Monetary Policy and Current Affairs of August - 2010

First Quarter Review of Monetary Policy 2010-11:

Monetary policy is the process by which the government, central bank of a country controls (i) the supply of money, (ii) availability of money, and (iii)cost of money or rate of interest, in order to attain a set of objectives oriented towards the growth and stability of the economy.

As expected, RBI has raised the policy rates in the first quarter review of monetary policy on 27-07-2010. This is the fourth rate hike since March this year raising the Repo by a total of 100 bps and Reverse Repo by 125 bps.

Highlights of the policy:

·        Repo rates hiked by 25 bps to 5.75% with immediate effect.

·        Reverse Repo rates hiked by 50 bps to 4.50% with immediate effect.

·        CRR, SLR and Bank rate kept unchanged at 6%, 25% and 6%, respectively.

·        Estimated for GDP growth for 2010-11 revised to 8.5% from 8%.

·        Inflation projection for March 2010 increased to 6% from 5.5%.

The next mid-quarter review of Monetary Policy for 2010-11 will be announced through a press release on September 16, 2010.

The second quarter review of Monetary Policy 2010-11, including developmental and regulatory policies, is scheduled on November 2, 2010.

August Current Affairs:

·        China has eclipsed Japan as the world's second-biggest economy after three decades of blistering growth that put overtaking the U.S. in reach within 10 years.

·        Former Union Power Secretary Harishankar Brahma has been appointed as the Election Commissioner in the Election Commission of India.

·        Britain’s Andy Murray won the 2010 Rogers Cup over Roger Federer 7–5, 7–5 on Sunday in Toronto.

·        The President Mrs. Pratibha Devisingh Patil this evening conferred the prestigious Best Parliamentarian Awards to Priya Ranjan Dasmunsi, Mohan Singh and Dr. Murali Manohar Joshi at an impressive function in the Central Hall of Parliament. The Awards were given for the year 2007, 2008 and 2009 respectively for their outstanding contributions to parliamentary debates.

·        Former Lok Sabha Speaker Somnath Chatterjee's book, "Keeping the Faith: Memoirs of a Parliamentarian", which was released by Prime Minister Dr. Manmohan Singh.

·        The Centre cleared for implementation the Rajiv Gandhi Scheme for Empowerment of Adolescent Girls — known as ‘Sabla' — aimed at enhancing their nutritional and economic status. The scheme will be run along with the Integrated Child Development Services (ICDS) project in anganwadi centres in 200 select districts, targeting girls in the age group 11-18.

·        Senior IPS officer R K Medhekar will be the new Director General of elite commando force -- National Security Guard. Medhekar, a 1975 batch officer of Kerala cadre, currently serving as Special Director General of Border Security Force. He will take over from 1972 batch IPS officer N P S Aulakh.

·        Vineet Jain, Managing Director, The Times of India (TOI) Group, has been elected as the new chairman of Press Trust of India (PTI), the leading news agency of India. Jain succeeds Vjiay Kumar Chopra, Editor, Punjab Kesari Group.

·        Union Minister of State for Environment and Forests Jairam Ramesh launched the Green Action for National Dandi Heritage Initiative(GANDHI) project in the historic coastal village in south Gujarat. It was at Dandi that Mahatma Gandhi launched his salt Satyagraha 80 years ago.

·        The postal department released a stamp(of Rs.5) in Visakhapatnam to commemorate the first death anniversary of the former chief minister late Y.S. Rajasekhar Reddy.

Quiz on Current Affairs 2010 - 72

1.      The 12th Global Businesswomen & Leaders Summit held at ______?

a)Israel     b)India      c)Kuwait     d)UAE    e)none

2.      Which of the following team has won the 2010 UEFA Champions League?

a)A.C. Milan     b)Manchester United     c)Bayern Munich     d)Inter Milan    e)none

3.      In which state UNICEF launched the project ‘Youth unity for village advancement' to create awareness on woman and child health in rural areas?

a)Rajasthan       b)Andhra Pradesh      c)Orissa      d)Madhya Pradesh     e)none

4.      Abdullah Gul visited India in February 2010. He is the President of _______?

a)Nigeria    b)Turkey     c)Kuwait     d)Palestine    e)none

5.      Which Country won the ICC Women World T20 Cup by defeating New Zealand?

a)India     b)England     c)West Indies    d)South Africa      e)Australia 

6.      Which country will host the 16th Asian Games which will be held from November 2010?

a)China    b)Srilanka    c)South Korea    d)Malaysia   e)none

7.      Who is the new Prime Minister of Japan after Yukio Hatoyama has resigned the post amid a row over an unpopular US army base on the southern island of Okinawa?

