The Securities and Exchange Board of India

The Securities and Exchange Board of India (SEBI) is the regulator for the securities market in India
"Its Basic function is to protect the interests of investors in securities and to promote the development, and to
regulate the securities market and for matters connected there with or incidental there to"
The Securities and Exchange Board of India was established on April 12, 1992 in accordance with the provisions
of the Securities and Exchange Board of India Act, 1992.
SEBI has to be responsive to the needs of three groups, which constitute the market:
The issuers of securities
The investors
The market intermediaries.

Headquarters
Its headquarters at the business district of Bandra Kurla Complex in Mumbai (Maharashtra), and has
Northern, Eastern, Southern and Western Regional Offices in New Delhi, Kolkata, Chennai and
Ahmedabad respectively. It has opened local offices at Jaipur and Bangalore.

Management of the Board.

The Board shall consist of the following members, namely: -
(a) A Chairman;
(b) Two members from amongst the officials of the [Ministry] of the Central Government dealing with Finance
(c) One member from amongst the officials of [the Reserve Bank];
(d) Five other members of whom at least three shall be the whole-time members to be appointed by the central
Government.

Chairman- Ajay tyagi

Powers
For the discharge of its functions efficiently, SEBI has been vested with the following powers:
- To approve bylaws of stock exchanges.
- To require the stock exchange to amend their bylaws.
- Inspect the books of accounts and call for periodical returns from recognized stock exchanges.
- Inspect the books of accounts of financial intermediaries.
- Compel certain companies to list their shares in one or more stock exchanges.

The Asian Infrastructure Investment Bank

The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank (MDB) conceived for the
21st century. The Bank's foundation is built on the lessons of experience of existing MDBs and the private sector.
Its modus operandi will be lean, clean and green:

Lean- with a small efficient management team and highly skilled staff;

Clean- an ethical organization with zero tolerance for corruption;

Green- an institution built on respect for the environment.

The AIIB, a modern knowledge-based institution, will focus on the development of infrastructure and other
productive sectors in Asia, including energy and power, transportation and telecommunications, rural
infrastructure and agriculture development, water supply and sanitation, environmental protection, urban
development and logistics, etc.
The AIIB will complement and cooperate with the existing MDBs to jointly address the daunting infrastructure
needs in Asia. AIIB welcomes all regional and non-regional countries, developing and developed countries, that
seek to contribute to Asian infrastructure development and regional connectivity.

Headquarters- Beijing, China

Official language - English

President- Jin Liqun

Main organ- Board of Governors

Board of Directors
HISTORY
Representatives from 22 countries signed the October 2014 Memorandum of Understanding (MOU) to establish
the AIIB and Beijing was selected to host Bank headquarters. Mr. Jin Liqun was appointed as the Secretary
General of the Multilateral Interim Secretariat. By the deadline of March 31st for submission of membership
applications, the Prospective Founding Members had increased to 57.
The bank started operation after the agreement entered into force on 25 December 2015.
Major economies that did not become PFM (Prospective Founding Members) include the G7/G8 members' Japan
and the United States

Share Holders
The capital of the bank is $100 billion, equivalent to 23 of the capital of the Asian Development Bank and
about half that of the World Bank.
Asian countries will contribute up to 75 per cent of the total capital and be allocated a share of the quota based
on their economic size.
BRICS members China, India and Russia are the three largest shareholders, with a voting share of 26.06
per cent, 7.5 per cent and 5.92 per cent, respectively.

Current News about AIIB

- AIIB 1st Annual Meeting to be held in Beijing on June 25-26, 2016.
- Asian Infrastructure Investment Bank and European Investment Bank agree to strengthen
cooperation
-The Asian Infrastructure Investment Banks Board of Directors approved its first 4 loans totaling
$509 million to finance 4 projects. Three of the 4 projects are co-financing operations with multilateral
development bank (MDB) partners. The approved loans are:
$165 million loan for a Power Distribution System Upgrade and Expansion Project in Bangladesh;
$216.5 million loan for a National Slum Upgrading Project in Indonesia, expected to be co-financed with the
World Bank;
$100 million loan to finance the Shorkot-Khanewal Section of National Motorway M-4 in Pakistan, co-
financed with the Asian Development Bank (ADB) and the United Kingdoms Department for International
Development (DFID); and
$ 27.5 million loan for the Dushanbe-Uzbekistan Border Road Improvement Project in Tajikistan, co-financed
with the European Bank for Reconstruction and Development (EBRD).
- Former IAS officer DJ Pandian has been appointed as vice president and CIO of AIIB
- Indias Dinesh Sharma has been elected to the board of directors of the Asian Infrastructure Investment Bank
(AIIB). He has been elected to the 12-member board through a secret ballot. This is the first board of directors of
AIIB.

(ASIAN DEVELOPMENT BANK)

ADB
The Asian Development Bank was conceived in the early 1960s as a financial institution that would be Asian
in character and foster economic growth and cooperation in one of the poorest regions in the world.
A resolution passed at the first Ministerial Conference on Asian Economic Cooperation held by the United
Nations Economic Commission for Asia and the Far East in 1963 set that vision on the way to becoming reality.

