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banking terms

By Victor S. Fischer
  ✍️ CRR Cash Reserve Ratio is the minimum fraction of total deposits of a bank’s customers that banks have to hold as reserves with the central bank. ✍️ SLR Statutory Liquidity Ratio is the ratio of liquid assets to the net demand and time liabilities. ✍️ LAF Liquid Adjustment Facility is a tool to allow banks to borrow money through repurchase agreements. It consists of repo and reverse repo operations. ✍️ MSF Marginal Standing Facility allows scheduled banks to borrow funds overnight from RBI against approved government securities. ✍️ MSS Market Stabilization Scheme is a monetary policy intervention by RBI to withdraw excess liquidity by selling government securities in the economy. ✍️ OMO Open Market Operations refers to the buying and selling of government securities in the open market so as to expand or contract the amount of money in the banking system. ✍️ REPO Repo...
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Inflation and its types

By Victor S. Fischer
Inflation The general rise in the price level of goods and services. It is estimated as the percentage rate of change in price index over the reference time-period. Currently in India inflation rate is measured with the help of Consumer Price Index- combined (Base year- 2012). Till April 2014, Inflation rate was measured with the help of WPI (Wholesale Price Index). Rate of Inflation= (Current period price index-Reference period price index)/(Reference Period Price Index)×100 Type of Inflation Based on rate of rising in Inflation 1. Creeping Inflation Price rise at very small rate (< 3 %) It is considered safe and essential for the economy. 2. Walking or Trotting Inflation Price rise at moderate rate (3 % < Inflation < 10 %) Inflation at this rate is a warning signal for the Economy. 3. Running Inflation Price rise at high rate (10 % < Inflation < 20 %) It affects economy adversely. 4. Hyperinfla...
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Various Price Indices in India

By Victor S. Fischer
Price Indices in India Various weighted price indices are calculated in India. These are- 1. Wholesale Price Index (WPI) 2. Old Consumer Price Index (a) Consumer Price Index for Industrial Workers (CPI- IW) (b) Consumer Price Index for Urban Non- Manual Employees (CPI- UNME) (c) Consumer Price Index for Agriculture Labourers (CPI-AL) (d) Consumer Price Index for Rural Labourers (CPI- RL) 3. New Consumer Price Index (Introduced in February 2011) (a) CPI (Rural) (b) CPI (Urban) (c) CPI (Combined) 4. Consumer Food Price Index Till April 2014, the Inflation rate was measured with the help of WPI (Wholesale Price Index). Currently, in India inflation rate is measured with the help of Consumer Price Index- combined. 1. Wholesale Price Index- It measures the change in the price of commodities traded in the wholesale market. It is also known as  headline inflation . Current base year- 2011-12. The index basket of the current series has a tot...
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Regulatory (Apex) Bodies in Financial sector in India

By Victor S. Fischer
RBI (Reserve Bank of India) RBI was established in April 1935 under Reserve Bank of India, 1934. On the recommendation of Hilton-Young Commission. Central Bank of India which was nationalized in 1949. Central office initial was established in Calcutta and later moved to Mumbai in 1937. Official Directors-  Governors and not more than  four deputy governors. Currently following persons are on following posts- Governor - Dr Urjit R. Patel RBI performs his function under the guidance of the Board of financial supervision. Board for Financial Supervision (BFS)- Constituted in November 1994.The Board is constituted by co-opting four Directors from the Central Board and is chaired by the Governor. Important Acts Administered by RBI- (i) Reserve Bank of India Act, 1934 (ii) Public Debt Act, 1944/Government Securities Act, 2006 (iii) Government Securities Regulations, 2007 (iv) Banking Regulation Act, 1949 (v) Foreign Exchange Management Act, 1999...
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Unemployment and its type

By Victor S. Fischer
Unemployment It is a situation in which people are ready and willing to work at the existing rate of wages but still, they cannot get work. Measurement unemployment and employment are done by NSSO (National Sample Survey Organization) in India. NSSO divide people into the following three categories - (a) Working people (engaged in an economic activity) (b) Not working (looking for work) (c) Neither working nor looking for workPeople in category (a) are called  People in category (a) are called  workforce. People in category (b) are called  unemployed. People in categories (a) and (b) are called  Labour force. People in category (c) are called  not in the Labour force. Number of unemployed = Labour force – Workforce Unemployment data in India are kept under the Ministry of Labour and Employment. Types of Unemployment- Structural Unemployment- Caused by structural change. Example- technological change, growing popul...
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Taxation In India

By Victor S. Fischer
In India, Taxes are divided into the following Six Groups/भारत में, करों को निम्नलिखित छह समूहों में विभाजित किया गया है:- India is a Federal state. Power is divided between the Union and the states. The functions have been classified as exclusively for the centre, exclusively for the state and both for the centre and the states. भारत एक संघीय राज्य है। सत्ता, संघ और राज्यों के बीच विभाजित ह...
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Banking Structure In India

