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Banking Awareness Question Bank for IBPS|SBI Clerks

1st In Banks in India
1. The First Bank in India – Bank of Hindustan

2. First Governor of RBI – Mr. Osborne Smith

3. First Indian governor of RBI – Mr. C D Deshmukh

4. First Bank to Introduce ATM in India – HSBC in 1987 in Mumbai. 1st ATM in World-Bank of Barclays in 1967 in London. ATM Founder—John Sheffard

5. First Bank to introduce saving Bank in India – Presidency bank in 1830

6. First Bank to Introduce Cheque system in India – Bengal Bank 1784

7. First Bank to introduce Internet Banking – ICICI BANK

8. First Bank to introduce Mutual Fund – State Bank of India

9. First Bank to introduce Credit Card in India – Central Bank of India

10. First Foreign Bank in India – Comptoired’Escompte de Paris of France in 1860

11.First Joint Stock Bank of India-Allahabad Bank

12. First Indian bank to open branch outside India in London in 1946 – Bank of India

13. First Indian Bank started with Indian capital – Punjab National Bank. Founder of Punjab National Bank is Lala Lajpat Rai

14. First Regional Rural Bank name Prathama Grameen Bank was started by – Syndicate Bank

15. First Universal Bank in India – ICICI Bank

16. First bank in India listed in New York Stock Exchange (NYSE) – ICICI Bank

17. First Bank in India to launch Talking ATMs for differently able person-Union Bank of India

18. First Bank in India to launch its own Payment Aggregators – State Bank of India. (SBIePay)

19. Country’s first all woman bank – Bhartiya Mahila Bank

20. First India bank Got ISO – Canara Bank

List of Schmes and Mobile Apps Introduced Banks in 2016:

SBI
1. BOUTIQUE FINANCING SCHEME – SBI

2. eforex – SBI

3. E-KYC – SBI

4. First home grown INDEX “COMPOSITE INDEX” – SBI

5. State Bank Freedom App-State Bank of India

6. TAB BANKING FACILITY – SBI

7. Twitter Handle account – SBI

8. Youth for India – SBI

ICICI Bank
1. Tap and pay – ICICI

2. Student Travel Card – ICICI

3. IMobile app for windows phone – ICICI

4. India’s first” transparent credit card “in association with American Express – ICICI

5.’Saral Rural Housing Loan’ Scheme-ICICI Bank

6. ICICI Apathon App – ICICI Bank launches ‘ICICI Appathon’, a Mobile App Development Challenge

7. EMI ON DEBIT CARD – ICICI BANK

8. Digital Banking “POCKET” – ICICI

9. Digital Village Project in Akodara Village of Gujarat – ICICI

10. Branch on Wheel – ICICI Bank in Odisha

AXIS Bank
1. Airtel money – AXIS BANK+AIRTEL
2. Asha Home loan – AXIS BANK
3. Kisan card – AXIS BANK

HDFC Bank:
1.Awareness initiative’Dhanchayat-HDFC Bank
2. DDA Housing Scheme 2014 – HDFC Bank
3. Chillar – Hdfc Bank

OTHER Bank Apps:
1. China’s first online Banking “webank” – Tancet Holdings
2. E-Wallet – IRCTC
3. Facebook-based funds transfer platform “KayPay” – Kotak Mahindra Bank
4. Kotak Bharat’ mobile banking app – Kotak Mahindra Bank (KMB)
5. India’s first credit card exclusively for GOLF LOVERS – RBL Bank
6. Instant money transfer – BOI
7.Maha Millionaire”, “Maha Lakhpati”-Bank of Maharashtra
8. M-Pesa – ICICI+Vodafone
9. M-Wallet – Canara Bank
10. Video conferencing – Indusuld & federal bank

What is NPA? 
It means once the borrower has failed to make interest or principal payments for 90 da ys, the loan is considered to be a non-performing asset

The assets portfolio of the banks is required to be classified as
1. standard assets
2. sub-standard assets
3. doubtful assets and
4. loss assets.

1. Standard asset is one that does not disclose any problems and which does not carry more than normal risk attached to the business .

2. An asset which has been classified as NPA for a period not exceeding 12 months is considered as sub-standard asset.

3. Doubtful asset is one which has remained NPA for a period exceeding 12 months.

4. An asset which is considered uncollectable and loss has been identified by the bank or internal or external auditors or the RBI inspection and the loss has not been written off is regarded as loss asset. The problem of NPAs in the Indian banking system is one of the foremost and the most formidable problems that had impact the entire banking system. Higher NPA ratio trembles the confidence of investors, depositors, lenders etc. NPA directly have the impact on:

1. Profitability of the bank decreases.
2. It lead to Asset (Credit) contraction.
3.Creates a problem in Liability Management.
4. Problem in Capital Adequacy.
5. Shareholders’ confidence declines.
6. Public confidence declines. In short, the high incidence of NPA impact on all important financial ratios of the banks viz., Net Interest Margin, Return on Assets, Profitability, Dividend Payout, Provision coverage ratio, Credit contraction etc., which reduces the confidence of stakeholders including Shareholders, Depositors, Borrowers, Employees and public at large.

What are the possible steps which can reduce the NPA?
1. Proper evaluation of credit proposals should be collected.
2. Banks should be equipped with latest credit risk management techniques to protect the bank funds and minimize insolvency risks.
3. Timely follow up is the key to keep the quality of assets intact and enables the banks to recover the interest/ installments in time.
4. Selection of right borrowers, viable economic activity, adequate finance and timely disbursement, end use of funds and timely recovery of loans should be the focus areas for preventing or minimizing the incidence of fresh NPAs.