Headquarters
The Philippines capital of Manila was chosen to host the new institution, which opened on 19 December 1966,
with 31 members that came together to serve a predominantly agricultural region. Takeshi Watanabe was
ADB's first President.
From 31 members at its establishment in 1966, ADB has grown to encompass 67 members - of which 48 are
from within Asia and the Pacific and 19 outside.
Georgia is the last member to join the ADB group in 2007.
During the 1960s, ADB focused much of its assistance on food production and rural development.
At the end of 2014, Japan holds the largest proportion of shares at 15.7%. The United States holds 15.6%,
China holds 6.5%, India holds 6.4%, and Australia holds 5.8%

President & Main organ

The highest policy-making body of the bank is the Board of Governors, composed of one representative
from each member state. The Board of Governors, in turn, elect among themselves the twelve members of the
Board of Directors and their deputies. Eight of the twelve members come from regional (Asia-Pacific) members
while the others come from non-regional members.
The Board of Governors also elect the bank's president, who is the chairperson of the Board of Directors and
manages ADB. The president has a term of office lasting five years, and may be reelected. Traditionally, and
because Japan is one of the largest shareholders of the bank, the president has always been Japanese.
The current president was Takehiko Nakao, who succeeded Haruhiko Kuroda in 2013

Areas of Focus and Results

ADB operations are designed to support the three complementary agendas of inclusive economic growth,
environmentally sustainable growth, and regional integration. ADB employs its limited resources in its areas of
comparative strengththe core areas of:
Infrastructure (water, energy, transport, urban development, information and communications technology)
Environment
Regional cooperation and integration
Finance sector development
Education
ADB also operates on a limited scale in other areas, including
Health
Agriculture and natural resources
Public sector management

As a multilateral development finance institution, ADB provides:

Loans
Technical assistance
Grants

Current news about ADB

Asian Development Bank(ADB) retained Indias GDP growth forecast at 7.4% for the current fiscal and forecast
the economy would grow at 7.8% in 2017-18.
The Asian Development Bank (ADB) has approved a project loan of $300 million to upgrade over 400 kilometers
(km) of major district roads in Uttar Pradesh
The Asian Development Bank (ADB) approved a $500 million loan to build a bridge across Indias Ganges
River. The 9.8 kilometer (km) road bridge in the northeastern state of Bihar will be Indias longest river bridge and
will provide vital transport links between the northern and southern parts of the state and with neighboring Nepal.
ADB's 50th Annual Meeting:
Fumiko Hayashi, Mayor of Yokohama, extends a warm welcome to delegates attending the 50th Annual Meeting
of the ADB Board of Governors, to be held in the Japanese city from 4 to 7 May 2017.

(INTERNATIONAL MONETARY FUND)

The International Monetary Fund (IMF) is an organization of 189 countries, working to foster global monetary
cooperation, secure financial stability, facilitate international trade, promote high employment and
sustainable economic growth, and reduce poverty around the world.

Created in 1945, the IMF is governed by and accountable to the 189 countries that make up its near-global
membership.
April 12, 2016 -- IMF Survey : Nauru Joins the IMF as 189th Member

Each country or region is represented by a member on the Fund's Executive Board and numerous staff
members. The ratio of board members from each country is based on the country's global financial position, so
that the most powerful countries in the global economy have the heaviest representation. The United
States has the highest voting power, followed by Asian countries such as Japan and China and Western
European countries such as Britain, Germany, France, and Italy

Headquarters -Washington, D.C., United States

Managing Director- Christine Lagarde

Main organ- Board of governors

Board of Governors
The Board of Governors consists of one governor and one alternate governor for each member country. Each
member country appoints its two governors. The Board normally meets once a year and is responsible for
electing or appointing executive directors to the Executive Board. While the Board of Governors is officially
responsible for approving quota increases, Special Drawing Right allocations, the admittance of new members,
compulsory withdrawal of members, and amendments to the Articles of Agreement and By-Laws, in practice it
has delegated most of its powers to the IMF's Executive Board

Why the IMF was created and how it works

The IMF, also known as the Fund, was conceived at a UN conference in Bretton Woods, New Hampshire, United
States, in July 1944. The 44 countries at that conference sought to build a framework for economic cooperation
to avoid a repetition of the competitive devaluations that had contributed to the Great Depression of the 1930s.

The IMF's responsibilities:

The IMF's primary purpose is to ensure the stability of the international monetary systemthe system of
exchange rates and international payments that enables countries (and their citizens) to transact with each other.
The Fund's mandate was updated in 2012 to include all macroeconomic and financial sector issues that bear on
global stability.

The IMF vs. the World Bank

The IMF works hand-in-hand with the World Bank, and although they are two separate entities, their interests are
aligned, and they were created together. While the IMF provides only shorter-term loans that are funded by
member quotas, the World Bank focuses on long-term economic solutions and the reduction of poverty and is
funded by both member contributions and bonds. The IMF is more focused on economic policy solutions,
while the World Bank offers assistance in such programs as building necessary public facilities and
preventing disease.

Special Drawing Right SDR

The SDR (Also known as the Paper Gold) was redefined as a basket of currencies. Currently, the SDR basket
consists of the U.S. dollar, euro, Japanese yen, and pound sterling. Effective October 1, 2016, the basket will be
expanded to include the Chinese renminbi.
The respective weights of the U.S. dollar, euro, Chinese renminbi, Japanese yen, and pound sterling are 41.73
percent, 30.93 percent, 10.92 percent, 8.33 percent, and 8.09 percent.1 These weights will be used to determine
the amounts of each of the five currencies to be included in the new SDR valuation basket that will take effect on
October 1, 2016

How a Country Can Join the IMF

Countries must apply to be a part of the IMF, although any country can apply. Over time, the stipulations of being
a member have changed, with membership requirements being more relaxed when the Fund was in its early
stages. Countries are required to make membership payments, or quotas, which are assigned to individual
countries based on their economic size and stipulate how much they contribute. These quotas are larger for more
powerful economies, and they form a pool from which countries in need can take loans. Member countries are
also required to adhere to the Code of Conduct, and stricter regulations may be imposed on those countries who
apply in hopes of financial aid

(NABARD)

(National Bank for Agriculture and Rural Development) set up as an apex Development Bank by the Government
of India with a mandate for facilitating credit flow for promotion and development of agriculture, cottage and
village industries etc.

