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JS Digest of Banking and Finance April 2016 3

CONTENTS
Vol. - X April-16 Issue - 8
BANKING & FINANCE Finance, SE

April 2016 Funds under Management .................. 1 2
Declaration in New ITR Forms .......... 1 3
SBI: PF Withdrawal Norms ......................... 1 3
SBIs Shanghai Desk .................................7 Unified Payments Interface (UPI) .... 1 3
Home Loan Rate Cut ...............................7
Foreign Branches ........................................7 Economy
LinkedIn Leader ........................................7 Inward remittance .................................. 1 3
Mobile App .................................................7 Masala Bonds .......................................... 1 3
Merger of 5 NE Rural Banks .................. 7 Table of Key Statistics .......................... 1 3
Revaluation of Assets ..............................7
National
RBI: Punishment for Illicit Money .............. 1 4
Increase in Investment Limits in Emergency Number 112 ....................... 1 4
G-Secs ............................................................8 100% FDI in e-market places ............. 1 4
New Method of Loan Rate Construction and Demolition
Calculation ..................................................8 activities Waste Management
RBI Portal for Trading PSL Rules ........................................................... 1 5
Certificates ...................................................8 First Woman CM of J&K ..................... 1 5
Monitori ng of Oversea s D irect Alcohol-Free Bihar .................................. 1 5
Investments .................................................8 Aadhaar Enrolments ............................. 1 5
First Bi-Monthly Monetary Policy Gatimaan Express .................................. 1 5
20 16 -1 7 .........................................................8 Kolkata Flyover Collapse .................... 1 5
Big Defaulters .......................................... 1 1 Entry of Women in temples ................ 1 6
KFA Outstanding .................................. 1 1 National Ranking of Higher
Transfer of Funds from Centre to Educational Institutions ...................... 1 6
Sta tes .......................................................... 1 1 Employment Generation ...................... 1 6
Punjab Food Loan Issue ...................... 1 1 GOI Proposal for IITs ........................... 1 6
Mergers of Private Banks and Ban of Diesel Cars .................................. 1 6
NBFCs ........................................................ 1 1 Increase in GOI Staff ............................. 1 6
State Borrowings .................................... 1 2 E-market Platform ................................. 1 7
RBI on UDAY bonds ............................. 1 2 Earthquake Tremors in North
India ............................................................ 1 7
Banking/Other Banks: Clean Fuel for Cooking ......................... 1 7
First Small Finance Bank ..................... 1 2 Death of Tribal Children in
Gold Monetisation Scheme .................. 1 2 Government Schools .............................. 1 7
Bank Boards Bureau (BBB) ................ 1 2 Action Plan for India ............................. 1 7
4 Contents
Kerala Temple Fire ................................. 1 8 Personalities ........................................... 2 4
TERI Chief Quits Again ....................... 1 8
Change of Name ..................................... 1 8 Sports ........................................................ 2 4
Climate Change Treaty ......................... 1 8
Assembly Polls ........................................ 1 8 Awards/Recognitions .......................... 2 5
Uttarakhand Crisis ................................ 1 8
Surge Pricing ............................................ 1 9 Appointments ........................................ 2 6
MGNREGA Funds .................................. 1 9
Heat Wave ................................................ 1 9 Miscellaneous ........................................ 2 6
Corbitt Tiger Reserve is in
Uttarkhand ............................................... 1 9 Recent Banking Developments:
Literacy Rate ............................................ 1 9 P B Business
Shatrujeet .................................................. 1 9 SBI GLOBAL ED-VANTAGE
SCHEME ................................................... 2 7
International SBI SKILL LOAN SCHEME ............... 2 9
Modis Trips ............................................. 1 9 SBI FLEXIPAY HOME LOAN ........... 3 0
Brussels Terror Blasts ........................... 1 9
Myanmars First Public Listing ......... 2 0 Deposits
World Bank Loan for Swachh Partnership ............................................... 3 0
Bharat Mission ..............................................
Fortunes List of 50 Greatest Forex
Leaders ...................................................... 2 0 Forei gn Exc hange Ma nagement
Blackstones Acquisition of (Remittance of Assets)
Mphasis ..................................................... 2 0 Regulations, 2016 ................................... 3 1
Forbes List ............................................... 2 0 Import of Rough, Cut a nd Pol ished
Chinas Growth ........................................ 2 0 Diamonds ................................................. 3 5
Investment by Foreign Portfolio Investors
False Testing by Mitsubishi ................ 2 0
(FPI) in Government Securities .......... 3 6
Seismic Activity in the Pacific ............ 2 1
External Commercial Borrowings (ECB)
Panama Papers ....................................... 2 1
Revised framework ............................ 3 6
Saudi Arabian Factory Fire ................. 2 2
Ac ceptance of deposits by Indi an
arathon in Space ..................................... 2 2
companies from a person resident outside
Space Mission to Nearest Star ........... 2 2
India for nomination as Director: ..... 3 8
India-France Solar Programme .......... 2 2
Foreign Direct Investment (FDI) in India
Chinas Military Chief ........................... 2 3 Review of FDI policy ......................... 3 8
BIS ............................................................... 2 3
Advances
Technology Priority Sector Lending
HCLs Acquisition ................................. 2 3 Certificates ................................................ 3 8
Fine on TCS ............................................... 2 3 The details of the Priority Sector Lending
Tech Company Results ......................... 2 3 Certificates ................................................ 3 9
Dates, Anniversaries .......................... 2 4

Govt. Business up of Risk Management System in
Revamped Gold Deposit Scheme Banks .......................................................... 4 7
(R- GDS) ................................................... 4 1 Standing Liquidity Facilities for
Legal Primary Dealers ...................................... 4 7
Tenants interest in Sarfaesi action ... 4 3 Master Directions Issued by RBI ....... 4 7
Acquittal in cheque bounce case ....... 4 4 Bullet Train ............................................... 4 8
Gene ra l Concept Brief - I

Change in Bank Rate ............................. 4 4 Indian Economy Roundup .................. 4 9
Marginal Standing Facility .................. 4 4
Liquidity Adjustment Facility ........... 4 5 Concept Brief - II
Section 42(1) of the Reserve Bank of Unified Payments Interface ................ 5 5
India Act, 1934 - Change in Concept Brief - III
Daily Minimum Cash Important Short Notes in
Reserve Maintenance Requirement ... 4 5 Foreign Exchange .................................... 5 8
Gold Monetisation Scheme, 2015 ...... 4 5
Oversight of Government Business Model Test Based on April16
in Agency Banks ..................................... 4 5 Information ............................................. 6 9
Security / Inspection needs
and Movement of Treasure ................. 4 7 Recollected Questions:
Risk Based Supervision - Follow MM II Confirmation Exam (TOs)
held on 05.07.2015 ................................. 7 1
6 Contents
BANKING & FINANCE APRIL 2016
SBI:
o SBIs Shanghai Desk: To attract Chinese investors for the Make
in India initiative, SBI, Shanghai has set up a special desk to
offer advisory services.
o Home Loan Rate Cut: SBI has reduced its home loan interest
rate by 0.1% to 9.4% for women borrowers while it is 9.45% for
men. Car loans rates are 9.75% for women while they are 9.8%
for men. This is because RBI had reduced its repo rate by 25 bps
in its first monetary policy review for 2016-17.
o Foreign Branches: SBI may shut unviable branches abroad in
an effort to consolidate its global operations. It plans to prepare
3-5 year road map for its international operations.
o LinkedIn Leader: SBI has the maximum followers with 2,20,972
at the professional networking site, LinkedIn, in India. It had
launched its page in June 2015.
o Mobile App: SBI has launched its State Bank of India No Queue
mobile app to save its customers time while availing banking
services. Some of its features include:
- displays branches nearest (within 15 km) to the location of the
customer
- books instant e-tokens for some services and indicates expected
waiting time for the service
When the customer reaches the branch, upon activation of the e-
token, his/her waiting time will be minimal.
o Merger of 5 NE Rural Banks: SBI has sought the merger of 5
rural banks in the North-East Arunachal Pradesh Rural Bank,
Meghalaya Rural Bank, Mizoram Rural Bank, Nagaland Rural
Bank and Langpi Dehangi Rural Bank (in Assam). SBI holds
35% stake, GOI 50% and respective State Governments 15% each
in the banks.
o SBH (State Bank of Hyderabad) is celebrating its Platinum Jubilee
(5-4-16).
o SBI plans to tap the wholesale bond market and change its mix
of resources. SBI Chairman has stated that this will reduce the
overall cost of resources which will enable the Bank to transmit
lower rates of interest to borrowers faster.
o Revaluation of Assets: If real estate assets of the Bank are revalued
there will be an excess of Rs.20000 Rs.25000 cr allowing for
addition of Rs.9000 cr to capital adequacy.

RBI:
Increase in Investment Limits in G-Secs: RBI has increased the
maximum limit up to which foreign investors can invest in
Government securities (G-secs) by Rs.20,500 crore for Central
Government securities and Rs.7,000 crore for State Government
securities in two tranches.
New Method of Loan Rate Calculation: RBI has asked banks to
use the marginal cost of funds method to calculate interest rates
on loans to customers for fixed loans up to 3 years. The central
bank had already directed banks to follow this method for floating
rate loans. Currently, banks are exempted from following this
method for only fixed rate loans with tenures of over 3 years.
RBI Portal for Trading PSL Certificates: Banks may buy Priority
Sector Lending (PSL) certificates with minimum lot sizes of Rs.25
lakh to make up their PSL targets. These may be traded on its e-
Kuber portal. This is meant to help PSL by leveraging different
strengths of banks.
Monitoring of Overseas Direct Investments: RBI has made it
easier for banks to access data for reference purposes when an
Indian party wants to invest in Joint Ventures and wholly-owned
subsidiaries or remittances and other financial commitments. It
has improved the overseas direct investments application
processes; the Indian party will have to provide more details of
investments and remittances.
First Bi-Monthly Monetary Policy 2016-17:

Policy: The repo rate has been reduced by 25 bps to 6.5%. The
policy rate corridor has been narrowed from +/-100 basis points
(bps) to +/- 50 bps. This has been achieved by reducing the
Marginal Standing Facility (MSF) by 75 bps and increasing the
reverse repo rate by 25 bps. As a result, the MSF is now 7% (and
hence the bank rate also) and the reverse repo is 6%. This will
align the Weighted Average Call Rate (WACR) with the repo
rate.
Reserve Ratios: The Cash Reserve Ratio (CRR) has been left
unchanged at 4% of Net Demand and Time Liabilities (NDTL).
However, banks only need to maintain 90% of the CRR on a
daily basis effective from the fortnight beginning April 16, 2016;
it used to be 95%. The Statutory Liquidity Ratio (SLR) has been
reduced by 25 bps to 21.25%.
Liquidity: While the central bank will continue to provide the
8 Banking & Finance

required liquidity, it will progressively lower the average ex ante
liquidity deficit in the system from 1% of NDTL to near neutrality.
This is so that banks plug their shortfalls in liquidity estimated
at around Rs.80,000-90,000 crore, by using RBIs facilities rather
than short term money markets.
Global Economy: World trade has been on the decline as there is
slowing import demand from Emerging Market Economies
(EMEs). Growth has also been weak in these nations. China has
been experiencing slowing growth as well as excess capacity
and contracting exports. Exports have been weak in the US also
though consumer spending has been improving. The Euro area
is suffering from the migrant crisis; quantitative easing and low
energy prices have helped the economy. Japan has experienced
weak consumer spending though it did not go into recession.
Agriculture: Agricultural growth moderated because of lower
kharif crop production. However, despite a bad monsoon period,
rabi crop production has been estimated to be higher than the
previous year.
Industry: Though industrial production has been flat and
manufacturing output on the decline, consumer sentiment seems
to be improving. RBI has a positive outlook on industrial outlook.
Services: In the second half of FY16, the services sector expanded
steadily. The RBI looks favourably upon this sector for H1 of
FY17 as well.
Inflation: Retail or Consumer Price Index (CPI) inflation declined
in February because of a decline in vegetable prices. It is expected
to be around 5% in 2016-17. However, the One Rank One Pension
(OROP) award and Seventh Pay Commission will put an upward
pressure on this.
External Sector: While exports continue to decline, the fall has
reduced to single digit. Low crude oil prices have ensured that
trade deficit has been at the lowest monthly since 2013. The
Current Account Deficit (CAD) is estimated to be 1.3% of GDP in
the January-March 2016 quarter. Foreign Direct Investment (FDI)
has been robust till January 2016 while Foreign Institutional
Investors (FIIs) have become net purchasers in March 2016.
Liquidity has been tight because of the GOIs large cash balances.
Concern: RBI expects retail inflation to decline to 4.2% by Q4 of
FY18 but the Seventh Pay Commission might cause it to increase
by 100-150 bps over 2 years. RBI expects that the reduction in the

policy rate will boost private investment which has been
languishing with unutilised capacity.
Growth Projection: RBI expects India to grow by 7.6% in terms of
Gross Value Added in FY17.
Stance: RBI has commended the GOI for its fiscal consolidation
course. It has also forecasted normal monsoons. The downside
risk lies in corporate sector stress, banks risk aversion and weak
global trade. The apex bank has kept its options for further rate
cuts open depending on macroeconomic and financial
conditions.
RBI has released some developmental and regulatory policies to
further the objective of extending financial services to the entire
nation:
Banking Structure:
RBI will redefine branches of banks in terms of services provided
and permissible methods of outreach with the intent of achieving
the objective of financial inclusion without compromising on
the autonomy enjoyed by banks.
RBI plans to explore other types of specialised banks (like
payment banks and small banks) in the form of custodian banks
and banks for wholesale and long-term financing.
RBI will not activate Counter Cycling Capital Buffers (CCCB)
now as per its analysis.
RBI has set up an expert panel under Chairperson Smt. Meena
Hemachandra on IT Examination and Cyber Security to provide
guidance on adoption of Information Technology (IT) by banks.
RBI plans to cover major banks in 2016-17 and all banks by
2017-18.
The central bank plans to offer technological support to Urban
Co-operative Banks (UCBs) through the Institute for Development
and Research in Banking Technology (IDRBT) to ensure
standardised Core Banking Solutions and further the objective
of Financial Inclusion (FI).
Financial Markets: RBI has simplified processes in the derivatives and
gilt markets and foreign investment segments. It has relaxed rules and
enabled easier access for investment by both domestic and international
players. It is also committed to making it easier for start-ups to do
business. It will arrange certification programmes for Business
Correspondents, relax the process of registration of Non Banking Finance
Companies (NBFCs) and enable Micro Small and Medium Enterprises
10 Banking & Finance

(MSMEs) easier access to the credit market. It will also focus on moving
the Payment and Settlement system towards cashless transactions.
o Big Defaulters: As per a Supreme Court (SC) directive, RBI had

submitted a list of defaulters who owe over Rs.500 crore to the
banking system to the apex court and requested it to keep the
information confidential. The SC is in the process of examining
the defaulters on the list. In an accompanying affidavit, the RBI
has said that the disclosure may have an adverse impact on
business and may accentuate the failure of business rather than
nursing it back to health. The disclosure may have an impact on
the livelihood of employees of such entities, RBI said.
o KFA Outstanding: Kingfisher Airlines (KFA) Vijay Mallya, one
of the biggest defaulters to the banking system, had offered to
settle his dues with a payment of Rs.6,868 crore (increased from
his initial offer of Rs.4,000 crore) out of the total outstanding of
Rs.9,000 crore. However, Public Sector Banks (PSBs) have rejected
the offer. SBI had an outstanding amount due to it of about
Rs.1,600 crore. The Supreme Court (SC) had asked Vijay Mallya
to reveal assets owned by him and his family and to deposit
substantial amount as advance deposit to prove his bonafide
intentions. However, he has claimed that he is a Non Resident
Indian (NRI) and does not need to disclose his assets. The KFA
Brand was up for sale for Rs.366 crore. The Ministry of External
Affairs (MEA) has since revoked his passport. A non-bailable
warrant has also been issued against him by a special court
under Prevention of Money Laundering Act (PMLA).
o Transfer of Funds from Centre to States: The transfer of central
funds to states has reduced by 0.3% of GDP in 2015-16 as
compared to the previous year as many centrally-sponsored
schemes were discontinued. The Good and Services Tax (GST)
will help increase states revenues. This is as per a report State
Finances: A Study of Budgets of 2015-16 released by the RBI.
o Punjab Food Loan Issue: RBI has asked banks to substantially
provision (15% of exposure) for loans (about Rs.12,000 crore are
considered risky) given to the Punjab Government to procure
food grains. The quantum of grains in stock does not cover the
loans disbursed. Usually, loans to state governments are
sovereign debts that are not in danger of default.
o Mergers of Private Banks and NBFCs: RBI has released master
directions for the merger of private banks and Non-Banking
Finance Companies (NBFCs). In the case of private banks, the

amalgamation must be approved by two-thirds majority of the
members of the respective Boards as well as two-thirds of the
shareholders. In the case of amalgamation of an NBFC and a
private bank, all accounts must be Know Your Customer (KYC)-
compliant and must finally become accounts of the bank.
o State Borrowings: The quantum of total market borrowings by
the State Governments and the Union Territory of Puducherry,
for the April to June 2016 quarter, is expected to be between
Rs.55,000 crore and Rs.60,000 crore.
o RBI on UDAY bonds: RBI has called market players to buy UDAY
bonds (Ujwal Discom Assurance Yojana). Earlier, only banks
were allowed to invest in these bonds. These bonds are issued
under the power distribution companies (discoms) loan
package.
Banking/Other Banks:
First Small Finance Bank: Indias first small finance bank,
Capital Small Finance Bank, was opened on April 24, 2016. It
opened 10 new branches. The bank used to be known as Capital
Local Area Bank and has been in operation since 2000 with 47
branches in Punjab. Small finance banks are meant to enable
financial inclusion of people in rural and unbanked areas.
Gold Monetisation Scheme: Punjab National Bank (PNB) is the
top mobiliser, with 1,311 kg of gold, under the Gold Monetisation
Scheme.
Bank Boards Bureau (BBB) is a 7 member body including
Chairman Vinod Rai, former CAG. BBB has been set up by the
Govt. with the objective of toning up of PSBs. H N Sinor former
JMD of ICICI Bank, Anil Khandelwal former CMD of BOB and
Rupa Kudwa former chief of CRISIL are the members. The other
members are Financial Services Secretary, Secretary, Public
Enterprises and a Deputy Governor of RBI. It is expected that the
Bureau will eventually transitioned into a Bank Investment
Company that would be the holding company for all PSBs.
Finance, SE:
Funds under Management: SEBI has asked Mutual Fund (MF)
companies to reduce the number of funds under their
management. The number of schemes have to be brought to 8
under debt and 7 under equity. It has directed them to offer only
one fund under each category. This is to enable simplicity in
investing as multiple funds tend to confuse customers.

