1. Under the scheme, interest payable by the students
availing the education loans, for the period of moratorium
(i.e. course period, plus one year or six months after
getting job, whichever is earlier) as prescribed under
the Education Loan Scheme of the IBA, shall be borne by
the Government of India.
2. The candidate will bear the Principal installments and
interest after moratorium period.
Implementing Agencies The Scheme will be implemented
by the Nodal Bank as per MoU between the Banks and
the Ministry of Social Justice & Empowerment.
Administrative Expenses :A provision not exceeding 2%
of the annual budget allocation for the scheme will be
made to meet the administrative and allied costs.
Monitoring and Transparency
1. The Ministry of Social Justice and Empowerment shall
monitor the performance of the scheme.
2. The Nodal Bank will be required to furnish quarterly
financial and physical progress reports to the Ministry.
•
Stand Up India Scheme
Union Cabinet approved the Scheme on January 06, 2016.
Objective : To promote entrepreneurship among SC/ST
and Women entrepreneurs for benefiting atleast 2.5 lakh
borrowers within 36 months from the launch of the
Scheme.
Methodology : To facilitate at least two such projects
per bank branch, on an average, one for each category
of entrepreneur.
Important provisions of the scheme :
1. Refinance window through Small Industries
Development Bank of India (SIDBI) with an initial amount
of Rs. 10,000 crore.
2. Handholding support at the pre-loan stage and during
operations including increasing their familiarity with
factoring services, registration with online platforms and
e-market places as well as sessions on best practices
and problem solving.
3. To leverage the institutional credit structure to reach
out to these under-served sectors of the population by
facilitating bank loans repayable up to 7 years and
between Rs.10 lakh to Rs.100 lakh for greenfield
enterprises in the non-farm sector.
4. The loans would be appropriately secured and backed
by a credit guarantee through a credit guarantee
scheme for which Department of Financial Services
would be the settler and National Credit Guarantee
Trustee Company Ltd. (NCGTC) would be the operating
agency.
Margin money of the composite loan would be up to
25%. Convergence with State schemes is expected to
reduce the actual requirement of margin money for a
number of borrowers.
BANKING FEATURES Banking events updatE ♦ April 2016 ♦ 7
Practical Problems based on Banking Ombudsman Decisions
1) The complainant received an SMS intimating that two transactions of Rs. 548.06 and eLearning
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complaint with the bank stating that the card was in his possession at the time of the
transaction. He also informed the bank that he had checked his account balance from one
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complainant requested bank to refund the disputed amount. He, thereafter, received a
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8 ♦ Banking events updatE ♦ April 2016
PM Fasal Bima Yojna (PMFBY)
Government approved PMFBY to replace the existing
schemes of National Agricultural Insurance Scheme (NAIS)
& Modified National Agricultural Insurance Scheme
(MNAIS) from Kharif 2016. Further, Weather Based Crop
Insurance Scheme (WBCIS) has also been modified and
the premium payable by the farmers as also its
administrative provisions and operationalisation process
have been brought on par with PMFBY. In addition, a
Unified Package Insurance Scheme (UPIS) has also been
approved for implementation on pilot basis in 45 districts
to cover other assets like machinery, life, accident,
house, student-safety etc.
RBI has advised banks to ensure strict compliance and
ensure coverage of 100% of defined loanee farmers wef
Apr 1, 2016. The salient features of PMFBY are given as
under:
Objective : To provide insurance coverage in case of
failure of the notified crop as a result of natural
calamities, pests & diseases.
Implementing agency : Ministry of Agriculture & Farmers
Welfare (MoA&FW), Govt. in association with Banks and
Insurance Agencies (Agriculture Insurance Company of
India and some private insurance companies).
Unit of insurance : The Scheme is implemented on an
‘Area Approach basis’ i.e., Defined Areas for each notified
crop which is Village/Village Panchayat level.
Coverage : 1. All crops for which past yield data is available.
2. All farmers growing notified crops in a notified area.
3. Enrolment is compulsory for loanee farmers (having
sanctioned Crop Loan /KCC ).
4. Other farmers including those with KCC/Crop Loan
but credit limit is not renewed.
RISKS TO BE COVERED :
1. Yield losses: Comprehensive risk insurance is provided
to cover yield losses due to non-preventable risks, such
as (i) Natural Fire and Lightning (ii) Storm, Hailstorm,
Cyclone, Typhoon, Tempest, Hurricane, Tornado etc. (iii)
Flood, Inundation and Landslide (iv) Drought, Dry spells
(v) Pests/ Diseases etc.
2. Prevented sowing : If farmers are prevented from
sowing the insured crop due to adverse weather, they
shall be eligible for indemnity claims upto a maximum of
25% of the sum-insured.
3. Post-harvest losses : Cover is available upto a maximum
14 days from harvesting, for crops kept in 'cut & spread'
condition to dry in the field after harvesting.
4. Localized calamities : Hailstorm, landslide, and
Inundation affecting isolated farms.
RISK EXCLUSIONS: Following shall be excluded:War &
kindred perils, nuclear risks, riots, malicious damage, theft,
act of enmity, grazed and/or destroyed by domestic and/
or wild animals, in case of Post–Harvest losses the
harvested crop bundled and heaped at a place before
threshing, other preventable risks.
SUM INSURED / LIMIT OF COVERAGE: The Sum Insured
would be equal to Scale of Finance (SoF) fixed by
Compilation : Manjot Kaur Toor (Sydney - Australia) (Source Website of GOI).
R
BANKING FEATURES
District Level Technical Committee (DLTC) which may
extend up to the value of the Threshold Yield of the
insured crop at the option of insured farmer.
Where value of the threshold yield is lower than SoF,
higher amount shall be the Sum Insured. Multiplying the
Notional TY with the Minimum Support Price (MSP) of
the current year arrives at the value of sum insured.
Wherever Current year’s MSP is not available, MSP of
previous year shall be adopted. For the crops for which,
MSP is not declared, farm gate price established by the
marketing department / board shall be adopted.
In case of Loanee farmers, the Insurance Charges payable
by the farmers shall be financed by loan disbursing office
of the Bank, and will be treated as additional component
to the SoF for the purpose of obtaining loan.
For farmers covered on voluntary basis, the sum-insured
is upto the value of Threshold yield i.e threshold yield x
(MSP or gate price) of the insured crop.
PREMIUM RATES: The Actuarial Premium Rate (APR)
would be charged. The rate payable by farmer will
be :
1. Kharif : Food & Oilseeds crops (all cereals, millets, &
oilseeds, pulses) - 2.0% of sum insured (SI) or Actuarial
rate, whichever is less
2. Rabi : Food & Oilseeds crops (all cereals, millets, &
oilseeds, pulses) - 1.5% of SI or Actuarial rate,
whichever is less
3. Kharif & Rabi : Annual Commercial / Annual -
Horticultural crops, 5% of SI or Actuarial rate, whichever
is less.
SHARING OF RISK: Risk will be shared by IA and the Govt.
The liability of the Insurance companies in case of
catastrophic losses computed at the National level for
an agricultural crop season, shall be upto 350% of total
premium collected (farmer share plus Govt. subsidy) or
35% of total Sum Insured (SI), of all the Insurance Companies
combined, whichever is higher.
The losses at the National level in a crop season beyond
this shall be met by equal contribution (i.e. on 50:50
basis) from the Central Government and the concerned
State Governments.
INDEMNITY LEVEL (IL) and THRESHOLD YIELD (TY) :
1. 3 levels of Indemnity, viz., 70%, 80% and 90%
corresponding to crop Risk in the areas shall be available
for all crops.
2. Threshold Yield (TY) shall be the benchmark yield
level at which Insurance protection shall be given to all
the insured farmers in an Insurance Unit.
3. Threshold Yield for a crop in an Insurance Unit shall
be based on average yield of last 7 years excluding 2
years of declared calamity, if any, multiplied by the level
of indemnity of the area.
TY = [Sum (last 7 years of yield minus 2 notified calamity
years if any) / (5 - 7, as the case be)] x level of indemnity
Calculation of claim payout : It is calculated as under:
CP = [Shortfall in yield / Threshold yield] / Sum Insured
(shortfall in yield = Threshold yield - actual yield)

• JALAN PANEL SUGGESTIONS IN FINAL REPORT: The Expenditure
management Commission headed by former RBI Governor Bimal Jalan has, in
its final report, suggested a no. of measures to streamline government
spending and plug the leakages of subsidies by expending the scope of the
direct benefit transfer (DBT) scheme. The Panel suggested that DBT scheme
may be used for scholarships, pensions and subsidies as well. A reduction in
subsidies through better targeting will also lower revenue spending and free
up more fiscal space for development work.
