In economics, the term recession generally describes the reduction of a countrys Gross Domestic Product (GDP) for

at least two quarters. A recession is ...(1)... by rising unemployment, increase in government borrowing, ...(2)..., of
share and stock prices, and falling investment. All of these characteristics have effects on people. Some recessions
have been anticipated by stock market declines. The real estate market also usually ...(3)... before a recession.
During an economic decline, high ...(4)... stocks such as financial services, pharmaceuticals and tobacco ...(5)... to
hold up better. However, when the economy starts to recover growth, stocks tend to recover faster. There is
significant disagreement about how health care and utilities tend to ...(6)...

In 2008, an economic recession was suggested by several important indicators of economic downturn. These ...
(7)... high oil prices, which led to ...(8)... high food prices due to a dependence of food production on petroleum, as
well as using food crop products such as ethanol and biodiesel as an ...(9)... to petroleum; and global inflation; a
substantial credit crisis investment blanks as well ...(10)... as commercial banks in various, and signs of
contemporaneous economic downturns in major economics of the world, a global recession.
1.
(1) imagined
(2)depict
(3) shown
(4) visualized
(5) characterized
2.
(1) Increase
(2) variance
(3) more
(4) decrease
(5) abundance
3.
(1) weakens
(2) intiates
(3) awakens
(4) strengthens
(5) volatile
4.
(1) maintained
(2) yield
(3) heavy
(4) result
(5) payment
5.
(1) are
(2) want
(3)tend
(4) yearn
(5) made
6.
(1) distribute
(2) recover
(3) wait

(4) increased
(5) fight
7.
(1) meant
(2) show
(3) numbered
(4) included
(5) encompass
8.
(1) fearful
(2) dangerous
(3) abnormally
(4) healthy
(5) nutritious
9.
(1) alternative
(2) variant
(3) substitute
(4) element
(5) integral
10.
(1) wealthy
(2) costly
(3) stand
(4) created
(5) established

ANSWERS 1. 5
2. 4
3. 1
4. 2
5. 3
6. 2
7. 4
8. 3
9. 1
10. 5

ndeed, much progress in this ...(1)... has already been made as a ...(2)... of the combined ...(3)... of the
government and the people of the state and the ...(4)... initiative provided by Central Government under

Prime Ministers ...(5)... leadership. The results of ...(6)... efforts are there for all to see. Prices of ...
(7)... commodities and other goods have ...(8)...considerably. The rate of inflation ...(9)... fallen to
gratifying figure of ...(10)... minus 3 % , the ...(11)... in the world. There is complete harmony in ...
(12)... public and private sector establishments and ...(13)... is bound to lead to ...(14)... industrial and
agricultural production. Is it is hope or a ...(15)...

1.
(1) Behalf
(2) Regards
(3) Way
(4) Regard
(5) Respect
2.
(1) Resultant
(2) Resulting
(3) Result
(4) Resulted
(5) Resultify
3.
(1) Effort
(2) Work
(3) Efforts
(4) Progress
(5) Movement
4.
(1) Proper
(2) Welcomes
(3) Required
(4) Welcome
(5) Initialization
5.
(1) Chair
(2) Inspires
(3) Inspiring
(4) Stable
(5) Stabilize
6.
(1) The
(2) These
(3) This
(4) Those
(5) Then

7.
(1) Certain
(2) Essential
(3) Good
(4) Several
(5) Manifold
8.
(1) Fell
(2) Falls
(3) Fallen
(4) Risen
(5) Plummeted
9.
(1) Have
(2) Become
(3) Has
(4) Greatly
(5) Rarely
10.
(1) Above
(2) Near
(3) Nearly
(4) Inflation
(5) Internal
11.
(1) Highest
(2) Lowest
(3) Higher
(4) Lower
(5) Lowering
12.
(1) State
(2) All
(3) Both
(4) Either
(5) Center
13.
(1) Will
(2) These
(3) This
(4) Those
(5) That

14.
(1) Great
(2) High
(3) Greater
(4) Lower
(5) Lowest
15.
(1) Certainty
(2) Definitive
(3) Hope
(4) Ultimate
(5) Expectation

1. 2
2. 3
3. 3
4. 3
5. 3
6. 2
7. 2
8. 3
9. 3
10. 3
11. 2
12. 1
13. 3
14. 3
15. 1

Mr. Chamberlain had come to get gift to thirty-five million pounds from South Africa and to win the hearts
of Englishmen and Boers. So he gave a ...(1)... shoulder to the Indian deputation. You know, he said,
that the Imperial Government has little control over self-governing colonies. Your grievances seem to be
genuine. I shall do what I can, but you must try your ...(2)... to placate the Europeans, if you wish to live
in their midst. The reply cast a chill over the members of the ...(3).... I was also disappointed.
It was an eye opener for us all, and I saw that we should start with our work do novo. I ...(4)... the
situation to my colleagues. As a matter of fact there was nothing wrong about Mr. Chamberlains reply. It
was well that he did not mince ...(5).... He had brought home to us in a rather gentle way the rule of might
being ...(6)..., or the law of the sword. But sword we had none. We ...(7)... had the nerve and the muscle
even to receive sword-cuts. Mr. Chamberlain had given only a short time to the sub-continent. If Sri Nagar
to Cape Comorin is 1,900 miles, Durban to Cape town is not less than 1,100 miles, and Mr. Chamberlain

had to cover the long distance at hurricane speed. From Natal he hastened to the Transvaal. I had to
prepare the case for the Indians there as well and ...(8)... it to him. But how was I to get to Pretoria? Our
people there were not in a position to ...(9)... the necessary legal facilities for my getting to them in time.
The war had reduced the Transvaal to a howling wilderness. There were neither provisions nor clothing
available. Empty or closed shops were there, waiting to be ...(10)... or opened, but that was a matter of
time.
1.
(1) cold
(2) cool
(3) hot
(4) warm
(5) left
2.
(1) hard
(2) best
(3) least
(4) fate
(5) hate
3.
(1) reputation
(2) crowd
(3) delegate
(4) leader
(5) deputation
4.
(1) expressed
(2) said
(3) explained
(4) exclaimed
(5) denied
5.
(1) lectures
(2) matter
(3) topic
(4) words
(5) deals
6.
(1) wrong
(2) right
(3) rite

(4) bright
(5) weak
7.
(1) hardly
(2) rare
(3) might
(4) do
(5) scarce
8.
(1) through
(2) permit
(3) submit
(4) deposit
(5) fill
9.
(1) secure
(2) procure
(3) pull
(4) fetch
(5) buy
10.
(1) replenished
(2) fed
(3) booked
(4) filled
(5) emptied

1. 1
2. 2
3. 3
4. 3
5. 4
5. 4
6. 2
7. 1
8. 3
9. 2
10. 1

nks are ...(1)... from other corporate in important ...(2)... and that makes corporate governance of banks
not only different but also more critical. Banks facilitate economic growth, are the ..(3)... of monetary
policy transmission and constitute the economys payment and settlement system. By the very ...(4)... of
their business, banks are highly leveraged. They accept large amounts of un collateralized public funds ...
(5)... deposits in a fiduciary capacity and further leverage those funds through credit creation. Banks are
interconnected in diverse, complex and opaque ways underscoring their contagion potential. If a
corporate fails, the ...(6)... can be restricted to the stakeholders. If a bank fails, the impacts can ...
(7)... rapidly through to other banks with potentially serious consequences for the ...(8)... financial system
and the macro economy. While regulation has a ...(9)... to play in ensuring robust corporate standards in
banks, the point to recognize is that ...(10)... regulations is a necessary, but not a sufficient condition for
good corporate governance. In this context, the relevant issues ...(11)... to corporate governance of banks
in India are bank ownership, accountability, transparency, ethics, compensation, splitting the posts of
chairman and CEO of banks and corporate governance under financial holding company structure, ...
(12)... should engage adequate attention.

1.
(1) Different
(2) Same
(3) Diverse
(4) Differentiated
(5) Similar
2.
(1) Aspects
(2) Perspectives
(3) Leads
(4) Manners
(5) Policies
3.
(1) Agents
(2) Catalysts
(3) Motivators
(4) Points
(5) Ingredients
4.
(1) Limitation
(2) Spread
(3) Nature
(4) Haste
(5) Urge
5.

(1) In
(2) For
(3) From
(4) As
(5) To
6.
(1) Fall over
(2) Push out
(3) Pull out
(4) Fall out
(5) Throw out
7.
(1) Inject
(2) Mix
(3) Flow
(4) Spread
(5) Constrict
8.
(1) Wide
(2) Instable
(3) Long
(4) Small
(5) Closed
9.
(1) Game
(2) Music
(3) Role
(4) Roll
(5) Interest
10.
(1) Calculated
(2) Miscalculated
(3) Estimated
(4) Imaginative
(5) Hard
11.
(1) Persisting
(2) Pertaining
(3) Disturbing
(4) Cornering

(5) Struggling
12.
(1) Which
(2) When
(3) Why
(4) How
(5) That

1. 1
2. 1
3. 1
4. 3
5. 4
6. 4
7. 4
8. 2
9. 3
10. 1
11. 2
12. 1

The protection of ...(1)... human rights is an ...(2)... necessity for the ...(3)... development of an individual.
If the ...(4)... bills called Protection of women ...(5)... sexual Harassment at workplace bill, 2010 and
Protection of children from sexual ...(6)... bill, 2010 ...(7)... into laws, they can go a long way in the
protection of Human Rights of women and children from ...(8).... In addition, the various movements by
groups of people by way of voluntary organizations offer a ray of hope towards individual ...(9)... leading
to a ...(10)...development of our nation.