Declaration in New ITR Forms: The Income Tax Department
(ITD) has added a new schedule in the new Income Tax Return
(ITR) forms. All individuals and Hindu Undivided Families
(HUFs), earning over Rs.50 lakh, must declare their assets
(movable and immovable property) and liabilities as of end 2015-
16.
PF Withdrawal Norms: After large and violent protests by
workers unions, particularly by garment workers in Karnataka,
the Employees Provident Fund Organisation (EPFO) has rolled
back its proposal to restrict withdrawal of the employers
contribution to an employees PF account till the applicant is 58
years of age. He/she was free to withdraw only his/her
contribution to the PF amount till the age of 58 years until the
proposal was withdrawn. EPFO plans to launch the One
Employee One EPF Account system on May 1, 2016 which will
discourage withdrawals from the EPF account and encourage
state governments to join the pension system.
Unified Payments Interface (UPI): The National Payments
Corporation of India (NCPI) has launched the next generation
technology Unified Payments Interface that will promote RBIs
vision of a cashless society. It will help customers transfer funds
without having to know details of the recipients bank IFSC code
or other bank account information. Customers can transfer
through a unique virtual address, mobile number or Aadhaar
number. Some banks have already gone LIVE with this
technology.
Economy:
Inward remittance: India is the largest remittance recipient in
2015 at $59 billion (in 2014: $ 60 billion).
Masala Bonds: State run companies like NTPC, PFC, REC to
raise funds in the UK by issuing Masala bonds. (Masala Bonds
are rupee - denominated borrowings by Indian entities in
overseas markets.)
Table of Key Statistics:
CRR 4%
SLR 21.25%
REPO 6.50%
REVERSE REPO 6%
MSF 7%
BANK RATE 7%
INFLATION (CPI)* 4.83%

FDI** US$ 42 bn
FII *** - US$ 2.7 bn
SENSEX@ 26064
NIFTY@ 7979
RS/$@ 66.44
GOLD/10 g@ 29,315
SILVER/kg @ 40,689
Forex Reserves# US$ 360.25 bn
Current Account Deficit as a % of GDP^ 1.3
Industrial Output^^ 2%
* March 2016
** April 2015 to February 2016
*** 2015-16
@ As on April 27 2016
# As on April 15 2016
^ October to December 2015
^^ February 2016
National:
Punishment for Illicit Money: Through a draft bill, the GOI
proposes to punish those who deal in illicit money known as
Ponzi operators with stringent imprisonment up to 10 years and
fine up to Rs.50 crore. While initial offenders will be subject to
fines of up to Rs.10 lakh and a minimum imprisonment of 1 year,
extendable to 5 years, repeat offenders will have fines of up to
Rs.50 crore and imprisonment ranging from 5-10 years. People
who collect money from one set of investors and pay them interest
on it with funds collected from another set of investors, rather
than through profits generated from investment, are known as
Ponzi dealers.
Emergency Number 112: Indias new emergency number is to
replace 100 for police, 101 for fire department and 102 for
ambulance services.
100% FDI in e-marketplaces: The GOI has allowed 100% Foreign
Direct Investment (FDI) in the marketplace models of e-commerce
sites through the automatic route. It has disallowed foreign
investment in the inventory model. Online sites are not allowed
to influence prices of goods sold. A marketplace model is where
the e-commerce site offers a digital platform that facilitates buyers
and sellers to carry on trade with consumers. In an inventory
model, the e-commerce site owns inventory and sells directly to

consumers. Sites such as Amazon and Flipkart predominantly
use certain sellers to sell most of their products. This has not
been permitted still.
Construction and Demolition Waste Management Rules: The
GOI has framed and notified new rules to reduce air pollution
due to construction and demolition activities. Some of the rules
include:
o Use of water sprinklers to suppress dust
o Waste to be transported in covered vehicles
o Construction sites to be covered
o Large generators to segregate waste soil, steel, concrete,
wood, plastics and so on and to pay charges for
collection, transportation, processing and disposal of
waste
o No waste to be dumped in landfills or drainages
o Governments to facilitate storage, processing and
recycling facilities and commission disposal facilities
o First Woman CM of J&K: Mehbooba Mufti Sayeed of the Peoples
Democratic Party (PDP) was sworn in as the first woman Chief
Minister (CM) of Jammu & Kashmir (J&K). She is the daughter of
the late J&K CM Mufti Mohammad Sayeed who passed away in
January 2016.
o Alcohol-Free Bihar: Bihar Chief Minister (CM) Nitish Kumar
has stated that Bihar is now a dry state where alcohol cannot be
sold or consumed, even in bars and restaurants. No licences will
be given with immediate effect. India Made Foreign Liquor (IMFL)
is also banned. Army cantonment areas have been excluded since
they have their own rules. Bihar has now become the second
state after Gujarat to ban alcohol.
o Aadhaar Enrolments: The GOI has achieved 1 billion Aadhaar
enrolments. This will help the GOI roll out a universal
distribution system of about Rs.3.5 lakh crore worth for welfare
benefits per annum through the Aadhaar card.
o Gatimaan Express: Indias first semi-high speed train travelled
from Nizamuddin (Delhi) to Agra, a distance of 188 km at a
speed of 160 kmph. It is now the fastest Indian train.
o Kolkata Flyover Collapse: The under-construction Vivekananda
flyover collapsed in Kolkata and at least 21 people were killed.
Hyderabad-based contractor company IVRCL was the company
in charge of the construction and some of its officials, including
its Vice President, Ranjit Bhattacharya, have been arrested. Other
arrests are expected.

o Entry of Women in temples: The Bombay High Court (HC) has
directed the state Government to conform to the law and ensure
that women have the same rights as men to enter Hindu temples.
The Government has agreed to implement the law, upholding
gender equality.
o National Ranking of Higher Educational Institutions: The
National Institutional Ranking Framework (NIRF) has carried
out the first ever Government ranking of institutions of higher
education in four categories:
Engineering Indian Institute of Technology (IIT),
Chennai
Management Indian Institute of Management (IIM),
Bangalore
Pharmacy Manipal College of Pharmaceutical Sciences
University Indian Institute of Science (IISc)
o Employment Generation: According to a study by industry body
ASSOCHAM, Karnataka is the top job-creating state in India
with 24% share in employment generation. Maharashtra (23%)
and Tamil Nadu (10.5%) are second and third respectively.
o GOI Proposal for IITs: The GOI has decided to increase the
annual fees for Indian Institutes of Technology (IITs) from
R.90,000 to Rs.2 lakh. An IIT panel including directors of Madras,
Bombay, Kanpur and Hyderabad IITs had suggested this as a
means to achieve financial autonomy. The Human Resource
Department (HRD) has stated that Scheduled Castes (SCs),
Scheduled Tribes (STs), Dalits and physically challenged
children as well as those whose annual income is less than Rs.1
lakh will be educated for free here. Students with families with
annual income of less than Rs.5 lakh will have to pay only one-
third of the fee. As per the Vidyalakshmi scheme, all IIT students
will be entitled to an interest-free loan for the fees. Students need
to get at least 75% in their XII standard board exams. The earlier
weightage of 40% given to XII standard results has been done
away with.
o Ban of Diesel Cars: The Supreme Court has extended its ban on
registration of diesel cars with 2000 cc and above engine capacity
in the National Capital Region (NCR).
Increase in GOI Staff: The GOI plans to increase its staff by 2.2
lakh in 2 years. As of March 2016, the Central Government staff
numbered 34.93 lakh. This is expected to increase to 35.23 lakh
by March 1, 2017 as per Budget estimates. This figure includes

the Railways but excludes the defence forces.
E-market Platform: The Indian Prime Minister Narendra Modi
unveiled an electronic platform for farmers to sell their produce
National Agricultural Market (NAM). It will connect 21
wholesale markets or mandis from 8 states. It will become pan-
India by 2017 and connect 585 mandis by March 2018.
Earthquake Tremors in North India: An earthquake measuring
6.8 on the Richter scale hit Myanmar; the tremors were felt in
North and East India, though there were no causalities.
Clean Fuel for Cooking: Vice Chairman of NITI Aayog, Arvind
Panagariya has suggested that electricity be used for cooking as
a cleaner alternative to petroleum products.
Death of Tribal Children in Government Schools: According
to investigations after a Right to Information (RTI) application
was filed, it has been found that 882 tribal children have died in
residential schools run by the Government between 2010 and
2015. 684 of these were in Maharashtra.
Action Plan for India: The GOI has come up with a host of reforms
to achieve:
eradication of poverty by 2032
US$ 10 trillion economy
creation of 175 million jobs
10% annual growth until 2032
The reforms include:
o Procurement norms to be WTO (World Trade
Organisation)-compliant by 2017-18
o 100% rural electrification by May 2018
o Rural tele-density to increase to 100% by 2020
o 175 million broadband connections by 2017
o All Gram Panchayats to have broadband connectivity
through optical fibres by December 2018
o 15 million metric tonnes fish production to be
achieved by 2020
o Implementation of seeding of Aadhaar numbers in
90% of ration cards by end of 2016-17
o Deregulation of genetically-engineered (Bt) insect-
resistant pulses by 2017-18
o Buffer stock of pulses to be created by 2017-18
o Permanent Account Numbers (PANs) to be
mandatory for all business entities; it is to serve as a

unique business identifier by the end of 2016-17
8 themes have been identified by Prime Minister Narendra Modi that the
GOI plans to work on:
1. Accelerated growth with inclusion and equity
2. Employment generation strategies
3. Universal access to quality health and education
4. Good governance
5. Farmer-centric issues in agriculture and allied activities
6. Swachh Bharat and Ganga rejuvenation
7. Energy conservation and efficiency
8. Innovative budgeting and effective implementation
Kerala Temple Fire: 112 people were killed and 1,000 others
injured when fireworks led to explosions in a temple in Kollam,
Kerala. 15,000 people were in the temple. The Government has
since arrested some temple authorities and the Kerala High Court
banned high-decibel fireworks at night in temples.
TERI Chief Quits Again: Former TERI (The Energy and Resources
Institute) Chief R K Pachauri, accused of sexual harassment, has
resigned from the TERI Governing Council again. He had earlier
been re-appointed as executive Vice Chairman of the institution
after resigning from his position but there had been much criticism
for this decision.
Change of Name: Gurgaon is to be named Gurugram according
to Haryana Chief Minister Manohar Lal Khattar who has given
in-principle approval for it. This has to be passed by the State
cabinet and the Union Government.
Climate Change Treaty: India is due to sign the climate change
treaty along with about 150 countries in New York, USA. 190
countries had agreed on the treaty during the 21st Conference of
Parties (COP21) held in Paris, France in December 2015. The
GOI has also fixed the year 2016-17 as the target for energy
efficiency norms to be implemented in vehicles in India.
Assembly Polls: Assembly elections took place in Assam and
West Bengal with high voter turnout in the different phases.
Tamil Nadu, Kerala and Puducherry are also due to go to polls
this year.
Uttarakhand Crisis: Presidents rule has been imposed in
Uttarakhand as some Congress Members of Parliament (MLAs)
rebelled against the Harish Rawat Government. The President

dismissed the Government following a sting operation against
the Chief Minister (CM), Harish Rawat. The Centre has issued
an ordinance to authorise Uttarakhand expenditure from April
1, 2016. While the High Court has struck down Presidents rule
in the state and asked the GOI to test its majority on the floor on
April 29, 2016, the Supreme Court has stayed the verdict of the
High court.
Surge Pricing: The Delhi High Court had asked the Delhi
Government to ensure that taxi aggregators do not advertise as
cheap transport while charging exorbitant fares. The Government
subsequently banned them from surge pricing where they charge
sums in multiple of the actual fare due to traffic or peak time
fares. Ola and Uber have since suspended the practice in Delhi.
While the practice has also been banned in Karnataka, it has not
been implemented by the taxi aggregators so far. The Delhi
Government has resumed the odd-even scheme flow of traffic in
the capital to control air pollution levels.
MGNREGA Funds: The Centre has given Rs.12,000 crore to
states for Mahatma Gandhi Rural Employment Guarantee Act
(MGNREGA) the rural job flagship programme.
Heat Wave: Heat waves, across the country, have led to the death
of over 100 people, many of them in Telangana and Odisha.
Corbett Tiger Reserve is in Uttarkhand: It is home to about 215
tigers. 50 hectares of the reserve have been gutted by fire recently.
Literacy Rate: Has gone up by 4.5% to 69% in 2014 as against
64.5% in 2008. Bihar improved its literacy rate considerably
during the period; still it has the lowest rate.
Shatrujeet: It is the codename of a proactive war strategy of the
Indian Army. The strategy aims to hit hard with multiple
conventional military strikes across the Pakistan border.
Kaziranga National Park is in Assam and is famous for its one -
horned rhinoceroses.
International:
Modis Trips: Members of the European Parliament have called
Indian Prime Minister Narendra Modi a major ally in the war
against terror, given the countrys history, during the PMs trip
to Brussels. The PM has visited the US and Saudi Arabia also in
this trip.
Brussels Terror Blasts: One Indian, 31-year old Raghvendran

Ganesan working in Infosys, has been confirmed dead out of 35
victims in the blasts that went off in the airport and metro stations
in Brussels. The Islamic State of Iraq and Syria (ISIS) has claimed
responsibility for these blasts.
Myanmars First Public Listing: After a gap of over 20 years,
Myanmars stock exchange opened for business with one
company trading First Myanmar Investment. The Asian
financial crisis and the military government had led to its closure.
Myanmars newly elected democratic government has enabled
this.
World Bank Loan for Swachh Bharat Mission: The World Bank
has signed an agreement with the GOI to lend US$ 1.5 billion
towards its efforts to launch the Swachh Bharat initiative. This
Mission is aimed at ending open defecation by 2019 by providing
sanitation facilities to rural areas and managing waste products
effectively and efficiently.
Fortunes List of 50 Greatest Leaders: Delhis Chief Minister
(CM) Arvind Kejriwal has been ranked at No.42 in Fortune
magazines 50 Greatest Leaders list. Amazons Chief Executive
Officer (CEO) Jeff Bezos is ranked first followed by Germanys
Chancellor, Angela Merkel.
Blackstones Acquisition of Mphasis: Private equity group
Blackstone has acquired 60.5% stake in IT services firm Mphasis
from Hewlett Packard Enterprises. It will have to mandatorily
offer to buy an additional 26% from the public. The deal for 75%
stake (maximum stake allowed in the company) of the company
is valued at between US$ 825 million (Rs.5,466 crore) to US$ 1.1
billion (Rs.7,071 crore) depending on the offer price agreed upon.
Forbes List: In the Forbes magazines Asia 50 Power
Businesswomen 2016 List, Reliance Industries director Nita
Ambani and SBI Chairman Arundhati Bhattacharya have been
ranked as the top two women business leaders. 8 Indians figure
in the list.
Chinas Growth: China grew by 6.7% in the January-March 2016
quarter as compared to the year-ago period. The International
Monetary Fund (IMF) has reported that China has US$ 1.3 trillion
worth of risky loans.
False Testing by Mitsubishi: Japanese Automaker Mitsubishi
has admitted that it falsified fuel efficiency tests in 600,000
vehicles presenting better fuel consumption rates than the actual
ones. The companys bottom line is expected to take a big hit.

Earlier, Germanys automaker Volkswagen had also admitted
to manipulating tests regarding emission and pollution controls
in its vehicles.
Seismic Activity in the Pacific:
2 earthquakes measuring 6.5 and 7.3 on the Richter scale
killed 48 people in Japan. The tremors that followed
measured 6.1. While there have been fears of Tsunami,
no warnings have been issued so far. Factories and
plants have been shut down.
In Ecuador, 587 people were killed in an earthquake
measuring 7.8 on the Richter scale; 2,500 people were
injured. Another one measuring 6 also hit soon after on
its coastline. Experts have stated that the two may be
unrelated incidents.
Panama Papers:
Case: Leaked documents from a Panamanian law firm,
Mossack Fonesca was shared with media groups by the
International Consortium of Investigative Journalists
(ICIJ). The papers revealed the hidden offshore financial
dealings of 140 political figures from 50 countries all
around the world, including 12 current or former heads
of state. 500 Indians were also named. A multi-agency
team will investigate the matter. RBI Governor Raghuram
Rajan has stated that some people could have genuine
reasons for holding stakes in foreign companies.
Global Fallouts:
o Icelands Prime Minister (PM) Sigmundur
Davio Gunnlaugsson has resigned; his name
was in the list for holding an offshore company
in the British Virgin Islands where millions of
dollars were deposited.
o Ian Cameron Father of David Cameron, Prime
Minister of Britain was named.
o Relatives of Chinese President Xi Jinping and
Russian President Vladimir Putin have also
been named.
o Indian Hindi film actors Amitabh Bachchan,
Aishwarya Rai Bachchan and Argentinian
football player Lionel Messi have also been
named. A Vijay Mallya-owned company is on
the list. FIFA President Gianni Infantino is also

linked.
Tax Evasion Angle: Offshore businesses can be set up
by Indians subject to FEMA / RBI guidelines However,
It is observed that many accounts have been used for tax
evasion, drugs, terrorism and other illegal and criminal
activities. RBI Governor has stated that it is possible for
the Indians named to have legitimate offshore accounts
as the Liberalised Remittance Scheme (LRS) permits
outward remittances. These individuals named have
paid the law firm headquartered in Panama, a tax haven,
Mossack Fonseca, money to set up offshore companies.
RBIs Norms: RBI currently allows Indians to invest in
bonafide business activities by setting up Joint Ventures
(JV) or Wholly Owned Subsidiaries (WOS) up to the limit
of US$ 250000 under LRS. However, Indian investors
must report any changes that have been made in the
company after their investment in it. They also have to
name the source of their investments. The changes
include
Change in status of Indian investor
Change in capital structure of the Joint Venture (JV) or
Wholly Owned Subsidiary (WOS)
Saudi Arabian Factory Fire: A fire in a petrochemical factory in
Saudi Arabia killed 12 people and injured 11 others. 3 of the
fatalities were Indians.
Marathon in Space: British astronaut, Tim Peake, aged 44, was
the first man to run the marathon (42.4 km) in space. American
astronaut Sunita Williams has run the marathon in space in
2007.
Space Mission to Nearest Star: Russian billionaire Yuri Milner,
British physicist Stephen Hawkins, and Mark Zuckerberg of
Facebook are part of a US$ 100 million space project, Breakthrough
StarShot that plans to send ultra-light nano crafts to the nearest
star system (after the Sun) Alpha Centauri, which is 25 trillion
miles away. The journey is likely to take 20 years. India is likely
to be a part of the project according to executive director of the
project, S Pete Worden.
India-France Solar Programme: India and France have launched
a solar programme with $1 trillion potential to help developing
countries utilise their solar resources to enable cleaner fuel usage.

