Banking Awareness Questions for IBPS, SBI, RRB, RBI and Clerical exams - Set 7

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
Headquarter : Mumbai, India
Current Governor : Urjit Patel (September 2016 - Present)

ANSWER: 4

Explanation:
Local Area Banks were set up as per a Government of India Scheme announced in August 1996.

There are only four Local Area Banks (LAB) in India, which exist in the form of Non-scheduled banks.

They are as follows:

Coastal Local Area Bank Ltd.

Founded : 27 December 1999
Headquarter : Vijayawada (Andhra Pradesh)
Area of Operation : Krishna, Guntur and West Godavari

Capital Local Area Bank Ltd.

Founded : 14 January 2000
Headquarter : Phagwara (Punjab)
Area of Operation : Jalandhar, Kapurthala and Hoshiarpur

Krishna Bhima Samruddhi Local Area Bank Ltd.

Founded : 28 February 2001
Headquarter : Mahbubnagar (Andhra Pradesh)
Area of Operation : Mahbubnagar in Andhra Pradesh, Raichur and Gulbarga in Karnataka

Subhadra Local Area Bank Ltd.

Founded : 1996
Headquarter : Kolhapur, Maharashtra
Area of Operation : Kolhapur

ANSWER: MSF

Explanation:
Marginal Standing Facility (MSF) rate refers to the rate at which the banks can borrow funds overnight from RBI against government securities.

MSF is a very short term borrowing scheme for scheduled commercial banks. Banks may borrow funds through MSF during severe cash shortage or acute shortage of liquidity.

• The RBI had introduced the marginal standing facility (MSF) in its Monetary Policy (2011-12).
• MSF came into effect on from May 9, 2011.
• Banks used the facility for the first time in June 2011 and borrowed Rs.1 billion via the MSF.

ANSWER: USA

Explanation:
USA has the largest shadow banking market in the world.

Shadow banking system refers to the financial intermediaries involved in facilitating the creation of credit across the global financial system but whose members are not subject to regulatory oversight.

The shadow banking system also refers to unregulated activities by regulated institutions.

Examples of intermediaries not subject to regulation include hedge funds, unlisted derivatives and other unlisted instruments, while examples of unregulated activities by regulated institutions include credit default swaps.

The shadow banking system has escaped regulation primarily because it does not accept traditional bank deposits.

Thus, many of the institutions and instruments have been able to employ higher market, credit and liquidity risks, and do not have capital requirements commensurate with those risks.

ANSWER: Enterprises

Explanation:
MSME stands for Micro, Small and Medium Enterprises.

The Government of India has enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 in terms of which the definition of micro, small and medium enterprises is as under:

Enterprises engaged in the manufacture or production, processing or preservation of goods as specified below:

1. A micro enterprise is an enterprise where investment in plant and machinery does not exceed Rs. 25 lakh;
2. A small enterprise is an enterprise where the investment in plant and machinery is more than Rs. 25 lakh but does not exceed Rs. 5 crore; and
3. A medium enterprise is an enterprise where the investment in plant and machinery is more than Rs.5 crore but does not exceed Rs.10 crore.

Enterprises engaged in providing or rendering of services and whose investment in equipment and other items not directly related to the service rendered as:

1. A micro enterprise is an enterprise where the investment in equipment does not exceed Rs. 10 lakh;
2. A small enterprise is an enterprise where the investment in equipment is more than Rs.10 lakh but does not exceed Rs. 2 crore; and
3. A medium enterprise is an enterprise where the investment in equipment is more than Rs. 2 crore but does not exceed Rs. 5 crore.

ANSWER: Union Bank of India

Explanation:
Union Bank of India (UBI) is one of the largest government-owned banks of India (the government owns 63.44% of its share capital).

Its online Telebanking facility are available to all its Core Banking Customers - individual as well as corporate.

It has representative offices in Abu Dhabi, United Arab Emirates, Beijing, Peoples Republic of China, London and Shanghai and branches in Hong Kong, Dubai, Antwerp and Sydney.

UBI – Union Bank of India

Founded : 11 November 1919; 97 years ago
Headquarter : Mumbai, India
Current Head : Arun Tiwari (Chairman & MD)

ANSWER: Adoption leave

Explanation:
The new policy is called “Bringing A Beautiful Yes”.

Private sector lender Yes Bank has rolled out adoption benefits for its workforce, to align organizational objectives with the needs of employees.

Realizing that employees need to spend time building and emotional connect with new additions to the family and recognizing that many are choosing to adopt children, the organization has introduced the benefits, which are applicable 1st August onwards.

YES Bank is India's fifth largest private sector Bank, founded by Rana Kapoor in 2004.
YES Bank is the only Greenfield Bank license awarded bank by the RBI in the last two decades.
YES Bank is a “Full Service Commercial Bank”, and has steadily built a Corporate, Retail & SME Banking franchise, Financial Markets, Investment Banking, Corporate Finance, Branch Banking, Business and Transaction Banking and Wealth Management business lines across the country.

YES Bank

Founded : 2004
Headquarter : Mumbai, Maharashtra
Current Head : Rana Kapoor (MD & CEO)

ANSWER: 56

Explanation:
At present, there are 56 RRBs in India.

Currently, RRB's are going through a process of amalgamation and consolidation.

First phase of amalgamation was initiated Sponsor Bank-wise within a State in 2005,
and the second phase was across the Sponsor banks within a State in 2012.

All RRBs were originally conceived as low cost institutions having a rural ethos, local feel and pro poor focus.
However, within a short time, most banks were making losses.

This may be again merged in near future.

ANSWER: Export Credit Guarantee Corporation

Explanation:
The ECGC Limited (Formerly Export Credit Guarantee Corporation of India Ltd) is a company wholly owned by the Government of India.

It provides export credit insurance support to Indian exporters and is controlled by the Ministry of Commerce.

Govt. of India initially set up Export Risks Insurance Corporation (ERIC) in July 1957.
It was transformed into Export Credit and Guarantee Corporation Limited (ECGC) in 1964, and to Export Credit Guarantee Corporation of India in 1983.

ECGC Limited

Founded : 1957
Headquarter : Mumbai, India
Current Head : Mrs. Geetha Muralidhar (Chairman & MD)

ANSWER: Public limited

Explanation:
Stock Holding Corporation of India Ltd (SHCIL) was established in 1986 under the Government of India as public limited company.

Stock Holding Corporation of India Ltd (SHCIL), India’s largest custodian and depository participant.

It is owned by the India's leading Banks and Financial Institutions such as SU-UTI, IFCI Ltd., LIC, GIC, NIA, NIC, UIC, and TOICL.

SHCIL is known for its online trading portal with investors and traders.

It is also responsible for e-stamping system around India.

Stock Holding Corporation of India (SHCIL), the country's first and one of the largest security custodians to financial institutions.

SHCIL

Founded : 1986
Headquarter : Mumbai, India
Current Head : Ramesh NGS ( Current MD)

ANSWER: Union Bank of India

Explanation:
National Payments Corporation of India (NPCI), the umbrella organization for all retail payments system in the country has partnered with Union Bank of India to launch an USSD based *99# mobile application for their customers.

This application can be downloaded in an android smart phone from the Google Play Store by the bank customers and can be used even without any internet connection as it does not require any data.

ANSWER: CRR

Explanation:
CRR – Cash Reserve Ratio

CRR is governed by the provisions of Section 42 of the Reserve Bank of India Act, 1934.

Please note that earlier RBI was empowered to fix CRR between 3-20% by notification.

However, from 2006 onwards the RBI is empowered to fix the CRR on its discretion without any ceiling.