82nd Establishment Day of RBI- 01st April 2017

Dear Readers,
The Reserve Bank of India is the central bank of the country. The Reserve Bank of India was set up on
the basis of the recommendations of the Hilton Young Commission. The Reserve Bank of India Act,
1934 (II of 1934) provides the statutory basis for the functioning of the Bank, which commenced
operations on April 1, 1935.

Burma (Myanmar) seceded from the Indian Union in 1937 but the Reserve Bank continued to act as
the Central Bank for Burma till Japanese Occupation of Burma and later upto April 1947. After the
partition of India, the Reserve Bank served as the central bank of Pakistan upto June 1948 when the
State Bank of Pakistan commenced operations. The Bank, which was originally set up as a shareholder's
bank, was nationalized in 1949.

The Bank was constituted to:-

1. Regulate the issue of banknotes
2. Maintain reserves with a view to securing monetary stability and
3. To operate the credit and currency system of the country to its advantage.

Takeaways from above News-

 RBI was set up on the basis of the recommendations of the Hilton Young Commission.
 Reserve Bank of India was established on 01st April 1935.
 Sir Osborne Smith was the first Governor of the Reserve Bank of India.
 Urjit Ravindra Patel is present and 24th Governor of RBI.
 The Reserve Bank of India was nationalized on 1st January 1949.
 C. D. Deshmukh was the first Indian governor of RBI.
 The headquarter of RBI is in Mumbai, Maharashtra.
At present, there are four deputy governors of RBI.
1. B.P. Kanungo
2. S. S. Mundra
3. N. S. Vishwanathan
4. Viral V. Acharya

Takeaways from Demonetization: Long Term Goals

Demonetization was a major step in Indian Economy, with curbing of Rs. 500 and Rs.1000 notes and
introduction of new notes in the system. In recent examination questions from demonetization were
asked, and for upcoming exams, you must be prepared to face questions from this. Boost your
knowledge and analytical thinking regarding demonetization from these 5 Takeaways: Long term goals
of demonetization.
Curbing Black economy for the long run

India has a huge parallel black economy which the government can’t tax and this was a major step in
controlling black or unaccounted money.

Ensuring Bank account for every citizen

Demonitization pushed more and more Indian citizens into the banking system and this is exactly what
the government wants. Everyone was compelled to open a bank account if they didn't had an existing
account, to deposit old currency notes.

Surgical Strike on counterfeit notes

Counterfeit or fake currency poses a major danger to a country's economy. However, now fake notes
have been removed from the system and new counterfeits will be difficult.

Boosting Less-Cash economy, a step towards digital era

Less-Cash economy a termed coined by Prime Minister is essentially boosting Online market through
increasing the use of credit cards, online payment systems. This is not just convenient for citizens, but
also for the government to monitor. Online transactions can be easily tracked and taxed.

Boost the Indian Economy

A good amount of black money will make its way into the white economy and that will only boost the
Indian economy. Then as a result of counterfeit notes being expelled from the system, the value of
Rupee will become stronger.The online industry has also recieved a huge boost.

What is Budget?

Budget
Budget is an Annual financial statement of the estimated receipts and expenditure of the Government
for the financial year. (1st April –31st March). It is presented by the Union Finance Minister in the
parliament. Once passed by both the houses of parliament and approved by the President of India, the
Budget comes into effect from 1st April.

Why do we need Budget?

The Budget is formulated to optimally allocate the Government’s resources to different sectors and
schemes, so that the broad objectives of the government could be achieved. It presents government’s
proposed revenues and expenditure for the coming financial year. It also determines how adequately
the financial and resource management responsibilities have been discharged in the last financial year.
Budget is also a means to ensure financial accountability of the Government to the Parliament. There
by maintaining legislative prerogative over taxation and expenditure.

How is the Budget Prepared in India?

Budget is prepared by the Budget Division, Department of Economic Affairs, Ministry of Finance.
a) The budget division issues an annual budget circular to all the Union Government ministries/
departments containing guidelines on how to prepare budget estimates.
b) The Ministries/departments prepare and present their estimates for budget allocation.
c) The ministries also provide the estimates for their revenue receipts in the current financial year and
next financial year to the finance ministry.
d) The finance minister then examines the proposals received from various ministries and makes
necessary changes, if any. The finance minister also consults the prime minister, and briefs the Union
Cabinet, about the budget.
e) The budget division then consolidates all the estimates received and prepares the budget
documents.

How are the Government receipts categorised in the budget?

