Clean Note Policy - 15 Mints Seminar Notes

Overview

• In India, currency forms a significant part of the money supply, even though we are moving towards Digitization. It was observed that many of the notes in circulation were soiled and mutilated and these wereno more considered as a decent medium of exchange. 
• Nobody wanted to accept these notes, however, if somebody acquired these notes while transacting, they wanted to get rid of them at the first available opportunity. 
• The Reserve Bank of India (RBI) has Introduced clan note policy in 1999, asking the banks do not pass on the soiled, torn, and scribbled notes to the customer and deposit the same to the RBI. 
• RBI has issued a directive under Section 35A of the Banking regulation Act, 1949, prohibiting the stapling of currency notes/packets.
  

Objective

• The objective of the Clean Note Policy is to give the customers good quality currency notes and coins while the soiled notes are withdrawn out of circulation and issue only good quality clean notes to the public and refrain from recycling the soiled notes receive over the counter.
  

RBI’s Clean Note Policy

• Bank shall accept and deliver currency notes in unstapled and unstitched condition only.
  
• Bank will ensure removal of soiled notes and will ensure such notes are not circulated. All such notes will be replaced with good notes.
  
• All customers are requested to tender currency notes in unstapled condition. The bank will also issue currency notes in unstapled condition.
  
• Please DO NOT write or scribble on the currency notes.
  
• DO NOT use banknotes for making garlands/toys, decorating pandals and places of worship or for showering on personalities in social events, etc.
  
• Please count and check the currency notes before leaving the counter.
  
• Soiled and Mutilated currency notes are freely exchanged under RBI note refund rules 2009 at our Teller Counters.
  
• Coins and small denomination notes are freely accepted/issued at our cash counters.
  
• It is to be noted that the watermark on these notes is a major security feature and if the watermark is damaged or broken the machine classifies them as bad notes.
  

Presented by

Kirubakaran

Banking Student

MAGME MEDAL

Open Market Operations - 15 Mints Seminar Notes

Introduction

• Open market operations (OMO) are actions a central bank takes to control the money supply, such as open market purchases and sales of short-term Treasury securities and other securities. 
• The Federal Reserve (Fed) uses open market operations to influence interest rates in the United States, specifically the federal funds rate used for interbank lending. 
• Buying securities puts money into the economy, which lowers interest rates and makes loans more available.
  

Open Market Operations

What are Open Market Operations?

The selling and buying of Treasury Bills and other Government Securities by a country's Central Bank in order to control the amount of money in the economy are known as open market operations.

Open market operations are a part of central banks' most important monetary control methods. When the central bank wants to reduce the market's money supply, it sells securities on the open market. The intention is to raise interest rates. This approach is also known as contractionary monetary policy.

Similarly, when the central bank wants to increase the amount of money on the market, it will buy securities. This action is being taken to lower interest rates and promote the nation's economic growth. This strategy is known as expansionary monetary policy.

Temporary Open Market

Operations (TOMOs)Repurchase Agreements, Reverse Repurchase Agreements

Types of Open Market Operations

The two types of open market activities are permanent open market operations and transient open market operations.

1. Permanent Open Market Operations (POMO): These involve the central bank of any country selling and buying securities or treasuries on the open market in order to change the money supply. It is a means of influencing the economy.

2. Temporary Open Market Operations: These are used to add or subtract reserves from or into the banking system on a short-term basis. Repurchase agreements, also known as Repos or reverse repurchase agreements, or RRPs, are used for short-term open market transactions.

Example: RBI's Role in Open Market Operation

The Reserve Bank of India conducted open market operations for the first time in 2019. In India, the RBI regulates OMOs by buying and selling G-Secs, government securities, in and out of the market. The main goal is to change the rupee's market liquidity conditions in the long term. When the RBI determines that there is more than adequate liquidity in the market, it sells securities and reduces rupee liquidity. On the other hand, the Reserve Bank of India purchases from the open market when it perceives a liquidity constraint.

Case Study

• Explain with an example of a federal bank engaging in outright open market operations. Understanding how the Federal Reserve of the United States sets monetary policy is critical to comprehending open market operations in India. The United States is the best open market operations example for us to understand the many nuances of free market activities. 
• In order to preserve the stability of the US economy and avoid the negative effects of inflation or deflation, the Federal Reserve Board establishes a goal known as the federal funds rate. Federal funds rates are the interest rates that banks charge one another for overnight loans. Due to this consistent flow of enormous sums of money, banks can ensure that their cash reserves are sufficient to meet client demands.
  
• In addition to serving as a benchmark for other interest rates, the federal funds rate determines the direction of a variety of interest rates, including those on credit cards, mortgages, and savings accounts.
  

Conclusion

• We could conclude that open market processes are critical components of an economy. They are required to maintain a consistent and controlled flow of funds into the market. 
• The Federal Reserve uses open market operations to raise or lower interest rates by buying and selling securities in the open market. They are one of the tools available of the Federal Reserve for accelerating or decelerating the nation's economic activity. Through open market operations, the Federal Reserve injects or removes money into the country's money supply.
  

Presented by

Arvind

CAT Student

MAGME MEDAL, HOSUR

 GENERAL CREDIT CARD - 15 Mints Seminar Notes

The credit card term is used for a small magnetic strip or chip based plastic card issued by the bank or finance organisation. The card holders can used their financial need and purchase the goods on credit.

General credit card will be normally 5 years valid depends on the banking sector. The credit limits will determined by lenders based on the several factors including your credit rating, personal income and loan repayment history.

PURPOUSE:

• General Credit Card is the loan scheme for you provides hassle free credit to customers from reward & semi urban centres based on their cash flow without insistence on security.
  
• This is objective is to increase the flow of credit to individuals for entrepreneurial activity in non form sector to G. C. C .
  

EVOLUTIONS:

• In 1958 bank of America launched the Bank Americard . 
• In 1985 the central Bank of india along with Vysya  bank and United Bank of India introduced the Central credit card.
  

TYPES:

There are 3 types of credit card accounts.

• Bank issued CC (Such as Visa & MasterCard)
  
• Store / Priority Card ( Such as bay &Sears)
  
• Travel & Entertainment card also called as Charge Cards (Such as American Express Dinners club )
  

ELIGIBILITY:

• The applicant should be minimum of 18 years old.
  
• On an average income requirements is Rs. 1,44,000 per annum salaried persons and self employed.
  
• The normally credit limits will be 2.5 to 3 times of monthly gross salary.
  

ADVANTAGE:

• Globally accepted mode of payment.
• Turn repayment in to EMIs
• Interest free repayment
• Rewards & cash back offer
• Credit Score
• Secure Payment.

DISADVANTAGES:

• Minimum due trap 
• Hidden cost 
• Easy to overuse 
• High interest rate 
• Credit card fraud.

Presented by

Kalyani

Banking Student

Magme Medal, Hosur