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If electricity / internet outage, worry not,


Class Video recording will be available in your Dashboard
Handout already uploaded in Dashboard, keep its print ready
before class, as I’ll ask you to write some things in it. IF NOT
taken print, worry not, write my instructions in a Blank Paper.

Queries:
• Technical issues: In LIVE comment box so the Staff can look into it.
• Educational issues: In google form – http://bit.ly/mrufaq1
Absenteeism Binge-Watching

Patience Overconfidence

Faith Risk
DAY#1 Attendance • Remain present in live class to cultivate
discipline in your weekly studies.
• “today not in ‘mood’, cousin’s wedding, I’m
busy with finishing Art & Culture syllabus.
so I will watch entire months recordings at
once later on” #EPICFAIL.
• Binge-Watching: students watch at 1.75x
speed / glance over all EPISODES. All finer
details will not get absorbed, memorized
and reflected in mind.
• Daily 1 almond each= nutritional
absorption will be more compared to eating
+2 months = ~40% drop 30 almonds only once in a month.
Freshers
• 1st Attempt in UPSC-2019
“I can skip this class, already know this WTO
theory from past youtube videos. This is too
basic for 1st attempt-walla”, will check it
later, because Rajya Sabha TV & Mains
Answer writing this the only important thing
Senior Players for me!!!!= #ABSENTISM= #EPICFAIL.

• Past Prelims (out of 200 marks): ~60-70 |


~90-100, Some even gave Mains / Interview,
some working in Bank/SSC /ONGC jobs
• but joined for discipline in studies
I hope you’re familiar with the exam structure, 2019
syllabus, if not then either google or go through
my recent lecture on Unacademy’s youtube .
19th Feb: UPSC
We are here
application form

2nd June : Prelim

Mid-July Prelims
Result 20th Sept: Mains
UPSC Prelims Paper-1 General Studies: 100 Qs x 2 marks = 200m. 2019

Reading list for other subjects, given in first page of Handout

19th Feb: UPSC


We are here
application form

Geography Agriculture Environment Economy


2nd June : Prelim

Mid-July Prelims
Polity & IR History Science Tech Current Result 20th Sept: Mains
UPSC Prelims Paper-1 General Studies: 100 Qs x 2 marks = 200m. 2019

Reading list for other subjects, given in first page of Handout

19th Feb: UPSC


We are here
application form

Geography Agriculture Environment Economy


2nd June : Prelim

Mid-July Prelims
Polity & IR History Science Tech Current Result 20th Sept: Mains

Primary focus of our course: Prelims Economy. But in i.e. economy’s


such manner that most parts for Mains-Economy also current &
covered. If seen handout- Mains mockQ, essay pointers contemporary
Affairs
System notifies you through email –
Mrunal has uploaded something. if not
received such mail, still check
dashboard ~12 hrs before.

• I’m aim to upload Sat+Sunday’s PDF


combined in one file. So you don’t have to
take new print on Sunday morning!
• keep its print ready before class, as I’ll ask
you to write some things in it. IF NOT taken
print, worry not, write my instructions in a
Blank Paper, then update once you print.
No need to make Live class • One color for writing (Blue
NOTES per se- Handout Handout Print Two pens of different
colors. / black)
itself is the note. But • Second color (orange,
papers required: red, green) for evaluation
1. Any thoughts, or margin notes. Use your
imagination.
epiphany, queries.
Note down-> ask me
through google form.
2. Mains-Answer writing
during breaks. Unruled A4 sized pages One report file- to store
printouts & papers
Powerpoints = nightmare .
• 4 hrs class = ~200-250 slides.
• Printing expensive even with 4 slides on page.
• Revision is nightmare- even in digital copies too many individual files
open-close-swipe each slide.
Exam Revision friendly solution is a text-based handout

~250 slides but condensed into just 6 pages double


side (total 12).
• You’ll fill these, when I tell you to. = more
mental involvement and connection between
what was taught in Powerpoint and how it’s
condensed into the PDF.
• During live class, refer to handout only when I
tell you to. Else focus on the Screen.
• No need to read handout before class.
• If not brought printout, don’t worry, keep PDF
minimized, write blanks in a paper / diary, then
update once you print.
• You’ll fill these, when I tell you to. = more
mental involvement and connection between
what was taught in Powerpoint and how it’s
condensed into the PDF.
• During live class, refer to handout only when I
tell you to. Else focus on the Screen.
• No need to read handout before class.
• If not brought printout, don’t worry, keep PDF
minimized, write blanks in a paper / diary, then
update once you print.

Hindi terms: to help mains aspirants (Hindi /


Gujarati / Marathi) and other vernacular
languages where you can extrapolate the hindi
words.
• You’ll fill these, when I tell you to. = more
mental involvement and connection between
what was taught in Powerpoint and how it’s
condensed into the PDF.
• During live class, refer to handout only when I
tell you to. Else focus on the Screen.
• No need to read handout before class.
• If not brought printout, don’t worry, keep PDF
minimized, write blanks in a paper / diary, then
update once you print.

Hindi terms: to help mains aspirants (Hindi /


Assamese / Kannad etc. translation- school
textbooks, state open university modules, Gujarati / Marathi) and other vernacular
Past Yojana magazines (available free languages where you can extrapolate the hindi
online), google translate, past topper /
seniors notes- self-manage.
words.
Download the PDF file by accessing the website through
Google Chrome Browser on a desktop PC or laptop. if the
problem still persists contact the technical support team at
help@unacademy.com
Not entirely “English” Not entirely
“Hindi”

Not promised ‘full length Hindi notes’, it’s not


humanly possible for me at this stage.
Yesterday, class over ~8:15PM, then recording uploaded by
8:33PM and notified through email, check spam folder.
Recording here
Ignore this FB
group, it’s
discontinued.
No need to
join it.
Click here to see the
slides without video.
Fast video playback and ‘binge-
watching’- then you can’t absorb
the knowledge fully. So if missed
class, watch @1x only. If attended
but re-watching then increased
speed . Click here to see the
slides without video.
Goto recorded class
Because then live quiz’s mystery and challenge will be
gone.
Because entire topic was not finished. If I
split the slides, causes naming confusion.
Goto recorded class
So it’s embedded in the recorded session itself still, I will
upload powerpoint in the same “discussion” place, but after
a particular topic is over. And I repeat- for exam only refer to
the handout.
Only 12 pages, printer friendly,
revision friendly.

PPT = ~250 slides


If others are giving
wrong answer,
don’t demotivate
them “tum galat
ho, why are you
here, you’ll not
pass exam, if you
can’t even solve
this.”
• When I’m saying xyz is not important for
exam, then some guys are quipping that “only
teach us what is important for exam. Don’t
waste time narrating that xyz is not important
for UPSC.”
• But then you’ll not learn how to be self-
sufficient for your second / third attempt in
UPSC and non-UPSC exam- danger of
remaining headless chicken chasing
whatever PDF material is circulated,
irrespective of utility for a particular exam.
• @senior players, I said in the opening section-
I’ve to teach basics to the first attempt
students as well.
• Some students are only passing funny
comments, quips and world gyan in
the live class.
• if you’re typing that in live class (and
anticipating the reaction of others),
then you’re missing what is being
taught on the screen.
• @end of the day- whether you want to
be a funny guy or a future officer,
you’ve to decide.
Comment box is
distracting, how to
disable it?

Ans.

