Modi had undertaken the following visits during the first quarter of 2015

====================================================
Country== Areas visited== Date(s)== Purpose(s)
====================================================
Seychelles==Victoria==1011 March==State visit
Mauritius==Port Louis==1113 March==State visit
Sri Lanka==Colombo, Jaffna==1314 March==State visit
Singapore==Singapore==29 March ==State funeral of Lee Kuan Yew
France==Paris, Toulouse, Neuve-Chapelle==912 April==State visit
Germany==Berlin, Hannover==1214 April==State visit
Canada==Ottawa, Toronto,Vancouver==1416 April==State visit
China==Xi'an, Beijing,Shanghai==1416 May==State visit
Mongolia==Ulan Bator==1617 May==State visit
South Korea==Seoul==1819 May==State visit
Bangladesh==Dhaka==6-7 June==State visit
Uzbekistan==Tashkent==6 July==State visit
Kazakhstan==Astana==7 July==State visit
Russia==Ufa==810 July==BRICS summit
Turkmenistan==Ashgabat==10-11 July==State visit
Tajikistan==Dushanbe==12 July==State visit
Kyrgyzstan==Bishkek==12 July==State visit

Digital India: Key Features

Prime Minister Narendra Modi inaugurated the Digital India week on Wednesday in the presence of senior
ministerial colleagues and top industry honchos, a move that aims to give a digital push to governance and
jobs. Right from his first day in office, the Prime Minister has always exhibited interest in a digitizing campaign
for India, something which he feels would bridge the gap between government initiatives and its beneficiaries.
With increasing internet penetration in India, a digital India campaign is the need of the hour.

Digital locker system to minimize usage of physical documents and enable their e-sharing via
registered repositories.

MyGov.in as an an online platform to engage citizens in governance through a "Discuss, Do and

Disseminate" approach.

Swachh Bharat Mission Mobile app to achieve the goals set by this mission.

E-Sign framework to allow citizens to digitally sign documents online using Aadhaar.

E-Hospital system for important healthcare services such as online registration, fee payment, fixing
doctors' appointments, online diagnostics and checking blood availability online.

National Scholarship Portal for beneficiaries from submission of application to verification, sanction
and disbursal.

Digitize India Platform for large-scale digitization of records in the country to facilitate efficient
delivery of services to the citizens.

Bharat Net programme as a high-speed digital highway to connect all 250,000 gram panchayats of
country -- the world's largest rural broadband project using optical fibre.

BSNL's Next Generation Network to replace 30-year old telephone exchanges to manage all types of
services like voice, data, multimedia and other types of communication services.

BSNL's large scale deployment of Wi-Fi hotspots throughout the country.

"Broadband Highways' as one of the pillars of Digital India to address the connectivity issue while
enabling and providing technologies to facilitate delivery of services to citizens.

Outsourcing Policy to create such centres in different northeastern states and in smaller towns across
the country.

Electronics Development Fund to promote innovation, research and product development to create a
resource pool within the country as also a self-sustaining eco-system of venture funds.

National Centre for Flexible Electronics to promote research and innovation in the emerging area of
flexible electronics.

Centre of Excellence on Internet on Things (IoT) as a joint initiative of the government agencies and
private institutions such as Nasscom.

Digital India promises to transform India into a connected knowledge economy offering world-class services at
the click of a mouse and will be implemented in a phased manner. The government feels that open access to
"broadband highways" across cities, towns and villages would give a fillip to trade across the country. "The
other important benefit we see is surge in e-commerce. The intention is to bring down net electronics imports to
zero by 2020, from about $100 billion now, a move which will help the country control its current-account
deficit. As things stand, net annual electronics imports could rise to $400 billion by 2020, outgrowing oil
imports.

Greek debt crisis: Essay

Since, Greece is the current interesting issue in the world and the downfall of its economy has been discussed.
The financial crisis affected the entire economy, thus the topics are interrelated to each other. Hence the crisis
affects all the sectors in the country. Thus the reasons for the crisis and its impact have been outlined in this
article.

