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12 Most Important GK topic for RBI Grade B Officer Exam Phase-I

Aug 26, 2016 17:41 IST

    RBI is all set to conduct Phase-I Examination for the post of Officers in Grade - B on 4th September 2016. Here the banking team of Jagran josh is providing important GK topic for RBI Grade B exam 2016 that will be useful for the candidates appearing for the exam. Candidates must go through the below topics before appearing for the examination.

    1) RBI: The Banker and Debt Manager to Government

    Managing the government's banking transactions is the traditional central banking function of RBI. Like individuals, businesses and banks, governments also need a banker to carry out their financial transactions in an efficient and effective manner, including the raising of resources from the public.  As per Section 20 of the RBI Act 1934, RBI has the obligation to undertake the receipts and payments of the Central Government and to carry out the exchange, remittance and other banking operations, including the management of the public debt of the Central Government. The Government also deposits its cash balances with the RBI.

    As per section 21 A of the RBI Act 1934, RBI act as the banker and debt manager to State Governments. Currently, the RBI acts as banker to all the State Governments in India (including Union Territory of Puducherry), except Sikkim. For Sikkim, it has limited agreement for management of its public debt.

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    2) Banking Awareness: Instruments of Monetary policy in India

    Monetary policy is the Macroeconomic Policy laid down by the central bank of the country. It refers to the use of instruments under the control of the central bank to regulate the availability, cost and use of money and credit.  It involves management of money supply and interest rate and is the demand side economic policy used by the government of a country to achieve macroeconomic objectives like inflation, consumption and growth.

    In India, monetary policy of the Reserve Bank of India (RBI) is aimed at managing the quantity of money in order to meet the requirements of different sectors of the economy and to increase the pace of economic growth.

    The goals of Monetary Policy:

    • Primarily price stability, while keeping in mind the objective of growth.

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    3) What are White Label ATMs and how is it different from ATMs?

    Automated Teller Machines (ATMs) set up, owned and operated by non-bank entities are called "White Label ATMs" (WLAs). They provide the banking services to the customers of banks in India, based on the cards (debit/credit/prepaid) issued by banks.

    Tata Communications Payment Solutions Limited (TCPSL) is the first company authorized by RBI to open WLAs in the country. It got launched under the brand name 'Indicash' on 27 June 2013 in Chandrapada, a village located in Vasai-Virar, Maharashtra. The launch of Indicash ('India' and 'cash'), marks a milestone for the country and ushers in a new era of ATM accessibility for the masses across cities, towns and villages. The company has already rolled out over 5,000 ATMs as on Mar’15.

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    4) All you need to know about Payment and Settlement Systems in India

    Payment and settlement systems play a vital role in improving overall economic efficiency of any country. The  system consist of all type of arrangements that use to systematically transfer money-currency, paper instruments such as cheques, and various electronic channels. The central bank of any country is usually the driving force in the development of national payment systems. In India, the RBI has been playing this developmental role.

    The Board for Regulation and Supervision of Payment and Settlement Systems (BPSS), a sub-committee of the RBI is the highest policy making body on payment systems in the country. In India, the payment and settlement systems are regulated by the Payment and Settlement Systems Act, 2007 (PSS Act).

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    5) An overview of Government Security market in India

    The Government Security (G-Sec) market in India has observed considerable changes during the past decade. Introduction of an electronic screen based trading system, dematerialized holding, establishment of the Clearing Corporation of India Ltd. (CCIL) as the Central Counter Party (CCP) for guaranteed settlement, new instruments, and changes in the legal environment are some of the major aspects that have contributed to the rapid development of the G-Sec market.

    Major participants in the G-Secs market historically have been large institutional investors. With the various measures for development, the market has also witnessed the entry of smaller entities such as co-operative banks, small pension, provident and other funds etc. These entities are mandated to invest in G-Secs through respective regulations.

    Here, are the banking team of Jagran Josh is providing the details about the G-sec market in India.

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    6) General Awareness for RBI Grade ‘B’ Officer Exam: Securitisation in India

    Financial sector’s primary role is intermediation between ultimate savers and ultimate investors. Primarily, it was only banks which were the intermediaries. As the financial sector evolved, other types of financial institutions came on the scene to undertake such intermediation directly, or between and among other intermediaries. A parallel development is the emergence of varieties of financial products, far removed from simple deposits and advances, delivering such intermediation.  Securitisation is among the latest of such intermediating product.

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    7) General Awareness for Bank Exams: Banking Ombudsman Scheme, 2006

    What is the Banking Ombudsman Scheme?