I’ve Have told


technical team
about this feature
request. .
Most of the
queries have
resolved, some
new pending-
I’ll do it after
the class.
2018 2019
• UPSC Prelims GS Paper=
~50 Theory + 35
contemporary (D-5) + 15
Current (D-1). Our live course will end
• I’ll covering all 3 parts for here.
Economy.
• Within current: majority Qs
are from D-1 year. i.e. for 2nd June
Upto D-1 Will send PDF for
Prelims 2019: Jan-2018 to Month. 30th whatever new : Prelim
updates upto 30
Dec 2018. April 2019. Apr 2019
• How much “LATEST” CA to
prepare? D-1 Month.
20th Sept: Mains
(although read newspaper
till the last day before
exam)
• Current affairs: economy – I 2018 2019
will do.
• What about CA from polity,
science etc. (1/1/2018 to
30/4/2019) you’ve to
prepare.
3 ways We are here
1. Various courses on UA &
elsewhere
2. Previous monthly
compilations of VisionIAS / 2nd June
Upto D-1
Drishti / insights/IASbaba : Prelim
Month. 30th
whichever. April 2019.
3. No need to make notes out of
CA compilation PDF/Mags.
No need to make notes for
GSP/GSM out of Newspaper 20th Sept: Mains
except what is important or
quotable for Essay, Ethics,
StatePCS, Interview hobby,
graduation & workXP.
No. of MCQs in Prelims out of 100
7
6 6
1) MBFI 2) Budget 3) Intl. Trade
2016 2017 2018
What we’ll study for UPSC (list not exhaustive) What we’ll not study for UPSC (list not exhaustive)

•Fiat money, legal tender, Digital Payment, Cryptocurrency


•RBI: Monetary policy (CRR, SLR), Autonomy, functions, •Technical papers & technical guidelines released by RBI,
powers SEBI, IRDAI. E.g. SEBI guidelines for MF aggregators…
•Banking sector- evolution, types, challenges NPA/TBS, •Sharemarket Broker / Investor
PCR, BASEL etc. •Banking / insurance Trivial GK for RBI, SEBI, LIC, EPFO
•Basics of Financial / capital market, Companies Act, CSR.. 4) Sectors of officers’ exam.
5) Infrastructure 6) HRD
•Pension, Insurance, Financial inclusion schemes, Economy
regulations
In Prelims out of (100 MCQs)
7
6 6
1) MBFI 2) Budget 3) Intl. Trade
2016 2017 2018
Mains GSM1-2-3 (Out of 750 m)
2016: PM Jan Dhan yojana, Fasal Bima
25
Yojana. Else, Mains “DIRECT” utility
rather low. Indirectly, fodder for “growth,
0 0 4) Sectors of
investment,
Economy Make5) Infrastructure
in India…” 6) HRD
2016 2017 2018
In Prelims out of (100 MCQs)
4
3 3
1) MBFI 2) Budget 3) Intl. Trade
2016 2017 2018
Mains GSM1-2-3
What we’ll study(Out of 750
for UPSC (listm)not What we’ll not study for UPSC (list not
exhaustive) exhaustive)
30
25
•Theory: budgeting, taxation, subsidies. •CA like interpretation of tax laws- how much
12.5Finance, FRBM, PSU-Disinvestment.
•Deficit IT on EPF withdraws.
•Latest Budget & Economic Survey. •Trivial GK like which FM presented max.
4) Sectors of
•GST, 15 th FC, Black Money- Demonetization Economy number of budgets…how much fridge
5) Infrastructure &
6) HRD
2016 2017 2018 washing machine got expensive or cheap?
In Prelims out of (100 MCQs)
4
3 3
1) MBFI 2) Budget 3) Intl. Trade
2016 2017 2018
Mains GSM1-2-3 (Out of 750 m) What has been asked:
30 • GSM2: Constitutional angles: GST amendment,
25 Finance Commission
12.5 • GSM3: Theory: “gender budgeting”, specific
current
4) Sectorsannouncements
of in the Budget itself
5) Infrastructure e.g.
6) HRD
Economy
2016 2017 2018 DDT, LCGT.
In Prelims out of (100 MCQs)
11
4 4
1) MBFI 2) Budget 3) Intl. Trade
2016 2017 2018
Mains GSM1-2-3
What we’ll (Out(list
study for UPSC of 750 m)
not exhaustive) What we’ll not study for UPSC (list not exhaustive)

25 30
• BoP- CAD, Exchange rate, Currency • Trivial figures – monthly up and down of Rs vs $
convertibility or crude price. Only trend should be known.
• Notable intl. organizations, summits, treaties,
0
agreements, WTO, IMF, SDR etc.
4) Sectors of
• Oil price, currency manipulation, protectionism, Economy 5) Infrastructure 6) HRD
2016
trade war etc. 2017 2018
In Prelims out of (100 MCQs)
11
4 4
1) MBFI 2) Budget 3) Intl. Trade
2016 2017 2018
Mains GSM1-2-3 (Out of 750 m)
What has been asked:
25 30 • GSM2: WTO, Protectionism & WTO (2018)
• GSM3: How to improve FDI, Protectionism &
Currency Manipulation (2018)
0 4) Sectors of
• Indirectly
Economy also helps- globalization, IR
5) Infrastructure 6) HRD
2016 2017 2018
What we’ll study for UPSC (list not exhaustive) What we’ll not study for UPSC (list not exhaustive)

• Schemes, policies for agri, mfg, service: incl. • Trivial figures & petty announcements.
latest budget & Survey, subsidies, loan waivers. • IMF brings down the forecast of India's growth
• Planning Commission, NITI Ayog etc. rate to _ _ % India’s tourism sector is estimated
• GDP, inflation, WPI-CPI etc. theory & current to be _ _ billion$ industry.
issues. • GSM3: Food processing Industry (given in
1) MBFI Mrunal.org/economy)
2) Budget 3) Intl. Trade
• Microeconomics I count here.

In Prelims out of (100 MCQs)


8
4 3
4) Sectors of
5) Infrastructure 6) HRD
Economy
2016 2017 2018
In Prelims out of (100 MCQs)
What has been asked:
8 • GSM2: How LPG affected India?
4 3 • GSM3: Why / how labour intensive exports? GDP
potential,why industrial growth rate poor, MSP &
other schemes of Agro,
1) MBFI NITI vs PC 3) Intl. Trade
2) Budget
2016 2017 2018
Mains GSM1-2-3 (Out of 750 m)
60 50
25
4) Sectors of
5) Infrastructure 6) HRD
Economy
2016 2017 2018
What we’ll study for UPSC (list not exhaustive) What we’ll not study for UPSC (list not exhaustive)

• Transport, Energy, Communication, Rural & Urban • Railway Budget – because there is no such thing.
Infrastructure- Issues, Policies & Schemes & OR even how many new train routes announced in
APPs new General budget.
• Including notable environment treaties & clean • TRAI’s technical consultation papers for
energy initiatives spectrums, call drops. Only basics should be
• Investment models for Mains/GSM3 1) MBFI known 2) Budget 3) Intl. Trade

In Prelims out of (100 MCQs)


4
2
1 4) Sectors of
5) Infrastructure 6) HRD
Economy
2016 2017 2018
In Prelims out of (100 MCQs) What has been asked:
4 • GSM1: Smart Cities (2016)
• GSM2: nothing directly yet. But indirectly-
2 poverty, education, health Qs.
1 • GSM3: Smart cities (2016), energy
1) MBFI 2) Budget 3) Intl. Trade
2016 2017 2018 infrastructure, PPP in Airports.
Mains GSM1-2-3 (Out of 750 m)
37.5
10 15
4) Sectors of
5) Infrastructure 6) HRD
2016 2017 2018 Economy
What we’ll study for UPSC (list not exhaustive) What we’ll not study for UPSC (list not exhaustive)

