Basic Banking Terms For IBPS PO IV Candidates

Banking Terms

1. What is a Repo Rate?
A: Repo rate is the rate at which our banks borrow rupees from RBI. Whenever the banks haveany shortage of funds they can borrow it from RBI. A reduction in the repo rate will help banks to get money at a cheaper rate. When the repo rate increases, borrowing from RBI becomes more expensive.

2. What is Reverse Repo Rate?
A: This is exact opposite of Repo rate. Reverse Repo rate is the rate at which Reserve Bank of
India (RBI) borrows money from banks. RBI uses this tool when it feels there is too much
money floating in the banking system. Banks are always happy to 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 to RBI due to this attractive interest rates.

3. What is CRR Rate?
A: Cash reserve Ratio (CRR) is the amount of funds that the banks have to keep with RBI. If
RBI decides to increase the percent of this, the available amount with the banks comes down.
RBI is using this method (increase of CRR rate), to drain out the excessive money from the
banks.

4. What is SLR Rate?
A: SLR (Statutory Liquidity Ratio) is the amount a commercial bank needs to maintain in the
form of cash, or gold or govt. approved securities (Bonds) before providing credit to its
customers. SLR rate is determined and maintained by the RBI (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 time liabilities. Time Liabilities are the liabilities a commercial bank liable to pay to the customers on their anytime demand. SLR is used to control inflation and propel growth. Through SLR rate tuning the money supply in the system can be controlled efficiently.

5. What is Bank Rate?
A: Bank rate, also referred to as the discount rate, is the rate of interest which a central bank
charges on the loans and advances that it extends to commercial banks and other financial
intermediaries. Changes in the bank rate are often used by central banks to control the money
supply. 

6. What is Inflation?
A: Inflation is as an increase in the price of bunch of Goods and services that projects the
Indian economy. An increase in inflation figures occurs when there is an increase in the average
level of prices in Goods and services. Inflation happens when there are fewer Goods and more
buyers; this will result in increase in the price of Goods, since there is more demand and less
supply of the goods.

7. What is Deflation?
A: Deflation is the continuous decrease in prices of goods and services. Deflation occurs when
the inflation rate becomes negative (below zero) and stays there for a longer period.

8. What is PLR?
A: The Prime Interest Rate is the interest rate charged by banks to their most creditworthy
customers (usually the most prominent and stable business customers). The rate is almost
always the same amongst major banks. Adjustments to the prime rate are made by banks at the
same time; although, the prime rate does not adjust on any regular basis. The Prime Rate is
usually adjusted at the same time and in correlation to the adjustments of the Fed Funds Rate.
The rates reported below are based upon the prime rates on the first day of each respective
month. Some banks use the name "Reference Rate" or "Base Lending Rate" to refer to their
Prime Lending Rate.

9. What is Deposit Rate?
A: Interest Rates paid by a depository institution on the cash on deposit.

10. What is FII?
A: FII (Foreign Institutional Investor) used to denote an investor, mostly in the form of an
institution. An institution established outside India, which proposes to invest in Indian market,
in other words buying Indian stocks. FII's generally buy in large volumes which has an impact
on the stock markets. Institutional Investors includes pension funds, mutual funds, Insurance
Companies, Banks, etc.

11. What is FDI?
A: FDI (Foreign Direct Investment) occurs with the purchase of the “physical assets or a
significant amount of ownership (stock) of a company in another country in order to gain a
measure of management control” (Or) A foreign company having a stake in a Indian Company.

12. What is IPO?
A: IPO is Initial Public Offering. This is the first offering of shares to the general public from a
company wishes to list on the stock exchanges.

13. What is Disinvestment?
A: The Selling of the government stake in public sector undertakings.

14. What is Fiscal Deficit?
A: It is the difference between the government’s total receipts (excluding borrowings) and total
expenditure. Fiscal deficit in 2009-10 is proposed at 6.8% of GDP.

15. What is Revenue deficit?
A: It defines that, where the net amount received (by taxes & other forms) fails to meet the
predicted net amount to be received by the government. Revenue deficit in 2009-10 is proposed at 4.8% of GDP.

16. What is GDP?
A: The Gross Domestic Product or GDP is a measure of all of the services and goods produced
in a country over a specific period; classically a year. GDP during 2008-09 is 6.7%.

17. What is GNP?
A: Gross National Product is measured as GDP plus income of residents from investments
made abroad minus income earned by foreigners in domestic market.

18. What is National Income?
A: National Income is the money value of all goods and services produced in a country during
the year.

19. What is Per Capita Income?
A: The national income of a country, or region, divided by its population. Per capita income is
often used to measure a country's standard of living.Per capita income during 2008-09
estimated by CSO: Rs.25, 494.

20. What is Vote on Account?
A: A vote-on account is basically a statement ,where the government presents an estimate of a
sum required to meet the expenditure that it incurs during the first three to four months of an
election financial year until a new government is in place, to keep the machinery running.

21. Difference between Vote on Account and Interim Budget?
A: Vote-on-account deals only with the expenditure side of the government's budget, an interim
Budget is a complete set of accounts, including both expenditure and receipts.