    The Banking Ombudsman Scheme enables an expeditious forum to bank customers for resolution of complaints relating to certain services rendered by banks. The Scheme is introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI. The Scheme was first introduced in1995 and was revised in 2006.

    Who is a Banking Ombudsman?

    The Banking Ombudsman is a senior official appointed by the RBI to redress customer complaints against deficiency in certain banking services.

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    8) Financial Awareness for RBI Grade ‘B’ Officer Exam: ‘Liberalised Remittance Scheme’

    Under the Liberalised Remittance Scheme (LRS), all resident individuals, including minors, are allowed to freely remit up to USD 2, 50,000 per financial year i.e. April to March for any permissible current or capital account transaction or a combination of both.

    Liberalised Remittance Scheme was introduced in 2004 as a liberalization measure to facilitate resident individuals in remitting funds abroad for permitted current or capital account transactions or combination of both. These Regulations are amended from time to time to incorporate the changes in the regulatory framework and published through amendment notifications.

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    9) Banking Term: BASEL Norms

    The Basel Committee on Banking Supervision has its origins in the financial market turmoil that followed the breakdown of the Bretton Woods system of exchange rates in 1973. After the collapse of Bretton Woods, many banks incurred large foreign currency losses. In response to disruptions in the international financial markets at that time, the central bank governors of the G10 countries---Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, the United Kingdom, and the United States established a Committee on Banking Regulations and Supervisory Practices at the end of 1974. Later renamed the Basel Committee on Banking Supervision, the Committee was designed as a forum for regular cooperation between its member countries on banking supervisory matters and improving the "quality of banking supervision worldwide."  The committee also serves as a bank for central banks.

    After existence as a G10 body, the Committee expanded its membership in 2009 and again in 2014 and now includes 28 jurisdictions. Generally, Countries are represented on the Committee by their central bank. The present Chairman of the Committee is Stefan Ingves, Governor of Sveriges Riksbank, Sweden's central bank. He was appointed as Basel Committee chairman in July 2011 and has been reappointed until June 2017. The Committee's Secretariat is located at the Bank for International Settlements (BIS) in Basel, Switzerland.

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    10) What is MICR and how a bank identifies fake demand drafts (DD)?

    Sometimes we read in news paper about how a bank identified fake demand drafts (DD), and alerted the police. In this case the bar codes in the fake DDs lacked magnetic ink and were not readable on the ‘Magnetic Ink Character Recognition'(MICR) and this along with other vital clues helped stop the fraud. So, in a way the MICR codes save the bank. However, this is not the only use of MICR. There are many more uses.  Here, the banking team of Jagran Josh is providing the details about MICR. What does it comprise of and how is it useful to customer?

    Many of you would have seen the magnetic inks bar codes printed on the bottom of your bank's cheque leaves. These bar codes are known as MICR code, an abbreviation for 'Magnetic Ink Character Recognition'. Actually, the MICR is the name given to the technology used in printing the code.
    In the early 1980s the Reserve Bank of India introduced many new modes for safe and effective payments across the country. One such important mode introduced was the unique system of MICR based cheque clearing system. Apart from being a security bar code to protect your transaction, the MICR code is also an indispensable part for online money transfers. Every bank branch is given a unique MICR code and this helps the RBI to identify the bank branch and speed up the clearing process.

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    11) Banking Term: Non-Banking Financial Company (NBFC)

    Non-banking financial companies (NBFCs) are fast emerging as an essential segment of Indian financial system. It is an heterogeneous group of institutions (other than commercial and co-operative banks) performing financial intermediation in a variety of ways, like accepting deposits, making loans and advances, leasing, hire purchase, etc. They raise funds from the public, directly or indirectly, and lend them to ultimate spenders. They advance loans to the various wholesale and retail traders, small-scale industries and self-employed persons. Thus, they have broadened and diversified the range of products and services offered by a financial sector. Gradually, they are being recognised as complementary to the banking sector due to their customer-oriented services; simplified procedures; attractive rates of return on deposits; flexibility and timeliness in meeting the credit needs of specified sectors; etc.

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    12) What is Call Money Market?

    The call money market is an essential part of the Indian Money Market, where the day-to-day surplus funds (mostly of banks) are traded. The money market is a market for short-term financial assets that are close substitutes of money. The most important feature of a money market instrument is that it is liquid and can be turned into money quickly at low cost and provides an avenue for equilibrating the short-term surplus funds of lenders and the requirements of borrowers.

    The loans are of short-term duration varying from 1 to 14 days, are traded in call money market. The money that is lent for one day in this market is known as "Call Money", and if it exceeds one day (but less than 15 days) it is referred to as "Notice Money". Term Money refers to Money lent for 15 days or more in the Inter Bank Market.

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