• Gender, Education, Skill, Poverty, Health, Hunger,


population- issues, policies & schemes, portals & • Trivial figure pursuit. We should know IMR, MMR,
APPs BPL % etc. figure but every small figure, ranking &
• Latest Budget & Economic survey report is not important.
• Notable Global reports, indices
• Sustainable Development Goals (SDGs) 1) MBFI 2) Budget 3) Intl. Trade

In Prelims out of (100 MCQs)


6
3 4
4) Sectors of
5) Infrastructure 6) HRD
Economy
2016 2017 2018
In Prelims out of (100 MCQs)
What has been asked:
6 • GSM1: Poverty removal, NITI’s Aspiration district program

3 4 • GSM2: Demographic dividend & Education reforms,


Health, hunger, Poverty removal schemes.
• GSM3: Manpower planning for growth, inclusive growth,
SDG progress in India 2) Budget
1) MBFI 3) Intl. Trade
2016 2017 2018
Mains GSM1-2-3 (Out of 750 m)

50 60
40
4) Sectors of
5) Infrastructure 6) HRD
2016 2017 2018 Economy
In Prelims out of (100 MCQs)

29 29
~20/100= ~1/5th
25
1) MBFI 2) Budget 3) Intl. Trade
2016 2017 2018
Mains GSM1-2-3 (Out of 750 m)
175 140 180
~150/750= ~1/5th
4) Sectors of
5) Infrastructure 6) HRD
2016 2017 2018 Economy
Refer to Topicwise Papers & Trend analysis available:
Mrunal.org/Prelims and Mrunal.org/Mains
Ans. No. we’ll re-learn those things, in a more structured, more compact
format, with new updates, new budget, new survey.
IYB chapter no.s are given in Handout
page1 so no need to write this.
1) MBFI 2) Budget 3) Intl. Trade

4) Sectors of
5) Infrastructure 6) HRD
Economy
My 500gms Pros/ लाभ
tomatoes for
your 5 kg wheat •Simplest form of trade
•Foreign Exchange: Iraq –oil,
India- wheat, no need to worry
for Rs-$ exchange rate or US
sanctions on Iran!

Cons/ नक
ु सान
Pros/ लाभ
My 500gms
tomatoes for •Simplest form of trade
your 5 kg wheat •Foreign Exchange: Iraq India

Cons/ नक
ु सान
But I want
mangoes for my •Double co-incidence of wants
wheat (आवश्यकताओ का दोहरा संयोग)
•Search cost / Cost of Transaction ↑
•Storage of perishable commodities, Loss
of Value.
•Divisibility & Fungibility problems
• Buying more than needed =
Suboptimal use of resources
• Specialization & division of labor
discouraged because everyone
tries to grow daily necessities-
milk, egg, vegetables.
Sum of these will not equal the big
diamond in terms of value
division yes

mutual
substitution
yes

Diamonds
are forever
but not
Sum of these will not equal the big fungible.
diamond in terms of value
division yes
1 bar = 250gm
mutual
substitution
yes

25 bars x 10 gm
= 250gm
division yes

mutual
substitution
yes

Micromax’s
poor battery
basic phone
Mukesh Ambani’s Mukesh Ambani’s
Co. share Rs.10 Co. ordinary share
face value Rs.10 face value

Anil Ambani’s Co. Mukesh Ambani’s


share Rs.10 face Co. Preferential
share Rs.10 face
value value

More about shares, bonds, debentures later in


Financial markets lecture within Pillar#1
wants

if not taken printout, don't worry, write the yellow-box Diamonds,


words in a blank paper and later fillup the printout. shares, bonds..
1) Measure of value (मल्
ू य का मापक)
•Money = Divisible & fungible [Rs.2000= Rs.500
x 4 Nos.]
•gm=weight, ml=volume, Rs. =value
•Labour- wage; capital- interest/dividend; land-
rent; balance sheet, Budget, BoP
1) Measure of value (मल्
ू य का मापक)
• Money = Divisible & fungible [Rs.2000= Rs.500 x 4 Nos.]
• gm=weight, ml=volume, Rs. =value
• Labour- wage; capital- interest/dividend; land-rent; balance sheet, Budget, BoP

2) Medium of exchange / transaction (ववननमय का माध्यम)


• Tomato->sell->Rs->buy wheat / mango.
• Money is Hard to counterfeit, durable, portable, acceptable
• White Money: declared to Govt, Black money: Not declared in IT / GST returns.
[More with budget-> Taxation]
Measure of Value

Medium of exchange / transaction

if not taken printout, don't worry, write the yellow-box


words in a blank paper and later fillup the printout.
Primary function:
Store of “DATA”
DVD
Secondary / derivative:
Provider of music,
entertainment, education
1) Store of Value (Savings => Investment)
Measure of value •मूल्य का संचय
•White (salary in bank- linked with PAN)
• Weight- grams •Black (Bizman hiding profit in cash under his pillow,
• Volume- ml not declaring in IT/GST returns)

• Wage – Rs. 2) Transfer of Value


•मूल्य का स्थानांतरण
•Soldier in Kashmir to parents in Kanyakumari

Medium of
exchange 3) Std. of Deferred Payments
•स्थगगत भुगतानो का मानक
• Tomatoes->sell->$
•Airtel buy iphoneX @3499 only per month x 24
• $->buy->wheat •(Time value of Money / interest)
Store

Transfer

if not taken printout, don't worry, write the yellow-box


words in a blank paper and later fillup the printout.
Loan, investment, share
Primary
bond deposit
Secondary (STD)
Measure of Value mobilization…
Contingent Functions
Medium of Exchange Store value Will study more in banking-
Transfer Value Basis of credit system, finance
Deferred Payments Financial markets
Employing factor inputs
Creation &
Land labour capital can be Redistribution of
mobilized because “Value” National Income
measured in Money.
Tata Nano: 30% tax
Essay for thought: Money is not the
root of all evil, greed is. पैसा नही, लोभ on profit -> MNREGA,
सभी बरु ाईओ का मल ू है . Food subsidies.
Match the following, AR,
2TF/3TF… online Quiz will be
after a few lectures
Commodity Metallic Paper /Token/ Bank Money, Crypto /Virtual
Money Money Representative deposit money Currency using
/ Fiat money/ digital blockchain
legal tender payment tech.
USA: iron nails, India, Pacific:
Aztec: cocoa beans Fiji: Whale teeth Crude gold nuggets
Bear pelts Cowries

bulky to Perishable: • div. of labour No value for Uniformity,


…?
transport fungus, • Hyperinflation
outsiders; purity ?
moisture if tide brings intl. trade..?
too many “Mint” them,
“Stamp” them
History
• Traders & Kings: stamped their marks for uniformity, precision.
• Indo Greek kings – issued gold coins, bilingual Greek and Kharosthi, then
Kushana issued GOLD coins, inspired from Roman coins. (NCERT)
• 390-550AD: Gupta Gold coins most spectacular- king is playing Veena,
shooting animals, sitting with wife, taking selfi …
• Delhi Sultanate Kings: Silver Tanka. Sher Shah Suri Rupiyah silver coin.
Akbar: Muhr.
• SELF STUDY: Rest of the history in Nitin Singhania Ch.23
Benefits
• Metal’s Intrinsic value, Non-perishable
• Divisible, Fungible, Melt-combine
• Even foreign trade possible. (precious metal = universal appeal) Self-study korbe
• Production low, Prices stable, Hyperinflation…X chaalo.
What if too many currency notes
1 mango = 1 $ are printed but not enough
commodities in the market =>
could lead to hyperinflation.
This is difficult in gold coins,
because gold supply itself is
limited.