The objective is to provide easy access to finance solar projects
and also help agriculturists in the countries that are members of
the International Solar Alliance (ISA).
Chinas Military Chief: Chinas President Xi Jinping has become
the Commander-in-Chief of the armed forces. He has ordered the
forces to be prepared for any eventuality with respect to disputes
in the islands of the South China Sea.
BIS (Bank for International Settlements) Basle has proposed a
uniform definition for NPAs and forbearance to ensure
consistency in disclosures. The guidelines for the definitions
seek to harmonise quantitative and qualitative criteria used for
risk categorization. Forbearance refers to concessions like
modification or refinancing of loans and debt securities that are
granted as a result of a borrowers financial difficulty.
Technology:
HCLs Acquisition: Indian IT company HCL Technologies
acquired majority stake in Mumbai-based engineering solutions
and services firm Geometric for US$ 200 million.
Fine on TCS: A federal jury in the US has levied a fine notice of
US$ 940 million on Indian Information Technology (IT) services
company Tata Consultancy Services (TCS) in a trade secret lawsuit
filed by US electronic medical records vendor Epic Systems. The
US company has claimed that its trade secrets and confidential
data were stolen by TCS.
Tech Company Results:
Infosys registered an increase of 16.2% in its net profits to
Rs.3,597 crore in the January-March 2016 quarter as compared
to the year-ago period. For the whole year, it registered 9.4%
increase in net profits to Rs.13,491 crore as compared to the
previous year.
Wipros net profit increased by 4% to Rs.2,570 crore in the
January-March 2016 quarter as compared to the year-ago period.
For the year 2015-16, its net profits increased by 2% to Rs.9,970
crore as compared to the previous year.
Tata Consultancy Services (TCS) net profit increased by 64.4%
to Rs.6,341 crore in the January-March 2016 quarter as compared
to the year-ago period. For the year 2015-16, its net profits
increased by 23.2% to Rs.24,215 crore as compared to the
previous year.

Dates, Anniversaries:
June 23 2016: Britain to vote to decide whether to stay in the
European Union (EU) or not.
April 14, 2016 125th birth anniversary of Dr B R Ambedkar,
principal architect of the Indian Constitution.
7th April World Health Day, World Health Organisation has
selected the theme of Diabetes for this year.
18th April World Heritage Day.
Personalities:
P Susheela (80): The Indian singer has entered the Guinness
book of world records for recording the highest number of songs
in different languages 17,695 songs in solo, duet and chorus
forms. She has sung in Tamil, Malayalam, Kannada and Hindi
among 12 Indian languages. She has already received the Padma
Bhushan in 2008 and the Lifetime Achievement Award by
Filmfare in 2006. She was the first playback singer to be awarded
the National Award for Best Female Playback Singing in 1969;
she has won this award 5 times in all.
Irom Sharmila (42): The Manipuri activist has been acquitted in
the 2006 attempt-to-suicide case by a Delhi court. She was
protesting through a fast- unto-death to repeal the Armed Forces
Special Powers Act (AFSPA) that she claims has been responsible
for widespread discrimination of the people of the North East.
She has been on a fast for the last 16 years and is being fed
through a nasal tube.
Prince (57): The American singer and music icon was found
dead near his studio. His full name was Prince Rogers Nelson.
He was famous for albums such as Why You Wanna Treat Me
So Bad and I Wanna Be our Lover. He has won 7 Grammy
awards and an Oscar for his songs.
Shaktiman (13): The police horse whose hind legs were broken
during a protest by BJP in Dehradun, Uttarakhand passed away.
While its legs were amputated and a prosthetic one fitted, it did
not survive.
Sports:
Cricket:
West Indies beat England to win the T20 Mens World
Cup. India lost to West Indies in the semi-finals.
West Indies beat Australia to win the T20 Womens

World Cup. India crashed out in the league matches
stage.
Hockey: India lost to Australia in the finals of the Azlan Shah
Cup held in Ipoh, Malaysia.
Gymnastics: Dipa Karmakar has become the first Indian to qualify
for the Olympics in the artistic gymnastics category. She will
participate in the 2016 Olympics to be held in Rio de Janeiro.
Golf: British golfer Danny Willet won the 2016 The Masters golf
tournament in Georgia, USA.
Formula One: Nico Rosberg of Germany, driving the Mercedes,
won the 2016 Bahrain and Chinese Grand Prix. Earlier, he had
won the Australian Grand Prix as well.
Badminton: Thai shuttler Ratchanok Intanon beat Chinese player
Li Xuerui to win the India Open Super series womens title while
Japans Kento Momota beat Denmarks Viktor Axelsen to win
the mens title in New Delhi.
Football: Bengaluru FC players won the 2016 I-League, the Indian
professional football league.
Awards/Recognitions:
National Film Awards: The 63rd National Film awards 2016 were
announced and the awardees were:
Best Actor: Amitabh Bachchan, Piku
Best Actress: Kangana Ranaut, Tanu Weds Manu
Returns
Best Feature Film: Bahubali (Telugu)
Best Popular Film: Bajrangi Bhaijaan (Hindi)
Best Direction: Sanjay Leela Bhansali, Bajrangi Bhaijaan
Skoch Awards: Corporation Bank was awarded the Skoch
Achiever Award for 2016 for National SME enablement.
Miss India: Priyadarshini Chatterjee, from Delhi, has been
crowned Femina Miss India World 2016.
Laureus Awards: Tennis players Novak Djokovic of Serbia and
Serena Williams of the USA won the Sportsman and
Sportswoman of the Year awards respectively at the Laureus
awards ceremony for 2015; it was held at Berlin, Germany.
Golden Peacock Award: New India Assurance was awarded
the Golden Peacock Award 2016 for innovation/service; it also
won the Iconic Brand Summit and Excellence Award 2016 by
industry body ASSOCHAM.

Appointments:
NASSCOM Chairman: C P Gurnani has been appointed as the
Chairman of industry body NASSCOM National Association
of Software and Services Companies for 2016-17.
Miscellaneous:
The year 2016 is predicted to be the hottest year ever so far.

RECENT BANKING DEVELOPMENTS APRIL2016
P B Business:
SBI GLOBAL ED-VANTAGE SCHEME
Purpose
To extend financial assistance to deserving/meritorious students for
pursuing full time regular courses in foreign colleges/ universities
Eligible Courses - Studies Abroad
Regular full time Graduate/Post Graduate/Doctorate Courses in Science,
Technology, Engineering, Mathematics, Medicine and Management in
institutions / universities of USA, UK, Canada, Australia, Europe,
Singapore, Japan and Hong Kong
Eligible Expenses
Fee payable to college / school / hostel.
Examination / Library / Laboratory fee.
Travel expenses/passage money for studies abroad.
Purchase of books/equipments/instruments/uniforms/ computer at
reasonable cost, if required for course completion and any other expense
required to complete the course like study tours, project work, thesis,
etc. can be considered for loan subject to the condition that these should
be capped at 20% of the total tuition fees payable for completion of the
course.
Caution deposit / building fund / refundable deposit supported by
Institution bills/receipts the amount considered for loan should not
exceed 10% of the tuition fees for the entire course.
Premium of RiNn Rakhsha (IRDA License No: UIN: 111N078V01):
Finance for RiNn Rakhsha will improve insurance-coverage of the
loan
Quantum Of Finance
Minimum Loan Amount: Rs. 20 Lacs
Maximum Loan Amount: Rs. 1.5 Cr
Margin
Scholarship/assistantship to be included in margin.
Margin to be brought in on year-on-year basis as and when
disbursements are made on a pro-rata basis.
Processing Fee:
Rs. 10,000/- per application.

Rate of Interest
Simple Interest will be charged during Course Period + Moratorium
Period
Sanction & Disbursement
The loan application will be accepted at selected/ identified
Branches only. List of Identified Branches is annexed at A.
Security
Tangible collateral security
Collateral security offered by Third Party (other than parents) can also
be accepted
Repayment And Repayment Holiday (Moratorium)
Accrued interest during the moratorium to be added to the
principal and repayment in EMI fixed.
Repayment will commence 6 months after completion of course
Repayment upto maximum of 15 years
However, a tenor premium of 1% will be charged in case of
repayment period of more than 10 years
Documents Required
Letter of admission
Completely filled in Loan Application Form
2 passport size photographs
PAN Card of the student and Parent/ Guardian
AADHAR Card of the student and parent/ Guardian
Proof of identity (driving license/passport/any photo identity)
Proof of residence (driving license/passport/electricity bill/
Telephone bill)
Statement of cost of study
Student/Co-borrower/ guarantors bank account statement for
last 6 months
IT return/ IT assessment order, of last 2 years of Parent/
Guardian/ other co-borrower
Brief statement of assets & liabilities of Parent/ Guardian/ other
co-borrower
Proof of income (i.e. salary slips/ Form 16) Parent/ Guardian/
other co-borrower Identified Branches For - SBI Global Ed-
Vantage Scheme
28 Recent Banking Developments

SBI SKILL LOAN SCHEME
Courses and Institution Eligibility
Training Institutes/ Courses: Courses run by Industrial Training
Institutes (ITIs), Polytechnics, training partners affiliated to National
Skill Development Corporation (NSDC)/ Sector Skill Councils, State
Skill Mission, State Skill Corporation, preferably leading to a certificate
/ diploma / degree issued by such organization as per National Skill
Qualification Framework (NSQF) are eligible for a Skilling Loan.
Schools recognized by Central or State Education Boards or Colleges
affiliated to recognized university leading to a certificate / diploma /
degree issued by such organization as per National Skill Qualification
Framework (NSQF) is eligible for a Skilling Loan.
There is no minimum course duration.
Expenses considered for loan

Tuition / Course Fee
Examination / Library / Laboratory fee
Caution deposit
Purchase of books, equipments and instruments
Any other reasonable expenditure found necessary for completion of
the Course. (As such courses are localized boarding, lodging may not
be necessary. However, wherever it is found necessary, the same could
be considered on merits)
Amount of Loan
Minimum Loan Amount: Rs. 5000
Maximum loan amount: Rs. 1,50,000
Timeline for Disposal of Loan Application

Maximum 6 days, after the receipt of duly completed application with
supporting documents.
The timeline start from the date of receipt of complete documents from
the applicant and the time taken by the applicant for submitting
documents and/ or for furnishing information sought by the Bank will
not be taken into account for the purpose of timeline indicated above.
All timeline counts will be on the basis of full working days. Wherever
there is a need for verification etc. with various authorities / Govt. bodies
across one or more centres, a minimum of 15 additional working days
will be applicable. We shall endeavour, at all times, to deliver within the
indicated timelines, barring in situations and circumstances that are
beyond the control of the Bank.

Processing Fees: Nil
Margin: Nil
Moratorium Period
Course Duration Moratorium Period

Courses of duration upto 1 year 6 months from the completion of the course
Courses of duration above 1 year 12 months from the completion of the course
Repayment Tenure
Lo an Amo unt R epaym ent Perio d in Years

Loans upto R s 50,000 U pto 3 years
Loans betw een R s 50,000 to Rs 1 lakh U pto 5 years
Loans abo ve R s. 1 lakh U pto 7 years
SBI FLEXIPAY HOME LOAN

Higher Home Loan eligibility with flexible repayment option.
Upto 1.2 times higher loan eligibility compared to loan eligibility
under normal Home Loan schemes available to working
professionals / executives.Loan amount, however, must be Rs.20
Lacs or higher.
Salaried applicants with minimum 2 year experience and aged
between 21- 45 years will be eligible to avail of SBI FlexiPay Home
Loan.
To neutralize the impact of such additional loan on monthly EMIs,
customers have the option of paying only interest during the
moratorium (pre-EMI) period, and thereafter, pay moderated EMIs.
The EMIs will be stepped-up during the subsequent years.
Option of selecting moratorium of upto 36 - 60 months. Only interest
to be repaid during the selected moratorium period.
Longer repayment of 25 to 30 years is available under the scheme.
However, customers will be free to make prepayments towards their
Home Loan loan without any pre-payment penalty.
Deposits:
Partnership: As per Section 464 of the Companies Act, 2013, the number
of partners in a partnership firm shall not exceed 100. However, Rule
(10) of the Companies (Miscellaneous) Rules, the number has been limited
to 50. Hence, the maximum number is now restricted to 50.

Forex:
Foreign Exchange Management (Remittance of Assets) Regulations,
2016:
The Reserve Bank has made the following regulations in respect of
remittance outside India by a person whether resident in India or not, of
assets in India, namely:
1. Short title and commencement:-
i) These Regulations may be called the Foreign Exchange
Management (Remittance of Assets) Regulations, 2016.
ii) They shall come into force from the date of their publication in
the official Gazette.
2. Definitions:-
In these Regulations, unless the context requires otherwise, -
(i) Act means the Foreign Exchange Management Act, 1999 (42 of
1999);
(ii) Authorised Dealer means a person authorised as an authorised
dealer under subsection (1) of section 10 of the Act;
(iii) Non-Resident Indian (NRI) shall have the same meaning
assigned under the Foreign Exchange Management (Deposit)
Regulations, 2016;
(iv) Person of Indian Origin (PIO) shall have the same meaning
assigned under the Foreign Exchange Management (Deposit)
Regulations, 2016;
(v) Remittance of asset means remittance outside India of funds
representing a deposit with a bank or a firm or a company, provident
fund balance or superannuation benefits, amount of claim or
maturity proceeds of Insurance policy, sale proceeds of shares,
securities, immovable property or any other asset held in India in
accordance with the provisions of the Act or rules or regulations
made there under;
(vi) the words and expressions used but not defined in these
Regulations shall have the same meanings respectively assigned to
them in the Act.
3. Prohibition on Remittance outside India of assets held in India:-
Save as otherwise provided in the Act or rules or regulations made
or issued thereunder, no person, whether resident in India or not,
shall make remittance of any asset held in India by him or by any
other person:
Provided that the Reserve Bank may, for sufficient reasons, permit
any person to make remittance of any asset held in India by him or
by any other person.

4. Permission for remittance of assets in certain cases:-
(1) A citizen of foreign state, not being a Person of Indian origin
(PIO) or a citizen of Nepal or Bhutan, who
(i) has retired from an employment in India, or
(ii) has inherited the assets from a person referred to in sub-section
(5) of section 6 of the Act; or
(iii) is a widow/ widower resident outside India and has inherited
assets of the deceased spouse who was an Indian citizen resident
in India, may remit through an authorised dealer an amount, not
exceeding USD 1,000,000 (US Dollar One million only) per financial
year on production of documentary evidence in support of
acquisition, inheritance or legacy of assets by the remitter
Provided that for the purpose of arriving at annual ceiling of
remittance, the funds representing sale proceeds of shares and
immovable property owned or held by the citizen of foreign state on
repatriation basis in accordance with the Foreign Exchange
Management (Acquisition and transfer of immovable property in
India) Regulations, 2016 and Foreign Exchange Management
(Transfer or issue of security by a person resident outside India)
Regulations, 2000 made under the Act, shall not be included.
Provided further that where the remittance is made in more than
one instalment, the remittance of all instalments shall be made
through the same authorised dealer.
(iv) had come to India for studies/ training and has completed his
studies/ training, may remit the balance available in his account,
provided such balance represents funds derived out of remittances
received from abroad through normal banking channels or rupee
proceeds of foreign exchange brought by such person and sold to
an authorised dealer or out of stipend/ scholarship received from
the Government or any Organisation in India.
(2) A Non-Resident Indian (NRI) or a Person of Indian Origin (PIO)
may remit through an authorised dealer an amount, not exceeding
USD 1,000,000 (US Dollar One million only) per financial year,
(i) out of the balances held in the Non-Resident (Ordinary) Accounts
(NRO accounts) opened in terms of Foreign Exchange Management
(Deposit) Regulations, 2016/ sale proceeds of assets/ the assets
acquired by him by way of inheritance/ legacy on production of
documentary evidence in support of acquisition, inheritance or
legacy of assets by the remitter;
(ii) Under a deed of settlement made by either of his parents or a
relative (relative as defined in Section 2(77) of the Companies Act,

2013) and the settlement taking effect on the death of the settler, on
production of the original deed of settlement;
Provided that where the remittance under Clause (i) and (ii) is made
in more than one instalment, the remittance of all instalments shall
be made through the same Authorised Dealer.
Provided further that where the remittance is to be made from the
balances held in the NRO account, the account holder shall furnish
an undertaking to the Authorised Dealer that the said remittance
is sought to be made out of the remitters balances held in the account
arising from his/ her legitimate receivables in India and not by
borrowing from any other person or a transfer from any other NRO
account and if such is found to be the case, the account holder will
render himself/ herself liable for penal action under FEMA.
(3) An authorised dealer in India may, also allow remittance out of
the assets of Indian companies under liquidation under the
provisions of the Companies Act, 2013, subject to the following
conditions:
(i) Authorised Dealer shall ensure that the remittance is in
compliance with the order issued by a court in India/ order issued
by the official liquidator or the liquidator in the case of voluntary
winding up; and
(ii) no remittance shall be allowed unless the applicant submits:-
(a) Auditors certificate confirming that all liabilities in India have
been either fully paid or adequately provided for.
(b) Auditors certificate to the effect that the winding up is in
accordance with the provisions of the Companies Act, 2013.
(c) In case of winding up otherwise than by a court, an auditors
certificate to the effect that there is no legal proceedings pending in
any court in India against the applicant or the company under
liquidation and there is no legal impediment in permitting the
remittance.
5. Permission to an Indian entity to remit funds in certain cases:-
(1) An entity in India may remit the amount being its contribution
towards the provident fund/ superannuation/ pension fund in
respect of the expatriate staff in its employment who are resident in
India but not permanently resident therein.
Explanation:
For the purpose of this Regulation, -
(a) expatriate staff means a person whose provident/
superannuation/ pension fund is maintained outside India by his
principal employer outside India;

