Saturday, May 2, 2015

Day 18 - Questions


Day 18 - Money Laundering

( Money Laundering, PMLA 2002, Stages of Money Laundering - Placement, Layering, Integration )


Recommended Study links - (Go through these topics before attempting MCQs)



1.  Money Laundering is a -
a.  Civil Offense
b.  Criminal Offense
c.  Both (a) and (b)
d.  None of the above

2.  Money Laundering involves -
a.  2 stages
b.  3 stages
c.  4 stages
d.  5 stages

3.  In which stage of Money Laundering, several transactions are done to remove the trace of money?
a.  Placement
b.  Layering
c.  Integration
d.  None of the above

4.  In which stage, illegitimate money comes back to the mainstream economy as a legitimate money?
a.  Placement
b.  Layering
c.  Integration
d.  None of the above

5.  What is the full form of PMLA?
a.  Provision of Money Laundering Act
b.  Prevention of Money Laundering Act
c.  Prescription of Money Laundering Act
d.  Proposition of Money Laundering Act




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Money Laundering


Money Laundering

Laundering means concealing/hiding the origins of money, that are obtained through illegal means, violating the laws of land. It often involves transfers to/from foreign banks or legitimate businesses to hide the illegal nature of the money, and make it appear as obtained form legitimate source.

In broad sense, Money Laundering is the process of converting Black Money into White Money.



Civil or Criminal Offense?

Often we talk about Black Money that are stashed abroad, mainly to avoid high taxes of the land. These money could have legitimate or illegitimate origin.

If these are achieved through legitimate sources, but to avoid taxes, are stored in foreign countries, then we simply call these as Black Money (not considered as Money Laundering). This is a case of civil offense.

But in Money Laundering, the Black Money must involve a predicate crime, such as the violation of IPC, etc, and is considered as criminal offense.



Stages of Money Laundering

Money Laundering involves three distinct stages, as follows -

1.  Placement
Illegitimate money / Dirty Money is collected and placed into a legitimate financial institution, generally in the form of cash (a way to hide trace). This stage is known as Placement of Illegitimate money.

2.  Layering
Layering is the stage, where the illegitimate money is processed through several financial transactions to change its form and hide its trace, so that it is difficult to follow and find its source.

It may consist of -

  • Bank to bank transfer
  • Wire transfer between different accounts, possibly in different names and in different countries
  • Changing the nature of currency
  • Purchasing other instruments, or assets to change the form of money, etc.

3.  Integration
In this stage, the illegitimate money returns to the mainstream economy as a legitimate one. This may involve a final bank transfer to the account of the business, where the launderer wants to invest. In this stage, the legitimate-looking money is difficult to trace back to its illegitimate source.



Prevention of Money Laundering Act, 2002 (PMLA)

The PMLA, 2002 is the principal framework in India to combat money laundering cases. It defines money laundering offence and provides for the freezing, seizure and confiscation of the proceeds of crime.

Some features -
  • RBI, SEBI and IRDA have been brought under the PMLA, making the provision of this act to be applicable to all the financial institutions in India, including banks, MFs, Insurance companies, etc.
  • The monitoring agency of Anti-Money Laundering activities in India is the Financial Intelligence Unit (FIU-IND). It is an independent body reporting directly to the Economic Intelligence Council (EIC), headed by the Finance Minister.
  • Punishment includes imprisonment up to 3 - 7 years, with fine up to Rs. 5 lakh.


Banks' Obligations


  • To follow the KYC norms properly
  • Maintain records for - nature and value of the transaction, single or series of transactions, keep record for 10 years, etc.
  • Verify and maintain the records of identity of all clients, etc.




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Friday, May 1, 2015

SSC CGL 2015 Notification


SSC Combined Graduate Level (CGL) 2015

Staff Selection Commission (SSC) has released the notification of Combined Graduate Level (CGL) 2015.



Brief Points

1.  Tentative Exam Date - August 9 & 16, 2015
2.  Last date to Apply -

  • Part-I registration - May 28 (5:00 PM)
  • Part-II registration - June 1 (5:00 PM)


2.  3 Tier Exam - No change in Pattern and will be in Offline Mode

"The Commission reserves the right to make changes in the scheme of examination such as conduct of Tier-I and Tier-II examination in on-line mode, treating Tier-I examination as only qualifying and not conducting personality test cum interview for some or all posts etc."

