Recent Economy Current Affairs Sept 2018

Recent Economy Current Affairs  Sept 2018

As per Association of Mutual Funds of India’s (AMFI) statistics, Maharashtra tops the chart for state with the maximum penetration & Assets Under Management (AUM).

As per the RBI, India's external debt declined 2.8% to USD 514.4 billion at June-end over the previous quarter on account of a decrease in commercial borrowings, short-term debt & non-resident Indian (NRI) deposits.

Economic Affairs Secretary SC Garg announced a reduction in gross borrowing estimate for the current fiscal by 70,000 crore rupees & maintained that the government will contain fiscal deficit target at 3.3%.

Department of Financial Services (DFS), Ministry of Finance & National Informatics Centre (NIC) jointly developed a mobile app called Jan Dhan Darshak as a part of financial inclusion (FI) initiative. This app will act as a guide for the common people in locating a financial service touch point at a given location in the country.

FDI in the telecom sector has jumped nearly five times in the last three years – from USD 1.3 Billion in 2015-16 to USD 6.2 Billion in 2017-18.

Global research agency Fitch has raised India’s growth forecast for the current fiscal to 7.8 per cent from the earlier 7.4 per cent.

Employees’ State Insurance Corporation (ESIC) has approved a new scheme- Atal Bimit Vyakti Kalyan Yojna for Insured Persons covered under the Employees’ State Insurance Act.

Central Board of Direct Taxes (CBDT) announced that no withholding tax will apply on interest payments made by an Indian company or a business trust to a non-resident in respect of offshore rupee-denominated bonds issued between September 17, 2018 & March 31, 2019.

Government has announced an array of steps to check the rising Current Account Deficit (CAD), & the fall in rupee. It decided on a number of steps to contain CAD, which widened to 2.4% of the GDP in the first quarter of 2018-19.

India’s overall exports (Merchandise & Services combined) in April-August 2018-19 (as per the RBI Press Release) are estimated to be USD 221.83 Billion,exhibiting a positive growth of 20.70% over the same period last year.

Indian economy grew by 8.2% in the first quarter (April-June) of the current fiscal, the highest in over two years. Manufacturing sector grew by 13.5% which signals very good turnaround in the sector.

Union Ministry of Micro, Small & Medium Enterprises (MSME) approved a proposal by the Khadi & Village Industries Commission (KVIC) to increase the wages of artisans by over 36%. With this, the wages will be increased from Rs 5.50 per hank previously to Rs 7.50 per hank.

"Certified Auditing and Accounting Professional" yesterday exam recollected

"Certified Auditing and Accounting Professional"

1. AS 21 CASE STUDY 5M
2.LFAR   CASE STUDY 5M
3.CASH flow statements 2 simple questions
4.GST plus which tax -VA7
5.1Q from MIS
6.ITEM IN SCHDULE3
7. 2 Q from BRS
8.1Q from capital and revenue expenditure
9.1Q  CAPITAL RECEIPTS
10. NPA provision related 2 q
11.3 Q from NPA types like doubt full, loss...
12.ADVANCES 5M - schedule 9
13.interest earned schdule 13
14.item in schedule 6
15.identify  which is SLR Security
16.profit on sale of investment
17.Brokarage ---Interest earned or other income?
18.assets and liabilities
19.direct tax which is incorrect
20.26QB
21.24Q,27Q, 26Q, 25Q which is incorrect

22.foresnsic audit
23.BASEL 3
24.CRAR, RWA
25.MOC
26. 15 TO 20 questions from B module of auditing in books

27.Tier 1 capital items
28.Book audit question no1 page 482
29. Book audit question no1 page 500
30.Ratio calculations
31.Book audit question no1 page 24

32.AS 7 cashflow statements

33.user of financial statements

34.stewadship accounting  page no 10

35.recognition  of income 

certified credit professionals recollected today

certified credit professionals recollected



Treds 5 questions came
5 questions irr npv
 Ratio tnw
 Interest coverage ratio
 Debt equity ratio
 IBC  3 questions
 Restructuring of msme 4 questions
 Payback method 1 mark
SMA0
 Loan disbursement in msme 25000 to 5 lakhs
 No of days
 Resolution of stressed assets
 Factoring forfeiting 5 questions
 Ic4 questions
Calculation with eoq
 Frequency of LC opening
 No of LC to be opened
Break even point 1 question
Which given under option is not source of working capital
A manager give a housing mortgage loan to Mr.a for rs.54 lakhs without getting title deed .now account becomes npa . How will you recover?

Commercial paper min max days

 Current ratio 1 mark theory
100000 in rural and 160000 in urban
 5000 od loanin janthan account SB ac
Housing loan 75 % max LTV

Cersai created under
Equitable mortgage
 In mortgage itself 3 questions separately
 How to check loan applicant
 How to check trade receivable are correctly mentioned by borrower

5 questions in insolvency and bankruptcy

1. Cersai us established under
a Indian Contract Act.
b Transfer of property Act.
c Sarfaesi Act.
d Insolvency act

2. Bank get the right of title to good:
a Hypothecation
b Pledge
c Lien
d Assignment

3. 1 mark question from BEP, Interest Coverage Ratio, Quick Ratio.