• GOVT. ANNOUNCES FIRST 20 SMART CITIES: The Government has
announced the names of 20 cities that have bagged the coveted “Smart City”
tag under its flagship mission. Delhi and 11 states whose cities made it to the
top 20. Proposals by 97 cities were assessed by three teams of evaluators
consisting of Indian and foreign experts. They were judged on feasibility,
cost-effectiveness, result orientation, citizen participation, smartness of the
proposal, strategic plan, vision and goals and others. The Centre will provide
Rs.200 Crore per city in the first year followed by Rs.100 Crore each year
after that. States will have to match the contribution.
• INDIA TO GET MORE VOTING RIGHTS IN IMF: Marking a “Historic” change
at the IMF, India, China and other emerging economies will now have more
voting rights in the International Monetary Fund (IMF) with the implementation
of long-pending quota reforms. For the first time the four emerging economies-
India, China, Brazil and Russia –will be among the 10 largest members of the
IMF. Besides, more than 6% of quota shares will shift to dynamic emerging
markets and developing countries. It will also mark the shift in shares from
over-represented IMF members to Under-represented ones.
• RBI FOR COMPENSATION TO PSB BOARD MEMBERS: RBI Governor has
said that Public Sector Banks’ (PSB) Board members need to be paid market
compensation if decent talent is to be attracted. Raghuram Rajan also said
that more decisions need to be decentralized from the government to the PSB
Boards once they have been fully professionalized.
• RBI ASKED BANKS TO CONDUCT INTERNAL AUDIT: All Public Sector Banks
and Private Banks have been asked by RBI to conduct a “Thorough Internal
Audit” and put the report before their respective audit committees, as part of
the RBI’s efforts to check fraudulent foreign exchange transactions. The
move comes in the wake of irregularities that came to light last year in the
Rs.6100 Crore import remittances effected by Bank of Baroda’s Ashoka Vihar
branch.
• MUTUAL FUNDS ROLLS OUT AaDHAR NUMBER FACILITY: Fund Houses
have started the facility to buy or sell mutual fund products by using the
Aadhar Number. Now the investor can invest online in mutual fund products
even if he/she is not compliant with Know Your Customer (KYC) details. The
new service will help investors buy or sell mutual fund products in a simpler and
faster way.
• NITI AaYOG TO ALIGN TARGETS WITH UN GOALS: NITI Aayog has drawn
a list of nodal ministries and key programmes of the government that would
help India work towards attaining the United Nation’s Sustainable Development
Goals in a time-bound manner. This is an exercise that would make respective
ministries accountable for their performance as well as help in introducing mid-
term correction in policy areas if required.
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Financial
Events
• NEW INDUSTRY DATA-WPI TO BE RELEASED:
The central Statistics Office is to release updated
indices this year to measure factory output and
wholesale prices. The indices will have a wider
basket of commodities and reporting units to rein
in volatility in monthly data trends. The updated
indices with the base year as 2011-12 as against
the current 2004-05, will also strictly implement
the Collection of Statistics Act, 2008, which can
penalize reporting units for not furnishing timely
and correct data.
• CENTRE SETS UP TAX PANELS: The centre has
set up two new Committees-Tax Policy Research
Unit (TPRU) and Tax Policy Council-to bring
coherence in its tax policies by streamlining and to
some extent merging direct and indirect tax policy
and administration. Led by the Finance Minister,
the Tax Policy council will suggest broad policy
measures for taxation based on inputs from the
Tax Policy Research Unit. The council will be
advisory in nature which will help the government
in identifying key policy decisions for taxation.
• RBI TO CLEAN UP BALANCE SHEET OF BANKS:
RBI will fine-tune the various regulatory
mechanisms currently available to banks to clean
up their balance sheets to increase their
effectiveness. Further, in a bid to help banks meet
the stringent Basel regulatory framework, RBI will
identify non-recognisable capital that is already
on bank balance sheets, to treat it recognizable
capital as per Basel norms, provided a bank meets
minimum common equity standards.
• RBI MOOTS PENALTY FOR DELAY IN
REPORTING FDI: RBI has proposed a penalty of
1% of the total amount of investment in the event
of delay in reporting by an investee company that
receives foreign direct investment (FDI) against
issue of shares. The penalty could be imposed if
the reporting delay is beyond the prescribed period
(30 days from receipt of funds in case of report via
advance remittance form and 10 days from issue
of shares in case of report via foreign currency
gross provisional reporting).
• GOVT TO PFRDA TO PROVIDE FULL RANGE
OF PRODUCTS: The Centre has asked the Pension
Regulator PFRDA to ensure that a full range of
investment products, including alternate investment
funds (AIFs) are made available for Indians saving
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for their retirement. Global investment products should also be available to
the savers so that they could diversify and improve the risk-reward ratio on
their portfolios. These are commonly available to people saving for their
retirement around the world.
• CBDT NOTIFIES PROCEDURE FOR EMAIL COMM: Central Board of
Direct Taxes (CBDT) has notified the format and procedure for the taxman
and taxpayers to usher in an ambitious pilot project of using emails as the
new mode of communication between the two sides. Under the new
procedure, the taxman will send emails, for issuing notices and summons
through the government registered “@ income tax government in” email
domain and the attached PDF documents will have his or her designation
and signature. In response, to such an IT notice, a taxpayer will have to
use his registered email id with the department to submit the details called
for, in a PDF format.
• SUPREME COURT RULING ON GOVT. PRIVILEGE: The Supreme Court
has ruled that the government can withdraw tariff concessions promised or
granted to industries since it is a privilege and not a right. The industries
can not ask for legal enforcement of tax exemptions as a matter of right.
• EXIM BANK TO ISSUE “PANDA BONDS”: Exim Bank which specializes in
promoting exports from India plansto raise up to $300 million by issuing
“Panda Bonds”. A Panda bond is a Chinese renminbi-denominated bond
from a non-Chinese issuer, sold in China. Even after the recent devaluation
of the Chinese currency, issuer still has a price advantage. At current
rates, the swap gives the lender a price advantage of up to 75 basis points.
• EPFO TO ISSUE ONE TIME BONUS : Retirement Fund Body EPFO plans to
dole out Rs.750 Crore bonus to its subscribers for 2015-16 instead of
raising the interest rate, a first of its kind move that would translate into
double digit returns for crores of subscribers.
• CIBIL ROLLING OUT INFO ABOUT FIRST-TIME BORROWERS: Credit
Information Bureau (India) has designed a Credit Risk Assessment System
to gauge first-time borrowers. The system which now has a significant
database of credit history from Microfinance institutions, traders and self-
help groups, can give huge insights to financial institutions which are seeing
a growing number of people.
• RUSSIA’S CENTRAL BANK REVOKES LICENCES OF TWO BANKS:
Russia’s Central Bank effectively closed down two of the country’s smaller
banks after it revoked their operating licences, its latest effort to consolidate
the sprawling banking sector. The closures are part of the Central Bank’s
strategy to consolidate the banking sector that is currently characterized
by a large number of small banks, many of which fail to meet regulatory
standards.
• RBI ISSUES FRESH DIRECTIONS TO BANKS ON NEW AS: RBI has
issued fresh directions to banks on implementation of New Accounting
Standards (AS). Banks have been asked to submit pro forma Ind AS financial
statements to RBI from the half year ended September 30, 2016 onwards.
Each bank will now be required to set up a steering committee-headed by
Executive Director-comprising members from cross-functioning areas of
the bank to immediately initiate the implementation process. RBI also wants
the audit committee of the bank’s board to oversee the projects of the Ind
AS implementation process.
• GOVT. LAUNCHES EDF: The Centre has launched Rs.10, 000 crore
Electronic Development Fund (EDF) specially targeted at the semi conductor
industry. EDF will provide risk capital to companies developing new
technologies in electronics, nano-electronics and information technology.
The Centre will contribute Rs.2200 Crore while the balance will be brought
in by private entities. Canbank Venture Capital Fund, a subsidiary of Canara
Bank has been appointed the implementation agency of EDF. The Fund will
also be used to acquire foreign companies and technologies that are required
for building hi-tech capabilities within India.
• CENTRE APPROVES NATIONAL CAPITAL GOODS POLICY: The
Government has approved the first-ever National Capital Goods Policy for
the capital goods sector. The policy envisages increasing exports to 40% of
Financial Events
production from the current 27%, while increasing
share of domestic production in India’s demand to
80% from 60%, potentially making India a net
exporter of capital goods. The Policy also aims to
facilitate improvement in technology depth across
sub-sectors, increase skill availability, ensure
mandatory standards and promote growth and
capacity building of MSMEs.
