Banking & General Financial Awareness

Notes:
Repo rate is the rate at which the Reserve Bank of India lends money to the commercial banks of India. It is an important Monetary policy tool.

Notes:
Banks can borrow money in the call money market for the following reasons: To cover the gaps or temporary mismatches in funds To meet the Statutory reserve requirements such as Cash Reserve Ratio(CRR) & Statutory Liquidity Ratio(SLR) To meet sudden demand for funds arising out of large outflows.

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National Payments Corporation of India (NPCI) functions as the authorised Bharat Bill Payment Central Unit (BBPCU). It is responsible for setting business standards, rules and procedures for technical and business requirements for all the participants.

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In the context of FOREX (foreign exchange), it primarily refers to the trading of currencies. The Reserve position in the IMF (International Monetary Fund) is not considered part of FOREX as it represents a country’s financial reserve and not a currency asset. 1. Foreign currency assets held by the RBI are part of FOREX. 2. Gold holdings of the RBI are not currency but a commodity. 3. SDRs (Special Drawing Rights) are international reserve assets but not currencies. 4. The Reserve position in the IMF is a financial reserve, thus not included in FOREX. Therefore, the correct answer is 4.

Notes:
The correct answer is 4. In the context of FOREX (foreign exchange), the following are included: 1. Foreign currency assets held by the RBI: These are crucial for managing the country’s foreign exchange reserves. 2. Gold holdings of the RBI: Gold is considered a reserve asset and contributes to the overall reserves. 3. SDRs (Special Drawing Rights): These are international reserve assets created by the IMF to supplement member countries’ official reserves. 4. Reserve position in the IMF: This represents a member country’s financial commitment to the IMF and can be accessed in times of need. All these components are vital for a country’s foreign exchange stability and liquidity.

Notes:
‘Reserve Ratio’ also known as Cash Reserve Ratio, it is the percentage of deposits which commercial banks are required to keep as cash according to the directions of the central bank.

Notes:
The most common deposit accounts are savings and checking. Deposit accounts fall into two major categories: demand deposits and time deposits. A deposit account in which amounts over a certain balance are automatically transferred to another account pursuant to a pre-determined set of arrangements is called a sweep account. In sweep accounts, funds are automatically managed between a primary cash account and secondary investment accounts.

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The basic aim of Lead Bank Scheme is that there should be stiff competition among the various nationalized banks and big banks should try to open offices in each district.

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The Banking Ombudsman Scheme was introduced under the Banking Regulation Act, 1949. This act provides the framework for the regulation of banks in India and was amended to include the Banking Ombudsman Scheme in 2006, aimed at addressing customer complaints and grievances against banks. The scheme enhances consumer protection in the banking sector.

Notes:
Cash pay out in India up to a maximum of Rs. 50,000/- per transaction. Any amount above this has to be paid through local cheque or pay order.