4. Two Case studies on IRR, NPV, Project evaluation, etc.

5. MSME theoretical case regarding Revitalization of Asset, case study of 5 marks

6. Insolvency Preceedings Act case study of 5 marks.

7. NCLT case study of 5 marks.

8. Many questions from Business Maths. No case study from financial statement.

9. More than 80 questions were theoretical only few numericals were asked.

10. Only two or three questions from working capital

Forex operations review and Recollected today exam

Forex operations review and Recollected today exam

Usance Period
sanction of fresh/enhanced export credit limits should be made within 45
Limit for export under OPGSP
Schedule III of FEMA
Remittance exceeding USD10Mio per project consultancy service in respect of Infra Projects
commission to an agents abroad for sale of residential flats-USD25000 or 5% of inward remittance
reimbursement of pre-incorporation expenses
Donation - 1% or USD 5Mio
Pan mandatory for all LRS remittance
LRS reporting - Daily Basis
LRS not applicable to HUF,Partnership form, Trust
2 new Incoterms incorporated in 2010
export realisation period
collectin bill
rate application from transfer from NRE to FCNR
who issue SOFTEX form
fedai last meetings
advance remittances toward imports of services are permitter without any limit
question on accruals in the account should be converted into rupees into rupee on last day of succeeding
month
who can open SNRR account
How much INR can be taken outside Inida
Export of gift articles not exceeding 5 lacs
NRO account Foreign nationals should not exceed more than 6 months
Vostro account is funded through which Form1/2/3/4
when we sent MT707
Travellers proceedings to which countries not exceeding USD 300 per visit
Target of FTP2015-20 export target of $900 billion by 2019-20
Article 13 of UCP 600
Green clause credit
Commercial invoice should be signed and dated
10-12 questions on ECB,FDI,ODI
3-4 questions on FTP

 Questions asked from UCP 600, LOC, LRS, FTP 2015- 2020, ECGC, PTA, ECB, etc.

Cleard Foreign Exchange Operations Exam today..paper was little bit tricky..no numericals, no case studies..just theoretical but concept based questions..ECB,FTP,LC,LRS,ECGC,EXIM, pre & post shipment are the some areas which covers more than half of the question paper.



forex operation question 27.10.2018

fro nre to fcnr which rate apply
as per latest what is mandatory for lrs "pan"
how much invest in jv - 400%
coprporate donate what amount - 1% of forex earning or $5 m which ever is less
one from high seas sale
marine insurance policy indemnity se related
fedai rate declare which rate in month end
one is ralated to var and fbil
if forward is more than spot then what - interest on base less than counter
regarding lou and loc - ans is both are dicontinued
one is if there is no loc and lou then what is the option for importer
one forfaiting
what is requirement to be an exporter
if account is standard then in which case there is no need to report ecgc before disbursement
ek bpo se related
one is from eefc
one is for tt buying
ftp target for 2020
advane under import of services without guarntee - $ 5 lakh
condition for granting loan against nri deposit
lc amendment- mt707
one from urbdg 758
urr 722
one from demand guarantee
standby lc
one is lc term prevail against sanction ye ans h question i forget
if lc not require transport , invoice then what - option given not remember
incoter added in 2010 - dap dat
one is if in lc there is no presentation date only expiry given then what will be presentation date
for what we can not issue lc
if lc is in fob then import licence what we endorse option - cif exw fob
who issue softex forms
one is edi port - sdf
if some mistake in shippong bill then what will appraising officer do - mark and point to commisioner

~forex operation question 27.10.2018
fro nre to fcnr which rate apply

as per latest what is mandatory for lrs "pan"

how much invest in jv - 400%

coprporate donate what amount - 1% of forex earning or $5 m which ever is less

one from high seas sale

marine insurance policy indemnity se related

fedai rate declare which rate in month end

one is ralated to var and fbil

if forward is more than spot then what - interest on base less than counter

regarding lou and loc - ans is both are dicontinued

one is if there is no loc and lou then what is the option for importer

one forfaiting

what is requirement to be an exporter

if account is standard then in which case there is no need to report ecgc before disbursement

ek bpo se related

one is from eefc

one is for tt buying

ftp target for 2020

advane under import of services without guarntee - $ 5 lakh

condition for granting loan against nri deposit

lc amendment- mt707

one from urbdg 758


urr 722

one from demand guarantee

standby lc
one is lc term prevail against sanction ye ans h question i forget

if lc not require transport , invoice then what - option given not remember

incoter added in 2010 - dap dat

one is if in lc there is no presentation date only expiry given then what will be presentation date

for what we can not issue lc

if lc is in fob then import licence what we endorse option - cif exw fob

who issue softex forms
one is edi port - sdf

if some mistake in shippong bill then what will appraising officer do - mark and point to commisioner


Foreign Exchange Operations Recollected question (27/10/18)-
1. LRS scheme availble to?
2. question abt Gift/donation.
3. one abt medical treatment?
4. PAN mandatory in LRS?
5. travellers limit 3000USD per visit or per annum?
6. foreign currency not permissible to- Nepal
7. forward contract limit- USD 1 million
8. question on RFC ac.
9. direct question on PIO.
10. whi can open SNRR ac
11. question abt prohibited investment.
12. what is green clause lc.
13. question on tolerance limit in Lc.
14. question abt advising bank.
15. question abt MT707.
16. 3-4 question abt bill of lading.
17. 2 new INCOTERMS.
18. SOFTEX form.
19. export to warehouse question.
20. 5-7 indirect question abt pre and post shipment.
21. question on forfaiting.
22. question on bill of entry.
23. 2-3 question on trade credit.
24. 1 question abt nature of transaction and rate applied.
25. 1 abt ECIB(WTPC)
26. 1 question on standby credit.
27. LRS statement submission.
28. normal transit period

• 29. ECB cost ceiling.

