IBPS PO Preparation 2019

Bank PO IBPS PO 2018
3901

  State Bank of India


 State Bank of India is a public sector banking and financial services company. It has its headquarters in Mumbai, Maharashtra. On 7 October 2013, Arundhati Bhattacharya became the first woman to be appointed Chairperson of the bank. Formation of State Bank of India and its Nationalization: · The roots of State bank of India lies with the formation of Bank of Calcutta in 1806. Later it was renamed to Bank of Bengal. · Next the three presidency banks namely the Bank of Bengal, the Bank of Bombay (incorporated in 1840) and the Bank of Madras (incorporated in 1843) amalgamated on 27 January 1921, and the single entity was named the Imperial Bank of India. · The Imperial Bank of India remained a joint stock company but without Government participation. · Next, under the provisions of the State Bank of India Act of 1955, the Reserve Bank of India acquired a controlling interest in the Imperial Bank of India and thus on 1 July 1955, the imperial Bank of India became the State Bank of India.

 Logo:
The logo came from National Institute of Design(NID), Ahmedabad and it was inspired by Kankaria lake, Ahmedabad, Gujarat.

 Slogans:
PURE BANKING, NOTHING ELSE, WITH YOU – ALL THE WAY, A BANK OF THE COMMON MAN, THE BANKER TO EVERY INDIAN, THE NATION BANKS ON US.  

3902

  Regional Rural Banks

 Regional Rural Banks (RRBs) were established in 1975 under the provisions of the Ordinance promulgated on the 26th September 1975 and followed by Regional Rural Banks Act, 1976 with the aim of developing rural economy in all. Some Facts about RRBs: · RRBs were set up on the recommendations of the Narasimham Working Group. · The first RRB to be set up was the Prathama Bank, sponsored by Syndicate Bank on October 2, 1975 in Uttar Pradesh. The head office is at Moradabad, UP. · At that time, Mrs Indira Gandhi was the Prime Minister of India. · The regulatory authority of these RRBs is NABARD. · All the RRBs are on Core Banking platform like other commercial banks. · The area of operation of the RRBs is limited to few districts in a State. · The percentage shares of the Government of India, the concerned State Government and the bank, which had sponsored the RRB is in the proportion of 50%, 15% and 35%. · Sponsor bank can be any Nationalized Commercial Bank. · The sources of funds of RRBs comprise of owned fund, deposits, borrowings from NABARD, Sponsor Banks and other sources including SIDBI and National Housing Bank. · RBI has allowed the RRBs to maintain a lower level of SLR than commercial banks. · The Chakrabarty Committee reviewed the financial position of all RRBs in 2010 and recommended for recapitalization. · Under the Dr Vyas Committee Recommendations, amalgamation of RRBs took place in 2013. · As a result of amalgamation, number of the RRBs reduced from 196 to 64 as on 31 March 2013. · All states in India have RRBs, except Sikkim and Goa.  

3903

  Bank Board Bureau


 BBB will recommend appointment of directors in Public Sector Banks (PSBs) and advice on ways of raising funds and dealing with issues of stressed assets.
Some Facts about Banks Board Bureau:

 · A search committee, which includes the Reserve Bank of India governor, will shortlist six candidates and a chairman for the part-time body which will take over the selection process for public sector banks and also discuss their business strategies · Besides RBI governor, the search committee will include secretary, financial services and secretary, Department of Personnel and Training. · The six-member panel will have three government officials and three experts, of which two will be from banking sector. · The BBB would replace the existing appointments board for PSBs. · The primary task of BBB will be to select top officials for PSBs · Besides this task, the BBB will also be a link between the government and banks and will be engaged with banks to evolve strategies for them. The first chairman of Banks Board Bureau selected is Vinod Rai who is former CAG (Comptroller & Auditor General of India).  

3904

  Credit Information Bureau (India) Limited

 Credit Information Bureau (India) Limited or CIBIL is India’s first Credit Information Company (CIC) founded in August 2000. CIBIL’s corporate office is in Mumbai, Maharashtra.   CIBIL collects the data from member institutions (banks and other lenders) and maintains records of a customer’s (individual or any business) payments pertaining to loans and credit cards. This information is then used to create Credit Information Reports (CIR) and credit scores. These credit scores and reports can be used by the lenders to evaluate and approve loan applications. The CIBIL scores ranges from 300 to 900. A greater CIBIL score is a good score for the evaluation of loans. So if a person pays his dues in a timely manner, he obtains a good CIBIL score. Now when this customer again comes to ask for a loan, his CIBIL score will be checked and if it is good he will have faster loan approval. Loan providers prefer credit scores which are greater than 750.