1 mango = 5 $
Pause Video to
Attempt it Yourself
Full ans @ Mrunal.org/Mains
Pepper (Yavanpriya), spices,
Gold, silver, wine, slave girls
ivory, silk, sandlewood

- More export = More gold


- More tax / revenue to king
- Gold -> AWESOME coins both in India and China
- ▼in Roman-Persian empires = ▼ in incoming gold = poor
quality coins. While people hoard old “good old” coins for
metal & melt them. Like this 
People will hoard
precious coins, and
use bad coins for
People will file or
payments.
extract precious
metal from the
coins, then use
Pause Video to
Attempt it Yourself
Pause Video to
Attempt it Yourself
Weak trade, weak empires = shortage of
Iran also issued gold, silver and funds. How to finance
paper money. wars, keep Nobles happy ? Chao
(paper money) of Kublai Khan of China.
Weak trade, weak empires = shortage of
Iran also issued gold, silver and funds. How to finance
paper money. wars, keep Nobles happy ? Chao
(paper money) of Kublai Khan of China.
- Previous Sultanate kings: Silver tanka
- Tughalaq bronze / copper coins with equal
face value like Silver coins. “Token coin”
- Result: silver coins hoarded, Fake coins used
to pay land tax, Foreign merchants did not
accept.
- Tughlaq withdrew token coins, exchanged
them for gold coins, even for forged coins!
- Ziauddin Barani “the heap of copper coins
remained lying on roadside in Tughlaqabad.”
Full Bodied Coins
•US Ten Cents before 1965
•Melt value of Silver $2.10 >
Face Value $0.10
•Intrinsic Value (अंतभत
ू )> Face
Value (अंककत मल्ू य)
•Melting, Hoarding, Shortage
Full Bodied Coins
•US Ten Cents before 1965
•Melt value of Silver $2.10 > Face Value $0.10
•Intrinsic Value (अंतभत
ू )> Face Value (अंककत मल् ू य)
•Melting, Hoarding, Shortage
Unlike Tughlaq’s era, now
difficult to mint fake coins so
Token Coin (प्रतीककात्मक) easily. Enforcement is stricter,
•92% copper, 9% nickel melting is illegal.
•Melt Value $0.02 < Face Value ($0.10)
•Intrinsic Value (अंतभत
ू )< Face Value (अंककत मल्
ू य)
5 blades x Rs. 2 each = 10 rupees
Melting: Upto 7 years Jail + fine under coinage act 2011

cupronickel = less attractive for smugglers + putting higher face value on smaller sized coins.
Salary to 29 Mansabdars

20 gm
Temptation to smuggled out Self-study Mughal Mansabdari system in NEW
for metal for intrinsic value? NCERT Class7 ch4.
Salary to 29 Mansabdars Salary to 79 Mansabdars

This is not
13 gm
20 gm “Demonetization”
Temptation to smuggled out Self-study Mughal Mansabdari system in NEW
for metal for intrinsic value? NCERT Class7 ch4.
Salary to 29 Mansabdars Salary to 79 Mansabdars

1. Barter system ▲
2. Tax collection ▼
3. East India co
4. Post mutiny: Rupee with
British monarch & queen
face. (Sanskrit word
“Rupyak”) This is not
20 gm “Demonetization” 13 gm
Temptation to smuggled out Self-study Mughal Mansabdari system in NEW
for metal for intrinsic value? NCERT Class7 ch4.
Pause Video to
Attempt it Yourself
There is no end to such COIN
GK, we’ll end the matter here.
Pause Video to
Attempt it Yourself
Intrinsic

if not taken printout,


don't worry, write the
yellow-box words in a Face value
blank paper and later
fillup the printout.
Accepted because of ‘trust’.
Hence called Fiduciary money
Fiat Money
वैधाननक कागजी मद्र ु ा
NCERT has wrong translation
Govt: Coinage Act 1906 (then 2011)
•1 rupee = 16 anna, 1 anna = 12 paise. Later
amended to decimal system (1955 but not imp)
•All coins upto Rs.1k
•Rs. 1 Note by Fin.Secy [ceased printing in 1994 due
to costs, restarted in 2017-18

RBI under RBI Act 1934


•1938: First Rs. 5…max Rs.10,000
•Present: Rs. 2 to 2000. although Rs.2 ceased in
1995.
•These Bank notes are signed by Gov.
Maharashtra W.Bengal
These places GK are
•Mumbai •Kolkata (Alipore) not important for UPSC

RBI acts as an agent to


circulate coins
Telangana UP
•Hyderabad(Saifabad •NOIDA
& Cherlapally)
Broad money,
Narrow money etc-
Dollar Yuan (Renminbi) Rs.1000 Note Filmstar
currency will study with
Banking->
Monetary Policy->
Money supply.
G-Sec, T-Bill, DD, Cheque, Kirana coin, Bitcoins?
Shares, Bonds ATM, Cards Casino coin

Legal tender = Settle debt & transactions throughout the country.


No one can refuse to accept.
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First purchase value is >> Face Value. Then only an idiot will
use for face value even if notified as legal tenders!
- Fiat money : issued by the fiat (order) of Government
- Legal tender: “when it can’t be refused to settle transactions & debts in a country.”

Chinmayanand coin
notified as legal tender.
Ref:
https://timesofindia.indiatimes.com/city/lucknow/R
efusing-Rs-10-coin-in-UP-may-invite-sedition-
case/articleshow/54504222.cms
Coins = low value
transactions. If used Currency Notes = Unlimited L.T.
Coins = Limited L.T.(सीमित) in large transaction
=shortage, • RBI Act 1934- Section 26: Every bank note is
• Pay only a limited amount inconvenience. legal tender in India. Settle any amount of
• Coinage Act 2011 debt.
• Rs. 1 / above => Rs.1000 • But Finance Act’17: “less than 2 lakh only” **
• 50 paisa x 20 coins=> Rs.10 Beyond use Cheque, DD, NEFT etc. else
• Below 50 paisa withdrawn (2011) penalty: entire amount.
Exact section, act or years also not imp.
- Fiat money : issued by the fiat (order) of Government
- Legal tender: “when it can’t be refused to settle transactions & debts in a country.”
In UPSC prelims, for economy MCQs, better to read English version than
Hindi, because must easier to comprehend. Their Hindi is too heavy.
Pause Video to
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Doesn’t
mention
currency notes.
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50 paise not withdrawn, just ‘rare’

Below 50 paise withdrawn in 2011.