Regards
Akshay Chauhan

Risk management recollected today exam

 risk management

Case study: 1 case study on forex option
1 case study spot forward rate
Case study of YTM
Case study maculary duration modified duration
Case study on stress testing
Case study on exposure norms using tier 1 tier 2 capital reference
Basic indicator approach, standardised approach case study
Var calculation
Daily volatility 2 qstn

Various types of cultures and revolutions

Various types of cultures and revolutions :
1. Sericulture: Silk production. 2. Apiculture: Honey Bee keeping
3. Aquaculture: Shrimp farming, fishes 4. Pisciculture: Breeding of fishes in pond
5. Floriculture: Flower production 6. Apriculture: Mushroom production
7. Silviculture: Forestry 8. Horticulture: Fruits production
9. White revolution: milk production 10_ Green revolution: increase in foodgrain production
11. Blue revolution: fish production 12_ Yellow revolution: increase in oilseeds and pulses
13. Olericulture : Vegetable Cultivation 14. Tissue culture: Improvement of plant varieties
15. Vermiculture - Rearing of earth worm 16. Mulberry Associated with - Sericulture
17. Rainbow revolution- connected with flowers

Limitation period of various documents CCP exam

Limitation period of various documents CCP exam


Temporary Overdraft without DPN 3 years from date of loan
Demand Loan 3 years from the date of loan
Demand Promissory Note 3 years from date of DPN
Bill of exchange_payable on demand 3 years from date of Bill.
Usance bill of exchange or promissory note 3 years from the due date of the bill or PN •
-Suit for Money_ Decree 3 years from the date right is due
Term Loans payable by instalments 3 years from due date of each instalment . .
Mortgage 12 years from the due date of the loan
Right of foreclosure by the mortgagee 30 years
Right of redemption 30 years
Cash credit against hypothecation or overdraft 3 years from the date of document.
Cash Credit Pledge Not applicable
Any suit by State/Central Government 30 years from the date when limitation would start
Deposit like SB, CA, FD with a bank 3 years from date of demand
Execution of Decree 12 years from the date of decree
Recovery of loss caused by fraud 3 years from the date of detection of fraud
Claim under Consumer Protection Act 2 year from the date light accrues
Dishonour of cheque under sec 138 of NI Act 1 month from the date right accrues
Appeal to High Court against Lower court 90 days from date of decree
Appeal to other courts on the decree at Lower court 30 days from date of decree

