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Top Banking/Finance Committees 2015-16

Deepak Mohanty Committee on Financial Inclusion

The RBI committee on pushing Financial Inclusion submitted its report on 28 December
2015. The committee recommended a slew of measures, including a special deposit
scheme for the girl child, government-to-person social cash transfer, and opening
interest-free windows (Islamic banking) by banks. Who headed this committee?
Deepak Mohanty (Executive Director, RBI)

The committee (titled Medium-Term path on Financial Inclusion) was constituted in July
2015 with the objective of working out a medium-term (five-year) measurable action
plan for financial inclusion. It was chaired by Deepak Mohanty, RBI executive director.

Important Recommendations of the Deepak Mohanty Committee:

Banks have to step up account opening for women

Union Govt. should consider a welfare scheme (Sukanya Shiksha) for promoting
financial inclusion of women that can be jointly funded by the Central and State
governments

Need for better use of the mobile banking facility for Government-to-Person
(G2P) payments, and this would push government in its financial inclusion drive

A unique biometric identifier such as Aadhaar be linked to each individual credit


account and the information should be shared with credit information companies

Commercial banks in India must be enabled to open specialised interest-free


windows (primarily for Islamic banking) with simple products

The committee pressed for digitisation of land records to increase formal credit to
all agrarian segments

Usha Thorat Committee on Small Banks


The Reserve Bank of India on 3 February 2015 constituted a committee to evaluate
applications received for the proposed small finance banks. Who headed this
committee? Usha Thorat, former Deputy Governor of RBI

Nachiket Mor on Payments Banks

The Reserve Bank of India on 3 February 2015 constituted a committee to evaluate


applications received for payments banks. Who headed this committee? Dr. Nachiket
Mor, Director, Central Board, RBI

Gandhi Committee on UCBs

The Reserve Bank of India (RBI) on 30 January 2015 constituted a 7-member


committee on urban cooperative banks (UCBs). The committee will primarily re-examine
and recommend appropriate set of businesses, size, conversion and licensing terms for
the UCBs. Who is heading this committee? R. Gandhi (Deputy Governor, RBI)

Vijay Kelkar Committee on PPP

The committee, which was reviewing the public-private partnership model (PPP model)
of infrastructure development, has recommended improving the financing of such
projects. Who was heading this committee on PPP Model, which submitted its report on
19 November 2015? Vijay Kelkar

The Vijay Kelkar Committee to review the PPP model of infrastructure


development submitted its report to Finance Minister Arun Jaitley on 19 November
2015. The committee was headed by Vijay Kelkar, former Chairman of the Finance
Commission.

The committee analysed the risks involved and the existing framework of risk-
sharing between the project developer and the government in the PPP model and
gave its recommendations. The report of the Committee has recommended reviving
the PPP model and redesigning it by introducing best international practices and by
improving capacity building.
Arvind Arvind Subramanian Committee on GST

The govt. committee on the proposed goods and services tax (GST) suggested how
much standard rate of GST as disclosed on 4 December 2015? 16.9-19.9%

The government-constituted committee on GST headed by Arvind Subramanian,


the Chief Economic Advisor (CEA), submitted its report to Union Finance Minister
Arun Jaitley on 4 December 2015.

The committee recommended that the standard GST rate be in the range of
16.9-17.9%. The standard rate would apply to most goods and services under the
new indirect tax regime.

The committee also recommended that 1% tax proposed to be levied on the


inter-state trade of goods to help the manufacturing states be done away with. This
is one of the major demands of the Congress. The committee recommended other
rates, with the lowest rate for goods at 12% and the highest rate at 40%. The
highest rate is for demerit goods such as alcohol.

Sumit Bose Committee on Financial Products

A committee set up by the government to rationalise distribution incentives for financial


products and curb their mis-selling, has in its report recommended flexible exits for
financial products and that profits from exit charges not accrue to product providers.
Who headed this committee? Sumit Bose, former Finance Secretary

The report of the Sumit Bose Committee recommended that the choice of
withdrawal of all financial products, except those pertaining to pensions, should
remain with the investor. It clearly said that financial products should have flexible
exit options and the cost of exit must be limited. Currently, products such as unit-
linked insurance plans (ULIPs) have a lock-in period of at least five years. It was
increased from three years following a spate of customer complaints prior to
September 2010, when market volatility led to poor returns for policyholders, who
exited early.
A.P. Shah Committee on MAT

