Banking Awareness Questions for IBPS, SBI, RRB, RBI and Clerical exams - Set 1

ANSWER: 1770

Explanation:
The first bank of India 'Bank of Hindustan' was established in the year 1770 in Calcutta.

This bank was established at Calcutta under European management.

It was liquidated in 1830-32.

Another bank during that period was the General Bank of India, established in 1786 but failed in 1791.

ANSWER: Government of India

Explanation:
Government of India

Public Sector Banks (PSBs) are banks where a majority stake (i.e. more than 50%) is held by Government.

There are total of 27 PSBs in India [21 Nationalized banks + 6 State bank group (SBI + 5 associates)].

In 2011, IDBI bank and in 2014 Bharatiya Mahila Bank were nationalized.

• The Central Government entered the banking business with the nationalization of the Imperial Bank of India in 1955 and the bank was renamed as the State Bank of India.
• The other state banks became the subsidiaries of the new bank when nationalized on 19 July 1960.
• The next major nationalization of banks took place in 1969 when the government of India, under prime minister Indira Gandhi, nationalized an additional 14 major banks.
• The next round of nationalization took place in April 1980. The government nationalized six more banks.

ANSWER: April 1, 1935

Explanation:
On April 1, 1935, the Reserve Bank of India, which is the central bank of this country, was established.

It was originally started as a shareholders' bank with a share capital of Rs. 5 crore divided into shares of Rs. 100 each, fully paid-up.

But since January, 1949 the Reserve Bank has been nationalized and it is now purely a concern of the State.

The Government of India holds the entire share capital of the bank which has been acquired by payment of compensation to the shareholders.

RBI - Reserve Bank of India

Founded - 1 April, 1935; 81 years ago
Headquarters - Mumbai, India
Current Governor - Urjit Patel (September 2016 - Present)

ANSWER: Universal Banking

Explanation:
Universal banking is a banking system in which banks provide a wide variety of financial services, including commercial and investment services.

Universal banking combines the services of a commercial bank and an investment bank, providing all services from within one entity.

Universal banks may offer credit, loans, deposits, asset management, investment advisory, payment processing, securities transactions, underwriting and financial analysis.

Some of the more notable universal banks include Deutsche Bank, HSBC and ING Bank.

The First Universal bank of India is the ICICI bank.
In 2014, it was the second largest bank in India in terms of assets and third in term of market capitalization.

ICICI – Industrial Credit and Investment Corporation of India

Founded: June 1994
Headquarters: Mumbai, Maharashtra
Current Head: Mrs. Chanda Kochhar (MD & CEO)

ANSWER: July, 1988

Explanation:
The National Housing Bank, the apex institution of housing finance in India, is a wholly-owned subsidiary of RBI.

It started operating from 9th July, 1988 with an authorized paid-up capital of RS. 450 crore.

It was set up under the National Housing Bank Act, 1987.

NHB registers, regulates and supervises Housing Finance Company (HFCs), keeps surveillance through On-site & Off-site Mechanisms and co-ordinates with other Regulators.

NHB – National Housing Bank

Founded - July 9, 1988
Headquarters - New Delhi, India
Current Head - Shri Sriram Kalyanaraman (MD & CEO)

ANSWER: SBI & ICICI Bank

Explanation:
The D-SIB framework requires RBI to disclose the names of banks designated as D-SIBs every year in August starting from August 2015. Now it is to be interpreted as that these banks are so integral to the economy that their failure would have to be prevented at any cost.

The Reserve Bank of India (RBI) retained the classification of State Bank of India and ICICI Bank Ltd as Domestic Systemically Important Banks (D-SIBs) in 2016 and maintained their bucketing structure as it was last year in 2015.

D-SIBs are sub-classified into bucket number 1 to bucket number 5 depending on their size (as % of GDP). Higher the bucket number, more capital they’ve to maintain.

In 2016, SBI (Bucket 3) and ICICI (bucket 1) D-SIBs.

ANSWER: UTI Bank

Explanation:
UTI Bank has been officially changed to Axis Bank Ltd.

Axis Bank is the third largest of the private-sector banks in India offering a comprehensive suite of financial products. The bank has its headquarters in Ahmedabad, Gujarat.

It offers the entire spectrum of financial services large and mid-size corporates, SME, and retail businesses.

As of 30 Jun. 2016, 30.81% shares are owned by promoters & promoter group (United India Insurance Company Limited, Oriental Insurance Company Limited, National Insurance Company Limited, National Assurance Company Ltd, GIC, LIC & UTI).

