Banking & Financial Awareness Mixed Quiz: Set 16

Common Equity Tier one is the purest form of going concern capital, able to absorb losses while the bank continues to trade, and it is made up of paid up equity capital, share premium, statutory reserves and retained earnings.

Ecowrap is the research report of the State Bank of India, brought out by its economic research department. Ecowrap is written by the team of the group chief economic adviser at SBI and comments on growth, inflation, bank credit, government finances and the state of households.

The whole of the deposit insurance premium is paid by the bank, and a bank is barred from passing the cost on, so the charge never appears in a depositor passbook.

The Deposit Insurance and Credit Guarantee Corporation is a wholly owned subsidiary of the Reserve Bank of India. It works under the Deposit Insurance and Credit Guarantee Corporation Act, 1961, has its head office in Mumbai, and is chaired by a Deputy Governor of the Reserve Bank.

The Payment and Settlement Systems Act, 2007 makes the Reserve Bank the designated authority for the regulation and supervision of payment systems in India; no person may commence or operate a payment system without its authorisation, and it issues the directions under which card networks, prepaid instruments and the retail…

Microfinance means small loans to poor households that banks treat as too risky, so a large loan is the opposite of the idea.

The crisis showed that banks had too little capital of genuinely loss absorbing quality and no cushion of liquid assets, so the Basel Committee issued Basel III in 2010 with stricter definitions of capital, the capital conservation and countercyclical buffers, a leverage ratio and the two liquidity standards.

A microfinance institution exists to lend small sums to poor and low-income people who cannot offer the security an ordinary bank asks for.

Inter-bank deposits are expressly excluded, because deposit insurance exists to protect ordinary depositors and not to insure banks against one another.

The licence of a payments bank excludes credit altogether: it may not lend to anyone and may not issue credit cards, and this single prohibition is what separates it from every other kind of bank in India.

The buffer of two and a half per cent of risk weighted assets is meant to be built up in good years and drawn down in bad ones, so it must consist of the highest quality capital, that is common equity.

Prathama Bank, with its head office at Moradabad in Uttar Pradesh and sponsored by Syndicate Bank, was the first of the five Regional Rural Banks set up on 2 October 1975, and its name, meaning the first, is itself the hint.

The Deposit Insurance Corporation, created under the Deposit Insurance Act, 1961, began functioning on 1 January 1962, and that is the date from which bank deposits in India have been insured.

It defines banking as accepting, for the purpose of lending or investment, deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise.

The Liquidity Coverage Ratio is a short term standard: a bank must hold enough high quality liquid assets, mainly cash, central bank reserves and sovereign securities, to survive the net cash outflows of a thirty day stress scenario, and the ratio must be at least a hundred per cent.

The Banking Ombudsman is a senior officer appointed by the Reserve Bank of India to hear and settle customer complaints about deficiency in banking service.

With effect from 1 April 2020 the Corporation charges twelve paise a year on every hundred rupees of a bank assessable deposits.

The Bank is located in Basel, Switzerland, was established in 1930 and is the oldest international financial institution in the world; it is often described as the bank for central banks because its members are central banks rather than private customers.

The Act allows the Corporation, with the previous approval of the Reserve Bank of India, to raise the premium only as far as fifteen paise a year for every hundred rupees of assessable deposits, so fifteen paise is the statutory ceiling.

The Reserve Bank issued its framework for Domestic Systemically Important Banks in 2014 and has since placed these three in the list, on the view that their size, interconnectedness and complexity make their failure a danger to the whole system.