(b) not permanently resident means a person resident in India for
employment of a specified duration (irrespective of length thereof)
or for a specific job or assignment, the duration of which does not
exceed three years.
6. Permission for remittance of assets on closure or remittance of
winding up proceeds of branch office/ liaison office (other than
project office)
(1) A branch or office established in India by a person resident
outside India may, for making remittance of assets on closure or
remittance of its winding up proceeds, apply to the Authorised Dealer
concerned supported by the following documents, namely:
(A) A copy of the Reserve Banks permission for establishing the
branch/ office in India, wherever applicable;
(B) Auditors certificate:
(i) indicating the manner in which the remittable amount has been
arrived and supported by a statement of assets and liabilities of the
applicant, and indicating the manner of disposal of assets;
(ii) confirming that all liabilities in India including arrears of gratuity
and other benefits to the employees etc., of the branch/ office have
been either fully met or adequately provided for;
(iii) confirming that no income accruing from sources outside India
(including proceeds of exports) has remained un-repatriated to India;
and
(iv) confirming that the branch/office has complied with all
regulatory requirements stipulated by the Reserve Bank of India
from time to time regarding functioning of such offices in India.
(C) A confirmation from the applicant that no legal proceedings are
pending in any Court in India and there is no legal impediment to
the remittance; and
(D) A report from the Registrar of Companies regarding compliance
with the provisions of the Companies Act, 2013, in case of winding
up of the office in India.
(2) On consideration of the application made under sub-regulation
(1), the authorized dealer concerned may permit the remittance
subject to the directions issued by the Reserve Bank in this regard,
from time to time.
7. Reserve Banks prior permission in certain cases:-
(1) A person who desires to make a remittance of assets in the
following cases, may apply to the Reserve Bank, namely:
(i) Remittance exceeding USD 1,000,000 (US Dollar One million only)
per financial year

(a) on account of legacy, bequest or inheritance to a citizen of foreign
state, resident outside India; and
(b) by a Non-Resident Indian (NRI) or Person of Indian Origin (PIO),
out of the balances held in NRO accounts/ sale proceeds of assets/
the assets acquired by way of inheritance/ legacy.
(ii) Remittance to a person resident outside India on the ground that
hardship will be caused to such a person if remittance from India is
not made;
(2) On consideration of the application made under sub-regulation
(1), the Reserve Bank may permit the remittance, subject to such
terms and conditions as it deem necessary.
8. Payment of taxes:-
Any transaction involving remittance of assets under these
regulations shall be subject to the applicable tax laws in India.
Import of Rough, Cut and Polished Diamonds:

AD Category - I banks were permitted to approve Clean Credit i.e. credit
given by a foreign supplier to its Indian customer / buyer, without any
Letter of Credit (Suppliers Credit) / Letter of Undertaking (Buyers Credit)
/ Fixed Deposits from any Indian financial institution for import of
Rough, Cut and Polished Diamonds, for a period not exceeding 180 days
from the date of shipment.
To ease the operational difficulties faced by the importers, it has been
decided, in consultation with the Government of India, to delegate the
powers for permitting such clean credit for a period exceeding 180 days
from the date of shipment to the AD banks, subject to the following
conditions:
i) AD banks being satisfied of the genuineness of the reason and bonafides
of the transaction and also that no payment of interest is involved for the
additional period
ii) The reasons for such extension are due to financial difficulties and/or
quality disputes, as in the case of normal imports (for which such
extension of time period for delayed payments has already been delegated
to the AD banks)
iii) The importer requesting for such extension is not under investigation/
no investigation is pending against the importer
iv) The importer seeking extension is not a frequent offender. Since there
is a possibility that the importer may have dealings with more than one
AD bank, the AD bank allowing extension may devise a mechanism
based on their commercial judgement, to ensure this.
v) AD banks may allow such extension of time up to a maximum period
of 180 days beyond the prescribed period/due date, beyond which they

may refer the cases to respective Regional Office of the Reserve Bank
AD banks may submit a half yearly report of such extensions allowed
customer-wise, to the respective Regional Office of the Reserve Bank.
Investment by Foreign Portfolio Investors (FPI) in Government

Securities
The limits for investment by foreign portfolio investors (FPI) in
Government securities were last increased by RBI in terms of the Medium
Term Framework (MTF) announced vide A.P. (DIR Series) Circular No 19
dated October 6, 2015.
As announced in the MTF, the limits for investment by FPIs in Central
Government Securities for the next half year are proposed to be increased
in two tranches, i.e., by Rs. 105 billion from April 4, 2016 and by Rs.100
billion from July 5, 2016 respectively.
As in the previous half-year, the limits for State Development Loans (SDL)
are proposed to be increased in two tranches, each of Rs.35 billion, from
April 4, 2016 and July 5, 2016 respectively.
External Commercial Borrowings (ECB) Revised framework:

The External Commercial Borrowings, Trade Credit, Borrowing and
Lending in Foreign Currency by Authorised Dealers and Persons other
than Authorised Dealers.
Taking into account prevailing external funding sources, particularly
for long term lending and the critical needs of infrastructure sector of the
country, the extant ECB guidelines have been reviewed in consultation
with the Government of India. Accordingly, it has been decided by RBI to
make the following changes in the ECB framework:
i. Companies in infrastructure sector, Non-Banking Financial
Companies -Infrastructure Finance Companies (NBFC-IFCs),
NBFCs-Asset Finance Companies (NBFC-AFCs), Holding
Companies and Core Investment Companies (CICs) will also be
eligible to raise ECB under Track I of the framework with minimum
average maturity period of 5 years, subject to 100 per cent hedging.
ii. For the purpose of ECB, Exploration, Mining and Refinery sectors
which are not included in the Harmonised list of infrastructure
sector but were eligible to take ECB under the previous ECB
framework (c.f. A.P. (DIR Series) Circular No. 48 dated September
18, 2013) will be deemed as in the infrastructure sector, and can
access ECB as applicable to infrastructure sector under (i) above.
iii. Companies in infrastructure sector shall utilize the ECB proceeds
raised under Track I for the end uses permitted for this Track. NBFCs-
IFCs and NBFCs-AFCs will, however, be allowed to raise ECB only

for financing infrastructure.
iv. Holding Companies and CICs shall use ECB proceeds only for on-
lending to infrastructure Special Purpose Vehicles (SPVs).
v. The individual limit of borrowing under the automatic route for
aforesaid companies shall be as applicable to the companies in the
infrastructure sector (currently USD 750 million).
vi. Companies in infrastructure sector, Holding Companies and CICs
will continue to have the facility of raising ECB under Track II of the
ECB framework subject to the conditionalities prescribed thereof.
The companies added under Track I should have a Board approved risk
management policy. Further, the designated AD Category-I bank shall
verify that 100 per cent hedging requirement is complied with during the
currency of ECB and report the position to RBI through ECB 2 returns.
On the ECB framework announced vide aforesaid Circular dated
November 30, 2015, it is further clarified by RBI that:
i. The designated AD Category-I banks may, under the powers
delegated to them, allow refinancing of ECBs raised under the
previous ECB framework, provided the refinancing is at lower all-
in-cost, the borrower is eligible to raise ECB under the extant ECB
framework and residual maturity is not reduced (i.e. it is either
maintained or elongated).
ii. ECB framework is not applicable in respect of the investment in
Non-convertible Debentures (NCDs) in India made by Registered
Foreign Portfolio Investors (RFPIs).
iii. Minimum average maturity of Foreign Currency Convertible Bonds
(FCCBs)/ Foreign Currency Exchangeable Bonds (FCEBs) is 5 years
irrespective of the amount of borrowing. Further, the call and put
option, if any, for FCCBs shall not be exercisable prior to 5 years.
iv. Only those NBFCs which are coming under the regulatory purview
of the Reserve Bank are permitted to raise ECB. Further, under Track
III, the NBFCs may raise ECBs for on-lending for any activities
including infrastructure as permitted by the concerned regulatory
department of RBI.
v. The provisions regarding delegation of powers to designated AD
Category-I banks is not applicable to FCCBs/FCEBs.
vi. In the forms of ECB, the term Bank loans shall be read as loans
as foreign equity holders / institutions other than banks, also
provide ECB as recognized lenders.
All other aspects of the ECB policy shall remain unchanged. AD Category
- I banks may bring the contents of this circular to the notice of their
constituents and customers.

Acceptance of deposits by Indian companies from a person resident
outside India for nomination as Director:
As per extant instructions of RBI no person resident in India shall accept
any deposit from, or make any deposit with, a person resident outside
India.
Under section 160 of the Companies Act, 2013, it is provided that a person
who intends to nominate himself or any other person as a director in an
Indian company is required to place a deposit with the said company. In
this context, it has come to the notice of the Reserve Bank that there is
ambiguity whether such deposits will require any specific approval from
the Reserve Bank under Notification No. FEMA 5(R), in cases where the
deposit is received from a person resident outside India.
It is clarified that keeping deposits with an Indian company by persons
resident outside India, in accordance with section 160 of the Companies
Act, 2013, is a current account (payment) transaction and, as such, does
not require any approval from Reserve Bank. All refunds of such deposits,
arising in the event of selection of the person as director or getting more
than twenty five percent votes, shall be treated similarly.
AD Category I banks may bring the contents of this circular to the
notice of their constituents and customers concerned. Necessary
amendments have been carried out in Master Direction No 14 on Deposits
and Accounts.
The directions contained in this circular have been issued under section
10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of
1999) and are without prejudice to permissions / approvals, if any,
required under any other law.
Foreign Direct Investment (FDI) in India Review of FDI policy

Insurance sector
The extant FDI policy for Insurance sector has since been reviewed by the
Government of India and accordingly it has been decided to enhance the
limit of foreign investment in insurance sector from 26 to 49 percent under
the automatic route subject to certain terms and conditions which have
been notified under FEMA.
Advances:
Priority Sector Lending Certificates:
Government of India vide Notification dated February 04, 2016 has
specified Dealing in Priority Sector Lending Certificates (PSLCs) in
accordance with the Guidelines issued by Reserve Bank of India as a
form of business under Section 6 (1)(o) of the Banking Regulation Act,
1949.

The details of the Priority Sector Lending Certificates - Scheme are as
under:
i) Purpose: To enable banks to achieve the priority sector lending target
and sub-targets by purchase of these instruments in the event of
shortfall and at the same time incentivize the surplus banks; thereby
enhancing lending to the categories under priority sector.
ii) Nature of the Instruments: The seller will be selling fulfillment of
priority sector obligation and the buyer would be buying the same.
There will be no transfer of risks or loan assets.
iii) Modalities: The PSLCs will be traded through the CBS portal (e-
Kuber) of RBI. The detailed operational instructions for carrying
out the trades are available through the e-Kuber portal.
iv) Sellers/Buyers: Scheduled Commercial Banks (SCBs), Regional
Rural Banks (RRBs), Local Area Banks (LABs), Small Finance Banks
(when they become operational) and Urban Co-operative Banks who
have originated PSL eligible category loans subject to such
regulations as may be issued by the Bank.
v) Types of PSLCs: There would be four kinds of PSLCs :
i) PSLC Agriculture: Counting for achievement towards the total
agriculture lending target.
ii) PSLC SF/MF: Counting for achievement towards the sub-target
for lending to Small and Marginal Farmers.
iii) PSLC Micro Enterprises: Counting for achievement towards the
sub target for lending to Micro Enterprises.
iv) PSLC General: Counting for achievement towards the overall
priority sector target.
Priority Sector comprises several categories, including Agriculture and

Micro Enterprises. In addition to the overall target and sectoral targets
for lending to agriculture and micro enterprises, banks are required to
achieve specified sub-target for lending to Small and Marginal Farmers.
Accordingly, to avoid computational issues in assessing the
achievement/shortfall of PSL targets, it is advised that the above four
types of certificates will represent specific loans and count for specific
sub-targets/targets as indicated hereunder:
Thus, a bank having shortfall in achievement of any sub-target (e.g. SF/

MF, Micro), will have to buy the specific PSLC to achieve the target.
However, if a bank is having shortfall in achievement of the overall target
only, as applicable to it, may buy any of the available PSLCs.
vi) Computation of PSL achieveisets or cash flow.
ix) Expiry date: All PSLCs will expire by March 31st and will not be

S.No. Type of PSLCs Representing Counting for
1. PSLC - All eligible Agriculture Achievement of
Agriculture loans except loans to agriculture
SF/MF for which target and
separate certificates overall PSL
are available target
2. PSLC - SF/MF All eligible loans to Achievement of
small/marginal SF/MF sub-
farmers target,
agriculture
target and
overall PSL
target
3. PSLC - Micro All PSL Loans to Micro Achievement of
Enterprises Enterprises micro-enterprise
sub-target and
overall PSL
target
4. PSLC - General The residual priority Achievement of
sector loans i.e. other overall PSL
than loans to target
agriculture and micro
enterprises for which
separate certificates
are available
valid beyond the reporting date (March 31st), irrespective of the
date it was first sold.
x) Settlement: The settlement of funds will be done through the
platform as explained in the e-Kuber portal.
xi) Value and Fee: The nominal value of PSLC would represent the
equivalent of the PSL that would get deducted from the PSL portfolio
of the seller and added to the PSL portfolio of the buyer. The buyer
would pay a fee to the seller which will be market determined.
xii) Lot Size: The PSLCs would have a standard lot size of 25 lakh and
multiples thereof.
xiii) Accounting: The fee paid for purchase of the PSLC would be treated
as an Expense and the fee received for the sale of PSLCs would be
treated as Miscellaneous Income.
xiv) Disclosures: Both seller and buyer shall report the amount of PSLCs
(category-wise) sold and purchased during the year in the
Disclosures to the Balance Sheet.

Illustration:
1. Bank A may sell PSLCs with a nominal value of 100 crores to Bank
B on July 15, 2016. Bank B will reckon 100 crore towards its priority
sector achievement as on the reporting dates of September 30, 2016,
December 31, 2016 & March 31, 2017, while Bank A will subtract
the same from its achievement figures for the respective reporting
dates. The PSLC will expire by March 31, 2017.
2. Bank C may buy 100 crore PSLC on March 30, 2017 from Bank D.
Bank D will subtract 100 crore from its PSL reporting on March 31,
2017 while Bank C will reckon the same towards its achievement.
The PSLC will expire by March 31, 2017.
Govt. Business:
Revamped Gold Deposit Scheme (R- GDS)
Revamped Gold Deposit Scheme (R- GDS) is in the nature of a fixed
deposit in gold. The customers can deposit their idle gold under R- GDS
which will provide them safety, interest earnings and a lot more.
Main features of R-GDS, in brief, are:

Medium and Long Term Government Deposit (MLTGD): Tenure: 5-7 years
and 12-15 years. The deposit will be accepted by the Bank on behalf of
the Central Government. Redemption of the deposit will be only in INR
equivalent of the value of gold as per then prevailing price of gold.
Headings Details
Purpose To mobilize the idle gold in the country and
put it into productive use.
To provide the customers an opportunity to
earn interest income on their idle gold
holdings.
Eligibility Any Resident Indian of the following categories:
Individuals, singly or jointly (as Former or
Survivor)
Proprietorship & Partnership firms.
HUFs Trusts including Mutual
Funds/Exchange Traded Funds registered
under
SEBI (Mutual Fund) Companies
Minimum Quantity 30 gms (gross)
(No upper limit for deposit)

Types of deposit Short Term Bank Deposit (STBD): Tenure 1 to
3 years. Redemption either in rupee equivalent
or gold.
Medium and Long Term Government Deposit
(MLTGD): Tenure: 5-7 years and 12-15 years.
The deposit will be accepted by the Bank on
behalf of the Central Government. Redemption
of the deposit will be only in INR equivalent of
the value of gold as per then prevailing price of
gold.
Rate of Interest & STBD:
Payment The current interest rates are: 0.50% p.a. for 1
year, 0.55 % for 2 years and 0.60% for 3 years.
Option for Interest Payment: STBD: Non-
Cumulative (on 31st March) every year or
Cumulative (On Maturity)
MLTGD: 5-7 years: 2.25% p.a.
12-15 Years: 2.50% pa.
The principal and interest on STBD shall be
denominated in gold. In the case of MLTGD, the
principal will be denominated in gold.
However, the interest on MLTGD shall be
calculated in Indian Rupees with reference to
the value of gold at the time of the deposit.
Acceptance of gold Gold i.e. Gold bars, Coins, Jewellery etc. will be
accepted in scrap form only.Customers to
submit Application Form, Identification Proof,
Address Proof and Inventory Form.
Issue of Gold Deposit Gold Deposit Certificate (in 995 fineness) will be
Certificate issued by Nodal Branch and will be sent to the
depositor by Bullion Branch, Mumbai.
Issue of Gold Deposit Gold Deposit Certificate will be issued by
Certificate Nodal Branch (i.e. Bullion Branch, Mumbai).
The certificate will be issued for pure gold
contents (i.e. in 995 fineness)
Gold Deposit Certificate (GDCs) will be sent
to the depositor by Nodal Branch i.e. Bullion
branch, Mumbai.

Effective Date Interest on deposits under the scheme will start
accruing from the date of conversion of gold
deposited into tradable gold bars after
refinement or 30 days after the receipt of gold
whichever is earlier.
Nomination facility Available for deposits in single names in
individual capacity.
Repayment STBD: Option to take repayment of principal
either in gold or equivalent rupees as on the
date of maturity.
MLTGD: Redemption of the deposit will be
only in INR equivalent of the value of gold as
per then prevailing price of gold
Premature payment STBD:Premature payment permitted after a
lock-in period of 1 year with a penalty on
applicable interest rate.
MLTGD: A Medium Term Government Deposit
(MTGD) is allowed to be withdrawn any time
after 3 years and a Long Term Government
Deposit (LTGD) after 5 years. Premature penalty
will be as per RBI Notification dated 21.01.2016.
Authorised Branches P B Branch, New Delhi
SME Branch Chandni Chowk, Delhi
Coimbatore Branch
Hyderabad Main Branch
Thyagarayanagar Branch, Chennai
Legal:
Tenants interest in Sarfaesi action:
The Supreme Court has reiterated its stand in favour of tenants in a case
where Securitisation (Sarfaesi) Act has been invoked against the owner
of the building. In this case, Indian Bank vs Nippon Enterprises South,
the bank has been successful in the Sarfaesi proceedings against the
owner of the building, which was mortgaged as secured assets. When
the proceedings were invoked against the tenants, they resisted as they
were third party. The Supreme Court followed its earlier decision in this
dispute and stated that the proceedings cannot automatically include
the tenants in the premises. It said that a tenant can be evicted only after
following the due process of law, as prescribed under the provisions of
the Rent Control Act. A tenant cannot be arbitrarily evicted using the
provisions of the Sarfaesi Act.