Government receipts are the income receipts of the government from all the sources in a particular
financial year. These are divided in to two different categories:
a) Revenue receipts: Revenue receipts are those receipts, which neither create liability nor reduce
the assets of the Government. These include revenue received from taxes, cess, interest payments,
dividend on investments etc. They are generally recurring in nature.
b) Capital Receipts: Capital receipts are those which either create liability or reduce the assets of the
Government. These include Government borrowings, disinvestment etc.

How is the Government expenditure categorised in the budget?

Government expenditure is categorised in two ways:
a) Revenue Expenditure: Expenditure that does not lead to creation of any assets or any reduction in
existing liabilities of the government. This includes Salary payments, Pensions, interest payments,
other administrative expenditures etc. These are generally recurring in nature and deal with day-to-
day administrative costs of the government.
b) Capital Expenditure: This refers to the expenditure that leads to creation of assets or reduction in
liabilities of the Government. Examples include infrastructure building, acquiring assets, repayment of
loans etc.

What is Outcome Budget?

From the fiscal year 2006-07, every Ministry presents a preliminary Outcome Budget to the Finance
Ministry, which is responsible for compiling them. The Outcome Budget is a progress card on what
various Ministries and Departments have done with the outlays in the previous annual budget. It
measures the development outcomes of all government programs and whether the money has been
spent for the purpose it was sanctioned including the outcome of the fund usage. For instance, it will
tell a citizen if money allocated for building a primary health centre, has indeed come up. It is a means
to develop a linkage between the money spent by a government and the results which follow. It is
expected to change the mindsets of government officials to become more result oriented, instead of
outlay centric.
Most Important Abbreviation From Union Budget 2017-18
Dear Readers,
As you all know that Budget was presented today by our Finance Minister, Arun Jaitley. It is very
important for competitive examination and we have filtered all the Important Abbreviations from the
document.

So here we present the most important ones for you all.