 The factors that effect an individual’s CIBIL score: · Multiple Loans and Credit Cards: Multiple secured and unsecured loans and multiple credit cards affect the CIBIL score because they indicate high debt a customer already carrying.

 · Delayed payments: Delayed payments and non-payments may bring down the credit score.

 · Increased credit limit: Requesting to increase the credit limit of credit card can also affect credit score because it indicates that the customer totally relies on credit cards.

 · Not tracking your credit report: Sometimes the credit report may contain wrong information due to any faults by the lenders, so one must keep on tracking their reports.


 If a customer wants to know his Credit Score and Report, he can apply with the CIBIL by filling an application form giving your complete details and paying Rs 500. If the information is found authentic, the customer can access his Credit Score and also the Credit Score and Report is emailed.  

3905

  Credit Rating Agencies in India 


A credit rating agency is a company which rates the debtors on the basis of their ability to pay back the debt in timely manner. They rate large scale borrowers, whether companies or governments.
There are three big credit rating agencies in the world which are Standard and Poor’s (S&P), Moody’s and Fitch Ratings. 

There are mainly 4 credit rating agencies in India which are

 

Credit Rating and Information Services of India Limited (CRISIL) · It is India’s first credit rating agency which was incorporated and promoted by the erstwhile ICICI Ltd, along with UTI and other financial institutions in 1987. · After 1 year, i.e. in 1988 it commenced its operations. · It has its head office in Mumbai. · It is India’s foremost provider of ratings, data and research, analytics and solutions, with a strong track record of growth and innovation. · It delivers independent opinions and efficient solutions. · CRISIL’s businesses operate from 8 countries including USA, Argentina, Poland, UK, India, China, Hong Kong and Singapore. · CRISIL’s majority shareholder is Standard & Poor’s.


 Investment Information and Credit rating agency (ICRA) · The second credit rating agency incorporated in India was ICRA in 1991. · It was set up by leading financial/investment institutions, commercial banks and financial services companies as an independent and professional investment Information and Credit Rating Agency. · It is a public limited company. · It has its head office in New Delhi. · ICRA’s majority shareholder is Moody’s.


 Credit Analysis & Research Ltd. (CARE) · The next credit rating agency to be set up was CARE in 1993. · It is the second-largest credit rating agency in India. · It has its head office in Mumbai. · CARE Ratings is one of the 5 partners of an international rating agency called ARC Ratings.


 ONICRA · It is a private sector agency set up by Onida Finance. · It has its head office in Gurgaon. · It provides ratings, risk assessment and analytical solutions to Individuals, MSMEs and Corporates. · It is one of only 7 agencies licensed by NSIC (National Small Industries Corporation) to rate SMEs. · They have Pan India Presence with offices over 125 locations. Apart from these credit rating agencies, there are three more credit rating agencies which are also registered with SEBI. These are Fitch Ratings India Private Ltd., Brickwork Ratings India Private Limited, SME Rating Agency of India Ltd. (SMERA).

 Note: · Out of four credit rating agencies, CRISIL, ICRA, CARE and ONICRA, ONICRA is a private sector agency, all others are public sector companies. · There are 6 credit rating agencies which are registered with SEBI. These are CRISIL, ICRA, CARE, Fitch India, Brickwork Ratings, and SMERA.  

3906

  Micro Units Development and Refinance Agency Bank (MUDRA Bank)


 Micro Units Development and Refinance Agency Bank (MUDRA Bank) was set up as a public sector financial institution on 8 April 2015 under Pradhan Mantri MUDRA Yojana (PMMY). It is set up to provide loans at low rates to Micro-Finance Institutions (MFIs) and Non-Banking Financial Companies (NBFCs) which then provide credit to MSMEs.   

Three categories have been identified in which the loans will be disbursed by the MUDRA Bank.

 These are: · Shishu: Under this, loans up to Rs 50,000 will be provided. · Kishore: Under this, loans up to Rs 5 lakh will be provided. · Tarun: Under this, loans up to Rs 10 lakh will be provided. Government has decided to provide an additional fund of Rs 1 trillion to the market and will be allocated as 40% to Shishu, 35% to Kishore, and 25% to Tarun.