Acquittal in cheque bounce case: If a person, who complains about a
cheque that was dishonoured by the bank for insufficiency of funds, fails
to appear before the magistrate to pursue his cause, the complaint could
be dismissed and it would amount to acquittal of the accused person, the
Supreme Court ruled in the case, V K Bhat vs G Ravi Kishore. They were
business partners and Bhat issued a cheque to the other which bounced.
The payee filed a complaint under Section 138 of the Negotiable
Instruments Act before the magistrate in Hyderabad but failed to appear
in the court. Therefore, the complaint was dismissed according to the
provisions of the Criminal Procedure Code. Later, revision petitions were
moved and ultimately the Andhra Pradesh high court revived the
proceedings. This was appealed against stating that revision of the order
of the magistrate was not permissible. The Supreme Court agreed and
stated that dismissal of the complaint for non appearance of the
complainant amounts to acquittal as contemplated in Section 256 of the
CrPC.
General:
Change in Bank Rate:
As announced in the First Bi-Monthly Monetary Policy Statement 2016-
17 dated April 05, 2016, the Bank Rate stands adjusted by 75 basis points
from 7.75 per cent to 7.0 per cent with effect from April 05, 2016.
All penal interest rates on shortfall in reserve requirements, which are

specifically linked to the Bank Rate stand revised as under:
Penal Interest Rates which are linked to the Bank Rate
Item Existing Rate Revised Rate

(Effective from April 05,
2016)
Penal interest Bank Rate plus 3.0 Bank Rate plus 3.0
rates on shortfalls percentage points percentage points (10.00 per
in reserve (10.75 per cent) or cent) or Bank Rate plus 5.0
requirements Bank Rate plus 5.0 percentage points (12.00 per
(depending on percentage points cent).
duration of (12.75 per cent).
shortfalls).
Marginal Standing Facility

It has been decided by RBI to reduce the Marginal Standing Facility (MSF)
rate by 75 basis points from 7.75 per cent to 7.00 percent with immediate
effect.

Liquidity Adjustment Facility Repo and Reverse Repo Rates:
As announced in the Monetary policy by the Governor today, it has been
decided to reduce the Repo rate under the Liquidity Adjustment Facility
(LAF) by 25 basis points from 6.75 per cent to 6.50 per cent.
Further, the Reverse Repo rate under the LAF has been increased by 25
basis points from 5.75 percent to 6.00 percent.
These changes will come into force with immediate effect. All other terms
and conditions of the current LAF Scheme will remain unchanged.
Section 42(1) of the Reserve Bank of India Act, 1934 - Change in

Daily Minimum Cash Reserve Maintenance Requirement
As announced in the First Bi-Monthly Monetary Policy Statement 2016-
17 dated April 5, 2016, it has been decided to reduce the minimum daily
maintenance of the Cash Reserve Ratio from 95 per cent of the requirement
to 90 per cent effective from the fortnight beginning April 16, 2016.
Gold Monetisation Scheme, 2015

In exercise of the powers conferred under Section 35A of the Banking
Regulation Act, 1949, the Reserve Bank of India has modified (Gold
Monetisation Scheme, 2015) the existing sub-paragraph 2.2.2 (v) to read
as follows:
In the case of MLTGD, the redemption of principal at maturity shall, at
the option of the depositor, be either in Indian Rupee equivalent of the
value of deposited gold at the time of redemption, or in gold. Where the
redemption of the deposit is in gold, an administrative charge at a rate of
0.2% of the notional redemption amount in terms of INR shall be collected
from the depositor. However, the interest accrued on MLTGD shall be
calculated with reference to the value of gold in terms of Indian Rupees
at the time of deposit and will be paid only in cash.
Oversight of Government Business in Agency Banks

In terms of the agency agreement entered into with agency banks for
conduct of government business, the Reserve Bank of India carries out
periodical review/inspection of government business. RBI has so far
been conducting such review/inspection at select branches, including
Focal Point Branches and Centralised Pension Processing Centres
(CPPCs). Relative reports were being issued to the branch/office
concerned at the end of the review/inspection.
It has since been decided by RBI to put in place a new system of oversight
of government business. Accordingly, the following will be the main
changes:
(a) The scope of the review/inspection will now also cover government

business at the Head Offices of agency banks. Various branches
and CPPCs will continue to be visited as hitherto.
(b) The current practice of issuing reports at the end of the review/
inspection will be discontinued. However, the offices/branches will
be advised of action points, if any, with a copy to its controlling
office.
(c) Comments in respect of action points marked as Major may be
submitted to the Regional Offices of the Reserve Bank under which
the branch/office falls.
(d) As regards other action points, necessary rectification may be
ensured by the bank itself. However, its quality and sustenance
may be examined and commented upon by internal audit.
As a part of the new arrangements, it has been decided to introduce
offsite monitoring of government business. Accordingly, agency banks
may report details of their government business as per the formats
prescribed. The completed statements may be e-mailed with a copy to the
Regional Office of Reserve Bank of India under whose jurisdiction the
bank falls. A list of agency banks and the Regional Office of the Reserve
Bank under which it falls is given by RBI. The first such report may relate
to the quarter ending March 31, 2016, and be submitted within 15 days
from the date to which it relates.
It has also been decided by RBI to have periodical interactions with senior
executives of each bank dealing with government business. Such meetings
will be held by the Regional Offices concerned of Reserve Bank, except in
the case of State Bank of India, where the meetings will be held by the
Central Office. The purpose of the informal meetings would be to maintain
a line of communication with the agency bank and to have first-hand
information and feedback on government business being conducted by
it. The agenda for discussion would broadly depend on the banks size
and nature of government business being handled by it. The discussions
would, at a minimum, include the following:
(a) Developments in the agency banks government business since last
inspection;
(b) Sustenance of compliance with inspection report findings;
(c) Progress in the case of large frauds relating to government business;
(d) Position with regard to complaints;
(e) Pension related issues;
(f) Issues raised by Central and State Government Departments such
as delays in remittance of government funds and penalties imposed;
(g) Issues raised by the Office of C&AG and other government agencies
in their periodical audit/inspection reports regarding the conduct
of government business by the agency bank; and

(h) Other related issues.
Security / Inspection needs and Movement of Treasure

The banks were advised by RBI to maintain Smoke Detection and Fire
Alarm System, as also the Fire Fighting System in good working order
through service contracts in respect of construction of new currency chest.
It has now been decided by RBI that all the banks having currency chests
should ensure conducting of fire audits bi-annually (once in two years)
by the officials from the District Fire Department. The banks may also
ensure that the working condition of the Hotline and other security related
gadgets, viz. access control, CCTV, etc. are checked once in a fortnight by
the CC officials.
Risk Based Supervision Follow up of Risk Management Systems in

Banks:
Banks ware required to submit a single report on the progress in
implementation of Risk Management System/ALM, Risk Based
Supervision and Risk Based Internal Audit, on quarterly basis to the
Reserve Bank.
On a review, it has been decided by RBI to dispense with the submission
of the said report by the banks to the Reserve Bank. Hence, the banks are
not required to submit the single report on the progress in implementation
of Risk Management System/ALM, Risk Based Supervision and Risk
Based Internal Audit, on quarterly basis to the Reserve Bank with effect
from the quarter ending March, 2016.
Standing Liquidity Facilities for Primary Dealers:

As per First Bi-monthly Monetary Policy statement 2016-17 of RBI the
repo rate under the Liquidity Adjustment Facility (LAF) has been reduced
by 25 basis points from 6.75 per cent to 6.50 per cent with immediate
effect.
Accordingly, the Standing Liquidity Facility provided to Primary Dealers
(PDs) (collateralised liquidity support) from the Reserve Bank would be
available at the revised repo rate, i.e., at 6.50 per cent with effect from
April 5, 2016.
Master Directions Issued by RBI:

The Reserve Bank has started issuing Master Directions on all regulatory
matters beginning January 2016 to streamline compliance in pursuance
of the decision announced in the Fourth Bi-monthly Monetary Policy
Statement, 2015-16 on September 29, 2015. The Master Directions

consolidate instructions on rules and regulations framed by the Reserve
Bank under various Acts including banking issues and foreign exchange
transactions. The process of issuing Master Directions involves issuing
one Master Direction for each subject matter covering all instructions on
that subject. Any change in the rules, regulation or policy is communicated
during the year by way of circulars/press releases. The Master Directions
will be updated suitably and simultaneously whenever there is a change
in the rules/regulations or there is a change in the policy. Explanations
of rules and regulations will be issued by way of Frequently Asked
Questions (FAQs) after issue of the Master Directions in easy to
understand language wherever necessary. With the issue of this Master
Direction, the instructions/guidelines contained in the circulars listed
therein stand repealed.
Bullet Train: Indias first high speed train (Bullet Train) is purchased
from a Spanish Company, Talgo. This will be tried in the Delhi Mumbai
route. The train will travel at a speed of 160 km per hour. The travel time
will be reduced to 12 hours.

CONCEPT BRIEF I
Indian Economy Roundup - April 2016
India continues to be the fastest growing economy in the world with an

average expected growth of 7.5% in 2016-17. While China has grown
along estimated, though lower, levels at 6.7% in the January to March
2016 quarter, the global outlook of India has been stable and positive.
However, RBI Governor Raghuram Rajan has advised caution to India
to contain its celebrations over being the fastest growing country in the
world as in his opinion, India is a one-eyed king in the land of the
blind. RBI had reduced rates with the positive news of the achievement
GOIs fiscal consolidation goals but the Governor has stated that further
reduction will depend on the playout of the monsoons.
Monsoons: The India Meteorological Department (IMD) has forecasted
106% of Long Period Average (LPA) rainfall this year. This is considered
above average rainfall. It is also expected that there will be fair distribution
around the country. With 2 consecutive droughts in the country, India is
becoming an agricultural importer; it imports wheat, pulses, corn and
soymeal (used for poultry feed) among others. There was 14% rainfall
deficit in 2015 and 12% deficit in 2014. Agricultural growth was 1.2%
last year but could be 6% in 2016-17 according to NITI Aayog member
Ramesh Chand. Many parts of the country are reeling under the water
crisis. With long periods of drought in the country, a water train traveled
350 km in 18 hours to deliver water from Miraj in West Maharashtra to
Latur in the Marathwada region of Maharashtra. The Centre has stated
that 33 crore people (25% of the population) living in 2.55 lakh villages
are facing drought. The IMD had earlier stated that India could expect a
scorching summer. Heat waves across the country have led to the death
over a hundred people.
Car Sales: Domestic passenger car sales were down 0.3% to 1.75 lakh
units in March 2016 as compared to the year-ago period.
Industrial Output: The Index of Industrial Production (IIP) grew by 2% in
February 2016; it declined by 1.5% in January 2016. Core sector growth
was 5.7% in February 2016 compared to 2.3% in the year-ago period.
Inflation: Retail inflation was 4.83% in March 2016 as compared to 5.26%
in February 2016. Food inflation rose to 3.7% in March 2016 as compared
to 3.4% in February 2016. Wholesale Price Index (WPI) inflation declined
0.85% in March 2016 as compared to 0.91% in February 2016. It is the
17th consecutive month of decline.
Trade: Exports were down 5.5% to US$ 22.71 billion while imports were
down by 21.56% to US$ 27.78 billion in March 2016 as compared to the

year-ago period. The resultant trade deficit was US$ 5.07 billion.
Cumulative value of exports was down 15.85% to US$ 261.1 billion in
2015-16; this is a 5-year low. Cumulative value of imports were down by
15.28% to US$ 379.5 billion in 2015-16. The cumulative trade deficit was
US$ 118.5 billion in 2015-16.
Fiscal Deficit: The GOIs fiscal deficit Rs.5.7 lakh crorecrossed the Revised
Estimates (RE) of FY16 by 7% in the period between April 2015 and
February 2016. But Finance Minister (FM), Arun Jaitley expects to achieve
the deficit target of 3.9% for 2015-16. This is usually possible with high
inflow of revenue in the form tax in the month of March every year.
Disinvestment: The GOI plans to raise Rs.5,000 crore from sale of its stake
in unlisted Public Sector Units (PSUs) such as Hindustan Aeronautics
Ltd. (HAL) and Ireda with these companies agreeing to buy it out with
their surplus funds. The GOI has revised its disinvestment target to
Rs.25,300 crore from Rs.69,500 crore in this financial year 2015-16.
Subsidy: 1 crore households have voluntarily given up their LPG subsidy
under the Give it Up Ujjwala programme of the GOI. The GOI plans to
supply free gas connections to 5 crore women from Below Poverty Line
(BPL) families over the next 3 years.
Infrastructure and Investments:

Asian Development Bank (ADB) has cleared a project loan of
US$ 300 million or Rs.2,000 crore for upgrading 400 km of dis-
trict roads in Uttar Pradesh.
Communications and Information Technology (IT) minister Ravi
Shankar Prasad has stated that Digital India initiative of the
government is a $1 trillion business opportunity across IT and
IT enabled services, telecom and electronics manufacturing.
Prime Minister Narendra Modi has stated that the GOI plans to
more than double port capacity from 1400 million tonnes to 3,000
million tonnes by 2025 and is looking at mobilising Rs.1 lakh
crore for this purpose.
Stock Markets: The SENSEX closed at 25838 and the NIFTY at 7899 on
April 22, 2016. Markets reacted positively to the sentiment expressed by
the US Federal Reserve. Its Chairman Janet Yellen had stated that the US
central bank will be cautious in increasing interest rates.
Currency: RBI Governor Raghuram Rajan has stated that the RBI will
continue to intervene in the currency markets to ensure that the exchange
rate does not move only because of inflow and outflow of capital. It should
also be a reflection of fundamentals of trade and services. The Rupee
closed at 66.49 against the US Dollar on April 22, 2016.
50 Concept Brief
Gold: The GOI plans to make hallmarking of gold jewellery mandatory
by Diwali. Gold imports contracted 80% to US$ 973 million in March
2016 as compared to the year-ago period. Gold prices closed at Rs.29,021
per 10 grams and silver prices closed at Rs.39,985 per kg on April 22,
2016.
Oil: The Saudi and Russian pact to contain the output of oil production
to curb the fall in prices will depend on Iran. The International Energy
Agency (IEA) has estimated that by the second half of 2016, oil oversupply
will diminish. Lower prices have led to reduced supply from outside the
Oil and Petroleum Exporting Countries (OPEC). The US shale oil boom
has faltered. The international crude oil price of Indian basket was US$
38.76 per barrel (bbl) on 18.04.2016.
Banking:
Deposit growth was 9.1% in FY16 as compared to the year-ago
period; this is a 53-year low. According to RBI data, bank depos-
its as of April 1, 2016 were Rs.97.2 lakh crore. The low deposit
growth has been attributed to:
o Increase of currency in circulation by Rs.50,000-60,000
crore
o Low Government spending
o Large deposits into tax-free bonds
o Foreign remittances
o Investments in small savings schemes
o Reduction in inflation leading to lower deposit rates
Rating agency Moodys has reported that asset quality of 11
Public Sector Banks (PSBs) is likely to face stress as there is risk
of restructured loans turning into bad loans. It has also stated
that the problem of under-recognition of bad loans is a concern.
Indian banks have been warned after the recent Bangladeshi
heist where foreign exchange reserves were hacked into.
Finance Minister Arun Jaitley has stated that banks must have
flexibility to restructure their bad loans. He has stated that the
GOI will amend the Securitisation and Reconstruction of Finan-
cial Assets and Enforcement of Security Interest (SARFESI) and
Debt Recovery Tribunals (DRTs) to expedite recovery.
RBI Governor Raghuram Rajan has stated that Indian banking
system is in the midst of a revolution with new age banks and
niche banks with digital payment services.
RBI has pruned the list of companies whose loans need to be
provisioned for. 20 companies have been taken out of the list of

150. This will ease the balance sheets of banks.
The GOI has directed banks to pass on rate cut gains. The RBI
had cut its policy repo rate by 25 bps to 6.5% and took a range of
measures to increase liquidity. SBI Chairman Arundhati
Bhattacharya has said that deposit rates need to come down
further for meaningful transmission.
Home loan rates are expected to dip with the new rate formula
marginal cost of funds approach. SBI has lowered its home loan
interest rate to 9.45% from 9.55% after RBI reduced its repo rate
by 25 bps to 6.5% recently.
Inoperative PF accounts are to earn interest from April 1 2016. 9
crore holders with Rs.32,000 crore deposits will benefit from this.
Capital Infusion: 3 Public Sector Banks (PSBs), Central bank of India (CBI),
Bank of India and Allahabad Bank, are set to receive up to Rs.2,375 crore
as capital infusion from the GOI. The Finance Ministry has asked PSBs
to sell stakes in non-core assets to raise capital.
Money in Circulation: The money in circulation in the hands of the public,
and reduction in growth of deposits has led RBI Governor Raghuram
Rajan to call it an election time phenomenon. However, SBI Chairman
Arundhati Bhattacharya has expressed a contrarian view stating that
rumours of demonetisation of higher denomination notes like the Rs.500
and Rs.1,000 notes has led to people withdrawing and investing in other
assets.
Interest Rates: RBI Governor Raghuram Rajan reduced policy repo rate by
25 bps to 6.5% in April 2016 but plans to see how the monsoons play out
before cutting rates again. He has stated that there is a link between
monsoons and food prices. With 2 droughts in a row, the Governor wants
to observe the situation before taking any more action.
NPAs:
RBI has stated that revival of state PSUs and distribution com-
panies are crucial for financial health. States must spend on
physical and social infrastructure and economise on non-essen-
tial heads.
30 banks led by SBI have decided to freeze loans to Punjab as it
has been found that funds lent for food grains do not match the
actual food grains procured.
Black Money: The Supreme Court (SC)-appointed Special Investigation
Team (SIT) has asked the Enforcement Directorate (ED), Central Bureau
of Direct Taxes (CBDT) and the DRI to analyse the Panama documents
52 Concept Brief
and submit a report after probing money laundering and black money.
US and India have committed to helping each other combat offshore
money laundering, terror financing and black money flowing out of their
countries through information-sharing and joint audits.
Foreign Flows:
High outbound flows have led to slower growth in deposits. In
the 2015-16 fiscal up to February 2016, US$ 3.8 billion was re-
mitted out of the country. In 2014-15, it was US$ 1.3 billion. RBI
had increased the remittances allowed under the Liberalised
Remittances Scheme (LRS) from US$ 125,000 to US$ 250,000 per
annum on May 26, 2015.
RBI has relaxed External Commercial Borrowings (ECB) norms.
All companies in the infrastructure sector may raise ECBs with a
minimum maturity of 5 years including NBFCs regulated by RBI,
as long as proceeds are used for financing infrastructure and
not their own use. Borrowings must be fully-hedged. Individual
limits of borrowing under the automatic route is US$ 750 mil-
lion.
Foreign Direct Investment (FDI) increased by 27.45% to U$ 42
billion during April-February in 2015-16, as compared to the
year-ago period, when India received inflows of US$ 32.96 bil-
lion, according to the RBI.
Rating agency Moodys has said that FDI inflow will provide a
stable source of financing for the Current Account Deficit (CAD).
Foreign exchange reserves were US$ 360.25 billion as on April
15, 2016. Indias exposure to US securities was US$ 119.8 bil-
lion in January 2016. China holds US$ 1.24 trillion the highest
among nations.
The World Bank has stated that India received the maximum
remittances in 2015 from abroad with US$ 69 billion; it received
US$ 70 billion in 2014.
RBI plans to open up the Government bond markets to foreign
investors in a calibrated manner according to RBI Deputy Gov-
ernor, H R Khan.
External Debt: Indias total external debt went up by 1% to US$ 480.2

billion end December 2015 as compared to end March 2015.
Growth Forecast: Asian Development Bank (ADB) has forecasted that India
will grow by 7.4% (earlier estimate was 7.8%) in FY17. Fitch Ratings has

estimated that India will grow by 7.7% in this fiscal while it retained its
forecast of 7.5% for the 2015-16 financial year. The International Monetary
Fund (IMF) has retained its growth forecast for India at 7.5% for this
fiscal and the next. It has estimated that global growth will be 3.2% in
2016. Finance Minister Arun Jaitley has stated that India could grow at
8.5% with good monsoons. The World Trade Organisation (WTO) has
cut world trade growth forecast from 3.9% to 2.8% in 2016. IMF Chief,
Christine Lagarde has stated that though there is no crisis, global growth
is weak; some economies are on the recovery path lending hope.
India is in an enviable stage of development with great scope to expand
its presence in the world. In its favour are political and economic stability.
With political will and the passage of reforms, investments will flow in
and help it achieve both domestic and global expectations of growth.
54 Concept Brief
CONCEPT BRIEF II
Unified Payments Interface
The National Payments Corporation of India (NPCI) has launched the