Remaining 69.19% shares are owned by Mutual Funds Institutions, FIIs, Financial Institutions (Banks), Insurance companies, corporate bodies & individual investors.

Axis Bank

Founded - 1993 (as UTI Bank)
Headquarters - Ahmedabad, Gujarat
Current Head - Shikha Sharma (MD & CEO)

• Winner in the 'Best Payment Initiatives' category amongst Private Sector Banks, IBA Banking Technology Awards 2015.
• Axis Bank has been featured in Limca Book of Records 2015 for creating a National Record for its campaign - 'Plant a Sapling'.

ANSWER: Narsimhan Committee

Explanation:
RRBs were set up on the recommendations of The M. Narasimham Working Group (during the tenure of Indira Gandhi government).

RRBs were established under the provisions of an Ordinance passed on September 1975 and the RRB Act. 1976.

It aims provide sufficient banking and credit facility for agriculture and other rural sectors.

RRBs are local level banking organizations created to serve primarily rural areas of India with basic banking and financial services.

ANSWER: Ashok Lavasa

Explanation:
Ashok Lavasa is current Finance Secretary. (1980 batch Haryana cadre IAS officer)
He replaced Ratan Watal.

The Finance Secretary is the Permanent Secretary-level civil servant, who plays a leadership role in the bureaucracy of the Finance Ministry, Govt. of India.

The Ministry of Finance is composed of five departments -

• the Department of Economic Affairs,
• the Department of Revenue,
• the Department of Expenditure,
• the Department of Financial Service,
• The Department of Investment and Public Asset Management (formerly k/as Department of Disinvestment).

Ministry of Finance

Formed: 29 October, 1946
Headquarters: Cabinet Secretariat, New Delhi
Key Documents: Union Budget, Economic Survey
Current Finance Minister: Arun Jaitley

ANSWER: T. S. Vijayan

Explanation:
T.S. Vijayan is the present chairman of the IRDA.

The Insurance Regulatory and Development Authority of India (IRDAI) is an autonomous, statutory agency tasked with regulating and promoting the insurance and re-insurance industries in India.

It was constituted by the IRDA Act, 1999, an act of Parliament passed by the Govt. of India.

The agency's headquarters are in Hyderabad, Telangana, where it moved from Delhi in 2001.

Organizational Structure

It is a ten-member body consisting of a chairman, five full-time and four part-time members appointed by the Govt. of India.

In September 2016, the authority was chaired by T. S. Vijayan and its full-time members were P. J. Joseph, Nilesh Sathe, V. R. Iyer, Pournima Gupte and D. D. Singh.

IRDA - Insurance Regulatory and Development Authority

Founded: 1999
Headquarters: Hyderabad, Telangana
Current Head: T. S. Vijayan

ANSWER: 2nd Saturday & 4th Saturday of the month

Explanation:
The Reserve Bank has said that the Real-time gross settlement - RTGS system will not be operated on second and fourth Saturdays with banks observing public holiday on those days.

The minimum amount to be remitted through RTGS is Rs 2 lakh while there is no upper ceiling.

Real-time gross settlement systems (RTGS) are specialist funds transfer systems where the transfer of money or securities takes place from one bank to another on a "real time" and on a "gross" basis.

"Gross settlement" means the transaction is settled on one-to-one basis without bundling or netting with any other transaction.

"Settlement" means that once processed, payments are final and irrevocable.

RTGS systems are typically used for high-value transactions that require and receive immediate clearing.

ANSWER: Basel II norms

Explanation:
Basel II is the second of the Basel Accords which are recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision.

First Pillar: Minimum Capital Requirement

The first pillar Minimum Capital Requirement is mainly for total risk including the credit risk, market risk as well as Operational Risk.

Second Pillar: Supervisory Review Process

The second pillar i.e. Supervisory Review Process is basically intended to ensure that the banks have adequate capital to support all the risks associated in their businesses.

RBI has issued guidelines to banks to have an internal supervisory process which is called ICAAP or Internal Capital Adequacy Assessment Process.

Another process stipulated by RBI which is actually the Independent assessment of the ICAAP of the Banks.
This is called SREP or Supervisory Review and Evaluation Process.

ICAAP is conducted by Banks themselves and SREP is conducted RBI which is along with the RBI’s Annual Financial Inspection (AFI) of the bank.

Third Pillar: Market Discipline

The idea of the third pillar is to complement the first and second pillar.

This is basically a discipline followed by the bank such as disclosing its capital structure, tier-I and Tier –II Capital and approaches to assess the capital adequacy.