23rd Year of Publication

B anking
Registration RNI No.67802/98
Volume - XXIII No.04 : April 2020

Update
events

Contents of this Issue

BANKING POLICY : 2 & 3
• Change in CRR
• Implementation of CCB
• Implementation of NSFR
• Interest subvention for crop loans

BANKING FEATURES : 4-6, 10

• Relief package for COVID19
• Prudential limits for UCBs
• ACU currencies
• Practical problems based on
Ombudsman Decisions

Multi-Option questions:7-9
Data Bank : 10
Those who win, are those, who think they can

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Executive Editor - S. Chand Singh Editor in Chief - Sh. N S Toor

2 ♦ Banking events updatE ♦ April 2020

B ANKING Maintenance of Cash Reserve Ratio

POLICY On 27.03.20, RBI decided to reduce the Cash
Reserve Ratio (CRR) of all banks by 100 basis points from 4.00
on the re-appointment of an MD & CEO/ CEO
in banks, the complete applications in the
prescribed forms i.e., ‘Form B’ along with
per cent to 3.00 per cent of their Net Demand and Time Liabilities ‘Declaration and Undertaking’ from
(NDTL) with effect from the reporting fortnight beginning March candidate(s), along with the remarks of
28, 2020 for a period of one year, ending on March 26, 2021. Nomination and Remuneration Committee of
Further, RBI reduced the minimum daily maintenance of the Cash having satisfied itself that the information is
Reserve Ratio from 90 per cent of the requirement to 80 per cent true and complete should be submitted to the
effective from the fortnight beginning March 28, 2020. This is a Department of Regulation, Central Office,
one-time dispensation available up to June 26, 2020. Reserve Bank of India, Mumbai, at least six
months before the expiry of the term of office
Section 24 of the Banking Regulation Act, 1949 – of the incumbent.
Maintenance of Statutory Liquidity Ratio (SLR) – Proposals for appointment of a new MD &
Marginal Standing Facility (MSF) CEO/ CEO, should invariably contain a panel
On 27.03.20, RBI decided to raise the borrowing limit of of at least two names in the order of
Scheduled Banks (excluding Regional Rural Bank) under the MSF preference. The proposals should be submitted
scheme from 2 per cent to 3 per cent of their Net Demand and to the Reserve Bank at least four months before
Time Liabilities (NDTL) outstanding at the end of the second the expiry of the term of office of the present
preceding fortnight with immediate effect. The enhanced limit incumbent.
will be applicable up to June 30, 2020.
Foreign Exchange Management (Export
Basel III Capital Regulations - Review of transitional of Goods and Services) (Amendment)
arrangements Regulations, 2020
On 27.03.20, RBI decided that the implementation of the last As per extant guidelines, the amount
tranche of 0.625% of Capital Conservation Buffer (CCB) shall representing the full export value of goods /
stand deferred from March 31, 2020 to September 30, 2020. software/ services exported shall be realised
Accordingly, minimum capital conservation ratios will also apply and repatriated to India within nine months or
for a further period of six months from March 31, 2020 till the within such period as may be specified by the
CCB attains the level of 2.5% on September 30, 2020. Reserve Bank, in consultation with the
Further, the pre-specified trigger for loss absorption through Government, from time to time, from the date
conversion / write-down of Additional Tier 1 instruments (PNCPS of export.
and PDI) shall remain at 5.5% of RWAs and will rise to 6.125% On 31.03.20, RBI modified the period from 9
of RWAs on September 30, 2020. months to 15 months, till 31.7.20.
Basel III Framework on Liquidity Standards – Doorstep Banking Services for Senior
Net Stable Funding Ratio (NSFR) Citizens and differently-abled Persons
On 27.03.20, RBI decided to defer the implementation of NSFR On 09.11.17, banks were advised by RBI to
guidelines by six months. These guidelines will now come into offer certain basic banking services to senior
effect from October 1, 2020 as against April 1, 2020. citizens of more than 70 years of age and
differently abled persons at the doorstep of
Appointment of Managing Director and Chief Executive such customers.
Officer (MD & CEO) / CEO / part-time Chairperson (PTC) In order to make the doorstep banking services
in Banks – ‘Declaration and Undertaking’ and allied for senior citizens and differently abled persons
matters effective, on 31.03.20, RBI advised banks to
To complete the appointment of Managing Director and Chief incorporate the following aspects in their Board
Executive Officer (MD & CEO)/ CEO/ part-time Chairperson approved policy for such services:
(PTC) in Banks in a timely manner, RBI reviewed its guidelines a) Banks shall offer the doorstep banking
on 31.03.20. services on pan India basis. Banks should
Based on the review, the ‘Declaration and Undertaking’ and develop a Board approved framework for
specimen of ‘Form A’ as well as ‘Form B’ have been revised. determining the nature of branches/centres
To enable Reserve Bank to convey the requisite approval in time where these services will be provided