The government-constituted committee on Minimum Alternate Tax (MAT) for foreign


institutional investors (FIIs) led by Justice A.P. Shah submitted its report to Union
Finance Minister Arun Jaitley during 21 August 2015. The committee recommended that
FIIs be granted relief on Minimum Alternate Tax (MAT) for the period before 1 April
2015. This comes as a major relief for the FIIs. It is worth mentioning that in 2012, the
Advance Authority Ruling (AAR), Delhi, directed Castleton to pay MAT in India on its
book profits, when the company transferred shares from a Mauritius entity to one in
Singapore. Pertaining to this, the income tax department had sent notices to 68 FIIs,
demanding Rs. 602 crore as MAT dues for earlier years. To resolve the issue, the
government had constituted a commission headed by Law Commission Chairman A P
Shah. The crux of the issue was whether the government would waive MAT prior to April
2015. From the current financial year, MAT is anyway not applicable to foreign portfolio
investors. It is expected the government will accept the committees suggestions and
stop demanding MAT from FPIs for the period before 1 April.

Banking/Economic Policies & Guidelines 2015-16

During 2015 the RBI announced how many reductions in the all-important Repo
Rate? Four

List of all Repo Rate Reductions during 2015

29 September 2015 50 basis points (new repo rate 6.75%)

2 June 2015 25 Basis points (new repo rate 7.25%)

4 March 2015 25 basis points (new repo rate 7.50%)

15 January 2015 25 basis points (new repo rate 7.75%)

Union Finance Ministry on 16 December 2015 made it mandatory to quote PAN


(permanent account number) for all transactions in excess of Rs.2 lakh, regardless
of the mode of payment, to curb black money. This guideline will come into effect
from which date? 1 January 2016
The Union Cabinet announced which new policy for white label ATM operations
in the country on 9 September 2015? It allowed 100% FDI under the automatic
route for white label ATM operations

The Reserve Bank of India on 1 September 2015 issued draft guidelines


pertaining to interest rates and base rates. In the draft, RBI has sought to
implement what new methodology for interest rates of the banks? It has
prescribed a uniform method by which banks have to arrive at the interest
rates for providing loans

The Reserve Bank of India (RBI) on 22 January 2015 came out with which
guideline on loan cost for countrys commercial banks? It directed all banks to
display all costs associated with loans on their website

From 25 November 2015 the Union Govt. extended the usage criterion of the
RuPay debit cards under the Pradhan Mantri Jan Dhan Yojana (PMJDY) in order to
avail of the in-built insurance cover to 90 days. What was the usage criterion till
now? 45 days

Union Govt. on 6 November 2015 imposed how much Swachh Bharat Cess on
all services? 0.5%

The govt. committee on the proposed goods and services tax (GST) has
suggested how much standard rate of GST as disclosed on 4 December 2015?
16.9-19.9%
The Reserve Bank of India (RBI) on 13 February announced it would soon put in
circulation currency notes with the denomination of Re 1. When printing of Re. 1
notes was discontinued by the govt. due to higher printing costs? November
1994

The Reserve Bank of India (RBI) on 17 April 2015 came out with which important
proposal pertaining to term deposits? It proposed to allow banks to offer
differential interest rates for term deposits

Indian Parliament on 7 December 2015 passed an amendment bill that permits


the filing of cases at the place where a cheque is presented for clearance and not
the place of issue. What is the name of this bill? Negotiable Instruments
(Amendment) Bill, 2015

The World Bank on 14 September 2015 released the first ever ranking of States
on the Ease of Doing Business in India. The rating assessed states over a six-
month period from January to June 2015 on the issue of implementation of ease of
doing business policy. Which state topped this list? Gujarat

What was the GDP growth rate of the Indian economy during the second quarter
(July-September) of 2015-16, as disclosed in the data released by the Central
Statistics Office (CSO) on 30 November 2015? 7.4%

What will be the total corpus of the new Financial Inclusion Fund (FIF) that was
announced by the Reserve Bank of India (RBI) on 15 October 2015? Rs. 2,000
crore
What was the notified interest rate (notified on 20 January 2015) for investments
in Sukanya Samriddhi Account (SSA), the special deposit scheme for girl child that
was launched on 22 January 2015? 9.1% p.a.

