1.Whatis a Bank?
A Bankis a financial organization which
accepts deposits that can be withdrawnondemand and also lends money to
individuals and business houses that need it.
Structureof banking sector in India:
2.Whatis RBI?
The
RBIis 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 Bankmaintains record of Government revenue and expenditure under
various heads. Itmaintains deposit accounts of all other banks and
advances money to otherbanks, when needed.Another important function of
the Central Bank is theissuance of currency notes, regulating their
circulation in the country by differentmethods.
3.Whatis Scheduled Bank?
Allbanks
which are included in the Second Schedule to the Reserve Bank of
IndiaAct, 1934 are scheduled banks.These banks comprise Scheduled
Commercial Banksand Scheduled Cooperative Banks. The type of banks comes
under these ScheduledCommercial Banks and Scheduled Cooperative Banks
can be seen in the abovefigure.All most all banks are Scheduled banks in
India.
4.Whatare Commercial Banks?
Commercialbanks
may be defined as, any banking organization that deals with the
depositsand loans of business organizationsCommercial banks issue bank
checks anddrafts, as well as accept money on term deposits. Commercial
banks also act asmoneylenders, by way of installment loans and
overdrafts.Commercial banks also allowfor 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 ofindividuals.
5.Typesof Loans offered by Commercial banks:
1)Secured Loan:
Asecured loan is one where the borrower provides a certain property or
asset ascollateral against the loan. The main condition of these loans
is that if theloan remains unpaid, the bank has the right to use the
property in any way theylike 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 creditcars, credit facilities such as a lines of credit,
corporate bonds, and bankoverdrafts.
3)Mortgage Loans:Mortgage
loans that are provided by commercial banks are similar to securedloans
but are used specifically to buy real estate property for
commercialpurposes. In most of these cases, the banks hold a lien on the
title to the particularproperty purchased with the loan. If the
borrower is unable to pay the loanback, the bank leverages this item
against the loan to generate funds orrecover the principal.
6.Whatare Public Sector Banks?
Theseare
banks where majority stake is held by the Government of India. i.e
morethan 51% of sharesExamples of public sector banks are: SBI, Bank of
India,Canara Bank, etc
7.Whatare Private Sector Banks?
Theseare
banks majority of share capital of the bank is held by private
individuals.These banks are registered as companies with limited
liability.Examples ofprivate sector banks are: ICICI Bank, Axis bank,
HDFC, etc.
8.Whatare Foreign Banks?
Thesebanks
are registered and have their headquarters in a foreign country
butoperate their branches in our country.Examples of foreign banks in
India are:HSBC, Citibank, Standard Chartered Bank, etc.
9.Whatare Regional Rural Banks?
RegionalRural
Banks were established under the provisions of an Ordinance
promulgatedon the 26th September 1975 and the RRB Act, 1976 with an
objective to ensuresufficient institutional credit for agriculture and
other rural sectors. Thearea of operation of RRBs is limited to the area
as notified by GoI coveringone or more districts in the State.RRBs are
jointly owned by GoI, the concernedState Government and Sponsor Banks
(27 scheduled commercial banks and one StateCooperative Bank); the
issued capital of a RRB is shared by the owners in theproportion of 50%,
15% and 35% respectively.Prathama bank is the first RegionalRural Bank
in India located in the city Moradabad in Uttar Pradesh.
10.Whatare Cooperative Banks?
Aco-operative
bank is a financial entity which belongs to its members, who areat the
same time the owners and the customers of their bank. Co-operative
banksare often created by persons belonging to the same local or
professionalcommunity or sharing a common interest. Co-operative banks
generally providetheir members with a wide range of banking and
financial services (loans,deposits, banking accounts, etc).They provide
limited banking products and arespecialists in agriculture-related
products.Cooperative banks are the primaryfinanciers of agricultural
activities, some small-scale industries andself-employed
workers.Co-operative banks function on the basis of"no-profit
no-loss".Anyonya Co-operative Bank Limited (ACBL) is thefirst
co-operative bank in India located in the city of Vadodara in Gujarat.
11.HowBank gets Money?
Banksmake
money by lending your money out at interest and by charging you
forservices provided. Banks keep on lending money.The other big revenue
itemsgenerated by banks are the fees they charge. Bank charge for every
service,whether it is for an electronic transaction, or permitting a
transfer throughthe Internet banking system.When banks get profits they
invest in othercompanies and in return they will get money
12.Whatis a Repo Rate?