• GOVT. TO PROVIDE AID TO SET UP GREEN
CAMPUS: The Government has decided to provide
financial assistance for Rs.5 Lakh to help
organizations develop their campuses or small
townships into a “Green Campus”. The Ministry of
New and Renewable Energy has invited proposals
from organizations interested for developing or
converting their existing campus or small township
into a green campus. Under the Ministry’s
“Development of Solar Cities Programme” the
financial assistance will be for preparation of a master
plan and detailed project report, including action
plan for renewable energy installation, green campus
development, awareness generation and training.
• RBI TO CONDUCT INCOGNITO CHECKS: RBI said
that it would soon undertake “incognito Visits” to
bank branches to check the culture towards customer
complaints. It will also undertake a review of how
banks have implemented the charter of customer
rights. Customers must have the right to access
banking services and to the grievance Redressal
machinery, so that they are not excluded from the
banking fold. RBI Governor said that websites, mobile
phones, missed calls, physical places and collection
points could be some ways to aggregate customer
complaints for redressal.
• PFRDA ROLLS OUT AaDHAR-BASED
MODALFOR NPS: Pension Regulator PFRDA has
rolled out an Aadhar-based Modal for online
registration to New Pension Scheme (NPS), enlarging
the options for know-your-customer (KYC)
verification. This would mean that prospective online
subscribers to NPS would not be deprived of the
eNPS facility if they were to offer their Aadhar Card
as a document of identity for KYC verification
purposes.
• GOVT. SANCTIONS FUNDS TO BUILD HOMES
FOR URBAN POOR: The Ministry of Housing and
Urban Poverty Alleviation has sanctioned the
construction of 81, 757 houses for economically
weaker sanctions in urban areas in seven states
with a total investment of Rs.4076 Crore. Under the
“Housing for All” Mission, 58, 456 dwellings will be
built under the ‘Beneficiary Led Construction’
component. The beneficiaries will build houses on
their own land with assistance from the centre and
the state government. Another 23, 301 houses will
be built under “Affordable Housing in Partnership”
component under which the state will provide land
and the centre will provide assistance of Rs.1.50
Lakh per beneficiary.
• FINMIN CLARIFIES TAX REPORTING NORMS
UNDER FATCA AND CRS: The Finance Ministry has
clarified on implementation of Foreign Account Tax

Compliance Act (FATCA) and Common Reporting Standards (CRS) and said that
all fixed deposits as well as auto sweep facilities in pre-existing savings bank
accounts will not require due diligence. In such cases, no additional
documentation are obtained for these fixed deposits accounts as they are
intrinsically related to existing savings bank account and all KYC documents are
available for the existing savings bank account. Accordingly, fixed deposits in
savings accounts opened before June 30, 2014 and December 31 2015 will not
have to be certified for FATCA and CRS respectively.
• GOVT. SET OUT DEFINITION OF START UP: The Government has set out
the definition of “Startup” to ensure that only deserving companies draw the
benefits of its “Startup India Action Plan” and to create a conducive environment
for Startup India. As per Govt. notification, Startup Companies would be
required to have equity funding of at least 20% by any incubation, angel or
private equity fund. Such companies would fall under the category of startups
up to five years from the date of incorporation as log as their turnover does not
exceed Rs.25 Crore. The process of recognizing a startup would be done
through a mobile application/portal.
• PM LAUNCHES RURBAN MISSION: The Prime Minster has launched Rurban
(Rural-Urban) Mission which aims to draw an investment of over Rs.5000 Core
in three years to transform rural areas to economically, socially and physically
sustainable spaces. The Mission will replace the UPA’s “Provision of Urban
Amenities in Rural Areas (PURAL) initiative and it would create village clusters
to minimize rural migration to cities through skill development programmes.
• RBI EXTENDS SWAP PACT WITH SAARC: RBI has extended the $2 billion
Currency Swap Arrangement to SAARC nations till mid November 2017 in order
to enhance economic cooperation and strengthen financial stability. Under the
arrangement, RBI is to offer swap arrangement up to an overall amount of $2
billion, both in foreign currency and Indian rupees. The swap amount available
to various member central banks has been arrived at broadly based on two
months import cover subject to a floor of $100 million and a maximum of $400
million per country.
• AMCs ALLOWED INVESTING UNCLAIMED AMOUNTS: To check mis-selling
of mutual funds, SEBI allowed unclaimed redemption and dividend amounts to
be invested in a separate plan of liquid scheme floated by fund houses specifically
for deployment of such amounts. Asset Management Companies will not be
permitted to charge any exit load in this plan and the total expense ratio of
such plan will be capped at 50 bps. Currently, mutual funds deploy unclaimed
dividend amounts in call money market or money market instruments only.
• BANKS BOARD BUREAU TO START FUNCTIONING: Moving ahead with
banking reforms, the Government has appointed Former Comptroller Auditor
General (CAG) of India Vinod Rai as the Chairman of the Banks Board Bureau.
The Board, which is expected to start functioning from April 1, will have a term
of two years. The Board will recommend top level appointments of directors
and non-executive Chairman at Public Sector Banks and also suggest ways of
raising funds and addressing the problem of stressed assets of these lenders.
• SIDBI TO RAISE “START UP INDIA FUND”: SIDBI will raise the proposed
Rs.10, 000 Crore corpus for “Start Up India Fund” from the RBI through the
priority sector lending shortfalls. The corpus will be used to refinance loans
extended by banks to the Scheduled Casts, Scheduled Tribes and women
entrepreneurs as part of the “Stand Up India Scheme”.
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• SUPREME COURT RULING ON CHOOSING
COURT: The Supreme Court has set aside the
judgment of the Bombay High Court and ruled
that an employee aggrieved by his termination
can move the Labour Court where he had been
employed or where the company headquarters is
located.
• MPC TO DECIDE INTEREST RATES AFTER
FINANCE BILL: The Monetary Policy Committee
(MPC) which will decide on interest rates after
the passage of the Finance Bill will have three
members each representing the RBI and the
Government but RBI Governor will have the
casting vote in case of a tie. The Government
proposes to amend the RBI Act, 1935 to put in
place a new monetary policy framework wherein
the decision on interest rates will be taken by a
Monetary Policy Committee instead of the RBI
Governor as was being done so far.
• SCHEME FOR DOMESTIC BLACK MONEY
UNVEILED: The Government has unveiled a new
scheme to tackle domestic black money, asking
those with undisclosed income to come clean by
paying tax, surcharge and penalty that adds up
to 45% of the concealed income. Taxpayers can
clean up their past transgression by paying 30%
tax, 7.5% surcharge and 7.5% penalty, adding
up to 45% of the undisclosed income. The
compliance window will remain open from June 1
to September 30. Those declaring undisclosed
income can pay the amount within two months of
making the declaration.
• FM PROPOSES FOR EASIER TAX REGIME: The
Finance Minister spelt out wide-ranging reform in
the tax administration aimed at simplifying
procedures and reducing litigation. Threshold limit
for audit of accounts has been raised from Rs.25
Lakh to Rs.50 Lakh and the threshold limit of
presumptive taxation has also been raised from
Rs.1 Crore to Rs.2 Crore. No penalty has been
proposed in respect of income tax disputes of up
to Rs.10 Lakh. Interest rates on delayed
payments of duty across all indirect taxes has
been rationalized at 15%. Monetary limit for
prosecution has been increased to Rs.2 Crore of
service tax evasion.
• GOVT. ALLOWED 100% FDI IN MULTI-
BRAND RETAIL: The Government has allowed
100% FDI in multi-brand retail of food and food
products and manufactured in India. It has been
stipulated that FDI be allowed into the food retail
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Rs.200 Rs.200
12 ♦ Banking events updatE ♦ April 2016
sector only through the Foreign Investment Promotion Board
(FIPB) route. The objective of the proposal is to enable big
multi-national retail chains in the food and food processing
sectors to create back-end infrastructure and bring in the
latest technology to the farm sector.
• STATES TO ISSUE BONDS UNDER UDAY SCHEME: Under
the UDAY Scheme, state governments take over 75% of
the debt of the distribution utilities. This is then issued as
non-SLR bonds. The remaining 25% of debt with electricity
distribution utilities is also refinanced through state
Government-backed DISCOM bonds. Now the Union
government has given permission to four states to issue
the bonds under UDAY Scheme. Four states are Uttar
Pradesh, Rajasthan, Jharkhand and Chhattisgarh.
• GOVT. WINDS UP NMCC: The Cabinet Committee of
Economic Affairs has approved winding up of the National
Manufacturing Competitiveness Council (NMCC) which was
set up by the previous Government as a forum for policy
dialogue between the industry and the government. The
approval to wind up NMCC comes into effect immediately as
the council has fulfilled the mandate for which it was
constituted. Further the Union Cabinet gave a green signal
to the setting up of a society- “36th International Geological
Congress” (IGC) for organizing the 36th IGC in 2020 with a
budgetary outlay of Rs.52 Core for preparatory activities.