1. IMF- International Monetary Fund

2. FDI- Foreign Direct Investment

3. CPI- Consumer Price Index

4. GDP- Gross Domestic Product

5. FCNR- Foreign Currency (Non-Resident) Account

6. GST- Goods and Service Tax

7. TEC India- Transform, Energise and Clean India

8. PACS- Primary Agriculture Credit Societies

9. KVKs- Krishi Vigyan Kendras

10. NAM- National Agricultural Market

11. APMC- Agricultural Produce Marketing Committee

12. MGNREGA- Mahatma Gandhi National Rural Employment Gurantee Act

13. PMGSY- Pradhan Mantri Gram Sadak Yojana

14. PMEGP- Prime Minister's Employment Generation Programme

15. NRDWP- National Rural Drinking Water Programme

16. PMKK- Pradhan Mantri Kaushal Kendras

17. SANKALP- Skill Acquisition and Knowledge Awareness for Livelihood Promotion programme

18. STRIVE- Skill Strengthening for Industrial Value Enhancement

19. NTA- National Testing Agency

20. ICDS- Integrated Child Development Services

21. IRCTC- Indian Railway Catering and Tourism Corporation

22. TIES- Trade Infrastructure for Export Scheme

23. FIPB- Foreign Investment Promotion Board

24. CERT-Fin- Computer Emergency Response Team for our Financial Sector

25. IRFC- Indian Railway Finance Corporation Limited

26. FFO- Further Fund Offering

27. PMMY- Pradhan Mantri Mudra Yojana

28. BHIM- Bharat Interface for Money

29. UPI- Unified Payment Interface

30. USSD- Unstructured Supplementary Service Data

31. IMPS- Immediate Payment Service

32. SIDBI- Small Industries Development Bank of India

33. DBT- Direct Benefit Transfer

34. FRBM- Fiscal Responsibility and Budget Management Act

35. MAT- Minimum Alternate Tax

36. MSE- Medium and Small Enterprises

37. NPA- Non-Performing Asset

38. MSME- Micro, Small and Medium Enterprises

39. SIT- Special Investigation Team

40. FPI- Foreign Portfolio Investor

41. TDS- Tax Deducted at Source

42. QIBs- Qualified Institutional Buyers

43. SEBI- Securities and Exchange Board of India

44. RBI- Reserve Bank of India

45. CBDT- Central Board of Direct Taxation

46. IPO- Initial Public Offering

47. HUF- Hindu Undivided Family

48. OECD- Organisation for Economic Co-operation and Development

49. EBITDA- Earnings Before Interest, Taxes, Depreciation and Amortisation

50. TCS- Tax Collection at Source

51. FTC- Foreign Tax Credit

52. MPEDA- Marine Products Export Development Authority

53. APDEA- Anchorage Police Department Employees Association

54. AAR- Authority for Advance Ruling

55. FMV- Full Motion Video

56. FEMA- Foreign Exchange Management Act

57. LED- Light-Emitting Diode

58. RCS- Regional Connectivity Scheme

59. PCBs- Printed Circuit Boards

60. VPEG- Vinyl Polyethylene Glycol

61. MTA- Medium Quality Terephthalic Acid

62. QTA- Qualified Terephthalic Acid

63. NSSF- National Small Savings Fund

Pradhan Mantri Garib Kalyan Yojana

The Lok Sabha has passed the Pradhan Mantri Garib Kalyan yojna (Second Amendment) Bill, 2016 in
the Lok Sabha. The Bill was introduced as some of the existing provisions of the Income Tax Act,
1961 can possibly be misused for concealing black money. The new bill attempts to impose a higher
rate of tax and penalty in respect of undisclosed incomes.

The Pradhan Mantri Garib Kalyan Yojana (PMGKY) is Union Government’s second income disclosure
scheme (IDS) to allow tax evaders to come clean with unaccounted wealth. (PMGKY) notified along
with other provisions of Taxation Laws (Second Amendment) Act, 2016 came into effect from 17
December 2016 and it will remain open until 31 March , 2017.

It provides for 50% tax and surcharge on declarations of unaccounted cash deposited in banks.The
recently launched Garib Kalyan yojana, is similar to Income tax declaration scheme, however there are
few differences. Under this scheme, tax rate will be higher and the declared income.

Rules of this Scheme –

1. Declarant have to deposit 25% of the undisclosed income
2. Declarant has to pay 30% tax at this income plus a penalty rate of 10% will be there
3. A surcharge at 33% of tax will also be levied and will be named as Pradhan Mantri Garib Kalyan Cess
4. Pradhan Mantri Garib Kalyan Yojana Cess will be a special component under the income tax
declaration scheme, where the payer needs to pay 33% surcharge on the tax levied.

A bold step Overnight: De-monetisation of Rs. 500 and Rs. 1000 notes
This Wednesday morning many were waiting in long queues, many were trying to withdraw cash from
ATMs , many struck and clueless of what to do in these two days… The government’s decision came
out as a bolt from the blue last night, but is this plight of the common man or a blessing in
disguise for the common man’s nation.

Prime Minister Narendra Modi yesterday night took nation by surprise by announcing that denomination
of Rs. 1000 and Rs. 500 notes will not be considered a legal tender with immediate effect from the
midnight. But this was just the tip of the iceberg for the common man as along with came those
aftereffects today.

All Banks nationwide are closed for Today and no ATM withdrawn can
be done for two days. The old currency notes of Rs.500 and Rs. 1000 are mere a piece of paper now but
from tomorrow citizens can visit various bank and post office branches and exchange old currency notes
for the new ones by giving a valid ID Proof of Adhaar Card and Pan Card or Voter ID ,Passport or Ration
Card. As announced, it is expected that ATMs will resume functioning for the common man from
11th of November.

This huge step no doubt is in benefit of the nation in the bigger picture as FIU of India get info about
transactions from banks. During this period, banks will take extra precaution and will share info with
Income Tax dept. as deemed fit. But still the hassle between people’s everyday life cannot be ignored.
Many woke up to find they are not able to withdraw any cash for two and are struck cashless.
Government hospitals, pharmacies at such hospitals will accept Rs. 500 and Rs. 1000 notes for 72 hours
from November 8 midnight. The move is designed to lock out money that is unaccounted for -
known as "black money " - which may have been acquired corruptly, or be being withheld from
the tax authorities.

The idea is to lock out money that is unaccounted for and make it
visible for tax purposes - banks will be happy to exchange a few thousand rupees, but will be asking
questions of those who turn up with hundreds of thousands or millions in currency. People will be able to
exchange their money at banks between 10 November and 30 December. The limit for exchanging old
currency notes for new ones is Rs.4000 upto 24th November. There will be a limit on withdrawal of
Rs. 10,000 per day and Rs. 20,000 per week, as expected this limit will increase in the coming
days.

However, on brighter side for these two days for the common man, there is no change in online
transaction, you can transact online or use various mobile wallets and apps, but then again are they
really useful in “every situation”? Don’t worry, as tomorrow you’ll be able to exchange notes and ATMs will
come into effect just after one another day, at last this decision is in the benefit of the nation, of the
common man himself.