Unified Payments Interface (UPI), a system allowing transfer of money
between two parties. This is an additional layer of software that enables
digitalisation in various components of the payment system. The objective
of the UPI is to make the payments process as simple as sending a text
message on the mobile phone. With UPI, customers can transfer funds
through a unique virtual address, mobile phone number or Aadhaar
number. A virtual address is an alias to a bank account that allows a
customers account to be uniquely mapped to the mobile phone number.
Nandan Nilekani, advisor of NPCI has said, The robust system (of UPI)
will help India leapfrog the desktop and the credit-card economy to
become a mobile-first economy, accelerating e-commerce and driving a
host of financial services.
How It Works:
Users must download the UPI- supported app from any banks
site. They must hold an Aadhaar number, bank account and a
smartphone for this.
They must, subsequently, open an account with a unique virtual
UPI ID.
Transfer of funds may take place between 2 UPI IDs.
Features:
o Speed and Limit: Amounts up to Rs.1 lakh per transaction may be
transferred or received in Real Time i.e. instantaneously; it will,
therefore, expedite payment operations considerably.
o Authentication: UPI works on a single-click 2 factor authentication.
It will allow customers to have multiple virtual addresses for
multiple accounts with different banks.
o Timing: The portal will work 24/7 so transfers may happen at
any time. This is better than the existing systems which enable
transfers within the hour only during working hours of the bank.
o Interbank Operability: Every bank is a member of the NPCI, which
is responsible for the successful transmission of all retail
payments in India. This will make the payment system fully
inter-operable without any closed systems; customers will be
able to undertake bank account to bank account transfers easily.
Otherwise, a banks mobile app does not transact with other

banks apps.
o Minimal Information: Recipients need not reveal confidential bank
account information (such as IFSC code, and other bank account
details); to the sender. They may be identified with nicknames.
Senders can transfer funds based on the nickname. This chosen
name could even be the Aadhaar number.
o Financial Inclusion: Since making payments will be more hassle-
free and quicker than the current modes of transfers - National
Electronic Funds Transfer (NEFT), Real Time Gross Settlement
(RTGS) and Immediate Payments Service (IMPS), this can go a
long way towards helping India achieve its objective of Financial
Inclusion (FI). UPI is considered an improved version of the IMPS,
which, according to Nandan Nilekani, does not have an easy
debit capability. The simplicity will ensure that the masses are
included by enabling them to adopt modern practices more
willingly.
o Cashless Society-Cum Security: UPI will promote RBIs objective of
a cashless society. In India, only about 6% of transactions are
cashless. Card-related transactions are on the rise; however, even
here, many retailers do not have card acceptance infrastructure.
Transactions on the omnipresent smartphone can increase safety
and security and even reduce corruption.
o Usage: The service can be used to replace cash-on-delivery during
e-commerce site purchases, payment to auto rickshaws and cabs,
toll payments, payments to restaurants, retail outlets and
hospitals and so on. This is because there is independence from
any particular mobile wallet platform or bank account.
Challenges: Security is the most important aspect of this system. The

encryption standards must be very strong. There must be end-to-end
encryption to ensure that there is no leakage of data in transit. Currently,
for card-related online transactions, banks have agreements with
merchants. This takes care of issues that may arise in relation to frauds.
It is imperative that fraud analytics and dispute resolution mechanisms
are addressed by this interface.
Current Status: Managing Director (MD) and Chief Executive Officer (CEO)
of NPCI, A P Hota has stated that a total of 29 banks have agreed to offer
this service to their customers and many more are expected to join this
year. Some of these banks have already begun the process of integrating
the UPI with their mobile apps. These include State Bank of India (SBI),
Canara Bank, Bank of India (BOI), ICICI Bank, HDFC Bank, Punjab
56 Concept Brief
National Bank, Bank of Baroda, HSBC, and Citi Bank these banks are
in the process of integrating the interface with their mobile apps. However,
Chief Operating Officer (COO) of NPCI, Dilip Asbe has stated that it will
take 2 months for these banks to offer this to customers as tests for security
and convenience have to be undertaken first.
RBI Governor Raghuram Rajan has stated that the banking system is in
the midst of a revolution. He has further said that India has the most
sophisticated public payments infrastructure in the world. The Unified
Payments Interface (UPI) is being hailed as an idea that will revolutionise
the payments system in the country. According to RBI data, there were
Rs.46,029 crore worth of mobile banking transactions in December 2015,
a jump of 46% compared to the previous month. The scope of this
technology is vast considering the widespread usage of the ubiquitous
smartphone and the objective to remove the hurdles of mobile banking
transactions. It is a step forward in the Prime Ministers vision of a Digital
India.

CONCEPT BRIEF III
Important Short Notes in Foreign Exchange
1. Non-Resident (Ordinary) Rupee Account (NRO):

The existing resident account of a person is re-designated as NRO
when that person becomes an NRI. Or a new account can be opened
by an NRI.
A person resident in Nepal and Bhutan is not an NRI; hence he
cannot open NR (O) a/c.
Individuals of Pakistan nationality/ownership require prior
approval of RBI for opening the accounts.
It can be opened as SB, C/A, Term Deposit a/c (Both TDR/STDR)
and RD a/c.
It can be opened by Persons of Indian Origin (PIO) also.
An NRI can open this account jointly with a resident of India on For
S basis. Also, NRIs / PIOs may open joint a/c with other NRI/PIO.
Students who have gone abroad for higher studies can also open
the account.
Foreign tourists visiting India can also open this account (SB/
Current a/c) provided their stay in India does not exceed 6 months.
Funds should be remitted from outside India. Any balance may be
converted into foreign currency and paid to the foreign tourist,
provided the a/c is not more than 6 months. The current regulations
of RBI for operation of such accounts by foreign tourists have to be
followed.
RBI has now permitted that a sum of up to USD 1 million per
financial year can be repatriated out of the NRO balances subject to
certain conditions. RBI has now permitted that within this ceiling,
the funds up to 1 million USD per financial year can also be
transferred to NRE account.
Interest income is taxable.
Nomination is allowed and if the nominee is an NRI; repatriation
is not allowed to the NRI nominee after the death of the depositor.
The amount should be credited to NRO a/c of the nominee.
No restrictions on local credits.
Transfer of funds from NRO to FCNR (B) a/c of the depositor is not
permitted.
Temporary OD is permitted to depositor / third parites without
ceiling (within the BMs powers); should be repaid within 2 weeks,
58 Concept Brief
from foreign currency remittance.
Operations by PA holder are restricted to withdrawals for
permissible local payments in rupees, repatriation to the a/c holder
himself through normal banking channels. The PA holder cannot
make any gift on behalf of NRI or transfer funds from the a/c to
another NRO a/c.
FEMA GUIDELINES COMMON TO NRE AND FCNR (B) ACCOUNTS

01. ELIGIBILITY: Non-Resident Indians (NRIs), and PIOs subject
to following conditions.
i) Individuals of Bangladesh/Pakistan nationality require prior
approval of RBI for opening the accounts.
ii) Account should be opened by the account holder himself.
Power of attorney holder is not permitted to open the account.
02. JOINT ACCOUNTS:
i) Permitted in the names of two or more NRIs / PIOs.
ii) Resident close relative can also be a joint holder of the account
on Former or Survivor basis. However, the said resident relative
shall be eligible to operate the a/c as a P/A holder.
03. REPATRIABILITY: Deposit and interest amount are fully
repatriable.
04. TAXATION: Interest earned on balances held in NRE/FCNR
accounts is exempted from Income Tax and Wealth Tax.
05. NOMINATION: In respect of individual NRI account holder,
nomination in favour of a Resident Indian or a Non-Resident
Indian is permitted.
Remittance to NRI Nominee is permitted in the case of a/c death
of the NRI depositor.
06. OPERATIONS BY POWER OF ATTORNEY: The account
operations by a Power of Attorney holder are restricted to
withdrawals for permissible local payments or remittance to the
account holder himself through normal banking c h a n n e l s .
The PA holder is not permitted to repatriate funds outside India
other than to the a/c holder himself; nor can be make any gift / or
transfer funds to another NRE a/c. There is no need for
appointing a power of attorney in FCNRB account, as it is only a
time deposit account and not a daily operated account.
07. LOANS IN INDIA IN INDIAN RUPEES TO THE ACCOUNT
HOLDER/S AND TO THIRD PARTIES AGAINST NRI
DEPOSITS:
i) Loans against deposits of NRIs are permitted without any
ceiling subject tousual margin and interest requirements for

following purposes:
a) Personal purposes or for carrying on permitted business
activities.
b) Direct investment in India on non-repatriation basis by way
of contribution to the capital of Indian firms/companies.
c) Acquisition of flat/house in India for his own residential use
subject to relevant regulations under FEMA 1999.
ii) Loans cannot be utilized for the purpose of on-lending or for
carrying on agriculture or plantation activities or for investment
in real estate business.
08. LOANS OUTSIDE INDIA TO THE ACCOUNT HOLDER/S
AND TO THIRD PARTIES AGAINST DEPOSITS: Loans are
permitted, if the loan proceeds are used abroad and are not
remitted back to India.
09. CHANGE OF STATUS: NRE/FCNR (B) accounts shall be re-
designated as resident accounts or the funds held in these
accounts can be transferred to RFC accounts on maturity (subject
to eligibility of account holder) at the option of the account holder
upon change of status from non-resident to resident.
10. Change of Resident Status of Account holder:
(a) From Resident to Non-resident
When a person resident in India leaves India for a country (other
than Nepal or Bhutan) for taking up employment, or for carrying
on business or vocation outside India or for any other purpose
indicating his intention to stay outside India for an uncertain
period, his existing account should be designated as a Non-
Resident (Ordinary) account.
(b) From Non-resident to Resident
NRO accounts may be designated as resident rupee accounts on
the return of the account holder to India for taking up employment,
or for carrying on business or vocation or for any other purpose
indicating his intention to stay in India for an uncertain period.
Where the account holder is only on a temporary visit to India,
the account should continue to be treated as non -resident during
such visit.
It is the responsibility of the NRI a/c holder to advise the bank
once he becomes a resident.
2. NON-RESIDENT (EXTERNAL) ACCOUNT (NRE):

The account can be opened in rupees only with remittances received
from abroad or transfer from another NRE account. A/c should be
opened by NRI/PIO himself / herself and not by PA holder.
60 Concept Brief
It can be opened as SB, C/A, Term Deposit a/c (TDR/STDR) and
R/D account.
For time deposits, minimum period is 1 year and maximum period
is 10 years
An NRI can maintain this account jointly with another NRI.
Both principal and interest are fully repatriable.
Forward Exchange cover to hedge the exchange risk on balance
held in NRE a/c is permitted.
Interest income is exempted from Income Tax.
Nomination is allowed and if the nominee is an NRI, repatriation is
allowed to the NRI nominee.
Exchange risk is borne by the customer.
No local credits except current income of the NRI provided all local
taxes have been paid on such income..
Temporary OD up to Rs.50,000/- (within BMs powers) can be
allowed and is repayable within two weeks from foreign remittance.
Each bank has the discretion to decide the interest rate.
Loans against deposits are permitted without any ceiling subject to
usual margin requirements for the permissible purposes.
3. FOREIGN CURRENCY (NON-RESIDENT) ACCOUNT (BANKS

SCHEME) FCNR[B]:
NRIs and PIOs can open this account. But, individuals of
Bangladesh/Pakistan nationality require prior approval of RBI.
It can be opened as a Time Deposit only (TDR/STDR).
Minimum period is 1 year and maximum period is 5 years.
The account can be maintained in any permitted foreign currency.
But in SBI we accept deposits only in USD, GBP, Euro, Yen, CAD,
AUD.
Funds should be remitted from abroad for opening the account or
by debit to NRE / FCNR(B) a/c. In case the foreign remittance is
received in rupee, it will be converted to foreign currency at clean
TT selling rate.
The account can be maintained jointly with another NRI/PIO only.
The account can be opened with resident close relative of the NRI as
former or survivor the resident relative being survivor Minimum
amount accepted is USD 1000, GBP l000, Euro 1000 and so on.

Interest income is exempted from Income Tax. Interest may be paid
at half yearly or yearly intervals based on customers option.
Nomination is allowed and if the nominee is an NRI, repatriation is
allowed.
Exchange risk is borne by the bank.
Loans in Indian Rupee against the deposits can be sanctioned to
either the account holder or to third parties without ceiling. But
loans in foreign currency can be sanctioned only to the account
holder.
The maturity proceeds in foreign currency can be remitted to third
parties abroad at the specific request of the depositor.
Interest is payable as per RBI guidelines.
Forward Cover: Forward Exchange Cover facility is permitted to
hedge the exchange rate risk on
a. the market value on investment made under the portfolio scheme
in accordance with provisions of FEMA, 1999 and
b. the amount of dividend due on shares held in Indian companies
and
c. balances held in NRE account.
Change of residential status of the account holder:
When an account holder becomes a person resident in India, deposits
may be allowed to continue till maturity at the contracted rate of
interest, if so desired by him. However, except the provisions relating
to rate of interest and reserve requirements as applicable to FCNR
(B) deposits, for all other purposes such deposits shall be treated as
resident deposits from the date of return of the accountholder to
India. Authorised dealers should convert the FCNR(B) deposits on
maturity into resident rupee deposit accounts or RFC account (if the
depositor is eligible to open RFC account), at the option of the
accountholder and interest on the new deposit (rupee account or
RFC account) shall be payable at the relevant rates applicable for
such deposits.
4. RESIDENT FOREIGN CURRENCY ACCOUNT (RFC)
NRIs who are coming back to India for permanent stay (i.e. Returning
Indians) can open this account.
This can be opened as Time Deposit only in SBI. [But according to
RBI, it can be opened as SB, CA and Term Deposit].
In SBI, it can be maintained only in US Dollars, Pound Sterling and
Euro. (As per RBI, it can be maintained in any permitted currency)
62 Concept Brief
Nomination is allowed and if the nominee is an NRI, repatriation
to the NRI nominee is allowed after the death of the depositor.
Exchange risk is borne by the bank.
Interest income is taxable
Joint accounts with resident close relatives can be opened on former
or survivor basis with resident relative as survivor.
5. RESIDENT FOREIGN CURRENCY (DOMESTIC) ACCOUNT
(MEANT FOR RESIDENTS OF INDIA)
Residents of India can open this account in AD Category 1 bank.
This account can be opened only as a current account (i.e. no interest
can be paid).
In SBI it can be opened in USD, Pound Sterling (GBP) and Euro
Minimum balance to be maintained in the account is USD 500, GBP
250 and Euro 500
Foreign exchange received in the form of gifts, honorarium, for
services rendered abroad or any unspent foreign exchange on
account of travel abroad can be credited into this account
Residents cannot buy foreign currency from the market and credit
this account
The balance in this account can be utilized for all purposes permitted
under FEMA
6. EXCHANGE EARNERS FOREIGN CURRENCY ACCOUNT
(EEFC)
Any Resident earning foreign exchange can open EEFC a/c as a
Current account; the balances can be used for remittances under
any permitted current account and capital a/c purposes.
It can be opened in USD, GBP, Euro and Japanese Yen, AUD and
CAD Opened only as current account, interest is not payable on
this account. Banks cannot give any type of loans keeping the
balance in this account as security.
Minimum Balance to be maintained is USD 5000/- or its equivalent.
100% foreign exchange earned during a calendar month can be
credited to this account subject to the condition that the balance
outstanding at the end of a particular calendar month should be
converted to Rupee before the end of the next calendar month.
Resident individuals may be permitted to include resident close
relative(s) as defined in the Companies Act, 1956 as a joint holder(s)
in their EEFC bank accounts on former or survivor basis. However,

such resident Indian close relative, shall not be eligible to operate
the account during the life time of the resident account holder.
Withdrawal in rupees converted from EEFC balances is allowed;
but the amount withdrawn shall not again be converted and re
credited to the account.
If the resident becomes NRI, the balance can be credited to NRE/
FCNR B a/c of the customer.
7. VISHWA YATRA FOREIGN TRAVEL CARD
It is a prepaid card issued by the bank in association with Visa
International
It is issued in USD, Pound Sterling ,Euro, AUD, CAD, Yen, Saudi
Riyal and SGD
It can be used all over the world except India and Nepal and Bhutan
Available at all A and B category branches
The card can be issued for a minimum amount of USD 200, GBP
120, Euro 150,CAD 200, AUD 200, Yen 15800, SAR 750, SGD 250.
The same minimum is applicable for reload also.
Maximum amount: As per the entitlement under FEMA
Reloading facility is available with a minimum of USD 250
The card can be used for withdrawals through ATM or for payment
at any merchant
establishment all over the world
Free insurance cover up to Rs.2 lacs available for 48 hours for pre
and post card lost liability on non-PIN based transactions subject
to conditions
For cards issued at one AD branch, reloading can be done any other
AD branch of SBI.
For issuing the cards, exchange rate applied is Bill selling rate.
8. OFFSHORE BANKING UNIT
RBI has permitted banks in India to establish Offshore Banking
Units (OBUs) in Special Economic Zones (SEZ)
Only one OBU can be established in each SEZ
OBUs can undertake only foreign currency transactions and not in
rupees
OBUs need not maintain CRR but they have to maintain SLR
OBUs will have to depend on external sources for raising funds for
their day to day transactions
SBI was the first bank to establish an OBU in SEEPZ, Mumbai
64 Concept Brief
9. MONEY TRANSFER SERVICE SCHEME (MTSS)
Money Transfer Service Scheme (MTSS) is a quick and easy way of
transferring personal remittances from abroad to beneficiaries in
India. Only inward personal remittances into India such as
remittances towards family maintenance and remittances favouring
foreign tourists visiting India are permissible. No outward
remittance from India is permissible under MTSS.
Authorised Dealer Category-I bank or an Authorised Dealer
Category-II or a Full Fledged Money Changer (FFMC), a Scheduled
Commercial Bank or the Department of Posts can apply to RBI to be
the Indian agent of a Money Transfer Company abroad.
Each remittance should not exceed USD 2,500/- at a time
Only 30 such remittances are allowed in a year
Only personal inward remittances as mentioned above are allowed
under the scheme
Cash can be disbursed to the beneficiary of remittance only up to
Rs. 50,000/-. Beyond the ceiling, it has to be disbursed by means of
cheque or draft or by account credit
10. FCNR(B) PREMIUM ACCOUNT
This is a product that combines the benefits of a FCNR (B) deposit
with forward cover to give enhanced return to the depositors.
Earlier it was known as Dollar premium Account as initially we
started with USD. Now, it can be made available in all the six
designated currencies namely USD, GBP, EURO, AUD, CAD and
JPY. Hence the name of the product has been changed
SALIENT FEATURES OF THE PRODUCT
Only for NRI customers
Deposit tenorone year
Minimum depositUSD 2000, GBP 2000, Euro 2000, AUD 2000,
CAD 2000, JPY 200,000
The account can be opened by
a) Conversion of existing balance in NRE saving bank account/
fixed deposit to FCNR(B) deposit
b) Remittance from abroad
Both principal and interest are payable in Indian Rupees and to be
credited on maturity in NRE savings bank account only.
NO AUTO RENEWAL FACILITY IS AVAILABLE
No interest is payable if the FCNR (B) deposit is closed before
maturity.

