Banking Regulation and Monetary Policy

Overseas depository bank is authorised by the issuing company to re-issue global depository receipts against issue of foreign currency convertible bonds or ordinary shares of the issuing company. 

Primary markets are required to meet registration and such other requirements as stipulated by the Securities and Exchange Board of India (SEBI). It includes operations on the stock exchanges, if they undertake any activity regulated by SEBI.

This master circular aims at consolidating all the instructions/guidelines issued by RBI on Know Your Customer (KYC) norms/Anti-Money Laundering (AML) standards/Combating Financing of Terrorism (CFT)/Obligations of banks under PMLA, 2002.

CIBIL - India's first credit information bureau - has been established to cater to the credit information requirement of the financial sector and serves as an effective mechanism for curbing the growth of Non-Performing Assets (NPAs). It was founded in August, 2000. CIBIL collects and maintains records of an individual's payments pertaining to loans and credit cards. These records are submitted to CIBIL by member banks and credit institutions, on a monthly basis.

Under Section 22 of the Reserve Bank of India Act, RBI has sole right to issue currency notes of various denominations, except one rupee notes. The one rupee note is issued by the Ministry of Finance and it bears the signatures of Finance Secretary, while other notes bear the signature of Governor, RBI. However, RBI is the only source of legal tender money because distribution of one rupee notes and coins and small coins all over the country is undertaken by the Reserve Bank as an agent of the Government.

"Security receipt" means a receipt or other security that is issued by a securitisation company or reconstruction company to any qualified institutional buyer pursuant to a scheme, evidencing the purchase or acquisition by the holder thereof, of an undivided right, title or interest in the financial asset involved in securitisation.

Banking means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise and withdrawal by cheque, draft, order or otherwise. 

Ways and means advances (WMA) is a mechanism used by Reserve Bank of India (RBI) under its credit policy by which it provides help to the States to tide over temporary mismatches in the cash flow of their receipts and payments.

Correct Answer: Joint stock companies – SEBI Joint-stock companies in India are governed by the Indian Companies Act, 1956. 

During the UPA government’s tenure, a committee headed by the then Chief Economic Advisor, Ashok Lahiri, released a report in November 2005 on encouraging FII flows and checking the vulnerability of capital markets to speculative flows. On recommendation from Lahiri Committee, in 2004, it passed a regulation that derivative instruments like PNs against underlying Indian securities can be issued only to regulated entities and further transfers, if any, can also be to other regulated entities only.

The Central Board of Directors governs the affairs of the RBI. The Board consists of Official Directors (Governor and not more than four Deputy Governors) and Non-Official Directors (ten Directors from various fields, one government official and each of the Directors of the four Local Boards) who are appointed by the Government of India for a period of four years.

The Offsite Surveillance and Monitoring System (OSMOS) plays a key role in identification of risks and monitoring banks on a continuous basis. OSMOS consists of a set of 28 structured returns that capture prudential and statistical information of banks at periodical intervals. The RBI requires banks to submit detailed and structured information periodically under OSMOS. On the basis of OSMOS, RBI analyzes the health of the banks.

This account was introduced as NRE scheme in 1970. It’s a Rupee account and the NRI can remit money to India from the funds abroad. This means that depositor is exposed to the currency rates risk. An NRE-RA account can be opened as saving, current, RD and FD only because these accounts are opened for the purpose of depositing income earned overseas. The funds held in these accounts can be remitted back overseas freely subject to terms and conditions of the resident country.

The Basel Committee on Banking Supervision (BCBS) is a committee of banking supervisory authorities that was established by the central bank governors of a group of ten countries in 1975.

Correct Answer: Micro and small enterprises - 10% of ANBC For Micro Enterprises - 7.5 percent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher to be achieved in a phased manner, i.e. 7 per cent by March 2016 and 7.5 per cent by March 2017.