RESERVE BANK OF INDIA.

o Recommended by Hilton-Young Commission in 1926.

o Reserve Bank of India Act, 1934 was passed in the parliament.
o The Reserve Bank of India was established on April 1, 1935.
o Initial capital was 5 crore divided by shares of 100 each.
o Its headquarters was in Calcutta but was permanently moved to Mumbai in 1937.
o Nationalised on 1 January, 1949.
o Financial Year 1 July - 30 June.
MONETARY POLICY.
o Current rates as per Fourth Bi-monthly Policy Statement for the year 2016-17.
o Cash Reserve Ratio : 4%
o Statutory Liquidity Ratio : 20.75% (Max 40%)
o Policy Repo Rate : 6.25%
o Reverse Repo Rate : 5.75%
o Marginal Standing Facility Rate : 6.75%
o Bank Rate : 6.75%

TYPES OF BANKS
o There are various types of banks which operate in our country
o Central Bank (RBI, in India)
o Commercial Banks Public Sector Banks Private Sector Banks Foreign Banks
o Development Banks (IFCI, SFCs)
o Co-operative Banks Primary Credit Societies Central Co-operative Banks State Co-
operative Banks
o Specialized Banks (EXIM Bank, SIDBI, NABARD)

BANKS OFFER DIFFERENT TYPES OF DEPOSIT ACCOUNTS

o Savings Bank Accounts
o Current Accounts
o Recurring Deposits.
o Fixed Deposit
GRANT OF LOANS AND ADVANCES
o The second important function of a commercial bank is to grant loans and
advances.
o LOANS
A loan is granted for a specific time period. Generally commercial banks
provide short-term loans. But term loans, i.e., loans for more than a year
may also be granted.
o ADVANCES
An advance is a credit facility provided by the bank to its customers. It differs
from loan in the sense that loans may be granted for longer period, but
advances are normally granted for a short period of time.
o Types of Advances
Cash Credit
Cash credit is an arrangement whereby the bank allows the borrower
to draw amount upto a specified limit. The amount is credited to the
account of the customer.
Overdraft
Overdraft is also a credit facility granted by bank. A customer who
has a current account with the bank is allowed to withdraw more than
the amount of credit balance in his account.
Discounting of Bills
Banks provide short-term finance by discounting bills, i.e., making
payment of the amount before the due date of the bills after
deducting a certain rate of discount.

NATIONALISATION OF COMMERCIAL BANK

o With a view to bring commercial banks into the mainstream of economic
development with definite social obligations and objectives, the government
decided to nationalize 14 major commercial banks (with deposits base of over Rs.
50 crores) on 19th July, 1969.
o The names of these banks are as under:
The Allahabad Bank
The Bank of Baroda
The Bank of India
 The Bank of Maharashtra
The Canara Bank
The Central Bank of India
The Dena Bank
The Indian Bank
The Indian Overseas Bank
The Punjab National Bank
The Syndicate Bank
The Union Bank of India
The United Bank of India
The United Commercial Bank
o As a result of nationalization, 85 percent of the banking business in terms of
deposits was brought under public control. On 15th April 1980, 6 more private
sector commercial banks (with deposits base of over Rs. 200 crores) were
nationalized.
o The names of these banks are as under:
The Andhra Bank
The Corporation Bank
The New Bank of India (merged with Punjab National Bank in 1993)
The Oriental Bank of Commerce
The Punjab and Sindh Bank
The Vijaya Bank
o Thus, 20 private sector commercial banks were nationalized and over 90 percent
of banking activity in the country was brought under the public sector. It brought
down the inequalities in income and wealth, and ensured greater social justice.

