All Banks Past Papers PDF | Complete Static Banking Awareness

Question: What is Net Interest Margin (NIM)?

Answer: The difference between interest earned on loans and interest paid on deposits.

Question: Give an example of Net Interest Margin calculation.

Answer: If loan interest is 9% and deposit interest is 4%, NIM is 5% (9% – 4%).

Question: Why is Net Interest Margin important?

Answer: It is a key parameter for the survival and profitability of any banking system.

Question: What is the benchmark NIM for profitable banking?

Answer: +3% or higher is the benchmark for profitable banking operations.

Question: Which banks currently achieve the +3% NIM benchmark? Answer: SBI and some new-generation private sector banks.

Question: What is the average NIM for most public sector banks?

Answer: Most public sector banks struggle with NIMs between 2.2% and 2.7%.

Question: How can banks increase their Net Interest Margin?

Answer: By reducing their cost of funds.

Question: What is a Savings Account?

Answer: A deposit account meant for individuals and small businesses to encourage saving habits.

Question: Who is eligible to open a standard Savings Account?

Answer: Resident Indians above 18 years of age.

Question: What are the rules for opening a Savings Account for minors aged 10 to 18?

Answer: It is allowed with certain restrictions.

Question: How is a Savings Account opened for a child under 10 years old? Answer: As a minor account managed with a guardian.

Question: What is the typical interest rate range for Savings Accounts?

Answer: Interest rates vary from 3.5% to 6% (mostly 3.5% at present).

Question: What is ECS in banking?

Answer: Electronic Clearing Service, used for regular monthly payments like personal or house loans.

Question: How much interest income on a Savings Account is tax-free?

Answer: Interest income up to Rs. 40,000 per year is exempt from income tax.

Question: How is Savings Account interest calculated since April 1, 2020? Answer: It is calculated on a daily basis.

Question: What is the usual minimum balance for a Savings Account without a chequebook?

Answer: Normally Rs. 500.

Question: What is the usual minimum balance for a Savings Account with a chequebook?

Answer: Normally Rs. 1,000.

Question: Who is eligible to open a Current Account?

Answer: Businessmen, firms, companies, trusts, and associations.

Question: Does a Current Account earn interest?

Answer: No, Current Accounts carry zero interest on deposits.

Question: Why do banks charge service charges on Current Accounts?

Answer: To cover operating costs since these accounts yield no interest for the bank.

Question: What are Demand Deposits?

Answer: Savings Accounts and Current Accounts, because money can be withdrawn at any time.

Question: What is the CASA Ratio?

Answer: The ratio of deposits in Current and Savings accounts relative to total deposits.

Question: What is the recommended minimum CASA Ratio for banks?

Answer: It should be more than 40%.

Question: What is an Inactive Account?

Answer: A Savings or Current account with no customer transactions for more than 12 months.

Question: What is a Dormant Account?

Answer: An account with no customer transactions for more than 24 months.

Question: What happens to bank deposits unclaimed for over 10 years?

Answer: They are transferred to the Reserve Bank of India (RBI).

Question: What is DEAF in banking?

Answer: Depositor Education Awareness Fund, an RBI scheme funded by unclaimed deposits to educate depositors.

Question: What is the tenure range for a Fixed Deposit (FD)?

Answer: From 7 days to 10 years.

Question: How much loan can be taken against a Fixed Deposit?

Answer: Generally up to 90% of the outstanding principal and accrued interest.

Question: At what interest threshold is TDS deducted on Fixed Deposits? Answer: When interest income exceeds Rs. 40,000 in a financial year.

Question: Which form does a bank issue after deducting TDS? Answer: Form No. 16A.

Question: Which form avoids TDS for non-taxable individual depositors? Answer: Form 15G.

Question: Which form avoids TDS for senior citizens outside the tax bracket? Answer: Form 15H.

Question: On what factor should Fixed Deposit interest rates be based?

Answer: On tenure (agreed time period) only, not on the quantum of money.

Question: What is a Recurring Deposit (RD)?

Answer: A monthly deposit scheme where fixed amounts are saved regularly over an agreed period.

Question: What is the maximum tenure for a Recurring Deposit?

Answer: Normally 120 months (10 years).

Question: What is the minimum amount for a deposit to be considered a Bulk Deposit?

Answer: Rs. 2 crore or more.

Question: Why are Bulk Deposits costly for banks?

Answer: Because they offer high interest rates, raising the overall cost of funds.

Question: From whom are Bulk Deposits usually obtained?

Answer: High Net-worth Individuals (HNIs).

Question: Which rules govern the nomination facility in Indian banks?

Answer: Banking Companies (Nomination) Rules 1985.

Question: What is the key benefit of the Nomination Facility?

Answer: Banks pay dues to the nominee without requiring a succession certificate or checking legal heir claims.

Question: Which account types offer the Nomination Facility?

Answer: Savings, Fixed, and Recurring deposit accounts (and select Current accounts).

Question: What does ‘Nominee’ mean in banking?

Answer: A person designated or entered to receive funds or assets upon the account holder’s death.

Question: When were No-Frill Accounts introduced?

Answer: November 2005.

Question: What was the main feature of a No-Frill Account? Answer: Zero minimum balance requirement with basic/no extra services.

Question: What happened to No-Frill Accounts in August 2012?

Answer: They were converted into Basic Savings Bank Deposit Accounts (BSBDAs).

Question: What core card facility is provided free with a BSBDA?

Answer: ATM cum debit card at free of cost.

Question: How many withdrawals per month are allowed in a standard BSBDA?

Answer: A maximum of 4 withdrawals per month across branch and ATMs.

Question: How many BSBDA accounts can a customer open per bank?

Answer: Only one account per bank.

Question: What is a BSBDA – Small Account?

Answer: A BSBDA opened when full official KYC norms cannot be satisfied.

Question: What is the minimum balance required for PMJDY accounts?

Answer: Zero minimum balance.

Question: What accident insurance cover is provided to PMJDY account holders?

Answer: Rs. 1,00,000 accident insurance cover.

Question: What life insurance cover was provided under PMJDY?

Answer: Rs. 30,000 life cover (for accounts opened up to Jan 26, 2015).

Question: What overdraft facility is available under PMJDY after 6 months?

Answer: An overdraft facility of Rs. 10,000 (preferably for the lady of the household).

Question: Which debit card is provided free with a PMJDY account?

Answer: RuPay Card.

Question: What is the eligible age limit for a PMJDY account?

Answer: 18 to 65 years.

Question: What is the maximum total deposit limit per year in a Small Account?

Answer: Aggregate deposits cannot exceed Rs. 1 lakh per year.

Question: What is the maximum monthly withdrawal limit in a Small Account?

Answer: Aggregate withdrawals and transfers cannot exceed Rs. 10,000 in a month.

Question: What is the maximum balance limit allowed at any point in a Small Account?

Answer: Maximum balance cannot exceed Rs. 50,000.

Question: What is the initial validity period of a Small Account?

Answer: 12 months.

Question: How can a Small Account validity be extended by another 12 months?

Answer: By providing proof of having applied for an Officially Valid Document (OVD).

Question: Who appoints the Banking Ombudsman?

Answer: Reserve Bank of India (RBI).

Question: Under which law and section is the Banking Ombudsman appointed?

Answer: Under Section 35A of the Banking Regulation Act 1949.

Question: When was the Banking Ombudsman Scheme first introduced?

Answer: In 1995.

Question: When did the current Banking Ombudsman Scheme become operative?

Answer: January 1, 2006.

Question: How many Banking Ombudsman offices are currently operating?

Answer: 22 operating offices, mostly located in state capitals.

Question: Which banks are covered under the Banking Ombudsman scheme? 

Answer: All Scheduled Commercial Banks, Regional Rural Banks (RRBs), and Cooperative Banks.

Question: What issues can a customer complain about to the Banking Ombudsman?

Answer: Delays or non-payment of cheques/bills, net-banking issues, mobile banking, and digital transaction issues.

Question: What is the first step a customer should take for any banking grievance?

Answer: The customer should first approach the bank directly with their grievance.

Question: When can a customer approach the Banking Ombudsman?

Answer: If the grievance is not settled by the bank within 30 days (due to no reply, rejection, or an unsatisfactory response), the customer can approach the Banking Ombudsman within 1 year.

Question: How can a complaint be submitted to the Banking Ombudsman?

Answer: Complaints can be submitted on plain paper or by sending an e-mail request.

Question: What is the fee charged for filing a complaint with the Banking Ombudsman?

Answer: No charges are involved; it is completely free of cost.

Question: What is the maximum award limit a Banking Ombudsman can grant?

Answer: The maximum limit of award is Rs. 20 lakhs (and up to Rs. 1 lakh in case of credit card-related complaints).

Question: Who is the Appellate Authority if a customer or bank is not satisfied with the Ombudsman’s decision?

Answer: Either party can approach the Appellate Authority within 30 days, which is vested with a Deputy Governor of the RBI.

Question: What is Financial Risk in banking?

Answer: Financial Risk arises from business transactions done by banks that expose them to potential monetary losses.

Question: What is Market Risk?

Answer: Market Risk is the risk of loss in balance sheet or off-balance sheet positions arising from adverse movements in market prices, prominent in investment banking.

Question: What is Credit Risk?

Answer: Credit Risk is the potential that a bank borrower or counterparty fails to meet their obligations on agreed terms, resulting in default.

Question: What is Interest Rate Risk?

Answer: Interest Rate Risk arises due to fluctuations in interest rates, affecting reported earnings, asset/liability values, off-balance sheet items, and cash flows.

Question: What is Liquidity Risk?

Answer: Liquidity Risk arises from a bank’s inability to meet its financial obligations or convert assets into cash due to an asset-liability mismatch.

Question: What is Operational Risk?

Answer: Operational Risk is the risk of loss arising from inadequate or failed internal processes, people, systems, day-to-day failures, or external events like fraud and tech issues.

Question: What is Capital Risk?

Answer: Capital Risk is the risk where a bank’s capital comes under partial or total threat, especially during emergency situations.

Question: What is Foreign Exchange (Forex) Risk?