Reporate
is the rate at which our banks borrow rupees from RBI. Whenever the
bankshave any shortage of funds they can borrow it from RBI. A reduction
in the reporate will help banks to get money at a cheaper rate. When
the repo rateincreases, borrowing from RBI becomes more expensive.
13.Whatis Reverse Repo Rate?
This
isexact opposite of Repo rate. Reverse Repo rate is the rate at which
ReserveBank of India (RBI) borrows money from banks. RBI uses this tool
when it feelsthere is too much money floating in the banking system.
Banks are always happyto lend money to RBI since their money is in safe
hands with a good interest.An increase in Reverse repo rate can cause
the banks to transfer more funds toRBI due to this attractive interest
rates.
14.Whatis CRR Rate?
Cashreserve
Ratio (CRR) is the amount of funds that the banks have to keep withRBI.
If RBI decides to increase the percent of this, the available amount
withthe banks comes down. RBI is using this method (increase of CRR
rate), to drainout the excessive money from the banks.
15.Whatis SLR Rate?
SLR(Statutory
Liquidity Ratio) is the amount a commercial bank needs to maintainin
the form of cash, or gold or govt. approved securities (Bonds)
beforeproviding credit to its customers.SLR rate is determined and
maintained by theRBI (Reserve Bank of India) in order to control the
expansion of bank credit.SLR is determined as the percentage of total
demand and percentage of timeliabilities. Time Liabilities are the
liabilities a commercial bank liable topay to the customers on their
anytime demand. SLR is used to control inflationand propel growth.
Through SLR rate tuning the money supply in the system canbe controlled
efficiently.
16.Whatis Bank Rate?
Bankrate, also
referred to as the discount rate, is the rate of interest which acentral
bank charges on the loans and advances that it extends to
commercialbanks and other financial intermediaries. Changes in the bank
rate are oftenused by central banks to control the money supply.
17. Whatis Inflation?
Inflationis
as an increase in the price of bunch of Goods and services that
projects theIndian economy. An increase in inflation figures occurs when
there is anincrease in the average level of prices in Goods and
services. Inflationhappens when there are fewer Goods and more buyers;
this will result inincrease in the price of Goods, since there is more
demand and less supply ofthe goods.
18. Whatis Deflation?
Deflationis
the continuous decrease in prices of goods and services. Deflation
occurswhen the inflation rate becomes negative (below zero) and stays
there for alonger period.
19.Whatis PLR?
ThePrime
Lending Rate is the interest rate charged by banks to their
mostcreditworthy customers (usually the most prominent and stable
businesscustomers). The rate is almost always the same amongst major
banks. Adjustmentsto the prime rate are made by banks at the same time;
although, the prime ratedoes not adjust on any regular basis. The Prime
Rate is usually adjusted at thesame time and in correlation to the
adjustments of the Fed Funds Rate. Therates reported below are based
upon the prime rates on the first day of eachrespective month. Some
banks use the name "Reference Rate" or"Base Lending Rate" to refer to
their Prime Lending Rate.
20.Whatis Deposit Rate?
InterestRates paid by a depository institution on the cash on deposit.
21.Whatis FII?
FII(Foreign
Institutional Investor) used to denote an investor, mostly in the
formof an institution. An institution established outside India, which
proposes toinvest in Indian market, in other words buying Indian stocks.
FII's generallybuy in large volumes which has an impact on the stock
markets. InstitutionalInvestors includes pension funds, mutual funds,
Insurance Companies, Banks,etc.
22.Whatis FDI?
FDI(Foreign
Direct Investment) occurs with the purchase of the “physical assets ora
significant amount of ownership (stock) of a company in another country
inorder to gain a measure of management control” (Or) A foreign company
having astake in a Indian Company.
23.Whatis IPO?
IPO
isInitial Public Offering. This is the first offering of shares to the
generalpublic from a company wishes to list on the stock exchanges
24.Whatis Disinvestment?
TheSelling of the government stake in public sector undertakings.
25.Whatis Fiscal Deficit?
It isthe difference between the government’s total receipts (excluding borrowings)and total expenditure.
26.Whatis Revenue deficit?
Itdefines
that, where the net amount received (by taxes & other forms)
failsto meet the predicted net amount to be received by the government.
27. Whatis GDP?
TheGross
Domestic Product or GDP is a measure of all of the services and goods
producedin a country over a specific period; classically a year.
28.Whatis GNP?
GrossNational
Product is measured as GDP plus income of residents from
investmentsmade abroad minus income earned by foreigners in domestic
market.