LOANS & ADVANCES

CHARGESONSECURITIES

PLEDGE
Pledge is defined in section 172 of Indian Contract Act
Pledge is the bailment of goods as a security for payment of a debt or performance of a promise.
Bailment is defined in Indian Contract Act.
Bailment means delivery of goods with some purpose and with the condition that when the purpose
is accomplished the goods will be delivered back to the.bailor.
Pledge can be only in respect of movable goods like stocks. On Railway receipt also charge is
created by pledge.
In the case of pledge, ownership remains with the borrower; only possession is transferred to the banker.
The bank as a pledgee must take care of the goods pledged as a person of ordinary prudence would
take of his own goods of the same value.
Bank can sell the goods without intervention of the court in case the pledgor fails to repay the bank
loan. But the sale can be done only after giving reasonable notice to the pledgor.
Bank as a pledgee has priority in right over the goods and Bank's right of sale under pledge cannot
be extinguished even by lawful seizure of goods pledged to it.
HYPOTHECATION
Hypothecation is defined in Section 2 of Sarfaesi Act.
Hypothecation is also done onmoveable property like stocks.
In case of hypothecation both ownership as well as possession remains with the borrower i.e. neither
ownership nor possession is transferred to the bank.
The charge created in Hypothecation is equitable charge.
When stocks are hypothecated to the bank, the charge is floating charge.
Basic difference between pledge and hypothecation is on account of possession.
ASSIGNMENT
Provisions relating to Assignment in section 130 of Transfer of Property Act.
Assignment is transfer of right or interest to recover the debt.
The transferor of claimis called as the assignor and the transferee is called the assignee.
Assignment is done on Book Debts, Supply Bills, L1C policy, fixed deposit etc.
Assignment is possible through writing only.
Acknowledgment required to be acknowledged by original debtor uis 131.
Assignor cannot give better title to the assignee than what assignor has.
In case of default, the assignee can recover the actionable claimamount fromthe original debtor without reference to
assignor.
MORTGAGE
Mortgage is defined in Section 58 of the Transfer of Property Act.
Mortgage is the transfer of interest in a specific immovable property, for the purpose of securing an
existing or future debt
The person creating the mortgage is called as the mortgagor and the person in whose favour mortgage
is created (bank) is called as the mortgagee.
Mortgage is created on immovable property like land and building.
Types ofMortgage: There are six types ofmortgages namely (i) SimpleMortgage (ii)Mortgage by Conditional Sale
(iii) UsufructuaryMortgage (iv) EnglishMortgage (v)Mortgage by Deposit of title Deeds (EquitableMortgage) and
(vi) AnamalousMortgage.Of these, allmortgages except EquitableMortgage require registration with the Registrar
of Assurances.
RegisteredMortgage: In the case of registeredmortgage (also called legalmortgage) first amortgage deed is written
which is stamped as per Stamp Act of the concerned state. The deed is then executed in the presence of two
witnesses. Thereafter, in terms of the Indian Registration Act 1908, it is to be registered with the Registrar of
Assurances (Sub Registrar) within 4months of the execution.
EquitableMortgage:
 EquitableMortgage is created bymere deposit of title deeds of property with intention to borrow.
 Title deedsmay be deposited by themortgagor himself or his agent.
 Title deeds should be deposited with the bank at Mumbai, Kolkatta and Chennai or any other town
notified by the State Government in this regard.
 Property may be situated anywhere in India. For property located in Lucknow, title deeds can be
deposited at Chennai.
 It is not necessary that the title deeds should be deposited with the branch or at the place where the loan is being
raised. These can be deposited anywhere in India at a notified place.
 The bank should not part with the title deeds even for a short duration at the request of themortgagor because if
some other creditor is induced to finance on the basis of title deeds, the bankmay lose priority over the
mortgaged property.
 EquitableMortgage does not require registration with Registrar of Assurances. But in case of a limited
company charge in respect of equitablemortgage under Section 125 of the Companies Act. 1956must be
registered with Registrar of Companies.
 All mortgages in favour of bank require registration with CERSAI (established under SARFAES1
Act) within 30 days.
Right of Foreclosure Available for Mortgage by Conditional Sale only
Personal liability of mortgager Not available for Mortgage by conditional sale
and usufructuary mortgage
Right to sale without court intervention English Mortgage.
Registration of mortgage with
Registrar of
Assurances not required in
Equitable Mortgage.a
There is absolute transfer of property English Mortgage
Loan is repaid out of income from the
mortgaged property
Usufructory mortgage
possession of property is with mortgagee Usufructory mortgage
VARIOUS KINDS OF CHARGES OVER SECURITIES Charge
immovable Property like land and building Mortgage
Actionable claims like Book debts, FDR. NSC, Life Policies Assignment
Movable property/_goods like Plant &machinery, stocks, vehicle, RIR Pledge or hypothecation
Paper securities like Shares, debentures, MF units, bonds Lien

Accounts numerical

1.
Find total assets if DER = 2:1, CL = 8 lac, equity = 4 lac.

Since total assets = debt + equity + liability
=> total assets = debt + 4 + 8
=> debt = TA - 12

Since DER = debt / equity
=>2:1 = (TA - 12) / 4
so, TA = 20 lacs Ans

2.
Find equity, given assets = 200 lac, DER = 2:1, CL = 56 lac.

Since DER = debt / equity
=> 2:1 = debt / equity
so, debt = 2 × equity

Since total assets = debt + equity + liability
=> 200 = 2 × equity+ equity + 56
So, equity = 48 lacs Ans

3.
Find NWC, given CR = 2.5:1 & CA = 30 lac.

Since CR = CA / CL & NWC = CA - CL
=> 2.5:1 = 30 / CL
=> CL = 12
and NWC = 30 - 12 = 18 lac Ans

4.
Suppose CR is 4:1, NWC is Rs 30000/-, what is CA?

Since CR = CA / CL & NWC = CA - CL => CL = CA - NWC
=> 4:1 = CA / (CA - 30000)
so, CA = Rs 40000 Ans

5.
An account became NPA on 05042009. The outstanding in the account is 10 lacs. Realisable value of security is 7 lacs. The balance including Rs 50000 as recorded and suspended interest. How much provision is required to be made on 31032010?


6.
Total current assets of a company is Rs 32 crore and the NWC is Rs 8 crore. The ratio is ___.
(Note:
Current asset = stock, debtors, loans etc
Total asset = current assets + non current assets
Non Current Assets = goodwill, preliminary exp)

Sol:
NWC = CA - CL
so, CA = 32 - 8 = 24
Current Ratio = Current Assets ÷ Current Liability 
= 32÷24 =1.33:1 Ans

_______________________
Acronyms used:
NWC = Net Working Capital
TA = Total Assets
CL = Current Liability
CA = Current Assets
CR = Current Ratio

Risk Weights for Important Assets

Risk Weights for Important Assets
Cash, balance with RBI, 0%
Balances with other banks with CRAR of 9% & above