Greece became the tenth member of the European Union in 1981 which ushered the period of
remarkable sustainable growth in the country. The country aimed to raise their standard of living to
unprecedented levels which would be achieved by widespread investments in industries, growing
revenues from tourism and shipping. The country then adopted the Euro in 2001. In 2004 Greece
hosted the Olympics games.

The roots of Greece's crisis are simple. Before Greece joined the Eurozone, investors treated it as a
middle-income country with poor governance which is to say, a credit risk. After Greece joined the
Eurozone, investors thought that Greece was no longer a credit risk they figured, if push came to
shove, other Eurozone members like Germany would bail Greece out. They were wrong. After joining
of Greece as the Eurozone member, investors began lending to Greece at about the same rates as they
lend to Germany. Faced with this sudden availability of cheap money, Greece began borrowing like
crazy. And then, when it couldn't pay back its debts, it turned out financial markets were wrong:
Germany and other Eurozone nations weren't willing to simply bail Greece out. That led the market to
panic around 2010, and you can see interest rates on Greek debt spike once again. Those high interest
rates make it basically impossible for Greece to borrow, and that makes it impossible for Greece to
pay its debts.
The result: Greece is insolvent and the Eurozone isn't as tight a union as the financial markets and
maybe the Eurozone's member states believed. That's the crisis.
Greece's debt-to-GDP ratio is an insane 172%, its much higher than any other country in the
Eurozone. But making matters worse is the fact that the financial markets no longer see Greece as
debt-worthy. No one wants to lend to Greece at reasonable rates, and so Greece can't keep paying to
service its current debts while carrying out basic government functions.
The latest round of the Greek crisis began when Greece rejected its two main political parties in
favour of the far-left SYRIZA. The main reason? SYRIZA promised to free Greece from the grinding
austerity that was leading to such widespread human misery. The only problem? SYRIZA had no
actual plan for freeing Greece from austerity; they tried to renegotiate the terms of the Eurozone's
support for Greece and came away basically empty handed. And so SYRIZA is asking the Greek
people to vote on whether to accept the Eurozone's terms and, by proxy, to remain in the Eurozone.
The vote is basically a final, desperate ploy for leverage, and one that's likely to fail. Either the Greek
people endorse more of the same, which SYRIZA doesn't want, or they reject the Eurozone's offer,
and basically have to leave the Eurozone, which would also be a disaster.
Over the past six years, Greece has experienced an economic depression on the scale of that
experienced by the United States in the 1930s. Its economy has contracted by around 25 percent, its
unemployment rate has exceeded 25 percent, and its youth unemployment has risen to over 50
percent.
At the same time, despite five years of budget austerity and a major write-down of its privately owned
sovereign debt, Greece's public debt to GDP ratio has risen to 180 percent. At the heart of Greece's
economic collapse has been the application of draconian budget austerity within a Euro straitjacket.
That straitjacket has precluded exchange rate depreciation or the use of an independent monetary
policy as a policy offset to the adverse impact of budget belt-tightening on aggregate demand.
In other words, the debt crisis destroyed Greece's economy, which in turn destroyed Greece's ability to
pay back its creditors or employ its people, which in turn forced Greece to beg the Eurozone and IMF
for help and the austerity measures they demanded destroyed Greece's economy even more.
The Greek government now faces the challenge in the economy of restructuring the reforms and to
ensure that the economic policies continue to enhance economic growth and increase Greece standard
of living and development in the economy.
Pursuing a strong fiscal policy which is combined with public-sector borrowing and the lowering of
interest rates has been the challenge for Greece. The Central bank of Greece is also making efforts to
increase borrowings at low interest rest in order to stabilize the economy.
The Government should reduce its expenditure and hence domestic products need to be encouraged.