a)Taro Aso     b)Naoto Kan    c)Yoshihiko Noda    d)Akihito     e)none

8.      The G-20 Summit in June 2010 held at __________?

a)Canada     b)US    c)South Korea    d)UK      e)none

9.      According to Economist Intelligence Unit (EIU), the research arm of the Economist magazine, India is expected to be the world's fastest growing economy by ______?

a)2014      b)2016     c)2018     d)2020    e)none

10. The economy of India is the ________ largest economy in the world by nominal GDP and the _______ largest by purchasing power parity (PPP)?

a)twelfth, fourth     b)fourth, twelfth     c)fourth, eleventh    d)eleventh, fourth    e)none

11. In India, the rural economy contributes about _____ percent to GDP?

a)20%     b)30%    c)40%      d)45%    e)none

12. Which of the following is not a member of BIMSTEC (Bay of Bengal Initiative for MultiSectoral Technical and Economic Cooperation)?

a)Nepal      b)Srilanka      c)Pakistan    d)Bhutan    e)All are members

13. Indian-origin Kamla Prasad Bissessar elected the first woman Prime Minister of _______?

a)Australia      b)Trinidad and Tobago       c)Costa Rica     d)Portugal     e)none

14. Which of the following is the most eco-friendly nation with the best pollution control measures and natural resource management?

a)Sweden       b)Switzerland      c)Norway     d)Iceland    e)none

15. Which is the first state in country to launch an online National Permit system for trucks and heavy vehicles?

a)Haryana      b)Maharashtra      c)Punjab     d)Gujarat     e)none

16. Which country has cancelled the Machine Readable Passport(MRP) printing deal with India?

a)Bangladesh      b)Nepal     c)Srilanka     d)Bhutan     e)none

17. The Reserve Bank of India is considering a proposal put forward by profit-oriented (MFIs) ________________ to allow them to be business correspondents of banks for financial inclusion?

a)Mutual Fund Institutions

b)Mutual Finance Institutions

c)Micro Finance Institutions

d)Mutual Facility Institutions

e)none

18. What is the present Reverse repo rate?

a)3.25%      b)5.25%     c)3.75%     d)6%    e)none

19. Who is the author of the book 'The Red Saree' that has been in news recently?

a)Gregory Rabassa     b)Javier Moro     c)Julio Cortazar    d)Peter Hulme

20. Who is the man behind with the Bhopal Gas Tragedy in 1984?

a)Patrick E. Gottschalk      b)Arjun Singh    c)Andrew N. Liveris    d)Warren Anderson    e)none

Latest Current Affairs Quiz - 2010

1.      Which of the following is the World’s fastest Supercomputer?

a)Jaguar     b)Roadrunner     c)Nebulae    d)Kraken XT5   e)none

2.      A/c to the latest notifications of Reserve Bank of India, how much amount of cash can Indians carry while travelling abroad?

a)$2000      b)$3000     c)$4000     d)$5000     e)none

3.      Who is the head of the 18 member high-level expert committee to suggest measures for efficient management of public expenditure?

a)C Rangarajan       b)Manmohan Singh     c)Deepak Parekh     d)Sam Pitroda    e)none

4.      Sunil Chhetri is associated to which of the following sport?

a)Cricket    b)Chess     c)Football    d)Badminton    e)none

5.      With which country India signed an agreement to establish a hotline between prime ministers of the two countries?

a)Pakistan    b)UK    c)Russia    d)Nepal    e)China

6.      Which country is the largest exporter of Cotton in 2009?

a)US    b)India     c)China    d)Brazil    e)none

7.      CryoSat 2, a satellite that will monitor variations in the extent and thickness of polar ice, launched by which country?

a)US     b)Japan    c)Europe    d)India    e)none

8.      With which country India has signed an agreement to boost cooperation in the education sector?

a)Maldives    b)Malaysia     c)Japan    d)Australia    e)none

9.      Which Srilankan cricketer has won a seat in parliament general elections?

a)Dharmasena      b)Sanath Jayasurya     c)Chaminda Vaas     d)M Jayawardene   e)none

10. Which of the following MP resigned in the wake of IPL controversy?

a)Sharad Pawar     b)Supriya Sule     c)Shashi Tharoor     d)M S Gill    e)none

11. The first of the new class of offshore patrol vessel indigenously designed and commissioned into Indian Coast Guard?

a)ICGS Vikram    b)ICGS Vishwast     c)ICGS Samar   d)ICGS Sankalp   e)none

12. After United States and Republic of Korea decided to eliminate travel restrictions based on HIV status, recently which of the following country done the same?