Note - It means, CGL may be in online mode, or remain in offline mode as earlier. But most probably to remain in offline mode, as indicated in "9(C): General Instructions" of notice.

Note - Tier-I may become only qualifying in nature, or remain same as to be included in merit list.

3.  Fees - Rs. 100 (exemption available for SC, ST, female candidates, etc.) - refer notification



Download Notification from Bankoncepts


  1. Bankoncepts Link - Click Me
  2. Official Link (SSC) - Click Me












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Day 17 - Questions


Day 17 - Monetary Aggregates

( Monetary Aggregates, M1, M2, M3, M4, Narrow Money, Broad Money )


Recommended Study links - (Go through these topics before attempting MCQs)



1.  The Working Group on Money Supply, set up to examine the analytical aspects of the monetary survey, introduced the new monetary aggregates. Who chaired the working group?
a.  Bimal Jalan
b.  Y.V. Reddy
c.  R. Rajan
d.  U.K.Patel

2.   Narrow Money consists -
a.  M1
b.  M2
c.  Both M1 and M2
d.  Both M3 and M4

3.  Broad Money consists -
a.  M1
b.  M2
c.  Both M1 and M2
d.  Both M3 and M4

4.  Which of the following is most liquid in nature?
a.  M1 
b.  M2
c.  M3
d.  M4

5.  Time deposits with banks falls in which category -
a.  Narrow Money
b.  Broad Money 
c.  Both (a) and (b)
d.  None of the above

6.  Given, currency with public - Rs. 90,000 crore, Demand Deposit with banks - Rs. 1,80,000 crore, Time deposit with banks - Rs. 2,20,000 crore, Other deposits with RBI - Rs. 2,60,000 crore, Savings Deposit of Post Office Savings Bank - Rs. 60,000 crore, All deposits with Post Office Savings Bank excluding National Savings Certificate (NSC) - Rs. 50,000 crore.
Calculate Narrow Money M1. 

(This type of question will not be asked in IBPS or SBI exams. But this question will help you clear your concept)
a.  Rs. 4,90,000 crore
b.  Rs. 5,30,000 crore 
c.  Rs. 5,70,000 crore
d.  Rs. 7,50,000 crore




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Thursday, April 30, 2015

Day 16 - Questions


Day 16 - CAMELS Rating

( CAMELS Rating, Indian Banks Rating )


Recommended Study links - (Go through these topics before attempting MCQs)


1.  CAMELS Rating is -
a.  A credit rating by Credit Rating Agencies
b.  A credit information report by Credit Information Bureaus
c.  A supervisory rating for banks or financial institutions by financial market regulator
d.  None of the above

2.  How many components are there in CAMELS rating?
a.  5 components
b.  6 components
c.  7 components
d.  8 components

3.  What 'L' denotes in CAMELS rating?
a.  Liability
b.  Liquidity
c.  Leverage
d.  Listing

4.  Which of the following committee recommended the bank rating system in India?
a.  Padmanabhan committee
b.  Urjit Patel committee
c.  Subramanyan committee
d.  G.K.Pillai committee

5.  As per CAMELS rating scale, which one is the lowest rating?
a.  1
b.  2
c.  5
d.  6




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CAMELS Rating


CAMELS Rating

CAMELS rating is an international (primarily USA) supervisory rating system to classify a bank / financial institution's overall condition according to 6 factors. The six factors are represented by the acronym 'CAMELS'.


Six Components

When introduced in 1979, the CAMELS system had five components. A 6th component - sensitivity to market risk - was added in 1996. The regulators that year also added an increased emphasis on an organization's management of risk.

The 6 components are -

  • C - Capital adequacy
  • A - Asset quality
  • M - Management
  • E - Earnings
  • L - Liquidity
  • S - Sensitivity to market risk

CAMELS Rating Scale

The ratings range from 1 to 5, with -
  • 1 - being the highest rating (meaning least amount of regulatory concern)
  • 5 - being the lowest rating (meaning maximum amount of regulatory concern)
An overall CAMELS score of 3, 4, or 5 can expose a financial institution to any of the informal and formal enforcement actions available to the regulators.




Bank rating system in India

As per the recommendations of Padmanabhan Committee (1996), the banks in India should be rated on a 5 point scale of A to E, widely based on international CAMELS rating model. The committee has suggested that supervision of banks should focus on defined parameters of soundness, financial, managerial and operational.

Based on these guidelines, RBI has evolved the model for rating banks based on CAMELS. Each of the 6 components would be weighed on a scale of 1 to 100 and would contain several parameters with individual weightage.