• EMPLOYERS TO GET INCENTIVES FOR PROVIDING UAN
TO EPFO SUBSCRIBERS: EPFO has announced an
Incentive Refund Scheme that encourages employers to
provide Universal Account Numbers (UAN) to all employees,
a step aimed at bringing transparency and accountability to
the EPF System. The Scheme will enable employers to claim
a refund of the administrative charge paid by them in each
quarter provided they qualify for it based on certain criteria.
The scheme will be effective from January 1 to December
31, 2016.
• SEBI FOR EARLY WARNING SYSTEM ON PONZI
SCHEMES: SEBI is planning to develop an early warning
system to ensure that investors do not fall prey to the Ponzi
Schemes. The system will be based on certain financial
parameters from the balance sheet of the suspected entities
and inquiries could be initiated against them. The move to
establish an early warning system is aimed at zeroing in on
companies that have taken deposits from the public whose
balance sheet parameters show that they may renege on
payment of interest and/or repayment of the principal.
• EBRD RAISES FUNDS THROUGH MASALA BONDS: The
European Bank for Reconstruction and Development (EBRD)
has raised Rs.500 Crore through “Masala” Bonds listed on
the London Stock Exchange’s main market. Masala Bonds
are rupee-denominated bonds issued in offshore capital
markets that are offered and settled in US dollars/Euros to
raise Indian rupees from international investors.
• BUDGET EASED POSSESSION NORM FOR HOME LOAN:
At present, the government allows a deduction from income
of up to Rs.2 Lakh for interest paid on a loan taken to
purchase of a house for own use if one gets possession
within three years from the end of the financial year in
which the loan was taken. The Union budget 2016 has
extended this limit to five years. The proposed change
however will be applicable from April 1, 2017.
• ICICI BANK LAUNCHES ‘WORK FROM HOME” FOR
WOMEN: ICICI Bank has launched “Work from Home”
Programme to prevent women employees from dropping out of its
workforce. The bank has deployed face recognition technology to
facilitate women to work from home and provide access to the
bank’s Core Banking Servers. Under the programme, employees
working from home can carry out multiple tasks such as checking
documents for disbursement of loans, image-based verification of
cheques for clearance, first level scrutiny of documents for opening
of accounts and processing of export-import documents for
payments.
• GOVT. SIGNS AGREEMENT WITH WORLD BANK ON STATES
RANKING: In view of the allegations of favoritism, the Centre has
distanced itself completely from the process of ranking states on
the “Ease of Doing Business” Index. Now, instead of roping in the
World Bank only as technical facilitator, as was done last year, the
government has now engaged the World Bank to carry out the
entire process of assessment right from the data collection to
evaluation and ranking. The Government has signed a three year
agreement with the World Bank assigning it to carry out the ranking
process of states based on the already identified parameters as
part of the annual report titled “Assessment of State Implementation
of Business Reforms”.
• TAX SOPS FOR MFIs-NPA PROVISION: Microfinance Institutions
(MFIs) can now enjoy a tax benefit on provisioning for non-
performing assets (NPA) on par with banks. Budget 2016 -17 had
proposed that non-banking finance companies (NBFCs) will be
allowed to claim tax deductions on the provision from NPAs up to
5% of total income.
• SEPARATE AGENCY TO MANAGE CENTRE’S DEBT: At present,
RBI handles the government’s borrowing programme through the
Internal Debt Management Department (IDMD). The Department
also regulates and supervises the primary dealers’ system and is
responsible for development of the government securities market.
RBI fully handles issuance (front-office) and infrastructure (back-
office) of G-secs. Now it is proposed to set up the Public Debt
Management Agency (MDMA) for which the RBI Act is to be amended.
The Government has said that before setting up the Agency, the
decision is to be taken as what to do with the staff of RBI’s Front
and Back Offices.
• REAL ESTATE BILL CLEARED; Parliament cleared the Real Estate
Bill which covers both commercial and residential projects.
Construction is to be started only after getting all statutory
clearances. All changes in ongoing projects to be vetted by 2/3rds
of the home buyers. 70% of funds collected from buyers to be
deposited to an escrow account to cover both cost of construction
and land. The Appellate Authority to adjudicate cases in 60 days
against 90 days till now.
• CABINET COMMITTEE APPROVES PMUY SCHEME: The
Committee has approved the Pradhan Mantri Ujjwala Yojana Scheme
for providing free LPG connections to women from BPL household.
Under the scheme Rs.8000 Crore has been earmarked for providing
5 Crore LPG connections. Through this scheme, the Ministry will
provide LPG connections at a concessional rate to 5 Crore below
poverty line families over the next three years. The connection will
be given only in the names of women members of the households.
• DRAFT LAW TO CRACK DOWN ON PONZI SCHEMES: A high-
level Inter-ministerial Group has proposed a new law for punitive
jail terms and fines to curb unregulated deposits and ponzi schemes.
The new legislation will override deposit-taking provisions in other
laws, including of the states, proposes penal provisions, including
imprisonment for a minimum of three years which can be extended
to 10 years and a fine that may be twice the aggregate funds
collected from the subscribers in such schemes.

GENERAL AWARENESS
• The Task Force in which RBI Governor,
Raghuram Rajan has joined to study the
future of the global financial system-
World Economic Forum
• Three Indian –Origin Persons have been
awarded -Australia’s Highest Civilian
Honour.
• World’s Biggest Automaker in 2015-
Toyota.
• India moved up from 85 to 76 on the
Corruption Perceptions Index in 2015 while
the country maintains its Top Clean
Position-Denmark.
• The Mission under which 20 cities have
bagged the coveted “Smart City” tag-
“Smart City Mission”.
• The Bank which rolled out bank’s Mobile
Banking App which will enable customers
to use their smart phones for a range of
transactions-Lakshmi Vilas Bank.
• The Bank in which CBI filed FIR against
Gujarat Firm for Rs.374 Crore Fraud-
Bank of Baroda.
• Three Indians, Mukesh Ambani, Azim
Premji and Shanghvi have made it to a
Global List of 50 Wealthiest People. The
List is topped by-Bill Gates.
• The City which has topped the First Smart
City List- Bhubneshwar.
• Country which will start automatic
exchange of tax information with other
nations from September 2018- Mauritius.
• The Insurance Company which has
launched its First E-Lounge Centre at
Mumbai for issuance of policies through
On-line Touch-screen system- New India
Assurance Company.
• The Ministry which has launched an e-
tendering portal to bring transparency in
the execution of works contracts and
make it cost-effective for the bidders-
Railway Ministry.
• The Bank which has bagged Assocham’s
Social Banking Excellence Award under the
Small Banks Category- Taminad
Merchantile Bank.
• The Bank which has launched “Flexi-Pay
Home Loan Scheme” for young working
professionals/executives-State Bank of
India.
• The Country in which World’s First Robot-
run Farm to be opened-Japan.
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• The Bank which received Golden Peacock Award for Excellence in HR
Practices-Union Bank of India.
• The country which tops the rankings for developed countries in asylum
applications per population- Hungary.
• The Centre has launched Rs.10, 000 Crore Fund to boost- Electronics
Manufacturing.
• The regulator in which UK Sinha’s term has been extended as Chief till
2017-SEBI.
• The First “Silk Road” Train is to connect- China and Iran.
• First-ever policy which has been approved by the Govt. for the capital
goods sector- National Capital Goods Policy.
• The Largest Bank which has been surpassed by the Postal Department in
CBS or Digital Connectivity-State Bank of India.
• The country in which Indian-origin Couple both aged 99 years, completed
their 80 years of marital bliss-New Zealand.
• The Transparency Watchdog in which Anjali Srivastava has been appointed
as Secretary- Central Information Commission.
• The Bank which has opened “Japan Desk” in New Delhi to facilitate Japanese
companies looking to invest-SBI.
• Prime Minister Narender Modi has been ranked 3 rd World Leader on-
Instagram.
• The posting norms which have been eased by the Centre for officers to
stay for a maximum period of 7 years from existing 5 years - Foreign
postings
• The country with which first Bilateral Pact has been entered by IRDAI-
UAE.
• Universities which have been directed by the government to install “National
Flag” at central place- All Central Universities.
• The Traditional Ceremony which is performed initiating the printing of the
Union Budget- Halwa Ceremony.
• West Bengal Finance Minister Amit Mitra is to chair- GST Panel.
• Country which has frozen hiring of foreign workers-Malaysia.
• Country which under new rules, is to ban foreign firms from online publishing
and whose websites are among world’s most censored-China.
• Bank which has been selected to represent India as Umpire (Table Tennis)
in the forthcoming 2016 Rio Olympic Games- Dena Bank.