PRIORITY SECTOR LENDING

o Priority Sector refers to those sectors of the economy which may not get timely
and adequate credit in the absence of this special dispensation, like agriculture and
allied activities, micro and small enterprises, poor people for housing, students for
education and other low income groups and weaker sections.
o CATEGORIES OF PRIORITY SECTOR
Agriculture and Allied Activities
Small Scale Industries
 Small Business / Service Enterprises
Micro Credit
Education loans
Housing loans
Weaker Sections (Small and marginal farmers, Artisans, village and cottage
industries etc)

NON-PERFORMING ASSETS
o (As per the recommendations of the Committee on the Financial System Chairman
by Shri M. Narasimham).
o An asset, including a leased asset, becomes non- performing when it ceases to
generate income for the bank. A non-performing asset (NPA) is loan or an advance
where;
o interest and/ or instalment of principal remain overdue for a period of more than
90 days in respect of a term loan,
o the account remains out of order in respect of an Overdraft/Cash Credit (OD/CC),
o the bill remains overdue for a period of more than 90 days in the case of bills
purchased and discounted,
o the instalment of principal or interest there on remains overdue for two crop
seasons for short duration crops,
o the instalment of principal or interest there on remains overdue for one crop
season for long duration crops,
o The amount of liquidity facility remains outstanding for more than 90 days, in
respect of a securitisation transaction undertaken in terms of guidelines on
securitisation dated February 1, 2006.
o in respect of derivative transactions, the overdue receivables representing positive
mark-to-market value of a derivative contract, if these remain unpaid for a period
of 90 days from the specified due date for payment.
o Banks should, classify an account as NPA only if the interest due and charged
during any quarter is not serviced fully within 90 days from the end of the quarter.
ASSET CLASSIFICATION
o Categories of NPAs
Sub-standard Assets (NPA for a period less than or equal to 12 months)
Doubtful Assets (sub-standard category for a period of 12 months)
Loss Assets (identified by the bank or internal or external auditors or the RBI
inspection)

PROVISIONING NORMS
o Provisioning Coverage Ratio (PCR) is essentially the ratio of provisioning to gross
non-performing assets and indicates the extent of funds a bank has kept aside to
cover loan losses.

PROVISIONING COVERAGE RATIO (IN PERCENT)

o STANDARD ASSETS
Direct advances to agricultural and small and Micro Enterprises (SMEs)
sectors 0.25%
Advances to Commercial Real Estate (CRE) Sector 1%
Housing loans extended at teaser rates and restructured advances 2%
Other loans and advances 0.40%
o SUBSTANDARD ASSETS
Secured loan 15%
Unsecured loan 25%
o DOUBTFUL ASSETS
Unsecured Loans 100%
Secured loan Up to one year 25%
One to three years 40%
More than three years 100%
o LOSS ASSETS 100%

RESERVE BANK OF INDIA

o The Reserve Bank of India (RBI) lowered the countrys growth forecast for 2016-17
to 7.1 per cent from 7.6 per cent during its fifth bi-monthly monetary policy review.
o Reserve Bank of India will shortly issue Rs 20 denomination banknotes in the
Mahatma Gandhi Series-2005, with the inset letter 'R' in both the number panels,
 bearing signature of Urjit R. Patel, Governor, Reserve Bank of India, and the year of
printing '2016' printed on the reverse of the banknote.
o GDP is likely to remain below the Reserve Banks early 2017 target of 5 per cent
for the next 12 months, opening up space for monetary easing, says an HSBC
report.
o According to the global financial services major, the declining trend in inflation is
expected to continue as new crop streams into the market and CPI inflation could
fall to below 4.5 per cent in January-March 2017.
o Reserve Bank increased the investment limits for foreign portfolio investors in
government securities by Rs100 billion to Rs2, 100 billion and also upped the limits
in state government securities.
o As announced in the medium term framework, the limits for investment by FPIs in
central government securities for the next half year are proposed to be increased
in two tranches, each of Rs100 billion from 3 October, 2016 and 2 January, 2017
respectively.
o The Reserve Bank of India has permitted 100 per cent foreign direct investment in
Other Financial Services carried out by non-banking finance firms.
o Financial Services will include activities which are regulated by any financial sector
regulator viz. RBI, SEBI, IRDA, Pension Fund Regulatory and Development
Authority, National Housing Bank or any other financial sector regulator as may be
notified by the government in this regard.