Answer: Forex Risk is the risk that a bank suffers losses due to adverse exchange rate movements while holding an open spot or forward position in foreign currency.

Question: What is Systemic Risk?

Answer: Systemic Risk is the risk of a breakdown or cascading failure across the entire financial system caused by interlinkages, leading to a severe economic downturn.

Question: What is Reputational Risk?

Answer: Reputational Risk is the loss of public confidence in a bank due to a negative perception or damaged brand image, regardless of whether actual wrongdoing occurred.

Question: Name two factors that can cause Reputational Risk for a bank.

Answer: Nonobservance of corporate governance codes and ineffective customer service or mismanagement of customer records.

Question: What does KYC stand for in banking?

Answer: Know Your Customer.

Question: What is the main objective of the KYC process?

Answer: To verify the identity and address of customers prior to opening accounts to prevent banks from being used for money laundering.

Question: Under which legal provisions are KYC guidelines issued by the RBI?

Answer: Under Section 35A of the Banking Regulation Act 1949 and Rule 7 of the Prevention of Money Laundering Rules 2005.

Question: What two main verifications are required under KYC?

Answer: Legal Name Verification and Correct Permanent Address Verification.

Question: What are the three customer risk classifications for KYC verification?

Answer: Low Risk, Medium Risk, and High Risk.

Question: How often must KYC be updated for Low Risk customers?

Answer: Once in every 10 years.

Question: How often must KYC be updated for Medium Risk customers?

Answer: Once in every 8 years.

Question: How often must KYC be updated for High Risk customers?

Answer: Once in every 2 years.

Question: What option is available for a person who does not have standard KYC documents?

Answer: They can open a “Small Account” with restricted transaction limits.

Question: Name any four Officially Valid Documents (OVD) accepted for KYC.

Answer: Passport, Voter’s ID Card, PAN Card, and Aadhaar Card.

Question: What other documents serve as Officially Valid Documents (OVD) for KYC?

Answer: Driving Licence, NREGA Card, and a letter from the National Population Register containing name and address details.

Question: What is an ATM?

Answer: Automated Teller Machine, a facility allowing account access for dispensing cash and conducting financial/non-financial transactions without visiting a bank branch.

Question: Within how many working days must a bank resolve an ATM transaction complaint?

Answer: Within 7 working days of the complaint.

Question: What compensation must a bank pay for delay in resolving an ATM complaint beyond 7 days?

Answer: Rs. 100 per day of delay beyond 7 days (provided the customer complained within 30 days of the transaction).

Question: What is an Onsite ATM?

Answer: An ATM located within the premises of a bank branch.

Question: What is a Offsite ATM?

Answer: An ATM located outside the bank premises, away from branch buildings.

Question: What is a White Label ATM (WLA)?

Answer: An ATM set up, owned, and operated by non-banking financial companies (NBFCs/FIs) under their own brand name.

Question: Which company launched the first White Label ATM in India?

Answer: Tata Communications Payment Solutions (TCPS) under the brand name “Indicash”.

Question: What is a Brown Label ATM?

Answer: An ATM where hardware and machine lease are owned by a third-party service provider, while cash management and network connectivity are provided by a sponsor bank whose brand is displayed.

Question: What is a Green Label ATM used for?

Answer: Provided specifically for agricultural transactions.

Question: What is an Orange Label ATM used for?

Answer: Provided specifically for share transactions.

Question: What is a Yellow Label ATM used for?

Answer: Provided specifically for e-commerce transactions.

Question: What is a Pink Label ATM?

Answer: An ATM monitored by guards to ensure access exclusively for women to avoid long queues.

Question: What is a Biometric ATM?

Answer: An ATM that uses security features like fingerprint or eye/iris scanners to verify customer identity and access bank accounts.

NRI Accounts and Payment Facilities

Tier	Population
Tier 1	1,00,000 and above
Tier 2	50,000 to 99,999
Tier 3	20,000 to 49,999
Tier 4	10,000 to 19,999
Tier 5	5,000 to 9,999
Tier 6	Less than 5,000

Question: Who is defined as a Non-Resident Indian (NRI) in banking?

Answer: An Indian citizen who resides outside India and holds a valid Indian passport.

Question: What are the three main types of bank accounts available for NRIs?

Answer: NRO Account, NRE Account, and FCNR(B) Account.

Question: What does NRO Account stand for?

Answer: Non-Resident Ordinary Rupee Account.

Question: In what currency is an NRO Account maintained?

Answer: In Indian Rupees (INR).

Question: Can an NRO Account be opened jointly with a resident Indian?

Answer: Yes, it can be opened jointly with a resident Indian.

Question: What happens to a resident Indian’s bank account when their status changes to NRI?

Answer: Their existing resident bank account is converted into an NRO Account.

Question: What account types can be opened under an NRO Account?

Answer: Savings Account (SA), Current Account (CA), Recurring Deposit (RD), and Fixed Deposit (FD).

Question: Is interest income earned in an NRO Account taxable in India?

Answer: Yes, income tax is deducted at source as per applicable rules.

Question: What is the maximum limit for repatriation of funds from an NRO Account?

Answer: A maximum of $1 million USD per financial year can be repatriated.

Question: What does NRE Account stand for? Answer: Non-Resident External Rupee Account.

Question: In what currency is an NRE Account maintained?

Answer: In Indian Rupees (INR).

Question: Can an NRE Account be opened jointly with a resident Indian?

Answer: No, it can only be opened as a joint account with another NRI.

Question: What is the primary source of funds that can be deposited into an NRE Account?

Answer: Only income/funds earned on foreign land can be deposited.

Question: What types of accounts can be maintained as NRE Accounts?

Answer: Savings Account (SA), Current Account (CA), Recurring Deposit (RD), and Fixed Deposit (FD).

Question: What is the minimum tenure required for term deposits in an NRE Account?

Answer: A minimum tenure of 1 year is required for term deposits.

Question: Is interest earned on an NRE Account taxable in India? Answer: No, interest income earned in an NRE Account is completely exempt from income tax in India.

Question: Are funds in an NRE Account repatriable to foreign countries?

Answer: Yes, funds in an NRE Account are fully and freely repatriable.

Question: What does FCNR(B) Account stand for?

Answer: Foreign Currency Non-Resident (Bank) Account.

Question: Which types of account operations are permitted under FCNR(B)?

Answer: Only Fixed Deposit (FD) accounts can be opened under FCNR(B).

Question: What are the minimum and maximum deposit terms for an FCNR(B) Account?

Answer: Minimum tenure is 1 year and maximum tenure is 5 years.

Question: In what currency is an FCNR(B) Account maintained?

Answer: It is maintained in RBI-approved foreign currencies (not in Indian Rupees).

Question: Is tax deducted on interest earned in an FCNR(B) Account?

Answer: No, interest earned is completely exempt from income tax in India.

Question: Are funds in an FCNR(B) Account repatriable?

Answer: Yes, principal and interest are fully repatriable to foreign countries.

LIBOR	DTAA
LIBOR stands for London Interbank Offered Rate.	DTAA stands for Double Taxation Avoidance Agreement.
It is the primary benchmark for short-term interest rates around the world.	It is an agreement between two countries with the objective of avoiding taxation of the same income in both countries.
Many financial institutions set their interest rates relative to it.	For availing DTAA benefits, an NRI has to submit a Tax Residency Certificate (TRC) to the bank annually.

Question: What does SNRR Account stand for?

Answer: Special Non-Resident Rupee Account.

Question: Who is eligible to open an SNRR Account?

Answer: Any person residing outside India who has a business interest in India.

Question: What is the purpose of opening an SNRR Account?

Answer: To carry out bona fide business transactions in Indian Rupees through authorized dealers in conformity with regulations.

Question: What is a Nostro Account?

Answer: An account held by a domestic (Indian) bank in a foreign bank abroad, maintained in foreign currency (e.g., an Indian bank holding a US Dollar account with Bank of America).

Question: What is a Vostro Account?

Answer: An account held by a foreign bank in a domestic (Indian) bank, maintained in Indian Rupees (e.g., Bank of America holding an INR account with an Indian bank).

Question: What does DEMAT stand for in banking and finance?

Answer: Dematerialised Account.

Question: What is the primary purpose of a DEMAT Account?

Answer: To hold and transact shares and financial securities in an electronic format.

Question: What defines a Dormant Account?

Answer: A bank account that has seen no customer-initiated activity or transactions for a continuous period of two years (24 months), excluding automated interest postings.

Question: What is an Escrow Account?

Answer: A temporary pass-through account managed by a neutral third party to safely hold funds during a business transaction between two principal parties until conditions are met.

Question: What is a GILT Account?

Answer: An account maintained by investors with Primary Dealers to hold Government Securities (G-Secs) and Treasury Bills (T-Bills) in dematerialized form.

Question: What is a Standing Instruction in banking?

Answer: A specific order or instruction given by an account holder to a bank to pay a fixed amount at regular intervals to a designated account.

Question: Give two practical examples of Standing Instructions.

Answer: Automatic payment of utility/electricity bills, periodic salary payments, or loan installment repayments (EMIs).

Question: What are Debit Cards and Credit Cards?

Answer: Plastic payment cards operating on global payment platforms (like Visa, MasterCard, RuPay) that allow cardholders to perform cash-free financial transactions.

Question: What is the key operational advantage of Debit and Credit Cards?

Answer: They facilitate cashless transactions and assure round-the-clock (24×7) liquidity access.

Criteria	Credit Card	Debit Card
Eligibility Criteria	Need to be fulfilled	No specific criteria
Maximum Limit	Determined based on credit score, credit history, etc.	Less than or equal to the savings or current account balance to which the card is linked
Interest	Charged or levied on the amount utilized	No interest charged; the amount is deducted from the linked account
Debt Instrument	Yes	No
Utilization Summary	Monthly Credit Statement	Monthly Bank Statement

 

Question: What are Visa and Mastercard?

Answer: Global payment processing institutions whose platforms facilitate debit, credit, and electronic card transactions worldwide.

Question: What is RuPay, and who developed it?

Answer: RuPay is an Indian payment card platform developed domestically by the National Payments Corporation of India (NPCI).