1.
(1) complex
(2) key
(3) marginal
(4) basic
(5) straight forward
2.
(1) provisional
(2) unconditional
(3) absolute
(4) total

(5) conclusive
3.
(1) fullest
(2) marginal
(3) essential
(4) lowest
(5) total
4.
(1) passed
(2) coming
(3) cancelled
(4) recent
(5) proposed
5.
(1) from
(2) to
(3) by
(4) against
(5) with
6.
(1) defense
(2) offence
(3) abolition
(4) crime
(5) abuse
7.
(1) materialize
(2) effective
(3) included
(4) starting
(5) mentioned
8.
(1) Harassment
(2) treatment
(3) crime
(4) abuse
(5) illness
9.
(1) skill

(2) power
(3) empowerment
(4) development
(5) right
10.
(1) effective
(2) whole
(3) total
(4) marginal
(5) holistic

1. 4
2. 3
3. 1
4. 5
5. 4
6. 2
7. 1
8. 4
9. 3
10. 5

Acid attacks, especially on women, are an issue of increasing (1). In order to (2) with such attacks, a
threepronged (3) is currently under formulation. The first is providing (4) punishment to perpetrators,
not only as proportionate punishment for their (5) but also to (6) potential offenders. The second
approach is to (7) attacks by regulating (8) to acids. The third is constructing a compensation scheme
for victims.
The Indian Penal Code did not have specific provisions to criminalise and punish acid
attacks (9) earlier this year. If a person is convicted for (10) acid on another, and thereby causing
temporary or permanent damage or deformity, a minimum imprisonment of 10 years and a maximum
of life imprisonment is now provided.
1.
1) value
2) welfare
3) gossip
4) concern
5) happening
2.
1) deal
2) do away
3) fight
4) solve
5) tussle
3.
1) dimension
2) solution

3) discussion
4) system
5) approach
4.
1) light
2) stringent
3) attractive
4) compulsory
5) serious
5.
1) performance
2) role
3) work
4) action
5) job
6.
1) defend
2) differ
3) deter
4) determine
5) dissociate
7.
1) prevent
2) facilitate
3) debar
4) examine
5) oversee
8.
1) approach
2) concede
3) knowledge
4) access
5) excess
9.
1) by
2) until
3) up to
4) before
5) prior
10.
1) supplying
2) giving
3) attacking
4) bringing
5) throwing
Answers
1. 4
2. 1
3. 5
4. 2
5. 4
6. 3
7. 1

8. 4
9. 2
10. 5

radually, Aftab stopped ...(1)... on himself, his worry about life or death was put aside and he started to be
filled with an ...(2)... and inexhaustible sense of happiness. He thought, Every day is so peaceful and
calm. Its nothing like the days he used to have before he got ill. There was nothing for him to fear any
longer. ...(3)... of ...(4)... he was cured of his sickness or not, he knew he would continue worshiping. It
was when he reached the state of ...(5)... able to think this way that a miracle came upon him.
He was back for examinations when the doctor, who few months earlier diagnosed him with severe
infection. Few months earlier, his stomach had been so swollen that he could feel it ...(6)... from ...
(7)... the skin. Now, it was back to its normal size and there was no longer any abnormality ...(8).... He ...
(9)... could not believe it at first, but he could think of the reason why this miracle had happened: He got a
second life. There was no mistake; he was made to live to prove the miracles of God. He now knows the
mission he must fulfil with his new life. It is to widely communicate the ...(10)... teachings of god and to
keep serving him. With literally a brand new life, there is a new light in his heart.
1.
1) routing
2) shellacking
3) breaking
4) striking
5) beating
2.
1) overwhelming
2) releasing
3) yielding
4) bounded
5) ending
3.
1) attentive
2) regardless
3) heedful
4) concerned
5) prudent
4.
1) that
2) either
3) rather
4) whether
5) this
5.

1) abstract
2) fact
3) being
4) deadness
5) inanimate
6.
1) contracting
2) bulging
3) rising
4) bending
5) waving
7.
1) underneath
2) superior
3) secondary
4) above
5) over
8.
1) whatsoever
2) hither
3) toward
4) away from
5) towards
9.
1) like wise
2) as well
3) further more
4) too
5) along
10.
1) plausible
2) unamusing
3) miraculous
4) normal
5) conventional
Answers
1. 5
2. 1
3. 2
4. 4

5. 3
6. 2
7. 1
8. 1
9. 4
10. 3

I am working toward saving money; one of the savings ...(1)... I may want to consider is a savings account.
Savings accounts ...(2)... pay interest (although a relatively small amount) on the account. A savings account
can be easily done, but there are definitely some things to take up and ...(3)... before choosing an option.
First, consider which bank you want to open the account with. Look for convenience, and ...(4)..., but also
consider the interest paid. Some banks provide specific facilities over a specific account balance, or with
some, the interest increases as the balance increases. Also ...(5)... any charges that bank may impose on
you. Common charges include low balance charges, monthly charges, and ATM charges (if I have access to
my money via ATM). Any charge that I have to pay will ...(6)... reduce my savings. So I try to minimise them. I
may also consider opening a savings account with Jan Dhan Yojana. Once I am to decide a bank, I'll have to
determine what kind of savings account I'll open. A basic savings account offers higher interest rates but ...
(7)... requirements and restrictions, ...(8)... other than saving accounts ...(9)... offer higher interest rates but
more restrictions. Before I open a new banking account. I am to start saving. Even if I only have a small
amount to ...(10)... each month, even a little money is a great start.

1.
1) benefits
2) privilege
3) discretion
4) options
5) grant
2.
1) infrequently
2) rarely
3) usually
4) unusually
5) habitually
3.
1) rank
2) evaluate
3) sized up
4) estimate
5) neglect
4.
1) accessibility
2) difficulty
3) restriction
4) inutility
5) suitability
5.
1) unification
2) rending
3) review
4) breaking
5) combining
6.

1) seeming
2) tending
3) partiality
4) likely
5) leaning
7.
1) consequential
2) major
3) important
4) large
5) fewer
8.
1) while
2) before
3) until
4) unless
5) during
9.
1) seldom
2) often
3) earlier
4) repeatedly
5) rarely
10.
1) withhold
2) counteract
3) contribute
4) take
5) withdraw

ANSWERS
1. 4
2. 3
3. 2
4. 1
5. 3
6. 4
7. 5
8. 1
9. 2
10. 3
Mohit was born in a small coastal village near Ahmedabad. He always loved reading but the small library in
his town was inadequate. There weren't ...(1)... many books and many of those had the pages ...(2)... out. So
he ...(3)... to finish those stories. His debut novel was my sweet memories.

It is a story about a Man's journey ...(4)... the past, a family drama, ...(5)... ...(6)... of secrets. It is an ...(7)... to
Ahmedabad. And much of this book has been drawn from his own ...(8)... up years in the city. He grew up in
Ahmedabad and worked for a while in Pune. He had been posted to UK, ...(9)... that time so he did a creative
writing course there something he always wanted to do. He went on to publish stories in publications. All

his stories start ...(10)... a picture he create in his mind. This one had two girls, were sharing secrets with
each other. He was now working on his second novel, based on real life story.
1.
1) that
2) to
3) so
4) the
5) too
2.
1) torn
2) moribund
3) released
4) signed
5) controlled
3.
1) has
2) have
3) had
4) is
5) suppose
4.
1) of
2) into
3) at
4) in
5) for
5.
1) a
2) an
3) all
4) almost
5) the
6.
1) ridiculous
2) unearthing
3) contradict
4) keep
5) access
7.
1) owe
2) agitate
3) cynical
4) ode
5) imprisoned
8.
1) growing
2) giving
3) set
4) cover
5) end
9.
1) offered
2) convention

3) around
4) negotiating
5) humiliating
10.
1) get
2) dangle
3) secure
4) with
5) betrayed

Answers:
1. 5
2. 1
3. 3
4. 2
5. 5
6. 2
7.4
8. 1
9. 3
10. 4
Once upon a time in Mumbai, I was present at Teachers' Day function that delivered a ...(1)... lesson to both
the management and the teaching staff. When the gifts were unwrapped and the teachers found stainless
steel tiffin boxes, a section of them ...(2)...:"Does this mean we do more cooking and have less time for
reading, researching and updating ? Is it a reminder that our primary place is the kitchen ?" They said they
preferred a field trip. If accepting gifts is tough, choosing is much ...(3).... So, You set ...(4)... cash, time and
effort to meet a gifting need and often end up feeling ...(5)... that it may not be the right one. How do I know ...
(6)... won't be ...(7)... to a shelf-back or worse, re-cycled ? The joy of choosing for some one you love doesn't
entirely take away the stress of finding the "perfect gift", does it ?

Well Face bookers, be reminded-you can get together on your Facebook walls and buy on another gifts.
Wrapp, an app that runs on smart phones or tablets etc, lets Face book friends buy gift cards from
participating retailers individually or by teaming up, store them in mobiles and ...(8)... them either online or at
physical stores. "E-commerce platforms are becoming ...(9)... more social with the ...(10)... of comments,
recommendations and purchase history from each person's social graph.
1.
1) Reasonable
2) upright
3) intense
4) startling
5) impair
2.
1) exploded

2) invigorate
3) moderated
4) favoured
5) redeemed
3.
1) rusty
2) more
3) ever
4) than
5) has
4.
1) deprave
2) rouse
3) aside
4) manly
5) heed
5.
1) uneasy
2) real
3) unreal
4) stout
5) revengeful
6.
1) creditable
2) benevolent
3) it
4) have
5) you
7.
1) haul
2) resist
3) enfold
4) atrocious
5) confined
8.
1) yield
2) adorn
3) uncouth
4) redeem
5) preserve
9.
1) comely
2) amity
3) inherently
4) towering
5) hampering
10.
1) inclusion
2) rampage
3) plunder
4) intrinsic
5) facade

Answers
1.4
2. 1
3. 2
4. 3
5. 1
6. 3
7. 5
8. 4
9. 3
10. 1
Cheque
It is an instrument in writing containing an unconditional order, addressed to a banker, sign by the
person who has deposited money with the banker, requiring him to pay on demand a certain sum of
money only to or to the order of certain person or to the bearer of instrument."