(COMPILATION- SAPANDEEP TOOR & MANJOT TOOR, - on the basis of information available on RBI Website)
 Banking events updatE ♦ April 2020 ♦ 3

Video Lessons
mandatorily and those where it will be provided on a best
effort basis and make the policy public. The list of branches
offering such doorstep banking services shall be displayed/
updated on the bank’s website regularly. CAIIB-JAIIB-Promotion Exam
b) Banks shall give adequate publicity to the availability of B-Sheet Analysis
these services in their public awareness campaigns. The Certified Credit Professionals
charges, in this regard, shall also be prominently indicated in
brochures and published in their websites.
Foreign Exchange Operations
Banks shall report the progress made in this regard to the • Use lap top / Smart Phone, as our class room
Customer Service Committee of the Board every quarter. • No travelling - no boarding/lodging charges
• Learn as per your time and place convenience
Short Term Crop Loans eligible for Interest
Subvention Scheme (ISS) and Prompt Repayment • Watch any video any no. of times during validity
Incentive (PRI) through KCC www.banking update
update.. com
bankingindiaupdate
Ministry of Agriculture & Farmers Welfare on Jan 23, 2020
advised that Short Term Crop Loans eligible for Interest
Subvention Scheme (ISS) and Prompt Repayment Incentive
(PRI) should be extended only through KCC thus making CORRESPONDENCE
KCC a prerequisite for claiming Interest Subvention and
Prompt Repayment Incentive by farmers w.e.f. April 1, 2020.
COURSE
In view of this, RBI advised banks on 26.02.20, to ensure
that all Short Term Crop Loans eligible for Interest Subvention
PROMOTION EXAM
Based on latest trends of IBPS exam. A large no. of bankers
(IS) and Prompt Repayment Incentive (PRI) benefit are already succeeded by using the course material. If unable to
extended only through KCC w.e.f. April 1, 2020. The existing attend class room program, this is the best option.
Short Term Crop Loans which are not extended through Course Kit : The course kit include:
KCC shall be converted to KCC loans by March 31, 2020. (a) subject-wise basic study material,
Accordingly, reimbursement of interest subvention for Short (b) assignment to improve retention
Term Crop Loans through non-KCC accounts shall not be (c) objective type practice exercise
considered beyond March 31, 2020. (d) recalled questions
(e) mock test papers.
Further, in view of the complete lockdown RBI decided
Fee : May differ from bank to bank. May be checked before
(30.03.20), that the banks may convert the existing Short remittance). Fee to be paid in advance.
Term Crop Loans including agriculture gold loans into KCC How to enrol : Call us at the numbers given below.
loans by June 30, 2020 with commensurate extension of