CHAIRMAN
Dr. Harsh Kumar Bhanwala, Chairman, NABARD, is a Post Graduate in Management from IIM, Ahmedabad

HEAD OFFICE-
NABARD has its head office at Mumbai, India.

HISTORY
At the instance of Government of India and Reserve Bank of India (RBI), constituted a committee to review the
arrangements for institutional credit for agriculture and rural development (CRAFICARD) on 30 March 1979,
under the Chairmanship of Shri B.Sivaraman, former member of Planning Commission, Government of India to
review the arrangements for institutional credit for agriculture and rural development.

The Committee, in its interim report, submitted on 28 November 1979, felt the need for a new organisational
device for providing undivided attention, forceful direction and pointed focus to the credit problems arising out of
integrated rural development and recommended the formation of National Bank for Agriculture and Rural
Development(NABARD).
The Parliament, through Act,61 of 1981, approved the setting up of NABARD. The bank came into existence
on 12 July 1982 by transferring the agricultural credit functions of RBI and refinance functions of the then
Agricultural Refinance and Development Corporation (ARDC). NABARD was dedicated to the service of the
nation by the late Prime Minister Smt. Indira Gandhi on 05 November 1982.

NABARD was set up with an initial capital of 100 crore. Consequent to the revision in the composition of share
capital between Government of India and RBI, the paid up capital as on 31 March 2015, stood at 5000 crore with
Government of India holding 4,980 crore (99.60%) and Reserve Bank of India 20.00 crore (0.40%).

It has 336 District Offices across the country, one special cell at Srinagar. It also has 6 training
establishments.

MISSION
Promote sustainable and equitable agriculture and rural prosperity through effective credit support, related
services, institution development and other innovative initiatives.

ROLE
It works as an institution which looks after the development of the cottage industry, small industry and village
industry, and other rural industries.

NABARD Refinance Available to-

- State co-operative agriculture and rural development banks (SCARDBs),
- State co-operative banks (SCBs),
- Regional rural banks (RRBs),
- Commercial banks (CBs) and other financial institutions approved by RBI.

While the ultimate beneficiaries of investment credit can be individuals, partnership concerns, companies,
State-owned corporations or co-operative societies, production credit is generally given to individuals.

NABARD is also known for its 'SHG Bank Linkage Programme' which encourages India's banks to lend to self-
help groups (SHGs). Largely because SHGs are composed mainly of poor women, this has evolved into an
important Indian tool for microfinance. By March 2006, 22 lakh SHGs representing 3.3 core members had to be
linked to credit through this programme.

NABARD also has a portfolio of Natural Resource Management Programmes involving diverse fields like
Watershed Development, Tribal Development and Farm Innovation through dedicated funds set up for the
purpose

IMPORTANT SCHEME Under NABARD

-Solar Scheme

-Capital Subsidy Schemes for Promoting Solar Photovoltaic Water Pumping Systems for Irrigation Purpose

-Capital Subsidy/Refinance Scheme for Installation of Solar Off Grid under Jawaharlal Nehru-National Solar
Mission (JNNSM) of the Ministry of New and Renewable Energy

-Solar Water Heating System

-Agricultural Marketing Infrastructure, Grading and Standardization scheme

-Rural Godowns Scheme

-Dairy Enterpreneurship Development Scheme.

What is MUDRA Bank?

Micro Units Development and Refinance Agency Bank (MUDRA Bank), is a new institution setup by the
Government of India for development of micro units and refinance of MFIs to encourage entrepreneurship in India
& provide the funding to the non-corporate small business sector.
MUDRA Bank will need two type of product like refinance for the micro units having loan requirement from Rs
50 thousands to 10 lakhs and support to Micro Finance Institutions (MFI) for landing. MUDRA will refinance to
micro business under the scheme of Pradhan Mantri MUDRA Yojana.

Types of Loan provided by MUDRA Bank

MUDRA SHISHU Yojana

Under Mudra Shishu Yojana banks are providing loan upto 50,000/-. It is basic scheme and banks are charging
very nominal interest rate which is around 10% to 12%.

MUDRA KISHOR Yojana

Under Mudra Kishor Yojana bank are providing loan between 50,001 to 5,00, 000/- rupee.
It is middle scheme & comes in category of unsecured loan & its Interest rate is high from14% to 17% depends
on bank to bank.

MUDRA TARUN Yojana

Mudra Tarun Yojana is the last scheme of government of India. Under MUDRA Tarun Scheme applicant can
apply loan between 5,00,001 to 10,00,000/-. It is also an unsecured Loan and its rate of interest rate is high and
starts from 16% and very bank to bank.

It would be ensured that more focus is given to Shishu Category Units and then Kishor and Tarun Categories.

Recently Central Government decides to provide an additional fund of One Lakh crore to the market and it will
be allocate according to below list.
40,000 Crore Rupee for Mudra Bank Shishu Loan Scheme.
35, 000 Crore Rupee for Mudra Bank Kishor Loan Scheme.
25, 000 Crore Rupee for Mudra Bank Tarun Loan Scheme.

The funding support from MUDRA are of four types :

Micro Credit Scheme (MCS) for loans upto 1 lakh finance through MFIs.
Refinance Scheme for Commercial Banks / Regional Rural Banks (RRBs) / Scheduled Co-operative Banks
Women Enterprise programme
Securitization of loan portfolio

Purpose of MUDRA loan

Mudra loan is extended for a variety of purposes which provide income generation and employment creation. The
loans are extended mainly for:
(i) Business loan for Vendors, Traders, Shopkeepers and other Service Sector activities.
(ii) Working capital loan through MUDRA Cards.
(iii) Equipment Finance for Micro Units.
(iv) Transport Vehicle loans.

Following is an illustrative list of the activities that can be covered under MUDRA loans:

1 Transport Vehicle
Purchase of transport vehicles for goods and personal transport such as auto rickshaw, small goods transport
vehicle, 3 wheelers, e-rickshaw, passenger cars, taxis, etc.