Types of Cheque
1. Bearer Cheque or open Cheque
When the words "or bearer" appearing on the face of the cheque are not cancelled, the cheque is
called a bearer cheque. The bearer cheque is payable to the person specified therein or to any other
else who presents it to the bank for payment. However, such cheques are risky, this is because if such
cheques are lost, the finder of the cheque can collect payment from the bank.
2. Order Cheque
When the word "bearer" appearing on the face of a cheque is cancelled and when in its place the word
"or order" is written on the face of the cheque, the cheque is called an order cheque. Such a cheque is
payable to the person specified therein as the payee, or to any one else to whom it is endorsed
(transferred).
3. Crossed Cheque
Crossing of cheque means drawing two parallel lines on the face of the cheque with or without
additional words like "& CO." or "Account Payee" or "Not Negotiable". A crossed cheque cannot be
encashed at the cash counter of a bank but it can only be credited to the payee's account.
4. Ante-Dated Cheque
If a cheque bears a date earlier than the date on which it is presented to the bank, it is called as "antidated cheque". Such a cheque is valid upto three months from the date of the cheque.
5. Post-Dated Cheque
If a cheque bears a date which is yet to come (future date) then it is known as post-dated cheque. A
post dated cheque cannot be honoured earlier than the date on the cheque.
6. Stale Cheque
If a cheque is presented for payment after 3 months from the date of the cheque it is called stale
cheque. A stale cheque is not honoured by the bank.

7. A self cheque
A self cheque is written by the account holder as pay self to receive the money in the physical form from the branch
where he holds his account.
What are NPAs (Non Performing Assets):
A mortgage in default would be considered non-performing, after a prolonged period of nonpayment(90 days).
The lender will force the borrower to liquidate any assets that were pledged as part of the debt
agreement. If no assets were pledged, the lenders might write-off the asset as a bad debt and then sell
it at a discount to a collections agency.
Here is an example to help you understand what NPAs are and how Banks counter itMr. X decided to start a business for that he needed money (the fuel) , X had 25% of the money in his
pocket, he decided to go through the route of Initial Public Offering(IPO) to generate 25% more by
offering his company shares to public , the remaining 50% he borrowed from Lena bank
by mortgaging his papas land.
Days passed and the company started to do badly then to worse and the loan installments lapsed
month on month, Lena bank issued warning but X continued the bad practice for more than 90
days (condition for NPA) and the bank labeled X as defaulter and the loan as a Non Performing Asset.
Now what X will do?
He could take his case against the bank to Debt recovery tribunal (DRT- A court for such cases).
What are Lena banks options?
In 2002, Govt. gave banks a lifeline called as SARFAESI Act (Securitization and Reconstruction of
Financial Assets and Enforcement of security interest Act)
With this Act Lena bank has the power to take possession of Mr.Xs property or can transfer this to
some other ownership.
What bank will do with the acquired property?
Bank can use this for their own purpose like , opening a new branch on it, installing of ATMs etc.
Bank can advertise in newspapers for the auction of the property acquired and could auction them
on any pre decided day.
Bank can sell the property to ARC (Asset Reconstruction Company), these are registered companies
under RBI, they buy such assets from banks and sell them at higher prices to gain profits.
NOTE- Total amount of NPAs are around 4.4% of the total assets of banks in India and
expected to increase to 4.7% till the end of FY15

Accrued interest: Interest due from issue date or from the last coupon payment date to the settlement date. Accrued
interest on bonds must be added to their purchase price.

Arbitrage: Buying a financial instrument in one market in order to sell the same instrument at a higher price in
another market.
Ask Price: The lowest price at which a dealer is willing to sell a given security.
Asset-Backed Securities (ABS): A type of security that is backed by a pool of bank loans, leases, and other assets.
Most ABS are backed by auto loans and credit cards these issues are very similar to mortgage-backed securities.

At-the-money: The exercise price of a derivative that is closest to the market price of the underlying instrument.
Basis Point: One hundredth of 1%. A measure normally used in the statement of interest rate e.g., a change from
5.75% to 5.81% is a change of 6 basis points.
Bear Markets: Unfavorable markets associated with falling prices and investor pessimism.
Bid-ask Spread: The difference between a dealers bid and ask price.
Bid Price: The highest price offered by a dealer to purchase a given security.
Blue Chips: Blue chips are unsurpassed in quality and have a long and stable record of earnings and dividends.
They are issued by large and well-established firms that have impeccable financial credentials.
Bond: Publicly traded long-term debt securities, issued by corporations and governments, whereby the issuer agrees
to pay a fixed amount of interest over a specified period of time and to repay a fixed amount of principal at maturity.
Book Value: The amount of stockholders equity in a firm equals the amount of the firms assets minus the firms
liabilities and preferred stock
Broker: Individuals licensed by stock exchanges to enable investors to buy and sell securities.
Brokerage Fee: The commission charged by a broker.
Bull Markets: Favorable markets associated with rising prices and investor optimism.
Call Option: The right to buy the underlying securities at a specified exercise price on or before a specified expiration
date.
Callable Bonds: Bonds that give the issuer the right to redeem the bonds before their stated maturity.
Capital Gain: The amount by which the proceeds from the sale of a capital asset exceed its original purchase price.
Capital Markets: The market in which long-term securities such as stocks and bonds are bought and sold.
Certificate of Deposits (CDs): Savings instrument in which funds must remain on deposit for a specified period, and
premature withdrawals incur interest penalties.
Closed-end (Mutual) Fund: A fund with a fixed number of shares issued, and all trading is done between investors
in the open market. The share prices are determined by market prices instead of their net asset value.
Collateral: A specific asset pledged against possible default on a bond. Mortgage bonds are backed by claims on
property. Collateral trusts bonds are backed by claims on other securities. Equipment obligation bonds are backed by
claims on equipment.
Commercial Paper: Short-term and unsecured promissory notes issued by corporations with very high credit
standings.

Common Stock: Equity investment representing ownership in a corporation; each share represents a fractional
ownership interest in the firm.
Compound Interest: Interest paid not only on the initial deposit but also on any interest accumulated from one
period to the next.
Contract Note: A note which must accompany every security transaction which contains information such as the
dealers name (whether he is acting as principal or agent) and the date of contract.
Controlling Shareholder: Any person who is, or group of persons who together are, entitled to exercise or control
the exercise of a certain amount of shares in a company at a level (which differs by jurisdiction) that triggers a
mandatory general offer, or more of the voting power at general meetings of the issuer, or who is or are in a position
to control the composition of a majority of the board of directors of the issuer.
Convertible Bond: A bond with an option, allowing the bondholder to exchange the bond for a specified number of
shares of common stock in the firm. A conversion price is the specified value of the shares for which the bond may be
exchanged. The conversion premium is the excess of the bonds value over the conversion price.
Corporate Bond: Long-term debt issued by private corporations.
Coupon: The feature on a bond that defines the amount of annual interest income.
Coupon Frequency: The number of coupon payments per year.
Coupon Rate: The annual rate of interest on the bonds face value that a bonds issuer promises to pay the
bondholder. It is the bonds interest payment per dollar of par value.
Covered Warrants: Derivative call warrants on shares which have been separately deposited by the issuer so that
they are available for delivery upon exercise.
Credit Rating: An assessment of the likelihood of an individual or business being able to meet its financial
obligations. Credit ratings are provided by credit agencies or rating agencies to verify the financial strength of the
issuer for investors.
Currency Board: A monetary system in which the monetary base is fully backed by foreign reserves. Any changes in
the size of the monetary base has to be fully matched by corresponding changes in the foreign reserves.
Current Yield: A return measure that indicates the amount of current income a bond provides relative to its market
price. It is shown as: Coupon Rate divided by Price multiplied by 100%.
Custody of Securities: Registration of securities in the name of the person to whom a bank is accountable, or in the
name of the banks nominee; plus deposition of securities in a designated account with the banks bankers or with
any other institution providing custodial services.
Default Risk: The possibility that a bond issuer will default ie, fail to repay principal and interest in a timely manner.
Derivative Call (Put) Warrants: Warrants issued by a third party which grant the holder the right to buy (sell) the
shares of a listed company at a specified price.
Derivative Instrument: Financial instrument whose value depends on the value of another asset.
Discount Bond: A bond selling below par, as interest in-lieu to the bondholders.
Diversification: The inclusion of a number of different investment vehicles in a portfolio in order to increase returns
or be exposed to less risk.

Duration: A measure of bond price volatility, it captures both price and reinvestment risks to indicate how a bond will
react to different interest rate environments.
Earnings: The total profits of a company after taxation and interest.

Earnings per Share (EPS): The amount of annual earnings available to common stockholders as stated on a per
share basis.

Earnings Yield: The ratio of earnings to price (E/P). The reciprocal is price earnings ratio (P/E).
Equity: Ownership of the company in the form of shares of common stock.
Equity Call Warrants: Warrants issued by a company which give the holder the right to acquire new shares in that
company at a specified price and for a specified period of time.
Ex-dividend (XD): A security which no longer carries the right to the most recently declared dividend or the period of
time between the announcement of the dividend and the payment (usually two days before the record date). For
transactions during the ex-dividend period, the seller will receive the dividend, not the buyer. Ex-dividend status is
usually indicated in newspapers with an (x) next to the stocks or unit trusts name.
Face Value/ Nominal Value: The value of a financial instrument as stated on the instrument. Interest is calculated on
face/nominal value.
Fixed-income Securities: Investment vehicles that offer a fixed periodic return.
Fixed Rate Bonds: Bonds bearing fixed interest payments until maturity date.
floating Rate Bonds: Bonds bearing interest payments that are tied to current interest rates.
Fundamental Analysis: Research to predict stock value that focuses on such determinants as earnings and
dividends prospects, expectations for future interest rates and risk evaluation of the firm.

