Monetary Policy of RBI - 15 Mints Seminar Notes

Objective:

• Full employment
• Price stability
• Economic Growth
• Balance of Payment

Definition:

• Monetary Policy refers to the credit control measures adopted by the central bank of a country.

• Monetary policy “as policy employing central bank’s control of the supply of the supply of money as an instrument for achieves of general economic policy.”

• It can be classified into two measures one is qualitative measures and other is quantitative measures

Quantitative Measures :

Repo rate, bank rate, cash reserve ratio, open market operations and statutory liquidity ratio .. etc are the quantitative tools

REPO: RBI gives money to Bank by Government securities (for short time)

REPO rate -6.50%  on august 2023 which was decided by  MPC meeting held at June

REVERSE REPO: the interest rate at which  the RBI absorbs liquidity  from bans against the collateral of eligible government securities under the LAF(Liquidity adjustment fund)

LAF (Liquidity adjustment facility): injects /absorbs liquidity into the other bank from the banking system.

SDF(standing Deposit facility): The rate at which the RBI accepts uncollateralised deposit, on an overnight basis, from all LAF participants.

MSF(Marginal standing facility): the penal rate at which banks can borrow, on an overnight basis, from the reserve Bank by dipping into their statutory liquidity Ratio(SLR) portfolio.SDF and MSF rate is placed at 25 basis points above the policy repo rate

Bank rate: the rate at  which it is ready to by or rediscount bills of exchange  or other commercial papers. Alignment with MSF rate(over long term period like a year)

Cash reserve Ratio(CRR): the average daily balance that a bank is required to maintain with the Reserve Bank as a per cent of its (net demand and time liabilities(NDTL)

Statutory liquidity ratio(SLR): Every bank shall maintain assets, the value of which shall not be less than such percentage of the total of its demand and time liabilities in India. These assets can be cash in hand, gold, government securities etc.

Open Market Operation(OMOS):The include outright purchase/sale of  government securities by the Reserve bank for injection/absorption of durable liquidity in the banking system.

Qualitative measures :

Loan to value  ratio controls:  the collateral required for a loan amount $60,000 should be 1 lakh . however for $20,000  loan 1 lakh collateral should not be taken .

Consumer credit control:  RBI suggest 80%  down payment manditory for EMI CASE 1: If bike 10% down-payment and  the rest as loan than such terms should be eliminated.

Rationing : Asking to banks to manditory lend some sector more than the other EG: 18% to 30% credit through priority sector lending for agriculture farmers

Moral suassion : some cases even after RBI reduce the Repo rate the bank do not reduce the lending rates for loans.

Action: Governor speaks in interview or collages take firm actions for achieving inflation reduction.

Direct action: If even after such intimation banks do not heed the RBI, it will give penalty on that bank

Presented By,

Thiruvenkadam

Banking Student

Magme Medal, Hosur.

 IBPS SO 2023

Institute of Banking Personnel Selection (IBPS) has given a notification for the recruitment of SO 2023

Total Vacancy: 1402

Eligibility Criteria:

Minimum Educational Qualification: Degree

Refer Notification.

Age Limit: (01.08.2023)

• Above 20 years - Below 30 years i.e. candidates should not have been born earlier than 02.08.1993 and later than 01.08.2003 (both dates inclusive)

Selection Process:

The selection will be made in three successive stages viz.,

• Preliminary Exam
• Mains Exam
• Interview Process

Apply Mode:

• ONLINE

Application Fees:

• For Others: Rs. 850/-
• For SC/ST/PWD/ Ex Serviceman candidates: Rs. 175/-
• Payment Mode (Online): Debit Cards (RuPay/ Visa/ MasterCard/ Maestro), Credit Cards, Internet Banking, IMPS, Cash Cards/ Mobile Wallets

Important Date

• Starting Date: 01-08-2023
• Last Date: 21-08-2023
• Preliminary Exam: December, 2023
• Preliminary Exam Results: January 2024

Notification Link: Click Here

Apply Link: Click Here

 IBPS PO 2023

Institute of Banking Personnel Selection (IBPS) has given a notification for the recruitment of PO 2023

Total Vacancy: 3049  

Eligibility Criteria:

Minimum Educational Qualification: Any Degree

Refer Notification.

Age Limit: (01.08.2023)

• Above 20 years - Below 30 years i.e. candidates should not have been born earlier than 02.08.1993 and later than 01.08.2003 (both dates inclusive)

Selection Process:

The selection will be made in three successive stages viz.,

• Preliminary Exam
• Mains Exam
• Interview Process

Apply Mode:

• ONLINE

Application Fees:

• For Others: Rs. 850/-
• For SC/ST/PWD/ Ex Serviceman candidates: Rs. 175/-
• Payment Mode (Online): Debit Cards (RuPay/ Visa/ MasterCard/ Maestro), Credit Cards, Internet Banking, IMPS, Cash Cards/ Mobile Wallets

Important Date

• Starting Date: 01-08-2023
• Last Date: 21-08-2023
• Preliminary Exam: September, 2023
• Preliminary Exam Results: October 2023

Notification Link: Click Here

Apply Link: Click Here

 SSC Junior Engineer (Civil, Mechanical & Electrical) 2023

SSC Junior Engineer Exam is conducted by the State Selection Commission to recruit candidates for the post of Junior Engineer.