29.Whatis National Income?
NationalIncome is the money value of all goods and services produced in a countryduring the year.
30.Whatis Per Capita Income?
Thenational
income of a country, or region, divided by its population. Per
capitaincome is often used to measure a country's standard of living.
31.Whatis Vote on Account?
Avote-on
account is basically a statement ,where the government presents
anestimate of a sum required to meet the expenditure that it incurs
during thefirst three to four months of an election financial year until
a new governmentis in place, to keep the machinery running.
32..Difference between Vote on Account and Interim Budget?
Vote-on-accountdeals
only with the expenditure side of the government's budget, an
interimBudget is a complete set of accounts, including both expenditure
and receipts.
33.What is SDR?
The SDR(Special
Drawing Rights) is an artificial currency created by the IMF in
1969.SDRs are allocated to member countries and can be fully converted
intointernational currencies so they serve as a supplement to the
official foreignreserves of member countries. Its value is based on a
basket of keyinternational currencies (U.S. dollar, euro, yen and pound
sterling).
34.What is SEZ?
SEZmeans Special
Economic Zone is the one of the part of government’s policies inIndia. A
special Economic zone is a geographical region that economic lawswhich
are more liberal than the usual economic laws in the country. The
basicmotto behind this is to increase foreign investment, development
ofinfrastructure, job opportunities and increase the income level of the
people
35.Whatis Open Market operations(OMO)?
Thebuying
and selling of government securities in the open market in order
toexpand or contract the amount of money in the banking system by RBI.
Openmarket operations are the principal tools of monetary policy.
36.Whatis Micro Credit?
It
is aterm used to extend small loans to very poor people for
self-employmentprojects that generate income, allowing them to care for
themselves and theirfamilies.
37.Whatis Liquidity Adjustment Facility(LAF)?
A
toolused in monetary policy that allows banks to borrow money through
repurchaseagreements. This arrangement allows banks to respond to
liquidity pressures andis used by governments to assure basic stability
in the financialmarkets.
38.Whatis RTGS System?
Theacronym
'RTGS' stands for Real Time Gross Settlement. RTGS system is a
fundstransfer mechanism where transfer of money takes place from one
bank to anotheron a 'real time' and on 'gross' basis. This is the
fastest possible moneytransfer system through the banking channel.
Settlement in 'real time' meanspayment transaction is not subjected to
any waiting period. The transactionsare settled as soon as they are
processed. 'Gross settlement' means thetransaction is settled on one to
one basis without bunching with any othertransaction.
39.Whatis Bancassurance?
It
isthe term used to describe the partnership or relationship between a
bank and aninsurance company whereby the insurance company uses the bank
sales channel inorder to sell insurance products.
40.Whatis Wholesale Price Index(WPI)?
TheWholesale
Price Index (WPI) is the index used to measure the changes in
theaverage price level of goods traded in wholesale market. A total of
435commodity prices make up the index. It is available on a weekly
basis. It isgenerally taken as an indicator of the inflation rate in the
Indian economy.The Indian Wholesale Price Index (WPI) was first
published in 1902, and wasused by policy makers until it was replaced by
the Producer Price Index (PPI)in 1978.
41.Whatis Consumer price Index(CPI)?
It is ameasure estimating the average price of consumer goods and services purchasedby households.
42.Whatis Venture Capital?
Venturecapital
is money provided by an outside investor to finance a new, growing,
ortroubled business. The venture capitalist provides the funding knowing
thatthere’s a significant risk associated with the company’s future
profits and cashflow. Capital is invested in exchange for an equity
stake in the businessrather than given as a loan, and the investor hopes
the investment will yield abetter-than-average return.
43.Whatis a Treasury Bills?
TreasuryBills
(T-Bills) are short term, Rupee denominated obligations issued by
theReserve Bank of India (RBI) on behalf of the Government of India.
They are thususeful in managing short-term liquidity. At present, the
Government of Indiaissues three types of treasury bills through
auctions, namely, 91-day, 182-dayand 364-day. There are no treasury
bills issued by State Governments.
44 .Whatis Banking Ombudsmen Scheme?
TheBanking
Ombudsman Scheme enables an expeditious and inexpensive forum to
bankcustomers for resolution of complaints relating to certain services
rendered bybanks.The Banking Ombudsman is a senior official appointed by
the Reserve Bankof India to redress customer complaints against
deficiency in certain bankingservices.The Banking Ombudsman Scheme was
first introduced in India in 1995,and was revised in 2002. The current
scheme became operative from the 1 January2006, and replaced and
superseded the banking Ombudsman Scheme 2002.