• Bank which has participated as Panelist in “Innovative Sanitation Financing
Forum” an event in collaboration with World Bank- PNB.
• Bank which has won six Banking Technology Awards from IBA-Union Bank
of India.
• The Mission which has been launched by Prime Minister in Chhattisgarh-
Rurban (Rural-Urban) Mission.
• Nations to whom RBI has extended Currency Swap Arrangement of $2
billion till November 2017- SAARC Nations.
• As per global survey, the Best Place in the World to live-Vienna of Austria.
• The Largest Indian Bank which has identified 1160 borrowers as “Willful
Defaulters” with dues of Rs.11, 705 Crore-State Bank of India.
• City in which India’s First Railway Auto Hub will come up- Chennai.
• Former Comptroller and Auditor General of India, Vinod Rai has been
appointed as Chairman of- Banks Board Bureau.
• SIDBI will raise proposed Rs.10, 000 Core corpus from RBI for- Stand Up
India Fund.
• India’s Project for which BRICS Bank’s First Loan will be for- Solar Energy
Project.
• The Bank which has won “Best Bank in Cooperative Sector Award”-Apna
Bank.
• The Bank which has received “Best Corporate Vigilance Excellence Award”-
Union Bank of India.
• The committee which will decide interest rates after passage of the Finance
Bill- Monetary Policy Committee.
• IGIA, Delhi and RGIA, Hyderabad have been featured among- World’s
Top Airports.
• The Council which the Govt. winds up as it has fulfilled the mandate for
Compilation : SP Sharma & Sapandeep Toor Source : Financial Newspapers, Financial News-Magazines & Financial and Institutional Web-sites
DIARY OF EVENTS
which it was established-National Manufacturing
Competitiveness Council.
• Country whose outlook on Sovereign Bonds has been
turned to “Negative” from “Stable” by the Rating
Agency Moody’s- China.
• The City which has the largest number of ultra high
net worth individuals in India- Mumbai.
• The second edition of a two day retreat which will
outline the reform agenda for the coming year for
State-owned banks- Gyan Sangam.
• Richest Indian Tech. Billionaire- Wipro Chairman
Azim Premji.
• The project, which aims to prevent accidents at level
crossings - Setu Bhartam Project.
• For the First time, a new Symbol will be provided for
voting by the Election Commission in the coming
state assembly elections- NOTA Option.
• Manoj Kumar, known for his patriotic films, has been
selected for- Dadasaheb Phalke Award.
• Mela, inaugurated by PM Narendra Modi in Delhi on
March 19 that demonstrated the modern farm
technology- Krishi Unnati Mela.
• Jalandhar-based Capital Local Area Bank is to start
operations on April 13 as- India’s First Small
Bank.
• The Bank which has won “Best Performing Public
Sector Bank” for high lending to self-help groups-
Indian Bank.
• Technology Pioneer Ray Tomlinson, US Programmer,
who is credited with choosing the @symbol for
messaging system- Inventor of Email.
• City in which World Culture Festival was organized
during March 2016 - Delhi
• The Scheme under which the Government will start
paying wages in 10 states directly into the
beneficiary’s account on daily basis- NREGA.
• Bank which launched a Credit-linked Subsidy Scheme
for Home Loans- ICICI Bank.
• Banking Regulator which cut all three of its interest
rates and expanded its asset-buying program -
European Central Bank.
• Country which is the Largest Importer of weapons
and military equipments- India.
• The Bill which was treated as “Money Bill” and
passed by the Lok Sabha without taking into account
the amendments proposed by Rajya Sabha -
Aadhar Bill.
• The Bank which is to offer mobile payment service
with Chillr app for customers- Andhra Bank.
• Roli Books’ Founder, Pramod Kapoor, has been
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France.
• The city which has the most health-insured people
among Metros- Chennai.
• Kochi Born social entrepreneur Shaffi Mather has
bagged the award at Silicon Valley for medical
emergency app- Start-up of the Year Award.
• The City which has topped the latest ranking of
Indian cities on the quality of governance-
Mumbai.
• The country whose Central Bank Governor has
resigned after hackers stole over $100 million from
the nation’s foreign reserves- Bangladesh.
 Banking events updatE ♦ April 2016 ♦15
____ when it is registered after a Senior Citizens’ Saving Scheme has
MOCK-TEST
period of 30 days with permission of been fixed at:
PAPER Central Registrar: a 7.8% b 8.1%
Questions based on Latest Policy a Rs.50 b Rs.1000 c 8.6% d 8.3%
01 What is RTGS monthly membership fee c Rs.500 d Rs.100 16 As per Govt. notification relating to
payable by scheduled commercial banks 09 Wef 1.2.2016, CERSAI has revised small savings, the interest rate for
wef 1.4.16? the registration charges payable by the quarter ending June 2016 on 5-
a Rs.10000 banks. On adjustment of loan, the year National Saving Certificate has
b Rs.5000 charges for satisfaction of existing been fixed at:
c Rs.2500 security interest are: a 7.8% b 8.1%
d Rs.2000 a Rs.50 c 8.6% d 8.3%
02 What are RTGS charges recoverable b Rs.100 17 For the purpose of calculation of
from customers including the time c same as in case of registration capital adequacy ratio, which of the
varying charges for amount up to Rs.5 d no charges following is not be taken as part of
lac? 10 For a loan facility to be eligible for CET -1 capital fund:
a Rs.10 b Rs.20 CGTMSE guarantee cover, the a paid up capital
c Rs.30 d Rs.55 maximum rate of interest charged by b statutory reserves
03 What are RTGS charges recoverable the bank concerned, in the loan c revaluation reserve @ 55% discount
from customers including the time account can be: d none of the above
varying charges for amount above Rs.5 a base rate of the bank 18 Foreign Currency Translation
lac? b bank rate + 4% Reserves (FCTR) created by a bank
a Rs.10 b Rs.20 c base rate + 4% can be taken as part of CET-1 capital
c Rs.30 d Rs.55 d bank rate + 3% fund by the bank at a discount of
04 Indian Accounting Standards (Ind AS) 11 As per RBI directions, the foreign ____, for the purpose of calculation
shall be implemented by banks from the currency comprises which of the of capital adequacy ratio:
accounting period : following? a 10% b 25%
a beginning 1.4.17 a currency notes and coins c 55% d 67%
b beginning 1.4.18 b debit card 19 Subject to compliance of certain
c ending 31.3. 18 c ATM card or any other instrument conditions, the Deferred Tax Assets
d ending 31.3.19 used to create financial transaction can be included in ____ capital fund
05 For implementation of new Indian d all the above by banks for the purpose of
Accounting Standards (Ind A) banks are calculation of capital adequacy ratio:
12 Post offices in India can sell foreign
to set up Steering Committee which is exchange in the form of: a CET-1 capital funds
to be headed by: a currency notes and postal order b Additional Tier-1 capital funds
a GM incharge of Accounts b coins and money order c Tier-2 capital funds
b Executive Director of the bank c money order and postal order d Capital conservation buffer
c Managing Director of the bank d currency notes, coins, money order Questions on MSME Rehabilitation
d Chairman of the Bank and postal order Framework
06 Wef 1.2.2016, CERSAI has revised the 13 As per Govt. notification relating to 20 The Framework notified by RBI during
registration charges payable by banks. small savings, the interest rate for March 2016 for revival and
For a loan up to Rs.5 lac, the charges the quarter ending June 2016, on rehabilitation of MSMEs can be used
are ____ when it is registered within a public provident fund (PPF) has been for MSME loans for limit up to:
period of 30 days: fixed at: a Rs.50 cr b Rs.25 cr
a Rs.50 b Rs.100 a 7.8% b 8.1% c Rs.10 cr d Rs.5 cr
c Rs.500 d Rs.1000 c 8.6% d 8.3% 21 Restructuring of loans of _____
07 Wef 1.2.2016, CERSAI has revised the 14 As per Govt. notification relating to relating to MSME will be governed by
registration charges payable by banks. small savings, the interest rate for the extant guidelines on Corporate
For a loan above Rs.5 lac, the charges the quarter ending June 2016 on Debt Restructuring / Joint Lenders’
are ____ when it is registered within a Sukanya Samridhi Scheme has been Forum mechanism:
period of 30 days: fixed at: a above Rs.50 cr
a Rs.50 b Rs.100 a 7.8% b 8.1% b above Rs.25 cr
c Rs.500 d Rs.1000 c 8.6% d 8.3% c above Rs.10 cr
08 Wef 1.2.2016, CERSAI has revised the 15 As per Govt. notification relating to d above Rs.5 cr
registration charges payable by banks. small savings, the interest rate for 22 Under the Framework for Revival &
For a loan the maximum charges are the quarter ending June 2016 on Rehabilitation of MSMEs mechanism,
Disclaimer : We have taken every care to provide information, we believe to be accurate We strongly believe that the subscribers
and reliable and do not assume responsibility of any kind nor shall be liable for losses & are the best consultants, we have. Based
consequence arising from use thereof. Since this information is based on the published on their feed back, we keep on redesigning
reports mostly, correctness or otherwise thereof may be verified by the user with the and restructring this publication. Kindly
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16 ♦ Banking events updatE ♦ April 2016
the branch maintaining the account
should forward the details of stressed
account with loan limits _____ to the
Committee constituted under the
mechanism, for suitable corrective
action plan (CAP)?