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• UPSC will not ask which
note- which color / photo in
Prelims, because candidate
could be carrying in wallet!
• IN interview- could ask
because you’ve to remove Mahatma Gandhi New Series of Notes
wallet, wristwatch etc.
outside!
- New Rupee symbol: through competition by Dept of
Eco.Affairs
- D.Udaya Kumar (Associate Professor @IIT Guwahati)
- 15/July/2010. although not imp for UPSC

Further self-study
from here

Sun Temple, Konark, Odisha. 13th Century Narsimhadev-I


Rs. 20 Update when released…
Humpi Chariot from Vittala Temple, Karnataka
Pressnote 2018-Jul: Lavender color. Rani ki Vav on Saraswati river, Patan, Guj.
Rani Udaymati for King Bhima-I of Chalukya / Solanki dynasty in 11th century,
UNESCO Heritage site
Sanchi Stupa, Madhya Pradesh.
Sarnath Pillar (Lion emblem), Uttar Pradesh.
“Satyamev Jayate”: Mundaka Upanishad
Red Fort, Delhi by Shah Jahan. 26th Jan’18: 10 ASEAN, ‘19: Trump (invited) but S. African
president Cyril Ramaphosa to come These type of GK not imp. for UPSC IAS/IPS these days.
Gateway of India, Mumbai for King George V
India Gate, Delhi for Indian Soldiers died in WW1 + Amar Jawan Jyoti: Bangla Liberation ‘71
Mangal Yaan / Mars Orbiter Mission, 2013 Yes this type of CA is important
Chandrayaan-1, 2008 ofr UPSC
Chandrayaan-2, 2018 (Planned 2019, Jan)
Gaganyaan: send 3 Indians in space, 2022 or before (announced on 15th August 2018)
8th Sch. 22 languages.
• Originally 14
• 92nd Amendment act, 2003 -
added Bodo, Dogri, Maithili,
But currency box has only
Santhali (during Vajpayee period)
15 languages + English and Hindi
• 113th Amendment 2010: to
= total 17 languages. But not imp for UPSC as
change the name of the language
your wallets are not prohibited in exam hall.
Oriya to Odiya
Such GK better reserved for KBC gameshow.
Language
panel shifted
towards
middle

Since currency notes are


banned, unlikely to carry
in exam hall. But UPSC
doesn’t go in such triviality
from contemporary affairs
8/11/2016
English
vocabulary for
CDS/Bank/SSC

Visually impaired: old series notes have square


(50), triangle (100), circle (500) diamond (1000)
Gandhi on left
side, ‘raised’
printing

Visually impaired: 10, 50 “size”. 100: 4 bleed lines;


raised printing of Gandhi, Ashoka Pillar raised H with micro-text ₹ 200
Visually impaired: 200: 4 lines and 2 circles
raised printing of Gandhi,
Ashoka Pillar raised H with micro-text ₹ 200
5 bleed lines
1 Rs. Note signed
by finance
Secretary doesn’t
have this promise.

2000: 7 bleed lines.


6 bleed lines reserved for future Rs.1000??
14 gm gold 73 gm gold
1 pound =73/14
14 gm gold 73 gm gold
= ~5 USD

Will study more in


Pillar#3 ->
currency exchange
War: how to print more money for soldier-salary, missile purchase? standards and
Developmental work like dams, roads
reserve system.
Gold standard Collapsed
I promise to
exchange this note
for
Another Rs.2000
Or Rs.500 x 4 Nos
Or Rs. 10x 200 Nos

1. Colonial / imperial era: “Full bodied” silver /gold coins worth value Rs. 2000 in weight
2. Modern: conversion to other notes and “TOKEN coins” of equal FACE value.
I promise to
exchange this note
for
Another Rs.2000
Or Rs.500 x 4 Nos
Or Rs. 10x 200 Nos
Modern: conversion to other notes and “TOKEN coins” of equal FACE value. Real Value
inflation adj. purchasing power not adjusted with inflation or time or interest rate, you just
get purchasing power worth value printing on note.
RBI Governor not bound
to honor this. So, to
avoid legal
complications
Specified Bank Notes
(Cessation of Liabilities)
Ordinance, 2016
then Act in Budget
session of 2017
Figures, punishment values
not imp. for exam.

More on
demonetization-
Blackmoney (pill2),
GDP (pill3)
Commodity Metallic Paper /Token / Bank Money, Crypto
Money Money Representative deposit Currency
/ Fiat Money / money blockchain
legal tender
digital
payment

NEXT is..
Fiat money
•Current Account of a bizman (0% interest Bank / Deposit •Spot
but no minimum balance req., overdraft
facility, large chequebook etc.*) Money •Deferred (recall 3rd
•Savings Account (~4% interest, penalty on secondary function of
•Paper order (Cheque, DD…) money..S-T-D)
not keeping minimum balance*)
•Electronic Orders (NEFT,
•FD (~6%/> interest, but can’t withdraw RTGS, Card / App based…)
before time, else penalty)

Post
Bank account demonetization, Payment
Will study more with UPI-BHIM etc
monetary policy-> CRR. gained hotness in
MCQs
Who and why?

• Viceroy Ripon (Father of local governance)


• To encourage cheque usages and to punish dishonor & forgery.
Dishonor= “insufficient balance in drawer’s account’.

Amendment bill 2017 (Passed in 2018, July)

• Trial Court (विचारण न्यायालय) can Award 20% Interim


Compensation To Victim. (अन्तररम पुरस्कार, मुआिजा)
• Appellate Court (अपील न्यायालय) can order villain to
deposit 20%. If villain found Innocent, returned with
Interest. Technical % not important for UPSC, but
objectives are – speedier justice, discourage
appeals
Drawee
(Bank)

Then what is promissory


Drawer note? Participatory
Payee (Sender) note- more in Pill#1->
subtopic Financial
(Recipient)
marketss
Timelimit
•Stale: Not withdrawn in 3 months
•Post dated: After a specific date
•Anti Dated: Before a specific date

Crossing
•No crossing, Open Cheque, “Bearer”. Anyone who presents can encash
from bank. Theft, Misuse 
•Crossed. “Payee’s AC only”.
•Further technical subtypes not imp. For UPSC
Outstation cheque, if deposited outside branch
collection charges 25-50-more depending on
amount + Service tax / GST

At par cheque, no such charges.


Deposit Kochi branch cheque to A’bad
Valid for 3 months

Indian financial system code


IFSC code: 11 alphanumeric
First four: bank name
Fifth: always 0
Last 6: branch

At par

9 digit MICR code


Cheque number
First 3 digit: city
Next 3 digits: bank
Last 3 digits: branch
Magnetic ink
MICR (Iron oxide)
Manual character
1986’India
Cheque recognition
clearance Automated
Optical character
clearing system OCR
recognition
(ACS)
Cheque
CTS-2010 Truncation
System
Paper cheques have to be sent from
one bank to another…. 
MICR / OCR / Barcoded require
special instruments 
Drawer (sender)
Payee (Recipient)

Scanned image
of cheque

Presenting branch retains


Drawee branch transfers money
physical cheque • Stop physical movement of cheques…theft,
tempering, cost, speed
• 2010 std: Cheque designs changed. More
secure, faster scanning & Easier OCR, smaller
scan image size..
Fiat money
Bank Money
•Current Account •Spot
•Savings Account •Paper order •Deferred
•FD •Electronic
Orders
Bank account Payment
1. Cheque: can be dishonored, if insufficient balance / forged sign.
2. Demand Draft: can’t be dishonored, amount is prepaid.
3. Overdraft: can withdraw excess of balance. 5K OD in PMJDY (more in
financial inclusion lecture)
And more for IBPS…. But do self-study as we are focusing on UPSC
Cheque Dishonor, Forgery
चेक अस्वीकृत होना, धोखाधड़ी

if not taken printout, don't worry, write the yellow-box


words in a blank paper and later fillup the printout.
if not taken printout,
don't worry, write the
yellow-box words in a
blank paper and later
fillup the printout.