22. What is SDR?
A: 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 into international
currencies so they serve as a supplement to the official foreign reserves of member countries. Its value is based on a basket of key international currencies (U.S. dollar, euro, yen and pound sterling).

23. What is SEZ?
A: SEZ means Special Economic Zone is the one of the part of government’s policies in India. A
special Economic zone is a geographical region that economic laws which are more liberal than
the usual economic laws in the country. The basic motto behind this is to increase foreign
investment, development of infrastructure, job opportunities and increase the income level of
the people.

OTHERE IMPORTAN TERMS

 • What is corporate governance?
The way in which a company is governed and how it deals with the various interests of its
customers, shareholders, employees and society at large. Corporate governance is the set of
processes, customs, policies, laws, and institutions affecting the way a corporation (or company)
is directed, administered or controlled.Is defined as the general set of customs, regulations,
habits, and laws that determine to what end a firm should be run.

• Functions of RBI?
The Reserve 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 Young Commission. The commission
submitted its report in the year 1926, though the bank was not set up for nine years.To regulate
the issue of Bank Notes and keeping of reserves with a view to securing monetary stability in
India and generally to operate the currency and credit system of the country to its advantage."
Banker to the Government: performs merchant banking function for the central and the state
governments; also acts as their banker.Banker to banks: maintains banking accounts of all
scheduled banks.

• What is monetary policy?
A Monetary policy is the process by which the government, central bank, of a country 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 objectives oriented towards the growth and stability of the economy.

• What is Fiscal Policy?
Fiscal policy is the use of government spending and revenue collection to influence the
economy. These policies affect tax rates, interest rates and government spending, in an effort to
control the economy. Fiscal policy is an additional method to determine public revenue and
public expenditure.

• What is Core Banking Solutions?
Core banking is a general term used to describe the services provided by a group of networked
bank branches. Bank customers may access their funds and other simple transactions from any
of the member branch offices. It will cut down time, working simultaneously on different issues
and increasing efficiency. The platform where communication technology and information
technology are merged to suit core needs of banking is known as Core Banking Solutions.

• What is bank and its features and types?
A bank is a financial organization where people deposit their money to keep it safe.Banks play
an important role in the financial system and the economy. As a key component of the financial
system, banks allocate funds from savers to borrowers in an efficient manner.
Regional Rural Banks were established with an objective to ensure sufficient
institutional credit for agriculture and other rural sectors. The RRBs mobilize
financial resources from rural / semi-urban areas and grant loans and advances
mostly to small and marginal farmers, agricultural labourers and rural artisans.
The area of operation of RRBs is limited to the area as notified by GoI covering
one or more districts in the State.
ii. Banking services for individual customers is known as retail banking.
iii. A bank that deals mostly in but international finance, long-term loans for
companies and underwriting. Merchant banks do not provide regular banking
services to the general public
iv. Online banking (or Internet banking) allows customers to conduct financial
transactions on a secure website operated by their retail or virtual bank. v. Mobile Banking is a service that allows you to do banking transactions on your
mobile phone without making a call , using the SMS facility. Is a term used for
performing balance checks, account transactions, payments etc. via a mobile
device such as a mobile phone.
vi. Traditional banking is the normal bank accounts we have. Like, put your money in the bank
and they act as a security and you will get only the normal interests (decided by RBI in our
case, FED bank in US).
vii. Investment banking is entirely different. Here, people who are having so much
money (money in excess which will yield only less interest if in Banks) will invest
their money and get higher returns. For example, If i have more money instead of
taking the pain of investing in share market, buying properties etc. I will give to
investment banks and they will do the money management and give me higher
returns when compared to traditional banks.

• What is E-Governance?
E-Governance is the public sector’s use of information and communication technologies with
the aim of improving information and service delivery, encouraging citizen participation in the
decision-making process and making government more accountable,transparent and effective.

• What is Right to information Act?
The Right to Information act is a law enacted by the Parliament of India giving citizens of India
access to records of the Central Government and State overnments.The Act applies to all
States and Union Territories of India, except the State of Jammu and Kashmir - which is
covered under a State-level law. This law was passed by Parliament on 15 June 2005 and came
fully into force on 13 October 2005.

• Credit Rating Agencies in India?
The credit rating agencies in India mainly include ICRA and CRISIL. ICRA wasformerly
referred to the Investment Information and Credit Rating Agency of India Limited. Their main
function is to grade the different sector and companies in terms of performance and offer
solutions for up gradation. The credit rating agencies in India mainly include ICRA and 
CRISIL(Credit Rating Information Services of India Limited) 

• What is Cheque?
Cheque is a negotiable instrument instructing a Bank to pay a specific amount from a specified
account held in the maker/depositor's name with that Bank.A bill of exchange drawn on a
specified banker and payable on demand.“Written order directing a bank to pay money”.

• What is demand Draft?
A demand draft is an instrument used for effecting transfer of money. It is a Negotiable
Instrument. Cheque and Demand-Draft both are used for Transfer of money. You can 100%
trust a DD. It is a banker's check. A check may be dishonored for lack of funds a DD can not.
Cheque is written by an individual and Demand draft is issued by a bank. People believe banks
more than individuals.