Rating Scale in India
  • A - Sound in every respect
  • B - Fundamentally sound, but with moderate weaknesses
  • C - Financial, operational and/or compliance weaknesses that give cause for supervisory concern
  • D - Serious or moderate financial, operational and/or managerial weaknesses that could impair future viability
  • E - Critical financial weaknesses that render the possibility of failure in the near term



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Wednesday, April 29, 2015

Financial Market Entities


Financial Market Entities


1.  Commercial Banks
Commercial banks include Public Sector Banks (PSB), Private Sector Banks and Foreign Banks. The main activity of these banks are acceptance of deposits from the public for the purpose of lending or investment.

2.  Cooperative Banks
Coop Banks are also allowed to raise deposits and provide advances from and to public. Urban Cooperative Banks (UCBs) are controlled by respective state governments and RBI, while other Coop banks are controlled by NABARD and state governments. Except for certain exemptions in paying a higher interest on deposits, the UCBs regulatory framework is similar to the other banks.

3.  Non-Banking Financial Companies (NBFCs)
NBFCs are allowed to raise money as deposits from the public and lend through various instruments including leasing, hire purchase, bill discounting, etc. These are licensed and supervised by RBI.

4.  Primary Dealers (PDs)
PDs deals with government securities both in Primary market and Secondary market. Their basic responsibility is to provide markets for government securities and strengthen the government securities market.

5.  Financial Institutions (FIs)
FIs are those developmental institutions that provide long-term funds for industry and agriculture. FIs raise their resources through long-term bonds from the financial market and borrowings from international FIs.

6.  Payment and Settlement System / Clearing Houses / Currency Chests
An efficient and effective Payment and Settlement system is a necessary condition for a well running financial system. Maintenance of Clearing Houses at various centers, creation of currency holding chests in different geographical areas and creation of the mechanism for electronic transfers of funds (EFT) are vital activities undertaken by RBI.

7.  Stock Exchanges
A stock exchange is duly approved by capital market regulator to provide sale and purchase of securities on behalf of investors. The stock exchanges provide Clearing House facilities for netting of payments and securities delivery. Securities include equities, debt, derivatives, etc.

8.  Brokers 
Only brokers are approved by capital market regulator to operate on the stock exchange. Brokers perform the job of intermediary between buyers and sellers of securities. They help build-up an order book, carry out price discovery and are responsible for broker's contracts being honored. The services are subject to brokerage.

9.  Equity and Debt Raisers
Companies wishing to raise equity or debt through stock exchanges have to approach the capital market regulator with the prescribed applications and a proforma for permission to raise equity and debt and get them listed on a stock exchange.

10.  Investment Bankers / Merchant Bankers
Merchant banks undertake a number of activities such as undertaking the issue of stocks, fund raising and management. They also provide advisory services and counsel on mergers and acquisitions (M&A), etc. They are licensed by capital market regulator.

11. Foreign Institutional Investors (FIIs)
FIIs are foreign-based funds authorized by capital market regulator to invest in the Indian equity and debt market through stock exchanges.

12.  Depositories
Depositories hold securities in demat form (not in physical form), maintain accounts of Depository Participants (DPs), who in turn, maintain sub-accounts of their customers. On instructions of the stock exchange clearing house, supported by documentation, a depository transfers securities from the buyers to sellers accounts in electronic form.

13.  Mutual Funds (MFs)
An MF is a form of collective investment that pools money from investors and invests in stocks, debt and other securities. It is a less risky investment option for an individual investor. MFs require the regulators' approval to start an Asset Management Company (AMC) and each scheme has to be approved by the regulator before it is launched.

14.  Registrars
Registrars maintain a register of share and debenture holders and process share and debenture allocation, when issues are subscribed. Registrars too need regulator's approval to do business.



If you want to add more financial entities in this list, feel free to comment or send a message through Contact Page



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Day 15 - Questions


Day 15 - CIBIL

( CIBIL )


Recommended Study links - (Go through these topics before attempting MCQs)


1.  What is the full form of CIBIL?
a.  Central Information Bureau of India Ltd.
b.  Credit Information Bureau of India Ltd.
c.  Central Investment Bureau of India Ltd.
d.  Credit Investment Bureau of India Ltd.