Delete this and write


“Bad money drives out
good money.”

And apologies for this


error.
But for 2019, it
fades, so we’ll
cover it but in a
condensed
manner.
Branch banking ->
Centralized banking,
data management,
synchronization

Examples Finacle (Infosys); BanCS (TCS)


SBI chairman
Rajnish Kumar
3 year tenure
from 2017
But not imp
for UPSC
RBI’s CBS= E-Kuber (by Polaris ltd)
Repo purchase, OMO, PSLC
trading, sovereign gold
bonds (will study in
Amitabh
upcoming lectures)
Chaudhari
Rajnish Kumar
Pause Video to
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Pause Video to
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2TF, 3TF : always circle
the directive word-
“correct or incorrect”?
Pause Video to
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Real time / Instant Settlement Delayed Settlement
•RBI’s Real Time Gross settlement •RBI’s National Electronic Fund
(RTGS) Transfer (NEFT)
•NPCi’s Immediate Payment Service •+ a few others….
(IMPS)
NPCi’s Unified Payment Interface (UPI)

Phonepe We need not do PHD over what amounts to real time


NPCi’s own SBIBuddy,
BHIM AxisPay
(Flipkart vs delayed. If at all they ask, it’ll be Real time:
+YesBank) RTGS, IMPS. Vs NEFT is not real time.
Sending From SBI to Axis From Axis to SBI
customer#1 5 5
customer#2 5 3
Monday (8AM-8:30AM): total 10 8
If manually sending … -2 2

एक्सीडेंट हो गया
रब्बा रब्बा...
Sending From SBI to Axis From Axis to SBI
customer#1 5 5
customer#2 5 3
Total (8AM-8:30AM) 10 8
NET (incoming) -2 (transfer 2 L to Axis)Gained +2

A settlement system where a large


number of transactions are
accumulated and offset against
each other, with only the net
difference being transferred at the
end of a given settlement cycle.
Every bank has a current account at RBI’s E-Kuber CBS platform
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• RTGS is instantly settled
individuallly, whereas • NEFT runs 8 am to 7 pm on
all working days of week
NEFT: 30 minutes in except the second and fourth
Type NEFT RTGS “BATCHES”
IMPS Saturday of the month.
• There is no limit on the
• RTGS is for high value / amount of funds that could
Weekday Weekday large scale / corporate be transferred using NEFT.
Available 24x7
s s
customer transactions "However, maximum amount
per transaction is limited to
• NEFT is targeted for retail Rs. 50,000 for cash-based
Min Any amt 2 lakh Rs. 1
/ mid-value . remittances within India and
also for remittances to Nepal
• Neither
10k is “FREE”. There under the Indo-Nepal
Max 10 lakh 2000 cr. is service fees + GST
(Mobile) Remittance Facility
2L(IFSC)
From SBI (**except may be within Scheme,"
• We’re not preparing for Bank
2.50 to same bank SBI2SBI).
Charges 25-50 5-15 interviews.
25
• Figures not important
• What is NPCi? After some slides.
• IMPS open 24x7, Instantly settled, just
like RTGS.
Type NEFT RTGS IMPS
• IMPS can be used from a bank’s
Weekd Weekd webportal, mobile phone app or USSD.
Available 24x7
ays ays • Like NEFT, IMPS is targeted for retail
Any segment / merchant transactions.
Min 2 lakh Rs. 1
amt • It’s NOT FREE. Fees + GST
2000 10k (Mobile) • Only BANKS can give NEFT-RTGS
Max 10 lakh
cr. 2L(IFSC) (Branch code, IFSC code), where IMPS
2.50 to can be used by Banks as well as PPI
Charges 25-50 5-15
25 (Prepaid Payment instruments like
Who can Only Only Bank & Paytm, airtel money, Mobikwik ,
offer? BANK Bank PPIs phonepe)
if not taken printout,
don't worry, write the
yellow-box words in a Core Banking Solution(s)
blank paper and later
fillup the printout.

Real Time Gross


settlement (तत्काल
ननपटान) National (राष्ट्रीय)
Immediate Payment Electronic Fund Transfer
Service (तत्काल
भुगतान सेवा)
1. Webportal
2. Mobile app (BHIM,
SBIPay etc)
3. USSD Unstructured
Supplementary Service
Data (USSD)
*99#mob…
Image source: NPCi circular
Phonepe
(Flipkart)’s
account in YES
Bank
• Can’t transfer Phonepe balance / cashback into mobikwik and vice
versa. NOT all online tax / state electricity companies bill/
insurance renewal sites accept them.
• This is Mobilewallets’ “Interoperability problem”.
• PayTM bank account and Airtel Bank account-> money transfer yes
but otherwise just app-balance then no.
• Obstacle in digital economy. So, RBI intervened….
Electronic Money Interoperability
• Moving money from Paytm to Freecharge/ PayU?
• Payment & settlement system act 2007 itself
doesn't permit.

Interoperability with Payment Network


• Using Paytm cash to settle credit card debt**

Interoperability with Financial institution


• Moving money from Paytm to SBI (% charges)
• Sending money from Phonepe to ICICI
• Paying LIC premium or SBI EMI…x
• 2018-October, RBI issued guidelines for
interoperability. Full KYC check, customer
grievances mechanism.
• RBI gets such regulatory powers from
Payment and Settlement Systems Act, 2007.
• From when How? Quantitative restrictions?
Image source: NPCi circular
Pause Video to
Attempt it Yourself
Word association

Interoperability is the ability of customers to transact across Pause Video to


commercially and technically independent payment platforms. Attempt it Yourself
OPC Pvt ltd Public ltd Dormant Not for Profit

•1 person •2-200 •7-…. •No •GSTN


•Listed significant network
•Unlisted accounting •NPCi
transactions (National
right now. Payment
•Future biz, corporation
intellectual of India)
assets.
Types of companies not given in handout
right now, because we’ll learn them They get certain benefits in stamp duty,
separately. registration, taxes etc. but we are not
preparing for CA exam
Original members, list not important for UPSC

State Bank of Punjab Bank of Union Bank of


Canara Bank
India National Bank Baroda India

Bank of India ICICI Bank HDFC Bank Citibank HSBC

• Registered as “Not for profit” (NPO) [“section 8” company] in


Companies act 2013
• 100 cr. Paid up capital.
• Objective: cost-effective payment solutions for banks.
No need to get overwhelmed, we
are studying these one by one …

ATM + this

Objective: cost-effective payment solutions for banks


Current & savings Account Push transaction
linked- direct transfer of (Remittance),
App: QR Scan & Pay Bill sharing among friends
Money without storing in Pull Transaction (monthly
‘wallet’ first. bill deduct)

NPCi’s Unified Payment Interface (UPI) 2016


NPCI’s IMPS (USSD mob2mob transaction) 2010
Overdraft User mandate for QR authenticity –
Cash on Delivery
Account linked DTH, Gym Invoice in the whether
type “Escrow”
[until now only payment @ future inbox merchant
mechanisms
CA,SA] date verified or not?