• What is a NBFC?
A non-banking financial company (NBFC) is a company registered under the
Companies Act, 1956 and is engaged in the business of loans and advances, acquisition of
shares/stock/bonds/debentures/securities issued by government, but does not include any
institution whose principal business is that of agriculture activity, industrial activity,
sale/purchase/construction of immovable property.
NBFCs are doing functions akin to that of banks; however there are a few differences:
(i)A NBFC cannot accept demand deposits (demand deposits are funds deposited at a
depository institution that are payable on demand -- immediately or within a very short period
-- like your current or savings accounts.)
(ii) it is not a part of the payment and settlement system and as such cannot issue cheques to its
customers; and
(iii) Deposit insurance facility of DICGC is not available for NBFC depositors unlike in case of
banks.

• Diff between banking & Finance?
Finance is generally related to all types of financial, this could be accounting, insurances and
policies. Whereas banking is everything that happens in a bank only.The term Banking and
Finance are two very different terms but are often associated together. These two terms are
often used to denote services that a bank and other financial institutions provide to its
customers.

• What is NASSCOM ?
The National Association of Software and Services Companies (NASSCOM), the Indian
chamber of commerce is a consortium that serves as an interface to the Indian software
industry and Indian BPO industry. Maintaining close interaction with the Government of India
in formulating National IT policies with specific focus on IT software and services maintaining
a state of the art information database of IT software and services related activities for use of
both the software developers as well as interested companies overseas. Mr. Som Mittal –
President. Chairman-Pramod Bhasin

• What is ASSOCHAM?
The Associated Chambers of Commerce and Industry of India (ASSOCHAM), India's premier
apex chamber covers a membership of over 2 lakh companies and professionals across the
country. It was established in 1920 by promoter chambers, representing all regions of India. As
an apex industry body, ASSOCHAM represents the interests of industry and trade, interfaces
with Government on policy issues and interacts with counterpart international organizations to
promote bilateral economic issues. President-Swati Piramal

• What is NABARD?
NABARD was established by an act of Parliament on 12 July 1982 to implement the National
Bank for Agriculture and Rural Development Act 1981. It replaced the Agricultural Credit
Department (ACD) and Rural Planning and Credit Cell (RPCC) of Reserve Bank of India, and
Agricultural Refinance and Development Corporation (ARDC). It is one of the premiere
agency to provide credit in rural areas. NABARD is set up as an apex Development Bank with a mandate for facilitating credit flow for promotion and development of agriculture, small-scale
industries, cottage and village industries, handicrafts and other rural crafts.

• What is SIDBI?
The Small Industries Development Bank of India is a state-run bank aimed to aid the growth
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 a wholly owned subsidiary of Industrial
Development Bank of India. • What is SENSEX and NIFTY?
SENSEX is the short term for the words "Sensitive Index" and is associated with the Bombay
(Mumbai) Stock Exchange (BSE). The SENSEX was first formed on 1-1-1986 and used the
market capitalization of the 30 most traded stocks of BSE. 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 and Nifty both are an "index”.
An index is basically an indicator it indicates whether most of the stocks have gone up or most
of the stocks have gone down.

• What is SEBI?
SEBI is the regulator for the Securities Market in India. Originally set up by the
Government of India in 1988, it acquired statutory form in 1992 with SEBI Act 1992 being
passed by the Indian Parliament. Chaired by C B Bhave.

• What is Mutual funds?
Mutual funds are investment companies that pool money from investors at large and offer to
sell and buy back its shares on a continuous basis and use the capital thus raised to invest in
securities of different companies. The mutual fund will have a fund manager that trades the
pooled money on a regular basis. The net proceeds or losses are then typically distributed to the
investors annually.

• What is Asset Management Companies?
A company that invests its clients' pooled fund into securities that match its declared financial
objectives. Asset management companies provide investors with more diversification and
investing options than they would have by themselves. Mutual funds, hedge funds and pension
plans are all run by asset management companies. These companies earn income by charging
service fees to their clients.

 • What are non-perfoming assets?
Non-performing assets, also called non-performing loans, are loans,made by a bank or finance
company, on which repayments or interest payments are not being made on time. A debt
obligation where the borrower has not paid any previously agreed upon interest and principal
repayments to the designated lender for an extended period of time. The nonperforming asset is
therefore not yielding any income to the lender in the form of principal and interest payments.

• What is Recession?
A true economic recession can only be confirmed if GDP (Gross Domestic Product)growth is
negative for a period of two or more consecutive quarters.

• What is foreign exchange reservers?
Foreign exchange reserves (also called Forex reserves) in a strict sense are only the foreign
currency deposits and bonds held by central banks and monetary authorities.However, the
term in popular usage commonly includes foreign exchange and gold,SDRs and IMF reserve
positions.