Future Value: The amount to which a current deposit will grow over a period of time when it is placed in an account
paying compound interest.

Future Value of an Annuity: The amount to which a stream of equal cash flows that occur in equal intervals will
grow over a period of time when it is placed in an account paying compound interest.

Futures Contract: A commitment to deliver a certain amount of some specified item at some specified date in the
future.

Hedge: A combination of two or more securities into a single investment position for the purpose of reducing or
eliminating risk.

Income: The amount of money an individual receives in a particular time period.

Index Fund: A mutual fund that holds shares in proportion to their representation in a market index, such as the S&P
500.

Initial Public Offering (IPO): An event where a company sells its shares to the public for the first time. The company
can be referred to as an IPO for a period of time after the event.

Inside Information: Non-public knowledge about a company possessed by its officers, major owners, or other
individuals with privileged access to information.

Insider Trading: The illegal use of non-public information about a company to make profitable securities transactions

Intrinsic Value: The difference of the exercise price over the market price of the underlying asset.

Investment: A vehicle for funds expected to increase its value and/or generate positive returns.

Investment Adviser: A person who carries on a business which provides investment advice with respect to
securities and is registered with the relevant regulator as an investment adviser.

IPO price: The price of share set before being traded on the stock exchange. Once the company has gone Initial
Public Offering, the stock price is determined by supply and demand.

Junk Bond: High-risk securities that have received low ratings (i.e. Standard & Poors BBB rating or below; or
Moodys BBB rating or below) and as such, produce high yields, so long as they do not go into default.

Leverage Ratio: Financial ratios that measure the amount of debt being used to support operations and the ability of
the firm to service its debt.

Libor: The London Interbank Offered Rate (or LIBOR) is a daily reference rate based on the interest rates at which
banks offer to lend unsecured funds to other banks in the London wholesale money market (or interbank market).
The LIBOR rate is published daily by the British Bankers Association and will be slightly higher than the London
Interbank Bid Rate (LIBID), the rate at which banks are prepared to accept deposits.

Limit Order: An order to buy (sell) securities which specifies the highest (lowest) price at which the order is to be
transacted.

Limited Company: The passive investors in a partnership, who supply most of the capital and have liability limited to
the amount of their capital contributions.

Liquidity: The ability to convert an investment into cash quickly and with little or no loss in value.

Listing: Quotation of the Initial Public Offering companys shares on the stock exchange for public trading.

Listing Date: The date on which Initial Public Offering stocks are first traded on the stock exchange by the public

Margin Call: A notice to a client that it must provide money to satisfy a minimum margin requirement set by an
Exchange or by a bank / broking firm.

Market Capitalization: The product of the number of the companys outstanding ordinary shares and the market
price of each share.
Market Maker: A dealer who maintains an inventory in one or more stocks and undertakes to make continuous twosided quotes.
market Order: An order to buy or an order to sell securities which is to be executed at the prevailing market price.
Money Market: Market in which short-term securities are bought and sold.
Mutual Fund: A company that invests in and professionally manages a diversified portfolio of securities and sells
shares of the portfolio to investors.
Net Asset Value: The underlying value of a share of stock in a particular mutual fund; also used with preferred stock.
Offer for Sale: An offer to the public by, or on behalf of, the holders of securities already in issue.
Offer for Subscription: The offer of new securities to the public by the issuer or by someone on behalf of the issuer.
Open-end (Mutual) Fund: There is no limit to the number of shares the fund can issue. The fund issues new shares
of stock and fills the purchase order with those new shares. Investors buy their shares from, and sell them back to,
the mutual fund itself. The share prices are determined by their net asset value.
Open Offer: An offer to current holders of securities to subscribe for securities whether or not in proportion to their
existing holdings.
Option: A security that gives the holder the right to buy or sell a certain amount of an underlying financial asset at a
specified price for a specified period of time.
Oversubscribed: When an Initial Public Offering has more applications than actual shares available. Investors will
often apply for more shares than required in anticipation of only receiving a fraction of the requested number.

Investors and underwriters will often look to see if an IPO is oversubscribed as an indication of the publics perception
of the business potential of the IPO company.
Par Bond: A bond selling at par (i.e. at its face value).
Par Value: The face value of a security.
Perpetual Bonds: Bonds which have no maturity date.
Placing: Obtaining subscriptions for, or the sale of, primary market, where the new securities of issuing companies
are initially sold.
Portfolio: A collection of investment vehicles assembled to meet one or more investment goals.
Preference Shares: A corporate security that pays a fixed dividend each period. It is senior to ordinary shares but
junior to bonds in its claims on corporate income and assets in case of bankruptcy.
Premium (Warrants): The difference of the market price of a warrant over its intrinsic value.
Premium Bond: Bond selling above par.
Present Value: The amount to which a future deposit will discount back to present when it is depreciated in an
account paying compound interest.
Present Value of an Annuity: The amount to which a stream of equal cash flows that occur in equal intervals will
discount back to present when it is depreciated in an account paying compound interest.
Price/Earnings Ratio (P/E): The measure to determine how the market is pricing the companys common stock. The
price/earnings (P/E) ratio relates the companys earnings per share (EPS) to the market price of its stock.
Privatization: The sale of government-owned equity in nationalized industry or other commercial enterprises to
private investors.
Prospectus: A detailed report published by the Initial Public Offering company, which includes all terms and
conditions, application procedures, IPO prices etc, for the IPO

Put Option: The right to sell the underlying securities at a specified exercise price on of before a specified expiration
date.
Rate of Return: A percentage showing the amount of investment gain or loss against the initial investment.
Real Interest Rate: The net interest rate over the inflation rate. The growth rate of purchasing power derived from an
investment.
Redemption Value: The value of a bond when redeemed.
Reinvestment Value: The rate at which an investor assumes interest payments made on a bond which can be
reinvested over the life of that security.
Relative Strength Index (RSI): A stocks price that changes over a period of time relative to that of a market index
such as the Standard & Poors 500, usually measured on a scale from 1 to 100, 1 being the worst and 100 being the
best.
Repurchase Agreement: An arrangement in which a security is sold and later bought back at an agreed price and
time.

Resistance Level: A price at which sellers consistently outnumber buyers, preventing further price rises.
Return: Amount of investment gain or loss.
Rights Issue: An offer by way of rights to current holders of securities that allows them to subscribe for securities in
proportion to their existing holdings.

Risk-Averse, Risk-Neutral, Risk-Taking:

Risk-averse describes an investor who requires greater return in exchange for greater risk.

Risk-neutral describes an investor who does not require greater return in exchange for greater risk.

Risk-taking describes an investor who will accept a lower return in exchange for greater risk.

Senior Bond: A bond that has priority over other bonds in claiming assets and dividends.
short Hedge: A transaction that protects the value of an asset held by taking a short position in a futures contract.
Settlement: Conclusion of a securities transaction when a customer pays a broker/dealer for securities purchased or
delivered, securities sold, and receives from the broker the proceeds of a sale.
Short Position: Investors sell securities in the hope that they will decrease in value and can be bought at a later date
for profit.
Short Selling: The sale of borrowed securities, their eventual repurchase by the short seller at a lower price and their
return to the lender.
Speculation: The process of buying investment vehicles in which the future value and level of expected earnings are
highly uncertain.
Stock Splits: Wholesale changes in the number of shares. For example, a two for one split doubles the number of
shares but does not change the share capital.
Subordinated Bond: An issue that ranks after secured debt, debenture, and other bonds, and after some general
creditors in its claim on assets and earnings. Owners of this kind of bond stand last in line among creditors, but
before quity holders, when an issuer fails financially.
Substantial Shareholder: A person acquires an interest in relevant share capital equal to, or exceeding, 10% of the
share capital.
Support Level: A price at which buyers consistently outnumber sellers, preventing further price falls.
Technical Analysis: A method of evaluating securities by relying on the assumption that market data, such as charts
of price, volume, and open interest, can help predict future (usually short-term) market trends. Contrasted with
fundamental analysis which involves the study of financial accounts and other information about the company. (It is
an attempt to predict movements in security prices from their trading volume history.)
Time Horizon: The duration of time an investment is intended for.
Trading Rules: Stipulation of parameters for opening and intra-day quotations, permissible spreads according to the
prices of securities available for trading and board lot sizes for each security.

Trust Deed: A formal document that creates a trust. It states the purpose and terms of the name of the trustees and
beneficiaries.
Underlying Security: The security subject to being purchased or sold upon exercise of the option contract.
Valuation: Process by which an investor determines the worth of a security using risk and return concept.

Warrant: An option for a longer period of time giving the buyer the right to buy a number of shares of common stock
in company at a specified price for a specified period of time.
Window Dressing: Financial adjustments made solely for the purpose of accounting presentation, normally at the
time of auditing of company accounts.
Yield (Internal rate of Return): The compound annual rate of return earned by an investment
Yield to Maturity: The rate of return yield by a bond held to maturity when both compound interest payments and the
investors capital gain or loss on the security are taken into account.
Zero Coupon Bond: A bond with no coupon that is sold at a deep discount from par value.