2 Community, Social & Personal Service Activities

Saloons, beauty parlours, gymnasium, boutiques, tailoring shops, dry cleaning, cycle and motorcycle repair shop,
DTP and Photocopying Facilities, Medicine Shops, Courier Agents, etc.

3 Food Products Sector

Activities such as papad making, achaar making, jam / jelly making, agricultural produce preservation at rural
level, sweet shops, small service food stalls and day to day catering / canteen services, cold chain vehicles, cold
storages, ice making units, ice cream making units, biscuit, bread and bun making, etc.

4 Textile Products Sector / Activity

Handloom, powerloom, khadi activity, chikan work, zari and zardozi work, traditional embroidery and hand work,
traditional dyeing and printing, apparel design, knitting, cotton ginning, computerized embroidery, stitching and
other textile non garment products such as bags, vehicle accessories, furnishing accessories, etc.

5 Business loans for Traders and Shopkeepers

Financial support for on lending to individuals for running their shops / trading & business activities / service
enterprises and non-farm income generating activities with beneficiary loan size of upto 10 lakh per enterprise /
borrower.

6 Equipment Finance Scheme for Micro Units

Setting up micro enterprises by purchasing necessary machinery / equipments with per beneficiary loan size of
upto 10 lakh.

MUDRA Card
MUDRA Card is a debit card issued against the MUDRA loan account, for working capital portion of the loan. The
borrower can make use of MUDRA Card in multiple withdrawal and credit, so as to manage the working capital
limit in a most efficient manner and keep the interest burden minimum. MUDRA Card will also help in
digitalization of MUDRA transactions and creating credit history for the borrower.

Chairman of MUDRA bank:-

Dr. Kshatrapati Shivaji - IAS

Formation of New Development Bank (NDB)

The idea for creation of the New Development Bank was first mooted in the Fourth BRICS Summit at New Delhi
on March 29, 2012 to meet the development funding requirements of the five founding countries namely Brazil,
Russia, India, China & South Africa (BRICS) and other emerging economies and developing countries as well.

On July 15, 2014 at the sixth summit in Fortaleza, Brazil the member countries signed the Articles for the New
Development Bank with an Authorized Capital of USD 100 billion. The founders established the Bank with a
purpose of mobilizing resources for infrastructure and sustainable development projects in BRICS and other
emerging economies and developing countries, complementing the existing efforts of multilateral and regional
financial institutions for global growth and development.To fulfill its purpose, the Bank was envisaged to support
public or private projects through loans, guarantees, equity participation and other financial instruments. It shall
also cooperate with international organizations and other financial entities, and provide technical assistance for
projects to be supported by the Bank.
The first Board of Governors meeting of the Bank was held in Moscow, Russia on July 7, 2015 where the
Bank formally came into existence as a legal entity. Mr. K.V. Kamath was elected the first President of the Bank
and the Vice-Presidents were appointed by the Governors.

Sustainable Development of NDB:

The 21st century has brought with it tremendous development. However, this progress has been skewed,
insufficient & often harmful to our environment. We are committed to be a partner in bringing about sustainable
development. We are looking forward to partner with initiatives that drive growth and employment while ensuring
environmental protection.

Infrastructure of NDB:
Infrastructure development is the key driver of economic and social growth. In the context of developing nations,
infrastructural deficiencies are a matter of concern. We, at NDB, strive to identify the gaps between needs and
funding. Our mission is to bridge these gaps and be a partner in bringing about truly holistic development.

Changing the course of development

The New Development Bank is instituted with a vision to support and foster infrastructure and sustainable
development initiatives in emerging economies. The Bank will also complement the efforts of other existing
financial institutions to realize the common goal of global growth. To accomplish our holistic objectives we work
with an attitude to listen, learn, collaborate, innovate.
 Difference
The New Development Bank comes with a very open mindset. Like the economies we look forward to partner
with, we too are on the development curve. We understand the challenges and needs of borrowing partners. This
gives us the ability to structure our offerings and processes accordingly. We aim at addressing the needs of
developing economies in todays context and partner with them.

Since inception in 1944, the World Bank has expanded from a single institution to a closely associated group of
five development institutions. Our mission evolved from the International Bank for Reconstruction and
Development (IBRD) as facilitator of post-war reconstruction and development to the present-day mandate of
worldwide poverty alleviation in close coordination with our affiliate, the International Development
Association (IDA) and other members of the World Bank Group, the International Finance Corporation (IFC), the
Multilateral Guarantee Agency (MIGA), and the International Centre for the Settlement of Investment
Disputes (ICSID).

President- Jim Yong Kim became the 12th president of the World Bank Group on July 1, 2012.
Headquarters- Washington, DC USA
Nauru became the 189th member country of World Bank on 12th April, 2016

The World Bank is like a cooperative, made up of 189 member countries. These member countries, or
shareholders, are represented by a Board of Governors, who are the ultimate policymakers at the World Bank.
Generally, the governors are member countries' ministers of finance or ministers of development. They meet
once a year at the Annual Meetings of the Boards of Governors of the World Bank Group and the International
Monetary Fund.

The World Bank Group consists of five

organizations:
1. International Bank for Reconstruction and
Development
The International Bank for Reconstruction and Development was created in 1944 to help Europe rebuild after
World War II. Today, IBRD provides loans and other assistance primarily to middle income countries. IBRD is the
original World Bank institution. It works closely with the rest of the World Bank Group to help developing
countries reduce poverty, promote economic growth, and build prosperity.

IBRD is owned by the governments of its 189 member countries, which are represented by a 25-member board
of 5 appointed and 20 elected Executive Directors. The institution provides a combination of financial resources,
knowledge and technical services, and strategic advice to developing countries, including middle income and
credit-worthy lower income countries.