2014 Reviewing main events

1

Narendra Modi becomes Prime Minister of India

The biggest event of 2014 was undoubtly the victory of the Bharatiya Janata Party (BJP) in the 16th General Elections and emergence of Narendra Modi as the most powerful leader in recent times. Modi led the BJP to an unprecedented victory in the elections and gave the country the most stable government in the past three decades. Modi helped the country receive first single-party majority in 30 years – and turned politics on its head. BJP won record 282 seats in these elections and almost plundered Congress, as it could win just 44 seats. Narendra Modi wave brought a shockingly high mandate from Uttar Pradesh (UP), where it won as many as 71 seats on its own out of 80 seats. BJP won 100% seats in Modi’s home state of Gujarat, Rajasthan, Delhi, Himachal Pradesh and Uttarakhand. The party got handsome gains in Maharashtra, Madhya Pradesh, Bihar, Jharkhand, Chhattisgarh, Karnataka and Assam. Narendra Modi defeated AAP’s convener Arvind Kejriwal by a huge margin of around 3 lakh 70 thousand votes in Varanasi constituency. Modi took oath as India’s 15^th Prime Minister in a lavish ceremony held at the Rashtrapati Bhawan on 26 May 2014. Head of states from SAARC countries added weight to his swearing-in ceremony.

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2

Telangana becomes newest state of India

Formation of Telangana as the newest State of the Indian Union was another historic and important event of 2014. The stroke of midnight hour on 1-2 June 2014 heralded Telangana’s birth as the 29th state of the Union, ending decades of turbulent struggle for the region in Andhra Pradesh. Turning the clock back 57 years when Telugu-speaking Telangana region of Hyderabad was merged with Andhra state in November 1956, a new state of Telangana came into being, capping numerous struggles for statehood. Telangana Rashtra Samithi (TRS) chief K Chandrasekhar Rao took oath as the first Chief Minister of Telangana on 2 June 2014. It became the newest state in India since Jharkhand was established as the 28th state in November 2000.

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3

Mars Mission (MOM) creates history 

India created history on 24 September 2014 by becoming the first country to successfully send a spacecraft into Mars’ orbit on its very first attempt. The mission executed by country’s space agency ISRO (Indian Space Research Organisation) became successful after the first signal of the Mars Orbiter Mission’s (MOM’s) success was confirmed from NASA’s ground station in Canberra, Australia. With this ISRO became the fourth space agency in the world to reach Mars after NASA (US), European Space Agency (Europe) and Roscosmos (Russia). India also became the first Asian country to successfully execute a Mars mission. MOM commenced its journey to the red planet Mars on 5 November 2013 through a launch from the First Launch Pad at Satish Dhawan Space Centre SHAR, Sriharikota, in Andhra Pradesh. The launch was done through ISRO’s reliable Polar Satellite Launch Vehicle (PSLV) C25 rocket. The MOM finally reached its destination – the Mars orbit on 24 September 2014. The orbiter’s propulsion system, called the Liquid Apogee Motor (LAM), erupted into life at 7.17 a.m. after remaining dormant for 300 days during the spacecraft’s journey to the Red Planet. With this the orbit entered into most crucial manoeuvre called Mars Orbit Insertion (MOI). This meant for lowering the spacecraft into the Martian orbit, with a peri-apsis of 423 km and an apo-apsis of 80,000 km. The manoeuvre ended successfully at 7.41 a.m., thus enabling India to make history.

4

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Supreme Court recognizes transgenders as ‘third gender’

The recognition of transgenders as ‘third gender’ by the Supreme Court of India on 15 April 2014 was a watershed event in India’s history. In a landmark judgment, the Supreme Court created the “third gender” status for ‘hijras’ or transgenders. Earlier, they were forced to write male or female against their gender. In another important order it asked the Centre to treat transgender as socially and economically backward. Hence transgenders will be treated on par with other backward castes (OBCs) and they will be given educational and employment reservation as OBCs. The apex court passed the order on a PIL filed by National Legal Services Authority (NALSA) urging the court to give separate identity to transgenders by recognising them as third category of gender. The order was considered a watershed event in India’s history as it was for the first time that the third gender has got a formal recognition. The SC observed that the absence of law recognizing hijras as third gender could not be continued as a ground to discriminate them in availing equal opportunities in education and employment. This ruling came after the Supreme Court’s decision in December 2013 which criminalised gay sex by reversing a landmark 2009 Delhi High Court order which had decriminalised homosexual acts. Justice K.S. Radhakrishnan headed the two-judge Supreme Court bench which gave this ruling.

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5

First signs of GST Regime  in India

Introduction of the Goods and Service Tax (GST) Bill in the Lok Sabha on 19 December 2014 by Union Finance Minister is expected to be a watershed development in Indian history. The GST is being seen as the biggest reform in the Indian economy since the economic reforms were unleashed during 1991-92. The GST will cut down the large number of taxes imposed by the central government and states and will lead to the creation of a unified market, which would facilitate seamless movement of goods across states and reduce the transaction cost of businesses. Economists say the implementation of GST could add 2% points to GDP growth of the country. The revised GST Bill takes into account the deal reached between the Centre and states on 15 December 2014 on contentious issues like including petroleum, alcohol and tobacco in GST. These items account for a major portion of states’ tax revenues. At present, petroleum products will be not be included in the GST but will remain within the central act and will be brought in at a later stage through the GST councils. Alcohol will be exempt from GST and states would have the freedom to decide their own levy. Service tax will be subsumed within GST. In case of losses in the states’ exchequer, the Centre will give 100% compensation for the first three years, 75% compensation for the fourth year and 50% compensation for the fifth year.