As the excess of exports would enable finance the deficit in the economy. Also it will lead to rise in
GDP thereby leading to decline in rate on unemployment.
Responsibilities of a bank P.O.
Before the completion of the probation period, which is for 2 years, he/she can be asked to perform any
kind of bank related activity; it can be the clerk or assistant type of job. This is done to get them acquainted
with various working procedures of the bank.
During the probation period they are trained for having the practical knowledge in finance, accounting,
marketing, billing as well as investment. This is done by entrusting them with jobs of various categories,
viz. any of the routine works such as scrolling, posting, account preparation etc.
After successful completion of the probation period, he/she is posted in any bank branch as an Assistant
Bank Manager to handle works on daily customer transactions, viz. passing a cheque, draft issuance, cash
management etc.
He/she has to work towards increasing the bank business viz. managing cash flow, loans and mortgages
and finances.
Another responsibility of PO is to work as public relations officer, handle customer complaints and address
various customer related issues such as discrepancies in accounts, rectification of undue charges and look
into complaints regarding services provided by the bank.
Once he/she gets acclimatized to the bank environment and gain enough experience on bank's working
procedures, based on their personal skills and aptitude, they can be assigned more responsible work viz.
planning, budgeting, marketing, loan processing and approval, investment management etc.
The work of a bank PO also includes managerial tasks, such as supervision of clerical work, taking
decisions for the benefit of the bank, managing cash balance etc.
PO has to verify all the work done by bank clerk. All the transactions of bank involve the role of makerand
checker. For example, in cash transactions, if clerk is the maker, then the PO is the checker; in case of
loans, generally he/she is the maker and bank manager is the checker. The responsibility of losses resides
with the checker.
He/she takes care of the loan related documents and performs on site visit of the loan taking parties as and
when required.
A bank PO issues ATM cards, cheque books, Demand Drafts etc.
It is anticipated that a PO should be aware of all the latest developments of the bank. They are required to
read all the circulars and should know about all the decisions taken by the bank management.
The career growth prospect of a bank PO is very high as compared to other government jobs. Based on
your skills and performances, you can quickly climb the ladder and attain high level banking posts in your
zone. All that is required on your part is strong determination and good preparation, so that you can clear
the bank P.O. exam and the interview successfully. Many individuals aspire to become bank PO, because
this job promises high career growth. This job basically involves supervision of the clerical works and
work towards increasing banks business by implementing better services.

Important Concepts in Insurance Digitalization- Insurance Awareness Materials:

Insurance Repository: An Insurance Repository (IR) is a facility to help policy holders buy and keep
insurance policies in electronic form, rather than as a paper document. These repositories. Like share
depositories or mutual fund transfer agencies, would hold electronic records of insurance policies issued to
individuals. Such policies are called electronic policies or e-policies held in an electronic insurance
account.

If an insurer does not have any agreement with an IR, it has to issue an electronic form through its own
portal and also through an email. The insurer shall also issue a physical copy in such a case. All insurers
are required to tie-up with IRs if a policyholder only wants a policy in electronic format.
E-insurance account: An e-insurance account can be opened by a person who has Insurance policies on his
own or who proposes to take insurance policies. Further, it can also be opened for a minor by his legal and
natural guardian, who proposes the life of minor for taking an insurance policy. A request for opening of
these accounts can be made to the IR directly or through insurers.
Insurance Transactions Exchange: Insurance Transactions Exchange or iTrex is a central index server
that offers de-duplication services and acts as a messaging hub between entities creating eIAS, electronic
policies and their servicing. For any query to i-Trex, a policy holder has to pay a transaction fee.

Atal Pension Yojana:

Ministry of Finance announced the launch of Atal Pension Yojana (APY) on May 9, 2015. The scheme is a
universal social security measure specially for the poor and the under-privileged, which will provide a
defined pension, depending on the contribution, and its period to its subscribers.
The enrolment under the scheme was introduction from June 1, 2015. The APY will be focused on all
citizens in the unorganized sector, who join the National Pension System (NPS) administered by the
Pension Fund Regulatory and Development Authority (PFRDA).
Under the APY, the subscribers would receive the fixed minimum pension of Rs. 1000-Rs 5000 per month
at the age of 60 years, depending on their contributions, which itself would be based on the age of joining
the APY.
The minimum age of joining APY is 18 years and minimum age maximum age is 40 years. Therefore,
minimum period of contribution by any subscriber under APY would 20 years or more.
The benefit of fixed minimum pension would be guaranteed by the Government.
The Central Government would co-contribute 50% of total contribution or Rs.1000 per annum, whichever
is lower, to each eligible subscribe account, for a period of 5 years, i.e., from financial Year 2015-16 to
2019-20, who join the NPS before 31st December, 2015 and who are not members of any statutory social
security scheme and who are not income tax payers.
The Government co-contribution is payable to eligible PRANs by PFRDA after receiving the confirmation
from Central Record Keeping Agency at such periodicity as may be decided by PFRDA