BANK
o Asian Development Bank (ADB) and the Government of India signed a 500 million
US dollar loan to build a 9.8 km long road bridge across the Ganges River. This will
be Indias longest river bridge.
o Federal Bank has tied up with Oxigen to expand the bank's e-collection facility to
the latter's nearly 2 lakh-plus retail outlets.
o Airtel Payments Bank, a subsidiary of Bharti Airtel, rolled out a pilot of its banking
services in Rajasthan, becoming the first payments bank to go live in the country.
o Private sector lender Yes Bank has partnered with Gujarat State Road Transport
Corporation (GSRTC) to digitise payments for booking of bus tickets.
o Competition Commission has approved the merger of Bharatiya Mahila Bank with
the country's largest lender State Bank of India (SBI).
 o According to the Chairman and Managing Director of MMTC, Ved Prakash, the
Public sector Company MMTC will tie-up with the State Bank of India (SBI) to sell
government-minted "Indian Gold Coin".
o Punjab National Bank (PNB) announced a partnership with cab aggregator Ola to
aid cash withdrawals for the citizens of Delhi and the National Capital Region
(NCR).
o The Women and Child Development Ministry has tied up with India Post and State
Bank of India to offer more payment options to buyers and simplify shipping of
products bought from "Mahila E-haat", an online marketing platform for women
entrepreneurs.

ECONOMY
o The country's largest car maker Maruti Suzuki India joined hands with taxi
aggregator Ola to train aspiring drivers-partners. Under a Memorandum of
Understanding signed between the two, the exercise aims to benefit 40,000
individuals/ Ola drivers-partners in safe driving over a period of three years, Maruti
Suzuki India (MSI) said in a statement.
o Vistaar Financial Services, an MSME-focused financing firm, has appointed former
Sebi chief C B Bhave as non-executive Chairman and Independent Director.
o Bhave was the Chairman of Securities and Exchange Board of India (Sebi) for a
period of three years during 2008-11, prior to which he was the Chairman and
Managing Director of National Securities Depositories Ltd (NSDL).
o Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum
Corp signed a pact to build India's biggest oil refinery at a cost of $30 billion on
the west coast. The three firms signed the pact for the 60-million tonne a year
refinery in Maharashtra with IOC as leader of the consortium, officials said. IOC will
hold a 50 per cent stake in the project while BPCL and HPCL will have 25 per cent
each. The consortium agreement was signed on the side-lines of the Petrotech
conference.
o The Women and Child Development Ministry has tied up with India Post and State
Bank of India to offer more payment options to buyers and simplify shipping of
products bought from "Mahila E-haat", an online marketing platform for women
entrepreneurs. Mahila E-haat", launched in March, was set up for the socio-
 economic empowerment of women and sellers can register their products on the
platform without having to pay any listing fee.
o Yaduvendra Mathur, Chairman and Managing Director of Export-Import Bank of
India (Exim), has been appointed as Additional Secretary in Niti Aayog. The
Appointments Committee of Cabinet has approved appointment of Mathur, a 1986
batch IAS officer of Rajasthan cadre, to the new post.
o Punjab National Bank (PNB) announced a partnership with cab aggregator Ola to
aid cash withdrawals for the citizens of Delhi and the National Capital Region
(NCR).
o Public Sector Company MMTC has tied-up with the State Bank of India (SBI) to sell
government-minted "Indian Gold Coin".
o India Ratings lowered its GDP forecast for 2016-17 to 6.8 per cent from 7.8 per cent
earlier, stating that the demonetisation drive will lead to an erosion of Rs 1.5 trillion
this fiscal.
o In a surprise move, Chitra Ramkrishna quit as Managing Director and CEO of the
National Stock Exchange with immediate effect presumably over differences with
some board members, after having served the premier bourse for over two
decades since its inception.