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6

INS Vikramaditya becomes part of Indian Navy

The commissioning of India’s largest naval ship – the INS Vikramaditya was also a landmark important event of 2014. Prime Minister Narendra Modi dedicated this huge ship to the nation on 14 June 2014 at a programme held in Goa. INS Vikramaditya, a floating airfield, has an overall length of about 284 metres and a maximum beam of about 60 metres, stretching as much as three football fields put together. Standing about 20 storeys tall from the keel to the highest point, the ship has a total of 22 decks and carries 1,600 personnel. With her complete stock of provisions, she is capable of sustaining herself at sea for about 45 days. Originally built as Baku and commissioned in 1987, the carrier served with the Soviet (until the dissolution of the Soviet Union) and Russian Navies before being decommissioned in 1996 as it was too expensive to operate. Later it was renamed in honour of Vikramaditya, a legendary 1st century BC emperor.

7

India declared Polio-free country

In a landmark achievement for India during 2014, the World Health Organisation (WHO) on 27 March 2014 officially certified India as a polio-free country with no case of the disease being reported in the country for three years. India had on 13 February 2014 completed three consecutive years without a single wild polio case being reported from any part of the country. It thus achieved the three-year milestone necessary to achieve polio-free certification from the World Health Organisation (WHO). The last case of polio in India was reported on 13 January 2011 in Howrah (West Bengal). Along with India 10 other countries were also declared polio free on 27 March. These 10 countries were – Bangladesh, Bhutan, Democratic People’s Republic of Korea, Indonesia, Maldives, Myanmar, Nepal, Sri Lanka, Thailand and Timor-Leste. It is worth mentioning that India embarked on the programme to eradicate polio 19 years ago in 1995, when the disease used to cripple more than 50,000 children in the country every year. A 2.3 million strong team of polio volunteers and 150,000 supervisors worked day and night to reach every child.

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8

Kailash Satyarthi wins Nobel Peace Prize

Child-rights activist Kailash Satyarthi’s being conferred the 2014 Nobel Peace Prize (jointly with Pakistani teenager Malala Yousafzai) was also one of the foremost events for India during 2014. Satyarthi was given this prestigious award on 10 December 2014 at Oslo (Norway). He and Malala were jointly selected for this prestigious award for their efforts against the suppression of children in their respective countries. Kailash Satyarthi thus became the seventh Indian to win Nobel Prize and the second to win the Peace Prize. The movement named ‘Bachpan Bachao Andolan’ was founded by him in 1983. This movement has helped rescue over 80 thousand children from bondage, trafficking and exploitative labour. In association with NGOs and other authorities, Kailash has organized hundreds of raids on factories and warehouses where children were being made to work. One of the most pioneering works of Kailash Satyarthi has been the establishment of the ‘Rugmark’ tag to be used on rugs and carpets to certify that they have been made without the labour of children. These rugs and carpets are exported abroad from India and other South Asian countries. Western countries were particularly receptive of accepting articles made by employing cheap child labour is apparently hazardous occupation of carpet weaving. ‘Rugmark’ is now known as ‘Goodweave’. ‘Goodweave’ is now a network of non-profit organisations which are dedicated to end illegal child labour in rug and carpet making.

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9

Swachh Bharat Abhiyan

Year 2014 would be remembered for the launch of the Swachh Bharat Abhiyan (SBA) or ‘Clean India Mission’ launched in the country which aims to clean the streets, roads and infrastructure of the country. Prime Minister Narendra Modi launched SBA officially on 2 October 2014 from Rajghat, the Mahatma Gandhi memorial in Delhi by himself wielding a broom and cleaning a road. The SBA will be a tribute to Mahatma Gandhi on his 150^th birth anniversary (2 October 2019), as the Government wants to celebrate it with a spick, span and clean India. This goal of a clean India was also set by the previous UPA government and the erstwhile government’s plan was to achieve 100% access to sanitation for all rural households in the country by 2022. The urban component of the SBA is proposed to be implemented over 5 years in all 4,041 statutory towns. The total expected cost of the programme is Rs. 62,009 crore, out of which the proposed central assistance will be of Rs. 14,623 crore. The Union Cabinet during September 2014 also decided to merge the ‘Nirmal Bharat Abhiyan’, a campaign for rural sanitation with “Swachh Bharat Abhiyaan”.

10

PMJDY launched

Prime Minister Narendra Modi on 28 August 2014 launched the ambitious Pradhan Mantri Jan Dhan Yojana (PMJDY). It is a dream project of NDA govt. to open at least one bank account to every household. The announcement of PMJDY was made by the Prime Minister on his first Independence Day speech on 15 August 2014. It has been conceived as a national mission on financial inclusion with the objective of covering all households in the country with banking facilities and having a bank account for each household. Under this scheme the account holders are provided a zero-balance bank account with RuPay debit card, in addition to accidental insurance cover of Rs 1 lakh (to be given by ‘HDFC Egro’). The National Payments Corporation of India (NCPI) has tied up with HDFC Ergo to provide the 1 Lakh initial cover while the additional 1 Lakh cover would be provided by the four state owned general insurers New India Assurance, National Insurance, United India Insurance and Oriental Insurance Company. The first phase of the mission, which started on 28 August 2014, would end in August next year. The second phase will start from 2015 till 2018, covering aspects such as micro insurance and pension schemes like ‘Swavalamban’. It was reported that under PMJDY, a total of 7 Crore (70 million) bank accounts have been opened with deposits totaling more than 5000 crore Rupees (approx 1 billion USD) as of 6 November 2014. As the government met the target, Union Finance Minister Arun Jaitley revised the target for opening of bank accounts under the scheme from 7.5 crore to 10 crore by 26 January 2015.