Important Points to know about MUDRA Bank:MICRO UNITS DEVELOPMENT & REFINANCE AGENCY (MUDRA) BANK
Headquarters - New Delhi
Announcement - February 2015, in Union Budget of India 2015 by Finance Minister Arun Jaitley.
Launched on - April 2015 by Prime Minister Narendra Modi
Chief Executive Officer (CEO) - Mr. Jiji Mammen , previously worked as the Chief General Manager
of NABARD.

IMPORTANT THINGS TO KNOW:

1.) MUDRA bank is a public sector financial institution that provides loans at low rates to
microfinance institutions and non-banking financial institutions.
2.) This bank comes under the Pradhan Mantri MUDRA Yojana scheme to provide services to small
entrepreneurs outside the service area of regular banks.
3.) Initial capital fund allotted for the bank is 20,000 crore.
4.) Credit guarantee fund is 3000 crore.
5.) Initially the bank functions as non-banking financial company and a subsidiary of the Small
Industries Development Bank of India(SIDBI).
6.) Will act as a regulator for the micro finance institutions(MFI), providing refinancing services and
guidelines to MFI.
7.) MUDRA bank classifies its customers in 3-categories.
Shishu can avail loans upto Rs.50,000
Kishore can avail loans upto Rs.5,00,000
Tarun can avail loans upto Rs.10,00,000
8.) Additional fund of Rs.1,00,000 crore was allotted to MUDRA increasing the percentage of loans
provided to its customers as follows.
40% to Shishu
35% to Kishore
25% to Tarun
9.) Customers who are eligible to avail loans from MUDRA bank are as follows.
Small manufacturing units
Shopkeepers
Fruits or vegetable vendors
Artisans

A) Some points related to Interest Rates on Bank Accounts

1) Interest on Savings A/c is calculated on daily balance basis.
2) Now, All Scheduled Commercial Banks (Excluding RRBs) have the discretion to offer differential interest
rates based on whether the term deposits are with or without-premature-withdrawal-facility, subject to the
following guidelines:
i. All term deposits of individuals (held singly or jointly) of 15 lakh and below should, necessarily, have
premature withdrawal facility.
ii. For all term deposits other than (i) above, banks can offer deposits without the option of premature
withdrawal as well.
iii. Banks should disclose in advance the schedule of interest rates payable on deposits i.e. all deposits mobilized
by banks should be strictly in conformity with the published schedule.

B) Taxation of Savings Bank Interest rates:

Unlike interest on fixed deposits, interest earned on savings bank accounts is not subject to Tax Deduction at
Source. However, this does not mean the interest earned on Savings accounts is completely tax free. It is exempt
up to Rs. 10,000 in a year, and if the interest you earn from Savings accounts crosses this threshold, it becomes
subject to tax.
C) Senior Citizens Savings Scheme, 2004:
A Scheme which is giving a higher interest rate to the senior citizens, if they make deposits in the banks.

The salient features of the Senior Citizens Savings Scheme, 2004 are given below:
Tenure of the deposit account

5 years, which can be extended by 3 years.

Rate of interest

9.3 per cent per annum

Investment to be in multiples of

Rs. 1000/-

Maximum investment limit

Rs. 15 lakh

Minimum
investment

Premature
facility

eligible

age

for

closure/withdrawal

60 years (55 years for those who have retired on superannuation or

under a voluntary or special voluntary scheme). The retired personnel
of Defence Services (excluding Civilian Defence Employees) will be
eligible to invest irrespective of the age limits subject to the fulfilment
of other specified conditions
Permitted after one year of opening the account but with penalty.