1. The First Bank in India Bank of Hindustan

2. First Governor of RBI Mr. Osborne Smith
3. First Indian governor of RBI Mr. C D Deshmukh
4. First Bank to Introduce ATM in India HSBC
5. First Bank to introduce saving Bank in India Presidency bank in 1830
6. First Bank to Introduce Cheque system in India Bengal Bank 1784
7. First Bank to introduce Internet Banking ICICI BANK
8. First Bank to introduce Mutual Fund State Bank of India
9. First Bank to introduce Credit Card in India Central Bank of India
10. First Foreign Bank in India Comptoire dEscompte de Paris of France in 1860
11. First Joint Stock Bank of India Allahabad Bank
12. First Indian bank to open branch outside India in London in 1946 Bank of India
13. First Indian Bank started with Indian capital Punjab National Bank
14. First Regional Rural Bank name Prathama Grameen Bank was started by Syndicate
Bank

15. First Universal Bank in India ICICI Bank

16. First bank in India listed in New York Stock Exchange (NYSE) ICICI Bank
17. First Bank in India to launch Talking ATMs for differently able person Union Bank of
India
18. First Bank in India to launch its own Payment Aggregators State Bank of India.
(SBIePay)
19. Countrys first all woman bank Bhartiya Mahila Bank
20. First India bank Got ISO Canara Bank

"Money Market" refers to the market for short-term requirement and

deployment of funds. Money market instruments are those instruments,
which have a maturity period of less than one year.
The most active part of the money market is the market for overnight call
and term money between banks and institutions and repo transactions.
Money Market is regulated by RBI.
Money Market can be further divided into 3 parts. These are:
a)
Call Money Market
b)
Term Money Market
c)
Notice Money Market
The market to get funds for 1 day only is called as Call Money Market. The
market to get funds for 2 days to 14 days is called as Notice Money Market.
The market to get funds for 15 days to 1 year is called as Term
Money Market.
Some of the Money Market instruments are:
1) Commercial Paper
2) Certificate of Deposit
3) T-bills
4) Cash Management Bills
Commercial Papersa) A CP is a short term security (7 days to 365 days) issued by a corporate
entity (other than a bank), at a discount to the face value.
b) Commercial Paper (CP) is an unsecured money market instrument issued
in the form of a promissory note.
c) CPs normally give a higher return than fixed deposits & CDs.
d) CP can be issued in denominations of Rs. 5 lakh or multiples thereof.
Amount invested by a single investor should not be less than Rs. 5 lakh (face
value).

e) Only corporates who get an investment grade rating can issue CPs, as per
RBI rules. It is issued at a discount to face value.
f) Bank and FIs are prohibited from issuance and underwriting of CPs.
Certificates of Deposit
a) CDs are negotiable money market instrument issued in demat form or as a
Usance Promissory Notes.
b) CDs issued by banks should not have the maturity less than seven days
and not more than one year.
c) Financial Institutions are allowed to issue CDs for a period between 1 year
and up to 3 years.
d) CDs are like bank term deposits but unlike traditional time deposits these
are freely negotiable and are often referred to as Negotiable Certificates of
Deposit.
e) CDs normally give a higher return than Bank term deposit.
f) All scheduled banks (except RRBs and Co-operative banks) are eligible to
issue CDs.
g) CDs are issued in denominations of Rs. 1 Lac and in the multiples of Rs. 1
Lac thereafter.
h) Discount/Coupon rate of CD is determined by the issuing bank/FI.
i) Loans cannot be granted against CDs and Banks/FIs cannot buy back their
own CDs before maturity
Treasury bills
a) Treasury Bills are short term (up to one year) borrowing instruments of the
Government of India which enable investors to park their short term surplus
funds while reducing their market risk.
b) They are auctioned by Reserve Bank of India at regular intervals and
issued at a discount to face value.
c) Any person in India including Individuals, Firms, Companies, Corporate
bodies, Trusts and Institutions can purchase Treasury Bills.
d) Treasury Bills are eligible securities for SLR purposes.
e) Treasury Bills are available for a minimum amount of Rs. 25,000 and in
multiples of Rs. 25,000 thereafter.
f) At present, RBI issues T-Bills for three different maturities: 91 days, 182
days and 364 days.
Cash Management Bills (CMBs)
a) Government of India, in consultation with the Reserve Bank of India, has
decided to issue a new short-term instrument, known as Cash Management
Bills (CMBs), to meet the temporary mismatches in the cash flow of the
Government.
b) The CMBs have the generic character of T-bills but are issued for
maturities less than 91 days.
c) Like T-bills, they are also issued at a discount and redeemed at face value
at maturity.

d) The tenure, notified amount and date of issue of the CMBs depends upon
the temporary cash requirement of the Government.

Short notes on Accounts for NRI/PIO in India

What are the different types of accounts which can be maintained by an NRI/PIO in India?

Types of accounts which can be maintained by an NRI / PIO in India:

A. Non-Resident Ordinary Rupee Account (NRO Account)

NRO accounts may be opened / maintained in the form of current, savings, recurring or fixed deposit
accounts. Interest rates offered by banks on NRO deposits cannot be higher than those offered by them
on comparable domestic rupee deposits.
Account should be denominated in Indian Rupees.
Permissible credits to NRO account are transfers from rupee accounts of non-resident banks,
remittances received in permitted currency from outside India through normal banking channels,
permitted currency tendered by account holder during his temporary visit to India, legitimate dues in India
of the account holder like current income like rent, dividend, pension, interest, etc., sale proceeds of
assets including immovable property acquired out of rupee/foreign currency funds or by way of legacy/
inheritance.
NRI/PIO may remit from the balances held in NRO account an amount not exceeding USD one million
per financial year, subject to payment of applicable taxes.
The limit of USD 1 million per financial year includes sale proceeds of immovable properties held by
NRIs/PIOs.

B. Non-Resident (External) Rupee Account (NRE Account)

1) NRE account may be in the form of savings, current, recurring or fixed deposit accounts.
2) Such accounts can be opened only by the non-resident himself and not through the holder of the power
of attorney.
3) Account will be maintained in Indian Rupees.
4) Accrued interest income and balances held in NRE accounts are exempt from Income tax.
5) Authorised dealers/authorised banks may at their discretion allow for a period of not more than two
weeks, overdrawings in NRE savings bank accounts, up to a limit of Rs.50,000.

6) Loans up to Rs.100 lakh can be extended against security of funds held in NRE Account either to the
depositors or third parties.
C. Foreign Currency Non Resident (Bank) Account FCNR (B) Account
FCNR (B) accounts are only in the form of term deposits of 1 to 5 years
Account can be in any freely convertible currency.
Loans up to Rs.100 lakh can be extended against security of funds held in FCNR (B) deposit either to
the depositors or third parties.
The interest rates are stipulated by the Department of Banking Operations and Development, Reserve
Bank of India.

BANK MEIN ACCOUNT KHULWANA HAI KYA?- TYPES OF

BANK A/C
Good Morning Readers,

Today we are posting the types of accounts in Banks. There are very frequent questions from this part
asked in many exams earlier. Just have an overview and read it with a light mind.

Types of Bank Accounts

A bank account can be a time deposit account or a term deposit account or a no frill account ie BSBDA .
TYPES OF BANK ACCOUNTS
a. Savings Bank Account
b. Current Deposit Account
c. Fixed Deposit Account
d. Recurring Deposit Account.
e. No-Frill Account
a. Savings Bank Account
This type of account can be opened with a minimum initial deposit that varies from bank to bank. Money
can be deposited any time in this account. Withdrawals can be made either by signing a withdrawal form
or by issuing a cheque or by using ATM card. Normally banks put some restriction on the number of
withdrawal from this account. Interest is allowed on the balance of deposit in the account. The rate of
interest on savings bank account varies from bank to bank and also changes from time to time. A

minimum balance has to be maintained in the account as prescribed by the bank. Interest rate is paid to
the account holders on daily balance basis.
b. Current Deposit Account
Big businessmen, companies and institutions such as schools, colleges, and hospitals have to make
payment through their bank accounts. Since there are restrictions on number of withdrawals from savings
bank account, that type of account is not suitable for them. They need to have an account from which
withdrawal can be made any number of times. Banks open current account for them. On this deposit bank
does not pay any interest on the balances. Rather the account holder pays certain amount each year as
operational charge. For the convenience of the account holders banks also allow withdrawal of amounts
in excess of the balance of deposit. This facility is known as overdraft facility.
c. Fixed Deposit Account (also known as Term Deposit Account)
Many a time people want to save money for long period. If money is deposited in savings bank account,
banks allow a lower rate of interest. Therefore, money is deposited in a fixed deposit account to earn
interest at a higher rate.
d. Recurring Deposit Account
This type of account is suitable for those who can save regularly and expect to earn a fair return on the
deposits over a period of time. While opening the account a person has to agree to deposit a fixed
amount once in a month for a certain period. The total deposit along with the interest therein is payable on
maturity. However, the depositor can also be allowed to close the account before its maturity and get back
the money along with the interest till that period. The rate of interest allowed on the deposits is higher
than that on a savings bank deposit but lower than the rate allowed on a fixed deposit for the same
period.
e. No Frill Account, ie BSBDA
The Basic Savings Bank Deposit Account allows you to bank with a zero minimum balance requirement.
All the existing Nofrills accounts opened by the banks are now converted into BSBDA in compliance with
the guidelines issued on August 22, 2012 by the Reserve Bank of India (RBI). BSBDA guidelines are
applicable to all scheduled commercial banks in India, including foreign banks having branches in India.
No charge will be levied for nonoperation/activation of inoperative Basic Savings Bank Deposit Account.
Notes:
a) Minimum age to open a bank account is now 10 years.
b) Maximum Interest rate is given on FD A/c.
c) The maximum period of an FD is 10 years & for RD is 5 years.