UPI 2.0 (2018, Aug)


Push transaction Pull Transaction
Bill sharing among
App (monthly bill QR Scan & Pay
(Remittance) friends
deduct)

NPCi’s Unified Payment Interface (UPI) 2016


NPCI’s IMPS (USSD mob2mob transaction) 2010
Pause Video to
Attempt it Yourself
hyperbole
Birbal ki khichdi

Requires Adhar bank linkage

Yes, because directly bank2bank


transfer through app, money not stored in ‘e-wallet’.
Pause Video to
Attempt it Yourself
National Payments Corporation of India (NPCI)
भारतीय राष्ट्रीय भगु तान ननगम (NPCI)

Unified Payments Interface (UPI)


एकीकृत भुगतान इंटरफेस (UPI)

Although this much chaste Hindi / Gujarati-ness is


neither required nor expected for the cutting-edge
technical terms Mains these days. GDP = Hindi should
be known..yes, UPI hindi.. Don’t lose your sleep over
it.
• Bharat Interface for Money
(BHIM) for android, ioS (2016)
• By National Payment
Corporation of India
• Based Unified Payments
Interface (UPI)
• Even non smart phone *99#
USSD
• Bank to bank transaction using
mobile phone (xyz@upi)
Possible to link with Adhar based biometric system
No cards, no hidden charges/MDR..
UPI “BASED” individual bank UPI based BHIM app by NPCi
apps itself
•Mrunal@hdfc install 1 app •Mrunal@UPI
•9825___@airtel : install •Switch between accounts
another app •No wallet, money
stays@bank, earns interest.
It’s not stored in ‘wallet
outside bank’, unlike PayTM..

Sweden “Swish” app-> 100% cashless by 2020.


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Technical factoid, I’ve not taught you this YET.

Pause Video to
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Technical factoid, I’ve not taught you this YET.

Pause Video to
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Prelims-2017: GS1 Correct answer 2 marks, wrong (-0.66)

42 23 35
100 Q
EasyQ Medium Tough

Selected 50:50 elimination


walla =113.5 /200m
40 correct Cutoff 105.**
50 MCQ
=80m 25 Correct = 50m So prelim cleared
25 Wrong = (-16.5)m

Still there are 10 MCQs nowhere /seen heard before.


Environment, Art & Culture, Economy…. No need to spend 90% of your
time preparing for that 10%
UPSC Prelims Paper-1: Correct answer 2 marks, wrong (-0.66)

49 18 33
2016 100 Q
EasyQ Medium Tough

42 23 35
2017 Medium Tough
100 Q
EasyQ

32 22 46
100 Q
2018 EasyQ Medium Tough
And nature of Q was such that 50:50 was
very tough in Prelims 2018.
BHIM Chip based Cards

1.When a user opens BHIM 1.Card itself


application for the first time, 2.Card’s PIN
the application automatically
binds itself to their device ID
and phone number.Same UPI
cannot be used from two
phones. The BHIM application
will also not work on a phone
which doesn’t have a SIM card.
2.User makes UPI PIN, it's
required for every transaction
through the application.
3.Bank's own authentication
process
2 factors

3 factors
Some clickbait guessmasters will
even say “extreme worded
statements’ always wrong so #2
must be wrong but such ‘meta-
keyword-analysis’ more useful in
Pause Video
Pre-2016, but backstabbing in Pre-to
Attempt
2018, even with law it Yourself
of averages.
Interoperability 
Can’t scan payTM QR code with Phonepe, and hence
can’t use Phonepe app wallet balance for paying a
Paytm merchant.
NPCi’s BharatQR
Interoperability  Works with all UPI based Bank
Can’t scan payTM QR code with Phonepe, and hence apps and BHIM app.
can’t use Phonepe app wallet balance for paying a Money stays in bank. So ‘wallets’
Paytm merchant. are not necessary’.
Merchant / retail
transactions.
Digital Payment Systems

Real time Delayed Settlement


•RBI’s Real Time Gross settlement (RTGS) •RBI’s National Electronic Fund Transfer (NEFT)
•NPCi’s Immediate Payment Service (IMPS) •RBI’s National Electronic Clearing Service
(NECS)
•NPCI’s National Automated Clearing House
National Payment Corporation of India (NACH)
Unified Payment Interface (UPI)
•Cards system (Visa, MasterCard and RuPay).

NPCi’s own BHIM: Bharat Monthly bulk settlement of utility bills,


SBIBuddy, AxisPay
Interface for Money salaries, insurance premium.
Merchant

Merchant Can’t have world wide reach


Duplication of effort

Merchant

Client
Merchant

Merchant
Visacard,
Payment gateway
Merchant
300 cr./ year
Merchant Discount
Annual charges of
rate (MDR) per
Merchant credit / debit card
transaction Client
NPCi’s RuPay
Merchant
300 cr./ year
40% less

Rupay launched in 2016


Pause Video to
Attempt it Yourself
Indirect helps increasing access to banking

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Attempt it Yourself
Magnetic (60s technology)
•Data on magnetic strip.
•Has to be ‘swiped’. Data can be
duplicated, cloned, skimmed = fraud.
•RBI Stopped this from
1/1/2019.Payment & Settlement Act
Magnetic (60s technology)
•Data on magnetic strip.
•Has to be ‘swiped’. Data can be duplicated, cloned, skimmed = fraud.
•RBI Stopped this from 1/1/2019.Payment & Settlement Act

EMV: Europay+Mastercard+Visa
•chip infrastructure with encryption. Dynamic data storage. RBI ordered
migration (2013- finally 1/1/2019)
•EMV-contact: must remain inside terminal.
•EMV-contactless: simply tap the card on terminal. (RFID)
•3D Secure technology-Bank interview. Chip&PIN | Chip&Signature.
RFID: Radio frequency Identification
• logistic, vehicle detection. Toll pay ICICI-
FAStag prepaid card
• no power source: range ~25m
• With power source: upto 100m

NFC: Nearfield communication tech.


• Contactless payment / datasharing possible,
• via Encrypted electromagnetic Radio tech.
Self study them in
• Range: ~few cm. eg. Apple Pay. BHIM
science tech books
like Ravi Agrahari.
Bharat Interface for Money
भारत इंटरफेस फॉर मनी

if not taken printout,


don't worry, write the
yellow-box words in a
blank paper and later
fillup the printout.

Europay+Mastercard+Visa
Size change and software update:
ATM can work on Windows Linux.
Bank label Brown 2016-17: Hitachi machines with Win7 got hacked. CDAC
project: Bharat Operating Systems Solutions (BOSS) LINUX
• Itself • Outsourced could be used in future. But not import for Prelims.
2017: 100% FDI allowed in this , to encourage digital economy.
When did RBI allow this, which was the first company to launch?
IBPS GK not important for us.

Sponsor bank gives cash

Bank label Brown Whitelabel


•Itself. Bank’s logo •Work •Non Bank’s
Outsourced but logo.
bank is in
command so
Bank’s logo. WHITE LABEL (non-Bank owns & operates)
• 2016-17: Hitachi’s
Sponsor bank gives cash Win7 based ATMs
hacked
• Non-urban areas,
operations not viable
• rising costs in
hardware-software
upgrades.
• Cassette warehouse
filling rules of RBI
• 2.38 lakh ATMs in
Bank label Brown Whitelabel India 50% of them will
shut
• Itself • Outsourced • Non Bank
WHITE LABEL (non-Bank owns & operates)
Bankmitra/ shopkeeper
gives cash manually

Budget 2017
0% Custom, excise duty

PoS, Card, Aadhar enabled fingerprint scanner


Pause Video to
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National Financial
Switch (NFS)
Pause Video to
Attempt it Yourself
Outsourced by bank, with bank’s logo.

Non-bank own & runs, doesn’t have


bank’s logo.