2. International Development Association (IDA)

The International Development Association (IDA) is the part of the World Bank that helps the worlds poorest
countries. Overseen by 173 shareholder nations, IDA aims to reduce poverty by providing loans (called credits)
and grants for programs that boost economic growth, reduce inequalities, and improve peoples living conditions.

IDA complements the World Banks original lending armthe International Bank for Reconstruction and
Development (IBRD). IBRD was established to function as a self-sustaining business and provides loans and
advice to middle-income and credit-worthy poor countries. IBRD and IDA share the same staff and headquarters
and evaluate projects with the same rigorous standards.

3. International Finance Corporation (IFC)

Established in 1956, IFC is owned by 184 member countries, a group that collectively determines our policies.
Through a Board of Governors and a Board of Directors, our member countries guide IFC's programs and
activities.

Each of our member countries appoints one governor and one alternate. Corporate powers are vested in the
Board of Governors, which delegates most powers to a board of 25 directors. Voting power on issues brought
before them is weighted according to the share capital each director represents.

The directors meet regularly at World Bank Group headquarters in Washington, D.C., where they review and
decide on investments and provide overall strategic guidance to IFC management.

4. Multilateral Investment Guarantee Agency (MIGA)

MIGA is a member of the World Bank Group. The mission of MIGA is to promote foreign direct investment (FDI)
into developing countries to help support economic growth, reduce poverty, and improve people's lives. MIGAs
operational strategy plays to foremost strength in the marketplaceattracting investors and private insurers into
difficult operating environments. We focus on insuring investments in the areas where we can make the greatest
difference.

5. International Centre for Settlement of Investment

Disputes (ICSID)
ICSID is the worlds leading institution devoted to international investment dispute settlement. It has extensive
experience in this field, having administered the majority of all international investment cases. States have
agreed on ICSID as a forum for investor-State dispute settlement in most international investment treaties and in
numerous investment laws and contracts.

ICSID was established in 1966 by the Convention on the Settlement of Investment Disputes between States
and Nationals of Other States (the ICSID Convention). The ICSID Convention is a multilateral treaty formulated
by the Executive Directors of the World Bank to further the Banks objective of promoting international
investment. ICSID is an independent, depoliticized and effective dispute-settlement institution. Its availability to
investors and States helps to promote international investment by providing confidence in the dispute resolution
process. It is also available for state-state disputes under investment treaties and free trade agreements, and as
an administrative registry.

Today in the study Notes we are Discuss about India's RRBs (Regional Rural Banks)

Regional Rural Banks (RRBs) were established in 1975 under the provisions of the Ordinance promulgated
on the 26th September 1975 and followed by Regional Rural Banks Act, 1976 with a view to develop the rural
economy and to create a supplementary channel to the 'Cooperative Credit Structure' with a view to enlarge
institutional credit for the rural and agriculture sector.

The Government of India, the concerned State Government and the bank, which had sponsored the RRB
contributed to the share capital of RRBs in the proportion of 50%, 15% and 35%, respectively. The area of
operation of the RRBs is limited to notified few districts in a State. The RRBs mobilise deposits primarily from
rural/semi-urban areas and provide loans and advances mostly to small and marginal farmers, agricultural
labourers , rural artisans and other segments of priority sector.

The RBI in 2001 constituted a Committee under the Chairmanship of Dr V S Vyas on Flow of Credit to
Agriculture and Related Activities from the Banking System which examined relevance of RRBs in the rural
credit system and the alternatives for making it viable. The consolidation process thus was initiated in the year
2005 as an off-shoot of Dr Vyas Committee Recommendations. First phase of amalgamation was initiated
Sponsor Bank-wise within a State in 2005 and the second phase was across the Sponsor banks within a State in
2012. The process was initiated with a view to provide better customer service by having better infrastructure,
computerization, experienced work force, common publicity and marketing efforts etc. The amalgamated RRBs
also benefit from larger area of operation, enhanced credit exposure limits for high value and diverse banking
activities. As a result of amalgamation, number of the RRBs has been reduced from 196 to 64 as on 31 March
2013. The number of branches of RRBs increased to 17856 as on 31 March 2013 covering 635 districts
throughout the country.
 Sources of Funds
The sources of funds of RRBs comprise of owned fund, deposits, borrowings from NABARD, Sponsor Banks and
other sources including SIDBI and National Housing Bank.

Owned Funds
The owned funds of RRBs comprising of share capital, share capital deposits received from the shareholders and
the reserves stood at 19304 crore as on 31 March 2013 as against 16462 crore as on 31 March 2012;
registering a growth of 17.26%. The increase in owned funds to the tune of 2842 crore was mainly on account of
accretion to reserves by the profit making RRBs. The share capital and share capital deposits together amounted
to 6174 crore of total owned fund while the balance amount of 13130 crore represented reserves.

Recapitalisation of RRBs
(a) The Chakrabarty Committee reviewed the financial position of all RRBs in 2010 and recommended for
recapitalisation of 40 out of 82 RRBs for strengthening their CRAR to the level of 9 per cent by 31 March 2012.
According to the Committee, the remaining RRBs are in a position to achieve the desired level of CRAR on their
own. Accepting the recommendations of the committee, the GOI along with other shareholders decided to
recapitalise the RRBs by infusing funds to the extent of 2200 Crore. The shareholder wise proportion
(GOI/Sponsor Banks/State Governments) is 50:35:15 respectively.