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11

National Youth Policy 2014

The erstwhile UPA Govt. launched the ambitious ‘National Youth Policy 2014′ (NYP 2014) on 21 February 2014. NYP 2014 is important from many aspects. It is a comprehensive policy document that states the vision of the Government of India (GOI) for the youth of the country and also how this vision is sought to be realised by the government. It replaced the National Youth Policy 2003 (NYP 2003) that was in force. NYP 2014 caters to needs of the youth in the age-group of 15-29 years, which constitutes 27.5% of population. The main vision of NYP 2014 is to empower youth to achieve their full potential, and through them enable India to find its rightful place in the community of nations. For achieving this vision, the Policy identified five well-defined objectives and 11 priority areas and suggests policy interventions in each priority area. The priority areas are education, skill development and employment, entrepreneurship, health and healthy lifestyle, sports, promotion of social values, community engagement, participation in politics and governance, youth engagement, inclusion and social justice. It seeks to achieve a productive workforce through education, skill development for better employability and entrepreneurship training; a healthy generation with sports as a way of life; a sense of community service and strong social values; high levels of participation in governance; and social inclusiveness by creating equitable opportunities for all.

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12

Prime Minister’s historic foreign visits

Year 2014 would be remembered for Prime Minister Narendra Modi’s historic visits to foreign countries. His visits to Bhutan, Nepal, the United States, Japan, Brazil and Australia were hailed as major successes in numerous diplomatic quarters. It was said that no Prime Minister of recent times was able to assert India so powerfully abroad as was Narendra Modi.

Bhutan visit

His first foreign visit after assuming charge was that of Bhutan. Modi described Bhutan as a natural choice for his first visit abroad as the two countries shared a “special relationship”. The fact that the Prime Minister chose Bhutan as his first foreign destination assumed significance since China has lately intensified efforts to woo it and establish full- fledged diplomatic ties with Thimphu. During this visit both countries reaffirmed their commitment to extensive development cooperation and discussed ways to further enhance economic ties.

Nepal visit

Narendra Modi became the first Indian prime minister to visit Nepal in 17 years and he suggested that now it will not take 17 more years that an Indian Prime Minister visits Nepal. The focus of Modi’s visit to Nepal was on 4 Cs — cooperation, connectivity, culture, constitution. He enthralled Nepali MPs through his powerful address to the Nepali Parliament. Important development of this visit was that both India and Nepal agreed to review, adjust and update the “Treaty of Peace and Friendship” of 1950 with an objective of charting a new course in bilateral relations. That ancient treaty allowed free movement of people and goods between the two nations and a close relationship and collaboration on matters of defence and foreign affairs.

Japan visit

Narendra Modi’s Japan visit was also dubbed as highly successful as India was able to convince Japan to look towards India as the most stable and safe investment option. Japan promised to give $35 billion to India through public and private funding over the next 5 years for developmental projects, including building of smart cities and cleanup of river Ganges. In another significant move Japan lifted the ban on six Indian entities including Hindustan Aeronautics Limited (HAL) which was imposed in the aftermath of 1998 nuclear tests. In Kyoto, a pact was signed under which Modi’s Lok Sabha constituency Varanasi will be developed on the pattern of Kyoto ‘smart city’ with the help of Japan.

US Visit

The major success of Narendra Modi’s US visit was that the US clearly stated that it was ready to reset its ties with India in coming days. US President Barack Obama set aside some protocols to display his bonhomie with Modi. There was great convergence between the two sides on peace and stability in the Asia-Pacific. Modi enthralled the audience at New York’s Madison Square Garden as he pitch 3D Mantra, skill development, talent pool and India’s bright economic prospects in his address. During his speech at the UN General Assembly he called for work in the direction of a sustainable world.

Australia visit

Narendra Modi’s Australia visit was also highly successful as he was able to bring Australia closer after the relations between the two countries were strained in 2009, over attacks on Indian students in Australia. In a major step towards realising its nuclear energy ambitions, India successfully signed the Civil Nuclear Cooperation Agreement (CNCA) with Australia. The deal thus concluded uranium sales talks that started between the two countries during 2012. India and Australia had held five rounds of negotiations on the uranium deal since 2012, when Australia reversed its policy on nuclear sales to India. The policy was based on India’s refusal to sign the Nuclear Non-Proliferation Treaty.

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Train connectivity to Northeast/Monorail/HighSpeed and Bullet trains

Year 2014 came out as a year for major reckoning for Indian Railways with some major announcements, connectivity and projects. The talks of high-speed trains and bullet trains in India gained momentum in 2014.