45.Whatis Subsidy?
Asubsidy
is a form of financial assistance paid to a business or economicsector.
Most subsidies are made by the government to producers or
distributorsin an industry to prevent the decline of that industry or an
increase in theprices of its products or to encourage it to hire more
labor.
46.Whatis a Debenture? How many types of debentures are there? What are they?
Adebenture is basically an unsecured loan to a corporation. A type of debtinstrument that is not secured by physical asset.
Debenturesare backed only by the general creditworthiness and reputation of the issuer
.i)Convertible Debentures:Any type of debenture that can be converted into some other security or it canbe converted into stock..
ii)Non-Convertibility Debentures(NCB):Non
Convertible Debentures are those that cannot be converted into
equityshares of the issuing company, as opposed to Convertible
debentures.Non-convertible debentures normally earn a higher interest
rate thanconvertible debentures do.
47.Whatis a
hedge fund?‘Hedge’ means to reduce financial risk.A hedge fund is an
investmentfund open to a limited range of investors and requires a very
large initialminimum investment. It is important to note that hedging is
actually thepractice of attempting to reduce risk, but the goal of most
hedge funds is tomaximize return on investment.
48.Whatis FCCB?
AForeign
Currency Convertible Bond (FCCB) is a type of convertible bond issuedin
a currency different than the issuer’s domestic currency. In other
words,the money being raised by the issuing company is in the form of a
foreigncurrency. A company may issue an FCCB if it intends to make a
large investmentin a country using that foreign currency.
49.Whatis Capital Account Convertibility(CAC)?
It
isthe freedom to convert local financial assets into foreign financial
assets andvice versa at market determined rates of exchange. This means
that capitalaccount convertibility allows anyone to freely move from
local currency intoforeign currency and back.The Reserve Bank of India
has appointed a committeeto set out the framework for fuller Capital
Account Convertibility.Capitalaccount convertibility is considered to be
one of the major features of adeveloped economy. It helps attract
foreign investment. capital accountconvertibility makes it easier for
domestic companies to tap foreignmarkets.
50.Whatis Current Account Convertibility?
Itdefines
at one can import and export goods or receive or make payments
forservices rendered. However, investments and borrowings are
restricted.
51.Whatis Arbitrage?
The opportunityto buy an asset at a low price then immediately selling it on a differentmarket for a higher price.
52.Whatis Capitalism?
Capitalismas
an economy is based on a democratic political ideology and produces a
freemarket economy, where businesses are privately owned and operated
for profit;in capitalism, all of the capital investments and decisions
about production,distribution, and the prices of goods, services, and
labor, are determined inthe free market and affected by the forces of
supply and demand.
53.Whatis
Socialism?Socialism as an economy is based on a collectivist type
ofpolitical ideology and involves the running of businesses to benefit
the commongood of a vast majority of people rather than of a small upper
class segment ofsociety.
OTHERIMP DATA (some would be repetitive):
1.Whatis corporate governance?
The
wayin which a company is governed and how it deals with the various
interests ofits customers, shareholders, employees and society at large.
Corporate governanceis the set of processes, customs, policies, laws,
and institutions affectingthe way a corporation (or company) is
directed, administered or controlled.Isdefined as the general set of
customs, regulations, habits, and laws thatdetermine to what end a firm
should be run.
Functionsof RBI?
TheReserve Bank
of India is the central bank of India, was established on April 1,1935
in accordance with the provisions of the Reserve Bank of India Act,
1934.The Reserve Bank of India was set up on the recommendations of the
Hilton YoungCommission. The commission submitted its report in the year
1926, though thebank was not set up for nine years.To regulate the issue
of Bank Notes andkeeping of reserves with a view to securing monetary
stability in India andgenerally to operate the currency and credit
system of the country to itsadvantage." Banker to the Government:
performs merchant banking functionfor the central and the state
governments; also acts as their banker.Banker tobanks: maintains banking
accounts of all scheduled banks.
What ismonetary policy?
AMonetary
policy is the process by which the government, central bank, of
acountry 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
objectivesoriented towards the growth and stability of the economy.
What is Fiscal Policy?
Fiscalpolicy
is the use of government spending and revenue collection to
influencethe economy. These policies affect tax rates, interest rates
and governmentspending, in an effort to control the economy. Fiscal
policy is an additionalmethod to determine public revenue and public
expenditure.
