Very Important Bank Related Things to Know

STATE BANK OF INDIA

The Origination of the State Bank of India goes back to the first decade of the 19th century with establishment of the bank of Calcutta on 2 June 1806.

After Three years the bank received its charter and was re-designed as the Bank of Bengal on 2 January 1809.

A unique institution, it was the first joint- stock bank of British India sponsored by The Government of Bengal.

The Bank of Bombay on 15 April 1840 and the bank of Madras on 1 July 1843 followed the Bank of Bengal.

These three banks remained at the apex of modern Banking in India till their Amalgamation as the Imperial Bank of India on 27 January 1921.
Headoffice of SBI: Mumbai
Founded on: July 1st, 1956
Logo comes : State Bank of India is a blue circle with a small cut in the bottom that depicts perfection and the small man the common man – being the centre of the bank’s business


Fund Transfer Systems

First bank established in India: Bank of Hindustan in 1770
Second bank: General Bank of India, 1786
Oldest bank in India originated in the Bank of Calcutta in June 1806 which was still in existence – State Bank of India
State Bank of India merged with three banks namely Bank of Bengal, Bank of Bombay and Bank of Madras in 1921 to form the Imperial bank of India which was converted as State Bank of India
First Indian bank got ISO: Canara Bank
First India bank started solely with Indian capital investment is Punjab National Bank
Founder of Punjab National Bank is Lala Lajpat Rai
Reserve bank of India (RBI) was instituted in 1935
First governor of RBI: Mr.Osborne Smith
First Indian Governor of RBI: Mr. C D Deshmukh
First bank to introduce savings account in India: Presidency Bank in 1833
First bank to introduce cheque system in India: Bengal Bank in 1833


General Awareness for Banks in India

First bank to introduce internet banking: ICICI bank
First bank to introduce mutual fund: State Bank of India
First bank to introduce credit card in India: Central Bank of India
Which cards are known as plastic money – Credit Cards.
Open market operations are carried out by – RBI
Capital market regulator is – SEBI
Largest Commercial bank in India – State Bank of India
The International Bank for Reconstruction and Development (IBRD) is known as – World Bank


List of RBI Governors

1    Sir Osborne A. Smith                  April 1st 1935 – June 30th , 1937
2    Sir James Braid Taylor                July 1st 1937 – February 17th , 1943
3    Sir Chintaman D. Deshmukh      August 11th 1943 – June 30th ,1949
4    Sir Benegal Rama Rau               July 1st 1949 – January 14th 1957
5    K.G. Ambegaonkar                     January 14th 1957 – February 28th 1957
6    H.V.R. Ienger                              March 1st 1957 – February 28th 1962
7    P.C. Bhattacharyya                     March 1st 1962 – June 30th 1967
8    L.K. Jha                                     July 1st 1967 – May 3rd 1970
9    B.N. Adarkar                             May 4th 1970 – June 15th 1970
10    S. Jagannathan                      June 16th 1970 – May 19th 1975
11    N.C. Sen Gupta                      May 19th 1975 – August 19th 1975
12    K.R. Puri                                 August 20th 1975 – May 2nd 1977
13    M. Narasimham                      May 2nd 1977 – November 30th 1977
14    Dr. I.G. Patel                           December 1st 1977 – September 15th 1982
15    Dr. Manmohan Singh              September 16th 1982 – January 14th 1985
16    A. Ghosh                                January 15th 1985 – February 4th 1985
17    R.N. Malhotra                        February 4th 1985 – December 22nd 1990
18    S. Venkitaramanan                December 22nd 1990 – December 21st 1992
19    Dr. C. Rangarajan                  December 22nd 1992 – November 22nd 1997
20    Dr. Bimal Jalan                      November 22nd 1997 – September 5th 2003
21    Dr. Y.V.Reddy                        September 6th 2003 – September 5th 2008
22    Dr. D. Subbarao                    September 5th 2008 –September 4th 2013
23    Dr. Raghuram Rajan             September 4th 2013


General Knowledge

Repo Rate: Repo rate means a purchase and sale of agreement. It is a contract to buy securities and then sell them back at an agreed future date and price. It is thus revenue for short term investment of surplus funds. From RBI point of view it is called a short term lending and from banks point of view it is called short term borrowing.