INTERNATIONAL
o China will host the ninth BRICS annual summit in the south-eastern coastal city of
Xiamen in September next year as it takes the rotating chair of the influential bloc.
o Pakistan Prime Minister Nawaz Sharif, who is under pressure to quit following the
Panama Papers leak, was unanimously re-elected as president of his party Pakistan
Muslim League-Nawaz. A five-member election committee headed by Chaudhry
Jaffar Iqbal organised the election.
o Indian-American Democrat Raja Krishnamoorthi won the Congressional election
from Illinois, defeating Republican former Elmhurst Mayor Peter DiCianni.
o Donald Trump has been elected the 45th President of the United States. Trump
becomes the first person without political or military experience to be elected
President.
o Pramila Jayapal became the First Indian-American woman to be elected to the US
House of Representatives, winning the Washington State Senate seat.
o China completed work on the world's highest road tunnel costing about USD 170
million on the Sichuan-Tibet highway which will shorten the time to reach Tibet by
two hours. The seven-km long tunnel, situated 6,168 metre above sea level, passes
through the main peak of Chola Mountain.
o India and Japan signed a landmark civil nuclear cooperation deal after talks
between Prime Minister Narendra Modi and his counterpart Shinzo Abe, a move
that will boost bilateral economic and security ties and facilitate US-based players
to set up atomic plants in India
o India will preside the eighth edition of the Conference of Parties (COP) to WHO
Framework Convention on Tobacco Control (FCTC) which will be held in
Switzerland's Geneva in 2018.
o The IMF has approved a loan of USD 162 million to Sri Lanka under its programme
to aid the governments reform programme which aims to promote inclusive
growth.
o The Cabinet gave ex post-facto approval to a pact between India and France for
cooperation in skill development, vocational education and training.
o The memorandum of understanding between the two countries is with respect to
cooperation in skill development, vocational education and training, the source
added.
o Japan and South Korea signed a controversial agreement to share defence
intelligence on North Korea, despite protests from opposition parties and activists
in Seoul.
o Ending a three-decade-old howitzer drought, India today signed a contract with
the US for buying 145 M777 ultralight howitzers for $737 million (Rs 5000 crore).
A senior MoD official formally signed the Letter of Offer and Acceptance (LOA) with
the US government for the seven regiments of howitzers.
o Crown Prince Maha Vajiralongkorn was proclaimed the new Thai King, heralding a
new chapter in the country's monarchy after the passing away of his revered father
who was the world's longest reigning monarch.
o John Key, the New Zealand prime minister and leader of the National party, has
resigned in a decision that has taken the country by surprise.
NATIONAL
o Prime Minister Narendra Modi dedicated to the nation three hydro-electric
projects (HEPs) with a generating capacity of 1,732 MW in Himachal Pradesh.
o Prime Minister Narendra Modi launched the National SC/ST Hub here to provide
support to entrepreneurs from the community.
o The 315-tonne INS Tahiyu is the sixth WJFAC Car Nicobar Class vessel to be
commissioned and allotted to the Eastern Fleet of the Navy.
o With an aim of boosting development in his Lok Sabha constituency Varanasi,
Prime Minister Narendra Modi launched seven schemes at the total cost of Rs. 5000
crore amid his assertion that his government believes in timely completion of
projects.
o Union Health Minister J P Nadda launched 'No More Tension' mobile application
with which people can measure their stress levels, understand its reasons and
adopt ways to fight it.
o Users will also have access to a one-stop-for-all health portal, which will host all
the mobile applications launched by the Health Ministry.
o Rustom-II, India's indigenously developed long-endurance combat-capable drone,
successfully completed its maiden-flight, giving a boost to Indias development
programme for Unmanned Aerial Vehicles (UAV).
o The Commerce Ministry launched a portal to provide relevant information and an
e-marketplace for buyers and sellers of India and Iran.
o The move would help in enhancing bilateral trade between the two countries.
o Defence Minister Manohar Parrikar commissioned INS Chennai, the third
indigenously designed guided missile destroyer in the Kolkata class.
o Agra-Lucknow Expressway was thrown open to public with fighter jets of the Indian
Air Force touching down on it after Uttar Pradesh Chief Minister Akhilesh Yadav
inaugurated Indias longest expressway.
o The Union Ministry of External Affairs, Government of India announced that
Antonio Costa, the Prime Minister of Portugal, accepted the proposal be the Chief
Guest at the 14th Pravasi Bharatiya Divas.
o The Cabinet cleared a proposal to sign an agreement between a Japanese
organisation, the Finance Ministry and the Health Ministry to set up a green
hospital demonstration project at AIIMS.
 o The government has approved six proposals from four developers to set up new
special economic zones (SEZs) across three states in areas such as IT and
biotechnology.
o The Government approved the inclusion of 15 new castes and modification in 13
other castes in the Central list of Other Backward Classes (OBCs).The last such
notification was issued till September, 2016.

