IBPS Booster 2- Banking Terms
1. Explain how Treasury Bills work?
Ans: The Government of India issues three types of treasury bills through auction - 91-day, 182-day and 364-day. Treasury bills (T-bills) offer short-term investment opportunities generally up to an year, thus they are useful in managing short-term liquidity . There are no treasury bills issued by State Governments. Treasury bills are available for a minimum amount of Rs.25, 000 and in multiples of Rs. 25,000. Treasury bills are issued at a discount and are redeemed at par. Treasury bills are also issued under the Market Stabilization Scheme (MSS).
2. What do you mean by the term Inflation?
Ans: Inflation is a rise in the general level of price of goods and services in an economy over a certain period of time. Inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of account within the economy. When the general price level rises, each unit of currency buys fewer goods and services.
3. State the full form of SLR and MSF.
Ans: SLR stands for Statuotory Liquidity Ratio and MSF stands for Marginal Standing Facility.
4. Differentiate between Direct Tax and Indirect Tax.
Ans: A Direct tax is that which is paid directly by someone to taxing authority. Income tax and property tax are an examples of direct tax. They are not shifted to somebody else; while Indirect tax is not paid by someone to the authorities and it is actually passed on to the other in the form of increased cost. They are levied on goods and services produced or purchased. Excise Tax, Sales Tax, VAT, Entertainment tax are Indirect taxes.
5. What is a Bridge Loan?
Ans: The bridge loan also known as a swing loan is basically a real estate loan or a home loan where the current residence/real estate is pledged by the borrower as collateral in order to purchase a new residence.
6. Briefly describe the process of debt management.
Ans: Debt management is a process of managing debts and repaying creditors. Debt management is a broad concept covering almost anything related to debts and their repayment.
7. What are Gross Dividends?
Ans: Gross dividends are basically the total amount of dividends that are earned by an individual or corporation in a single accounting and tax year. It must be noted that capital gains are also included in gross dividends.
8. Explain Mortgage.
Ans: A mortgage is a legal agreement between the lender and the borrower where real estate property is used as collateral for the loan, in order to secure the payment of the debt. According to the mortgage agreement, the lender of the loan is authorized to confiscate the property if borrower stops paying the installments.
9. State which bank introduced first these facilities:
(a) Mobile ATM – ICICI bank ; (b) Credit Card – Central Bank of India ; (c) Internet Banking – Bank of Baroda.
10. What is PIN?
Ans: PIN stands for Personal Identification Number .It is a secret numeric password shared between user and a system that can be used to authenticate the user to the system.
11. State the difference between Micro, Small and Medium Enterprise.
Ans: A micro enterprise is an enterprise where investment in plant and machinery does not exceed Rs. 25 lakh and investment in equipment does not exceed Rs. 10 lakh.
A small enterprise is an enterprise where the investment in plant and machinery is more than Rs. 25 lakh but does not exceed Rs. 5 crore and the investment in equipment is more than Rs.10 lakh but does not exceed Rs. 2 crore.
A medium enterprise is an enterprise where the investment in plant and machinery is more than Rs.5 crore but does not exceed Rs.10 crore. and the investment in equipment is more than Rs. 2 crore but does not exceed Rs. 5 crore.
12. Why RSBY was launched?
Ans: Rashtriya Swasthya Bima Yojna (RSBY) launched for BPL(Below Poverty Line) families in Assam. The scheme is being implemented in 24 districts.
13. Explain Doubtful and Non Performing Assets.
Ans: An asset would be classified as doubtful if it has remained in the substandard category for a period of 12 months and an asset, including a leased asset, becomes non performing when it ceases to generate income for the bank.
14. Define Reflation.
Ans: When government wants to control the deflation condition, they suggests RBI to decrease the key rates. If deflation is not controlled, govt. makes a fiscal policy. (Taxes decreased, subsidy on loan increased). This whole process is termed as Reflation.
15. Who won five Rajbhasha Awards organised by RBI?
Ans: Punjab National Bank (PNB) won five Rajbhasa Awards organized by RBI