What Is Foreign Direct Investment?

Foreign direct investment (FDI) is an investment made by a company or individual in one country in
business interests in another country, in the form of either establishing business operations or
acquiring business assets in the other country, such as ownership or controlling interest in a foreign
company.

Foreign direct investments are commonly categorized as being horizontal, vertical or

conglomerate in nature.

A horizontal direct investment : In this type of investment , investor establish the same type of
business operation in the foreign countries as it operates in its home country.

A vertical direct investment: A vertical investment is one in which different but related business
activities from the investor's main business are established or acquired in a foreign country.
A conglomerate type of foreign direct investment is one where a company or individual makes a
foreign investment in a business that is unrelated to its existing business in its home country.

India open its economy in 1991 and now it has became one of the fastest growing economy in the
world. Infact India has become on the most open economies in the world and its 92% FDI comes
through the automatic route.

In India the Foreign Investment Promotion Board (FIPB) offers a single window clearance for
applications on Foreign Direct Investment (FDI) that are under the approval route.Where as the
sectors under automatic route do not require any prior approval from FIPB and are subject to only
sectoral laws.

Present Indian Government concept of "Make in India" has open its market for the investment
of more and more FDI in Indian economy. Indian PM has invited the foreign investors to
invest in Indian market from the international arena. During FY2015, India received the
maximum FDI equity inflows from Mauritius at US$ 9.03 billion, followed by Singapore (US$
6.74 billion), Netherlands (US$ 3.43 billion), Japan (US$ 2.08 billion) and the US (US$ 1.82
billion).

There are some concern from investors point of view especially when they invest in Indian economy.
Many Investors complained about the tax structure , Problem of bureaucracy , clearance at different
stages , Infrastructure , Land acquisition and different government in center and state level are the
main concern.
Present government has taken a lot of initiative for FDI reforms, a high-level meeting chaired by
Prime Minister Narendra Modi, paved the way for companies such as Apple and microsoft to set
shop in India. In defence, foreign investment beyond 49 per cent (and upto 100 per cent) has been
permitted through the government approval route, in cases resulting in access to modern technology
in the country.

To promote the development of pharmaceutical sector, the government has permitted up to 74 per
cent FDI under automatic route in existing pharmaceutical ventures. The government has permitted
100 per cent FDI in India-based airlines. However, a foreign carrier can only own upto 49 per cent
stake in the venture, and the rest can come from a private investors including those based overseas.
These are the some of the initiative taken by the present government to improve the economy of
india and attract more and more FDI in India. Today India is competing with the whole world and
especially with china in that circumstance India need to promote its economy and work on the
concern of the Investors. India need to change from service sector to manufacturing sector.

Monetary policy is an instrument by which central bank controls the supply of money in
the economy by its control over the interest rates in order to maintain price stability
and achieve high economic growth. In context of India Reserve Bank of India (RBI) is
the highest authority which uses this policy in order to maintain the price stability in the
economy.
On June 27, 2016, the Government amended the RBI Act to hand over the job of
monetary policy-making in India to a newly constituted Monetary Policy Committee
(MPC).

What is Monetary Policy Committee (MPC)?

Monetary Policy Committee (MPC) is a committee

constituted by the government in order to bring "value and transparency" to rate
setting decisions. The new MPC is a six-member panel featuring three members from
the RBI — the Governor, a Deputy Governor and another official — and three
independent members to be selected by the Government.
The MPC will meet four times a year to decide on monetary policy by a majority vote.
And if there’s a tie between the ‘yes’ and the 'no' the RBI governor gets the deciding
vote.

How it is different from earlier committee?

Earlier technical advisory committee constituted by the

RBI, which consists central bank’s top brass including the deputy governor and the
governor and external advisers, give their opinion and suggestions on what the RBI
should do. But the governor’s word is final on the rates and the advice of the technical
advisors is not binding on the RBI

Countries like New Zealand, England, Canada, South

Africa, Sweden are the prominent one which are using MPCs for implementing
their monetary policy targets. MPCs will play a crucial role in order to tackle the
issues of rate setting in india as inflation is the one of the core issue in india today .The
MPC will ensure that decisions on interest rates are made through debate by a panel of
experts. The many-heads-are-better-than-one approach may also help ensure that the
decision isn’t easily influenced by bias or lobbying.