a above Rs.50 lac
b above Rs.25 lac
c above Rs.10 lac
d above Rs.5 lac
23 Under the Framework for Revival &
Rehabilitation of MSMEs mechanism,
the branch maintaining the account
should forward the details of stressed
account with loan limits falling under
the prescribed cut off celing, to
internal Committee at Distt/Regional/
Zonal level constituted under the
mechanism within a period of ___ for
suitable corrective action plan (CAP)?
a 5 banking days
b 10 banking days
c 15 banking days
d 25 banking days
24 A borrower can voluntarily initiate the
proceedings under the Framework for
Revival & Rehabilitation of MSMEs
mechanism if any of the following
condition is satisfied:
a apprehension about failure of
business
b inability or likely inability to pay debts
c erosion in net worth due to
accumulated loss to the extent of
50% of NW
d any of the above
25 When a request is received from
borrower to initiate the proceedings
under the Framework for Revival &
Rehabilitation of MSMEs mechanism
by the Standing Committee for
Stressed Assets, it should convene a
meeting for corrective action plan
(CAP) within:
a 5 banking days
b 10 banking days
c 15 banking days
d 30 banking days
26 When a request is received under the
Framework for Revival &
Rehabilitation of MSMEs mechanism
by the Standing Committee for
Stressed Assets, it has to write to
statutory creditors regarding
outstanding liabilities for making claim
within a period of:
a 5 banking days
b 10 banking days
c 15 banking days
d 30 banking days
27 For consortium or MBA loans Under
the Framework for Revival &
Rehabilitation of MSMEs mechanism,
the Standing Committee for Stressed
Assets shall take a decision about
corrective action plan (CAP) within:
a 5 days b 15 days
c 20 days d 30 days
28 For consortium or MBA loans under
the Framework for Revival &
Rehabilitation of MSMEs mechanism,
if Techno-Economic Viability (TEV) is
to be conducted, the Standing
Committee for Stressed Assets shall
finalize the terms of restructuring
within ___ when the amount is up to
Rs.10 cr:
a 5 working days
b 15 working days
c 20 working days
d 30 working days
29 Under the Framework for Revival &
Rehabilitation of MSMEs mechanism,
upon finalization of terms of corrective
action plan, the implementation will
be completed within ____ if CAP is
restructuring and within ___ if CAP is
rectification:
a 60 days and 30 days
b 90 days and 30 days
c 90 days and 60 days
d 60 days and 90 days
30 Under the Framework for Revival &
Rehabilitation of MSMEs mechanism,
the basis for proceeding with a
decision is agreement of the majority
of banks which means ___ majority
by amount and ___ by no. of banks.
a 50%, 60%
b 60%, 75%
c 80%, 60%
d 75%, 50%
Questions on PM Fasal Bima Yojna
31 The implementing agency of Pradhan
Mantri Fasal Bima Yojna is :
a Ministry of Rural Development, Govt.
of India
b Ministry of Agriculture, Govt. of India
c Agriculture Insurance Co. Limited
d Commercial banks
32 Unit area of insurance under Pradhan
Mantri Fasal Bima Yojna is:
a Farmer land holding
b village
c district
d State
33 Which crops are covered by Pradhan
Mantri Fasal Bima Yojna :
a all crops
b notified crops
c all crops in notified areas where yield
data is available
d discretion of insurance company
34 Which farmers are covered by
Pradhan Mantri Fasal Bima Yojna :
a farmers who have raised crop loans
and renewed their limit
b farmers who have raised crop loans
and not renewed their limit
c farmers who have not raised loans
d all farmers
35 Which of the following risk is covered
by PM Fasal Bima Yojna : (1) yield
losses (2) prevented sowing losses
(3) post harvest losses (4) localized
calamities (5) war and nuclear risk
a 1 to 5 all
b 1 to 4 only
c 1 to 3 only
d 1 only
36 Which risk out of the following is not
covered by PM Fasal Bima Yojna :
a war and kindred perils
b nuclear risk,
c riot, theft, malicious damages, act of
enmity
d all the above
37 What is the amount of insurance
where farmer is a loanee farmer under
Pradhan Mantri Fasal Bima Yojna :
a value of crop
b threshold yield x MSP or gate price of
the insured crop
c scale of finance
d scale of finance or up to value of
threshold yield at option of the farmer
38 What is the amount of insurance
where farmer is not a loanee farmer
under PM Fasal Bima Yojna :
a value of crop
b threshold yield x MSP or gate price of
the insured crop
c scale of finance
d scale of finance or up to value of
threshold yield at option of the farmer
39 Actuarial premium rate (APR) is
charged under Pradhan Mantri Fasal
Bima Yojna, which is presently fixed
at ___ in case of Annual commercial
or horticulture Crops:
a 2% of sum insured or actuarial rate
whichever is less
b 1.5% of sum insured or actuarial rate
whichever is less
c 5% of sum insured or actuarial rate
whichever is less
d at rates negotiated by the bank and
insurance company
40 Actuarial premium rate (APR) is
charged under Pradhan Mantri Fasal
 Banking events updatE ♦ April 2016 ♦17
Bima Yojna, which is presently fixed at d 40%, 50%, 60% a 10 days b 15 days
___ in case of Rabi Crops: 45 Under Credit Guarantee Fund Scheme c 20 days d 30 days
a 2% of sum insured or actuarial rate for Education Loans offerred by 50 Under Credit Guarantee Fund Scheme
whichever is less National Credit Guarantee Trust for Education Loans offerred by
b 1.5% of sum insured or actuarial rate Company, the amount of eligible National Credit Guarantee Trust
whichever is less education loan is up to : Company, ___ amount of the claim
c 5% of sum insured or actuarial rate a Rs.5 lac b Rs.7.50 lac payable is to be paid within 30 days
whichever is less c Rs.10 lac d Rs.15 lac a 70% b 75%
d at rates negotiated by the bank and 46 Under Credit Guarantee Fund Scheme c 80% d 85%
insurance company for Education Loans offerred by Recalled Questions
41 Actuarial premium rate (APR) is National Credit Guarantee Trust 51 Which kind of charge out of the
charged under Pradhan Mantri Fasal Company, the margin on eligible following is not possible on stocks, in
Bima Yojna, which is presently fixed at education loan is (find the correct): favour of a bank:
___ in case of Khariff Crops: a Nil for loan up to Rs.4 lac a pledge
a 2% of sum insured or actuarial rate b 5% for loan above Rs.4 lac for
b assignment
whichever is less education in India
c hypothecation
b 1.5% of sum insured or actuarial rate c 15% for loan above Rs.4 lac for
whichever is less education in India d lien
c 5% of sum insured or actuarial rate d all the above 52 Foreign Direct Investment (FDI) up to
whichever is less 100 per cent is permitted under
47 Under Credit Guarantee Fund Scheme
Government approval route for
d at rates negotiated by the bank and for Education Loans offerred by
investments in existing companies in
insurance company National Credit Guarantee Trust
pharmaceuticals sector, which is
42 Under Pradhan Mantri Fasal Bima Company, to be eligible for
called:
Yojna, the risk to be shared by the guarantee, the rate of interest on the
Insurance agency is: loan can be maximum : a brown-field investments
a 150% of total premium collected or a base rate + 2% b green-field investments
35% of total sum insured whichever is b base rate + 4% c yellow-filed investments
higher c bank rate + 2% d red-field investments
b 250% of total premium collected or d bank rate + 4% 53 In terms of the recommendations of
25% of total sum insured whichever is 48 Under Credit Guarantee Fund Scheme the Prime Minister’s Task Force on
higher for Education Loans offerred by Micro, Small and Medium Enterprises
c 350% of total premium collected or National Credit Guarantee Trust (Chairman: Shri T K A Nair) constituted
35% of total sum insured whichever is Company, the annual guarantee fee by the Govt of India the banks are to
higher is ___ of outstanding balance on date achieve a _____ annual growth in
d 50% of total premium collected or 25% of application for guarantee cover. number of micro enterprise accounts.