 Some important facts: · MUDRA bank is not a physical bank. · Eligible entities can apply for MUDRA Bank loan under PMMY in NBFCs, MFIs, Rural Banks, District Banks, Nationalize Banks, Private Banks, Primary Lending Institutions and other intermediaries. · Any person who is eligible and having the need of loan of up to Rs 10 lakhs can approach for loans under PMMY · It will not refinance agriculture sector under PMMY but the traders of vegetables & fruits are covered under MUDRA Bank Schemes. · The bank is set up as a subsidiary of the Small Industries Development Bank of India (SIDBI), and later it will be converted to a separate institution. · The bank was decided to act as regulator of MFIs, but later the decision was withdrawn and it will be done by RBI. · There is no fix interest rate in MUDRA loan; it will vary from bank to bank. · It was launched by Prime Minister Narendra Modi in New Delhi.  

3907

  Security Printing and Minting Corporation of India Limited 

Security Printing and Minting Corporation of India Limited (SPMCIL) was incorporated on 13 January 2006 under the Companies Act, 1956 with its headquarters in New Delhi. It is a Miniratna Company and is wholly owned by the Government of India.
It has nine units including four mints, four presses and one paper mill. 

Printing Presses: There are 4 printing presses in the country which are · Currency Note Press, Nashik Road · Bank Note Press, Dewas · India Security Press, Nashik · Security Printing Press, Hyderabad The first two are currency printing presses which are engaged in production of Bank Notes for our country as well as for foreign countries using state of the art technology. The last two are security printing presses which have specialized technology and multiple printing processes to produce security products under secure operating procedures and manufacturing protocols. These presses have the latest technological facilities for Designing, Pre-printing and Post-Printing.
India Security Press, Nashik prints and supplies judicial/non-judicial stamp papers, all types of postal & non postal stamps & stationery, passports, visa & other travel documents, MICR & Non-MICR Cheques in continuous Stationery form, Identity Cards, Railway Warrants, Income Tax Return Order Forms, Saving Instruments, commemorative stamps etc. It has printed tickets for Commonwealth Games 2010.
Security Printing Press, Hyderabad was established in the year 1982 to cater to the needs of the Central and various State Governments by printing and supplying security documents such as Postal Stationery items, Central Excise Stamps, Non-Judicial Stamps, Court Fee Stamps, Indian Postal Orders and Saving Instruments etc.

 Mints: The Mints are situated at Mumbai, Hyderabad, Kolkata and Noida.

 Paper Mill The Security Paper Mill (SPM), Hoshangabad was established in 1968 which is responsible for manufacturing of different types of Security Papers.  

3908

  Small Industries Development Bank of India 


Small Industries Development Bank of India (SIDBI) was set up on April 2, 1990under an Act of Indian Parliament. It has its head office in Lucknow, Uttar Pradesh


 Mission of SIDBI:
“To facilitate and strengthen credit flow to MSMEs and address both financial and developmental gaps in the MSME eco-system”. 


Associates of SIDBI:

 o Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) Government of India and SIDBI set up the CGTMSE in July 2000 to provide credit guarantee support of loans up to Rs. 100 lakh to MSMEs under its Credit Guarantee Scheme (CGS). 


o SME Rating Agency of India Ltd. (SMERA) SIDBI along with some leading banks set up SMERA in September 2005 to provide comprehensive, transparent and reliable ratings and risk profiling. 


o India SME Technology Services Ltd. (ISTSL) ISTSL was set up in November 2005 which provides a platform for MSMEs to tap opportunities at the global level for acquisition of modern technologies.


 o India SME Asset Reconstruction Company Ltd. (ISARC) ISARC is the country’s first MSME focused Asset Reconstruction Company set up for the resolution of non-performing assets (NPA) which would facilitate greater and easier flow of credit from the banking sector to the MSMEs.


 o Delhi Financial Corporation (DFC) DFC has been set under ‘The State Financial Corporation Act, 1951 with objectives to promote, finance and develop industries / service activities in the small and medium scale sectors including commercial transport in the NCT, Delhi and UT, Chandigarh.  

3909

  Foreign Investments – FDI VS. FPI VS. FII


 For a developing country like India, the total capital requirements cannot be met with internal sources alone, so foreign investments become an important part in supplying capital. The two most common foreign investments are FDI and FPI. 


Foreign Direct Investment (FDI) as the name suggests is investing directly in another country. A foreign company which is based in some other country like France invests in India either by setting up a wholly owned subsidiary or getting into a joint venture with some company based in India and then conducts its business in India.