Question: What does NPCI stand for, and when was it incorporated?

Answer: National Payments Corporation of India, incorporated in December 2008 (under Section 25 of the Companies Act).

Question: What is the authorized and paid-up capital of NPCI?

Answer: Authorized capital is Rs. 300 crores, and paid-up capital is Rs. 100 crores.

Question: Name six major products developed by NPCI.

Answer: National Financial Switch (NFS), Automated Clearing House (ACH), Immediate Payment Service (IMPS), Cheque Truncation System (CTS), Aadhaar Payment Bridge System (APBS), and RuPay Card.

Question: What is UPI, and which infrastructure is it built upon?

Answer: Unified Payments Interface is an instant payment system developed by NPCI, built over the existing IMPS (Immediate Payment Service) infrastructure.

Question: What is a VPA in UPI transactions?

Answer: Virtual Payment Address, a unique identifier used to send and receive money via UPI without sharing bank account details.

Question: What is the standard per-transaction and per-day transfer limit for UPI?

Answer: Up to Rs. 1 lakh per transaction and Rs. 1 lakh per day (subject to individual bank limits).

Question: What is the maximum number of UPI transactions allowed per day?

Answer: A maximum of 20 transactions per day.

Question: What is “#UPI Chalega”?

Answer: A promotional campaign launched by NPCI to drive digital payment adoption across India.

Question: What is BHIM, and when was it launched?

Answer: Bharat Interface for Money, a UPI-based payments app launched on December 30, 2016, by Prime Minister Narendra Modi.

Question: How many languages does the BHIM app currently support?

Answer: 16 languages (including Hindi, English, Urdu, Punjabi, Tamil, Telugu, Bengali, Gujarati, Marathi, and others).

Question: How can a user access BHIM features without an internet connection?

Answer: By dialing the USSD code *99# on any mobile phone.

Question: What are the per-transaction and per-day transfer limits on the BHIM app?

Answer: Up to Rs. 40,000 per transaction and a maximum of Rs. 40,000 per day for each linked bank account.

Question: Is there a limit on receiving money via the BHIM app?

Answer: No, there is no limit on the amount of money you can receive via BHIM.

Question: What does IFSC stand for, and how long is the code?

Answer: Indian Financial System Code, an 11-digit alphanumeric code.

Question: What is the primary function of an IFSC code?

Answer: It uniquely identifies a specific bank branch under electronic transfer systems like NEFT and RTGS.

Question: Explain the structure of an 11-digit IFSC code.

Answer: The first 4 characters represent the bank name, the 5th character is a reserved buffer (usually ‘0’), and the last 6 characters represent the specific bank branch.

Question: What is NEFT?

Answer: National Electronic Funds Transfer, a nationwide electronic payment system enabling one-to-one funds transfer between bank accounts.

Question: What are the minimum and maximum transfer limits for NEFT?

Answer: There is no minimum or maximum limit for NEFT transfers (though amounts of Rs. 2 lakh and above typically use RTGS).

Question: What system processing mechanism does NEFT use?

Answer: Straight Through Processing (STP).

Question: When did NEFT become a 24×7 service on all days?

Answer: On December 16, 2019, as directed by the Reserve Bank of India (RBI).

Question: How are NEFT transaction batches processed throughout the day?

Answer: NEFT operates in half-hourly batches, totaling 48 settlement batches every 24 hours.

Question: What are the transaction charges for NEFT as per RBI guidelines?

Answer: No charges are levied on NEFT transactions as per RBI guidelines.

Question: What does RTGS stand for in banking?

Answer: Real-Time Gross Settlement.

Question: What is the primary characteristic of RTGS transactions?

Answer: It allows instantaneous funds or securities transfer where settlement happens on a continuous, individual order basis without netting debits against credits.

Question: For what type of transactions is RTGS primarily used?

Answer: It is used for large-value transactions.

Question: What is the minimum transaction limit for RTGS?

Answer: Minimum limit is Rs. 2 lakhs.

Question: What is the maximum transaction limit for RTGS?

Answer: There is no maximum limit for RTGS transactions.

Question: Since when has RTGS been made available 24×7 (round-the-clock)?

Answer: Since December 2020.

Question: What were the operational timings of RTGS before December 2020? Answer: From 7:00 AM to 6:00 PM on all working days (excluding second and fourth Saturdays).

Question: What does IMPS stand for? Answer: Immediate Payment Service.

Question: What is the primary feature of IMPS?

Answer: It provides instant round-the-clock (24×7) money transfer, including via mobile devices, making it suitable for emergencies.

Question: What is the maximum transfer limit per day for IMPS?

Answer: Approximately Rs. 2 lakhs per day.

Question: What does SWIFT stand for in international banking?

Answer: Society for Worldwide Interbank Financial Telecommunication.

Question: What is a SWIFT Code used for?

Answer: It is a standard Bank Identifier Code used for international interbank funds transfers and foreign exchange (FOREX) messaging with correspondent banks abroad.

Question: How many characters does a standard SWIFT Code consist of?

Answer: It consists of either 8 or 11 characters (an 8-character code refers to the primary head office).

Question: Breakdown the 11-character structure of a SWIFT Code.

Answer: First 4 digits = Bank code, next 2 digits = Country code, next 2 digits = Location code, and last 3 digits = Branch code (optional).

Question: Which countries partnered in November 2019 to explore an alternative to the SWIFT mechanism?

Answer: India, China, and Russia.

Question: Why did India, China, and Russia seek an alternative to SWIFT?

Answer: To facilitate smooth trade with countries facing American financial sanctions.

Currency Note	Dimensions	Base Colour	Motif / Image
1 Rupee Note	97 mm × 63 mm	Pink Green	Sagar Samrat
10 Rupee Note	63 mm × 123 mm	Chocolate Brown	Sun Temple (Odisha)
20 Rupee Note	63 mm × 147 mm	Greenish Yellow	Ellora Caves (Maharashtra)
50 Rupee Note	66 mm × 135 mm	Fluorescent Blue	Hampi with Chariot (Karnataka)
100 Rupee Note	66 mm × 142 mm	Lavender	Rani Ki Vav (Gujarat)
200 Rupee Note	66 mm × 146 mm	Bright Yellow	Sanchi Stupa (Madhya Pradesh)
500 Rupee Note	66 mm × 150 mm	Stone Grey	Red Fort (Delhi)
2000 Rupee Note	66 mm × 166 mm	Magenta	Mangalyaan

Question: What is a POS Terminal?

Answer: Point of Sale Terminal, a hardware device at retail stores allowing customers to make purchases using debit, credit, or prepaid cards.

Question: How does a POS terminal process a transaction?

Answer: The card is swiped or inserted, and embedded data is electronically validated and authorized via the merchant acquirer’s payment gateway.

Question: What type of income do POS terminals generate for banks?

Answer: They are a reliable source of Non-Interest Income for banks.

Question: What governs Negotiable Instruments in India?

Answer: The Negotiable Instruments Act, 1881.

Question: How are bearer instruments and order instruments transferred?

Answer: Bearer instruments are transferred merely by delivery, while order instruments require endorsement and delivery.

Question: What is a Bill of Exchange?

Answer: A written, signed document containing an unconditional order to pay a certain sum of money for goods or services to a specified payee.

Question: What is a Promissory Note?

Answer: An unconditional written commitment signed by a debtor to pay a specified sum of money to a named person or order within a set time.

Question: Is an oral or verbal promise valid as a Promissory Note?

Answer: No, a Promissory Note must always be in writing.

Question: What is a Cheque?

Answer: A negotiable instrument containing an unconditional written order by an account holder directing their bank to pay a specified sum of money on demand.

Question: Name the three parties involved in a cheque transaction.

Answer: Drawer (the person who writes the cheque), Drawee (the bank directed to pay), and Payee (the person receiving the money).

Question: Who is the payee in a self-cheque transaction?

Answer: The drawer is also the payee.

Question: What is an Order Cheque?

Answer: A cheque payable to a specific named person or to their order.

Question: What is a Bearer Cheque?

Answer: A cheque payable to whoever holds or presents the instrument.

Question: What is a Blank Cheque?

Answer: A cheque signed by the drawer with all other columns left unfilled.

Question: What is a Stale Cheque?

Answer: A cheque presented after its validity period of three months from the date of issue.

Question: What is a Mutilated Cheque?

Answer: A cheque torn into two or more pieces.

Question: What is a Post-Dated Cheque?

Answer: A cheque bearing a date later than the date on which it was issued.

Question: What is an Open Cheque?

Answer: An uncrossed cheque that can be cashed directly over the bank counter.

Question: What is a Crossed Cheque?

Answer: A cheque bearing two parallel transverse lines across its face, directing the bank not to pay cash over the counter but through a bank account.

Question: What does MICR stand for?

Answer: Magnetic Ink Character Recognition.

Question: How many digits make up a MICR Code on a cheque? Answer: A 9-digit code.

Question: Explain the structure of a 9-digit MICR code.

Answer: First 3 digits represent the City/District, middle 3 digits represent the Bank Name, and last 3 digits represent the Branch Location.

Question: Why is crossing of cheques done?

Answer: To prevent the cheque from falling into wrong hands and ensure payment is credited safely into a bank account rather than paid as cash.

Question: What is General Crossing on a cheque?

Answer: Adding two parallel transverse lines across the face of the cheque (with or without words like “& Co.”).

Question: What is Special Crossing on a cheque?

Answer: A crossing where the specific name of a collecting banker is added across the face of the cheque.

Question: What is Restrictive Crossing?

Answer: A crossing that instructs the collecting bank to credit the cheque amount exclusively to the payee’s account.

Question: What is Non-Negotiable Crossing?

Answer: A crossing containing the words “Not Negotiable” between two parallel transverse lines, indicating the receiver gets no better title than the transferor had.

Question: What is an Endorsement on a cheque?

Answer: A signature on the back of a cheque by the holder to transfer ownership rights, cash it, or deposit it into an account.

Question: What is a Demand Draft (DD)?

Answer: A bill of exchange drawn by one bank branch on another branch of the same bank (or another bank) directing payment of a specific sum to a third party.