Modes of holding

Accounts can be held both in single and joint holding modes. Joint
holding is allowed only with spouse.

Applicability to NRI, PIO and

HUFs

Non Resident Indians (NRIs), Persons of Indian Origin (PIO) and

Hindu Undivided Family (HUF) are not eligible to open an account
under the Scheme.

Global satellite to be named after Sir Abdul Kalam

~GlobalSat for DRR, a global satellite for earth observation and disaster risk reduction.
~Renamed as "UN Kalam GlobalSat"
~Decision taken by CANEUS
~CANEUS = Canada - Europe - US Asia

Payment Banks : A Step Closer Towards Financial Inclusion

A debate sparked on Wednesday about the RBI giving License to the Payment Banks. This might sound new to
you, but yes there is a different catageory called Payment Banks. Payments bank licence will allow companies
to collect deposits (initially up to Rs 1 lakh per individual), offer Internet banking, facilitate money transfers and
sell insurance and mutual funds. It is new stripped-down type of banks, which are expected to reach customers
mainly through their mobile phones rather than traditional bank branches.
The objectives of setting up of payments banks will be to further financial inclusion by providing small savings
accounts and payments/remittance services to migrant labour workforce, low income households, small
businesses, other unorganised sector entities and other users. Such banks will ensure more money comes into the
banking system and will help reach out to people in rural areas. Moreover, the payments bank licence will
enable the network of 1,54,000 post offices (including 1,30,000 rural post offices) to offer banking services to
the masses in the country.
List of the companies who got the license to run payment banks:
Aditya Birla Nuvo Ltd
Airtel M Commerce Services Ltd
Cholamandalam Distribution Services Ltd
Department of Posts
Fino PayTech Ltd
National Securities Depository Ltd
Reliance Industries Ltd
Dilip Shantilal Shanghvi
Vijay Shekhar Sharma
Tech Mahindra Ltd
Vodafone m-pesa Ltd
The next question that arrives in ones mind is that what is the need of payment bank and "Kya baaki banks kam
hain" but there is only one answer to all the questions that this step is one of the major step towards Financial
Inclusion. These banks have limited services as compared to the other banks. Let's see what these banks can or
can't do :
They cant offer loans but can raise deposits of upto Rs. 1 lakh, and pay interest on these balances just like a
savings bank account does.
They can enable transfers and remittances through a mobile phone.
They can offer services such as automatic payments of bills, and purchases in cashless, cheque less transactions
through a phone.
They can issue debit cards and ATM cards usable on ATM networks of all banks.
They can transfer money directly to bank accounts at nearly no cost being a part of the gateway that connects
banks.
They can provide forex cards to travellers, usable again as a debit or ATM card all over India.
They can offer forex services at charges lower than banks.
They can also offer card acceptance mechanisms to third parties such as the Apple Pay.
This is for the first time in the history of India's banking sector that RBI is giving out differentiated licences for
specific activities. RBI is expected to come out with a second set of such licences for small finance banks
and the process for those is in its final stage. The move is seen as a major step in pushing financial inclusion in
the country.
Its a step to redefine banking in India. The Reserve Bank expects payment banks to target Indias migrant
labourers, low-income households and small businesses, offering savings accounts and remittance services with
a low transaction cost. It hopes payments banks will enable poorer citizens who transact only in cash to take
their first step into formal banking. It could be uneconomical for traditional banks to open branches in every
village but the mobile phones coverage is a promising low-cost platform for quickly taking basic banking
services to every rural citizen. The innovation is also expected to accelerate Indias journey into a cashless
economy.
The most prominent figure among those left out is Kishore Biyani, founder and CEO of Future Group. Indeed,
Biyani throwing his hat in the ring was out of sync with the group's moves over the past few years. He had sold
his stake in public listed financial services firm Future Capital (now Capital First) and has also been looking to