CAIIB/JAIIB
Interest Subvention (IS) and Prompt Repayment Incentive
(PRI) benefit against such accounts till June 30, 2020.
‘Fully Accessible Route’ for Investment by Non- Course is based on exam pattern of IIB&F. A large no. of
residents in Government Securities candidate have succeeded in all 3 papers in first attempt with
our study material.
In the Union Budget 2020-21, govt. had announced that
Course Kit : The course kit include:
certain specified categories of Central Govt. securities would (a) subject-wise basic study material,
be opened fully for non-resident investors without any (c) objective type practice exercise
restrictions, apart from being available to domestic investors (d) mock test papers.
as well. Accordingly, a separate route viz., Fully Accessible Fee : Fee differs for different papers. Fee payable in
Route (FAR) for investment by non-residents in securities advance, for which details may be obtained by calling
issued by Govt. of India has been notified by RBI on 30.03.20. 01722665623 .
The scheme shall operate along with 2 existing routes, viz., How to enrol : To enrol, advise name, address for
correspondence, eMail id, mobile phone, bank name, subjects
Medium Term Framework and Voluntary Retention Route for enrolment.
(VRR). The scheme comes into operation on 01.04.20.
RBI notified securities such as Govt. securities of 5-year, DS Institute of Banking
10-year and 30-year tenors shall be eligible for investment Office:SCO No.32, Sector 33-D, Chandigarh 160 020
under the FAR.
• Phone: 0172-2665623, 09988221167
4 ♦ Banking events updatE ♦ April 2020 BANKING FEATURES
Covid-19 : Relief Package of RBI as well as the revised terms, as permitted above.
3. The rescheduling of payments, including interest, will
On 27.03.20, RBI announced the following package:
not qualify as a default for supervisory reporting and
(i) Rescheduling of Payments – Term Loans and reporting to Credit Information Companies by the lending
Working Capital Facilities institutions. CICs shall ensure that actions taken by banks
1. For all term loans (including agricultural, retail and pursuant to the above announcements do not adversely
crop loans), all commercial banks (including RRBs, impact the credit history of the beneficiaries.
small finance banks and local area banks), co-operative Other Conditions
banks, all-India Financial Institutions, and NBFCs and
1. Lending institutions shall frame Board approved polices
housing finance companies, can grant a moratorium
for providing the above-mentioned reliefs.
of 3 months on payment of all instalments falling due
2. Wherever exposure to a borrower is Rs.5 crore or
between March 1, 2020 and May 31, 2020. The
above as on March 1, 2020, bank shall develop an MIS
repayment schedule for such loans as also the residual
on the reliefs provided to borrowers which shall include
tenor, will be shifted across the board by three months
borrower-wise and credit-facility wise information
after the moratorium period. Interest shall continue to
regarding the nature and amount of relief granted.
accrue on the outstanding portion of the term loans
during the moratorium period. Limits on exposure and large exposures and
2. For working capital facilities [cash credit/overdraft], revision in the target for priority sector lending
lending institutions can defer the recovery of interest for Primary Urban Coop Banks (UCBs)
applied in respect of all such facilities during the period On 13.03.20, RBI issued following directions to UCBs:
from March 1, 2020 upto May 31, 2020 (deferment). Prudential Exposure Limits
The accumulated accrued interest shall be recovered 1) In place of previous guidelines, the prudential
immediately after the completion of this period. exposure limits (funded and non-funded exposure) for
(ii) Easing of Working Capital Financing UCBs for a single borrower/party and a group of
For working capital facilities (CC/OD), lending connected borrowers/parties shall be 15% and 25%,
institutions may recalculate the ‘drawing power’ by respectively, of their tier-I capital.
reducing the margins and/or by reassessing the working These revised limits shall apply to all fresh exposures.
capital cycle. This relief shall be available for all such UCBs shall bring down their existing exposures which
changes effected up to May 31, 2020 and shall be are in excess of the revised limits to within the aforesaid
contingent on the lending institutions satisfying revised limits by March 31, 2023. Where existing
themselves that the same is necessitated on account of exposure comprises only TLs and non-fund-based
the economic fallout from COVID-19. facilities and no further exposure shall be taken on such
Classification as Special Mention Account (SMA) borrowers, these facilities may be allowed to continue
and Non-Performing Asset (NPA) as per their respective repayment schedule / till maturity.
1. Since the moratorium/deferment/recalculation of the Tier-I capital as on March 31 of the preceding financial
‘drawing power’ is being provided specifically to enable year shall be reckoned for fixing the exposure limits.
the borrowers to tide over economic fallout from 2) UCBs shall have at least 50% of their aggregate loans
COVID-19, it will not be treated as concession or comprising loans of not more than Rs.25 lakh or 0.2%
change in terms and conditions of loan agreements due of their tier I capital, whichever is higher, subject to a
to financial difficulty of the borrower under Prudential maximum of Rs.1 crore, per borrower/party. UCBs
Framework for Resolution of Stressed Assets) which do not comply with these threshold shall comply
Directions, 2019. Consequently, such a measure, by with the above requirements by March 31, 2024.
itself, shall not result in asset classification downgrade. Revised Priority Sector Lending Target