Maturity proceeds is fully repatriable from NRE savings bank
account
The product is available only in selected branches identified by
Corprorate Centre.
In case of cancellation of forward contract by the customer,
cancellation charges and exchange loss has to be borne by the
customer at the prevailing rates.
11. SERVICE TAX ON FOREIGN EXCHANGE TRANSACTIONS
Effective from 1.4.2011, service tax is to be recovered from customers
on foreign exchange transactions at the rates indicated in GMU
circular No. IBG/FD/FD-Misc/1/2011-12
12. EXTERNAL COMMERCIAL BORROWING
As per the latest circular, RBI has liberalized rules for raising ECB
under automatic route as under:
The limit for borrowing per financial year raised to $ 750 million.
For corporates in specified service sectors as hotel, hospital and
software, it is raised to $200 million pa
13. PROCESSING AND SETTLEMENT OF EXPORT AND IMPORT
RELATED PAYMENTS FACILITATED BY ONLINE PAYMENT
GATEWAY SERVICE PROVIDERS (OPGSP)
RBI has permitted AD category I banks to offer facilities for
repatriation of export related remittances and make payment for
imports by entering in to standing arrangements with OPGSPs in
respect of export of goods and services and import of goods and
software as permitted under Foreign Trade Policy.
RBI has provided detailed guidelines to be followed by banks.
The ceiling for making available this facility is:
For exports USD 10,000 per transaction
For imports USD 2000
14. E FOREX MAGAZINE
GMU Kolkatta has launched its e magazine e forex which is a
compilation of informative articles and events covering forex
markets.
It will be a very useful magazine for SBI staff to get updated
information on the happenings in forex area.
This is a quarterly magazine. The first issue covering April-June
2015 was released on the
eve of Bank Day, 1st July 2015.
15. FXOUT, A UNIQUE PRODUCT FOR OUTWARD
REMITTANCES HAS BEEN INTRODUCED BY THE BANK.
It integrates three technology platforms viz CBS, Mercury fx, and
66 Concept Brief
IRC. It is a web based product available to all the branches across
India. All authorized users of CBS can initiate non trade related
remittances up to INR 10,00,000 or its equivalent (USD 16000
approximately) for their retail customers.
Presently the product is available in three currencies USD, GBP and
EURO
The transactions initiated by the branches in CBS are transmitted to
GMU Kolkatta and get processed under Straight Through Process
(simultaneous debit in the remitters account and conversion
through mercury fx) Generation and transmission of SWIFT message
(MT 103) is also automated. The centralization of remittance at GMU
Kolkatta would improve the regulatory compliances viz RBI/ FEMA
regulations, OFAC validation etc
SBI IS THE FIRST BANK TO INTRODUCE SUCH A PRODUCT
IN THE INDUSTRY
16. TLM (TRANSACTION LIFE CYCLE MANAGEMENT
RECONCILIATION PREMIUM)
Since the year 2002, bank was using SSR (Smart Stream
Reconciliation) software for reconciliation of nostro entries.
With changing technology, increased data flow and for better MIS,
bank felt the need to have state of art reconciliation software, with
inbuilt security features, for carrying out all other activities as a
part of Nostro reconciliation process,
Bank has therefore migrated to the above upgraded version of SSR.
This software meets the global standards of reconciliation.
17. SBI E FOREXACCESS TO DEALING ROOM THROUGH
ELECTRONIC MODE
This is an internet based platform launched by SBI on 18.6.2015.
This is an extension of existing Mercury fx being used by the
branches.
The rationale for introducing this product is to enable mid corporate,
small and medium enterprises to book their trade transactions at
the rates provided directly by the Central treasury, Mumbai.
The transaction can be initiated by the customer directly for
obtaining exchange rates or through the branch.
The product facilitates customers to obtain forex rates without
having the need to physically visit the branch.
Customer will get on line rates for three currency pairs (USD/INR,
EUR/ USD and GBP / USD)
For other currency pairs, the customer can use chat mode and seek
rates form the dealer.

Detailed operational guidelines for making available this product
have been issued by the bank.
18. Special Non-Resident Rupee Account - SNRR account
1. Any person resident outside India, having a business interest in
India, may open Special Non-Resident Rupee Account (SNRR
account) with an authorised dealer for the purpose of putting
through bona fide transactions in rupees, not involving any violation
of the provisions of the Act, rules and regulations made thereunder.
2. The SNRR account should carry the nomenclature of the specific
business for which it is in operation.
3. The operations in the SNRR account should not result in the account
holder making available foreign exchange to any person resident in
India against reimbursement in rupees or in any other manner.
4. The SNRR account shall not bear any interest.
5. The debits and credits in the SNRR account should be specific/
incidental to the business proposed to be done by the account holder.
6. The tenure of the SNRR account should be concurrent to the tenure
of the contract/ period of operation/ the business of the account
holder and in no case should exceed seven years. No operations are
permissible in the account after seven years from the date of opening
of the account.
7. The balances in the SNRR account shall be eligible for repatriation.
8. Transfers from any NRO account to the SNRR account are prohibited.
9. All transactions in the SNRR account will be subject to payment of
applicable taxes in India.
10. SNRR account may be designated as resident rupee account on the
account holder becoming a resident.
11. The amount due/ payable to non-resident nominee from the account
of a deceased account holder, shall be credited to NRO account of
the nominee with an authorised dealer/ authorised bank in India.
12. Opening of SNRR accounts by Pakistan and Bangladesh nationals
and entities incorporated in Pakistan and Bangladesh requires prior
approval of Reserve Bank.
68 Concept Brief
MODEL TEST WITH ANSWERS BASED ON APRIL
2016 INFORMATION:
1) Who won the Best Actor award at the National Film Awards?
2) Who holds the Guinness World Record for recording the highest
number of songs in different languages?
3) Who is Irom Sharmila?
4) The GOI has allowed ____% FDI in e-commerce sites with ______
model.
5) The maximum foreign investment permissible in G Secs is ________
6) MCLR has to be adopted by banks for floating rate loans and for
fixed rate loans up to 3 years
(True / False)
7) In which country the Stock Exchange has now started functioning
after a gap of 20 years?
8) Who won the 2016 T20 mens and womens World Cup?
9) Indias fastest train is ________ running between ___ and _____.
10) Which company was the contractor to the recently-crashed
Vivekananda flyover construction project?
11) Which state recently completely banned sale and consumption of
alcohol?
12) Who is the first woman CM of J&K?
13) What is the repo rate now? The reverse repo and MSF are ____%
____ and ____% respectively.
14) What is the Statutory Liquidity Ratio (SLR)?
15) What is the minimum percentage of CRR that should be maintained
by banks on a daily basis?
16) NASSCOMs Chairman is ______
17) ______ is Femina Miss India 2016.
18) What is the minimum size of Priority Sector Lending Certificates
that can be bought by banks to make up their PSL targets?
19) Who is the first Indian artistic gymnast to qualify for the Olympics?
20) Who won sportsman of the year at the Laureus Awards for 2015?
21) What was the name of the police horse which recently died from
injuries sustained during a riot in Dehradun?
22) With which sport is the Azlan Shah Cup associated?
23) The US federal jury has levied a fine notice of US$ 940 million on an
Indian company for theft of trade secrets / confidential data. Name
the company.
24) Which auto company has recently admitted to falsifying fuel
efficiency tests?

25) It has been proposed to change Gurgaons name to _______.
26) What is State Bank of India No Queue?
27) Recently, the Supreme Court asked the RBI to give it a list of defaulters
with over Rs.______ due to the banking system.
28) The nearest star to the Earth, after the Sun, is the _______.
29) Stephen Hawkins is a British _______.
30) There has been a huge global fallout of the leaked ______ papers
with information regarding prominent individuals, with interest in
foreign companies all over the world.
31) The first small finance bank that was opened was the _______.
Answers:
1) Amitabh Bachchan for Piku
2) P Susheela of India
3) Manipuri activist protesting the AFSPA, Who is on a fast for the last
16 years.
4) 100; marketplace
5) Rs.20,500 cr for Central Govt. securities and Rs.7000 cr for State
Govt. securities.
6) True 7) Myanmar
8) West Indies beating England (mens) and West Indies beating
Australia (womens)
9) Gatimaan Express; Nizamuddin (Delhi) to Agra.
10) IVRCL of Hyderabad
11) Bihar
12) Mehbooba Mufti Sayeed
13) 6.5%; 6 and 7
14) 21.25%.
15) 90% (effective from the fortnight beginning 16.04.2016).
16) C P Gurnani
17) Priyadarshini Chatterjee
18) Rs25.00 lakhs
19) Dipa Karmakar
20) Tennis player Novak Djokovic of Serbia
21) Shaktiman 22) Hockey
23) TCS 24) Japans Mitsubishi
25) Gurugram
26) It is a mobile app to save its customers time while availing banking
services.
27) 500 crore 28) Alpha Centauri
29) physicist 30) Panama
31) Capital Small Finance Bank
70 Model Test
RECOLLECTED QUESTIONS: MM II
CONFIRMATION EXAM (TOS) HELD ON 05.07.2015.
1. The profit of a unit will increase from second year by switching over
to _____method from Straight Line Method for charging
depreciation.
2. Xpress Credit-Min NMI is________
3. Xpress Credit-Max EMI/NMI ratio is ________
4. Bankers Cheque Validity period is _______.
5. ITRO Validity period is _______.
6. Interest on PPF account will be paid after 15 years even if the a/c is
not renewed at _______.
7. Bank Guarantee: Max period for issue is ______
8. Sahaj: Max Withdrawal is
9. Bankers Cheque: Max Limit
10. Expand: MAT:
11. Expand: WAP:
12. FMC merged with ______
13. First International Financial Services Centre (IFSC) set up in ______.
14. SHG Comes under:
15. Tier I capital under BASEL III as per RBI and SBI is ______.
16. SB-03 is equivalent to whichexternal rating?
17. The extent of Guarantee cover (up to Rs. 5 Lacs ) under CGTMSE is:
18. Bhoomiheen Kisan which is not applicable?
19. CGTMSE was set up by the Govt. of India and _____
20. Max no. of Vehicles that can be owned by an SRTO to be treated as
priority sector lending is _______.
21. Combo Loan is_______.
22. Non payment advice for issue of duplicate IOI is required up to
what amount?
23. No surety is required for issue of duplicate IOI for amounts up to
Rs. ____
24. Max penalty under RTI;
25. Not covered under PSL
26. MUDRA Bank
27. SME Credit Plus can be given to units with internal credit risk rating
of ______.
28. Deceased claim settlement without surety is up to Rs._____
29. SBI Debit Card is also known as ____
30. Min capital required for Small and Payment banks is Rs._______

31. Virtual card validity period is _______.
32. Contribution =
33. Housing Loan: Max Exposure to Individual is _______
34. Cheques have to be physically verified by 2 people in CCPC for
amounts above Rs.______
35. Computer Security Day is observed on ______
36. KYC day is observed on ________
37. Encryption:
38. Western Union money transfer scheme: Min and Max amount is
_______
39. mPassbook facility is available for
40. SBI Imprest Card is
41. In Small Deposit Ac, free withdrawals in one month are:
42. Personal Accident Insurance (PAI) for classic card is ______.
43. Head of World Bank is _______.
44. Head of WTO is _________.
45. ASBA - Expand:
46. The present Chief Election Commissioner is_________.
47. Max withdrawal limit per month in Small a/c is
48. Max amount that can be loaded in gift card in a month is for
Rs.______
49. Head of SEBI is
50. Minimum amount of TDR that can be issued is Rs._____
51. Maximum term for issue of TDR is ______
52. ATM Cash should tally with ______
53. Which is not a domestic credit rating agency? CARE/CRISIL/ARCIL
54. CERSAI registration should be done within how many days?
55. Credit rating Agencies are regulated by ______.
56. RainbowRevolution relates to ______.
57. Vegetable Production is _______
58. An account will become inoperative in how many months?
59. Max loan to a medical practitioner under Doctor Plus in metro /
urban centres:
60. Min amount in SHG Credit Card is______.
61. Validity period of KCC is _______.
62. Fiscal Policy is framed by:
63. Maximum investment in equipment for Micro Service Enterprises
under MSMED Act is.
64. Planning Commission is replaced by:
65. Education loan repayment starts from_____
66. Review of SME Credit Card is done ______
72 Recollected Questions
67. Maximum extension given to education loan is
68. Unconditional Cancellability Clause (UCC) means
69. SB a/c (BSBD) can be closed without any penalty within how many
days?
70. Other expenses in Education Loan can be given for:
71. Student Loan for studies in India is:
72. Student Loan for studies Abroad is:
73. Max Age for Yuva Home Loan is Rs._____
74. Loan for Earnest Money Deposit: Margin:
75. Min Loan under Home Loan Top Up is Rs.____
76. Min Loan under NRI HL _______
77. Max loan for furnishing and consumer durables _______
78. GDP is assessed by
79. Credit Conversion Factor (CCF) for Financial Guarantee is _______
80. Credit Conversion Factor (CCF) for Performance Guarantee ______
81. Mixed Farming is:
82. General Credit Card (GCC) max Loan;
83. Turn Around Time (TAT) for SME Loan > Rs. 25000 upto Rs. 5 lacs
is
84. Non cooperative borrowers:
85. Deadman Switch is:
86. In LLP the liability of partners is upto:
87. Insurance premium paid under KCC is shared by the bank and
farmer in the ratio of
88. No collateral is insisted under Tie Up arrangement in contract
farming up to Rs.______.
89. Frequency of inspection for std ATL is:
90. Suspicious Transaction Report (STR) under PMLA is to be sent to
______
91. Network used by POS is:
92. Expand USSD:
93. AS-2 in Accounting Standards is for:
94. Which is not a money market instrument? CD / CP / Treasury bills
/ Shares and bonds.
95. Maximum credit exposure limit for Non Corporate borrowers is
________.
96. Expand GST
97. JAM trinity is
98. To be eligible for PAI under Jan Dhan, Rupay card should at least
have been usedat ATM within ______ days prior to accident.
99. When a term loan for more than 3 years is sanctioned by the bank
the major risk is_______

100. Periodical stock statement for Krishi Kalyan is
101. After issuing a Garnishee Order by court, Bank is referred as__
102. SME Construction equipment loan-repayment period:_______
103. An account guaranteed by Central Govt. will become NPA_______.
104. Defence salary package comes under _____ risk
105. Inoperative accounts comes under_ risk.
106. Simple Mortgage is also known as _______
107. Visually impaired persons can issue third party cheques up to__
108. Yellow colour portion of Drop box contains with _ cheques
109. What is Regressive Taxation?
110. One Rupee note is signed by:
111. GNP/Total Population =
112. Goods and Service Tax is applicable for ______.
113. FDI in Insurance sector increased to:
114. SHG concept came from which country?
115. Lending to SHG recommended by which committee?
116. Inflation affects the common man because it_________.
117. Maximum limit under entrepreneur scheme:
118. SBI Realty max loan amount______
119. Two credit reports to be taken for car loan for above ______.
120. Min amount of loan to form Joint Lenders Forum:
121. Sans Recourse is _______ endorsement.
122. Trust Account comes under ______ risk category
123. The amount to be credited to the suggestors a/c if the suggestion is
taken for consideration is Rs.______,
124. ATMs owned and maintained by non-banking companies are
called________,
125. Unique feature of Small Accounts:
126. For used car, the maximum loan amount is _______
127. Home loan sanction is valid for _____ months.
128. The loan amount, in the case of vehicle loans to be dispersed through
RTGS / NEFT if the amount exceeds Rs_______
129. Minimum land holding for tractor loan is ______
130. Maximum loan that can be granted to SHGs is
131. Minimum loan amount under SHG Gold card is ______:
132. Maximum loan under KGC scheme:
Answers: 5. 3 months
1. Written Down Value 6. prescribed rates till1 closure
2. Rs.7,500 7. 18 months (by Branch)
3. 50% 8. Drawings per cheque
4. 3 months limited to Rs.15,000; Max
Cash withdrawal at ATM Rs. 15,000/-.
9. No maximum
10. Minimum Alternate Tax
11. Wireless Application Protocol
12. SEBI
13. Gujarat
14. Micro Financing
15. RBI: 7%; SBI: 9.6% as on 31.03.2015.
16. Crisil BB.
17. 85% of the amount in default subject to a max of Rs.4.25 lacs
18. Margin 5%
19. SIDBI (Aug 2000)
20. Now, no stipulation regarding no of vehicles; investment not to
exceed Rs.2 cr
21. Combination of Home Loan & Car Loan
22. Now, not required for any amount.
23. Rs. 1 lac
24. Rs.250/- per day; Maximum: Rs. 25,000
25. Question not clear.
26. Micro units Development Refinance Agency Corpus Rs.20,000 cr
27. SB 9 (old SB 4)
28. Rs. 5 lacs
29. Cash Plus
30. Rs.100 cr
31. 48 hrs from the time of its generation
32. Sales Variable cost
33. Rs. 50 cr
34. Rs. 1 Cr and above
35. 30th Nov
36. 1st Aug
37. Conversion of plain language into secret language
38. Min Nil; Max US D 2500 per day
39. SB and Current Accounts holders with Android phones.
40. Co-branded card with Railways
41. 4 (including ATM withdrawals)
42. Nil
43. Jim Yong Kim
44. Roberto Azevedo
45. Application Supported by Blocked Amount. (Max Rs.2.00 lacs;
Applicable for IPO / Mutual Funds.)
46. Dr. Nazim Zaidi
47. Rs. 10,000