Major steps taken to solve the problems of Non-Performing Assets in India :- 
1. Debt Recovery Tribunals (DRTs) Narasimham Committee Report I (1991) recommended the setting up of Special Tribunals to reduce the time required for settling cases. Accepting the recommendations, Debt Recovery Tribunals (DRTs) were established.

2. Securitisation Act (SARFAESI) 2002: Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 is popularly known as Securitisation Act. This act enables the banks to issue notices to defaulters who have to pay the debts within 60 days. Once the notice is issued the borrower cannot sell or dispose the assets without the consent of the lender. The Securitisation Act further empowers the banks to take over the possession of the assets and management of the company. The lenders can recover the dues by selling the assets or changing the management of the firm. The Act also enables the establishment of Asset Reconstruction Companies for acquiring NPA.

3. Lok AdalatsLok Adalats have been found suitable for the recovery of small loans. According to RBI guidelines issued in 2001. They cover NPA up to Rs. 5 lakhs, both suit filed and non-suit filed are covered. Lok Adalats avoid the legal process.

4. Compromise Settlement: Compromise Settlement Scheme provides a simple mechanism for recovery of NPA. Compromise Settlement Scheme is applied to advances below Rs. 10 Crores. It covers suit filed cases and cases pending with courts and DRTs (Debt Recovery Tribunals). Cases of Willful default and fraud were excluded.

5. Credit Information Bureau:A good information system is required to prevent loans from turning into a NPA. If a borrower is a defaulter to one bank, this information should be available to all banks so that they may avoid lending to him. A Credit Information Bureau can help by maintaining a data bank which can be assessed by all lending institutions.

NORMS ISSUED BY BIS
Basel I :In 1988,The Basel Committee on Banking Supervision (BCBS) introduced capital measurement system called Basel capital accord,also c alled as Basel 1. It focused almost entirely on cr edit risk. It defined capital and structure of risk weights for banks. The minimum capital requirement was fixed at 8% of risk weighted assets (RWA). RWA means assets with different risk profiles. For example, an asset backed by collateral would carry lesser risks as compared to personal loans, which have no collateral. India adopted Basel 1 guidelines in 1999. The Basel I Accord, issued in 1988, has succeeded in raising the total level of equity capital in the system.Like many regulations, it also pushed unintended consequences? because it does not differentiate risks very well, it perversely encouraged risk seeking. It also promoted the loan securitization that led to the unwinding in the subprime market.

Basel II :In June 1999, the Committee issued a proposal for a new capital adequacy framework to replace the 1988 Accord. This led to the release of the Revised Capital Framework in June 2004. Generally known as?Basel II”, the revised framework comprised three pillars, namely minimum capital, supervisor review and market discipline. Minimum capital is the technical, quantitative heart of the accord.Banks must hold capital against 8% of their assets, after adjusting their assets for risk. Supervisor review is the process whereby national regulators ensure their home country ba nks are following the rules. If minimum capital is the rule book, the second pillar is the referee system. Market discipline is based on enhanced disclosure of risk. This may be an important pillar due to the complexity of Basel. Under Basel II, banks may use their own internal models (and gain lower capital requirements) but the price of this is transparency

Basel III 
a. The Basel Committee is the primary global standard-setter for the prudential regulation of banks & provides a forum for cooperation on banking supervisory matters. Its mandate is to strengthen the regulation, supervision & practices of banks worldwide with the purpose of enhancing financial stability. Stefan Ingves, Governor of Sveriges Riksbank (SWEDEN), is the Chairman of the Basel Committee.

b. Basel III or Basel 3 released in December, 2010 is the third in the series of Basel Accords. These accords deal with risk management aspects for the banking sector.

c. According to Basel Committee on Banking Supervision “Basel III is a comprehensive set of reform measures, developed by the Basel Committee on Banking Supervision, to strengthen the regulation, supervision & risk management of the banking sector”.

d. Basel 3 measures aim to: – Improve the banking sector’s ability to absorb shocks arising from financial & economic stress, whatever the source – Improve risk management & governance – Strengthen banks’ transparency & disclosures

INDIA AND BASEL NORMS:
– Presently indian banking system folllows basel II norms. – The Reserve Bank of India has extended the timeline for full implementation of the Basel III capital regulations by a year to march 31,2019.March 31, 2019. – Around 10 public sector banks (PSBs) will get a total capital infusion of Rs 12,517 crore fr om the government before this financial year ends. – Government of India is scaling disinvesting their holdings in PSBs to 52 per cent.

Three Pillars of Basel 3
Pillar 1: Minimum Regulatory Capita Requirements based on Risk Weighted Assets (RWAs): Maintaining capital calculated through credit, market & operational risk areas (mainly that capital which can absorb risk.)

Pillar 2: Supervisory Review Process: Regulating tools & frameworks for dealing with peripheral risks that bank face. Pillar 3: Market Discipline Increasing the disclosures that banks must provide to increase the transparency of banks Important Facts related to BASEL 3

– Minimum Ratio of Total Capital To RWAs-10.50%
– Minimum Ratio of Common Equity to RWAs–4.50% to 7.00%
– Tier I capital to RWAs–6.00%
– Core Tier I capital to RWAs–5.00%
– Capital Conservation Buffers to RWAs-2.50%
– Leverage Ratio–3.00%
– Countercyclical Buffer–0% to 2.50% 

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Mallikarjuna

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