 Examples: Various software companies like IBM India which is initially based in Unites States but has opened its subsidiaries in different part of India, Maruti Suzuki is yet another example in which Suzuki of Japan had joint ventured with Maruti Udyog Ltd. SBI life insurance is a joint venture life insurance company between State Bank of India (SBI) and BNP Paribas Assurance of France and there are many other examples.


   Foreign Portfolio Investment (FPI) is similar to FDI in a way that this is also direct investment but investment in only financial assets such as stocks, bonds etc. of a company located in another country. In contrast to FDI, a portfolio investment is an investment made by an investor who is not involved in the management and day-to-day business of a company.

 Example: Any foreign company invests in the shares of Infosys (based in India).   


Foreign Institutional Investor (FII) is an investor of group of investors who bring FPIs. Institutional investors include hedge funds, insurance companies, pension funds and mutual funds. They participate in the secondary market of economy. To participate in the market of India, FIIs must register themselves with Securities and Exchange Board of India (SEBI).  

3910

  INITIAL PUBLIC OFFERING (IPO)


 Initial public offering is the process by which a private company can go public by sale of its stocks to general public. It could be a new, young company or an old company which decides to be listed on a stock exchange and hence goes public. The company which offers its shares, known as an ‘issuer’, does so with the help of investment banks. After IPO, the company’s shares are traded in an open market. When the shares trade freely in the open market, money passes between public investors.  The company which wants to raise its funds generally goes for an IPO. So it is simply a money making process. The money can be used in various ways, such as re-investing in the company’s infrastructure or expanding the business. A public company can always issue more stocks and they get better rates also when they issue debt.  A company going for an IPO needs an investment bank to serve a number of purposes. · One of the primary roles of an investment bank is to serve as a sort of intermediary between corporations and investors through initial public offerings (IPOs). · They do the required asset management for large investment funds. · The bank evaluates the company and determines a price at which to offer the stock shares. · It also advises the company to whether go public or raise funds through any alternative means. · It also advises the company for mergers and acquisitions and to evaluate the fair price of acquisitions. · There can be more than one investment bank.
Apart from the various advantages, there are some disadvantages too of going for an IPO. · The cost associated with the process is the first factor. · Private companies do not have to disclose their information to anyone, but being after IPO they will have to disclose certain business and financial information which can prove helpful to their competitors. · For the management, efficient attention and effort is required. · There is also a risk that required funds will not be raised. · There is also a loss of control over the company because of the addition of new shareholders.  

3911

  

Inflation – Different Types and Impacts

Inflation is nothing but the more price we pay for goods. It is the persistent rise of all goods and services over a period of time. The rate of inflation is measured on the basis of price indices which are of two kinds—Wholesale
Price Index (WPI) and Consumer Price Index (CPI). 

Demand – Pull Inflation When there is a mis-match between demand and supply, it will eventually pull up the prices. Here we have two cases. In first case, the demand increases over the same level of supply. In second case, the supply decreases with the same level of demand. In both cases the situation of
demand-pull inflation arise. 


Cost – Push Inflation An increase in factor input costs pushes up prices. In general the factors that could contribute to Cost-Push inflation are increases in corporate taxes, rising wages, and rising raw materials cost. 


Low Inflation Low inflation takes place in a longer period and the range of increase is usually in ‘single digit’. Such inflation has also been called as ‘creeping inflation’.


 Deflation Deflation is the exact opposite of inflation. The persistent fall in the prices of all goods and services over a period of time is called deflation. When deflation occurs it is possible to buy more amount of goods with the same amount of money. Deflation has often had the side effect of increasing unemployment in an economy, since the process often leads to a lower level of demand in the economy. 


Stagflation Stagflation is a situation in an economy where inflation and unemployment both are at higher levels. Stagflation occurs when the economy isn’t growing but prices are going up. Stagflation is basically a combination of high inflation and low growth.


 Galloping Inflation This is a “very high inflation” running in the range of double-digit or triple digit (i.e. 20%, 100% or 200% a year). The Russian economy showed such inflation after the disintegration of the ex-USSR in the late 1980s.


 Hyperinflation This form of inflation is ‘large and accelerating’ which might have the annual rates in million or even trillion. In such inflation not only range of increase is very large but the increase takes place in a very short span of time, prices shoot up overnight. This hasn’t happened in the U.S. since the Civil War, occurred in Germany before World War II, and in Zimbabwe in the 2000s. Such an inflation quickly leads to a complete loss of confidence in the domestic currency and people start opting for other forms of money. 