Currently the members of MPCs are three non-RBI

members: Pami Dua, director of the Delhi School of Economics; Chetan Ghate, a
professor at the Indian Statistical Institute; and Ravindra Dholakia, a professor at the
Indian Institute of Management, Ahmedabad. The other three members are Patel, R
Gandhi, an RBI deputy governor, and Michael Patra, an executive director at the central
bank.
On 4th oct 2016 India’s first monetary policy committee gets to work with an interest
rate cut. India's newly appointed RBI governor Urjit Patel’s first monetary policy review,
it was also the first time that a newly-appointed committee decided the interest rate
trajectory. The recently-formed monetary policy committee (MPC) decided to cut the
repo rate—the rate at which the RBI lends to commercial banks—by 25 basis points to
6.25%.

Latest RBI Bank Rates in Indian Banking - 2016

SLR Repo Reverse Repo Bank

Rate CRR MSF Rate Rate Rate

20.75% 4% 6.75% 6.25% 5.75% 6.75%

Lowering repo rate reduces the overall cost of borrowing in the country and promote
the investment which strengthen the economic growth. The MPC may put a stop to the
public skirmishes between the Government and the RBI.

SBI Merger : All about the creating of Banking Giant

Dear Readers,

Nowadays, a lot of news is being flashed on various newspapers about proposed merging of smaller NPA
ridden public sector banks with their larger counterpart. But the biggest move took place yesterday
only when the Union Cabinet chaired by Prime Minister Narendra Modi gave it's approval to the
takeover of several subsidiaries by the State Bank of India as proposed by SBI earlier that it wants to
take over five units that had been running at arms-lengths, and also the state-run Bharatiya Mahila
Bank. This is going to be the first move to consolidate the country's struggling PSBs. Recently Gyan
Sangam was also held in Gurugram where the center of discussion was purely based on the merging
of public sector banks with each other.
So the question arises, Why the merger is needed? Why does the government want to merge various
PSB with each other or consolidate the number?

So here are the reasons for merger :

 As in the recent top 1000 banks of the world, no Indian bank could find a place in top 50 even
after having 7th largest GDP and with 3rd largest purchasing power parity(PPP). SBI that
consists 18% of the total banking money and 6-7% its associate's banks, if gets merged can be in
the top 50 list of the world as the merged entity will create a banking giant, which can
compete with the largest in the world with an asset base of almost Rs 37 lakh crore, with
22,500 branches and 58,000 ATMs as on December 2015. SBI alone has approximately 16,500
branches, including 198 foreign offices spread across 36 countries in the world.

 As per SBI Chairman Arundhati Bhattacharya also, the merger of SBI and its associate banks is
a win-win for both (SBI & SBI Associates). While the network of SBI would stand to increase,
its reach would multiply. One can expect efficiencies to be created from the rationalisation
of branches, common treasury pooling and proper deployment of a large skilled resource base.
With this merger, some visibility at the global level is likely to increase.

 Adoption and development of technologies in associate banks will be faster.

So for the same Government has created a panel to look after the merging of Public Sector Banks.
The panel will closely work with the Banks Board Bureau(BBB) to identify the right matches for
consolidation. The proposed merger is likely to be completed much before the end of the current
financial year. As the SBI chairman Arundhati Bhattacharya expects to have a combined balance sheet
for the financial year ending 2016-17.

Benefits & Losses of Merger :

  From banking facility point of view, SBI is the more technically advanced compared to it's
associate banks. It takes 2-3 years to adopt the same technology for the associate banks
that SBI is using now.

 Another thing is that it is not going to impact customers. Customers will be getting better
facilities or world class facilities.

 Some associate banks which are under staffed will get exponential benefit out of it.

 It will also help in financial inclusion. As now banks would be able to open more branches at
the rural places, it will help people to get banking facilities easily as all associate banks will be
on the same level and providing the same facilities.

 Merging 27 banks not just SBI and associates into 4-5 big banks will boost the banking sector.
May help in reducing the bad loans as well.

The All India Bank Employees’ Association (AIBEA) wants the five associate entities to be merged
into a separate, single large bank, instead of all of them being merged individually with
SBI. AIBEA has even called for a strike on May 20, opposing the merger. Analysts also fear the move will
lead to higher operating costs in the near-term for SBI.

AIBEA's points related to this merger:

 If the Government wants to keep the less number of banks, why did it issue licenses to
companies to set up payments and small finance banks as recently new license had been given
to various private players to open the payment bank?
  If the main problem which is being faced by public sector banks is the rising of non-performing
assets then how will this get resolved by merging banks?