rewind holding in insurance JVs to focus on the core retail business.MG George Muthoot and others, from
Muthoot Finance, the largest gold financing company in the country, too missed on the list of firms which got
nod for payments bank licences. There is a set of firms such as Dhoots-controlled DTH company Videocon d2h
Ltd that was not considered for the licence. The group had sought to enter financial services as a business
through its DTH firm, which is now listed on NASDAQ. Among others, NSE Strategic Investment Corporation
Ltd, a part of national bourse NSE and realtor Kalpataru Corporation also missed on the opportunity to add a
new business line. While mobile wallets have been one of the fastest growing segment, RBI granted approval
only to Paytm (the applicant was its co-founder Vijay Shekhar Sharma). Its peers like Oxigen, MobiKwik,
Citrus and ItzCash lost out on the opportunity to become payments bank, at least for now.
Indias domestic remittance market is estimated to be about Rs. 800-900 billion and growing. With money
transfers made possible through mobile phones, a big chunk of it, especially that of the migrant labour, could
shift to this new platform. Payment banks can also play a crucial role in implementing the governments direct
benefit transfer scheme, where subsidies on healthcare, education and gas are paid directly to beneficiaries
accounts. Also, this is the first time since banks were nationalized, that private sector business groups have
bagged the RBIs nod for banking services.

Quizes based on above information :

1. What is the minimum paid up capital required for Payment Banks?

a) 100 Crores
b) 500 Crores
c) 50 Crores
d) 150 Crores
e) 200 Crores

2. Which of the following is the one who did not get a license?
a) India Post
b) Tech Mahindra
c) Reliance Industries
d) Future Group
e) None of these

3. Which of the following is not true about the payment banks?

a) They can not offer loans.
b) They can provide forex cards to travellers, usable again as a debit or ATM card all over India.
c) The objectives of setting up of payments banks will be to further financial inclusion.
d) Payment banks can undertake lending activities
e) Foreign shareholding in the payment banks would be as per extant FDI policy.

4. Which of the following services will not be provided by the payment banks?
a) Internet Banking
b) Mobile Money Transfer
c) Cheque Less Transactions
d) Forex Card to Travellers
e) Credit Cards

5. RBI has given licenses to how many companies

a) 10
b) 11
c) 12
d) 13
e) 14

The guidelines for licensing of payment banks were announced in November 2014 and on August 19, 2015 the
Reserve Bank of India (RBI) gave an in-principle approval to 11 of the 41 applicants. The full list includes
Reliance Industries, Aditya Birla Nuvo, Vodafone, and Airtel, with the RBI adding it will move to give such
licences more regularly in the future.

"The 'in-principle' approval granted will be valid for a period of 18 months, during which time the applicants
have to comply with the requirements under the guidelines and fulfil the other conditions as may be stipulated
by the Reserve Bank," the RBI stated.

The goal behind creating these payment banks is to bring about financial inclusion, by making it easier for
anyone to get a bank account. That's also why the cash limit in the accounts is set to just Rs. 1 lakh - it might
seem like a very low limit to most people reading this, but if you're typically outside the banking system, then it
is a fairly comfortable amount. The real effect will come to remittances within the country, as it will become
easier for people to send money home to smaller towns and villages while working in the city.

"We have partnered with several government bodies to run pilots for enabling direct transfer of wages and
subsidies," says Sunil Sood, Vodafone CEO. "The payment bank licence will enable us to build on this further
and offer a more comprehensive portfolio of banking and financial products and services, accelerating India's
journey into a cashless economy."

"We want to provide bank accounts to people in the villages, to bring them into the digital economy, to send
money, buy goods and services, through the digital economy," he adds.

The new payment banks will also make people less dependent on cash, even for small sums, and since a mobile
wallet could be a bank account soon, this move could, over time, have a big impact on m-commerce.

So what exactly is a payment bank, and why is it important?