2. The asset classification of term loans which are The overall target shall stand increased to 75% (from
granted relief shall be determined on the basis of revised 40%) of ANBC or CEOBSE, whichever is higher.
due dates and the revised repayment schedule. Similarly, UCBs shall comply with the above target by March 31,
working capital facilities where relief is provided, the 2024 as per the following milestones:
SMA and the out of order status shall be evaluated
a) by 31.3.21 = 45%, b) by 31.3.22 = 50%, c) by
considering the application of accumulated interest
31.03.23 = 60% and d) by 31.03.24 = 75%
immediately after the completion of the deferment period
Summary edited by : Arundeep Toor - Source RBI website.
BANKING FEATURES Banking events updatE ♦ April 2020 ♦ 5
RBI Policy Directions “ACU Dollar”, “ACU Euro” and “ACU Yen” which shall
be equivalent in value to one US Dollar, one Euro and
Legal Entity Identifier: Extension of deadline for
one Japanese Yen respectively.
participation in non-derivative markets
In order to facilitate transactions / settlements, effective
In the context of the difficulties arising from the outbreak
March 06, 2020, participants in the Asian Clearing Union
of novel coronavirus disease (COVID-19) and with a
will have the option to settle their transactions either in
view to enabling smoother implementation of the LEI
ACU Dollar or ACU Euro or in ACU Japanese Yen.
system in non-derivative markets, the timeline for
Further, AD banks are allowed to open and maintain ACU
implementation (Phase III) has been extended by RBI
Dollar, ACU Euro and ACU Japanese Yen accounts with
on 27.03.20, in respect of entities with net worth up to
their correspondent banks in other participating countries.
Rs.200 cr from 31.03.20 to 30.09.20.
All eligible payments are required to be settled by the
Standing Liquidity Facility for Primary Dealers
concerned banks through these accounts.
On 27.03.20, the policy repo rate under the Liquidity
Notwithstanding the above, it may be noted that
Adjustment Facility (LAF) has been reduced by 75 basis
operations in ‘ACU Euro’ has been temporarily suspended
points to 4.40% from 5.15% with immediate effect.
with effect from July 01, 2016.
Accordingly, the Standing Liquidity Facility provided to
Issue of Long Term Bonds by Banks – Financing
Primary Dealers (PDs) (collateralised liquidity support)
of Infrastructure and Affordable Housing
from RBI would be available at the revised repo rate of
Affordable housing is included in the harmonised master
4.40 per cent with effect from March 27, 2020.
list (HML) of infrastructure subsectors issued vide gazette
LAF Repo and Reverse Repo Rates
notification dated August 13, 2018. For lending to
On 27.03.20, the Monetary Policy Committee (MPC) of infrastructure sector, banks/FIs shall continue to follow
RBI decided to reduce the policy Repo rate under the the definition of affordable housing projects as per the
Liquidity Adjustment Facility (LAF) by 75 basis points definition in the HML. (Affordable Housing” is defined
from 5.15% to 4.40%with immediate effect. as a housing project using at least 50% of the Floor Area
Further, consequent upon the widening of the LAF Ratio (FAR)/Floor Space Index (FSI) for dwelling units
corridor, the Reverse Repo rate under the LAF stands with carpet area@ of not more than 60 square meters)
adjusted from 4.90% to 4% with immediate effect. Due to inclusion of affordable housing under the HML,
Priority Sector Lending - Lending by banks to on 17.03.20, RBI decided to align the definition of lending
NBFCs for On-Lending to affordable housing with the definition provided in the
As per circular dated 13.08.20, RBI had informed that HML of infrastructure subsectors, as under:
the bank loans to registered NBFCs (other than MFIs) Existing definition : Housing loans eligible under priority
for on-lending will be eligible for classification as priority sector lending by the RBI, and also housing loans to
sector under respective categories up to March 31, 2020. individuals upto Rs. 50 lakhs for houses of values upto
After undertaking a review, on 23.08.20, RBI decided to Rs. 65 lakhs located in the six metropolitan centres viz.
extend the priority sector classification for bank loans Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and
to NBFCs for on-lending for FY 2020-21. Further, Hyderabad and Rs. 40 lakhs for houses of values upto
existing loans disbursed under the on-lending model will Rs. 50 lakhs in other centres for purchase/construction
continue to be classified under Priority Sector till the of dwelling unit per family.
date of repayment/maturity. Revised definition : Housing loans eligible to be
Bank credit to registered NBFCs (other than MFIs) and classified under priority sector lending (as updated from
HFCs for on-lending will be allowed up to an overall time to time) and housing loans to individuals for
limit of 5% of individual bank’s total PS lending. acquiring dwelling units within the prescribed threshold
Settlement system under Asian Clearing Union under the affordable housing definition in the HML.
(ACU) Mechanism Classification of
The Board of Directors of ACU have decided to permit Investment Fluctuation Reserve (IFR)
Japanese Yen for settling payments among the ACU Some banks enquired RBI whether IFR, forming part of
member countries. Accordingly, clause (a) and (b) of General Provisions and Loss Reserves, can be reckoned
Article IV of the General Provisions of Agreement as Tier II capital only to the extent of 1.25% of total
establishing the Asian Clearing Union have been revised credit risk weighted assets. On 17.03.20, RBI clarified
and the Asian Monetary Unit is now denominated as that there is no such ceiling for IFR.
6 ♦ Banking events updatE ♦ April 2020