ALL ABOUT NBFC'S

Dear Readers,

You all must have heard that the Reserve Bank of India is entrusted with the responsibility of
regulating and supervising the Non-Banking Financial Companies. So, lets discuss about
what actually NBFCs are.
About the term NBFC:
A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act,
1956
engaged
in
the
business
of
loans
and
advances,
acquisition
of
shares/stocks/bonds/debentures/securities issued by Government or local authority or other
marketable securities of a like nature, leasing, hire-purchase, insurance business, chit fund
business.
Difference between BANK & NBFC:
NBFCs lend and make investments and hence their activities are akin to that of banks;
however there are a few differences as given below:
i. NBFC cannot accept demand deposits;
ii. NBFCs do not form part of the payment and settlement system and cannot issue cheques
drawn on itself;
iii. deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not
available to depositors of NBFCs, unlike in case of banks.
Different types/categories of NBFCs registered with RBI:
NBFCs are categorized
a) In terms of the type of liabilities into Deposit and Non-Deposit accepting NBFCs,
b) Non deposit taking NBFCs by their size into systemically important and other non-deposit
holding companies (NBFC-NDSI and NBFC-ND) and
c) By the kind of activity they conduct.
Within this broad categorization the different types of NBFCs are as follows:

i. Asset Finance Company(AFC) : An AFC is a company which is a financial institution

carrying on as its principal business the financing of physical assets supporting
productive/economic activity, such as automobiles, tractors, lathe machines, generator sets,
earth moving and material handling equipments, moving on own power and general purpose
industrial machines.
ii. Investment Company (IC) : IC means any company which is a financial institution
carrying on as its principal business the acquisition of securities.
iii. Loan Company (LC): LC means any company which is a financial institution carrying on
as its principal business the providing of finance whether by making loans or advances or
otherwise for any activity other than its own but does not include an Asset Finance Company.

iv. Infrastructure Finance Company (IFC): IFC is a non-banking finance company

a) which deploys at least 75 per cent of its total assets in infrastructure loans,
b) has a minimum Net Owned Funds of Rs. 300 crore,
c) has a minimum credit rating of A or equivalent d) and a CRAR of 15%.

v. Infrastructure Debt Fund: Non- Banking Financial Company (IDF-NBFC) : IDF-NBFC is a

company registered as NBFC to facilitate the flow of long term debt into infrastructure
projects. IDF-NBFC raise resources through issue of Rupee or Dollar denominated bonds of
minimum 5 year maturity. Only Infrastructure Finance Companies (IFC) can sponsor IDFNBFCs.
vi. Non-Banking Financial Company - Micro Finance Institution (NBFC-MFI): NBFCMFI is a non-deposit taking NBFC having not less than 85%of its assets in the nature of
qualifying assets which satisfy the following criteria:
a. loan disbursed by an NBFC-MFI to a borrower with a rural household annual income not
exceeding Rs. 60,000 or urban and semi-urban household income not exceeding Rs.
1,20,000.
b. tenure of the loan not to be less than 24 months for loan amount in excess of Rs. 15,000
with prepayment without penalty;
vii. Non-Banking Financial Company Factors (NBFC-Factors): NBFC-Factor is a nondeposit taking NBFC engaged in the principal business of factoring. The financial assets in
the factoring business should constitute at least 75 percent of its total assets and its income
derived from factoring business should not be less than 75 percent of its gross income.
Register with RBI:
A company incorporated under the Companies Act, 1956 and desirous of commencing
business of non-banking financial institution as defined under Section 45 I(a) of the RBI Act,
1934 should comply with the following:
i. it should be a company registered under Section 3 of the companies Act, 1954
ii. It should have a minimum net owned fund of Rs 200 lakh.
Deposits in NBFC:
a) Presently, the maximum rate of interest an NBFC can offer is 12.5%. The interest may be
paid or compounded at rests not shorter than monthly rests.
b) The NBFCs are allowed to accept/renew public deposits for a minimum period of 12
months and maximum period of 60 months. They cannot accept deposits repayable on
demand.
c) The deposits with NBFCs are not insured.

d) The repayment of deposits by NBFCs is not guaranteed by RBI.

Brief about RNBC
a) Residuary Non-Banking Company is a class of NBFC which is a company and has as its
principal business the receiving of deposits, under any scheme or arrangement or in any
other manner and not being Investment, Asset Financing, Loan Company.
b) These companies are required to maintain investments as per directions of RBI, in
addition to liquid assets.
c) The amount payable by way of interest, premium, bonus or other advantage, by whatever
name called by a RNBC in respect of deposits received shall not be less than the amount
calculated at the rate of 5% (to be compounded annually) on the amount deposited in lump
sum or at monthly or longer intervals; and at the rate of 3.5% (to be compounded annually)
on the amount deposited under daily deposit scheme.
d) Further, a RNBC can accept deposits for a minimum period of 12 months and maximum
period of 84 months from the date of receipt of such deposit. They cannot accept deposits
repayable on demand.
Some other regulators:

Category of Companies

Regulator

Chit Funds

Respective State Governments

Insurance companies

IRDA

Housing Finance Companies

NHB

Venture Capital Fund /

SEBI

Merchant Banking companies

SEBI

Stock broking companies

SEBI

Nidhi Companies

Ministry of corporate affairs, Government

of India

A Brief on CURRENCY SYSTEM IN INDIA

Dear Readers,
Today we are providing you all some important points on our Currency system as this is one
of the important topic within Banking Awareness. We are expecting questions from this
portion. So, enjoy the post.
Present Denomination of Bank Notes:

At present, banknotes in India are issued in the denomination of Re.1, Rs.5 Rs.10, Rs.20,
Rs.50, Rs.100, Rs.500 and Rs.1000. These notes are called banknotes as they are issued by
the Reserve Bank of India (Reserve Bank).
Denomination of Bank Notes & Coins:
The Reserve Bank can also issue banknotes in the denominations of five thousand rupees
and ten thousand rupees, or any other denomination that the Central Government may
specify. There cannot, though, be banknotes in denominations higher than ten thousand
rupees in terms of the current provisions of the Reserve Bank of India of Act, 1934. Coins
can be issued up to the denomination of Rs.1000.
Role of Government of India in Currency System:
In terms of Section 25 of RBI Act, 1934 the design of banknotes is required to be approved
by the Central Government on the recommendations of the Central Board of the Reserve
Bank of India. The responsibility for coinage vests with the Government of India on the basis
of the Coinage Act, 1906 as amended from time to time. The Government of India also
attends to the designing and minting of coins in various denominations.
How much currency to be produced?
The Reserve Bank decides the volume and value of banknotes except Re. 1 note to be
printed each year. The quantum of banknotes that needs to be printed, broadly depends on
the requirement for meeting the demand for banknotes due to inflation, GDP growth,
replacement of soiled banknotes and reserve stock requirements.
Who decides the coins issue?
The Government of India decides the quantity of coins to be minted on the basis of
indents( official order) received from the Reserve Bank.
How does the Reserve Bank estimate the demand for banknotes?
The Reserve Bank estimates the demand for banknotes on the basis of the growth rate of
the economy, the replacement demand and reserve stock requirements by using statistical
models/techniques.
What is a currency chest?
To facilitate the distribution of banknotes and rupee coins, the Reserve Bank
has authorized select branches of scheduled banks to establish Currency Chests. These are
actually storehouses where banknotes and rupee coins are stocked on behalf of the Reserve
Bank.
What is a small coin depot?
Some bank branches are also authorized to establish Small Coin Depots to stock small coins.
The Small Coin Depots also distribute small coins to other bank branches in their area of
operation.
What are soiled, mutilated and imperfect banknotes?

(i) "soiled note:" means a note which, has become dirty due to usage and also includes a
two piece note pasted together wherein both the pieces presented belong to the same note,
and form the entire note.
(ii) Mutilated banknote is a banknote, of which a portion is missing or which is composed of
more than two pieces.
(iii) Imperfect banknote means any banknote, which is wholly or partially, obliterated,
shrunk, washed, altered or indecipherable but does not include a mutilated banknote.
Can soiled and mutilated banknotes be exchanged for value?
Yes. Such banknotes can be exchanged for value.
Clean Note Policy:
Reserve Bank of India has been continuously making efforts to make good quality banknotes
available to the members of public. To help RBI and banking system, the members of public
are requested to ensure the following:
a) Not to staple the banknotes
b) Not to write / put rubber stamp or any other mark on the banknotes
c) Store the banknotes safely to prevent any damage
Note:
1) Seeking to spread awareness among public about fake notes, the Reserve Bank has
launched a website explaining ways to detect counterfeit notes. With a tagline 'Pehchano
Paise Ki Boli, Kyunki Paisa Bolta Hai', the website- www.paisaboltahai.rbi.org.in -- gives visual
presentation with pointers on currency notes of 10, 20, 50, 100, 500 and 1,000 rupee
denominations.
2) MINIMUM RESERVE SYSTEM
The Reserve Bank has the sole right to issue currency notes, except one rupee notes which
are issued by the Ministry of Finance. The RBI follows a minimum reserve system in the note
issue. Initially, it used to keep 40 per cent of gold reserves in its total assets. But, since
1957, it has to maintain only Rs. 200 crores of gold and foreign exchange reserves, of which
gold reserves should be of the value of Rs. 115 crores.
3) After a gap of over 20 years, Re 1 note has been released in the country and it bears the
signature of Finance Secretary Rajiv Mehrishi. Incidentally, the note was released at
Shrinathji temple in Nathdwara, Rajasthan, on March 6 by Mehrishi.

ANY TIME MONEY provide karta hai- ATMs & WLAs

Dear Readers,

First of all Good Morning to all of you. Today we are posting some
questions out of which you can expect at least one or two questions in upcoming
bank exams. It is Important for you to understand what to read out of thousand
topics from book. But we will provide you handpicked topics and will present to
you in such a manner that it will stay forever in your mind.
Q.1. What is an Automated Teller Machine (ATM)? Ans 1. Automated Teller Machine is a
computerized machine that provides the customers of banks the facility of accessing their
account for dispensing cash and to carry out other financial & non-financial transactions
without the need to actually visit their bank branch.
Q.2. What are White Label ATMs (WLAs)?
Ans 2. ATMs set up, owned and operated by non-banks are called White Label ATMs. Nonbank ATM operators are authorized under Payment & Settlement Systems Act, 2007 by the
Reserve Bank of India.
Q.3. What has been the rationale of allowing non-bank entities for setting up of
WLAs ?
Ans 3. The rationale of allowing non-bank entity to set up White Label ATMs has been to
increase the geographical spread of ATM for increased / enhanced customer service.
Q.4. What type of cards can be used at an ATM/WLA?
Ans 4. The ATM/ATM cum debit cards, credit cards and open prepaid cards (that permit cash
withdrawal) issued by banks can be used at ATMs/WLAs for various transactions.
Q.5. What are the services/facilities available at ATMs/WLAs?
Ans 5. In addition to cash dispensing, ATMs/WLAs may offer many other services/facilities to
bank customers. Some of these services include:

Account Information

Cash Deposit (Acceptance of deposits are not permitted at WLAs)

Regular Bills Payment (not permitted at WLAs)

Purchase of Re-load Vouchers for Mobiles (not permitted at WLAs)

Mini/Short Statement

PIN change

Request for Cheque Book

Q.6. What is Personal Identification Number (PIN)?