a)India      b)Australia      c)Malaysia     d)China    e)none

13. Reliance Industries has found a fourth oil discovery in the Cambay basin. Cambay basin is in which state?

a)Andhra Pradesh     b)Gujarat      c)Rajasthan     d)Maharashtra    e)none

14. With which Indian company Renault and Nissan are developing an ultra low cost car to take on Tata Nano?

a)Mahindra & Mahindra     b)TVS      c)Bajaj      d)Maruti Suzuki    e)none

15. New Moore or Purbasha island near the Bay of Bengal has been completely submerged into the sea. This island was claimed by both India and ___________?

a)Bhutan   b)Srilanka     c)Myanmar     d)Bangladesh   e)Maldives

16. The Tsunami Early Warning System (TEWS) has won the Platinum Icon award for innovative use of technology in Web Ratna Awards, 2009. It is developed by ___________?

a)Infosys     b)HP     c)Wipro     d)TCS    e)none

17. The first Non-Latin web address launched in which of the following language?

a)Tamil    b)Thai    c)Mandarin     d)Urdu    e)Arab

18. What is the maximum limit that foreign investors can hold in state-run banks?

a)10%    b)15%     c)20%    d)30%    e)49%

19. What is the full form of ECB in banking?

a)External Commercial Borrowings

b)Electronic Commercial Borrowings

c)Export Commercial Borrowings

d)Enterprise Commercial Borrowings

e)none

20. Veselin Topalov, a famous player associated with which of the following sport?

a)Badminton    b)Chess     c)Tennis     d)Football    e)none

March Current Affairs - 2010

·        India's economic growth slipped to 6 per cent in the third quarter of this fiscal compared to 7.9 per cent in the previous quarter, mainly due to contraction in farm output and certain services.

·        P J Nayak, former chairman and CEO of Axis Bank, is the Business Standard Banker of the Year for 2009.

·        The ancient site of Bhima Devi Temple located in the Yadavindra Gardens in Pinjore near here has been chosen by the Union Ministry of Tourism for the Best Maintained Tourist Friendly Monument award.

·        Telecom giant BSNL has lost its place in the coveted list of top 10 profit-making central PSUs which is topped once again by Oil and Natural Gas Corporation. Power producer NTPC moved up to the second place, pushing down steel counterpart SAIL to third slot, according to the Department of Public Enterprises Survey for 2008-09. Mineral major NMDC is fourth in the list, while Coal India is ranked 5th.

·        Microsoft has been voted the leading business-facing brand in the world, knocking competitor Google from the number one spot. Google has dropped to number five in the annual Business Superbrands Top 500 survey, compiled by The Centre for Brand Analysis (TCBA), with Rolls-Royce retaining its position in second place, while Sony and Virgin Atlantic have been voted into third and fourth place, respectively.

·        Chhattisgarh government has decided to install mobile phone jammers in seven jails in the state to ensure that the inmates do not communicate with their accomplices outside.

·        Sangh Parivar veteran and former Rajya Sabha member Nanaji Deshmukh passed away.

·        BSNL launched the country’s first mobile broadband fourth generation Internet access network - Mobile WiMAX in Kerala.

·        Noted Kannada poet and writer Jayant Kaikini will be awarded by the first Kusumagraj National Literary award.

·        Former Australian Prime Minister John Howard was nominated by Australia and New Zealand Cricket board to take over as ICC President.

·        Pakistan Cricket Board (PCB) has decided to appoint former captain Waqar Younis as the new coach of the national team.

·        The International Monetary Fund has approved a USD 3.6 billion loan to Iraq to help the war-torn country meet pressing financial needs.

·        Obama has appointed eminent Indian American attorney, Amy K Singh, as President's Advisory Committee on the Arts for the prestigious John F Kennedy Center for Performing Arts.

·        Dubai's government has ordered its departments to cut spending by 15 per cent to save 3.7 billion dirham’s (about Rs 4,602 crore), with the aim of reducing the emirate's deficit.

·        National Tourism Awards 2008-09: Rajasthan received the award for best tourism related programmes, Andhra Pradesh was chosen for best tourism infrastructure and Sikkim for best state from the North East for tourism related programmes.

·        Government has asked the United Nations to pay approximately USD 62.92 million as reimbursement in connection with India's participation in UN peacekeeping operations.

·        Olympian and famous national hockey player Syed Mushtaque Ali alias Farzan Chacha has passed away.