By Victor S. Fischer
Banking System and its Structures Money Market In this borrowing and lending of funds take place up to 1 years. It is used for short-term credit. It includes Reserve Bank of India, Commercial Banks, Cooperative Banks, Regional Rural Banks, Some NBFC’s etc. The composition of Money Market Indian Money market consists of  organised sector  and  unorganised sector . 1. Organised Sector- It is also divided into two categories-          a. Banking b. Sub Markets a. Banking- In this, we include Commercial Banks, Regional Rural Banks, and Cooperative Banks. Commercial Banks- Regulated under Banking Regulation act 1949. They can accept deposits, can provide loans and other financial services to earn profit. Commercial Banks consists of - Public Sector Banks and  Private Sector Banks . (i) Public Sector Banks- In these Banks majority of shares (more than 50 %)...
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Big Bank Theory

By Victor S. Fischer
Payments Banks (a).  What exactly is a Payment Bank? Payment Bank is basically a new model of banks that has been conceptualized by RBI. Now, many of you may further ask, how it is different from a regular banks? How is it different from a regular bank ? Payment Banks operate on a smaller scale as compared to the commercial banks of the country. Payment Banks do not have any credit risk involved with them as they cannot issue loans and credit cards. Payment Banks can accept demand deposits up to Rs 1 lakh only. Why were the Payment Banks required? The primary aim of payments bank is to expand the availability of financial services to unbanked entities,  for instance,  small businesses, households with low income, migrant labour force etc. i.e. to achieve financial inclusion as well as to provide financial services to every citizen concentrating more to the rural India. (b). History of Payment banks Reserve Bank of India (RBI), on...
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RBI Steps Towards Financial Inclusion : Small Financia Bank

By Victor S. Fischer
Even after more than 65 years of India's Independence, there are so many people who are still not using banking services. They do not have accounts in banks, even do not hold any identity proof and still making the transaction with the old methodology. Hence, they are unable to access any financial products and services provided by banks or government. In 2004,  RBI formulated Khan Commission  for incorporating financial inclusions. To practice financial inclusion, RBI has instructed all the banks to provide basic banking facilities like deposit, withdrawal, savings, and loan to all citizens with minimum documentation i.e. KYC (Know Your Customer) norms either with zero or minimum balance accounts.  The government is trying to provide basic banking facilities to the weaker sections of our society so as to include them in the banking era. Only basic banking facilities can attract them to open their accounts in banks. Even with minimum KYC norms, if b...
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Popular Posts

Idioms and phrases part II

By Victor S. Fischer
26. Eat, sleep and breathe something - Meaning -  Being so enthusiastic and passionate about somehting that you think about it all the time. Example -  My son has recently learnt cycling. He eats, sleeps and breathes it now. 27. With bells on - Meaning -  When you are delighted and eager to go somewhere, you are said to go with bells on. Example -  The new year party at the beach is most awaited. I will be there - with bells on. 28. Fever pitch - Meaning -  When a feeling is very intense and exciting, it is said to be at a fever pitch. Example -  His love for music had reached a fever pitch before he became a world known musician. 29. Blood, sweat and tears - Meaning -  Something that requires a lot of effort and hard work. Example -  Being the team of Indian cricket team is not just a matter of luck for him, it is his blood, sweat and tears which has got him here. 30. Have on the brain - Meaning -  Thinking or talking about it all day long. Example -  He has just got engaged. Now, he ...
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Blood safety and availability

By Victor S. Fischer
Blood is needed every two seconds. Hospitals need blood for people who are injured, who undergo surgical procedures, organ transplants, cancer treatments, and treatment for other diseases that affect blood like sickle cell anemia and thalami. Blood can save life.    But the baddest side  is that  ability of blood is more less than in worldwide and if there where is blood that is quietly not safe due to improperly store and more reason.so I am presenting you the report of  WHO report of Blood safety and  availability .. Key Fact Of the 112.5 million blood donations collected globally, approximately half of these are collected in the high-income countries, home to 19% of the world’s population. In low-income countries, up to 65% of blood transfusions are given to children under 5 years of age; whereas in high-income countries, the most frequently transfused patient group is over 65 years of age, accounting for up to 76% of all transfusions. The blood donation rate in high-income countrie...
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Idioms and phrases...

By Victor S. Fischer
1. Acid Test: Meaning -  Acid test proves the effectiveness of something. Example -  I practiced hard at the dance sessions but the acid test will come when the master will assess our solo performances. 2. Cut the ground from under feet : Meaning -  When you cut the ground from under someone's feet, you do something which weakens their position. Example -  When team India hit more than 350 runs in the ODI, they cut the ground from under the opponent's feet. 3. Chase your tail: Meaning -  Spending a lot of time and energy doing a lot of things but actually achieving too little. Example -  He's been chasing his tail all week collecting data but the report is still not ready 4. Whole bag of tricks - Meaning -  Means trying all the clever means to achieve something. Example -  It was really difficult to find the information even after applying the whole bag of tricks. 5. Deliver the goods - Meaning -  Do what is expected or promised. Example -  I have given my car to a new mech...
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