Write anywhere here


NPCi’s NFS (National Financial
Switch) runs the ATM-network
Understand
concept, no
need to
remember
figure
Rs. 10,000/- paid Rs. 10,000-Rs.230
Customer doing Cash payment
If more adopted, then
…then why need PoS!
we can charge less...
Cash transaction -blackmoney

PoS
Adoption MDR ▲

Debit Card= PoS


ATM cash Adoption
withdrawal ▼
FMCG, ice-cream-
margin is thin anyways.
Merchants either don’t keep PoS->Bank account,
OR Insist on cash for <200
small payment.
upar se tax on profit!
Understand concept, no need to
remember figure

Rs. 10,000-Rs.90
Rs. 10,000/- paid (less if turnover below
20lakh pa)
If 10,000 bill then entirely
merchant has to bear MDR
… but 2000 x 5 =
Government will bear MDR
subsidy. ;-)

- From 1/1/18 for Two years


- Payments made via Debit card, BHIM or Aadhar enabled payment system
upto Rs.2,000
- Govt will bear the MDR.
If 10,000 bill then
entirely merchant
has to bear MDR …
but 2000 x 5 =
Government will
bear MDR subsidy.
But, We’ll know the transaction volume
- From 1/1/18 for Two years & raid on you accordingly.
- Payments made via Debit card, BHIM or Aadhar enabled payment system
upto Rs.2,000
- Govt will bear the MDR.
Pause Video to
Attempt it Yourself
Ofcourse you don’t have to do it
yourself, in this age of
PDF/Magz walla.

Objective: Promote DIGITAL Payment &


financial inclusion
Guessmaster-giri,
wordassociation, even
50:50 can lead you to
wrong answer!
Pause Video to
Attempt it Yourself
0.1% on "withdrawal of cash on a single day
of over Rs 10,000 or more from banks.
• Helps in data-mining
of source and
destination of cash
transactions. Bogus
bills, dummy firms
used for tax evasion.
• More in Pillar#2-
budget /taxation

BCTT declining from 585 crores to 50 crores. So people withdrawing cash less- behavior changed.
May be withdrawing in smaller batches <10k, but we don’t have to do PHD)
Pause Video to
Attempt it Yourself
Official MEITY notification
says only this.
Pause Video to
Attempt it Yourself
Front 70-80 words Back 70-80 words
We can define or explain
this term, and then
connect it with ‘less cash
economy’.
Not required to memorize to such depth for Mains.

Concise expression : If not this, Then this bad thing happens. If this
Then this good thing will happen.
Front 70-80 words Back 70-80 words
Paan-ki-dukaan expression “
more mobiles than toilets,
Don’t digress to peripheral bullets still people don’t use wallets
they’ve become payment bank license due to interoperability
so don’t suffer from interoperability. problems
with UPI enabled mechanisms / BHIM
app now interoperability is not a
challenge. = “SPOTLIGHT” on peripheral Word limit. No need to
things you’ll run out of word limit without explain what are the
touching the core question. guidelines.
Merchant Discount Rate
व्यापाररक छूट दर (MDR)- not required.

Ministry of Electronics and Information


Technology (इलेक्रॉननकी और सच ु ना-
Datamining by tax authorities. प्रौद्योगगकी मंत्रालय)
कर अगधकाररयों द्वारा डेटा
खनन

Those who don’t have to write Hindi, use the


time to recap the handout’s that much portion!
Payment Service
Payment Systems Providers
Next question is…
Who regulates these people?
Real time / Instant Bank Non-Bank
Delayed Settlement
Settlement

RBI’s Real Time RBI’s National


Gross settlement Electronic Fund Cards Wallets, PPI
(RTGS) Transfer (NEFT)

NPCi’s Immediate RBI’s National Cards network


Payment Service Electronic Clearing ATM (Master card,
(IMPS) Service (NECS) Visa) Further PHD unnecessary e.g.
• Financial Market Infrastructure
NPCI’s National
NEFT-RTGS
ATM (White (FMI): Clearing corp. of India ltd.
Automated Clearing Label)
House (NACH) (G-sec, Money market, forex)
• Instant Money Transfer outside
Cross border:
Cards system (Visa,
MasterCard and
Wallet, App,
Western Union, India: Empays
IMPS, UPI
RuPay). Money Gram
Banking Reforms: Narsimhan-II (1998)
• Payment & Settlement Systems Act 2007-> RBI supervise..
• RBI-> Board for Regulation and Supervision of Payment and
Settlement Systems. (BPSS)
• All Payment system providers have to register.

2017-Budget
• Replace BPSS with Payments Regulatory Board (PRB) in RBI
• Ratan Watal Committee on digital payment recommended
• 2018- October: RBI opposes this move.
Controversy 2018, Sept/Oct:
Chief Economic Affairs Secretary S.C.Garg Committee
gave report to finmin. Suggested separate chairman
appointed by Government.

Dy.Gov (out of 3 Members


4) by Union Gov.
Need not waste time
until the bill is passed
to amend the
RBI officer Payment &
Settlement Systems
Act, 2007.
• HRD ministry’s Vittiya Saksharta
Abhiyan wherein college students
explain people about digital
transactions.
• NITI+NPCi launched lottery /
Ratan Watal C.Babu Naidu cashback schemes for customers
Committee by chief ministers’ (Lucky Grahak) and merchants (Digi
FinMin (16’Dec) Committee to PM Dhan Vyapar). Government itself
•Medium term reco. (16’Nov-’17 Jan)
To strengthen digital •Promote digital
launched further referral bonus,
payment ecosystem. payment cashback schemes.
Even if not asked directly, the pointers
can help indirectly other questions of
GSM-economy.
Body: Charms Body: Challenges
- Saves cost of printing new - MDR ceiling vs profitability of
currency (Rs.27 billion a year) banks and card companies
– environment, - Interoperability, Fintech
- Better efficacy of monetary companies evolving more
policy updates, NPA/fraud rapidly than legal framework.
surveillance. (how? will study - KYC: Aadhar vs privacy debate
when we enter into those
topics)
Body: Charms Body: Challenges
- Better tax surveillance, checks - Power, telecom infrastructure not
on fake counterfeit currency available everywhere.
terror finance, - Government itself must become
- targeted delivery of agri-loans a role model first in handling tax,
and subsidies/ DBT: Annually tender, tolls, procurements
Rs. 1 lakh crore saved. through digital payment.
- Can save farmers from - To encourage digital payment if
moneylenders, and poor families MDR subsidy, tax breaks,
from Ponzi schemes. lotteries given for perpetual time
-> fiscal deficit.
Meaning, Hindi term- that we’ll- Post-Demonetization, digital
study in budget itself. transactions ↑ but then again ↓
so, punitive measures = ☹
Body: Charms Body: Challenges
Secure, difficult to steal, time, - Digital divide
convenience, financial - Low financial literacy- notion
inclusion. of security associated with
holding physical currency.
- cyberfraudster, Card
cloning,
- Service fees on NEFT / card
payments.
http://yojana.gov.in/Recent_archive_2017.asp
http://yojana.gov.in/Recent_archive_2017.asp
Commodity Metallic Paper Money Bank Money, Crypto
Money Money legal tender deposit Currency /
money virtual
digital currency
payment blockchain

NEXT Part..
Throughout the week, read
other subjects as well from
the book mentioned in
handout page1!

Bitcoin pending- will study next time.


Handout before class- take its
printout, Powerpoint once ‘block of
topic is finished.

Also a Quiz, so revise the material.