Practical Problems based on Banking Ombudsman Decisions

1) A customer had deposited a cheque of Rs.24,00,000 in his account. The
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amount was duly transferred to his account and he withdrew Rs.80,000 on
the same day after which the balance in his account was Rs.23,20,008. He Study Material
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claimed that he did not do any further transactions in the account. However,
on next day somebody apparently in collusion with some employee of the
bank credited Rs.1,00,000 to his account and thereafter, the entire amount
of Rs.24,00,000 was credited back to the account of the drawer of the Features of CDs
cheque. The bank did not take any action on his complaint. In its reply to BO • Explanation for each question/answer.
the bank stated that there was an internal family dispute between the • Improve understanding and retention.
complainant and his wife, who had issued the said cheque. The bank enclosed • Remove confusions. .
a representation from the drawer of the cheque wherein she claimed that the • Improve time management. Set your own
cheque had been fraudulently got signed by the beneficiary/complainant. BO time during practice.
observed that the bank had not offered any comment as to how the disputed • Test your preparation before Exam.
transactions in the account had been carried out at the bank’s end irrespective • Practice on-line without use of internet.
of the underlying dispute between the drawer and the drawee. In a meeting • Questions are shuffled when used again.
with bank officials BO asked bank officials to explain whether the reversal • Large no. of questions based on latest
of transaction was in conformity with existing banking law and practices. guidelines and memory recalled questions.
The bank officials had no valid justification. The bank was advised to
immediately refund entire amount along with interest at fixed deposit rate for
the delayed period to the complainant. Bank Promotion Exam - Rs.300
2) Proprietor of a firm lodged a complaint with the BO office that 5 cheques Bank Promotion Interview - Rs.300
issued in the name of his firm were deposited by his supervisor in his savings Banking Ready Recknor - Rs.300
account by writing his savings account number in the pay-in-slip and the CAIIB (New Syllabus)
proceeds of these cheques were wrongly credited to his personal savings • Bank Financial Mgmt - Rs.300
account. The BO called for original documents and the action taken on the • Advanced Bank Mgmt - Rs.300
earlier complaint received by the bank from the complainant. After due
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examination of all the documents including the internal investigation report,
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it was observed that bank was negligent in collecting and crediting the cheques
drawn in the name of the firm to the personal account of the supervisor. As CAIIB (Case Studies)
the protection of Sec131 of Negotiable Instrument Act was not available to • Advanced Bank Mgmt -Rs.300
the bank, an advisory was issued directing the bank to credit the amount of • Bank Financial Mgmt -Rs.300
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3) The complainant alleged that there was a fraudulent transfer of funds
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through combo voucher from his account to an unknown account in other
bank. The complainant submitted a copy of reply by the bank in response to
his RTI query wherein the bank had categorically stated that transfer voucher
was meant for internal use of the bank and transfer of fund was being done
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on written request of the account holder/authorized person. On taking up the Promotion,CAIIB/JAIIB, log in
matter, the bank replied that the transfer of funds was made on the basis of nstoorBankingonline.com
combo voucher, which had the signature of depositor which tallied with
account opening form held on their record. Bank also stated that the authority
letter required as per internal circular was not obtained and an internal
investigation had been done and disciplinary action initiated against erring
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and signature tallied, the bank had the mandate to debit the account. Score High with Latest Study Kits
BO observed that the bank’s stand that mere signature on the transfer voucher
constituted proper mandate was not acceptable, as the bank had been obtaining
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separate mandate for transfer of funds. A purported mandate on the combo
voucher was not complete in as much as the name of the beneficiary was
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not proper as also the amount was mentioned only in figures and not in Contact
words. BO passed an award against the bank directing to pay the value of 09814 331 661
disputed transaction with interest at extant savings bank rate from the date 01722665623
of transaction till the date of payment to the complainant.
 Banking events updatE ♦ April 2020 ♦07
MOCK-TEST under CRR to ___ % of average 10 On 27.03.20, RBI changed the
PAPER fortnightly balance? repo rate. Due to this change, the
a 70% from existing 80% new marginal standing facility
Questions on RBI Policy rate is?
b 70% from existing 90%
01 As per RBI directions dated a 5.15% b 4.40%
27.03.20, banks can grant c 80% from existing 90%
d 85% from existing 90% c 4.65% d 3.75%
moratorium on term loan
repayment for a period of 3 06 On 27.03.20, RBI allowed 11 On 27.03.20, RBI changed the
months i.e. banks to complete creation of repo rate. Due to this change, the
capital conservation buffer (last new bank rate is?
a 01.03.20 to 31.05.20
installment) to bring the CCB to a 5.15% b 4.40%
b 31.03.20 to 30.06.20
2.5% of RWAs, by ____ instead c 4.65% d 3.75%
c 01.04.20 to 31.03.20
of 31.03.20: 12 As per RBI directions, the
d 01.05.20 to 31.07.20
a 30.06.20 exposures shifted to a person
02 As per RBI directions dated resident outside India, will attract
b 30.09.20
27.03.20, in cash credit or a minimum risk weight of
overdraft account, the recovery of c 31.12.20
d 31.03.21 ____%.
which of the following can be
07 On 27.03.20, RBI deferred the a 100% b 125%
deferred for 3 months ending
31.05.20: implementation of net stable c 150% d 200%
a all types of charges funding ratio under Basle 13 Asian Monetary Unit is
framework to: denominated as 1) ACU Dollar,
b interest applied to the accounts
a 1.8.20 2) ACU Euro 3) ACU Yen 4) ACU
c overdraft allowed GBP
d all the above b 1.10.20
c 1.1.21 a 1 to 4 all
03 As per RBI directions on Covid- b 1 to 3 only
19 relief, if moratorium on term d 1.4.21
08 As per March 27, 2020 c 1 and 2 only
loan installment repayment is
allowed or interest is deferred for directions of RBI, wherever the d 1 and 4 only
recovery in CC/OD accounts, the exposure of a lending institution 14 Affordable Housing is defined as
banks are to make provision ___ to a borrower is _______ as on a housing project using at least
% if such accounts are in default March 1, 2020, the bank shall ___of the Floor Area Ratio
but in standard category: develop an MIS on the reliefs (FAR)/Floor Space Index (FSI)
a 15% b 10% provided to its borrowers which for dwelling units with carpet
shall inter alia include area@ of not more than 60
c 5% d 2%
borrower-wise and credit- square meters:
04 On 27.03.20, RBI reduced the
facility wise information a 75% b 60%
cash reserve ratio rate from ___
regarding the nature and amount c 50% d 40%
to ___ as %age of net demand and
of relief granted. 15 As part of capital adequacy
time liabilities, for a period of one
year beginning from 28.03.20: a Rs.1 cr and above framework in India, which of the
a 4% to 3% b Rs.2 cr and above following is part of Tier-2 capital
c Rs.5 cr and above and at the same time, the 1.25%
b 4.5% to 4%
d Rs.10 cr and above of risk weighted assets ceiling is
c 5% to 4.5% not applicable on that?
d 5% to 4% 09 On 27.03.20, RBI changed the