20%
Secured loans to Staff Members 20%
Other loans to staff members 75%
Housing Loan if LTV.ratio more than 75% 100%
Housing loan if LTV Ratio is up to 75%
Loan up to Rs.30 lac to individual secured by Mortgage 50%
Loan more than Rs.30 lac to individual secured by Mortgage 75%
All Housing Loan of Rs 75 lakh and above 125%
Forex and gold open position 100%
Exposure to Central/State Govt 0%
Central Govt guaranteed advance 0%
State Govt guaranteed advances 20%
Loans to PStis (not guaranteed by Govt) 100%
Claims on unrated corporates 100%
Exposure to DICGC/CGFT. 0%Exposure to ECGC 20%
Loans against FOR, LIC policy, NSCs with margin 0%
Education loan (under Basel I —100%) But under Basel-II 75%
Loans against gold/silver jewellery up to Rs.1 lac 50%
Consumer credit / credit cards/Personal Loan 125%
Exposure to capital market 125%
Commercial real estate . 100%
Commercial Real Estate — Residential Housing (CRE-RH) 75%
Venture Capital invstmt as part of Capital market exposure 150%
Loans to non-deposit taking NBFCs for on-lending 100%
Retail Loan & Loan to SME (Retail Loan means limits up to Rs 5 crore and sale 75%
FY less than Rs 50 crore)
NPA if specific provision is less than 20% 150 %
If specific provision is 20% and above but less than 50% 100%
If specific provision is 50% and above• 150%
Bills purchased under LC issued by another bank 20%

Certified accounts and audit recollected July 2018

Pay more attention on audit part, specially those relating to RBIA.. and module 3 and 4 of audit...
In last attempt, around 20-30 questions were case study based, each comprising of 5 questions, in accounts, questions based on ratio analysis came in case study..

By
Shashank atreya

Cyber fraud management exam recollected on 20.10.2018

20.10.2018 cyber crime question
1.cyber crime definition
2.3 factor pressure,opportunity,rationalisation
3.cybernetics,kybernetes,steersman,governor,cyberpunk----given 4 option
4.honey pot
5.1st worm
6.denial of service
7.buffer overflow
8.shoulder surfing
9.access control
10.script kiddles
11.john doe order
12.nigrria419
13cyber wefare
14 email spoofing
15 cyber stalking
16domain name .in represent
17.Satyam infoway ltd vs siffynet supreme court
18cyber warfare
19phishing
20zeus
21.non repudiation
22 tailgating

23.trapdoor
24.captcha.

25 .blue hat hacker
26phreaking
27. Ethical hacking
28.anonymous
29bar code matrix code
30.RFID
31.data manipulation and data definition language
32.symmetic encryption
33. Encryption and decryption
34.locard exchange principle
35.c-Dac
36.payment getway
37.payment and settlements system 2007
38 acquiring bank
39 brute force attack
40.man in the middle attack
41session hijacking
42.digital wallet
43OLTP
44 Ucpdc
45.EMV card
46.netra drdo
47CBI Specialized structure
48.electonic signature
49.DSCI set ip NASSCOM
50.US Initiative -cyber security information sharing act
51.it act andit amendment act.
52.Pki
53 .authenticity
54.maximum value that can be stored in a prepaid card 50000
55. SWIFT


By pritee Hardiha

Certified credit counselors after MSME exam

Certified credit councelor (CCC) certificate.
How get it after clearing MSME for bankers:::

So many conditions you have to fulfill it.

Only individuals are entitled to be enrolled as CCCs. Graduate with finance/economics, engineering-cum-finance, commerce qualifications or retired bankers with 5 years or more experience in credit to MSMEs in India.
Have qualified the prescribed course for credit counselors i.e. certificate course on MSME conducted by IIBF.
Conversant with Information Technology skills along with communication proficiency and team building skills.
Age of individuals should generally not exceed 65 years at the time of selection. Continuation as CCC, shall be subject to performance review, till the age of 75 years.
Should not be a defaulter to any Banks / FIs or criminal case pending against him/ her or black listed/debarred by any agency. (self declaration to be furnished)
Should have necessary infrastructural facilities to extend services efficiently.
Will have to be enrolled on portal. Merely qualifying the certificate exam shall not allow a person to practice as CCC. He/she has to pass through the filter mechanism prescribed.

Satisfy the eligibility criteria prescribed (as given in Hand Book on CCC) for enrolment.
Qualify the prescribed certification course i.e. Certificate course on MSME conducted by IIBF (http://www.iibf.org.in/certificate_exam_schedule.asp)
Qualified candidates may apply through udyamimitra portal (https://udyamimitra.in/Home/CCC) for enrolment.
Eligible candidates would be empanelled as CCCs on portal after due diligence process

Components of credit management

Loan Policy of the Bank



Influenced by market conditions, policies of other banks, own SWOT analysis, RBI guidelines

Exposure limits-single borrower/group

Exposure limits for sectors

Discretionary powers



Credit Appraisal :



Five Cs - Character, Capacity, Capital, Conditions and Collaterals

Credit delivery-documentation, creation of charges

Control and Monitoring

Rehabilitation and Recovery

Risk management-identification,

Measurement & Evaluation

Delivery

Control and Monitoring

Rehabilitation and Recovery

Credit Risk Management

Refinance



RBI Guidelines



End use of funds

Priority sector 40%(agr 18%),weaker sector 10% foreign banks 32%, small enterprises 10%, export credit 12% of ANBC/off balance sheet expo, whichever is higher. Agr, MSE, housing(20 lacs), Education(10 lacs/20 lacs abroad), Export credit, SHG, KVI, Retail

Weaker sec. –small/marginal farmers, artisans, SGSY, SC/ST, DRI, SJSRY, SLRS, SHG

Micro, small and medium enterprises

Mfg sec: Micro upto 25 lacs, Small 25 lacs to 5 crs, Medium 5 crs to 10 crs

Service : Rs 10 lacs, 10-2 crs, 2-5 crs

Credit Exposure Norms –



For individuals/groups : 15/40 of capital funds- addl 5/10 for infra.