Question: Is a Demand Draft explicitly named in the Negotiable Instruments Act, 1881?

Answer: No, but due to its structure, it is legally classified under Bills of Exchange.

Criteria	Cheque	Demand Draft
Drawer	Individual account holder	Normally a scheduled bank
Certainty of Payment	No certainty of payment	Payment is certain
Stoppage of Payment	Drawer can stop it by issuing an order	No one can stop it
Legal Definition	Defined in NI Act, 1881	Not defined in NI Act, 1881

Question: What does CTS-2010 stand for?

Answer: Cheque Truncation System – 2010.

Question: What is the process of truncation in cheque clearing?

Answer: Truncation is the process of stopping the physical flow of a paper cheque, converting it into a digital image for electronic verification and clearing.

Question: What primary benefit does the Cheque Truncation System offer?

Answer: It eliminates the need to physically move paper cheques between banks, speeding up settlement times.

Question: What is BPLR, and when was it introduced?

Answer: Benchmark Prime Lending Rate, introduced in 2003.

Question: Why was BPLR replaced as a lending benchmark?

Answer: It lacked transparency, which resulted in different borrowers receiving loans at unequal interest rates for similar credit profiles.

Question: Who headed the RBI working group that recommended replacing BPLR?

Answer: Shri Deepak Mohanty (report submitted in October 2009).

Question: What is Base Rate?

Answer: It is the minimum interest rate set by banks below which scheduled commercial banks are not permitted to lend loans to customers.

Question: Name the four main components used in calculating Base Rate.

Answer: Cost of funds, operating expenses of the bank, profit margin, and negative carry on CRR (Cash Reserve Ratio) and SLR (Statutory Liquidity Ratio).

Question: Why were RBI Repo Rate cuts not effectively passed on to borrowers under the Base Rate regime?

Answer: Because Repo Rate was not included as a component in calculating the Base Rate.

Question: What does MCLR stand for, and when was it introduced?

Answer: Marginal Cost of Funds based Lending Rate, introduced on April 1, 2016.

Question: Name the four components of Marginal Cost of Lending Rate (MCLR).

Answer: Marginal cost of funds, negative carry on account of CRR, operating costs, and tenor premium.

Question: Why did RBI introduce External Benchmark Rates (Repo Rate) in 2019?

Answer: Internal benchmarks like Base Rate and MCLR failed to deliver effective transmission of monetary policy changes to end-borrowers.

Question: From what date did RBI make External Benchmark-linked rates mandatory for new retail and MSME loans?

Answer: From October 1, 2019.

Question: How frequently must banks adjust their External Benchmark Rates?

Answer: At least once every 3 months.

Question: Name three loan categories exempted from Base Rate / MCLR restrictions.

Answer: Loans under the Differential Rate of Interest (DRI) scheme, loans to a bank’s own active or retired employees, and loans against a bank’s own deposits.

Question: When was the Differential Rate of Interest (DRI) scheme launched by the Government of India?

Answer: In 1972.

Question: What percentage of previous year advances must Scheduled Commercial Banks lend under DRI?

Answer: At least 1% of the total advances from the previous year.

Question: What fixed interest rate is charged on DRI loans?

Answer: 4% per annum.

Question: Who are the target beneficiaries under the DRI scheme?

Answer: The “poorest among the poor”, including SCs/STs, Adivasis, physically handicapped persons, orphanages, and women’s homes.

Question: What is the maximum loan limit for crop loans that receive interest subvention from the Government of India?

Answer: Up to Rs. 3 lakhs.

Question: How are interest rates determined for Rupee Export Credit advances below Base Rate?

Answer: They can be below Base Rate to the exact extent of the interest subvention provided by the Government of India.

Question: What is ALMC in banking operations?

Answer: Asset Liability Management Committee, responsible for reviewing base rates and bank asset-liability balances.

Question: Who is the target audience for Reverse Mortgage Loans?

Answer: Senior citizens aged 60 years and above.

Question: What are the age criteria for married couples applying for a Reverse Mortgage Loan?

Answer: One spouse must be at least 60 years old, and the other must not be below 55 years of age.

Question: How does a Reverse Mortgage Loan work?

Answer: A senior citizen mortgages their house to a bank, and the bank pays them regular monthly payouts during their lifetime (up to a maximum period of 20 years normally).

Question: How is a Reverse Mortgage Loan settled after the borrower’s death?

Answer: The loan is repaid by selling the mortgaged property, and any surplus amount is handed over to the legal heirs.

Question: What is a Secured Loan?

Answer: A loan where the borrower pledges an asset/property as collateral, giving the lender a legal lien over the asset (e.g., vehicle loan, home loan).

Question: What is an Unsecured Loan?

Answer: A loan where no collateral, security, or guarantor is pledged, granted purely on the borrower’s creditworthiness (e.g., personal loan).

Question: What is another common name for an Unsecured Loan?

Answer: Signature Loan.

Question: Why do Unsecured Loans carry higher interest rates than Secured Loans?

Answer: Because they carry a higher risk of default for the lender due to the absence of collateral.

Question: What is Revolving Credit?

Answer: A flexible credit line where a customer pays a commitment fee and can draw, repay, and reuse funds as cash flow needs fluctuate.

Question: What is an Overdraft / Cash Credit facility?

Answer: A flexible credit facility where a borrower can withdraw funds as needed up to an approved credit limit set by the bank.

Question: How is interest calculated on an Overdraft or Cash Credit account?

Answer: Interest is charged only on the actual amount utilized/withdrawn up to the repayment date, rather than on the total sanctioned credit limit.

Question: Give an example of interest calculation in a Cash Credit or Overdraft account.

Answer: If a borrower is sanctioned a limit of Rs. 30 lakhs but withdraws only Rs. 15 lakhs, interest will be charged strictly on Rs. 15 lakhs.

Question: What is the primary difference between an Overdraft account and a Cash Credit account?

Answer: The primary distinction lies in the nature of the underlying security pledged against the credit line.

Question: What type of security secures a Cash Credit account?

Answer: A Cash Credit account is typically secured by the pledge or hypothecation of tangible goods, raw materials, or produce.

Fixed Interest Rate	Floating Interest Rate
Interest is fixed for the whole tenure of the loan period, usually 15 to 20 years.	The interest rate changes frequently as the effective rate changes.
It is normally fixed at a certain percentage.	The rate varies according to changes in the applicable/effective interest rate.
Interest is normally slightly higher than the floating interest rate because it is difficult to analyze the economic situation for the entire loan period.	The floating interest rate is normally lower than the fixed interest rate.
The fixed interest rate remains unchanged throughout the fixed tenure.	The floating interest rate may increase or decrease during the loan period.
—	Normally, banks vary the repayment period by keeping the EMI constant.

Question: What does EMI stand for in banking?

Answer: Equated Monthly Installment.

Question: What is an Equated Monthly Installment (EMI)?

Answer: A fixed amount paid by a borrower to a lender on a specified date every month until the loan is fully repaid.

Question: What components are included in an EMI payment?

Answer: An EMI includes both principal repayment and interest charges.

Question: What is an Amortization Schedule?

Answer: A detailed table indicating the breakdown of principal and interest components across each payment period over the life of a loan.

Question: What does Amortization mean?

Answer: Spreading loan payments out over multiple time periods.

Question: What is a Moratorium Period?

Answer: A specified period during which a borrower is not required to pay back the loan, commonly known as a grace period granted by banks during genuine hardships (such as natural disasters or business losses).

Question: What is Collateral Security?

Answer: Fixed property or other tangible assets pledged by a borrower to a lender to secure a loan.

Question: How does collateral security affect the interest rate on a loan?

Answer: It lowers the interest rate because the lender can recoup losses by selling the asset if the borrower defaults.

Question: Why do personal loans and credit card balances carry higher interest rates?

Answer: Because they are unsecured advances backed by no collateral security, presenting higher risk to lenders.

Question: Who is a Lessor and who is a Lessee?

Answer: The Lessor (landlord) is the rightful owner of the property, while the Lessee is the user who acquires the right to use the property for a specified period by paying one-time or periodic fees.

Question: What is Bailment?

Answer: The contractual transfer of possession of an asset or property for a specific objective, where ownership remains with the Bailor.

Question: Can a Bailee use the bailed property for their own benefit?

Answer: No, the Bailee cannot use the property; they are strictly responsible for its safe keeping and eventual return to the Bailor.

Question: What is Priority Sector Lending (PSL)?

Answer: A dispensation mandated by the RBI requiring banks to allocate a specific portion of bank credit to vulnerable or crucial sectors of the economy like agriculture, MSMEs, housing, education, and weaker sections.

Question: What overall target is set for Priority Sector Lending for domestic scheduled commercial banks?

Answer: 40% of Adjusted Net Bank Credit (ANBC) or Credit Equivalent Amount of Off-Balance Sheet Exposure (CEOBE), whichever is higher.

Question: Which committee recommended the 40% Priority Sector Lending target for banks by 1985?

Answer: Dr. K.S. Krishnaswamy Committee.

Question: Which banking categories are excluded from standard SCB Priority Sector Lending directions?

Answer: Regional Rural Banks (RRBs) and Small Finance Banks (SFBs), which follow separate target frameworks.

Question: What new categories were recently included in the revised PSL guidelines by the RBI?

Answer: Loans to farmers for installing solar power plants, setup of Compressed Bio Gas (CBG) plants, and bank finance to start-ups up to Rs. 50 crore.

Question: What is the PSL requirement for foreign banks with less than 20 branches in India?

Answer: 40% of ANBC or CEOBE, out of which up to 32% can be in the form of export lending and not less than 8% to other priority sectors.

Question: What percentage of ANBC is reserved for Agriculture within the 40% PSL target?

Answer: 18% of ANBC or CEOBE.

Question: What sub-target is allocated for Small and Marginal Farmers within the Agriculture PSL limit?

Answer: A sub-target of 8%.

Question: What is the landholding definition for a Marginal Farmer?

Answer: Farmers holding land up to 2.5 acres (1 hectare).