STATE
o The Maharashtra government will soon start an ambulance boat service for the
villages located near Mumbai, to ensure quick response in medical emergency. The
ambulance boat can speedily reach villages located near Mumbai.
o Kerala has become the third Open Defecation Free (ODF) state in the country.
Earlier, Himachal Pradesh and Sikkim had declared themselves Open Defecation
Free.
o Scripting a new chapter in the country's transport sector which moves towards
clean fuel, India's first liquefied natural gas-driven bus was launched in Kerala.
o Maharashtra has become the first state to adopt Fly Ash Utilisation Policy, paving
way for prosperity by generating "wealth from waste", and environment protection.
o Prime Minister Narendra Modi laid the foundation stone of the All India Institute
of Medical Sciences (AIIMS) in Bathinda district in Punjab.
o Visakhapatnam will host the 20th National eGovernance Conference in January
next year that would witness the participation of IT industry giants and government
officials.
o As the host state, AP would showcase the "fourth industrial revolution" it launched,
powered by IoT.
o Promoting Uttar Pradesh as a market for investment and entrepreneurial
activities, Chief Minister Akhilesh Yadav laid the foundation for a 455-acre food
park to be run by yoga guru Baba Ramdevs Patanjali group.
o Hailakandi district of Assam has become the first district to pay wages to tea
garden workers through individual bank accounts.
o Amidst a pall of gloom following Chief Minister Jayalalithaas death, senior AIADMK
leader O. Panneerselvam was elected the leader of the Legislature Party shortly and
sworn in as Chief Minister of Tamil Nadu.
SPORTS
o Australian cycling champion Anna Meares has announced her retirement after a
stunning career, including six Olympic medals.
o Mahendra Singh Dhoni recorded his 108th victory as India skipper to go past
former Australia captain Allan Border's tally of 107 wins in the list of most victories
by an ODI captain in the history of the game.
o The Indian Boxing Council, a licensing body for the country's professional boxers,
has been inducted into the World Boxing Organization with voting rights in the
WBO's annual convention at Puerto Rico.
o A brilliant Bengaluru FC created history after becoming the first football club from
India to reach the final of Asian Cup. The Bangalore based club defeated defending
champions Johor Darul Tazim 3-1 in the second leg of the semi-final in Bangalore.
o The Indian football team achieved its best FIFA ranking in over six years when the
side jumped 11 places to be 137th in the latest list released.
o India created history at the IWF Youth (Boys & Girls) World Weightlifting
Championships at Penang, Malaysia, bagging a silver and a bronze medal in the
56kg weight category.
o A wolf has been chosen as mascot of the 2018 FIFA World Cup in Russia, according
to the results of public voting announced live on a TV channel. The wolf will be
named Zabivaka.
o Rio Olympian Sandeep Tomar and Amit Dhankar were among the gold medal
winners in their respective weight categories at the ongoing senior (men's and
women's) National Wrestling championship at Gonda, Uttar Pradesh.
o North Korea's women's U-17 team won the 2016 FIFA U-17 Women's World Cup.
The North Koreans defeated Japan in penalty kicks to grab the title.
o This is North Korea's second U-17 Women's World Cup title. The country won the
first ever U-17 Women's World Cup in 2008.
o Norwegian Magnus Carlsen extended his dominance over the chess world by
winning the World Chess Championship for the third consecutive time, beating his
Russian challenger Sergei Karyakin in a tie breaker.
o Omar Abdulrahman, arguably Asia's biggest star, was crowned AFC player of the
year in a glittering ceremony in his home country of United Arab Emirates.
 o Olympic silver medallist PV Sindhu jumped two places to achieve her career-best
ranking of seven in the world while Saina Nehwal was also back in the top 10 in
the latest BWF World Ranking.
o Nico Rosberg quit Formula One, just five days after winning the world title for
Mercedes in a move that stunned motor racing. The 31-year-old German, who beat
off teammate Lewis Hamilton in the finale, is the first reigning champion to quit
since Alain Prost in 1993.
o Usain Bolt is track and field's male athlete of the year, winning the award from the
sport's governing body for a sixth time. Almaz Ayana of Ethiopia won the women's
award, after her world-record run to win Olympic gold in the 10,000 meters.
o Indian racer Armaan Ebrahim and his Sri Lankan teammate Dilantha Malagamuwa
concluded their 2016 racing season on a high by winning the Pro Am
Championship in the Lamborghini Super Trofeo Series.
o Indias Mukesh Kumar became the oldest golfer to win an Asian Tour title when he
lifted the weather-hit Panasonic Open here after it was curtailed to 54 holes.