48. Rs. 50,000
49. U K Sinha
50. Rs. 1000
51. 10 Years
52. No. of pieces under supervisory mode, ADMIN balance and BGL
A/c.
53. ARCIL
54. 30 days
55. SEBI
56. Flower Cultivation
57. Olericulture
58. If there are no operations for 24 months continuously
59. Rs.5 crore
60. Rs.50,000
61. 5 Years
62. MOF, Govt. of India
63. Rs.10 lacs
64. NITI Aayog
65. Course period + 1 year or 6 months after getting job whichever is
earlier.
66. Annually
67. 24 months after completion of the course
68. Limit liable to be cancelled.
69. within 14 days or after 1 year
70. purchase of books, equipments (Computers, Library / Laboratory
fees)
71. Max. Rs.10 lacs
72. Max. Rs.30 lacs
73. 45 years
74. Loan not given against Earnest Money Deposit.
75. Rs.2 lacs
76. Rs. 3 lacs
77. 10% of loan amount subject to a maximum of Rs.25 lacs
78. Central Statistics Organisation (CSO).
79. 100%
80. 50%
81. Farming with other allied activities
82. Rs.5,00,000/-
83. within 4 weeks
84. The borrowers / defaulters who do not give satisfactory
clarifications.to enable resolution / recovery of loans.
85. That which will enable INB customers to lock the user screen
86. The extent of their contribution to LLP
87. 2:1
88. Rs. 3 lacs
89. Once in 6 months
90. FIU IND, New Delhi
91. Ethernet
92. Unstructured Supplementary Service Data
93. Valuation of Inventories.
94. Shares and bonds
95. Rs.100 crore.
96. Goods and Services Tax
97. Jan Dhan, Aadhaar and Mobile Phone
98. 45 days.
99. Liquidity risk (due to ALM mismatch)
100. Bi-monthly if production loan exceeds Rs.1 lac
101. Garnishee
102. up to 4 years
103. As per prudential norms of RBI.
104. Low Risk
105. Medium Risk
106. Registered Mortgage
107. No limit
108. Outstation Cheques.
109. As the tax base increases, the taxation rate decreases (Eg: Tax base
Rs.1,00,000 tax rate 60%: Tax base Rs.6,00,000: tax rate: 10%)
110. Finance secretary, Ministry of Finance, GOI.
111. Per capita Income
112. Manufacturing and Service Enterprises
113. 49%
114. Bangladesh
115. Kalia Committee
116. Reduces the value of currency
117. Max. Project cost: Rs.20 lacs; Margin: 10%; Loan limit: Rs.18 lacs.
118. Rs.10 crores.
119. Rs. 5 lacs
120. Rs.1000 million and above
121. without recourse
122. High
123. Rs.500
124. White label ATMs
125. A/c opened based on Self-attested photograph and affixation of
signature / thumb impression on the Account opening form

(Liberalised KYC norms)
126. Rs.15.00 lacs
127. 6 months
128. All disbursements to be routed through NEFT / RTGS.
129. 2 acres
130. 4 times of the corpus.
131. Rs. 2.00 lacs
132. 5 times the annual farm income or 50% of the land mortgaged as
collateral security minus term loan outstandings whichever is less
subject to a maximum of Rs.10.00 lacs.
DESCRIPTIVE PART:
Communication:
1. You are the Branch Manager of a Rural / Semi Urban Branch located
in a market area. Write a letter to your controlling authority recommending
shifting of the branch premises to other location.
Case Studies:
1. Ms. Kavita, newly joined as Assistant in SBI, is staff at your branch
and she has complained that two of the office mates are making
improper gestures or unwelcome signs to her in the office. How
will you deal with the situation as BM if a) she gives a written
complaint b) if she is hesitating to give a written complaint c) if
she gives a written complaint and then wants to do conciliation.
2. You are entering into the BMs cabin to say Good Night to him
and you observe that BM is in adjacent washroom and VVRs are
lying on his desk. The Vouchers are torn and dispersed. You
suspect a foul play and report the matter to Manager PBD (Branch
Operations). You both conclude that there is fraud in sanctioning
and disbursing of loans to public. Your RM has a good relation
with BM and you want to take up the matter ahead in
whistleblower policy. How will you go about it in the situation?
3. Mr. Das is a BM of a branch and a customer Mr. Patel approaches
complaining that a cheque of Rs. 23000/- has been wrongly
debited to his account. However he has not issued any such
cheque. BM confirms that a cheque has been paid by CCPC
Ahmedabad and gets the copy of scanned cheque and finds out
that the original cheque leaf is in customers custody. The
signature on the cheque is roughly matching with the system.
What should Mr Das do in this case? What is the duty of CCPC
Ahmedabad?
4. One of the customers wants to buy a second hand car of his
neighbour costing Rs. 25 lacs. He has approached you for a loan.
The car is 3 years old and our approved valuer has valued the
vehicle at Rs. 25 lacs.
a. Can the loan proposal of the customer be accepted?
b. What is the maximum of loan amount that can be financed to
the customer?
c. What should be the repayment period of the proposed loan?
Rationale:
1. The RTI Query Management and Tracking System has been
introduced by the Bank.
2. Interest should not be applied in NPA account.
3. Insurance of stocks pledged/hypothecated to the Bank must be
done in the joint names of the borrower and the Bank.
4. Review of standard account has been introduced by the bank.
5. Stock audit should be conducted for large advances.
6. Bank has set up self kiosk for printing of passbooks.
7. Aadhaar details are seeded in the borrower accounts/ Education
loan accounts for interest subsidy.
Answers:
Communication:
Address in Regional Address in Hindi State Bank of India
Language Attayampatty
Edappady Taluk
Salem
Tamil Nadu
The Regional Manager
Region III
State Bank of India
Regional Business Office
Salem
No.BR - 04 27.10.2015
Dear Sir,
Shifting of the branch to a more spacious and convenient location.

Attayampatty branch located in the market area at this rural centre has
completed 12 years of existence. The branch has grown in size in terms of
number of staff, deposits and advances business, customer base etc. over

the period. The customers feel congestion and difficulty in transacting
business and lot of problem is faced by staff and customers in parking
the vehicles because of constraints of space etc. The premises is also very
small and inadequate for installing ATM / CDM / Passbook Printing
machines etc. Also we find it difficult to exhibit notice boards / posters of
our schemes etc. for the information of customers.
With a view to take advantage of growing business, I have been scouting
for a suitable premises for the past 6/8 months. I am now happy to advise
that one of our rich farmers who is owning a good and spacious house
built in 2014 is willing to let it out for rent for the bank and has also
undertaken to effect the required structural changes as per Banks
requirement.
Its location is fine, easily approachable by staff / customers. The quality
of construction is good. It has adequate space to put e-lobby and for
parking staff and customers vechicles. The total area works out to around
4000 sqft which is quite adequate to take care of our present requirements
as also future expansion. The market rent at this centre is around Rs.30
per sqft. and the landlord is agreeable for this rate with usual advance of
6 months rent.
I consider it a good opportunity for us in all respects and we can move to
the building after making necessary minor structural changes. I request
you to kindly arrange for the visit of the Banks Premises Officer and the
Engineer to inspect the building and clear it to proceed further in the
matter.
Your faithfully,
(Sd) xxx
Branch Manager
(Name)
Case Studies:
1. The Sexual Harassment at Work Place (Prevention, Prohibition
and Redressal) Act 2013 has come into effect to promote well
being of women employees at work-place. So, it is the duty of the
Bank as a responsible employer to observe that no woman
employee faces hostile environment in the work place and no
woman employee has grouse to believe that she is disadvantaged
or placed in a sexually vulnerable position as a result of her
employment in the Bank.
In the light of the above, the three situations would be dealt with
as under:
a) When Ms. Kavita gives written complaint: The matter will be
investigated to ascertain whether the allegations contained in
the letter are true. If it is proved to be correct it will be construed
as a major misconduct committed on the part of the two employees
in terms of the relevant conduct and service rules and appropriate
action as laid down in this regard will be initiated against them.
b) Ms. Kavita is hesitating to give a written complaint: The two
employees against whom Ms. Kavita has complained will be
called for a personal and private discussions in my cabin and
they will be counselled appropriately highlighting the provisions
of Sexual Harassment at Work Place (Prevention, Prohibition
and Redressal) Act to bring home the need for proper conduct
and behaviour towards women employees at the office. In the
event of their regret and assurance that such things would not
happen again, the matter will be set at rest. Ms. Kavita will be
suitably briefed in the matter to her satisfaction.
c) Ms. Kavita gives a written complaint and then wants to do
conciliation.
The two employees will be briefed about the written complaint
given by Ms. Kavita about their behaviour and the action they
will be liable under Sexual Harrasment at Work Place (Prevention,
Prohibition and Redressal) Act. In the event of their sincere regret,
they will be advised to submit suitable Regret letters. They will
also be strictly warned to refrain from such kind of behaviour in
future. Ms. Kavita will be informed of the developments and will
be advised to withdraw the complaint and the matter will be
treated as closed.
2. As per SEBI listing agreement it has been made mandatory for all
the entities listed with them to have a Whistle Blower Policy as
per which employees may report to the management, the
instances of unethical behaviour, actual or suspected, fraud or
violation of the code of conduct or ethics policy.
With a view to mitigate operational, legal and reputational risks
of the Bank and also to enhance the corporate governance
standards, a Whistle Blower Policy has been implemented by the
Bank. The policy is an internal mechanism for its staff members
for reporting any unethical practice or behaviour or violation of
service rules in the Bank. This policy is based on the norms of
Government of India resolution in this regard which defines the
role and function of the designated authority and timelines for
disposal of Whistle Blower cases. There are provisions to protect
the interest of the Whistle Blowers by keeping the informants

identity closely guarded and pursue the information provided to
the logical end. The complaint form, the procedure for recording
of complaints and review of complaints are standardised under
the policy.
In the given case, the following violations of service rules are
observed.
(i) The vouchers are found torn and dispersed.
(ii) It has happened in the late hours of the day giving suspicion
for foul play.
These give clear indication to suspect that there is fraud in
sanctioning and disbursing loans to public.
The Whistle Blower policy gives protection to the whistle blowers
by keeping their identity closely guarded. In the circumstances
and in order to protect the Banks interest, Manager, PBD and I
will report the matter either to DGM (Vigilance) of the Circle or
DGM (Vigilance) at Corporate Centre as per provisions in this
regard in the format prescribed by the Bank notwithstanding the
fact that there seems to be a good relationship between the RM
and the BM.
3. The original cheque is with Mr. Patel and he complains that he
has not issued any cheque.
The CCPC, Ahmedabad has however paid a cheque based on the
electronic image of the cheque presented in clearing (CTS). It
appears that CCPC, Ahmedabad has failed to scrutinise the image
of the cheque thoroughly in all respects including the drawers
signature while paying it. Probably the signature of the drawer,
Mr. Patel could have been forged and it was not clear on the face
of it and it has been overlooked by CCPC, Ahmedabad. A cheque
with a forged signature is a nullity and void in law as there is no
mandate from the customer to honour it. As such, the Bank will
be liable to make good the amount to Mr. Patel.
CCPC, Ahmedabad which is functioning as the paying bank has
to always act in good faith and without negligence. Its duty is to
scrutinise the cheque under all respects before making payment
to claim protection under NI Act as payment in discourse (see 10
NI Act). In case of any doubt or the electronic image is not clear or
ambiguous, CCPC, Ahmedabad should have called for the
original (physical) cheque for verification from the collecting bank
before effecting payment. CCPC, Ahmedabad should be suitably
advised to be more alert and careful while passing cheques for
payment when received in clearing under CTS for safeguarding
Banks interest. This is to be done by its controller.
4. The Bank has a scheme for financing second hand vehicles. The
major conditions governing the advance for second-hand
vehicles are as under:
i) The vehicle should be roadworthy and a certificate of fitness /
valuation should be obtained from an approved valuer of the
Bank.
ii) The vehicle should not be more than 5 years old
iii) The maximum loan should not exceed Rs.15 lacs.
iv) The repayment period should be fixed so as to ensure that it
does not exceed 7 years from the date of original purchase of the
vehicle.
In the light of the above, the questions are answered seriatim as
under.
a) Yes.
b) The maximum loan amount should not exceed Rs.15.00 lacs.
c) The maximum period of repayment for car loan is 7 years. The
car is already 3 years old. Hence the loan should be repaid
within the remaining period of 4 years (48 months).
Rationale:
1 a) This will enable the Bank to know the type of questions being
asked under RTI Act and ensure that the questions have been
properly answered and no adverse criticism is made against the
Bank. Also to ensure that the information which are exempt from
disclosure as per sec 8 of the Act such as information that would
affect sovereignty and integrity of India, information that has
been expressly forbidden to be published by courts and
information affecting commercial confidence, trade secrets,
intellectual property etc are not given.
b) This will also avoid payment of penalty etc by the Bank for
Non / Delayed submission of the information.
2. Once an account is identified as an NPA, it ceases to generate
income for the bank. The principal itself is doubtful of recovery
in these cases. Hence, interest is not applied on accrual basis, as
it would inflate banks profit. This results in the Bank paying
taxes on the artificial profit. Hence it is reckoned only on
realization basis. As per RBI directives on IRAC norms.
3. This enables the Bank to make a claim on the insurance company
in case of loss by fire etc. Also, the insurance company will not
settle the claim with the borrower ignoring our right. Further, the
bank has insurable interest in the goods as it is a creditor.
4. Review of standard account would enable the Bank.

a) To satisfy that the units performance is as per projections
with regard to sales, net profit, level of stocks / debtors etc. made
at the time of sanction of the advance.
b) To satisfy that the conduct of a/c is satisfactory and there is
healthy turnover in the a/c, and there are no adverse features in
the conduct of account such as non routing of sale proceeds,
return of cheques, invocation of BG, devolvement of L/C bills
etc.
c) To identify early warning signals and take appropriate timely
corrective action for smooth conduct of the account.
5. Stock-Audit will throw out facts such as
a) Whether the quantity / quality, value declared in the stock-
Statement is correct and that proper and consistent valuation
method is followed by the enterprise.
b) There are no obsolete / slow moving / rejected / returned
stocks with the enterprise and stocks received for job work etc
are not included in the stock statement. Stocks have been insured
for full market value against all major risks and the policies are
current and in order in all respects.
c) Any adverse features coming to light through stock audit can
be taken up with the enterprise and rectified early to prevent the
account becoming irregular / NPA.
6. i) This will enable auto updation of pass books by the customers
themselves with ease and without waiting at the counter for this
purpose. It adds to good customer service and customer
satisfaction. Bar Coding has made the process faster and simpler
for customers.
ii) The staff who will be relieved of this work can be gainfully
employed in development of business like cross-selling of various
products to customers.
7. i) It ensures that interest subsidy is credited directly to the eligible
persons based on Aadhaar card identity as authorised by the
concerned government dept.
ii) This is a direct benifit transfer to the eligible customers which
avoids delay, role of middlemen in getting the subsidy /
bureaucracy and corruption in making available the subsidy to
the beneficiaries.
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J.S.

Vol.-X April -16 Issue-8

Recollected Questions and Model

subscription@jsinstitute.co.in We are sure these will be found

JS Digest of Banking and Finance April 2016 3

BANKING & FINANCE Finance, SE

Dates, Anniversaries .......................... 2 4

JS Digest of Banking and Finance April 2016 5

Gene ra l Concept Brief - I

JS Digest of Banking and Finance April 2016 7

First Bi-Monthly Monetary Policy 2016-17:

8 Banking & Finance

JS Digest of Banking and Finance April 2016 9

10 Banking & Finance

o Big Defaulters: As per a Supreme Court (SC) directive, RBI had

JS Digest of Banking and Finance April 2016 11

12 Banking & Finance

JS Digest of Banking and Finance April 2016 13

14 Banking & Finance

JS Digest of Banking and Finance April 2016 15

16 Banking & Finance

JS Digest of Banking and Finance April 2016 17

18 Banking & Finance

JS Digest of Banking and Finance April 2016 19

20 Banking & Finance

JS Digest of Banking and Finance April 2016 21

22 Banking & Finance

JS Digest of Banking and Finance April 2016 23

24 Banking & Finance

JS Digest of Banking and Finance April 2016 25

26 Banking & Finance

JS Digest of Banking and Finance April 2016 27

28 Recent Banking Developments

Expenses considered for loan

Timeline for Disposal of Loan Application

JS Digest of Banking and Finance April 2016 29

Course Duration Moratorium Period

Lo an Amo unt R epaym ent Perio d in Years

SBI FLEXIPAY HOME LOAN

30 Recent Banking Developments

JS Digest of Banking and Finance April 2016 31

32 Recent Banking Developments

JS Digest of Banking and Finance April 2016 33

34 Recent Banking Developments

Import of Rough, Cut and Polished Diamonds:

JS Digest of Banking and Finance April 2016 35

Investment by Foreign Portfolio Investors (FPI) in Government

External Commercial Borrowings (ECB) Revised framework:

36 Recent Banking Developments

JS Digest of Banking and Finance April 2016 37

Foreign Direct Investment (FDI) in India Review of FDI policy

38 Recent Banking Developments

Priority Sector comprises several categories, including Agriculture and

Thus, a bank having shortfall in achievement of any sub-target (e.g. SF/

JS Digest of Banking and Finance April 2016 39

40 Recent Banking Developments

Main features of R-GDS, in brief, are:

JS Digest of Banking and Finance April 2016 41

42 Recent Banking Developments

JS Digest of Banking and Finance April 2016 43

All penal interest rates on shortfall in reserve requirements, which are

Item Existing Rate Revised Rate

Marginal Standing Facility