Ans 6. PIN is the numeric password which is separately mailed / handed over to the
customer by the bank while issuing the card. Most banks require the customers to change
the PIN on the first use. Customer should not disclose PIN to anybody, including to bank
officials. Customers should change the PIN at regular intervals.
Q.7. Can these cards be used at any bank/non-bank ATM (WLA) in the country?
Ans 7. Yes. The cards issued by banks in India may be used at any bank / white label ATM in
the country.
Q.8. Is the customer charged for ATM transactions?
Ans.8. With effect from November 01, 2014, Savings bank account holders can do
a minimum of three transactions (including both financial and non-financial transactions)
free of charge in a month at other bank ATMs in case of ATMs located in six metro
locations, viz. Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad. At other
locations, the savings bank account holders can transact a minimum of five
transactions (including both financial and non-financial transactions) free of charge in a
month at other bank ATMs. Similarly, Basic Savings Bank Deposit Account holders will
continue to get five free transactions. Banks on their own can decide to offer more number
of transactions free of cost to their customers. In case of charges to be levied on customers,
the customer can be charged a maximum of Rs. 20/- per transaction (plus service tax, if any)
by his/her bank.
Q.9. What steps should a customer take in case of failed ATM transaction at other
bank/white label ATMs, when his / her account is debited?
Ans 9. The customer should lodge a complaint with the card issuing bank at the earliest.
This process is applicable even if the transaction was carried out at another banks/nonbanks ATM. In case of WLAs, the contact number/toll free numbers are also available for
lodging complaints regarding failed transactions at their ATMs.
Q.10. Is there any time limit for the card issuing banks for recrediting the
customers account for a failed ATM/WLA transaction indicated under Q. No. 9?
Ans 10. As per the RBI instructions, banks have been mandated to resolve customer
complaints by re-crediting the customers account within 7 working days from the date of
complaint.
Q.11. Are the customers eligible for compensation for delays beyond 7 working
days?
Ans 11. Yes. Effective from July 1, 2011, banks have to pay compensation of Rs. 100/- per
day for delays in re-crediting the amount beyond 7 working days from the date of receipt of
complaint for failed ATM transactions. The compensation has to be credited to the account of
the customer without any claim being made by the customer. If the complaint is not lodged
within 30 days of transaction, the customer is not entitled for any compensation for delay in
resolving his / her complaint.

Q.12. What is the course of action for the customer if the complaint is not
addressed by his/her bank within the stipulated time / not addressed to his
satisfaction?
Ans 12. The customer can take recourse to the Banking Ombudsman, if the grievance is not
redressed by the his/her card issuing bank.

Short Notes on CBS..!!

Hello Readers,
Here we are providing Short Notes on Core Banking Solutions - one of the hot topic asked in the
Interviews. Hope you like the post!!!
The term CORE means - Centralized Online Real-time Exchange.
What is CBS?
CBS refers to the software applications for recording transactions, storing customer information,
calculating interest and completing the process of passing entries in a single database.
What CBS does?
CBS enables accessing of complete customer account details centrally. It makes it possible for a bank
customer to access his bank account through whichever channel he prefers like internet banking, mobile
banking, ATM etc.
CBS in India
This initiative was taken by the banks on the basis of First Rangarajan Committee report on bank
computerisation submitted in the year 1984.
The committee was constituted under the chairmanship of Dr. C. Rangarajan (Then deputy governor of
RBI).
Old generation banks initially were hesitant about this but with the advent of new generation private sector
banks in India during 1994-1996, the real era of bank marketing started and these banks started to offer
any-where and any-time banking facilities to its customers.
Syndicate Bank was the first among the Public Sector Banks to implement Core Banking.
First CBS branch of Syndicate bank was Jayanagar Branch in Bangalore.
Benefits of CBS
A. Benefits for the customers

Through CBS a bank customer can avail banking facilities (transactions) 24x7.

It is time saving, convenient and efficient.

B. Benefits for the banks

This paradigm shift in banking has revolutionised the speed, efficiency and reach of the delivery
systems. It gives greater customer satisfaction which is essential for every bank in this day an
age.

Since it offers alternate channels than brick and mortar banking, it is a viable alternative to
opening new branches, therefore reduces a banks operational costs.

Alternative for extended working hours.

Reduces long queues in bank cash counters.

Banking Awareness: Monetary Policy of India

Monetary policy is the process by which monetary authority of a country i.e. RBI controls the supply of
money in the economy by its control over interest rates in order to maintain price stability and achieve
high economic growth. In India, the central monetary authority is the Reserve Bank of India (RBI) is so
designed as to maintain the price stability in the economy.
MEASURES OF MONETARY POLICY:
Quantitative measures to control amount of credit.
Qualitative measures to control the allocation to different sections of economy.
TOOLS OF QUANTITATIVE MEASURES :
BANK RATE: The bank rate also known as the discount rate, is the rate of interest charged by the RBI for
providing funds or loans to the Banking system in india. It also signals the medium-term stance of
monetary policy.

OPEN MARKET OPERTIONS(OMO): The buying and selling of government securities in the
open market in order to expand or contract the amount of money in the banking system.
Purchases inject money into the banking system and stimulate growth while sales of securities do
the opposite.

LIQUIDITY ADJUCTMENT FACILITY(LAF): Liquidity Adjustment Facility is the primary

instrument of Reserve Bank of India for modulating liquidity and transmitting interest rate signals
to the market. Under the scheme, repo auctions (for absorption of liquidity) and reverse repo
auctions (for injection of liquidity) are conducted on a daily basis (except Saturdays). It is sameday transactions, with interest rates decided on a cut-off basis and derived from auctions on
uniform price basis.

REPO/REVERSE REPO RATE: These rates under the Liquidity Adjustment Facility (LAF)
determine the corridor for short-term money market interest rates. In turn, this is expected to
trigger movement in other segments of the financial market and the real economy.

MARKET STABLISATION SCHEME (MSS): This instrument for monetary management was
introduced in 2004. Liquidity of a more enduring nature arising from large capital flows is

absorbed through sale of short-dated government securities and treasury bills. The mobilised
cash is held in a separate government account with the Reserve Bank.
TOOLS OF QUALITATIVE MEASURES:

CREDIT CEILING: In this operation RBI issues prior information or direction that loans to the
commercial banks will be given up to a certain limit. In this case commercial bank will be tight in
advancing loans to the public. They will allocate loans to limited sectors. Few example of ceiling
are agriculture sector advances, priority sector lending.

MORAL SUASION: Moral Suasions are suggestion and guidelines by the RBI to the commercial
banks to take so and so action and measures in so and so trend of the economy. RBI may
request commercial banks not to give loans for unproductive purpose which does not add to
economic growth but increases inflation in the economy.

CREDIT AUTHORIZATION SCHEME: Credit Authorization Scheme was introduced in November,

1965 when P C Bhattacharya was the chairman of RBI. Under this instrument of credit regulation
RBI as per the guideline authorizes the banks to advance loans to desired sectors

Static GK being an integral part of exam, we are providing you the Quiz on important National Parks that
might appear in any of the upcoming examinations. Friends, static is a part in which you have to study in bits
and parts. So, do read it on a light note and revise it after two or three days and we can assure that you will
retain
the
names
and
their
states
till
the
exam.

1.Which national park is the only floating park in the world?

A.Keibul Lam Jao National Park
B.Sunderban National Park
C.Madhav National Park
D.None
of
Ans-A.Keibul Lam Jao National Park

the

above

2. Which national park is also known as the last home of Hangul or Kashmiri Stag?
A.Dachigam National Park
B.Gobindsagar Wildlife Sanctuary
C.Corbett National Park
D.None
of
Ans- A. Dachigam National Park

the

above

3.Indias oldest national park, ____________ is also the first national park that took conservation of tigers
seriously and inspiring other national parks to do the same.A.Dachigam National Park
B.Gobindsagar Wildlife Sanctuary
C.Corbett National Park
D.None
Ans-C. Corbett National Park.

of

the

above

4.Which National Park is the shelter for the rare species of deer known as blackbuck ?
A.Bandhavgarh National Park
B.Hazaribagh National Park
C.The Blackbuck National Park
D.None
of
Ans-C. The Blackbuck National Park

the

above

5.The story plot of Rudyards Kipling Jungle Book, which national park has won accolades by being
named in one of the most important historic accounts called Ain-i-Akbari?
A.Panna National Park
B.Pench National Park
C.Indravati National Park
D.None
Ans-B. Pench National Park

of

the

above

6.Which national park can rightly be called the Land of Crocodiles?

A.Panna National Park
B.Pench National Park
C.Madhav National Park
D.None
Ans-C. Madhav National Park

of

the

above

7.Which national park is known as a safe home for the rare species called the Brow-Antlered deer,
which is also called the dancing deer?
A.Keibul Lam Jao National Park
B.Sunderban National Park

C.Indravati National Park

Ans-A. Keibul Lam Jao National Park

8.Lothian Island Bird Sanctuary is in?