Total Vacancy: 1324

Eligibility Criteria:

Educational Qualifications

He/She must hold a valid degree in Electrical, Civil, Mechanical discipline from a recognized university (As on 16.08.2023).

For more Details, Kindly Check Notification

Age Limit: (01.08.2023)

• For the posts for which age limits upto 30 years as on 01.08.2023, i.e. candidates must have been born not earlier than 02.08.1993 and not later than 01.08.2005
• For the posts for which age limits upto 32 years as on 01.08.2023, i.e. candidates must have been born not earlier than 02.08.1991 and not later than 01.08.2005
• Age relaxation is admissible for SC/ST/OBC/ PH/ Ex-servicemen candidates as per rules.

Selection Process:

The selection will be made in two successive stages viz.,

• Paper I
• Paper II

Apply Mode:

• ONLINE

Application Fees:

• For Others: Rs. 100/-
• For SC/ST/PWD/ Ex Serviceman candidates: Nil
• Payment Mode (Online): Debit Cards (RuPay/ Visa/ MasterCard/ Maestro), Credit Cards, Internet Banking, IMPS, Cash Cards/ Mobile Wallets

Important Date

• Starting Date : 26-07-2023
• Last Date : 16-08-2023
• Preliminary Exam: October, 2023

Notification Link: Click Here

Apply Link: Click Here

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

INDIAN POSTAL BANK - 15 Mints Seminar Notes

• India Post is a government-operated postal system in India, part of the Department of Post under the Ministry of Communications. Generally known as the Post Office, it is the most widely distributed postal system in the world.
• Warren Hastings had taken initiative under East India Company to start the Postal Service in the country in 1766. 
• It was initially established under the name "Company Mail". 
• It was later modified into a service under the Crown in 1854 by Lord Dalhousie. 
• Dalhousiee introduced uniform postage rates (universal service) and helped to pass the India Post Office Act 1854 which significantly improved upon 1837 Post Office act which had introduced regular post offices in India.
• It created the position Director General of Post for the whole country.
  
• It is involved in delivering mail (post), remitting money by money orders, accepting deposits under Small Savings Schemes, providing life insurance coverage under Postal Life Insurance (PLI) and Rural Postal Life Insurance (RPLI) and providing retail services like bill collection, sale of forms, etc. 
• The DoP also acts as an agent for the Indian government in discharging other services for citizens such as old age pension payments and Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) wage disbursement. 
• With 154,965 post offices (as on March 2017), India Post is the widest postal network in the world.
  
• The country has been divided into 23 postal circles, each circle headed by a Chief Postmaster General. 
• Each circle is divided into regions, headed by a Postmaster General and comprising field units known as Divisions. 
• These divisions are further divided into subdivisions.
• In addition to the 23 circles, there is a base circle to provide postal services to the Armed Forces of India headed by a Director General.
• One of the highest post offices in the world is in Hikkim, Himachal Pradesh operated by India Post at an altitude of 14,567 ft (4,440 m).
  

Who is the owner of India Post?

India Post is a government-operated postal system in India, part of the Department of Post under the Ministry of Communications.

Which is the first post office in India?

The East India company opened its first post office in 1727. In 1774 Calcutta GPO was established. The site where the GPO is now located was actually the site of the first Fort William. An alley beside the post office was the site of the guardhouse that housed the infamous 1756 Black Hole of Calcutta (1756).

What is the old name of India Post?

Company Mail

It was initially established under the name "Company Mail". It was later modified into a service under the Crown in 1854 by Lord Dalhousie.

Who is the father of Indian postal stamp?

the  answer is Robert Clive. The modern postal system, a preferred facilitator of communication in British India, was established in India by Lord Clive in 1766 and it was further developed by Warren Hastings in 1774.

How many types of Indian post are there?

All postal articles whose contents are in the nature of message can be classified as mail which includes Letters, Postcards, Inland Letter Cards, Packets, Ordinary, Registered, Insured, Value Payable articles and Speed Post. Mail is further classified as first class and second class mail.

Who is the chairman of India Post?

Shri Vineet Pandey is currently Secretary (Posts) and Chairman, Postal Services Board. He is an Officer of 1986 batch of the Indian Postal Service and has more than 33 years of experience in Postal Service.

What are the 2 types of postal services?

The two types of postal services are Regular mail and Express mail.

What are the 3 types of post office?

It is basically classified into 3 types, namely – Head Post office, Sub Post Office and Branch Post Office.

Which is best scheme in Post Office?

Well-known schemes are Public Provident Fund (PPF), Kisan Vikas Patra and Sukanya Samriddhi Yojanas. The government has made these small savings schemes available via post offices to provide a safe investment avenue for the public by providing good returns and keeping their investments safe

What are the schemes available in Post Office?

Post Office Savings Account(SB)

National Savings Recurring Deposit Account(RD)

National Savings Time Deposit Account(TD)

National Savings Monthly Income Account(MIS)

Senior Citizens Savings Scheme Account(SCSS)

Public Provident Fund Account(PPF) 

Sukanya Samriddhi Account(SSA)

Presented by,

Swarna

Banking Student

Magme Medal @ Hosur