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Banking and Finance

* What is Fiscal Policy?
Ans: Fiscal policy is the use of government spending and revenue collection to influence the economy. These policies affect tax rates, interest rates, and government spending, in an effort to control the economy. Fiscal policy is an additional method to determine public revenue and public expenditure.

* What is the Banking Ombudsman Scheme?
Ans: The Banking Ombudsman Scheme enables an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by banks. The Banking Ombudsman Scheme is introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995.
* Which are the banks covered under the Banking Ombudsman Scheme, 2006?
Ans: All Scheduled Commercial Banks, Regional Rural Banks, and Scheduled Primary Co-operative Banks are covered under the Scheme.

* What is Inflation?
Ans: Inflation is as an increase in the price of the bunch of Goods and services that project the Indian economy. An increase in inflation figures occurs when there is an increase in the average level of prices in Goods and services. Inflation happens when there are fewer Goods and more buyers; this will result in the increase in the price of Goods since there are more demand and less supply of the goods.

* What is Deflation?
Ans: Deflation is the continuous decrease in prices of goods and services. Deflation occurs when the inflation rate becomes negative (below zero) and stays there for a longer period.

* What is FII?
Ans: FII (Foreign Institutional Investor) used to denote an investor, mostly in the form of an institution. An institution established outside India, which proposes to invest in the Indian market, in other words, buying Indian stocks. FII’s generally buy in large volumes which have an impact on the stock markets. Institutional Investors includes pension funds, mutual funds, Insurance Companies, Banks, etc.

* What is FDI?
Ans: FDI (Foreign Direct Investment) occurs with the purchase of the “physical assets or a significant amount of ownership (stock) of a company in another country in order to gain a measure of management control” (Or) A foreign company having a stake in an Indian Company.

* What is IPO?
Ans: IPO is Initial Public Offering. This is the first offering of shares to the general public from a company wishes to list on the stock exchanges.

* What is GDP?
Ans: The Gross Domestic Product or GDP is a measure of all of the services and goods produced in a country over a specific period; classically a year.

* What is GNP?
Ans: Gross National Product is measured as GDP plus income of residents from investments made abroad minus income earned by foreigners in a domestic market.

* What is Revenue deficit?
Ans: It defines that, where the net amount received (by taxes & other forms) fails to meet the predicted net amount to be received by the government.

* What is Disinvestment?
Ans: The Selling of the government stake in public sector undertakings.

* What is Fiscal Deficit?
Ans: It is the difference between the government’s total receipts (excluding borrowings) and total expenditure.

* What are Mutual funds?
Ans: Mutual funds are investment companies that pool money from investors at large and offer to sell and buy back its shares on a continuous basis and use the capital thus raised to invest in securities of different companies. The mutual fund will have a fund manager that trades the pooled money on a regular basis. The net proceeds or losses are then typically distributed to the investors annually. A company that invests its clients’ pooled fund into securities that match its declared financial objectives. Asset management companies provide investors with more diversification and investing options than they would have by themselves. Mutual funds, hedge funds, and pension plans are all run by asset management companies. These companies earn income by charging service fees to their clients.

*  What is Cheque?
Ans: Cheque is a negotiable instrument instructing a Bank to pay a specific amount from a specified account held in the maker/depositor’s name with that Bank. A bill of exchange is drawn on a specified banker and payable on demand.“Written order directing a bank to pay money”.

*  What is demand Draft?
Ans: A demand draft is an instrument used for effecting transfer of money. It is a Negotiable Instrument. Cheque and Demand-Draft both are used for Transfer of money. You can 100% trust a DD. It is a banker’s check. A check may be dishonored for lack of funds a DD can not. The cheque is written by an individual and Demand draft is issued by a bank. People believe banks more than individuals.

* What is NABARD?
NABARD was established by an act of Parliament on 12 July 1982 to implement the National Bank for Agriculture and Rural Development Act 1981. It replaced the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of Reserve Bank of India, and Agricultural Refinance and Development Corporation (ARDC). It is one of the premiere agency to provide credit in rural areas. NABARD is set up as an apex Development Bank with a mandate for facilitating credit flow for promotion and development of agriculture, small-scale industries, cottage and village industries, handicrafts and other rural crafts.

* What are SENSEX and NIFTY?
Ans: SENSEX is the short term for the words “Sensitive Index” and is associated with the Bombay (Mumbai) Stock Exchange (BSE). The SENSEX was first formed on 1-1-1986 and used the market capitalization of the 30 most traded stocks of BSE. Whereas, NSE has 50 most traded stocks of NSE. Sensex Is The Index Of BSE. And Nifty Is The Index Of NSE. Both Will Show Daily Trading Marks. Sensex and Nifty both are an “index”. An index is basically an indicator, it indicates whether most of the stocks have gone up or most of the stocks have gone down.

* What is SEBI?
Ans: SEBI is the regulator for the Securities Market in India. Originally set up by the Government of India in 1988, it acquired statutory form in 1992 with SEBI Act 1992 being passed by the Indian Parliament. Chaired by C B Bhave.

* Define Financial Inclusion:
Ans: Financial inclusion means providing to the large unbanked population of India access to financial products and services like deposit accounts and credit facilities, financial advisory services. Steps were taken so far promotion for financial inclusion has been the co-operative movement, nationalization of the bank, lead bank scheme, regional rural banks, and self-help groups and last but not the least no-frill accounts.

* What is Balanced Growth of an economy?
Ans: Growth of an economy in which all aspects of it especially factors of production, grow at the same rate.

* What is Gross Domestic Product (GDP)?
Ans: Gross Domestic Product (GDP) is the total value of all final goods and services currently produced within the domestic territory of a country in a year.

* The difference between economic Growth and Economical Development:
Ans: Economic growth is the process whereby the real per capita income continues to grow in the long run whereas the economic development is the process whereby the real per capita income increases in the long run along with a reduction in poverty, unemployment, and inequality.