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Reverse Repo rate : Reverse Repo Rate is an instrument of borrowing funds for a short period and involves selling a security and simultaneously agreeing to repurchase it at a stated future date for slightly higher price. From RBI point of view it is called a short term borrowing and from banks point of view it is called a short term lending.

Group Company : As per RBI for the purpose of FDI, two or more enterprise which , directly or indirectly , are in position to exercise 26% or more of voting rights in other enterprise or appoint more than 50% of the members of the board of directors in the other enterprises.

Branch Vs Subsidiary: A subsidiary is a separate legal entity from the parent company, although owned by parent company, has a same legal identity as its parent company , from liability , on the other hand branch is not a separate legal entity of the parent company and liability wise there is no limit to the parents company’s liability , RBI has permitted to Foreign Banks to change from Branch Mode to the Wholly Owned Subsidiaries.

NFS (National Financial Switch): It facilitates interconnectivity between banks’ switches and interbank payment Gateway for authentication & routing the payment details of various E-commerce & E-Govt. activities (Retail Banking). Now NFS has been overtaken by NPCI (National Payment Corporation of India).

SLR (Statutory Liquidity Ratio): This is a minimum Reserve which every bank has to maintain with itself in the most liquid form to meet any demand of the depositors. Normally Government securities are purchased to maintain SLR.

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Prime Lending Rate (PLR): The term originally indicates the rate of interest at which a bank lends to favored customers, i.e. those with high credibility, though this is no longer always the case. Some variable interest rates may be expressed as a percentage above or below prime rate.


Basic Economic Terms

Interest Rate Swaps: An interest rate swap is the transfer of contractually agreed between two counterparties of their respective interest rate obligation. Interest rate swaps are commonly used as a means of converting fixed rate to floating rate debt and vice versa.

Operating Ratio: A ratio shows the efficiency of a company’s management by comparing operating expense to net sales. Calculated on the basis of : Operation ratio = Operating expense/net sales

Wholesale Price Index (WPI): WPI is taken into consideration while calculating the inflation.

Coupon Rate: Specified interest rate on a fixed maturity security fixed at the time of issue. The coupon rate of a bond is the amount of interest paid per year as a percentage of the face value or principal.

NRO (Non Resident Ordinary a/c) : In this account , a person cannot repatriate income without RBI approval but can remit Interest thereof.

NRNR (Non Resident Non Repatriable A/c ) : Under this account Principal amount in not permissible to repartriate but interest can be.


BANKING OMBUDSMAN

Banking Ombudsman is a quasi judicial authority functioning under Banking Ombudsman Scheme 2006.It provides independent, expeditious and inexpensive forum to aggrieved/Un-satisfied Bank customers. RBI introduced this Scheme under powers granted U/s 35-A of Banking Regulation Act.

Complaints are accepted only if they are made within one year after the complaint has received the reply from bank.

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Types of Complaints submitted to ombudsman for resolution :
1.      Non-payment or inordinate delay in the payment or collection of cheques, drafts ,bills etc.
2.      Non-acceptance, without sufficient cause, of coins tendered and for charging of commission for this service.
3.      Non-acceptance without sufficient cause of small denomination notes tendered for any purpose and for charging of commission for the service.
4.      Failure to issue or delay in issue, of drafts pay orders or bankers cheque.
5.      Non-adherence to prescribed working hours.
6.      No payment or delay in payment of inward remittances.
7.      Failure to honor guarantee or letter of credit commitments.
8.      Failure to provide or delay in providing a banking facility promised in writing by a bank or its direct selling agents.
9.       Delays, non-credit of proceeds to parties’accounts, non-payment of deposit or non-observance of the Reserve Bank directives, if any applicable to rate of interest on deposits in any savings, current or other account maintained with a bank.
10.  Delays in receipts of export proceeds, handling of export bills, collection of bills etc. for exporters provided the said complaints pertain to the Banks operations in India.


What is Finance Act?

The Finance Act contains necessary amendments in the direct taxes and indirect taxes signifying the policy decisions of the Union Government.

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