Question: What is the landholding definition for a Small Farmer?

Answer: Farmers holding land between 2.5 acres and 5 acres (1 to 2 hectares).

Question: What percentage of ANBC is allocated to Micro, Small, and Medium Enterprises (MSMEs) under PSL?

Answer: 7.5% of ANBC or CEOBE.

Type of Activity	Investment	Turnover
Micro	Up to ₹1 crore	Below ₹5 crore
Small	Up to ₹10 crore	Below ₹50 crore
Medium	Up to ₹50 crore	Below ₹250 crore

Question: What is the limit for incremental export credit classification under Priority Sector Lending for domestic scheduled commercial banks?

Answer: Incremental export credit up to 2% of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher.

Question: What is the per-borrower limit for Export Credit classification under PSL as updated by the RBI?

Answer: Enhanced to Rs. 40 Crore (up from Rs. 25 Crore).

Question: What are the PSL individual loan limits for educational purposes?

Answer: Up to Rs. 10 Lakh for studies in India and up to Rs. 20 Lakh for studies abroad.

Question: What are the PSL individual housing loan limits for metropolitan and other centers?

Answer: Up to Rs. 35 Lakh in metropolitan centers (population over 10 lakhs) and up to Rs. 25 Lakh in other centers.

Question: What are the maximum dwelling unit cost limits for housing loans to qualify under PSL?

Answer: Total cost of the dwelling unit must not exceed Rs. 45 Lakh in metropolitan centers and Rs. 30 Lakh in other centers.

Question: What is the per-borrower loan limit under PSL for building social infrastructure?

Answer: Bank loans up to Rs. 5 Crore per borrower in Tier II to Tier VI centers (for building schools, healthcare centers, drinking water facilities, etc.).

Question: What is the per-borrower loan limit under PSL for renewable energy projects?

Answer: Bank loans up to Rs. 15 Crore per borrower (for solar-based power generation, windmills, etc.).

Question: What percentage of ANBC is reserved for Weaker Sections under Priority Sector Lending?

Answer: 10% of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher.

Question: Name four categories of beneficiaries included under the Weaker Sections category for PSL.

Answer: Small and Marginal Farmers, DRI scheme beneficiaries, individual women beneficiaries (up to Rs. 1 Lakh), and artisans/cottage industries (individual limit up to Rs. 1 Lakh).

Question: What are Priority Sector Lending Certificates (PSLCs)?

Answer: Certificates designed to enable banks to achieve their Priority Sector Lending targets by buying excess PSL coverage from banks that have over-achieved their targets.

Question: Which committee first recommended the PSLCs scheme?

Answer: Committee on Financial Sector Reform led by former RBI Governor Dr. Raghuram Rajan.

Question: What is the name of the RBI portal used for trading PSLCs?

Answer: e-Kuber (RBI’s Core Banking Solution portal).

Question: Name the four types of PSLCs available in India.

Answer: PSLC Agriculture, PSLC S&MF (Small and Marginal Farmers), PSLC Micro Enterprises, and PSLC General.

Question: What is a Non-Performing Asset (NPA)?

Answer: A loan or asset that ceases to generate income for a bank when interest and/or installment of principal remains overdue for a period of more than 90 days.

Question: Which committee recommended the introduction of Income Recognition and Asset Classification (IRAC) norms in 1991?

Answer: Committee on Financial System (CFS) headed by Shri M. Narasimham.

Question: What is a Substandard Asset?

Answer: An asset that has remained classified as an NPA for a period less than or equal to 12 months.

Question: What is a Doubtful Asset?

Answer: An asset that has remained in the substandard category for a period of 12 months.

Question: What is a Loss Asset?

Answer: An asset where the loss has been identified by the bank, auditors, or RBI inspectors, but the amount has not yet been written off completely.

Question: What are Special Mention Accounts (SMA) and their timeframes?

Answer: Accounts showing signs of stress classified into SMA-0 (overdue up to 30 days), SMA-1 (overdue 31 to 60 days), and SMA-2 (overdue 61 to 90 days).

Question: At what stage and loan exposure level is the formation of a Joint Lenders’ Forum (JLF) mandatory?

Answer: At the SMA-2 stage for loan exposures of Rs. 100 Crore or more.

Question: What is Strategic Debt Restructuring (SDR)?

Answer: A process where lending banks convert outstanding debt into equity to take over management control and turn around a distressed company.

Question: What minimum exposure is required for Corporate Debt Restructuring (CDR)?

Answer: Outstanding exposure of Rs. 10 Crore or more involving multiple banking or consortium/syndicated loan accounts.

Question: What approval majority is required among lending banks to pass a Corporate Debt Restructuring (CDR) proposal?

Answer: At least 75% of banks by loan value and 60% of banks by number.

Question: Under which Act are Debt Recovery Tribunals (DRTs) established?

Answer: Recovery of Debts Due to Banks and Financial Institutions (RDDBFI) Act, 1993.

Question: What is the statutory timeline prescribed for DRTs to settle a case?

Answer: Within 6 months.

Question: Under which Act are Asset Reconstruction Companies (ARCs) created?

Answer: SARFAESI Act, 2002 (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act).

Question: What is the main advantage of the SARFAESI Act for banks recovering NPAs?

Answer: It empowers banks and financial institutions to auction or sell secured assets to recover NPAs without the intervention of a court.

Question: What minimum loan outstanding is required to apply the SARFAESI Act?

Answer: Outstanding loan balance of Rs. 1 Lakh and above.

Question: Which was the first Asset Reconstruction Company established in India?

Answer: Asset Reconstruction Company (India) Ltd (ARCIL).

Question: What statutory amendment provided for the institutionalized framework of the Monetary Policy Committee (MPC)?

Answer: The amendment to the Reserve Bank of India Act, 1934 by the Finance Act, 2016.

Question: What is a “run on a bank”?

Answer: A panic situation where a large number of depositors attempt to withdraw their deposits simultaneously, exceeding the bank’s liquid cash reserves and leading to potential bank failure.

Question: What is Cash Reserve Ratio (CRR)?

Answer: The percentage of Net Demand and Time Liabilities (NDTL) that scheduled commercial banks must maintain in cash with the RBI.

Question: Under which Act and section is the Cash Reserve Ratio (CRR) specified?

Answer: Section 42(1) of the Reserve Bank of India Act, 1934.

Question: What are the minimum floor and maximum ceiling limits for CRR set by the RBI?

Answer: There are no statutory floor or ceiling limits for CRR following the RBI Amendment Act, 2006.

Question: What is Statutory Liquidity Ratio (SLR)?

Answer: The proportion of NDTL that banks are required to maintain in liquid assets such as cash, gold, or approved unencumbered government securities.

Question: Under which Act and section is Statutory Liquidity Ratio (SLR) mandated?

Answer: Section 24 of the Banking Regulation Act, 1949.

Question: What is the statutory ceiling limit for Statutory Liquidity Ratio (SLR)?

Answer: The maximum statutory ceiling limit for SLR is 40%.

Question: What is Repo Rate?

Answer: The rate at which the RBI lends short-term funds (1 to 90 days) to commercial banks against government securities under a repurchase agreement.

Question: What is the minimum loan amount available under the Repo Rate facility?

Answer: Rs. 5 Crore.

Question: What is Reverse Repo Rate?

Answer: The interest rate paid by the RBI when it borrows or absorbs excess liquidity from commercial banks.

Question: What is Marginal Standing Facility (MSF)?

Answer: An overnight borrowing window provided by the RBI to scheduled commercial banks to borrow funds against SLR securities.

Question: What is the minimum transaction limit under Marginal Standing Facility (MSF)?

Answer: Rs. 1 Crore (and in multiples of Rs. 1 Crore thereafter).

Question: What is Bank Rate?

Answer: The long-term lending rate (up to 365 days) at which the central bank lends money or rediscounts bills of exchange for commercial banks without requiring collateral.

Question: What are Open Market Operations (OMOs)?

Answer: The buying and selling of government securities in the open market by the RBI to inject or absorb liquidity in the banking system.

Question: What is Disinvestment?

Answer: The process by which the government sells a minority portion of its equity stake in a public sector enterprise while retaining controlling ownership (above 51%).

Question: What is Privatization?

Answer: The process of transferring 100% ownership and management control of a government enterprise to private entities.

Question: Where is the headquarters of the Bank for International Settlements (BIS) / Basel Committee located?

Answer: Basel, Switzerland.

Question: When was Basel I introduced globally, and when did India adopt it?

Answer: Introduced globally in 1988; adopted by India in 1999.

Question: What was the minimum capital requirement prescribed under Basel I?

Answer: 8% of Risk-Weighted Assets (RWA).

Question: Name the 3 Pillars of Basel II Norms.

Answer:

1. Minimum Capital Adequacy Requirements

2. Supervisory Review Process

3. Market Discipline

Question: What major limitation led to the failure of Basel II during the 2008 financial crisis?

Answer: It failed to adequately account for and mitigate systemic risk and liquidity risks.

Question: What is the international standard for Capital Adequacy Ratio (CAR) under Basel III versus the requirement in India?

Answer: 8% internationally, whereas the RBI mandates a higher CAR of 9% for Indian banks.

Question: What is “Dear Money”?

Answer: Money available at high interest rates due to restricted money supply policies, making borrowing expensive.

Question: What is “Barren Money”?

Answer: Idle money that generates no interest or financial return (e.g., cash kept in a safe deposit locker).

Question: What is “Hot Money”?

Answer: Highly volatile funds that move quickly across markets seeking short-term high yields.

Question: What is “Fiat Money”?

Answer: Government-issued currency that is declared legal tender and is backed by government guarantee rather than a physical commodity like gold.

Question: Define the components of Reserve Money ($M0$).

Answer: Currency in circulation + Bankers’ deposits with the RBI + “Other” deposits with the RBI.

Question: Define the components of Narrow Money ($M1$).

Answer: Currency with the public + Demand deposits with the banking system + “Other” deposits with the RBI.

Question: Define the components of Broad Money (M3).

Answer: Intermediate Money (M2) + Long-term time deposits of residents + Call/Term funding from financial institutions.