A.West Bengal
B.Bihar
C.UP
D.MP
Ans-A. West Bengal

9. It is the third largest national park in India in terms of area ________________.

A.Balpakram National Park
B.Kaziranga National Park
C.Namdapha
Ans-C. Namdapha National Park

National

Park

10.The West Garo Hills of Meghalya is the hotspot of diversity with which National Park reflecting the
preservation?
A.Nokrek National Park
B.Balpakram National Park
C.Keibul
Lam
Ans-A..Nokrek National Park

Jao

National

Park

Read more: http://www.bankersadda.com/2016/06/sbi-po-mains-static-gk-quiz-national.html#ixzz4Cx1L9ib0

1. Kaziranga Wildlife Sanctuary - Assam

2. Manas Wildlife Sanctuary - Assam
3. Gir National Park & Wildlife Sanctuary- Gujarat
4. Sundarbans National Park - West Bengal
5. Periyar National Park and Wildlife Sanctuary Kerala
6. Kanha National Park - Madhya Pradesh
7.Bandhavgarh National Park - Madhya Pradesh
8. Ranthambore National Park & Wildlife Sanctuary -Rajasthan
9.Bharatpur Bird Sanctuary - Rajasthan
10.Tal Chappar Wildlife Sanctuary - Rajasthan
11.Sariska Wildlife Sanctuary - Rajasthan

12. Chilka Lake Bird Sanctuary Odissa

13. Nandankanan Zoo Odissa
14. Corbett National Park Uttrakhand

1. Asian Infrastructure Investment Bank Beijing, China

2. New Development Bank (BRICS Development Bank) Shanghai, China
3. Asian Development Bank Manila, Philippines
4. International Monetary Fund (IMF) Washington DC, US
5. World Bank Washington DC, US
6. United Nations Organization (UN) New York, US
7. United Nations Childrens Fund (UNICEF) New York, US
8. United Nations Populations Fund (UNFPA) New York, US
9. United Nations Conference on Trade & Development (UNCTAD) Geneva,
Switzerland
10. World Health Organization (WHO) Geneva, Switzerland
11. World Economic Forum Geneva, Switzerland
12. International Labour Organisation Geneva, Switzerland
13. World Trade Organisation Geneva, Switzerland
14. World Meteorological Organisation Geneva, Switzerland
15. World Intellectual Property Organisation Geneva, Switzerland
16. International Committee of the Red Cross Geneva, Switzerland

17. United Nations Education Scientific & Cultural Organisation (UNESCO) Paris,
France
18. Organisation for Economic Cooperation & Development (OECD) Paris,
France
19. United Nations Industrial Development Organisation (UNIDO) Vienna,
Austria
20. International Atomic Agency Vienna, Austria
21. Organisation of Petroleum Exporting Countries (OPEC) Vienna, Austria
22. Amnesty International London, UK
23. International Maritime Organisation London, UK
24. Commonwealth of Nations London, UK
25. North Atlantic Treaty Organisation (NATO)- Brussels, Belgium
26. South Asian Association for Regional Cooperation (SAARC) Kathmandu,
Nepal
27. Association of South East Nations (ASEAN) Jakarta, Indonesia
28. Asia Pacific Economic Cooperation (APEC) Singapore
29. International Cricket Council (ICC) Dubai, UAE
30. Food & Agricultural Organisation (FAO) Rome, Italy
31. International Court of Justice The Hague, The Netherland
32. International Olympic Committee Lausanne, Switzerland

33. The Organization for the Prohibition of Chemical Weapons (OPCW) The
Hague, The Netherlands
34. The Fdration Internationale de Football Association (FIFA) Zurich,
Switzerland
35. World Wide Fund for Nature (WWF) Avenue du Mont-Blanc, Gland,
Vaud, Switzerland

1. SDR (Special Drawing Rights): SDR are new form of International

reserve assets, created by the International Monetary Fund in 1967.
The value of SDR is based on the portfolio of widely used countries and
they are maintained as accounting entries and not as hard currency or
physical assets like Gold.
2. NEFT (National Electronic Fund Transfer): NEFT enables funds
transfer from one bank to another but works a bit differently than
RTGS. NEFT is slower than RTGS. The transfer is not direct and RBI acts
as the service provider to transfer the money from one account to
another. You can transfer any amount through NEFT, even a rupee.
Minimum limit: No Minimum limit, Maximum Limit: No maximum limit.
3. RTGS (Real time gross settlement): RTGS system is funds
transfer systems where transfer of money or securities takes place
from one bank to another on a "real time" and on "gross" basis.
Settlement in "real time" means payment transaction is not subjected
to any waiting period. The transactions are settled as soon as they are
processed. Minimum & Maximum Limit of RTGS: 2 lakh and no upper
limit.
4. CRAR(Capital to Risk Weighted Assets Ratio) or CAR(Capital
Adequacy Ratio): Capital to risk weighted assets ratio is arrived at by
dividing the capital of the bank with aggregated risk weighted assets
for credit risk, market risk and operational risk.
5. Non Performing Assets (NPA): An asset, including a leased asset,
becomes non performing when it ceases to generate income for the
bank.The Duration of NPA declaration is of 90 days.

6. Participatory Notes : are derivative instruments, used by Foreign

Institutional Investors (FIIs) who are NOT registered with SEBI. These
are mostly used by overseas HNIs (High Net worth Individuals), hedge
funds and other foreign institutions, allow them to invest in Indian
markets through registered Foreign Institutional Investors (FIIs), while
saving on time and costs associated with direct registrations. Foreign
institutions, allow them to invest in Indian markets through registered
Foreign Institutional Investors (FIIs), while saving on time and costs
associated with direct registrations.
7. IFSC: IFSC code means Indian Financial System Code. RTGS
and NEFT payment system of Reserve Bank of India (RBI) use these
codes. IFSC code consists of 11 Characters identified as under (Lets
take an example of SBI, Madhapur Hyderabad):- First 4 digits show the
Identity of the bank. i.e. SBIN 5th digits in default as ZERO (for future
use) i.e. 0 Last 6 Characters display the Branch Identity. i.e. 004187 So
IFSC Code is SBIN004187
8. MICR:MICR code means Magnetic Ink Character Recognition code
which contains 9 digits, like 380002006 appearing at the bottom of the
cheque, following the cheque number. Each Bank Branch has a unique
MICR code. First 3 digits:-City PIN Code + Next 3 digits :Bank Code
+Last 3 Digits-Branch Code
9. CTS (CHEQUE TRUNCATION SYSTEM) is basically an online
image-based cheque clearing system where cheque images and
Magnetic Ink Character Recognition (MICR) data are captured at the
collecting bank branch and transmitted electronically. Truncation
means, stopping the flow of the physical cheques issued by a drawer to
the drawee branch.
10. Core Banking Solution (CBS) :-Core Banking Solution (CBS) is
networking of branches, which enables Customers to operate their
accounts, and avail banking services from any branch of the Bank on
CBS network, regardless of where he maintains his account.
11. Commercial Paper: Commercial Paper (CP) is an unsecured
money market instrument issued in the form of a promissory note.
Corporate, primary dealers (PDs) and the All India Financial Institutions
(FIs) are eligible to issue CP. Maturity period: between a minimum of 7
days and a maximum of up to one year from the date of issue. CP can

be issued in denominations of Rs.5 lakh or multiples thereof. Only a

scheduled bank can act as an IPA (Issuing and Paying Agent) for
issuance of CP.
12. Treasury Bills: Treasury bills (T bills) offer short term investment
opportunities. They are thus useful in managing short term liquidity. At
present, the Government of India issues three types of treasury bills
through auctions, namely, 91 day, 182 day and 364 day. There are no
treasury bills issued by State Governments. Treasury bills are available
for a minimum amount of Rs.25,000 and in multiples of Rs. 25,000.
Treasury bills are issued at a discount and are redeemed at par.
13. Certificates of Deposit (CD): Certificate of Deposit (CD) is a
negotiable money market instrument and issued in dematerialised
form or as a Usance Promissory Note against funds deposited at a bank
or other eligible financial institution for a specified time period.
Note: CDs can be issued by (i) scheduled commercial banks{excluding
Regional Rural Banks and Local Area Banks}; and (ii) select All ]India
Financial Institutions (FIs) that have been permitted by RBI Minimum
amount of a CD should be Rs.1 lakh, and in multiples of Rs. 1 lakh
thereafter. The maturity period of CDs issued by banks should not be
less than 7 days and not more than one year, from the date of issue.
14. Bank Rate: The interest rate at which at central bank lends money
to commercial banks. Often these loans are very short in duration.
Managing the bank rate is a preferred method by which central banks
can regulate the level of economic activity. Lower bank rates can help
to expand the economy, when unemployment is high, by lowering the
cost of funds for borrowers. Conversely, higher bank rates help to reign
in the economy, when inflation is higher than desired.
15. Repo Rate: Whenever the banks have any shortage of funds they
can borrow it form RBI. Repo rate is the rate at which commercial
banks borrows rupees from RBI. A reduction in the repo rate will help
banks to get money at cheaper rate. When the repo rate increases
borrowing form RBI becomes more expensive.
16. Reverse Repo Rate: Reverse Repo rate is the rate at which RBI
borrows money from commercial banks. Banks are always happy to
lend money to RBI since their money is in the safe hands with a good
interest. An increase in reverse repo rate can cause the banks to

transfer more funds to RBI due to this attractive interest rates. One
factor which encourages an organisation to enter into reverse repo is
that it earns some extra income on its otherwise idle cash.
17. CRR (Cash Reverse Ratio): CRR is the amount of funds that the
banks have to keep with RBI. If RBI increases CRR, the available
amount with the banks comes down. RBI is using this method (increase
of CRR), to drain out the excessive money from the banks.
18. SLR (Statutory Liquidity Ratio): SLR is the amount a
commercial banks needs to maintain in the form of cash, or gold, or
govt. approved securities (Bonds) before providing credit to its
customers. SLR rate is determined and maintained by RBI in order to
control the expansion of the bank credit.
19. Marginal Standing Facility (MSF): MSF rate is the rate at which
banks borrow funds overnight from the Reserve Bank of India against
approved government securities.