2.  Credit Information Report / Credit Reports for borrowers / customers are prepared by -
a.  CIBIL
b.  CRISIL
c.  IMF
d.  None of the above

3.  Which of the following is an example of Credit Information Company (CIC)?
a.  CRISIL
b.  World Bank
c.  IMF
d.  CIBIL

4.  CIBIL TransUnion Score is a -
a.  Credit Score
b.  Credit Rating
c.  Loan Application
d.  None of the above

5.  Who is the current Managing Director (MD) of CIBIL (as of April 29, 2015)?
a.  Arun Thukral
b.  Mavila Vishwanathan Nair
c.  R.Gandhi
d.  R.Rajan




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Tuesday, April 28, 2015

JAIIB Exam for PO/Clerk


Junior Associate of Indian Institute of Bankers (JAIIB)


JAIIB 2016 Registration

If you haven't registered yet, please register at this page - JAIIB Registration





Objectives

JAIIB aims at providing required level of basic knowledge in banking and financial services (BFS), banking technology, customer relations, basic accountancy and legal aspects necessary for carrying out day to day banking operations.



Eligibility

  1. The exam is open only to the ordinary members of the Indian Institute of Banking & Finance (IIBF) (any person working in the banking and finance industry can apply to IIBF for lifetime membership)
  2. Minimum qualification - Matriculation


Subject of Examination
  1. Principles and Practices of Banking
  2. Accounting and Finance for Bankers
  3. Legal and Regulatory Aspects of Banking


Examination Fees
  • First Block of 2 attempts - Rs. 2,697
  • Second Block of 2 attempts - Rs. 2,697


Medium of Exam
  • Either Hindi or English, and should clearly mention in application form


Pattern of Exam
  1. Each Question Paper will contain approx. 120 objective type MCQ, carrying 100 marks, including questions based on case study / case lets. The Institute may, however, vary the number of questions to be asked for a subject. There will be No Negative marking for wrong answers.
  2. Questions for the JAIIB exam will be asked calling for - (a) Knowledge testing, (b) Conceptual grasp, (c) Analytical / logical exposition, (d) Problem Solving, (e) Case analysis


Mode, Duration and Periodicity of Exam
  1. Mode - Online mode in majority centers and Offline mode at selected centers. Exam will be held on 3 consecutive Sundays (one paper each Sunday)
  2. Duration - 2 hours each paper
  3. Periodicity - Twice year - in May-June and November-December


Passing Criteria
  1. Pass - Minimum 50 out of 100 marks in each subject
  2. Candidates securing at least 45 marks in each subject with an aggregate of 50 % marks in all subjects in a single attempt will also be declared as having passed JAIIB examination


Time Limit for Passing Exam
  1. Candidates will be required to pass JAIIB exam within a time limit of 2 years (i.e., 4 consecutive attempts). Initially a candidate will have to pay exam fee for a block of 1 year, i.e., for 2 attempts.
  2. In case he/she is not able to pass JAIIB exam within 1st block of 2 attempts, he/she can appear for a further period of 1 year (2nd block), i.e., 2 attempts on payment of requisite fee.
  3. The candidates who have exhausted the first block of 2 attempts, should necessarily submit the examination application form for the next attempt, without any gap. If they do not submit the examination form immediately after exhausting the first block, the examination conducted will be counted as attempts of the second block for the purpose of time limit for passing.
  4. Candidates not able to pass JAIIB exam within the stipulated time period of 2 years are required to re-enroll themselves afresh by submitting fresh Exam Application Form. Such candidates will not be granted credit/s for subject/s passed, if any, earlier.
  5. Attempts will be counted from the date of application irrespective of whether a candidate appears at any examination or otherwise.


"Class of Pass" Criteria
  1. The Institute will consider the FIRST PHYSICAL ATTEMPT of the candidates at the exam as first attempt for awarding class. In other words, the candidate should not have attempted any of the subject/s pertaining to the concerned exam any time in the past and has to pass all the subjects as per the passing criteria and secure prescribed marks for awarding class. Candidate re-enrolling for the exam after exhausting all permissible attempts as per the time limit rule will not be considered for awarding class.
  2. FIRST CLASS - 60 % or more marks in aggregate and pass in all the subjects in the FIRST PHYSICAL ATTEMPT
  3. FIRST CLASS WITH DISTINCTION - 70 % or more marks in aggregate and 60 or more marks in each subject in the FIRST PHYSICAL ATTEMPT
  4. Candidate who have been granted exemption in the subject/s will be given "Pass Class" only.