repo rate. What is the new rate? a provisions on standard loans
05 On 27.03.20, RBI reduced the b provision on NPA loans
requirement of min daily balance a 5.15% b 4.40%
c 4.65% d 3.75% c floating provisions
Disclaimer : We have taken every care to provide information, we believe to be accurate We strongly believe that the subscribers
and reliable and do not assume responsibility of any kind nor shall be liable for losses & are the best consultants, we have. Based
consequence arising from use thereof. Since this information is based on the published on their feed back, we keep on redesigning
reports mostly, correctness or otherwise thereof may be verified by the user with the and restructring this publication. Kindly
original sources, in advance. .......................................................................Editor send your suggestions and views.
8 ♦ Banking events updatE ♦ April 2020
*d investment fluctuation reserves b within 7 working days of date d credit risk – basic indicatory
16 The urban cooperative banks of confirmation of suspicion approach operational risk –
(UCBs) are required to maintain c within 3 days of date of date of internal rating based approach
priority sector lending of ___% confirmation of suspicion 24 In case of payment of cheque
of adjusted net bank credit or d within 15 days of close of the with an endorsement, the paying
credit equivalent of off-balance month banker gets protection only
sheet exposure, which ever is 21 If a reporting entity (say a bank) when:
higher, which is to be achieved or its designated director on the a signatures of the endorser are not
by 31.03.24? Board or any of its employees has forged
a 40% b 60% failed to comply with the b endorsement is not without
c 75% d 85% obligations under provisions of consideration
Recalled Questions from Prevention of Money Laundering c endorsement appearing on the
Promotion Exam Act then, without prejudice to instrument is regular
17 For which of the following any other action that may be d all the above
category of loans the risk weight taken under any other provisions 25 Which of the following groups,
for Capital Adequacy ratio of this Act, for each failure, he can become a partners in a
purpose is 125%: may be fined partnership firm:
a exposure to capital market a for an amount up to Rs.50000 a a private company, a public
b exposure to real estate b for an amount of Rs.10000 to Rs. company, a partnership firm, an
c loans to strategically important 1 lac NBFC
non-deposit taking NBFCs c for an amount of Rs.1 lac to b a public company, an HUF, an
d exposure to NPA account in Rs.10 lac individual person, a private
housing finance loans d for an amount of Rs.1000 to company
18 A bank wants to bring change in Rs.10000 c an individual person , a private
the terms and conditions relating 22 A drawee bank is responsible to company, a public company, a
to saving bank account. The one of the following for wrongful partnership firm
bank should inform the customer dishonour of a cheque: d a private company, a public
about this ____ month / days a The payee, if suffers any loss company, a partnership firm, a
before implementation of the b The endorsee, if suffers any loss minor
change: c The presenter, if suffers loss 26 A power of attorney executed
a 2 months d The account holder, if suffers abroad and attested by Notary
b 45 days loss public in that country:
c one month e any of the above, if suffered loss a Is valid in India also if stamped
d 15 days 23 Under Basel III, for calculation in India within 3 months from
19 A bill dated 1.1.2016 is payable of risk weighted assets or for date of entry into India.
2 months after sight and it was determining amount of capital b Not valid in India unless attested
sighted on 15.1. 2016, but charge, which of the following in India
accepted on 18.1. 2016. The due approach is used for credit risk c Valid if attested in India also by
date for payment would be: and operational risk : Chief Justice
a 15.3. 2016 a credit risk – standard approach, d a to c
b 18.3. 2016 operational risk – standard 27 Under the cash budget method
c 17.3. 2016 approach of working capital assessment,
d 21.03.2016 b credit risk – standard approach, the amount is fixed on the basis
operational risk – basic indicator of:
20 As per KYC guidelines, the
approach a opening cash deficit
suspicious transactions’ report is
to be submitted c credit risk – internal rating based b closing cash deficit
approach, operational risk – basic c peak cash deficit
a within 3 days of close of the
indicator approach d opening cash balance
month
 Banking events updatE ♦ April 2020 ♦9
e all the above b mortgage by conditional sale
e closing cash balance
33 With a view to affect the money c usufructuary mortgage
28 A certificate of deposit is:
supply in the economy, RBI d equitable mortgage
a issued at face value
resorts to Open market
b issued at discount to face value 39 In PM Employment Generation
operations, which mean:
c issued at a discount to maturity Program, the maximum project
a Sale/purchase of securities
value cost in case of manufacturing
b Sale/purchase of govt. security units is restricted to:
d none of the above
c Sale/purchase of govt. securities
29 Rate of interest which bank are a Rs.5 lac
by RBI
required to pay to customer on b Rs.10 lac
d all the above
balance in their account c Rs.25 lac
34 In a public limited company,
transferred to Depositor
maximum and minimum no. of d Rs.50 lac
Education Awareness Fund,
share-holders is: 40 A Banking Outlet for a Domestic
w.e.f. 1.7.2018 is___ % p.a.
simple: a 50 and 10 Scheduled Commercial Bank, a
b No limit and 7 Small Finance Bank and a
a 2% b 2.5%
c 100 and 2 Payment Bank is a fixed point
c 3% d 3.5%
d 1000 and 100 service delivery unit, manned by
30 Under liberalized foreign either bank’s staff or its Business
exchange remittance scheme, e any number at the discretion of
Correspondent where services of
what is the maximum amount that the company
acceptance of deposits,
can be remitted, per financial year: 35 What is the period for
encashment of cheques/ cash
a $ 200000 b $ 150000 preservation of documents
withdrawal or lending of money
c $ 125000 d $ 100000 obtained while opening of deposit
are provided for a minimum of
accounts as per KYC Directions
e $ 250000 __ hours per day for at least ___
2016 of RBI:
31 Which among the following is the days a week.
a 2 years b 5 years
minimum holding (investment in a 5 hours and 5 days
paid up capital) criteria in terms c 8 years d 10 years
e no time period is specified. b 6 hours and 5 days
of capital for treating a company,
partnership firm, society or any 36 The balance in hand of a c 4 hours and 5 days
other corporate body as particular currency due to sale d 4 hours and 6 days
‘Overseas Corporate Body’: and purchase thereof at any time 41 As per provisions of Mental
a 50% by NRIs and balance by of the day, is called Health Act, 1987, the authorities
resident Indian a position of foreign currency appointing the guardian or
b 60% by NRIs and the balance by b closing balance of foreign manager of property of a
Govt. of India only currency mentally ill person, are :
c 60% by NRIs irrespective of c day position a any court
balance holding d day-light position b district courts only
d 70% by Resident Indians returning e overnight position c district courts/distt.collectors
from abroad 37 The marginal cost based lending d High Courts only
e 70% by NRIs rate (MCLR) is required to be
32 Which among the following is not reviewed by banks at least ___: Answers
true with regard to realisation of a once in a quarter 01 a 02 b 03 b 04 a 05 c
export proceeds by the exporter b once in a month 06 b 07 b 08 c 09 b 10 c
in India from date of shipment: c once in a half year 11 c 12 c 13 b 14 c 15 d
16 c 17 a 18 c 19 d 20 b
a normal exporters 9 months d once in a year 21 b 22 d 23 b 24 c 25 c
b status holders 9 months 38 In which of the following 26 a 27 c 28 b 29 d 30 e
c warehouse exporters 15 months mortgages, the recovery of the 31 c 32 d 33 c 34 b 35 b
d units in special economic zones loan is from income of property: 36 d 37 b 38 c 39 c 40 c