An important agreement pertaining to wage revision of bank employees was


signed on 23 February 2015 between the Indian Banks Association (IBA) and bank
trade unions at Mumbai which resulted in the aversion of the proposed 4-day bank
strike from 25 February. What are the main points under this agreement? 15%
hike in wages and off on second and fourth Saturdays of the month

The Union Govt. on 1 April 2015 revamped the procedure for appointment of
non-official directors (NoDs) on the Boards of public sector banks, insurance
companies and financial institutions. What the new age limit for appointment of
NoDs is, as prescribed in these guidelines? Less than 67 years

International Banking and Finance 2015-16

The US Federal Reserve raised interest rates by 0.25 percentage points on 16


December 2015. This was the first interest rate increase by the Fed since which
year? Since 2006

The signing ceremony of the Asian Infrastructure Investment Bank (AIIB) took
place at the Great Hall of the People in Beijing on 29 June 2015. 50 founding
members of AIIB, including India, signed on the articles of AIIB that determine each
countrys share and the lenders initial capital. What is Indias stake in AIIB? 8.52%
(India is its second largest shareholder with a stake of 8.52% and voting share of
7.5%. The voting shares are based on the size of each member countrys economy
and not contribution to the Banks authorised capital. Chinas shareholding is
30.34% and it has retained 26.06% of the voting rights with veto powers for certain
key decisions)
The Annual Meetings of the Boards of Governors of the World Bank Group
(WBG) and the International Monetary Fund (IMF) or the 2015 WBG/IMF Annual
Meetings was held between 6 and 12 October 2015 at which city? Lima (Peru)

In a victory for Beijings campaign for recognition as a global economic power,


the International Monetary Fund (IMF) admitted Chinas Yuan into its benchmark
currency basket on 30 November 2015. With this Yuan will be added to the Special
Drawing Rights (SDR) basket alongside the dollar, euro, pound sterling and yen.
When Yuan will be officially added to the SDR basket to get reserve currency
status? October 2016

According to announcement made by international financial transactions agency


Society for Worldwide Interbank Financial Telecommunication (SWIFT), which
currency has recently become one of the top five most-used currencies in the world,
overtaking the Canadian dollar and the Australian dollar? Chinese Yuan

Which African country during June 2015 started the process of demonetization to
legally end its virtually worthless local currency which had witnessed hyper-inflation
as high as 500 billion per cent in the recent times? Zimbabwe

The 10th Ministerial Conference of the World Trade Organization (WTO)


concluded on 19 December 2015 with some landmark agreements on a series of
trade initiatives. This WTO Conference was held at Nairobi (Kenya)

New Banking Technologies 2015-16

What is the name of the m-wallet (mobile wallet) application of State Bank of
India (SBI) that was launched by Finance Minister Arun Jaitley on 18 August 2015?
SBI Buddy
Which bank on 4 July 2015 became the first in the country to launch the MUDRA
Card, under the Pradhan Mantri MUDRA Yojana (PMMY) scheme? Corporation
Bank

Which bank launched Indias first contactless debit and credit card on 7 January
2015 that enables one to make payments by just waving the card near merchant
terminals instead of swiping the same? ICICI Bank

Countrys largest private bank ICICI Bank on 25 May 2015 launched which new
password service for its customers? Voice Password Service

Which private bank on 10 February 2015 launched first-of-its-kind digital banking


service called Pockets, which enables users to instantly send money to any e-mail
id, mobile number, friends on Facebook and bank account? ICICI Bank

ICICI Bank on 20 April 2015 launched a new payment service called Tap-n-Pay
which enables customers make over-the-counter payments without using cash. This
first-of-its-kind payment service was launched in collaboration with which IT
company? Tech Mahindra

Top Banking/Economic Personalities 2015-16

Who won the Nobel Prize in Economics for 2015 as announced on 12 October
2015? Angus Deaton (United States)
Which noted banker of India was on 11 May 2015 appointed as the first President
of the $100-billion New Development Bank (NDB) of the BRICS countries, to be
based in Chinas financial hub Shanghai? KV Kamath

Who was named as the first Chief of the Beijing-backed Asian Infrastructure
Investment Bank (AIIB), which is being established as an alternative financial entity
to the U.S. and Europe-dominated banking institutions? Jin Liqun

RBI Governor Raghuram Rajan was elected as the Vice-Chairman of the Bank of
International Settlement (BIS) on 10 November 2015. With this he became the first
Indian central bank Governor to become the vice-chairman of BIS. BIS is
headquartered in which Swiss city? Basel

On 5 January 2015 who was named as the first Vice-Chairman of the newly
announced NITI Aayog (Policy Commission), which replaced Planning
Commission? Arvind Panagariya