of total sum insured whichever is higher a 0.25% b 0.5% a 10%
43 Under Pradhan Mantri Fasal Bima c 0.75% d 1% b 12.5%
Yojna, the risk sharing ratio between 49 Under Credit Guarantee Fund Scheme c 15%
Central and State Govt. is: for Education Loans offerred by d 17.5%
a 75:25 b 60:40 National Credit Guarantee Trust 54 A forex bill discounted by the bank
c 50:50 d 33:67 Company, the prescribed annual was returned back unpaid. The
44 There are 3 indemnity levels under guarantee fee is payable within ___ amount will be recovered from the
Pradhan Mantri Fasal Bima Yojna : from the date of Credit Guarantee party by using the following rate:
a 70%, 80%, 90% Demand Advice Notice of guarantee a bills buying rate
b 60%, 70%, 80% fee: b TT selling rate
c 50%, 60%, 70%
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 18 ♦ Banking events updatE ♦ April 2016
c bills selling rate
d TT buying rate
55 KYC guidelines have been issued by
RBI under provisions of :
a Section 21 of Banking Regulation Act
b Section 35 of Banking Regulation Act
c Section 35 A of RBI Act
d Section 35 A of Banking Regulation Act
56 As per Income–tax (22nd
Amendment) Rules, 2015 (Rule 114B),
w.e.f. 1.1.2016, where quoting of
permanent account number (PAN) is
mandatory and the person concerned
does not have PAN, he is required to
make a declaration on Form No.___
a 15G b 61A
c 60 d 15H
57 In case of cash credit which of the
following is correct statement:
a in hypothecation ownership is with
bank.
b in cash credit pledge, the possession
with the borrower
c in case of hypothecation the
possession is with the bank
d in case of pledge the ownership
remains with the borrower
e in case of hypothecation ownership
and possession is with the bank
58 The CERSAI created under SARFAESI
Act 2002, is an abbreviation for which
of the following:
a Central Electronic Registry of Secured
Asset and Reconstruction of Security
Interest of India
b Central Electronic Registry of
Securitization Asset Reconstruction
and Security Interest of India
c Central Electronic Registration of
Securitization Asset Reconstruction
and Security Interest
d Compulsory Electronic Registry of
Securitization Asset Reconstruction
and Security Interest
59 As per Government of India
Name:____________________________________________________
SUBSCRIPTION FORM
notification, it is mandatory to file the b 12 from date of mortgage
particulars for registration of c 12 years from the date when the
mortgage by deposit of title deeds mortgage money has become due
within _____ of creation of the d 12 years from date of loan
mortgage with Central Electronic e 12 years from date of loan or date or
Registry of Securitization Asset mortgage, whichever lower.
Reconstruction and Security Interest 63 Within how many days does the
of India in respect of all mortgages annual return of unclaimed deposit
created on or after 31st March 2011.
accounts is required to be submitted
a 7 days b 15 days by banks to RBI, following the days
c 30 days d 45 days after close of the calendar year:
60 Your branch has sanctioned a bills a 15 days
purchasing limit of Rs.80 lac to M/s b 23 days
Rameshwar Hardware Limited under c 30 days
which demand bills of exchange d 45 days
accompanied by Railway Receipts or e 60 days
Goods Receipts are purchased. The 64 Which of the following will be
company forgot to file the particulars considered a micro enterprise:
of the charge with Registrar of a engaged in manufacturing and
Companies and inspecting official has maximum investment in equipment
raised an objection. Which of the restricted to Rs.25 lac
following remedies is available to the b engaged in services and maximum
company/bank? investment in plant and machinery
a seek ROC permission who has can restricted to Rs.10 lac
waive delay up to 270 days c engaged in manufacturing and
b No need to file particular for such limits maximum investment in plant and
as it is in the nature of pledge by way machinery restricted to Rs.10 lac
of constructive possession d engaged in services and maximum
c seek permission from National
investment in equipment restricted to
Company Law Tribunal which has Rs.10 lac
replaced CLB.
65 You are incharge of loans department
d seek permission from Ministry of
in your branch. In which situation, in
Company Affairs
the loan accounts the interest can be
61 In the beginning of the financial year,
debited and taken to income to
the capital of a firm was Rs.24000.
in-crease the profits:
The firm earned a profit of Rs.4500
and paid tax at 20%. The partners a It has become due
also withdrawn Rs.1500. What is the b It has become due and stands
closing balance in the capital account. recovered if it is NPA account
a Rs.24000 b Rs.26100 c It has become due and account has
c Rs. 27000 not been a non-performing account
d inadequate information d b and c above
62 What period is available as limitation e: None of the above
in case of mortgage:
a 3 years from date of mortgage
Answers
01 b 02 c 03 d 04 b 05 b
06 a 07 b 08 b 09 d 10 c
11 d 12 c 13 b 14 c 15 c

Address:__________________________________________________ 16 a 17 d 18 b 19 a 20 b
21 b 22 c 23 a 24 d 25 a
_________________________________________________________
26 c 27 d 28 c 29 b 30 d
__________________________________________Pin ____________ 31 b 32 b 33 c 34 d 35 b

EMail Id_____________________________Mobile:________________ 36 d 37 d 38 b 39 c 40 b
41 a 42 c 43 c 44 a 45 b
DraftNo___________Date_________drawn on___________Bank, for Rs______fvg
46 d 47 a 48 b 49 d 50 b
Banking & Management Academy. PERIOD from ________ to________
51 b 52 a 53 a 54 b 55 d
( Old Subscn No. _______ ) 56 c 57 d 58 b 59 c 60 a
61 b 62 c 63 c 64 d 65 d

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National Credit Guarantee
Trust Company Ltd
Subsequent to the Central Budget
announcements to set up various
credit guarantee funds, a common
trustee company in the name and
style of National Credit Guarantee
Trustee Company Ltd was set up by
the Department of Financial Services,
Ministry of Finance, Government of
India to act as a common trustee
company to manage and operate
various credit guarantee trust funds.
It was incorporated under the Indian
Companies Act, 1956 on March 28,
2014 with a paid-up capital of Rs.10
crore, with its registered office in
New Delhi. Presently it provides
following:
1) Credit Guarantee Fund for Skill
Development (CGFSD) : Guarantees
for Skill Development Loans by the
member banks of IBA up to Rs.1.5 lakh
extended without collateral or third-
party guarantee. The fund has a
Target of 10-20 lakh loans to be
guaranteed in a year.
2) Credit Guarantee Fund for
Education loans (CGFEL) : Guarantees
for Education Loans by the member
banks of IBA up to Rs.7.5 lakh
extended without collateral or third-
party guarantee. It has a Target of 10
lakh loans to be guaranteed in a year.
3) Credit Guarantee Fund for
Factoring (CGFF) : Guarantees for
domestic factored debts of MSMEs.
Credit Guarantee Fund Scheme
for Education Loans (CGFSEL)
Loan Limit : The maximum loan limit
is Rs 7.5 lakh without any collateral
security and third party guarantee.
Interest Rate : The Interest Rate
charged by MLI should be maximum
up to 2% p.a. over the Base Rate.
Margin : Upto Rs. 4 lakh Nil. Above
Rs. 4 lakh: Studies in India 5% Studies
Abroad 15%
Education Loan eligible under the
Scheme:
(i) The Fund shall cover education
loans by MLI to an eligible borrower
as per IBA scheme, sanctioned on or
after date of notification of scheme.
(ii) MLI applies for guarantee cover
for education loans disbursed in the
quarter April-June, July-September,
October-December and January-
March prior to expiry of the following
quarter viz. July-September, October-
December, January-March and April-
June, respectively.
(iii) as on the material date, (a) there
are no overdues in respect of the
account to the lending institutions
and/or the loan has not been
classified as a Non-Performing Asset
(NPA) in the books of the lending
institution, and/or (b) the activity of
the borrower for which the credit
facility was granted has not ceased;
Education Loans not eligible :
i. Loan for which risks are additionally
covered by Government or by any
general insurer or any other person
or association of persons carrying on
the business of insurance, guarantee
or indemnity, to the extent they are
so covered.
ii. Any Education loan which has been
sanctioned by the lending institution
with interest rate of more than 2%
over the Base Rate of the lending
institutions in cases where Base Rate
is applicable.
Responsibilities of lending institution
under the scheme:
i. MLI shall evaluate and sanction
Education Loan in accordance with
the IBA Model Educational Loan
Scheme for pursuing higher studies
in India / abroad and conduct the
account(s) with normal banking
prudence and due diligence.
ii. MLI shall ensure linkage of every
education loan with Aadhar number
and register the borrower’s/co-
borrower’s name with an appropriate
credit information bureau.
