5. What is the current policy rate (as per Oct,2013) of Statutory Liquidity Ratio?
Ans: The current policy rate of SLR as fixed by RBI is 23%
6. Explain Market Stabilisation Scheme.
Ans: Market Stabilisation Scheme for monetary management was introduced in 2004. Here Liquidity of a more enduring nature arising from large capital flows is absorbed through sale of short-dated government securities and treasury bills. The mobilised cash is held in a separate government account with the Reserve Bank.
7. Write down the function of ALM.
Ans: ALM stands for Asset Liability Management in Banks.
The ALM functions extend to liquidly risk management, management of market risk, trading risk management, funding and capital planning and profit planning and growth projection It is a tool that enables bank managements to take business decisions in a more informed framework with an eye on the risks that bank is exposed to. It is an integrated approach to financial management, requiring simultaneous decisions about the types of amounts of financial assets and liabilities - both mix and volume - with the complexities of the financial markets in which the institution operates.
8. How a daily wage earner without any document can open a bank account?
Ans: A customer with low income who is not able to produce documents to satisfy the bank about his identity and address, can open bank account with an introduction from another account holder who has been subjected to full KYC procedure provided that the balance in all his accounts taken together is not expected to exceed Rupees Fifty Thousand (Rs. 50,000/-) and the total credit in all the accounts taken together is not expected to exceed Rupees One Lakh (Rs. 1,00,000/-) in a year. The introducer’s account with the bank should be at least six months old and should show satisfactory transactions to the bank. Photograph of the customer who proposes to open the account and also his address needs to be certified by the introducer,
or
any other evidence as to the identity and address of the customer to the satisfaction of the bank.
If at any point of time, the balance in all his/her accounts with the bank (taken together) exceeds Rupees Fifty Thousand (Rs. 50,000/-) or total credit in the account exceeds Rupees One Lakh (Rs. 1,00,000/-) in a year, no further transactions will be permitted until the full KYC procedure is completed.
9. Write some features of Cheque.
Ans: Cheque being a bill of exchange should have the following features:
a. A cheque must be an unconditional order to pay a certain amount of money
b. A cheque must be payable on demand
c. A cheque must be signed by the drawer
d. A cheque must be drawn upon a specified banker
e. A cheque must be dated
10. What is meant by bounced cheque?
Ans: It is a slang word for a check that cannot be processed because the writer has insufficient funds. A bounced check will often be returned to the writer along with a penalty fee for non-sufficient funds. "Passing" such cheques is illegal, and the crime can range from a misdemeanour to a felony, depending on the amounts involved and whether the activity involved crossing state lines.
Generally bounced cheques are written inadvertently by people who simply were unaware that their bank balances were too low. It is always a good idea to have a small overdraft line of credit to cover such situations, or keep a close eye on your balance near bill-paying time.