What isCore Banking Solutions?
Corebanking
is a general term used to describe the services provided by a group
ofnetworked bank branches. Bank customers may access their funds and
other simpletransactions from any of the member branch offices. It will
cut down time,working simultaneously on different issues and increasing
efficiency. The platformwhere communication technology and information
technology are merged to suitcore needs of banking is known as Core
Banking Solutions.
What is bank and its features and types?
A
bankis a financial organization where people deposit their money to
keep itsafe.Banks play an important role in the financial system and the
economy. As akey component of the financial system, banks allocate
funds from savers toborrowers in an efficient manner.
RegionalRural
Banks were established with an objective to
ensuresufficientinstitutional credit for agriculture and other rural
sectors. TheRRBs mobilizefinancial resources from rural / semi-urban
areas and grant loansand advancesmostly to small and marginal farmers,
agricultural labourers andrural artisans.
Thearea of operation of RRBs is limited to the area as notified by GoI coveringoneor more districts in the State
.ii.Banking services for individual customers is known as retail banking
.iii.
Abank that deals mostly in but international finance, long-term loans
forcompanies and underwriting. Merchant banks do not provide
regularbankingservices to the general public
iv.Online banking (or
Internet banking) allows customers to conductfinancialtransactions on a
secure website operated by their retail or virtualbank.
v.Mobile
Banking is a service that allows you to do banking transactions
onyourmobile phone without making a call , using the SMS facility. Is a
term usedforperforming balance checks, account transactions, payments
etc. via amobiledevice such as a mobile phone
.vi.Traditional
banking is the normal bank accounts we have. Like, put your moneyin the
bank and they act as a security and you will get only the
normalinterests (decided by RBI in our case, FED bank in US)
.vii.Investment
banking is entirely different. Here, people who are having somuchmoney
(money in excess which will yield only less interest if in Banks)will
investtheir money and get higher returns. For example, If i have
moremoney instead oftaking the pain of investing in share market, buying
propertiesetc. I will give toinvestment banks and they will do the
money management andgive me higherreturns when compared to traditional
banks.
What isE-Governance?
E-Governanceis
the public sector’s use of information and communication technologies
withthe aim of improving information and service delivery, encouraging
citizenparticipation in the decision-making process and making
government moreaccountable,transparent and effective.
What isRight to information Act?
TheRight
to Information act is a law enacted by the Parliament of India
givingcitizens of India access to records of the Central Government and
Stateovernments.The Act applies to all States and Union Territories of
India, exceptthe State of Jammu and Kashmir - which is covered under a
State-level law. Thislaw was passed by Parliament on 15 June 2005 and
came fully into force on 13October 2005.
Credit Rating Agencies in India?
Thecredit
rating agencies in India mainly include ICRA and CRISIL.
ICRAwasformerly referred to the Investment Information and Credit Rating
Agency ofIndia Limited. Their main function is to grade the different
sector andcompanies in terms of performance and offer solutions for up
gradation. Thecredit rating agencies in India mainly include ICRA and
CRISIL(Credit RatingInformation Services of India Limited)
What isCheque?
Chequeis
a negotiable instrument instructing a Bank to pay a specific amount
from aspecified account held in the maker/depositor's name with that
Bank.A bill ofexchange drawn on a specified banker and payable on
demand.“Written orderdirecting a bank to pay money”.valid for 3 months.
What isdemand Draft?
Ademand
draft is an instrument used for effecting transfer of money. It is
aNegotiable Instrument. Cheque and Demand-Draft both are used for
Transfer ofmoney. You can 100% trust a DD. It is a banker's check. A
check may bedishonored for lack of funds a DD can not. Cheque is written
by an individualand Demand draft is issued by a bank. People believe
banks more thanindividuals.valid for 3 months.
What isa NBFC?
Anon-banking
financial company (NBFC) is a company registered under theCompaniesAct,
1956 and is engaged in the business of loans and advances, acquisition
ofshares/stock/bonds/debentures/securities issued by government, but
does notinclude any institution whose principal business is that of
agricultureactivity, industrial activity, sale/purchase/construction of
immovableproperty.
NBFCsare doing functions akin to that of banks; however there are a few differences:
(i)ANBFC
cannot accept demand deposits (demand deposits are funds deposited at
adepository institution that are payable on demand -- immediately or
within avery short period -- like your current or savings accounts).