NBFC/NBFC-AFC 10/15%- 15/20% on lent infra

Base Rate System



Wef 1/7/2010 replaced BPLR

Banks may determine actual roi

Transparent, applicable to all except DRI, bank’s own employees, against deposits, qtrly review of BR

Existing loans with BPLR to continue, switch over option to be given

Credit Restrictions



Adv against bank’s own shares

Relatives of directors/sr officers

Industries consuming ozone depleting substances

Sensitive commodities

FDRs of other banks/CD

Buy back of shares

Credit Assessment/Delivery



MPBF method

For SME upto 5 crs limits turnover method

Working capital above 10 crs , loan component 80%

For seasonal/cyclical industrial bank may exempt with approval of board.



Fair practices code



Pertains to



Loan application, processing

Appraisal, terms and conditions

Disbursement

Post sanction supervision

Discrimination, harassment in recovery, takeover of accounts

Large exposure frame work

LARGE EXPOSURES FRAMEWORK (LEF)

The following write up on Large Exposures Framework (LEF) is based on RBI Notification No. RBI/2016-17/167 DBR.No.BP.BC.43/21.01.003/2016-17 dated December 1, 2016. Candidates are

advised to refer to the Notification for additional details.

In order to align the exposure norms for Indian banks with the BCBS standards, RBI has laid down the

guidelines on Large Exposures Framework on December 1, 2016. The guidelines are aimed at

significant tightening of norms pertaining to concentration risks of banks, especially in relation to large

borrowers. The guidelines come into effect from April 1, 2019. A large exposure is defined as any exposure to a counter-party or group of counter-parties which is

equal to 10 per cent of the bank’s eligible capital base (defined as tier-I capital). LARGE EXPOSURE LIMITS

Single Counterparty: The sum of all the exposure values of a bank to a single counterparty must not

be higher than 20 percent of the bank’s available eligible capital base at all times. In exceptional cases, Board of banks may allow an additional 5 percent exposure of the bank’s available eligible capital base. Banks shall lay down a Board approved policy in this regard. Groups of Connected Counterparties: The sum of all the exposure values of a bank to a group of

connected counterparties, as defined below, must not be higher than 25 percent of the bank’s available

eligible capital base at all times. Any breach of the above LE limits shall be under exceptional conditions only and shall be reported to

RBI immediately and rectified at the earliest but not later than a period of 30 days from the date of the

breach. Definition of connected counterparties

Bank may have exposures to a group of counterparties with specific relationships or dependencies

such that, where one of the counterparties fail, all of the counterparties are likely to fail. A group of this

sort is referred to, in this framework, as a group of connected counterparties and must be treated as a

single counterparty. In this case, the sum of the bank’s exposures to all the individual entities included

within a group of connected counterparties is subject to the large exposure limit and to the regulatory

reporting requirements. Counterparties exempted from LEF

The exposures that will be exempted from the LEF are listed below:

a. Exposures to the Government of India and State Governments which are eligible for zero percent

Risk Weight under the Basel III – Capital Regulation framework of the Reserve Bank of India;

b. Exposures to Reserve Bank of India;

c. Exposures where the principal and interest are fully guaranteed by the Government of India; d. Exposures secured by financial instruments issued by the Government of India, e. Intra-day interbank exposures;

f. Intra-group exposures;

g. Borrowers, to whom limits are authorised by the Reserve Bank for food credit;

h. Banks’ clearing activities related exposures to Qualifying Central Counterparties (QCCPs)

i. Rural Infrastructure Development Fund (RIDF) deposits placed with NABARD. However, a bank’s exposure to an exempted entity which is hedged by a credit derivative shall be

treated as an exposure to the counterparty providing the credit protection notwithstanding the fact that

the original exposure is exempted.

Bcsbi recollected questions on 20.10.2018

Recollected questions of BCSBI on 20-Oct

1. No PF for MSME units limit
2. Waiver of collateral up to what limit
3. Consumer forum are....
4. Award max. limit by BO
5. Appeal against award time limit for consumer
6. Customer delight
7 Cases relating to F/S and E/S (nomination)
8. Powers of CEO of BCSBI
9. Holder in due course means
10. Question on Marketing of services
11. Recover agents questions
12. NI Act questions
13. Sick units MSME questions

By Arshad mirza
14. OVD question
15. BCSBI objective
16. Working capital assessment for MSME by Projected Turnover method
17. Skill development initiatives questions
18. Moratorium period for skill development
19. Shifting/closing of branch notice period

