Search your Topic HERE....

August 21, 2017

Banking & Financial Awareness for IBPS 2017 : Banking System in India

sponsored links

Banking system in India

Banks and other financial organizations play a vital role in any nation's economy by performing services essential in the management of any economy.

Safeguarding, transferring, lending, and exchanging money in various forms, are the main functions that banks perform. Each of these roles has an undulate effect in the economy that helps keep money moving.

In India, Banking Sector and Money Market are controlled by RBI (Reserve Bank of India).

We have different types of banks in our system. They are... 
  • Commercial banks like SBI, Andhra Bank, ICICI, Axis bank etc., (both in Public Sector and Private Sector at National and International levels, Foreign Banks like HSBC, Citi bank etc.) 
  • RRBs ( Regional Rural Banks ex. Chaitanya Godavari Grameena bank). 
  • Cooperative Banks. 
  • NABARD (National Bank for Agriculture and Rural Development). 
  • EXIM bank (Export and Import Bank). 
  • Development Banks like IDBI, SIDBI etc., 
  • National Housing Bank.
  • Payment Banks. 
What is the Banking Ombudsman Scheme ? 
  • The Banking Ombudsman Scheme is a speedy and inexpensive forum for bank customers for resolution of complaints relating to certain services rendered by banks.
What are the different categories under priority sector Lending in our banking system ? 
  • Priority Sector includes the following categories :
    • Agriculture 
    • Micro, Small and Medium Enterprises 
    • Export Credit 
    • Education 
    • Housing
    • Social Infrastructure
    • Renewable Energy
    • Others
What is NEFT ?
  • National Electronic Funds Transfer (NEFT) is a nation-wide payment system facilitating one-to-one funds transfer. Under this Scheme, individuals, firms and corporates can electronically transfer funds from any bank branch to any individual, firm or corporate having an account with any other bank branch in the country. 
What is RTGS System ?
  • The short form 'RTGS' stands for Real Time Gross Settlement, which can be defined as the continuous (real-time) settlement of funds transfers individually. 'Real Time' means the processing of instructions at the time they are received, rather than at some later time. 'Gross Settlement' means the settlement of funds transfer instructions, occurs individually. 
What is a Non-Banking Financial Company (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 leasing, hirepurchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property.
  • A non-banking institution which is a company and has principal business of receiving deposits under any scheme or arrangement in one lump sum or in instalments by way of contributions or in any other manner, is also a non-banking financial company (Residuary non-banking company). 
What are White Label ATMs (WLAs) ? 
  • ATMs set up, owned and operated by non-banks are called White Label ATMs. Non-bank ATM operators are authorized under Payment & Settlement Systems Act, 2007 by the Reserve Bank of India. Ex. Indicash ATM ( by TATA company ) etc., 
What is Sovereign Gold Bond (SGB) ? Who is the issuer ?
  • SGBs are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The Bond is issued by Reserve Bank on behalf of Government of India. 
What are the objectives of Payment Banks ? 
  • There is a need for transactions and savings accounts for the underserved in the population. Also remittances have both macro-economic benefits for the region receiving them as well as micro-economic benefits to the recipients. Higher transaction costs of making remittances diminish these benefits.
  • Therefore, the primary objective of setting up of payments banks will be to further financial inclusion by providing 
    • small savings accounts and 
    • payments/ remittance services to migrant labour workforce, low income households, small businesses, other unorganised sector entities and other users, by enabling high volume-low value transactions in deposits and payments/remittance services in a secured technology-driven environment. 
  • Scope of activities
    • Acceptance of demand deposits. Payments bank will initially be restricted to holding a maximum balance of Rs. 1,00,000 per individual customer.
    • Issuance of ATM/debit cards. Payments banks, however, cannot issue credit cards. 
    • Payments and remittance services through various channels. 
    • Distribution of non-risk sharing simple financial products like mutual fund units and insurance products, etc.,
What are Prepaid Payment Instruments ? 
  • Prepaid payment instruments are payment instruments that facilitate purchase of goods and services against the value stored on such instruments. The value stored on such instruments represents the value paid for by the holder, by cash, by debit to a bank account, or by credit card. 
  • The Prepaid instruments can be issued as smart cards, magnetic stripe cards, internet accounts, internet wallets, mobile accounts, mobile wallets, paper vouchers and any such instruments which can be used to access the prepaid amount. 
What is NPCI ? 
  • National Payments Corporation of India (NPCI) is an umbrella organization for all retail payments system in India. It was set up with the guidance and support of the Reserve Bank of India (RBI) and Indian Banks' Association (IBA).
  • The core objective was to consolidate and integrate the multiple systems with varying service levels into nation-wide uniform and standard business process for all retail payment systems. The other objective was to facilitate an affordable payment mechanism to benefit the common man across the country and help financial inclusion.
What is BRIM App ?
  • Bharat Interface for Money (BRIM) is an app that lets us make simple, easy and quick payment transactions using Unified Payments Interface (UPI). We can make instant bank-to-bank payments and Pay and collect money using just Mobile number or Virtual Payment Address (VPA).
What is RuPay card ? 
  • RuPay, a new card payment scheme (debit card) launched by the National Payments Corporation of India (NPCI), has been conceived to fulfil RBI's vision to offer a domestic, open-loop, multilateral system which will allow all Indian banks and financial institutions in India to participate in electronic payments.
  • The benefits of RuPay debit card are the flexibility of the product platform, high levels of acceptance and the strength of the RuPay brand-all of which will contribute to an increased product experience.

Important Banking Abbreviations

  • MUDRA - Micro Units Development and Refinance Agency Limited 
  • PMMY - Pradhan Mantri Muds Yojana
  • IMPS - Immediate Payment Service
  • BBPS - Bharat Bill Payment System 
  • ALPS - Aadhaar Enabled Payment System 
  • APBS - Aadhaar Payment Bridge System 
  • MACH-National Automated Clearing House
sponsored links
Related Posts Plugin for WordPress, Blogger...