Banking Awareness 2017 Inwards Unproblematic Linguistic Communication – Lesson 5

Banking Awareness 2017 – Lesson 5

Dear Gr8 Ambitionists, hither is the fifth lesson of our Banking Awareness 2017 series. With this lesson, the 4 lesson serial on the Reserve Bank of Bharat (RBI) volition live on completed. This lesson deals alongside important Banking Awareness topics, RBI 4 Tier structure, PLR (Prime Lending Rate), Base Rate, Marginal Cost of Funds Based Lending Rate (MCLR), RBI policy on Fake Notes, Clean Note Policy in addition to the listing of RBI Governors till now. Happy Reading 🙂

RBI Structure 4-tier

The Reserve Bank of Bharat (RBI) has proposed a four-tier banking construction every bit opposed to the existing 2-tier model inward lodge to heighten contest & finance higher increment inward country.

  • First Tier : The starting fourth dimension tier may consist of 3 or 4 large Indian banks alongside domestic in addition to international presence along alongside branches of unusual banks inward India. 
  • Second Tier : Mid sized banks including niche banks alongside economy-wide presence may cast the minute tier. These are capable of offering a broad make of banking products in addition to services to the domestic economic scheme such every bit investment banking, wholesale banking in addition to funding large infrastructure projects.
  • Third Tier : The 3rd tier would stimulate got onetime private sector banks, regional-rural banks in addition to multi province urban co-operative banks (UCBs). 
  • Fourth Tier The 4th tier may consist of many pocket-sized privately owned local banks in addition to co-operative banks. These would specifically cater to the credit requirements of pocket-sized borrowers inward the organized sector inward un-banked in addition to under-banked areas. 

Prime Lending Rate (PLR)

The involvement charge per unit of measurement charged past times banks to their largest, nearly secure in addition to nearly credit worthy customers or brusk term loans.

Note : The RBI introduced the Base Rate organisation alongside lawsuit from 1st July 2010 which replaced the Bench Mark Prime Lending Rate (BPLR) system.

Base Rate

Base Rate is the minimum involvement charge per unit of measurement of a banking corporation below which it cannot lend, except inward representative allowed past times RBI. Each private banking corporation has its ain base of operations rate.

As per RBI guidelines (as inward July 2012) the next categories of loans could live on priced without reference to Base Rate.

  • DRI advances
  • Loans to bank’s ain employees including retired employees. 
  • Loan to banks depositors against their ain deposits. 

MCLR (Marginal Cost of funds based Lending Rate)

The RBI has released “guidelines” on computing involvement rates on advances based on marginal cost of funds. The guidelines come upward into lawsuit from 1st Apr 2016. These measures are expected to amend transparency inward methodology followed past times banks to decide involvement on advances alongside improved transmission of policy rates into lending rates of banks. Further, MCLR volition aid banks to live on to a greater extent than competitive in addition to heighten their long run value in addition to contribution to economical growth.

Key Features

  • All rupees loans sanctioned in addition to credit limits renewed w.e.f 1st Apr 2016, volition live on priced alongside reference to MCLR which volition live on internal benchmark for this purpose. 
  • Actual lending rates volition live on determined past times adding the components of spread to MCLR. 
  • MCLR volition live on a tenure linked internal benchmark. 
  • Bank may specify involvement reset dates on their floating charge per unit of measurement loans, they wil stimulate got the selection loans alongside reset dates link either to appointment of sanction of loan / credit limits or to appointment of review of MCLR in addition to the periodicity of reset shall live on 1 yr or lower. 
  • Bank volition review & set out their MCLR of unlike maturities every calendar month on a pre-announce date. 
  • Existing loans & credit limits linked to base of operations charge per unit of measurement may driblet dead on till repayment or renewal, every bit representative may be. Existing borrowers volition stimulate got the selection to deed to (MCLR) linked loan at mutually accepted terms. 
  • The MCLR prevailing on the 24-hour interval the loan is sanctioned volition live on applicable till side past times side reset date, irrespective of charges inward benchmark during the interim period. 
  • Banks volition driblet dead on to review & set out base of operations charge per unit of measurement every bit hitherto. 

RBI Policy on Fake Notes

  • RBI compensate “The Bank” to the extent of 25% of the national value of the counterfeit notes or Rs. 100 denomination & above, detected in addition to reported to RBi in addition to law authorities. 
  • Claims for compensation should live on made through forged banknote vigilance jail cellphone of the banks inward prescribed format on a monthly footing through email inside fifteen days of the succeeding month. 
  • Reimbursement volition live on done past times RBI, share of currency management, to commence with, on a quarterly basis. 
  • A review of inward a higher house organisation volition live on conducted afterward 1 year. 

Clean Note Policy

  • Banks should create away alongside stapling of whatever banknote bundle in addition to instead secure banknote packets alongside newspaper bands. 
  • Banks should sort notes into re-issuable in addition to non-issuable & number alone clear notes to public.
  • Banks should forthwith halt writing of whatever sort on watermark window of banking corporation notes.

Governors of RBI till right away (2017)

  • Sir Osborne Smith – Tenure (01-04-1935 to 30-06-1937)
  • Sir James Taylor – Tenure (01-07-1937 to 17-02-1943)
  • Sir C D Deshmukh – Tenure (11-08-1943 to 30-06-1949)
  • Sir Benegal Rama Rau – Tenure (01-07-1949 to 14-01-1957)
  • K G Ambegaonka – Tenure (14-01-1957 to 28-02-1957)
  • H V R Iengar – Tenure (01-03-1957 to 28-02-1962)
  • P C Bhattacharya – Tenure (01-03-1962 to 30-06-1967)
  • L K Jha – Tenure (01-07-1967 to 03-05-1970)
  • B north Adarkar – Tenure (04-05-1970 to 15-06-1970)
  • S Jagannathan – Tenure (16-06-1970 to 19-05-1975)
  • N C Sen Gupta – Tenure (19-05-1975 to 19-08-1975)
  • K R Puri – Tenure (20-08-1975 to 02-05-1977)
  • M Narasimham – Tenure (02-05-1977 to 30-11-1977)
  • Dr. I G Patel – Tenure (01-12-1977 to 15-09-1982)
  • Dr. Manmohan Singh – Tenure (16-09-1982 to 14-01-1985)
  • A Ghosh – Tenure (15-01-1985 to 04-02-1985)
  • R north Malhotra – Tenure (04-02-1985 to 22-12-1990)
  • Venkitaramanan – Tenure (22-12-1990 to 21-12-1992)
  • Dr. C Rangarajan – Tenure (22-12-1992 to 21-11-1997)
  • Dr. Bimal Jalan – Tenure (22-11-1997 to 06-09-2003)
  • Dr. Y V Reddy – Tenure (06-09-2003 to 05-09-2008)
  • Dr. D. Subbarao – Tenure (05-09-2008 to 04-09-13)
  • Dr. Raghuram Rajan – Tenure (04-09-2013 to 04-09-2016)
  • Dr. Urjit R. Patel – Tenure (04-09-2016 to date)

That’s all for right away friends. In our side past times side lesson nosotros shall larn around other of import banking awareness topic 2017, types of banks, their caput quarters in addition to useful tricks to hollo back them. Good Day 🙂

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