(b) As on 31 March 2013, an amount of 2015.86 crore has been released to 37 RRBs in 20 States. The released
amount includes GoIs contribution of 1003.92 crore, State Govt's contribution of 303.59 crore and Sponsor
bank's contribution of 708.35 crore. The recapitalisation is complete in respect of 35 RRBs (5 in Odisha , 3 in
MP, 2 in Uttarakhand, 2 in Jharkhand, 2 in Chhatisgarh, 2 in Bihar, 2 in Maharashtra, 3 in West Bengal, 5 in
Rajasthan and one each in Assam, Arunachal Pradesh, Nagaland, Tripura, J&K, Karnataka, Tamil Nadu, Gujarat
& UT of Puducherry). GoI share 7.99 cr. is pending in respect of Manipur Rural Bank. Mizoram State Government
has partially released 0.50 crore in respect of Mizoram Rural Bank and 2.80 crore is pending. Two State Govts.
viz. UP(2 RRBs), & J&K (1 RRB) have not released any amount in respect of 3 RRBs operating in their states.
Out of 35 fully recapitalised RRBs, 3 RRBs viz. Central Madhya Pradesh GB, Manipur Rural Bank and Mizoram
GB have not achieved CRAR of 9 per cent as on 31.3.2013.

Deposits
Deposits of RRBs increased from 186336 crore to 211458 crore during the year registering growth rate of 13.48
%. There are Thirty three (33) RRBs having deposits of more than 3000 crore each.

The Regional Rural Banks (Amendment) Bill, 2014

The Regional Rural Banks (Amendment) Bill, 2014 was introduced by the Minister of Finance, Mr. Arun Jaitley, in
Lok Sabha on December 18, 2014. The Bill seeks to amend the Regional Rural Banks Act, 1976.
The Regional Rural Banks Act, 1976 mainly provides for the incorporation, regulation and winding up of Regional
Rural Banks (RRBs).

Sponsor banks: The Act provides for RRBs to be sponsored by banks. These sponsor banks
are required to (i) subscribe to the share capital of RRBs, (ii) train their personnel, and (iii) provide managerial
and financial assistance for the first five years. The Bill removes the five year limit, thus allowing such assistance
to continue beyond this duration.
Authorised capital: The Act provides for the authorised capital of each RRB to be Rs five crore. It does not
permit the authorised capital to be reduced below Rs 25 lakh. The Bill seeks to raise the amount of authorised
capital to Rs 2,000 crore and states that it cannot be reduced below Rs one crore.

Issued capital: The Act allows the central government to specify the capital issued by a RRB,
between Rs 25 lakh and Rs one crore. The Bill requires that the capital issued should be at least Rs one crore.

Shareholding: The Act mandates that of the capital issued by a RRB, 50% shall be held by the
central government, 15% by the concerned state government and 35% by the sponsor bank. The Bill allows
RRBs to raise their capital from sources other than the central and state governments, and sponsor banks. In
such a case, the combined shareholding of the central government and the sponsor bank cannot be less than
51%. Additionally, if the shareholding of the state government in the RRB is reduced below 15%, the central
government would have to consult the concerned state government.
The Bill states that the central government may by notification raise or reduce the limit of shareholding of the
central government, state government or the sponsor bank in the RRB. In doing so, the central government may
consult the state government and the sponsor bank. The central government is required to consult the
concerned state government when reducing the limit of shareholding of the state government in the RRB.

Board of directors: The Act specifies the composition of the Board of Directors of the RRB
to include a Chairman and directors to be appointed through the central government, NABARD, sponsor bank,
Reserve Bank of India, etc. The Bill states that any person who is a director of an RRB is not eligible to be on the
Board of Directors of another RRB.
The Bill also adds a provision for directors to be elected by shareholders based on the total amount of equity
share capital issued to such shareholders. If the equity share capital issued to shareholders is 10% or less, one
director shall be elected by such shareholders. Two directors shall be elected by shareholders where the equity
share capital issued to them is from 10% to 25%. Three directors shall be elected in case of equity share capital
issued being 25% or above. If required, the central government can also appoint an officer to the board of
directors to ensure effective functioning of the RRB.

The Act specifies the term of office of a director (excluding the Chairman) to be not more than two years. The Bill
raises this tenure to three years. The Bill also states that no director can hold office for a total period exceeding
six years.

Closure and balancing of books: As per the Act, the books of a RRB
should be closed and balanced as on December 31 every year. The Bill changes this date to March 31 to bring
the Act in uniformity with the financial year.

At present there are 56 RRBs in India (There is no RRBs working in Goa and Sikkim)

Reserve Bank of India (RBI)

I. RBI established on April 1, 1935 under RBI Act 1934 (recommendations of John Hilton Young
Commission 1926 called Royal Commission on Indian Currency and Finance), is the central bank of the
country and was nationalised w.e.f Jan 01,1949.
II. Originally it was a shareholders bank which was taken over by the Central Govt. under Reserve Bank
(Transfer of Public Ownership) Act 1948 (paid up capital Rs. 5 cr).
III. RBIs central office is in Mumbai.
IV. Urjit R. Patel is the current and 24th Governor of Reserve Bank of India.
V. Presently, 3 Deputy Governors of RBI. These are-
a) R. Gandhi
b) SS Mundra
c) N.S Vishwanathan

Functions of RBI:
Issuance of currency: RBI is the authority in India to issue currency notes (called bank notes) under signatures
of Governor. (One rupee note called currency note is issued by the Central Govt. and signed by Finance
Secretary). The stock of currency is distributed with the help of currency chests spread all over the country.

Banker to Govt.: RBI transacts govt. business and manages public debt. SBI or any other bank is appointed
Agent where RBI does not have office. It provides Ways & Means advances to Govt.

Bankers bank: It keeps a part of deposits of commercial banks (as CRR) and acts as lender of last resort by
providing financial assistance to banks. It provides export credit refinance, Liquidity Adjustment Facility and
Marginal Standing Facility.