BFM Treasury Management

Points BFM / Treasury Management ★☆★
1. Swap generally used for interest arbitrage when one currency is not fully convertible.
2.TOD & TOM rates are generally quoted at discount to the rate of spot rate.
3. CBLO is a money market instrument launched by CCIL. It is generally a repo instrument.
4. The money in circulation is calculated by Broad money or M3.
5. C → 1 days
     N→ <= 14 days
     T → >14 days but < 1 yr
Here C is call money, N is Notice money & T is Term money
6. LAF is used measure to day to day liquidity in the market.
7. Treasury is proned with market risk.
8. CBLO→ Collatrised Borrowing Lending obligation
9. VaR measure can be used to assess the currency risk , interest risk and price risk.
10. Yield and price of bond move inversely.
11. The option is said to be ITM if strike price is less than the forward rate in case of a call option or if strike price is greater in a ut option.
12. Money market is measured by VaR and duration.
13. IRS( Interest rate swap ) is OTC instrument issued by banks.
14. OTC ( over the counter ) refers to the derivative products sold by banks to meet specific requirements of clients.
15. RBI has permitted banks to borrow and invest through their overseas correspondent in forigen currency subject to a ceiling of 50% of Tier I capital or USD 10 millions.
16. Spot and forward transaction are the primary product of forex market.
17. Treasury is also responsible for balance sheet management.
18. NDS(Negotiated dealing system is an electronic platform for faciliating dealing in gov. Sec.
19. LAF refers to RBI lending funds to banking thtough repo rate.
20. VaR is used to measure potential loss or wrost case scenario while holding a trading position.
21. VaR is a statistical measure indicating worst possible movement of market rate over a given period of time under normal market condition at defined confidence level.
22. Options refers to contracts where the buyer of an option has a right but no obligation to exercise the contract.
23. Options are either call option or put option.
24. Derivatives are basically of three kinds→ forward contracts, optional & swap.
25. Options are primarily used as hedge against price fluctuations , it is similar to insurance against adverse movement of price.
26. Transfer pricing refers to fixing the cost of resources and return an assets of the bank in a rational manner.
27. Transfer pricing is an integral function of ALM.
28. Futures are forward contracts traded in future exchange.
29. FRA(Forward Rate agreement) closely linked with IRS, where the interest payable for future period is commited under the agreement.
30. The difference between sources and uses of funds in specific time band is known as liquidity gap.
31. Derivaties can be used to hedge high value transactions or aggregrate risks as reflected in asset-liability mismatches.
32. For the purpose of ALM ,all assets and liabilities are placed in time buckets is measured as a gap b/w rate sensitive assets and rate sensitive liabilities.
33. CD ( Credit Derivatives) help the issuer diversify the credit risk and use the capital more efficiently.
34. Roles of Treasury → Liquidity management, propritery positions , Risk management.
35. Forwad refers to purchase or sale of currency on a future date. The exchange rate for forward sale or purchase are quoted today, hence such transaction are referred to as forward contracts b/w buyer & seller.

Current Affairs on 20.10.2018

Today's Headlines from www:

*Economic Times*

📝 Debt refinancing deals slow down in real estate sector

📝 UIDAI tells banks to continue Aadhaar-enabled payments

📝 SC denies income tax exemption to local authority

📝 NBFCs liquidity crunch to hit home loan sales: report

📝 Govt to allow data service initially under in-flight connectivity

📝 PTC India to ink PPAs with 7 firms, 5 states for 1,900MW by Oct end

📝 Reliance Jio 4G revolution may render the 2G featurephone extinct

📝 China trade pact stalls as Trump tariffs feed India backlash

*Business Standard*

📝 Mphasis Q2 net profit up 37% at Rs 2.7 bn on good show in key verticals

📝 Foreign exchange reserves see highest fall of $ 5.1 billion in 7 years

📝 Vanguard Group sees opportunity for EM currencies as dollar extends rise

📝 GST Council allowing dual jurisdiction over assesses worrying traders: CAIT

📝 Fintech firms capturing market share from banks; $250-bn revenue at stake

📝 RBI issues dissent note to govt over regulation of payments system

📝 Fairfax starts infusion in Catholic Syrian Bank, forks out Rs 4.40 bn

📝 China posts slowest growth in nine years; GDP expands by 6.5% in Q3

*Financial Express*

📝 Maharashtra Cooperative Bank seeks RBI permission to takeover urban cooperative banks

📝 Gold imports widen India's trade gap; rise 4% to $17.63 billion in April-September

📝 Reliance Industries raises Rs 3,500 crore on BSE BOND platform

📝 DoT asks MTNL to outline long-term roadmap as part of revival talks

📝 Facebook hires former UK deputy prime minister Nick Clegg as head of global affairs

📝 NASSCOM inks MoU to expand Indian SMEs in MENA region

📝 Government decides to increase the tenure of FSAs between CIL, steel industry

*Mint*

📝 Lenders accept ArcelorMittal resolution plan for Essar Steel

📝 IFC launches $1 billion masala bond programme to aid India investments

📝 RBI opens banking tap to ease liquidity crunch at NBFCs

📝 ICICI Securities reports 3.22% rise in Q2 profit at ₹134.22 crore

📝 Tata Sons said to be in talks to buy stake in Jet Airways

📝 Invesco to buy OppenheimerFunds, adding $246 billion in assets

📝 UltraTech Cement standalone profit at Rs 391 crore

📝 RIL to replicate Reliance Jio model for Jio broadband.