Payment banks can accept deposits restricted to Rs. 1 lakh per customer, and are allowed to pay customers
interest on the money that is being deposited. They can be used for either current accounts or savings accounts.
For companies that have operated as mobile wallets (which are a type of Pre-Paid Instrument aka PPI), this is a
big step forward as it raises the funds limit, and allows interest to be paid on the deposits, making it more
attractive for users to store their money with a Paytm or m-Pesa.
Unlike a regular bank however, a payment bank can't loan money to people, or issue credit cards. Also, the
payment banks are only allowed to invest the money customers deposit into government securities.
While the payment banks can't issue credit cards, they can issue ATM and debit cards. Since many of the 11 new
license holders already operate mobile wallets, the ability to issue an ATM card helps close the loop and makes
it easier to convert virtual money into cash, and vice versa.
This is also very important when considered from the perspective of financial inclusion, as someone could now
fill cash into a m-Commerce bank account from Delhi, and a relative in a small town who holds the debit card
could withdraw cash from any ATM frictionless, or even in a more rural location, through any point of sale
terminal with a "business correspondent", essentially an authorised partner for the bank. It's these partners - and
theoretically the small convenience shop in a village that sells mobile recharges could be one of them - that will
serve the purpose of bank branches, though the payment banks can set up branches if they want.
Payment banks can be integrated with your savings bank accounts via IMPS and NEFT transfers. As already
mentioned, the payment banks ATM or debit cards will also work on all banks' machines. Payment banks can't
accept NRI deposits, which makes sense considering the goal of financial inclusion.

So why these 11 companies?

The RBI guidelines say that payment bank licenses would be granted to mobile firms, supermarket chains, and
others, to cater to individuals and small businesses. The goal is to provide small savings accounts, and payments
and remittance services to a migrant labour workforce, low income households, small businesses, and others. Of
the 41 companies and individuals that applied, only 11 have been selected.
Interestingly, some of the companies that did not make the cut for now, such as Oxigen services, already see a
large chunk of their business coming through remittances, and have worked on a four-month pilot project for the
RBI, using the Adhaar card to enable cash payments for government schemes.
The companies that have been selected right now seem to largely fit the bill. In some of the cases - Paytm (Vijay
Shekhar Sharma), Finotech, Reliance, Airtel, Vodafone, and Idea (Aditya Birla Nuvo) the connection is pretty
clear. Paytm's cash wallet is already pretty popular thanks to its tie up with Uber, and many people use their
telco's wallets to pay their phone bills in exchange for discounts on the bill. Now, you could also earn interest on
the money stored there, and potentially, use these accounts all small transactions.
The phone companies in particular have large distribution networks throughout India, even in rural locations,
and this will help as people will be able to easily convert cash into virtual money and vice versa.
"With over 90,000 m-pesa agents, we are already providing people in remote areas a convenient way to, transfer
money and make payments in a safe and secure manner," says Vodafone's Sood.
The Department of Posts is also important for that same reason - the Department of Posts can reach every
village, and connect farmers to banks. Think of the huge number of government subsidies and cash programs
that are meant to encourage development in villages, and consider how, to access these payments, villagers
would have had to travel for hours to nearby cities in order to visit a bank branch, where the experience was
frequently alienating. Instead, the friendly postman you meet every day could be your banking relationship
manager.

Cholamandalam, and the National Securities Depository both make sense from a finance and banking history
perspective, and Tech Mahindra makes sense as a technology company.
It's important to remember that the RBI has said it will use the learnings it gains from these first set of new
payment banks to improve its processes, and will give licenses more regularly. With that in mind, it appears that
the licenses have been given to some fairly different companies to see what approaches will be successful.

What is the objective of the payment bank?

The objectives of setting up of payments banks will be to further financial inclusion by providing small savings
accounts and payments/remittance services to migrant labour workforce, low income households, small
businesses, other unorganised sector entities and other users.

Do you get debit/credit cards for transaction?

No, you can't get credit cards for transaction but the payment banks can issue ATM/debit cards.

What will payment banks do for the banking system?

Such banks will ensure more money comes into the banking system and will help reach out to people in rural
areas. Moreover, the payments bank licence will enable the network of 1,54,000 post offices (including 1,30,000
rural post offices) to offer banking services to the masses in the country.

What about applying for loans through payment banks?

The RBI guidelines say that the payments bank cannot undertake lending activities. So if you want to apply for
loan, you will have to go to the regular banks which issue loans.