(ii) itis not a part of the payment and settlement system and as such cannot issuecheques to its customers; and
(iii)Deposit insurance facility of DICGC is not available for NBFC depositors unlikein case of banks.
Diffbetween banking & Finance?
Financeis
generally related to all types of financial, this could be
accounting,insurances and policies. Whereas banking is everything that
happens in a bankonly.The term Banking and Finance are two very
different terms but are oftenassociated together. These two terms are
often used to denote services that abank and other financial
institutions provide to its customers.
What is NASSCOM ?
TheNational
Association of Software and Services Companies (NASSCOM), the
Indianchamber of commerce is a consortium that serves as an interface to
the Indiansoftware industry and Indian BPO industry. Maintaining close
interaction withthe Government of India in formulating National IT
policies with specific focuson IT software and services maintaining a
state of the art information databaseof IT software and services related
activities for use of both the softwaredevelopers as well as interested
companies overseas.
What is ASSOCHAM?
TheAssociated
Chambers of Commerce and Industry of India (ASSOCHAM), India'spremier
apex chamber covers a membership of over 2 lakh companies
andprofessionals across the country. It was established in 1920 by
promoterchambers, representing all regions of India. As an apex industry
body, ASSOCHAMrepresents the interests of industry and trade,
interfaces with Government onpolicy issues and interacts with
counterpart international organizations topromote bilateral economic
issues. The current president of ASSOCHAM is Mr.Rajkumar Dhoot.
What isNABARD?
NABARDwas
established by an act of Parliament on 12 July 1982 to implement
theNational Bank for Agriculture and Rural Development Act 1981. It
replaced theAgricultural Credit Department (ACD) and Rural Planning and
Credit Cell (RPCC)of Reserve Bank of India, and Agricultural Refinance
and DevelopmentCorporation (ARDC). It is one of the premiere agency to
provide credit in ruralareas. NABARD is set up as an apex Development
Bank with a mandate forfacilitating credit flow for promotion and
development of agriculture,small-scale industries, cottage and village
industries, handicrafts and otherrural crafts.
What isSIDBI?
TheSmall
Industries Development Bank of India is a state-run bank aimed to aid
thegrowth and development of micro, small and medium scale industries in
India.Set up in 1990 through an act of parliament, it was incorporated
initially as awholly owned subsidiary of Industrial Development Bank of
India.
What isSENSEX and NIFTY?
SENSEXis
the short term for the words "Sensitive Index" and is associatedwith
the Bombay (Mumbai) Stock Exchange (BSE). The SENSEX was first formed
on1-1-1986 and used the market capitalization of the 30 most traded
stocks ofBSE. Where as 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 andNifty both are an "index”. An index is
basically an indicator it indicateswhether most of the stocks have gone
up or most of the stocks have gonedown.
What isSEBI
?SEBIis
the regulator for the Securities Market in India. Originally set up
bytheGovernment of India in 1988, it acquired statutory form in 1992
with SEBIAct 1992 being passed by the Indian Parliament. Chaired by
U.K.Sinha.
What isMutual funds?
Mutualfunds are
investment companies that pool money from investors at large andoffer to
sell and buy back its shares on a continuous basis and use the
capitalthus raised to invest in securities of different companies. The
mutual fundwill have a fund manager that trades the pooled money on a
regular basis. Thenet proceeds or losses are then typically distributed
to the investorsannually.
What isAsset Management Companies?
Acompany
that invests its clients' pooled fund into securities that match
itsdeclared financial objectives. Asset management companies provide
investorswith more diversification and investing options than they would
have bythemselves. Mutual funds, hedge funds and pension plans are all
run by assetmanagement companies. These companies earn income by
charging service fees totheir clients.
What are non-perfoming assets?
Non-performingassets,
also called non-performing loans, are loans,made by a bank or
financecompany, on which repayments or interest payments are not being
made on time. Adebt obligation where the borrower has not paid any
previously agreed uponinterest and principal repayments to the
designated lender for an extendedperiod of time. The nonperforming asset
is therefore not yielding any income tothe lender in the form of
principal and interest payments.
What
isRecession?A true economic recession can only be confirmed if GDP
(GrossDomestic Product)growth is negative for a period of two or more
consecutivequarters.
What isforeign exchange reservers?
Foreignexchange
reserves (also called Forex reserves) in a strict sense are only
theforeign currency deposits and bonds held by central banks and
monetaryauthorities.However, the term in popular usage commonly includes
foreignexchange and gold,SDRs and IMF reserve positions
