Important Topics From Banking Awareness- MCLR, NI, NPA

Banking and Financial Awareness Questions will assist you in understanding crucial ideas in the Banking Awareness Section. These Banking and Financial Awareness Questions are also useful for other banking exams like SBI SO, SBI Clerk, IBPS PO, IBPS Clerk, IBPS RRB Officer, IBPS RRB Office Assistant, IBPS SO, NABARD Grade-A, RBI Assistant, LIC, and others. Read the entire blog to get the list of Important Topics from Banking Awareness so that you can prepare for tests.

Important Topics From Banking Awareness

Because financial awareness is vital in all of our exams, one must concentrate on the banking portion to achieve high marks in the mains examination. You can find the study tree for the banking awareness component here.

Banking History And All The First In Banking

It emphasizes that India’s banking system is the foundation for its economic development. With the advancement of technology and consideration of people’s interests, major changes in the banking system and management have been noticed over the years. The “Bank of Hindustan,” founded in 1770 in the then-Indian city of Calcutta, was the country’s first bank.

Marginal Cost Of Funds Based Lending Rate (MCLR)

The MCLR (Marginal Cost of Funds based Lending Rate) is the lowest lending rate at which a bank is not allowed to lend. The MCLR replaced the previous base rate mechanism for determining commercial bank lending rates.

The Reserve Bank of India (RBI) establishes a fixed internal reference rate for banks. RBI-regulated banks and lending institutions then utilize this interest rate to determine the minimum interest rate for various loan categories.

Negotiable Instruments (NI)

A negotiable instrument is a document that guarantees payment of a specific sum of money to a specific person (the payee). It is written like a contract and requires payment either on-demand or at a specific period.

Nationalization Of Banks In India Monetary Policy 

This article discusses why banks were nationalised, why it was necessary, what impact it had on the Indian financial structure, and which banks were involved in the process.

Non-Performing Assets (NPA)

NPA is defined by the Reserve Bank of India as any advance or loan that has been late for more than 90 days. A loan is an asset for banks since the interest we pay on these loans is one of the Bank’s most important sources of income.

When customers, whether retail or corporate, are unable to pay their interest, the asset becomes ‘non-performing for the Bank, as it does not generate any revenue. As a result, the RBI has defined non-performing assets (NPAs) as assets that have stopped generating income for them.

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Basel III Accord

Basel III is a collection of norms and policies designed to ensure that multinational banks have enough capital to survive during economic downturns.

Banks with riskier assets must have more capital on hand than banks with safer portfolios, according to the Basel II agreement.

Securitization And Reconstruction Of Financial Assets And Enforcement Of Security Interest (SARFAESI) Act

The SARFAESI Act lays forth in detail how Asset Securitization Companies (SCs) and Reconstruction Companies (RCs) are formed and operate. The Act specifies the scope of their activities, capital needs, and funding, among other things. The Act was enacted to handle the problem of non-performing assets (NPAs) or bad assets through various processes and systems.

Deposit Insurance And Credit Guarantee Corporation (DIGGC)

Customers’ deposits in a bank are covered by deposit insurance. The Deposit Insurance and Credit Guarantee Corporation (DICGC) provides it. It covers commercial public banks as well as small financial institutions. The deposit insurance does not cover company deposits.

Inflation-Indexed Bonds (IIBs)

The issue of IIBs has gained importance in the context of recent high levels of inflation in Emerging Market and Developing Economies, as the value of money rapidly depreciates in a high-inflation environment.

Because of the low inflation seen in industrialised nations, the issue of inflation-indexed bonds is limited.

Non-Banking Financial Company (NBFC)

A Non-Banking Financial Corporation (NBFC) is a corporation that is registered under the Companies Act, 2013 and engages in lending, hire-purchase, leasing, insurance, receiving deposits in some situations, chit funds, stock, and share acquisition, and other activities.

Financial Inclusions

Financial inclusion is a means of providing individuals with banking and financial services to include everyone in society by providing them with basic financial services regardless of their income or savings. It focuses on providing financial assistance to those who are economically disadvantaged.

Types Of Money And Measures Of Money Supply

The subject of this topic is money is one of the most fundamental concepts in economics to grasp. It refers to all of the notes, coins, and demand deposits held by the public on a given day. Like money demand, the money supply is a stock variable.

Foreign Investment In India

This topic covers the inflow of Foreign Direct Investment (FDI) into India via automated and government channels.

External Commercial Borrowings (ECB) And Trade Credit

Borrowings under the ECB are made through two channels: the automatic route and the approved route. ECB funding is available to eligible borrowers such as corporate importers, financial institutions, housing finance firms, power finance and trade companies, NGOs, and special economic zones. Borrowings for the infrastructure and industrial sectors are often taken on an automatic basis.

Government Schemes Related To Banking Sector

This topic discusses the government of India programs such as the Pradhan Mantri Jan Dhan Yojana (PMJDY), Jan Dhan to Jan Suraksha, Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY), Atal Pension Yojana (APY), Pradhan Mantri Mudra Yojana, and others.

Role Of Banking Ombudsman In Banking Sector

The Reserve Bank of India has chosen a top officer to resolve client complaints about deficiencies in some banking services. If a customer is dissatisfied with the Bank’s services and facilities, he or she has the right to file a complaint with the Bank’s complaint cell. If the Bank does not take any action or make any efforts, the customer may file a complaint with the relevant Bank’s Ombudsman.

Risks In Banking Sector

It goes over major bank risks such as credit, operational, market, and liquidity risks. Banks have well-built risk management infrastructures and are expected to obey government rules since they are exposed to a variety of hazards.

Conclusion

Banking Awareness is an important topic that will assist all banking applicants in not only passing the general awareness part but also passing the interview.

It is likely the easiest component to score, and all applicants rely on it to achieve a good grade. Oliveboard can assist you with current trends and expertise. Explore it to download banking awareness notes and take the quiz to test your understanding of banking and finance.

FAQs

Is there a distinction between banking and financial awareness?

They should be distinct, yet from the standpoint of the exams, we study financial awareness as part of banking.

What are the most significant Banking Awareness topics?

The history of banking, the structure, and function of the Reserve Bank of India,
Lending Rates, Bank Nationalization in India, Currency Circulation and Management in India
Non-Performing Assets (NPA), Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, Deposit Insurance and Credit Guarantee Corporation, Monetary Policy, Types of Bank Accounts in India, Financial Inclusions, Marginal Cost of Funds Based Lending Rate (MCLR), Non-Performing Assets (NPA), Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, Deposit Insurance and Credit Guarantee (DICGC) are all important topics from Banking Awareness section