MSME-CDP

MSE-CDP

Micro & Small Enterprises - Cluster Development Programme (MSE-CDP)

The Ministry of Micro, Small and Medium Enterprises (MSME), Government of India (GoI) has adopted the Cluster Development approach as a key strategy for enhancing the productivity and competitiveness as well as capacity building of Micro and Small Enterprises (MSEs) and their collectives in the country. A cluster is a group of enterprises located within an identifiable and as far as practicable, contiguous area and producing same / similar products / services. The essential characteristics of enterprises in a cluster are (a) Similarity or complementarity in the methods of production, quality control and testing, energy consumption, pollution control, etc (b) Similar level of technology and marketing strategies / practices (c) Similar channels for communication among the members of the cluster (d) Common challenges and opportunities.

Objectives of the Scheme:

(i) To support the sustainability and growth of MSEs by addressing common issues such as improvement of technology, skills and quality, market access, access to capital, etc.

ii) To build capacity of MSEs for common supportive action through formation of self help groups, consortia, upgradation of associations, etc.

(iii) To create/upgrade infrastructural facilities in the new/existing industrial areas/ clusters of MSEs, including setting up of Flatted Factory Complexes.

(iv) To set up common facility centres (for testing, training centre, raw material depot, effluent treatment, complementing production processes, etc.)

Components:

(i) Setting up of CFCs: Creation of tangible “assets” as Common Facility Centers (CFCs) like Common Production/Processing Centre (for balancing/correcting/improving production line that cannot be undertaken by individual units), Design Centres, Testing Facilities, Training Centre, R&D Centres, Effluent Treatment Plant, Marketing Display/Selling Centre, Common Logistics Centre, Common Raw Material Bank/Sales Depot, etc. The GoI grant will be restricted to 70% of the cost of project of maximum Rs 15.00 crore. GoI grant will be 90% for CFCs in NE & Hill States, Clusters with more than 50% (a) micro/ village (b) women owned (c) SC/ST units.

(ii) Infrastructure Development: Consist of projects for infrastructural facilities like power distribution network, water, telecommunication, drainage and pollution control facilities, roads, banks, raw materials storage and marketing outlets, common service facilities and technological backup services for MSEs in the new/ existing industrial estates/areas. The GoI grant will be restricted to 60% of the cost of project of Rs 10.00 crore. GoI grant will be 80% for projects in NE & Hill States, industrial areas/ estates with more than 50% (a) micro (b) women owned (c) SC/ST units.

Current Affairs on 19.10.2018

Today's Headlines from www:

*Economic Times*

📝 Railways gets Rs 2600 crore for revamp of 19 stations

📝 Steel plant equipment makers, global tech providers set to sign $5 billion deals

📝 Reliance Industries inducts Arundhanti Bhattacharya on board

📝 Icertis doubles down on APAC business driven by India; to scale revenues to 20% in 3-5 years

📝 E-car sales plunge 40% in FY18, but e-bikes volume soars 138%

📝 NTPC to raise $150 mn in foreign currency loan

📝 ONGC says finances are sound; no issues with salary payments

📝 Oil refiners’ profit will fall on high crude prices: RIL

*Business Standard*

📝 Slowing spends cast shadow on India's IT services industry, says Gartner

📝 Uber Technologies sells $2 billion of bonds as private placement

📝 Novartis to acquire US-based cancer drugmaker Endocyte for $2.1 billion

📝 India's nation brand value grew 5% in 2018 to $2,159 billion: Report

📝 91% of India's adult population has wealth below Rs 730,000: Credit Suisse

📝 Unilever posts strong sales growth in Q3, thanks to Indian market

📝 Banks can continue with Aadhaar-enabled payment system, says UIDAI

📝 MFs pump Rs 110 bn in equities in a fortnight, FPIs stance remains bearish

*Financial Express*

📝 Huawei to enter Indian wearable devices market early next year

📝 OYO checks into Southeast Asia; enters Indonesia with over 30 EXCLUSIVE hotels, adds 1,000 rooms

📝 Samsung says plans to double business in flagship tablet category by December

📝 Big relief: Petrol, diesel prices cut for the first time in two months on softer crude

📝 File DFR for Rs 2,500-crore greenfield Sabari airport, Kerala tells infrastructure firm Louis Berger

📝 Major blow to Indian IT firms in US: Donald Trump’s planned H-1B visa rule changes to hurt Indians

📝 Airlines to fly 23,117 domestic flights every week during winter schedule

*Mint*

📝 TCS displaces Accenture as largest IT firm servicing banks

📝 AI may raise ₹500 cr from banks next week

📝 Treebo and FabHotels have initiated merger talks

📝 Dutch firm Koninklijke DSM to buy assets in India

📝 Patients with J&J’s faulty hip implants to get up to ₹1.2 crore compensation

📝 India could be removed from US currency monitoring list

📝 Netflix considers cheaper prices in India

📝 Shriram Properties plans to file IPO papers by December.