Controller of Banks: An entity which is to conduct banking business in India has to obtain license from RBI. It
acts as controller of banks by including the banks in 2nd Schedule of the Act. It issues directions, carries
inspection (on-site as well as off-site) and exercises management control.
Controller of credit: RBI can fix interest rates (including Bank Rate) and exercise selective credit controls.
Various tools such as change in cash reserve ratio, stipulation of margin on securities, directed credit guidelines
etc. are used for this purpose. It also carries sale and purchase of securities which are known as open market
operations.

Maintenance of external value: RBI is responsible also for maintaining external value of Indian currency as well
as the internal value. Foreign exchange reserves are held by RBI and it has a wide power to regulate foreign
exchange transactions under Foreign Exchange Management Act (FEMA).

POLICY RATES
Repo Rate
Repo rate is the rate of interest which is levied on Short-Term loans taken by commercial banks from RBI.
Whenever the banks have any shortage of funds they can borrow it from RBI.

Reverse Repo Rate

This is exact opposite of Repo rate. Reverse repo rate is the rate at which commercial banks charge on their
surplus funds with RBI. RBI uses this tool when it feels there is too much money floating in the banking system.

SLR Rate
SLR (Statutory Liquidity Ratio) is the amount a commercial bank needs to maintain in the form of cash, or gold or
government approved securities (Bonds) before providing credit to its customers.
It is determined as the percentage of total Net Demand and Time Liabilities (NDTL).

Bank Rate
It is defined in Sec 49 of RBI Act 1934 as the standard rate at which RBI is prepared to buy or rediscount bills of
exchange or other commercial papers eligible for purchase under this act.

Cash Reserve Ratio (CRR)

CRR refers to the ratio of banks cash reserve balances with RBI with reference to the banks net demand and
time liabilities to ensure the liquidity and solvency of the scheduled banks.

Special Economic Zone

This policy intended to make SEZs an engine for economic growth supported by quality infrastructure
complemented by an attractive fiscal package, both at the Centre and the State level, with the minimum possible
regulations.
India was one of the first in Asia to recognize the effectiveness of the Export Processing Zone (EPZ) model in
promoting exports, with Asia's first EPZ set up in Kandla in 1965. With a view to overcome the shortcomings
experienced on account of the multiplicity of controls and clearances; absence of world-class infrastructure, and
an unstable fiscal regime and with a view to attract larger foreign investments in India, the Special Economic
Zones (SEZs) Policy was announced in April 2000.

Facilities and Incentives offered to the SEZs

The incentives and facilities offered to the units in SEZs for attracting investments into the SEZs, including foreign
investment include:-
- Duty free import/domestic procurement of goods for development, operation and maintenance of SEZ units
- 100% Income Tax exemption on export income for SEZ units under Section 10AA of the Income Tax Act for
first 5 years, 50% for next 5 years thereafter and 50% of the ploughed back export profit for next 5 years.
- Exemption from minimum alternate tax
- External commercial borrowing by SEZ units upto US $ 500 million in a year without any maturity restriction
through recognized banking channels.
- Exemption from Central Sales Tax.
- Exemption from Service Tax.
- Single window clearance for Central and State level approvals.
- Exemption from State sales tax and other levies as extended by the respective State Governments.

Types
The term special economic zone can also include:
Free trade zones (FTZ)
Export processing zones (EPZ)
Free zones/ Free economic zones (FZ/ FEZ)
Industrial parks/ industrial estates (IE)
Free ports
Bonded logistics parks (BLP
Urban enterprise zones

Objective
The Government of India announced the introduction of Special Economic Zones in April 2000 to achieve the
following objectives:
Generation of additional economic activity
promotion of exports of goods and services
Promotion of investment from domestic and foreign sources
Creation of employment opportunities
Development of infrastructure facilities

Administrative Set Up
The functioning of the SEZs is governed by a three tier administrative set up. The Board of Approval is the
apex body and is headed by the Secretary, Department of Commerce. The Approval Committee at the Zone level
deals with approval of units in the SEZs and other related issues. Each Zone is headed by a Development
Commissioner, who is ex-officio chairperson of the Approval Committee

FDI Policy on SEZ

FDI up to 100% is allowed through the automatic route for all manufacturing activities in Special Economic
Zones (SEZs), except for the following activities:
Arms and ammunition, explosives and allied items of defence equipment, defence aircraft and warships
Atomic substances
Narcotics and psychotropic substances and hazardous chemicals
Distillation and brewing of alcoholic drinks
Cigarettes/cigars and manufactured tobacco substitutes
Sectoral norm as notified by Government shall apply to foreign investment in services

Important SEZs in INDIA

1. Kandla Special Economic Zone Kandla, Gujarat
2. SEEPZ Special Economic Zone Mumbai, Maharashtra
3. Noida Special Economic Zone Uttar Pradesh
4. MEPZ Special Economic Zone Chennai, Tamil Nadu
5. Cochin Special Economic Zone Cochin, Kerala
6. Falta Special Economic Zone Falta, West Bengal
7. Visakhapatnam SEZ Vishakhapatnam, Andhra Pradesh

What is Benami?

Benami essentially means property without a name. In this kind of transaction the person who pays for the
property does not buys it under his/her own name. The person on whose name the property has been purchased
is called the benamdar and the property so purchased is called the benami property. The person who finances
the deal is the real owner. ' The property is held for the benefit - direct or indirect - of the person paying the
amount.

What constitutes Benami property?

Property that does not stick to the following criteria:
a) Property held in the name of spouse or child for which the amount is paid out of known sources of income
b) A joint property with brother, sister or other relatives for which the amount is paid out of known sources of
income
c) Property held by someone in a fiduciary capacity

This means, by law, if you buy a property in name of your parents, too, can be declared as benami.
In August, Parliament had passed the Benami Transactions (Prohibition) Act, with the assurance from
Finance Minister Arun Jaitley that genuine religious trusts would be kept out of the purview of this new legislation.
The new legislation will make a provision of seven year imprisonment and fine, replacing the three-year jail term,
or fine, or both.