Benefits of Passing JAIIB and CAIIB

Non-Monetary Benefits -
  • Enables promotions within team
  • Valued by fellow bankers and team
  • Better understanding of banking sector
  • You can suffix the degree to your name, e.g., Mr. XYZ JAIIB

Monetary Benefits - 
  1. JAIIB for Clerks - 1 increment in salary
  2. JAIIB for Officers - 1 increment in salary
  3. CAIIB for Clerks - 2 increments in salary (have to pass JAIIB first)
  4. CAIIB for Officers - 1 increment in salary (have to pass JAIIB first)

For example - Bank PO Scale 1 Salary structure (as on April 28, 2015) is -
Rs. 14,500 - (600 x 7) 18,700 - (700 x 2) - 25700

If Mr. X has basic pay of 14,500, then after passing JAIIB exam, he will get 1 increment, meaning his new basic pay will be 14,500 + 600 = 15,100. 



For Official Notification and Detailed Syllabus follow the link Click Me









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Day 14 - Questions


Day 14 - Credit Rating Agencies

( Credit Rating Agencies, CRISIL, S&P )


Recommended Study links - (Go through these topics before attempting MCQs)


1.  Which of the followings are referred to as 'Big Three' international credit rating agencies -
a.  S&P, Moody's, CRISIL
b.  S&P, Moody's, Brickwork
c.  Fitch Group, ICRA, Brickwork
d.  S&P, Moody's, Fitch Group

2.  Which of the followings are Indian credit rating agencies (CRA)?
a.  CRISIL
b.  ICRA
c.  CARE
d.  All of the above

3.  What is the full form of CRISIL?
a.  Credit Rating Information Services of India Limited
b.  Credit Rating Investment Services of India Limited
c.  Credit Rating Insight Services of India Limited
d.  Credit Rating Indian Services for Investment and Liability

4.  Which of the following debt obligation ratings are provided by CRISIL?
a.  Non-convertible debentures, bonds, preference shares
b.  Commercial papers, Certificate of Deposits, Short-term Debt
c.  Fixed Deposits, Loans
d.  All of the above

5.  What is the current rating (as of April 28, 2015) of India by S&P?
a.  AA
b.  A
c.  BBB
d.  BB




Note - Do not refer any source while answering the questions. You can comment in the Comment Section below.



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Monday, April 27, 2015

Day 13 - Questions


Day 13 - Know Your Customer (KYC)

( Know Your Customer, e-KYC )


Recommended Study links - (Go through these topics before attempting MCQs)


1.  What is the full form of KYC?
a.  Know Your Company
b.  Know Your Customer
c.  Know Your Custodian
d.  Know Your Current-Account

2.  Which of the followings are necessary for KYC?
a.  Identity
b.  Address
c.  Photograph and Signature
d.  All of the above

3.  Which of the followings are Officially Valid Documents (OVD) for identity proof?
i.  Passport
ii.  Driving License
iii.  EPIC Card
iv.  PAN Card
v.  Ration Card
vi.  Aadhar Card
vii.  NREGA Card

a.  All except (vii)
b.  All except (v)
c.  All except (v) and (vii)
d.  All except (iii)

4.  If a customer doesn't have any Official Valid Documents (OVD) for KYC, then -
a.  A Current account can be opened for him
b.  A Small Account can be opened for him
c.  A Savings Account can be opened for him
d.  A BSBDA Account can be opened for him

5.  What is the time period / validity for a Small Account without OVD?
a.  6 months
b.  12 months
c.  18 months
d.  24 months

6.  Currently, for e-KYC, which of the following is must?
a.  EPIC card number
b.  Aadhar card number
c.  Passport file number
d.  Mobile phone number

7.  What is the maximum account balance at any point of time in Small Account?
a.  Rs. 50,000
b.  Rs. 1 lakh
c.  Rs. 25,000
d.  Rs. 2 lakh

8.  Small account (without OVD), can be extended for a certain period of time, if customer provides the proof that he has applied for OVD. What is the extension period?
a.  6 months
b.  12 months
c.  2 years
d.  5 years

9.  PAN (Permanent Account Number) card information is maintained by -
a.  Union Home Ministry
b.  Income Tax Department, CBDT
c.  Ministry of External Affairs
d.  CBEC

10.  PAN card is mandatory for -
a.  Income Tax returns
b.  Tax Deduction at Source (TDS)
c.  bank deposits above Rs. 50,000
d.  All of the above


Note - Do not refer any source while answering the questions. You can comment in the Comment Section below.



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