Question: What is Branch Banking?

Answer: A system of banking where a single bank conducts its financial operations through a network of branches spread across different locations.

Question: What is Para Banking?

Answer: Financial services provided by commercial banks outside their core traditional functions (deposits and loans), such as selling insurance, mutual funds, credit cards, and managing pension funds.

Question: What is Universal Banking?

Answer: A comprehensive banking structure where a single financial institution provides a full range of commercial banking, investment banking, asset management, and insurance services under one roof (e.g., ICICI Bank).

Question: What is Narrow Banking?

Answer: A risk-averse strategy where banks invest their funds predominantly in risk-free government securities rather than extending high-risk loans.

Question: What is Shadow Banking?

Answer: Financial intermediation and lending activities carried out by non-banking financial companies (NBFCs) or unregulated entities outside the traditional commercial banking system.

Question: What is Unit Banking?

Answer: A banking model where an independent bank operates strictly from a single office or branch, catering to a localized community.

Question: What is Retail Banking?

Answer: Direct banking services delivered directly to individual retail consumers rather than large corporations or other banks (e.g., savings accounts, personal loans, debit/credit cards).

Question: What is Wholesale Banking?

Answer: Banking services tailored specifically for high-net-worth clients, mid-sized companies, commercial entities, and large corporations.

Question: What is Chain Banking?

Answer: A system where an overlapping group of individuals or entities acquires controlling interest in three or more independently chartered banks to coordinate their operations.

Question: What is Offshore Banking?

Answer: Banking services provided by a financial institution located outside the account holder’s home country or jurisdiction.

Question: What is Green Banking?

Answer: Environmental-friendly banking practices that promote sustainable development, paperless operations, and green energy financing.

Question: What is Merchant Banking?

Answer: A combination of banking and financial consultancy services provided to corporate clients for a fee, including underwriting, issue management, and project advisory.

Question: Under which Act and year was the Reserve Bank of India (RBI) established?

Answer: The Reserve Bank of India Act, 1934; the RBI officially began operations on April 1, 1935.

Question: On what date was the Reserve Bank of India nationalized?

Answer: January 1, 1949.

Question: What is the Minimum Reserve System followed by the RBI for issuing banknotes?

Answer: The RBI maintains a minimum total reserve of Rs. 200 Crore, of which at least Rs. 115 Crore must be held in gold and the remainder in foreign currency reserves.

Question: Which agency issues the one-rupee note in India?

Answer: The Ministry of Finance, Government of India (signed by the Finance Secretary).

Question: What is Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL)?

Answer: A wholly-owned subsidiary of the RBI established on February 3, 1995, headquartered in Bengaluru, which prints and supplies banknotes.

Question: Where are the two bank note presses operated by BRBNMPL located?

Answer: Mysore (Karnataka) and Salboni (West Bengal).

Question: What is DICGC, and what is its official headquarters location?

Answer: Deposit Insurance and Credit Guarantee Corporation, a wholly-owned subsidiary of the RBI headquartered in Mumbai.

Question: Under which Act and year was DICGC established?

Answer: DICGC Act, 1961 (established on July 15, 1978).

Question: What is the deposit insurance limit provided by DICGC per depositor per bank?

Answer: Up to Rs. 5,00,000 (covering both principal and interest).

Question: What insurance premium rate do banks pay to DICGC per Rs. 100 deposit?

Answer: 12 Paise per Rs. 100 deposit per annum (increased from 10 Paise).

Question: Who bears the cost of the DICGC deposit insurance premium?

Answer: The insured banks pay the premium directly; no charge is levied on depositors.

Question: Which working group recommended the creation of Regional Rural Banks (RRBs) in 1975?

Answer: Narasimham Working Group.

Question: Name the first Regional Rural Bank established in India.

Answer: Prathama Grameen Bank (established on October 2, 1975).

Question: What is the equity shareholding ratio between entities owning Regional Rural Banks (RRBs)?

Answer: Central Government (50%), Sponsor Bank (35%), and State Government (15%).

Question: On whose committee recommendations was NABARD established, and on what date?

Answer: B. Sivaraman Committee (CRAFICARD); NABARD started functioning on July 12, 1982.

Question: What is the difference between Direct Finance and Refinance in rural credit?

Answer: Direct Finance is credit extended directly to end-borrowers by commercial/co-operative banks, whereas Refinance is credit provided by apex bodies (like NABARD) to retail banks to replenish their lending resources.

Question: What is the Lead Bank Scheme, and which committee coined the term?

Answer: A scheme adopting an “Area Approach” to coordinate credit delivery and rural development in assigned districts, formulated by the Nariman Committee (based on Prof. D.R. Gadgil’s study group).

Question: How is the regulatory setup structured for Urban Co-operative Banks (UCBs)?

Answer: Dual regulation: banking operations are regulated by the RBI, while registration and administrative management are overseen by the Registrar of Co-operative Societies (RCS).

Question: What is the three-tier structure of short-term Rural Co-operative Banks in India?

Answer:

1. State Co-operative Banks (Apex Level)

2. District Central Co-operative Banks (District Level)

3. Primary Agricultural Credit Societies (Village/Grass-root Level)

Question: What is MUDRA?

Answer: Micro Units Development and Refinance Agency Ltd., a public financial institution set up under Pradhan Mantri MUDRA Yojana to provide low-cost refinance to banks, MFIs, and NBFCs for micro-enterprise lending.

Scheme	Loan Amount
Shishu	Up to Rs. 50,000
Kishor	Rs. 50,000 to Rs. 5 lakh
Tarun	Rs. 5 lakh to Rs. 10 lakh

Question: What is a Non-Banking Financial Company (NBFC)?

Answer: A company registered under the Companies Act engaged in lending, investments in shares/bonds/securities, leasing, hire-purchase, insurance, or chit business, whose principal business is not agricultural, industrial, or real estate activity.

Question: Can NBFCs accept Demand Deposits?

Answer: No, NBFCs cannot accept Demand Deposits (savings or current accounts); they can only accept time/term deposits if specifically authorized by the RBI.

Question: Can NBFCs issue cheques drawn on themselves?

Answer: No, NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on themselves.

Question: Is DICGC deposit insurance available to NBFC depositors?

Answer: No, the deposit insurance facility provided by the DICGC is not available to depositors of NBFCs.

Question: Which type of NBFC falls under the purview of the NBFC Ombudsman scheme?

Answer: Deposit-taking NBFCs (NBFC-D).

Question: Which committee recommended the concept and framework for Payment Banks in India?

Answer: Nachiket Mor Committee.

Question: What is the initial minimum paid-up equity capital required to set up a Payment Bank?

Answer: Rs. 100 Crore.

Question: What is the maximum deposit limit permitted per individual customer in a Payment Bank?

Answer: Up to Rs. 1 Lakh per customer.

Question: What minimum percentage of promoter stake is mandatory for the first 5 years in Payment Banks?

Answer: At least 40% minimum promoter contribution.

Question: Under which Act and Section are licenses granted to Payment Banks by the RBI?

Answer: Section 22 of the Banking Regulation Act, 1949.

Question: What are Small Finance Banks (SFBs)?

Answer: Niche banks licensed by the RBI to provide basic banking services, including deposit acceptance and credit supply to unbanked and underserved segments such as small business units, marginal farmers, and micro-industries.

Criteria	Small Finance Bank	Payment Bank
Capital Requirement	₹200 crore	Paid-up equity capital requirement of ₹100 crore
Primary Activities	Accepting deposits and lending to small farmers, small businesses, micro and small industries, and unorganized sector entities	Provides payment and deposit services
Lending	Loans and advances of up to ₹25 lakh, primarily to micro enterprises	No credit lending is allowed
Maximum Balance	—	Maximum balance of ₹1 lakh per individual customer
Credit Cards	Can issue credit facilities subject to applicable rules	Cannot issue credit cards
ATM/Debit Cards	Can issue ATM/debit cards	Can issue ATM/debit cards
Eligible Promoters	Professionals with 10 years in financial services or promoter groups with a 5-year track record	Card issuers, finance companies, Business Correspondents, telecom companies, retailers, etc.
Conversion	Existing resident-owned and controlled NBFCs, MFIs, and Local Area Banks (LABs) can opt for conversion into Small Finance Banks	—
Promoter’s Initial Contribution	40%, which may be reduced to 26% in 12 years	—
Promoter’s Stake	Promoters should retain a 40% stake for the first five years	—
Exposure Limit	Maximum loan size and investment exposure to a single/group borrower/issuer is restricted to 15% of capital funds	—
Micro Enterprises	Loans to micro enterprises should constitute at least 50% of the loan portfolio	—
Rural Branches	For the first three years, 25% of branches should be in unbanked rural areas	No such rule
Priority Sector Lending (PSL)	75% of Adjusted Net Bank Credit (ANBC) must be extended to PSL-eligible sectors	Lending is not allowed
Deposits	Can offer Savings, Current, Fixed and Recurring Deposits	Can offer only Savings and Current Accounts
CRR & SLR	Subject to RBI prudential norms, including CRR and SLR requirements	Must maintain CRR with RBI; 75% of demand deposit balances must be invested in SLR with maturity up to one year, while up to 25% may be held in current/time or fixed deposits with other scheduled commercial banks
Foreign Shareholding	As per FDI policy for private sector banks, as amended from time to time	As per applicable FDI policy
RBI Regulations	Subject to prudential norms and regulations applicable to existing commercial banks	Subject to applicable RBI regulations

Question: What was the first bank established in India, and when was it founded?

Answer: The Bank of Hindustan, established in Calcutta (now Kolkata) in 1770 (it ceased operations in 1832).

Question: Name the three Presidency Banks established during the British rule and their establishment years.

Answer: Bank of Bengal (1806), Bank of Bombay (1840), and Bank of Madras (1843).

Question: What entity was formed by amalgamating the three Presidency Banks, and in what year?

Answer: The Imperial Bank of India, formed on January 27, 1921.

Question: When was the Imperial Bank of India nationalized and renamed as the State Bank of India (SBI)?

Answer: In 1955 (following the recommendations of the All India Rural Credit Survey Committee / AD Gorwala Committee).