Is there any grievance body?

The RBI guidelines clearly say that the banks should have a high powered Customer Grievances Cell to handle
customer complaints. The operations of the bank should be fully networked and technology driven from the
beginning, conforming to generally accepted standards and norms.

what the devaluation is and what could be the implications.

A deliberate downward adjustment to the value of a country's currency, relative to another currency, group of
currencies or standard. Devaluation is a monetary policy tool of countries that have a fixed exchange rate or
semi-fixed exchange rate. It is often confused with depreciation, and is in contrast to revaluation.
Devaluating a currency is decided by the government issuing the currency, and unlike depreciation, is not the
result of non-governmental activities. One reason a country may devaluate its currency is to combat trade
imbalances. Devaluation causes a country's exports to become less expensive, making them more competitive
on the global market. This in turn means that imports are more expensive, making domestic consumers less
likely to purchase them.
While devaluating a currency can seem like an attractive option, it can have negative consequences. By making
imports more expensive, it protects domestic industries who may then become less efficient without the pressure
of competition. Higher exports relative to imports can also increase aggregate demand, which can lead to
inflation.

Devaluation of Yuan
China cut the value of its yuan currency against the US dollar for the second day in a row Wednesday, taking the
reductions to 3.5 per cent this week the largest in more than two decades. The move has reinforced concerns
about the world's second largest economy, and analysts are divided over the reasons behind the move and the
consequences it will have.The People's Bank of China (PBoC) said Tuesday's "one-time correction" in the yuan
is part of a larger scheme to give the market a bigger say in the value of the currency, also known as the
renminbi (RMB).
At the same time Chinese growth has been slowing, and a devaluation can boost the economy by making
exports -- a key sector -- cheaper for overseas buyers. A decades-long boom has turned China into the world's
second-largest economy, but despite being the world's largest trader in goods its role in the global financial
system remains relatively limited. It has been looking to build up its presence, setting up a new multilateral
Asian Infrastructure Investment Bank, and is also pushing to join the exclusive club of the International
Monetary Fund's basket of "special drawing rights" (SDR) reserve currencies. But it must show progress on
liberalising the yuan regime to win membership.
The jury is still out. For China, the move could deliver both an export and economic boost -- but will also make
imports more expensive, potentially pushing up inflation, and raise costs for Chinese firms with dollardenominated debt. For the rest of the world, some analysts believe the move could trigger currency wars, as

other emerging market countries devalue to compete. Market and economic turmoil could cause the United
States to delay plans to raise interest rates as the world's biggest economy recovers.
Most analysts expect the yuan to weaken further, but at a more gradual pace. SG Global Economics said in a
research report that it saw a "bias for further depreciation" in the yuan, extending to five per cent over 12
months.The United States has previously criticised the yuan for being undervalued, but also hopes China will
speed financial reforms and create a more level playing field for American companies. It is taking a wait-andsee attitude. The IMF, now considering China's application for SDR currency status, praised the move as giving
market forces a greater role.

India's Preparedness on This Move

Global experts have expressed extreme views on the devaluation extreme views on the devaluation of the yuan.
Some have said it is more significant than the Greek crisis and the coming U.S. Fed interest rate increase. But
for others, it is small and long-overdue adjustment that barely begins
To make up for the really big recent moves in the dollar, euro and yen. The pick-up in real credit growth and
indirect tax receipts suggests that the underlying momentum in the economy is improving. Mr. Subramanian
told press persons.
The growth in underlying indirect tax collections (excluding the additional revenue from excise increases in
diesel and petrol and higher clean energy cess and service tax rate) of 14.6 per cent for the first four months of
the scal, he said, represents a "healthy increase in nominal GDP growth.
He said China's surprise decision, which its Asian counterparts trade with a bearish tone on Tuesday, could be
aimed at satisfying the conditions the IMF had spelt nut for granting it reserve currency status aud inclusion in
the special drawing right (SUB) basket. Arundhati Bhattacharya, SBI Chairperson, however, said: Yuan
devaluation is a challenge obviously because it makes our exports a little uncompetitive.