– no time limit 41 c
a simple mortgage
10 ♦ Banking
Banking events ♦
events updatE updatE April♦ 10
April ♦2020 2020 Registration RNI No. 67802/98 Postal Regn No.CHD /0001/2015-17
Relief Package for poor to tackle the financial diffi- DATA COLUMN
culties arising from Covid-19 outbreak Business of Banks
The economic relief package was announced by Central Govt. on (Rs.in cr) Mar31'19 Mar13-20
Aggregate deposits 10805150 13339089
26.03.20. It includes a mix of food security and direct cash transfer Cash in hand/RBI 570490 632546
benefits which shield poor families during lockdown. Summary of the Investments 3043660 3795013
Bank Credit: 7881890 10140493
package is given hereunder: -Food 53930 60392
-Non-Food 7827960 10080101
· Under the Pradhan Mantri Gareeb Kalyan Ann Yojna(PMGKY) which is Cash-Deposit Ratio 5.27 4.63
a part of the relief package, at least 80 crore poor people will be covered. Investment-Deposit 28.14 28.03
Credit-Deposit 72.95 76.91
· Under the scheme, an additional five kilos of rice/wheat will be given to Money Stock
80 crore individuals (over the 5 kilo they already get) along with a one- (Rs.in cr) Mar31'19 Mar13-20
M3 (Out of which) 15430870 16526566
kilo pulse per household for a period of three months. (a) Currency with public 2052230 2308312
· The Govt. will spend Rs 45,000 crore for undertaking these measures. (b) Demand deposits-Banks 1626310 1576035
(c) Time Deposits - Banks 11720590 12606045
·Finance Minister also announced that there will be Rs 50 lakh insurance (d) Other deposits with RBI 31740 36175
cover for each healthcare worker for three months. Sources of Money Supply
(a) Net Bank credit to Govt 4387790 5038798
· “Safai karamcharis, ward-boys, nurses, paramedics, technicians, doctors (b) Bank credit to Comrcl sectr 10380180 10796486
and specialists and other health would be covered by a special insurance (c) Net Forex assets of Banks 2977860 3761465
Important Banking Indicators
scheme. Any health professional who, while treating Covid-19 patients Statutory Liquidity Ratio 18.00% (10.04.2020)
meets with some accident, then he/she would be compensated with an Cash Reserve Ratio 03.00% (28.03.2013)
Overnight LAF (of NDTL) 0.25%
amount of Rs 50 lakh under the scheme. 14days term Repo(of NDTL) 0.75%
Under Direct Benefit Transfer Reverse Repo Rate 03.75% (17.04.2020)
Repo Rate 04.40% (27.03.2020)
· 8.69 crore farmers to be immediately benefited through direct cash MSF Rate 04.65% (27.03.2020)
Bank Rate 04.65% (27.03.2020)
transfers under Kisan Samman Nidhi. Instalment of Rs 2,000 in the first Small Savings Interest Rates
week of April will be transferred. PPF 7.1% (01.04.2020)
· Wages under MNREGA will also be increased by Rs 2000 per worker 5-year NSC
Sukanya Smridhi
6.8% (01.04.2020)
7.6% (01.04.2020)
on an average as additional income to help daily wage labourers. Senior Citizen Saving 7.4% (01.04.2020)