Skewflation It is an un-usual inflation, where there is an inflation in one particular sector for a particular period of time, while the other sector is experiencing no changes at all or facing deflation. 

· It slow down the economic growth rate. · Inflation redistributes wealth from creditors to debtors i.e. lenders suffer and borrowers benefit out of inflation. · Prices goes up, that mean you pay more money for the same product which you got it lesser earlier.  · With the rise in inflation, lending institutions feel the pressure of higher lending. · Investment in the economy is boosted by the inflation (in the short-run).
The standard of living declines.  · The export segment of the economy benefits due to inflation. · Inflation gives an economy the advantage of lower imports and import-substitution as foreign goods become costlier.  

3912

  All About Deficits


 A deficit is when there is excess of expenditures over revenue for a given time period. The three deficits related to budget are: Revenue Deficit, Fiscal Deficit and Primary Deficit. Fourth one is Current Account Deficit. 


 · Revenue deficit is when the total revenue expenditure is greater than the expected revenue. · So Revenue deficit = Total revenue expenditure – Revenue Receipts. · So it is only related to the revenue expenditure and not the total expenditure. · Example: Somebody opens a cloth shop. He expects revenue of Rs 4000 from his total sales, but due to less sales, only Rs 3000 could be made as revenue, then this deficit of Rs 1000 is revenue deficit. 


 · Fiscal Deficit is when the total expenditure of government is greater than the total revenue generated. · The borrowings of the government are not added in the revenue, but Fiscal deficit indicates government’s borrowings only. · So Fiscal deficit = Total expenditure – Total revenue excluding borrowings · A large deficit will mean a large amount of borrowings. Government borrows from market or central bank to meet its expenditure needs. · To meet expenditure needs, government can also print money but that will lead to inflation. · Fiscal Deficit is on Capital Expenditure, and it can happen without a revenue deficit also.


  · Primary Deficit is when interest payments are deducted from the fiscal deficit. · So Primary Deficit is a part of Fiscal Deficit. · Primary deficit = Fiscal Deficit – Interest payments · Interest payments mean the payments made on the previous borrowings taken by the government. 


 · Current Account Deficit is when the total import value of goods/services of a country exceeds the total export value. · So unlike the above three deficits, it is an international matter. · CAD = Total imports value – Total exports value · It is also known as trade deficit. · CAD is not necessarily harmful for a country because it can also mean investments in the country giving jobs to its people. · CAD is calculated as a percentage of Gross Domestic Product (GDP).  

3913

  Systemically Important Banks


 A few banks assume systemic importance due to their size, cross-jurisdictional activities, complexity, lack of substitutability and interconnectedness. These banks are ‘Too Big To Fail (TBTF)’. Too Big To Fail means that if the banks fail due to any reason, there failure will cause significant disruption to the essential services provided by the banking system and in turn will have a significant impact on the economy of the country too. These banks are known as Systemically Important Banks (SIBs) as there continued functioning is very important to provide uninterrupted services of banking system to the economy. There are two types of SIBs: · Global Systemically Important Banks (G-SIBs):  which are decided by Basel Committee on Banking Supervision (BCBS). · Domestically Systemically Important Banks (D-SIBs): which are decided by country’s central bank. In India, RBI will determine a cut-off score beyond which banks will be considered as D-SIBs. Any bank (public, private, foreign, etc.) can be given this tag. 


To identify the D-SIBs by RBI, a two-step process is followed: · Sample of banks: In this step the banks are asked to compute their systemic importance (not all banks are required to submit this data – the banks will be selected based on their size as a percentage of GDP). The banks having size as a percentage of GDP beyond, 2% will be selected in the sample of banks.  

3914

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3915

  In a bag there are in all 84 currency notes in the denominations of Rs. 20 and Rs. 100 only. If the total amount of all these currency notes is Rs. 4,800. How much amount is there in the bag. in the denomination of Rs. 20 ? 

3916

  A milkman diluted 63 litres of milk with water. The percentage of milk in the solution is now 70%. How many litres of water did the milkman add ?  

3917

  A man walking at a speed of 6 km/h, crosses a stationary train in 144 seconds. How much time will the same train take to cross a pole while running at an average speed 72 km/h ? (in seconds) 


3918

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3919


A, B and C, each working alone, can finish a project in 24 days, 30 days and 40 days respectively. A started the project by working alone for 3 days and then B took over from A. B worked alone for 6 days and then C took over from B. C finished the remaining work. In how many days the whole project was finished ?  

3920

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Australia(Melbourne)- Founding Place

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