Guarantee Fee:
i. MLI shall pay Annual Guarantee Fee
(AGF) of 0.50% p.a. of the outstanding
amount as on the date of application
of guarantee cover, upfront to the
Fund within 30 days from the date of
Credit Guarantee Demand Advice Note
of guarantee fee. All subsequent
AGFs would be calculated on the basis
of the outstanding loan amount as at
the beginning of the Financial Year.
ii. The demand on MLIs for the AGF
would be raised upon approval of
guarantee cover. The guarantee start
date would be the date on which
Banking events updatE ♦ April 2016 ♦19
proceeds of the AGF are credited to
Trust’s Bank account. AGF shall be
paid by the MLI within 30 days i.e. on
or before April 30, of every year.
iii. In the event of any error or
discrepancy or shortfall being found
in the computation of the amounts
or in the calculation of the guarantee
fee, such deficiency / shortfall shall
be paid by the eligible lending
institution to the Fund together with
interest on such amount at a rate of
4% over and above the Bank Rate.
Guarantee cover :
The Fund shall provide guarantee
cover to the extent of 75% of the
amount in default.
Invocation of guarantee
(i) The lending institution may invoke
the guarantee within one year from
date of NPA, if NPA is after lock-in
period or within one year of lock-in
period, if NPA is within lock-in period
ii. NCGTC shall pay 75% of the
guaranteed amount on preferring of
eligible claim by the lending
institution, within 30 days. NCGTC
shall pay to the lending institution
interest on the eligible claim amount
at the prevailing Bank Rate for the
period of delay beyond 30 days. The
balance 25% of the guaranteed
amount will be paid after obtaining a
certificate from the MLI that all
avenues for recovering the amount
have been exhausted. On a claim
being paid, NCGTC / the Fund shall
be deemed to have been discharged
from all its liabilities on account of
the guarantee in force in respect of
the borrower concerned.
Diploma in
Banking & Finance
It is a desirable qualification for
recruitment of PO or Clerk (as per IBA).
Benefits : Enhanced chances of selection.
• Financial & promotion benefit on joining
a bank • It is equal to JAIIB. Hence direct
exam of CAIIB can be attempted.
• 3 papers (objective-type) can be
passed in 2 half-yearly attempts.
• No negative marking.
• Exam conducted half-yearly by IIBF.
• Eligibility is 10+2 pass.
For BEST & EASY STUDY KITS or 40
hours E-Learning. Call us 01722665623
Banking events updatE ♦ April 2016 ♦ 20 Registration RNI No. 67802/98 Postal Regn No.CHD /0001/2015-17
Licensed to be Post Without Prepayment at BPO Centre, PO Sector 17, Chandigarh
Monetary Policy Committee (MPC) DATA COLUMN
The Finance Bill 2016 proposes to amend RBI Act 1934 to make provision Business of Banks
(Rs.in cr) Apr03'15 Mar04'16
for creation of MPC. The important provisions are summarized as under:
Aggregate deposits 891148 9406580
1. Objective : MPC shall determine the Policy Rate required to achieve Cash in hand/RBI 420920 448840
the inflation target and its decision shall be binding on RBI. Investments 2550180 2730790
Bank Credit: 6830960 7248510
2. Composition of MPC : Central Govt. can constitute Monetary Policy -Food 69230 107390
Committee of the RBI consisting of the following : -Non-Food 6761740 7141120
Cash-Deposit Ratio 4.80 4.78
(a) the Governor of RBI — Chairperson, ex officio; Investment-Deposit 30.03 29.04
(b) Deputy Governor (RBI), incharge of Monetary Policy— Member, ex officio; Credit-Deposit 77.92 77.04
Money Stock
(c) One officer of RBI (nominated by Central Board)—Member, ex officio; (Rs.in cr) Mar31'15 Mar04'16
(d) 3 persons to be appointed by Central Govt.— Members. M3 (Out of which) 10545550 11635060
(a) Currency with public 1386350 1569080
Central Govt. appointed members : These are to be appointed on (b) Demand deposits-Banks 890750 966410
recommendations of Search-cum-Selection Committee consisting Cabinet (c) Time Deposits - Banks 8253870 9086700
Secretary, RBI Governor etc. (term :4 years). These members should not: (d) Other deposits with RBI 14590 12870
Sources of Money Supply
(i) have completed age of 70 years on the date of appointment as Member; (a) Net Bank credit to Govt 3006160 3419680
(ii) be Member of any Board or Committee of the Bank; (b) Bank credit to Comrcl sector 7039580 7772280
(c) Net Forex assets of Banks 2250650 2434690
(iii) be an employee of the Bank; Important Banking Indicators
(iv) be a public servant as defined under section 21 of Indian Penal Code; Statutory Liquidity Ratio 21.50% (07.02.2015)
Cash Reserve Ratio 04.00% (15.02.2013)
(v) be a Member of Parliament or any State Legislature; Reverse Repo Rate 05.75% (29.09.2015)
(vi) has been at any time, adjudged as an insolvent; Repo Rate 06.75% (29.09.2015)
MSF Rate 07.75% (29.09.2015)
(vii) have been convicted of an offence which is punishable with an Bank rate 07.75% (29.09.2015)
imprisonment for a term of one hundred and eighty days or more; Overnight LAF (of NDTL) 0.25%
14-days term Repo (of NDTL)0.75%
Such member may resign by giving a written notice of not less than six Bank of England Rate 0.50%
weeks. Central Govt. may remove from office any Member of MPC. European Comm. Bank 0.25%
Secretariat : RBI shall appoint a Secretary to MPC for secretariat support. Capital & Money Market Indicators
Parameter end-Mar15 Mar16
Information to members : RBI shall provide all information to the Members Dollar-spot TT (Rs.) 62.50 68.03
of MPC that may be relevant to achieve the inflation target. BSE - Sensex (points) 27458 24551
NSE - Nifty(S&P CNX) 8341 7455
Meetings of MPC : (1) RBI shall organise at least 4 meetings of MPC in a Foreign reserves (Million $) 339992 355947
year. The meeting schedule for a year shall be published by RBI at least Gold /Oz in USD) 1187 1211
one week before the first meeting in that year.
(2) The quorum for a meeting of the Monetary Policy Committee shall be
INDIAN ECONOMY-IMPORTANT PARAMETERS
RBI's growth estimate for 2015-16 : 7.9%
4 Members, at least one of whom shall be the Governor and in his absence,
GDP growth-2014-15 (revised estimate) : 7.6%
the Deputy Governor who is the Member of the Monetary Policy Committee. GDP@constant mkt prices (cr) : 10656925
(3) The meetings shall be presided over by the Governor. GVA@2011-12 basic prices (cr) : 9857672
(4) Each Member shall have one vote. GDP projected by Govt. for 2015-16 : 14108945
Fiscal Deficit Target (2015-16) 3.9% of GDP : 555649 cr
Decision by way of voting : All questions which come up before MPC Revenue Deficit Target (2015-16) 2.8.% of GDP : 394472 cr
shall be decided by a majority of votes by the Members present and Share of service sector in GVA (2014-15) : 52.7%
voting, and in the event of an equality of votes, the Governor shall have a Share of manufacturing sector in GVA : 29.7%
second or casting vote. Each Member shall write a statement specifying Share of agriculture sector in GVA : 17.6%
the reasons for voting in favour of, or against the proposed resolution. Wholesale Price Index : -4.5%
Money Supply (M3) expansion : 12.9%
Minutes of meeting : RBI shall publish, on the 14th day after every meeting, Exports during 2014-15 : 310.5 bn
the minutes of the proceedings of the meeting. Imports during (2014-15) : 447.5 Bn
Inflation target : (1) The Central Government shall, in consultation with Export target - 2015-16 (in $) : 310 bn
RBI, shall determine the inflation target in terms of the Consumer Price India's share in world merchandise export : 1.70%
Index, once in every five years. India's currency rating (S&P) : BB Postv
India's external debt (Sept 2015) US $ : 484 Bn
(2) The Central Government shall, upon such determination, notify the Tax-GDP ratio (2014-15) : 9.93%
inflation target in the Official Gazette. Apr- Feb16:Export $ 238.4 bn$ Imports : 351.8 bn
Publishing of MPR : RBI shall, once in every 6 months, publish a document Per capita Income 2014-15 (Rs.) : 88533
to be called the Monetary Policy Report (MPR), explaining Indian economy's ranking in PPP terms : 3rd
Indian economy's ranking in world in value: 10th
(a) the sources of inflation; and
(b) the forecasts of inflation for the period between 8 to 18 months from OUR PUBLICATIONS : REFER PAGE 9,11
the date of publication of the document.
• DATE OF DESPATCH - Apr 7 / 10, 2016

Published by Chand Singh at 1008, Sector 45-B, Chandigarh - Printed by Chand Singh at Golden Graphics 'n' Printers, Industrial Area, Ram Darbar, Chandigarh Editor - Chand Singh