Here is all you want to know about Benami Act and how it will affect you:

What is Benami Act?

First, a benami transaction is one where a property is held by one person and the amount for it is paid by another
person. Therefore, in a benami transaction, the name of the person who paid the money is not mentioned.
Directly or indirectly, the benami transaction is done to benefit the one who pays.
What isnt a benami transaction?
1. Property held under the name of spouse or child, for which the amount is being paid through a known source
of income.
2. A joint property with brother, sister or other relatives for which the amount is paid out of known sources of
income.
3. Property held by someone in a fiduciary capacity; that is, transaction involving a trustee and a beneficiary.

What falls under benami transaction?

Assets of any kind movable, immovable, tangible, intangible, any right or interest, or legal documents. As
such, even gold or financial securities could qualify to be benami.

How it affects the people?

It is being done to curb on black money. People with unaccounted income will sure have a tough time ahead. As
for the general public, it wont be much of an issue if their transactions are legal.

About the term NBFC:

A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged in the
business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local
authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit fund business.

Difference between BANK & NBFC:

NBFCs lend and make investments and hence their activities are akin to that of banks; however there are a few differences as
given below:
i. NBFC cannot accept demand deposits;
ii. NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself;
iii. deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs,
unlike in case of banks.

Different types/categories of NBFCs registered with RBI:

NBFCs are categorized
a) In terms of the type of liabilities into Deposit and Non-Deposit accepting NBFCs,
b) Non deposit taking NBFCs by their size into systemically important and other non-deposit holding companies (NBFC-
NDSI and NBFC-ND) and
c) By the kind of activity they conduct.
Within this broad categorization the different types of NBFCs are as follows:

i. Asset Finance Company(AFC) : An AFC is a company which is a financial institution carrying on as its principal
business the financing of physical assets supporting productive/economic activity, such as automobiles, tractors, lathe
machines, generator sets, earth moving and material handling equipments, moving on own power and general purpose
industrial machines.

ii. Investment Company (IC) : IC means any company which is a financial institution carrying on as its principal business
the acquisition of securities.

iii. Loan Company (LC): LC means any company which is a financial institution carrying on as its principal business the
providing of finance whether by making loans or advances or otherwise for any activity other than its own but does not
include an Asset Finance Company.

iv. Infrastructure Finance Company (IFC): IFC is a non-banking finance company

a) which deploys at least 75 per cent of its total assets in infrastructure loans,
b) has a minimum Net Owned Funds of Rs. 300 crore,
c) has a minimum credit rating of A or equivalent d) and a CRAR of 15%.

v. Infrastructure Debt Fund: Non- Banking Financial Company (IDF-NBFC) : IDF-NBFC is a company registered as
NBFC to facilitate the flow of long term debt into infrastructure projects. IDF-NBFC raise resources through issue of Rupee
or Dollar denominated bonds of minimum 5 year maturity. Only Infrastructure Finance Companies (IFC) can sponsor IDF-
NBFCs.

vi. Non-Banking Financial Company - Micro Finance Institution (NBFC-MFI): NBFC-MFI is a non-deposit taking
NBFC having not less than 85%of its assets in the nature of qualifying assets which satisfy the following criteria:
a. loan disbursed by an NBFC-MFI to a borrower with a rural household annual income not exceeding Rs. 60,000 or urban
and semi-urban household income not exceeding Rs. 1,20,000.
b. tenure of the loan not to be less than 24 months for loan amount in excess of Rs. 15,000 with prepayment without penalty;
vii. Non-Banking Financial Company Factors (NBFC-Factors): NBFC-Factor is a non-deposit taking NBFC engaged
in the principal business of factoring. The financial assets in the factoring business should constitute at least 75 percent of its
total assets and its income derived from factoring business should not be less than 75 percent of its gross income.

Register with RBI:

A company incorporated under the Companies Act, 1956 and desirous of commencing business of non-banking financial
institution as defined under Section 45 I(a) of the RBI Act, 1934 should comply with the following:
i. it should be a company registered under Section 3 of the companies Act, 1954
ii. It should have a minimum net owned fund of Rs 200 lakh.

Deposits in NBFC:
a) Presently, the maximum rate of interest an NBFC can offer is 12.5%. The interest may be paid or compounded at rests not
shorter than monthly rests.
b) The NBFCs are allowed to accept/renew public deposits for a minimum period of 12 months and maximum period of 60
months. They cannot accept deposits repayable on demand.
c) The deposits with NBFCs are not insured.
d) The repayment of deposits by NBFCs is not guaranteed by RBI.

Brief about RNBC

a) Residuary Non-Banking Company is a class of NBFC which is a company and has as its principal business the receiving
of deposits, under any scheme or arrangement or in any other manner and not being Investment, Asset Financing, Loan
Company.
b) These companies are required to maintain investments as per directions of RBI, in addition to liquid assets.
c) The amount payable by way of interest, premium, bonus or other advantage, by whatever name called by a RNBC in
respect of deposits received shall not be less than the amount calculated at the rate of 5% (to be compounded annually) on
the amount deposited in lump sum or at monthly or longer intervals; and at the rate of 3.5% (to be compounded annually) on
the amount deposited under daily deposit scheme.
d) Further, a RNBC can accept deposits for a minimum period of 12 months and maximum period of 84 months from the
date of receipt of such deposit. They cannot accept deposits repayable on demand.

Some other regulators:

Category of Companies Regulator
Chit Funds Respective State Governments
Insurance companies IRDA
Housing Finance Companies NHB
Venture Capital Fund / SEBI
Merchant Banking companies SEBI
Stock broking companies SEBI
Nidhi Companies Ministry of corporate affairs, Government of India