Question: Which is the oldest joint-stock bank in India that functioned continuously from its inception?

Answer: Allahabad Bank, established in 1865 at Allahabad, Uttar Pradesh.

Question: Which was the first limited liability bank managed by an Indian board of directors?

Answer: Oudh Commercial Bank, established in 1881 at Faizabad, Uttar Pradesh (failed in 1958).

Question: Which was the first bank solely established and managed by Indians, and where was its original head office?

Answer: Punjab National Bank (PNB), established in 1895 at Lahore (now in Pakistan).

Question: Which major national movement between 1906 and 1911 spurred the creation of numerous indigenous Indian banks?

Answer: The Swadeshi Movement.

Question: On what exact date were 14 major commercial banks nationalized in India for the first time?

Answer: July 19, 1969 (under the Prime Ministership of Indira Gandhi).

Question: What was the minimum deposit criteria for the 14 commercial banks nationalized in 1969?

Answer: Banks with deposit bases of Rs. 50 Crore and above.

Bank	Year of Establishment
Canara Bank	1906
Bank of India	1906
Corporation Bank	1906
Indian Bank	1907
Bank of Baroda	1908

Static Banking Awareness: Bank Nationalization & Recent Mega Mergers

Question: How many commercial banks were nationalized during the second phase of bank nationalization in 1980?

Answer: 6 major commercial banks (nationalized on April 15, 1980).

Question: What was the minimum deposit criteria for the banks nationalized in 1980?

Answer: Banks with demand and time liabilities (deposits) of Rs. 200 Crore and above.

Question: Name the 6 commercial banks nationalized in 1980.

Answer:

1. Andhra Bank

2. Oriental Bank of Commerce (OBC)

3. New Bank of India

4. Corporation Bank

5. Punjab and Sind Bank

6. Vijaya Bank

Question: Which was the first nationalized bank to be merged with another nationalized bank in 1993?

Answer: New Bank of India (merged into Punjab National Bank).

Question: Following the mega-consolidation drive, how many Public Sector Banks (PSBs) are operating in India?

Answer: 12 Public Sector Banks (reduced from 27 in 2017).

Question: Which banks were merged into Punjab National Bank (PNB) during the mega-merger?

Answer: Oriental Bank of Commerce (OBC) and United Bank of India.

Question: Which banks were merged into Union Bank of India during the mega-merger?

Answer: Andhra Bank and Corporation Bank.

Question: Which bank was merged into Canara Bank during the mega-merger?

Answer: Syndicate Bank.

Question: Which bank was merged into Indian Bank during the mega-merger?

Answer: Allahabad Bank.

Question: Which banks were merged into Bank of Baroda (BoB) in April 2019?

Answer: Vijaya Bank and Dena Bank.

Question: Which five associate banks and one specialized bank were merged into State Bank of India (SBI) on April 1, 2017?

Answer: State Bank of Bikaner & Jaipur (SBBJ), State Bank of Hyderabad (SBH), State Bank of Mysore (SBM), State Bank of Patiala (SBP), State Bank of Travancore (SBT), and Bharatiya Mahila Bank (BMB).

Anchor Bank	Amalgamating Bank(s)	Position by Size
PNB (Punjab National Bank)	Oriental Bank of Commerce + United Bank of India	2nd Largest
Canara Bank	Syndicate Bank	4th Largest
Union Bank of India	Andhra Bank + Corporation Bank	5th Largest
Indian Bank	Allahabad Bank	7th Largest

Question: Under which Schedule of the RBI Act, 1934 are banks excluded or removed when they cease operations or merge?

Answer: The Second Schedule of the Reserve Bank of India Act, 1934.

Question: Which six public sector banks were removed from the Second Schedule of the RBI Act following their mega-mergers?

Answer: Syndicate Bank, Oriental Bank of Commerce (OBC), United Bank of India, Andhra Bank, Corporation Bank, and Allahabad Bank.

Question: What is the Money Market?

Answer: A component of the financial market that deals in short-term borrowing and lending of funds with maturities up to 1 year (1 day to 365 days).

Question: What is the tenure for Call Money, Notice Money, and Term Money?

Answer:

• Call Money: 1 day (overnight)

• Notice Money: 2 days to 14 days

• Term Money: Exceeding 14 days up to 365 days

Question: What are Treasury Bills (T-bills)?

Answer: Short-term, zero-coupon money market instruments issued and auctioned by the RBI on behalf of the Central Government to meet short-term liquidity requirements.

Question: What are the standard maturity periods and minimum denomination for Treasury Bills?

Answer: Maturity periods are 91 days, 182 days, and 364 days; issued in minimum denominations of Rs. 25,000 and multiples thereof.

Question: What is a Commercial Paper (CP)?

Answer: An unsecured, short-term debt instrument issued in the form of a promissory note by highly rated corporates, primary dealers, and financial institutions to meet short-term working capital needs.

Question: What is the minimum net worth requirement for a company to issue Commercial Paper, and what are its tenure and minimum denomination?

Answer:

• Minimum Net Worth: Rs. 4 Crore

• Tenure: 7 days to 1 year

• Minimum Denomination: Rs. 5 Lakh and in multiples thereof

Question: What is a Certificate of Deposit (CD)?

Answer: A negotiable money market instrument issued by Scheduled Commercial Banks (excluding RRBs and Local Area Banks) and All India Financial Institutions against funds deposited for a specified period.

Question: What are the tenure limits and minimum denomination for Certificates of Deposit (CDs)?

Answer:

• Tenure by Banks: 7 days to 1 year

• Tenure by Financial Institutions: 1 year to 3 years

• Minimum Denomination: Rs. 1 Lakh and in multiples thereof

Question: What are Cash Management Bills (CMBs)?

Answer: Very short-term zero-coupon instruments issued by the Central Government (via RBI) to meet temporary cash flow mismatches with maturities of less than 91 days.

Question: What is the Capital Market?

Answer: A segment of the financial system used for long-term borrowing and equity/debt financing with tenure exceeding 1 year, overseen primarily by SEBI.

Question: What is the difference between Primary Market and Secondary Market?

Answer: The Primary Market deals with the fresh issue of securities directly to investors (e.g., Initial Public Offering – IPO), whereas the Secondary Market deals with the trading of existing, previously issued securities among investors (e.g., Stock Exchanges).

Question: What is the difference between Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI)?

Answer: FDI involves long-term direct investment in physical enterprise assets, management control, or joint ventures in a foreign country; FPI involves passive investment in foreign financial assets (shares, bonds) without operational control or direct management oversight.

Parameter	FDI (Foreign Direct Investment)	FPI (Foreign Portfolio Investment)
Definition	FDI refers to investment made by foreign investors to obtain a substantial interest in an enterprise located in a different country.	FPI refers to investing in the financial assets of a foreign country, such as stocks or bonds available on an exchange.
Role of Investors	Active	Passive
Type	Direct Investment	Indirect Investment
Degree of Control	High	Very Low
Term	Long-term	Short-term
Management of Projects	Efficient	Comparatively less efficient
Investment Done On	Physical assets of the foreign country	Financial assets of the foreign country
Entry & Exit	Difficult	Relatively Easy
Risks Involved	Stable	Volatile
Major Impact	Leads to transfer of funds, technology, and other resources to the foreign country.	Leads to capital inflows to the foreign country.

Question: What is a Differentiated or Niche Bank?

Answer: A bank licensed by the RBI to carry out a limited or specific range of activities rather than full-fledged universal banking services (e.g., Payment Banks and Small Finance Banks).

Question: What is the difference between Greenfield and Brownfield projects?

Answer: A Greenfield project involves starting a new venture completely from scratch without any connection to prior infrastructure, whereas a Brownfield project involves expanding, modifying, or upgrading existing infrastructure.

Question: What is a Bridge Loan?

Answer: A short-term financing facility (typically up to one year) that bridges the gap until an entity secures long-term financing or satisfies an immediate financial obligation.

Question: What is Channel Finance?

Answer: Working capital financing extended by financial institutions to dealers or distributors based on their commercial relationships with large corporate entities.

Question: What is the fundamental difference between Insolvency and Bankruptcy?

Answer: Insolvency is a financial state where an entity’s liabilities exceed its assets and it cannot meet debt obligations; Bankruptcy is a legal status resulting from a court proceeding where a trustee liquidates assets to pay off creditors.

Question: What is Liquidation?

Answer: The legal process of winding up or dissolving a company by selling its assets and distributing the proceeds to clear outstanding debt liabilities.

Question: Who is an Actuary?

Answer: A professional specializing in mathematics, statistics, and financial theory who evaluates risk and calculates insurance premiums and reserves.

Question: What is the accounting difference between Amortization and Depreciation?

Answer: Amortization is the process of writing off the cost of intangible assets over time, while Depreciation measures the reduction in the monetary value of tangible physical assets due to wear and tear or obsolescence.

Question: What is Arbitrage?

Answer: The simultaneous purchase and sale of an asset in different markets or exchanges to profit from price differentials.

Question: What is Bancassurance?

Answer: A partnership mechanism through which banks sell insurance products of a tied insurance company to their existing customer base.

Question: How many Basis Points (bps) make up 1%?

Answer: 100 basis points equal 1 percentage point (1 bps = 0.01%).

Question: What is Core Banking Solutions (CBS)?

Answer: A centralized banking network that connects bank branches, enabling customers to conduct transactions and access services from any branch on the network regardless of where their account was opened.

Question: What is Marginal Standing Facility (MSF)?

Answer: An emergency window through which scheduled commercial banks borrow overnight funds from the RBI against government securities when inter-bank liquidity dries up.

Question: What are Open Market Operations (OMOs)?

Answer: The buying and selling of government securities and Treasury Bills in the open market by the RBI to regulate money supply and adjust liquidity conditions in the economy.

Question: What is a Recession?

Answer: An economic phase marked by a decline in Gross Domestic Product (GDP) for two or more consecutive quarters.

Question: What are Special Drawing Rights (SDRs)?

Answer: An international reserve asset created by the International Monetary Fund (IMF) to supplement the official foreign exchange reserves of its member countries.