SCIENCE
o China successfully launched a spacecraft carrying two astronauts, in its longest-
ever manned space mission, who would later join its experimental space lab
orbiting the Earth as the country moved a step closer to establish its permanent
space station by 2022.
o India's first Astrobiology Conference Life in Space- was organised in the city by
Mumbai-based Indian Astrobiology Research Centre and IARC Centre for United
Nations in collaboration with Nehru Science Centre.
o The telescope portion of NASAs James Webb Telescope is finally complete
marking a major benchmark for the spacecraft that has been in development for
the past 20 years.
o NASA's Magnetospheric Multiscale mission (MMS) has set the Guinness World
Record for highest altitude fix of a GPS signal, at 70,000 kilometres above the
surface of the Earth.
o Scientists have developed the world's first light-seeking synthetic nano robot
which may help surgeons remove tumours and enable more precise engineering
of targeted medications. It has been a dream in science fiction for decades that
tiny robots can fundamentally change our daily life.
 o China successfully launched the Tianlian I-04 satellite from the Xichang Satellite
Launch Centre in Sichuan province of Southwest China. This data satellite was
launched on a Long March-3C carrier rocket. The launch of the Tianlian I-04 marks
the 241st mission of China's Long March series of rockets.
o Remote sensing satellite Resourcesat-2A was launched from the Satish Dhawan
Space Centre (SDSC) in Sriharikota, Andhra Pradesh at 10:24 a.m. The spacecraft
was flown aboard a PSLV-C36 rocket. It was the 37th consecutive successful flight
of the indigenous light-lifting rocket. The 1,235-kg spacecraft has started orbiting
pole-to-pole at 824 km from Earth.

MISC
o The tiny island of Kakkathuruthu in Kerala's backwaters has made it to a selected
list of stunning destinations across the world compiled by the National Geographic
magazine.
o The book, named "Driven: The Virat Kohli Story" has been written by senior
journalist Vijay Lokapally and published by Bloomsbury India. It was unveiled in an
event.
o In a rare honour, New York City declared October 19, 2016 as Waris Ahluwalia day
in recognition of the Sikh-American actor and designer for his powerful message
of countering ignorance and advocating for religious understanding and tolerance.
o London Mayor Sadiq Khan, son of a bus driver from Pakistan, is the most influential
Asian in the UK, according to a list featuring Britains 101 prominent Asians,
including Nobel Peace Prize winner Malala Yousafzai, the Hinduja brothers, Laxmi
Mittal and musician Zayn Malik.
o India's financial hub Mumbai has been named among top 15 cities globally in terms
of total wealth held, while London topped the list.
o Maharashtra Governor Ch Vidyasagar Rao inaugurated the 19th 'World Peace
Conference'.
o According to the World Bank's latest 'Doing Business' report, India has been ranked
130th in the list of 190 countries. New Zealand has topped this list.
o Entrepreneur Mohini Sharma Mane is set to represent India at the 2016 Mrs World
pageant, to be held in Korea.
o Global Rajasthan Agritech Meet (GRAM), a three-day international event, began in
Jaipur on 9 November 2016. The main focus of the meet is to double the income
of farmers through suitable technologies and agricultural activities.
o The International Competition Network (ICN) announced that the Competition
Commission of India (CCI) would host the 2018 ICN Annual Conference. The
Conference will be held at Delhi in MarchApril 2018.
o For the eight consecutive year, China has retained the top spot in the list of the
worlds fastest supercomputers for its Sunway TaihuLight which can perform 93
million billion calculations per second, media report said.
o India has slipped two spots compared to last year in English proficiency rankings
while China has improved its ranking, according to a new report. India is placed at
22nd spot in the new report released by Swedish education company EF Education
First. In 2015, India was placed at 20th spot by the same study.
o 66-year-old & one of the highest paid bankers in the country HDFC Bank's Aditya
Puri has been ranked 36th in the US magazine Fortunes top 50 business persons
list for 2016, and is the only Indian among three persons of Indian origin in the
global rankings.