Banking awareness : Descriptive questions and answers - 13

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Banking Quiz
‪ Q: ‎Definition of 'Currency'
Currency is a form of money, including coins and paper notes, which is issued by a government and circulated within an economy. Used as a medium of exchange for goods and services.
Q: Define Inflation.
A:The rate at which the general level of prices for goods and services is rising, and, subsequently,purchasing power is falling. Central banks attempt to stop severe inflation, along with severe deflation.
Q: Define Deflation.
A: When the overall price level decreases so that inflation rate becomes negative, it is called deflation. It is the opposite of the often-encountered inflation.
Q: What is objective of SIDBI?
A:SIDBI was established on April 2, 1990. The Charter establishing it, The Small Industries DevelopmentBank of India Act, 1989 envisaged SIDBI to be "the principal financial institution for the promotion,financing and development of industry in the small scale sector and to co-ordinate the functions of theinstitutions engaged in the promotion and financing or developing industry in the small scale sector and for matters connected therewith or incidental thereto.
Q: Where its HQ is located?	A:Lucknow.
Q: SEBI?
A:- Established on April 12, 1992 in accordance with the provisions of the SEBI Act, 1992.
Chairman	- Shri U K Sinha
Head Office	– Mumbai
Q: IRDA?
A:Establishment - Following the ecommendations of Malhotra Committee report, in 1999, IRDA wasconstituated as an autonomous body to regulate and develop the insurance industry. The IRDA wasincorporated as a statutory body in April 2000.
Chairman	- T S Vijayan
Head Office	- Hyderabad, Andhra Pradesh
Q: IDBI?
A:Chairman & Managing Director	- M. S. Raghavan
Establishment - Established as a Public Financial Instutution under RBI in 1964. It was seperated fromRBI in 1976 and became full fledged Development Bank. In 2004, It was converted into Commercial bank which has a Govt share holding of 52.7% at present. It is now a Public Sector Commercial Bank.
Head Office	- Mumbai.
Q: SIDBI?
A:Establishment - Established on April 2, 1990
Chairman	- Dr. Kshatrapati Shivaji
Head Office	- Lucknow.
Q: NABARD?
A:Establishment - Established on July 12, 1982 with the paid up capital of Rs. 100 Crore have 50:50contribution of GOI and RBI.
Govt Stake at Present	- 99%
RBI Stake at Present	- 1% (RBI divested its 71.5% stake to the GOI in NABARD)
Chairman	- Harsh Kumar Bhanwala
Head Office	- Mumbai
Established according to the recommendation of - Shivaraman Committee
Key Points -Provides refinance facilities to various such financial institutions which provide loans to promote productive activities in rural areas.
To meet its own loan requirement
Q: ECGC?
A:Provides a range of credit risk insurance covers to exporters against loss in export of goods andservices
Q: What is Objective of Payments Banks?
A:Objective of payments banks is to increase financial inclusion by providing small savings accounts to labour, low income households,
Q: Can Payment Bank accept deposits?
A: Payments Banks can accept demand deposits (only current account and savings accounts). Theywould initially be restricted to holding a maximum balance of Rs 100,000 per customer. Based onperformance, the RBI could enhance this limit.
Q: How people will be able to differentiate it from other banks?
A:The Payments Banks would be required to use the word ‘Payments’ in its name to differentiate it fromother banks.
Q: Whether credit lending is allowed for Payments Banks?
A: No credit lending is allowed for Payments Banks.
Q: List companies got permission to start payment Banks from RBI?
A:11 Companies are as under:
Aditya Birla Nuvo Limited
Airtel M Commerce Services Limited
Cholamandalam Distribution Services Limited
Department of Posts
Fino PayTech Limited
National Securities Depository Limited
Reliance Industries Limited
Shri Dilip Shantilal Shanghvi
Shri Vijay Shekhar Sharma
Tech Mahindra Limited
Vodafone m-pesa Limited.

Q. What is Mobile Banking?
A:Mobile banking (also known as M-Banking, SMS Banking etc.) is a term used for performing balancechecks, account transactions, payments etc. via a mobile device such as a mobile /cell phone.
Q.. What is meant by Priority Sector Lending?
A:Priority sector lending include only those sectors, as part of the priority sector that impact largesections of the population, the weaker sections and the sectors which are employment-intensive such as agriculture, and Micro and Small enterprises
Q:What is Co-operative Bank
A : An association of persons who collectively own and operate a bank for the benefit of consumers
Q:What is Core Banking Solutions (CBS)
A : Core Banking Solutions is a buzz word in Indian banking at present, where branches of the bank areconnected to a central host and the customers of connected branches can do banking at any branchwith core banking facility
Q:What is Crossing of Cheques
A: Crossing refers to drawing two parallel lines across the face of the cheque.A crossed cheque cannotbe paid in cash across the counter, and is to be paid through a bank account
Q.General crossing and Special crossing
Ans.A general crossing means that cheque can be paid through any bank and a special crossing, wherethe name of a bank is indicated on the cheque, can be paid only through the named bank.
Q:What is Current Account
A : Current account with a bank can be opened generally for business purpose. There are no restrictions on withdrawals in this type of account. No interest is paid in this type of account.
Q Define Customer
A : A person who maintains any type of account with a bank is a bank customer. Consumer Protection Act has a wider definition for consumer as the one who purchases any service for a fee like purchasing a demand draft or a pay order. The term customer is defined differently by Laws, softwares and countries.
Q:What is Debit Card
A: A plastic card issued by banks to customers to withdraw money electronically from their accounts.When you purchase things on the basis of Debit Card the amount due is debited immediately to the account . Many banks issue Debit-Cum-ATM Cards
Q:Who is Debtor
A : A person who takes some money on loan from another person
Q:What is Demand Deposits
A: Deposits which are withdrawn on demand by customers.E.g. savings bank and current account deposits.
Q:What is Demat Account
A: Demat Account concept has revolutionised the capital market of India. When a depository company takes paper shares from an investor and converts them in electronic form through the concerned company, it is called Dematerialisation of Shares. These converted Share Certificates in Electronic form are kept in a Demat Account by the Depository Company, like a bank keeps money in a deposit account.Investor can withdraw the shares or purchase more shares through this demat Account
Q What is E-Banking ?
A: E-Banking or electronic banking is a form of banking where funds are transferred through exchange of electronic signals between banks and financial institution and customers ATMs, Credit Cards, Debit Cards, International Cards, Internet Banking and new fund transfer devices like SWIFT, RTGS
Q What is Electronic Commerce (E-Commerce)?
A: E-Commerce is the paperless commerce where the exchange of business takes place by Electronic means.
Q What is Endorsement?
A : When a Negotiable Instrument contains, on the back of the instrument an endorsement, signed by the holder or payee of an order instrument, transferring the title to the other person, it is called endorsement
Q What is Factoring ?
A: It is a financial transaction in which a bank sells its accounts receivable to a third party at a discount.
Q What is 'FIAT MONEY'?
A:Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat money is derived from the relationship between supply and demand rather than the value of the material that the money is made of. Historically, most currencies were based on physical commodities such as gold or silver, but fiat money is based solely on faith. Fiat is the Latin word for "it shall be".
Q. What is MUDRA?
A:MUDRA, which stands for Micro Units Development & Refinance Agency Ltd., is a new institution being set up by Government of India for development and refinancing activities relating to micro units.The purpose of MUDRA is to provide funding to the non corporate small business secto