Acronym	Abbreviation
ACS	Automated Clearing System
ADR	American Depository Receipt
AEPS	Aadhaar Enabled Payment System
AFS	Annual Financial Statement
AIF	Alternative Investment Fund
ALCO	Asset Liability Committee
ALM	Asset Liability Management
AMFI	Association of Mutual Funds in India
ANBC	Adjusted Net Bank Credit
APBS	Aadhaar Payment Bridge System
ARC	Asset Reconstruction Companies
ASBA	Application Supported by Blocked Amount
ATM	Automated Teller Machine
BBPS	Bharat Bill Payment System
BCBS	Basel Committee on Banking Supervision
BCSBI	Banking Codes and Standards Board of India
BHIM	Bharat Interface for Money
BIS	Bank for International Settlements
BOP	Balance of Payments
BPLR	Benchmark Prime Lending Rate
BRBNMPL	Bharatiya Reserve Bank Note Mudran Private Limited
BSBDA	Basic Savings Bank Deposit Account
CAD	Capital Account Deficit
CAD	Current Account Deficit
CAGR	Compound Annual Growth Rate
CAR	Capital Adequacy Ratio
CARE	Credit Analysis and Research Ltd.
CASA	Current Account Savings Account
CBLO	Collateralized Borrowing and Lending Obligations
CBS	Core Banking Solution
CCEA	Cabinet Committee on Economic Affairs
CCF	Credit Conversion Factor
CCL	Cash Credit Limit
CDR	Corporate Debt Restructuring
CDS	Credit Default Swap
CEPA	Comprehensive Economic Partnership Agreement
CIBIL	Credit Information Bureau of India Limited
CIDR	Central Identities Data Repository
CII	Confederation of Indian Industry
CMIS	Currency Management Information System
CPI	Consumer Price Index
CRAR	Capital to Risk-Weighted Assets Ratio
CRILC	Central Repository of Information on Large Credits
CRIS	Comparative Rating Index of Sovereigns
CRISIL	Credit Rating Information Services of India Limited
CRR	Cash Reserve Ratio
CSR	Corporate Social Responsibility
CTS	Cheque Truncation System
CVV	Card Verification Value
DEAF	Depositor Education and Awareness Fund
DICGC	Deposit Insurance and Credit Guarantee Corporation
DII	Domestic Institutional Investor
DNS	Domain Name System
DPG	Deferred Payment Guarantee
DPN	Demand Promissory Note
DRAT	Debt Recovery Appellate Tribunal
DRI	Differential Rate of Interest
DSCR	Debt Service Coverage Ratio
DTAA	Double Taxation Avoidance Agreement
ECB	External Commercial Borrowings
ECGC	Export Credit Guarantee Corporation
ECR	Export Credit Refinance
ECS	Electronic Clearing System
EDI	Electronic Data Interchange
EDP	Entrepreneurship Development Programme
EEFC	Exchange Earners’ Foreign Currency
EFSF	European Financial Stability Facility
EFTPOS	Electronic Funds Transfer at Point of Sale
ELSS	Equity Linked Savings Scheme
EMI	Equated Monthly Instalment
EPOS	Electronic Point of Sale
EPS	Earnings Per Share
ETF	Exchange Traded Fund
FCA	Foreign Currency Assets
FCCB	Foreign Currency Convertible Bond
FCNRA	Foreign Currency Non-Resident Account
FCNRD	Foreign Currency Non-Repatriable Deposit
FDI	Foreign Direct Investment
FEMA	Foreign Exchange Management Act
FERA	Foreign Exchange Regulation Act
FICCI	Federation of Indian Chambers of Commerce and Industry
FII	Foreign Institutional Investor
FIMMDA	Fixed Income Money Market and Derivatives Association
FINO	Financial Inclusion Network and Operations
FIPB	Foreign Investment Promotion Board
FPI	Foreign Portfolio Investment
FPO	Follow-on Public Offer
FRA	Forward Rate Agreement
FRBM	Fiscal Responsibility and Budget Management Act
FRN	Floating Rate Note
FSLRC	Financial Sector Legislative Reforms Commission
GAAR	General Anti-Avoidance Rule
GFD	Gross Fiscal Deficit
GIRO	Government Internal Revenue Order
GMS	Gold Monetization Scheme
GNFV	Gross Negative Fair Value
HCE	Host Card Emulation
IBA	Indian Banks’ Association
IBRD	International Bank for Reconstruction and Development
ICAAP	Internal Capital Adequacy Assessment Process
ICRA	Investment Information and Credit Rating Agency of India Limited
IDRBT	Institute for Development and Research in Banking Technology
IEPF	Investor Education and Protection Fund
IFSC	Indian Financial System Code
IIB	International Investment Bank
IIP	Index of Industrial Production
IMPS	Immediate Payment Service
IMT	Instant Money Transfer
INFINET	Indian Financial Network
IPO	Initial Public Offering
IRBI	Industrial Reconstruction Bank of India
IRO	Interest Rate Options
ISCI	International Standard Industrial Classification
KCC	Kisan Credit Card
KVP	Kisan Vikas Patra
KYC	Know Your Customer
LAF	Liquidity Adjustment Facility
LAMPS	Large Sized Adivasi Multipurpose Societies
LCR	Liquidity Coverage Ratio
LIBOR	London Interbank Offered Rate
LRS	Liberalised Remittance Scheme
LTCG	Long-Term Capital Gains
MAMP	Minimum Average Maturity Period
MCLR	Marginal Cost of Lending Rate
MFI	Micro Finance Institutions
MIBOR	Mumbai Interbank Offered Rate
MICR	Magnetic Ink Character Recognition
MSF	Marginal Standing Facility
MSS	Market Stabilisation Scheme
MUDRA	Micro Units Development and Refinance Agency
NABARD	National Bank for Agriculture and Rural Development
NACH	National Automated Clearing House
NAS	National Accounts Statistics
NBFC	Non-Banking Financial Companies
NDS	Negotiated Dealing System
NDTL	Net Demand and Time Liabilities
NEFT	National Electronic Funds Transfer
NFA	No-Frills Account
NFS	National Financial Switch
NPA	Non-Performing Assets
NPCI	National Payments Corporation of India
NPS	National Pension Scheme
NPV	Net Present Value
NRE	Non-Resident External Account
NRO	Non-Resident Ordinary Account
OLTAS	Online Tax Accounting System
OMO	Open Market Operations
OTCEI	Over the Counter Exchange of India
P-Notes	Participatory Notes
P2P	Peer-to-Peer
PACS	Primary Agricultural Credit Societies
PCA	Prompt Corrective Action
PCR	Public Credit Registry
PFRDA	Pension Fund Regulatory and Development Authority
PGS	Payment Gateway System
PIN	Personal Identification Number
PIO	Persons of Indian Origin
PIS	Portfolio Investment Scheme
POA	Power of Attorney
PPF	Public Provident Fund
PPIs	Prepaid Payment Instruments
PPP	Public Private Partnership
PPP	Purchasing Power Parity
PRSF	Partial Risk Sharing Facility
RDBMS	Relational Database Management System
RDDBFI	Recovery of Debts Due to Banks and Financial Institutions
RIDF	Rural Infrastructure Development Fund
RLA	Recoveries of Loans & Advances
ROA	Return on Assets
RTGS	Real Time Gross Settlement
RWA	Risk-Weighted Assets
SARFAESI	Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act
SDR	Special Drawing Rights
SFMS	Structured Financial Messaging System
SGB	Sovereign Gold Bond
SHG	Self-Help Group
SIFI	Systemically Important Financial Intermediaries
SIP	Systematic Investment Plan
SIPS	Systemically Important Payment System
SLR	Statutory Liquidity Ratio
SMERA	SME Rating Agency of India Limited
SMILE	SIDBI Make in India Loan for Small Enterprises
SPNS	Shared Payment Network System
STRIPS	Separate Trading of Registered Interest and Principal of Securities
SWIFT	Society for Worldwide Interbank Financial Telecommunication
TDS	Tax Deducted at Source
TIN	Tax Information Network
UEBA	Universal Electronic Bank Account
UIDAI	Unique Identification Authority of India
UPI	Unified Payments Interface
UPIN	Unique Property Identification Number
USSD	Unstructured Supplementary Service Data
UTI	Unit Trust of India
VCF	Venture Capital Fund
VPA	Virtual Payment Address
WCTL	Working Capital Term Loan
WMA	Ways and Means Advances
WPI	Wholesale Price Index

YTM	Yield to Maturity

Question: On what date was the Pradhan Mantri Jan-Dhan Yojana (PMJDY) officially launched by Prime Minister Narendra Modi?

Answer: August 28, 2014 (announced on August 15, 2014).

Question: What is the primary objective of the Pradhan Mantri Jan-Dhan Yojana (PMJDY)?

Answer: To ensure universal financial inclusion by providing affordable access to basic banking services, including savings accounts, credit, insurance, pension, and remittances to every unbanked household.

Question: What type of bank account is opened under the Pradhan Mantri Jan-Dhan Yojana?

Answer: Basic Savings Bank Deposit Account (BSBDA) with zero minimum balance requirement.

Question: What debit card facility is provided to PMJDY account holders?

Answer: A RuPay Debit Card equipped with built-in accident insurance coverage.

Question: What relief measure was announced on March 26, 2020, for women PMJDY account holders during the COVID-19 outbreak?

Answer: Ex-gratia payment of Rs. 500 per month for three consecutive months (April–June 2020) directly credited to their PMJDY accounts.

Atal Pension Yojana (APY)

Pradhan Mantri MUDRA Yojana (PMMY)

Types of MUDRA Loans

Kisan Credit Card (KCC)

Eligibility

• Individual or joint borrowers who are owner cultivators

• Tenant farmers

• Oral lessees and sharecroppers

• Self-Help Groups (SHGs) or Joint Liability Groups (JLGs) of farmers, including tenant farmers and sharecroppers

Who Can Issue Kisan Credit Card?

• Commercial Banks

• Regional Rural Banks (RRBs)

• Small Finance Banks

• Cooperative Banks

Small Savings Schemes