High speed train

Indian Railways on 3 July 2014 achieved a major milestone by running the fastest train in India (christened ‘semi-bullet train’ by some segments of media). This test train achieved fastest speed of 160 km/hr on Indian tracks and covered the distance between Delhi and Agra (178 km) in around 99 minutes. The regular high-speed train between Delhi and Agra has been named ‘Gatimaan Express’ and will take 105 minutes to cover 200 km distance.

In the Rail Budget 2014-15 nine sectors were proposed for operations of high-speed trains. These nine sectors are – Delhi-Agra, Delhi-Chandigarh, Nagpur-Bilaspur, Goa-Mumbai, Chennai-Hyderabad, Delhi-Kanpur, Delhi-Pathankot, Mysore-Bangalore-Chennai, and Nagpur-Secundrabad.

Bullet Train project

As far as bullet train is concerned, the Mumbai–Ahmedabad high-speed rail corridor has been proposed for establishment of India’s first bullet train. During 2014 the feasibility study on this project was carried out by the Japanese International Cooperation Agency (JICA). Air-conditioned bullet trains are expected to operate in the corridor at speeds of 320 kmph, enabling commuters to traverse the 534-km distance in 2 hours.

Train connectivity to Northeast

Year 2014 would be remembered for major achievements in train connectivity to India’s Northeastern region. On 7 April 2014 Arunachal Pradesh’s capital Itanagar became the second capital in the Northeastern region to have rail-connectivity. This became possible after commissioning of the newly built 20-km Harmuti-Naharlagun railway line that connects Itanagar. Till now Assamese capital Guwahati was the only North-Eastern state capital with direct train connectivity. Itanagar received the first passenger train on this day from Dekargaon.

Similarly Meghalaya came on the railway map of India on 29 November 2014 with commencement of first train service from this state. Prime Minister Narendra Modi flagged off the first train from Meghalaya – the 55819 Up Mendipathar – Guwahati. Mendipathar is the first railway station in Meghalaya and train connectivity in the state became possible due to construction of the 19.75 km long line from Dudhnoi in Assam to Mendipathar.

Jammu-Katra train connectivity

In another major initiative the rail-link for Katra was inaugurated by Prime Minister Narendra Modi on 4 July 2014 by flagging off the inaugural train from Katra to Jammu. The Katra-Udhampur rail section also features India’s longest steel girder bridge – the Jhajjar Bridge. Katra railway station has been named Mata Vaishno Devi railway station while the first direct train between New Delhi and Katra was named as Shree Shakti Express. This train started its regular journey from 14 July 2014.

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14

Accidents in the Indian Navy

Year 2014 would also be remembered some major accidents in the Indian Navy. The accident on board INS Sindhuratna (a kilo-class submarine) led to the resignation of the then Chief of Naval Staff Admiral D K Joshi on 26 February 2014, who owned moral responsibility. Two naval officers were killed in this accident. Joshi thus became the first military chief to resign from his post since independence. Other naval accidents that took place during 2014 involved INS Betwa, INS Kolkata, INS Airawat, INS Ganga and INS Vipul.

Stock Exchanges in India

·         The Stock Exchange is the market for buying and selling of stocks, shares, securities, bonds and debentures etc. It increases the market ability of existing securities by providing simple method for public and others to buy and sell securities.
·         The first organized stock exchange in India was started in Bombay (now Mumbai) when the "Native Share Brokers' Association" known as the Bombay Stock Exchange (BSE) was formed by the brokers in Bombay. BSE was Asia's oldest stock exchange.
·         In 1894, the Ahmedabad Stock Exchange was started to facilitate dealings in the shares of textile mills there.
·         The Calcutta Stock Exchange was started in 1908 to provide a market for shares of plantations and jute mills.
·         The number of stock exchanges rose from 7 in 1939 to 21 in 1945. Under the Securities Contract (Regulation) Act of 1956, the Government of India has so far recognized 23 Stock Exchanges. Bombay is the premier exchange in the country.
·         With the setting up of National Stock Exchange, all regional stock exchanges have lost relevance.
·         The BSE transformed itself into a corporate entity from being a brokers association, from the middle of August, 2005.
·         As a public limited company, BSE (Bombay Stock Exchange) is obliged to dilute stock brokers stake to 49%.
·         To prevent excessive speculation and volatility in the stock market SEBI has introduced rolling settlements from 2nd July 2001, under which settlement has to be made everyday.
Some Important Share Price Index of India
·         BSE SENSEX : This is the most sensitive share index of the Mumbai Stock Exchange. This is the representative index of 30 main shares. Its base year is 1978-79. BSE is the oldest stock exchange of India, founded in 1875.
·         BSE 200 : This represents 200 shares of Mumbai Stock Exchange. Its base year is 1989-90.
·         DOLLEX : Index of 200 BSE Dollar Value Index is called DOLLEX. Its base year is 1989-90.
·         NSE-50 : From 28th July 1998, its name is S and P CNX Nifty. National Stock Exchange has launched a new share Price Index, NSE-50 in place of NSE-100 in April 1996. NSE-50 includes 50 companies' shares. This stock exchange was founded on Ferwani Committee's recommendation in 1994.
·         Note : CRISIL Set up in 1998 is, a credit rating agency. It undertakes the rating fixed deposit programmes, convertible and non-convertible debentures and also credit assessment of companies.
·         CRISIL 500 : It is the new share Price Index introduced by Credit Rating Agency, the "Credit Rating Information Services of India Limited" (CRISIL) on 18tj January 1996
o    Apart from CRISIL, ther is another credit rating agency called "Investment Information and Credit Rating Agency of India Limited (ICRA)". It rates debt instruments of both financial and manufacturing companies.
·         The National Stock Exchange (NSE) has launched a new version of its online trading software called "National Exchange for Automatic Trading (NEAT)"