London-based financial journal Central Banking named who as the winner of


the Governor of the Year award on 13 January 2015? Raghuram Rajan, RBI
Governor

Financial & Banking Initiatives 2015-16

Small Banks

Ushering another banking revolution in the country, the Reserve Bank of India (RBI) on
16 September 2015 accorded in-principal approval for 10 small finance banks. These
banks will focus on small geographies for operations but with a strong capital base.
Which 10 entities were selected for these small banks? 1) Au Financiers 2) Capital
Local Area Bank 3) Disha Microfin 4) Equitas Holdings 5) ESAF Microfinance 6)
Janalakshmi Financial Services 7) RGVN (North East) Microfinance 8) Suryoday
Micro Finance 9) Ujjivan Financial Services and 10) Utkarsh Micro Finance

Payments Banks

In an important step for Indias banking sector, the Reserve Bank of India (RBI) on 19
August 2015 granted its in-principle approval to setting up Payments Banks to 11
entities and individuals. The RBI had received 41 applications for payments banks by
end of deadline in February this year. Which are these 11 entities and individuals to get
approval for payments bank? 1) Aditya Birla Nuvo 2) Airtel M Commerce Services
3) Cholamandalam Distribution Services, 4) Department of Posts 5) Fino PayTech
6) National Securities Depository Ltd (NSDL), 7) Reliance Industries 8) Tech
Mahindra, 9) Vodafone m-pesa (Entities) and 10) Dilip Shanghvi and 11) Vijay S.
Sharma (Individuals)

MUDRA

MUDRA Bank, an ambitious initiative to provide boost to Indias micro and small
business entities, was inaugurated by Prime Minister Narendra Modi at a programme
held in New Delhi on 8 April 2015. What is the full expansion of the term MUDRA?
Micro Units Development and Refinance Agency

Asian Infrastructure Investment Bank

The signing ceremony of the Asian Infrastructure Investment Bank (AIIB) took place at
the Great Hall of the People in Beijing on 29 June 2015. 50 founding members of AIIB,
including India, signed on the articles of AIIB that determine each countrys share and
the lenders initial capital. What is Indias stake in AIIB? 8.52% (India is its second
largest shareholder with a stake of 8.52% and voting share of 7.5%. The voting shares
are based on the size of each member countrys economy and not contribution to the
Banks authorised capital. Chinas shareholding is 30.34% and it has retained 26.06% of
the voting rights with veto powers for certain key decisions)

CIPS

China on 8 October 2015 launched the much anticipated international payment system
that seeks to provide global dimensions to its currency Yuan. What is the name of this
payment system? China International Payment System (CIPS)

Money-Order Service

India Post, the postal department of Govt. of India, on 1 April 2015 closed its 135-year
old Money Order (MO) service. The Money Order service, which provided pan-India
door-delivery of funds to a payee from over 155,000 post offices, was an integral part of
the department since 1880. India Post is now focusing on which 2 postal remittance
services? Electronic Money Order (eMO) and Instant Money Order (iMO)

Price Stabilization Fund

The Union Govt. during March 2015 established a fund with a corpus of Rs. 500 crore
which seeks to keep prices of perishable farm commodities under control through
suitable market interventions. What is the name of this fund? Price Stabilization
Fund (PSF)

Unified Payment platform

National Payments Corporation of India (NPCI), the umbrella organisation for retail
payment system in India, on 18 February 2015 launched a unified platform for providing
a single payment interface across all systems. What is the name of this interface that
will enable all account holders to send and receive money from their smartphones with
a single identifier? Unified Payment Interface (UPI)
Gold Monetisation Scheme

Union Cabinet on 9 September 2015 announced the Gold Monetisation Scheme under
which gold in any form can be deposited with banks for a period of one to 15 years.
What is the primary objective of this scheme? To bring out the huge amount of gold
that is being kept idly by Indians

Panch Deep

The Union Government on 4 January 2015 announced Rs. 1,900 crore for e-
governance project Panch Deep. This project seeks to achieve what? To automate
all transactions between the organisations and employees with regard to ESIC

Education Portal

What is the name of the first dedicated portal for the benefit of students seeking
educational loans that was launched during August 2015 by the Union Govt.? Vidya
Lakshmi

Chit Funds

The Reserve Bank India (RBI) on 11 June 2015 gave permission to which investor
segment to invest in regulated chit funds in India? Non-Resident Indians (NRIs)

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