· 3 crore senior citizens, persons with disabilities (Divyangs) and widows Capital & Money Market Indicators
Parameter end-Mar19 end-Mar20
will get one-time additional amount of Rs 1,000 in two instalments, to be Dollar-spot TT (Rs.) 69.22 75.38
given through DBT over a period of three months. BSE - Sensex (points) 38862 28265
NSE - Nifty(S&P CNX) 11666 7895
· 20 crore Jan Dhan women account holders will be covered under the Foreign reserves (Million $) 411905 475561
relief package and a compensation of Rs 500 per month for the next Gold /Oz in USD) 1292 1621

three months. INDIAN ECONOMY-IMPORTANT PARAMETERS

· BPL families will get free cylinders for three months under the Ujjawala Growth estimate for FY 2020-21 : 6-6.5%
scheme as well. GDP@constant mkt prices (cr) 2019-20 : 20442233

· Collateral-free loans have been doubled to Rs 20 Lakh for women self- GVA@2011-12 basic prices (cr) 2018-19 : 12906936
GDP projected by Govt. for 2020-21 : 22489420
help groups under the Deen Dayal National Livelihood Mission. Fiscal Deficit Target (2020-21) 3.5% of GDP : 796337 cr
· Government will bear the cost of EPF contribution of both employer Revenue Deficit Target (2020-21) 2.7.% of GDP : 609219 cr
and employee (24 per cent) for the next three months. However, this is Wholesale Price Index : 2.7%
Money Supply (M3) expansion - YoY : 10.3%
only for those establishments which have up to 100 employees and 90 Exports during 2018-19 : 331.0 bn
per cent of them earn less than Rs 15,000. Imports during (2018-19) : 507.06 Bn
·Govt to amend the regulation of EPF due to this pandemic so that workers Export target - 2017-18 (in $) : 310 bn

can draw upto 75 per cent non-refundable advance from credit in PF India's share in world merchandise export : 1.70%
India's currency rating (S&P) : BB Postv
account or 3 months salary, whichever is lower. India's external debt (Mar 2019) US $ : 543.0 Bn
Marginal Standing Facility (MSF) Tax-GDP ratio (2018-19) : 12.1%

On 27.03.20, the Monetary Policy Committee (MPC) of RBI decided to Apr- Jan20:Export $ 265.3 bn Imports : 398.5 bn
Per capita Income 2018-19 (Rs.) : 126406
reduce the policy Repo rate under the Liquidity Adjustment Facility by 75 Indian economy's ranking in PPP terms : 3rd
basis points from 5.15 per cent to 4.40 per cent with immediate effect. Indian economy's ranking in world in value: 7th
Consequently, MSF rate stands adjusted from 5.40% to 4.65% with
OUR PUBLICATIONS : REFER PAGE 9,11
immediate effect.
• DATE OF DESPATCH - May 1, 2020

Published by Chand Singh at 1008, Sector 45-B, Chandigarh - Printed by Chand Singh in digital form. Editor - Chand Singh