Indian History

History of India

India is home to one of the richest and the most ancient civilizations in the world, which existed over 5,000 years ago. This civilization originated in the Indus River Valley; hence the name given to it was Indus Valley civilization. The civilization with its main cities Mohenjadaro and Harappa flourished for over eight centuries.

Aryan and Greek Invasions

• The country was influenced by many invasions, the Arya or Aryans (1500BC) as they are known today are the first invaders.  As they settled in the middle Ganges River valley, they adapted to antecedent cultures.
• They spoke a group of languages which have become known as Indo-European. They settled in the region to the north west of India, known as the Punjab.
• The second great invasion into India occurred around 500 BC, when the Persian kings Cyrus and Darius, pushing their empire eastward, conquered the prized Indus Valley.
• After centuries of obscurity, doubt and conjecture, India came into the full light of recorded history with the invasion of Alexander the Great of Macedonia in 327 BC. Although Alexander crossed the Indus and defeated an Indian king, he turned back without extending his power into India.

Maurya and Gupta Periods

• In the 4th and 5th centuries A.D., northern India was unified under the Gupta Dynasty. This period is known as India’s Golden Age.
• India’s first imperial dynasty was founded by Chandragupta Maurya. Maurya dynasty reached its peak around 260 BC under the Emperor Ashoka, the most famous figures in Indian History.
• In the fifth century, large parts of India were united under Ashoka. He also converted to Buddhism, and it is in his reign that Buddhism spread to other parts of Asia.
• The Gupta period has been described as the golden age of Indian history and under their rule of northern India, arts, including poetry and literature, flourished.
• The exquisite Ajanta and Ellora caves were excavated in this period. Gupta period extended from 320AD to 480AD. But in 455 AD the Huns invaded India from the north and destroyed the Gupta Empire.

Muslim Invasions

• The Medieval Period in Indian history began with the Muslim Invasions.
• In the 10th and 11th centuries, Turks and Afghans invaded India and established sultanates in Delhi. From the 11th to the 15th centuries, southern India was dominated by Hindu Chola and Vijayanagar Dynasties.
• During this time, the two systems–the prevailing Hindu and Muslim–mingled, leaving lasting cultural influences on each other.
• In the early 16th century, descendants of Genghis Khan swept across the Khyber Pass, defeated Ibrahim Lodi the last ruler of the Delhi Sultanate at the battle of Panipat and established the Mughal (Mogul) Dynasty, which lasted for 200 years.
• The golden era of the Mughal period was under the rule of Akbar the great.

European Invasions

• The Portuguese were the first Europeans to settle in India, in Goa, in the fifteenth century (1498). The Europeans arrived even before the Mughals.
• The Dutch East India company was chartered in 1602 and they established spice trade and factories in Cochin, Nagapatinam and Agra. In 1613, the British East India Company, a trading company, started its first trading post in Gujarat.
• In 1757, at the Battle of Plassey, Robert Clive, an employee of the British East India Company, defeated the Nawab of Bengal, Siraj-ud-Daulah and established their political sovereignty in India. It was an important step towards the eventual British dominance of the country
• The conquest of India, which could be said to have begun with the Battle of Plassey (1757), was practically completed by the end of Dalhousie’s tenure in 1856.
• However, the Mutiny of 1857, which began with a revolt of the military soldiers at Meerut, soon became widespread and posed a grave challenge to the British rule.
• The revolt was controlled by the British within one year, it began from Meerut on 10 May 1857 and ended in Gwalior on 20 June 1858. Britain then ruled India with local rulers for over three hundred years.

Indian Independence

• A national movement for independence was created. Maulana Abdul Kalam Azad, Subhas Chandra Bose, Bhagat Singh, Rajguru, Sardar Ballabh Bhai Patel, Sarojini Naidu, Chander Shekhar Azad were the notable people of the movement.
• But the most relevant leader of the movement was Mohandas Karamchand Gandhi; Gandhi worked with Jawaharlal Nehru, the secretary of the Indian National Congress and transformed the Indian National Congress political party into a mass movement to campaign against the British colonial rule.
• After several years of struggle, Britain decided to quit India.
• On August 15, 1947, India became a dominion within the Commonwealth, with Jawaharlal Nehru as Prime Minister.
• Enmity between Hindus and Muslims led the British to partition British India, creating East and West Pakistan, where there were Muslim majorities.
• India became a republic within the Commonwealth after promulgating its constitution on January 26, 1950.