·        Afghanistan launches poppy eradication programme. Afghanistan, source of 90 per cent of the world's heroin, announced plans to wipe out opium poppies across most of the country.

Types of Banks in India - 2010

What is a Bank?

A Bank is a financial organization which accepts deposits that can be withdrawn on

demand and also lends money to individuals and business houses that need it.

Structure of banking sector in India:

 What is RBI?

The RBI is India's central bank. The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.

RBI acts as a banker to the Government and Banks.

The Central Bank maintains record of Government revenue and expenditure under various heads. It maintains deposit accounts of all other banks and advances money to other banks, when needed.

Another important function of the Central Bank is the issuance of currency notes, regulating their circulation in the country by different methods.

What is Scheduled Bank?

All banks which are included in the Second Schedule to the Reserve Bank of India Act, 1934 are scheduled banks.

These banks comprise Scheduled Commercial Banks and Scheduled Cooperative Banks. The type of banks comes under these Scheduled Commercial Banks and Scheduled Cooperative Banks can be seen in the above figure.

All most all banks are Scheduled banks in India.

What are Commercial Banks?

Commercial banks may be defined as, any banking organization that deals with the deposits and loans of business organizations

Commercial banks issue bank checks and drafts, as well as accept money on term deposits.  Commercial banks also act as moneylenders, by way of installment loans and overdrafts.

Commercial banks also allow for a variety of deposit accounts, such as checking, savings, and time deposit. These institutions are run to make a profit and owned by a group of individuals.

Types of Loans offered by Commercial banks:

1)Secured Loan: A secured loan is one where the borrower provides a certain property or asset as collateral against the loan. The main condition of these loans is that if the loan remains unpaid, the bank has the right to use the property in any way they like to realize the outstanding amount.

2)Unsecured Loan: Unsecured loans have no collateral and therefore command higher interest rates. There are a variety of unsecured loans available today and these include credit cars, credit facilities such as a lines of credit, corporate bonds, and bank overdrafts.

3)Mortgage Loans: Mortgage loans that are provided by commercial banks are similar to secured loans but are used specifically to buy real estate property for commercial purposes. In most of these cases, the banks hold a lien on the title to the particular property purchased with the loan. If the borrower is unable to pay the loan back, the bank leverages this item against the loan to generate funds or recover the principal.

What are Public Sector Banks?

These are banks where majority stake is held by the Government of India.

Examples of public sector banks are: SBI, Bank of India, Canara Bank, etc.

What are Private Sector Banks?

These are banks majority of share capital of the bank is held by private individuals. These banks are registered as companies with limited liability.

Examples of private sector banks are: ICICI Bank, Axis bank, HDFC, etc.

What are Foreign Banks?

These banks are registered and have their headquarters in a foreign country but operate their branches in our country.

Examples of foreign banks in India are: HSBC, Citibank, Standard Chartered Bank, etc.

What are Regional Rural Banks?

Regional Rural Banks were established under the provisions of an Ordinance promulgated on the 26th September 1975 and the RRB Act, 1976 with an objective to ensure sufficient institutional credit for agriculture and other rural sectors. The area of operation of RRBs is limited to the area as notified by GoI covering one or more districts in the State.

RRBs are jointly owned by GoI, the concerned State Government and Sponsor Banks (27 scheduled commercial banks and one State Cooperative Bank); the issued capital of a RRB is shared by the owners in the proportion of 50%, 15% and 35% respectively.

Prathama bank is the first Regional Rural Bank in India located in the city Moradabad in Uttar Pradesh.

What are Cooperative Banks?

A co-operative bank is a financial entity which belongs to its members, who are at the same time the owners and the customers of their bank. Co-operative banks are often created by persons belonging to the same local or professional community or sharing a common interest. Co-operative banks generally provide their members with a wide range of banking and financial services (loans, deposits, banking accounts, etc).

They provide limited banking products and are specialists in agriculture-related products.

Cooperative banks are the primary financiers of agricultural activities, some small-scale industries and self-employed workers.

Co-operative banks function on the basis of "no-profit no-loss".

Anyonya Co-operative Bank Limited (ACBL) is the first co-operative bank in India located in the city of Vadodara in Gujarat.

How Bank gets Money?

Banks make money by lending your money out at interest and by charging you for services provided. Banks keep on lending money.

The other big revenue items generated by banks are the fees they charge. Bank charge for every service, whether it is for an electronic transaction, or permitting a transfer through the Internet banking system.

When banks get profits they invest in other companies and in return they will get money.