 How does government's financial Inclusion program will be successful after consolidating the
Banks?

 What about the Identity of the Merging bank, whether new name will be given after merging or
the largest entity will have their own name?

 What about the career path and growth of the employees of merging entities ?

Possible effects of merger on SBI's recruitment process in Future:

Currently, vacancies in SBI and SBI associates are filled through separate recruitment. But after the
merger, the SBI associates will no longer exist. So at this point of time, we can't predict the number of
vacancies. It may can more or less. But, whoever will get recruited will get the opportunity to work in
the banking behemoth 'State Bank of India' !

In the last, one thing is clear that Indian banking is stepping toward a new era of Banking World.

Insurance Sector
Dear all, in view of upcoming insurance exams, were are presenting you a brief write-up on insurance sector and
companies in this sector.

In India, insurance has a deep-rooted history. It finds mention in the writings of Manu ( Manusmrithi), Yagnavalkya
(Dharmasastra) and Kautilya ( Arthasastra ). The writings talk in terms of pooling of resources that could be re-
distributed in times of calamities such as fire, floods, epidemics and famine. This was probably a pre-cursor to
modern day insurance. Ancient Indian history has preserved the earliest traces of insurance in the form of marine
trade loans and carriers’ contracts. Insurance in India has evolved over time heavily drawing from other countries,
England in particular.

Brief history of insurance sector

The insurance sector in India has completed all the facets of competition - from being an open competitive market to
being nationalized and then getting back to the form of a liberalized market once again. The history of the insurance
sector in India reveals that it has witnessed complete dynamism for the past two centuries approximately.With the
establishment of the Oriental Life Insurance Company in Kolkata, the business of Indian life insurance started in the
year 1818.

Important milestones in the Indian life insurance business

1912: The Indian Life Assurance Companies Act came into force for regulating the life insurance business.

1928: The Indian Insurance Companies Act was enacted for enabling the government to collect statistical
information on both life and non-life insurance businesses.
1938: The earlier legislation consolidated the Insurance Act with the aim of safeguarding the interests of the insuring
public.

1956: 245 Indian and foreign insurers and provident societies were taken over by the central government and they
got nationalized. LIC was formed by an Act of Parliament, viz. LIC Act, 1956. It started off with a capital of Rs. 5
crore and that too from the Government of India. The history of general insurance business in India can be traced
back to Triton Insurance Company Ltd. (the first general insurance company) which was formed in the year 1850 in
Kolkata by the British.

Important milestones in the Indian general insurance business

1907: The Indian Mercantile Insurance Ltd. was set up which was the first company of its type to transact all general
insurance business.

1957: General Insurance Council, an arm of the Insurance Association of India, framed a code of conduct for
guaranteeing fair conduct and sound business patterns.

1968: The Insurance Act improved for regulating investments and set minimal solvency levels and the Tariff
Advisory Committee was set up.

1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in
India. It was with effect from 1st January 1973.

107 insurers integrated and grouped into four companies viz. the National Insurance Company Ltd., the New India
Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC
was incorporated as a company.

Insurance Repository in India

The Insurance Repository in India is a database of insurance policies. It allows policy holders to make revisions to a
policy with speed and accuracy. It launched on 16 September 2013. It is the world's first of its kind. India's
Insurance Regulatory and Development Authority has issued licenses to five entities to act as Insurance
Repositories:

 Central Insurance Repository Limited (CIRL)

 SHCIL Projects Limited
 Karvy Insurance repository Limited
 NSDL Database Management Limited
 CAMS Repository Services Limited

E-Insurance Account

E-Insurance account is the facility available to the policy holder to keep all of their insurance policies in a demat
form by opening an account with an insurance repository, it`s a one point of contact for all of the insurance
contracts, if any change is needed in any of the personal information then instead of going to an each insurer and
submitting the request separately to each one of them, here through an e-insurance account, the policy holder can
submit a request to an insurance repository for that change and it will be applicable for all the policies the
policyholder posses.It works in a similar manner like we keep our securities-shares, mutual funds in an electronic
form.

What type of an Insurance Policies can be kept in an E Insurance Account:

1.All of the below mention policies can be kept in an electronic form provided these have been issued by the
companies registered with Insurance Regulatory Development Authority(IRDA)

2.All the Life insurance policies including individual or group.

3. All the general insurance policies including individual or group.

4. Any other form of an insurance policy approved by an IRDA.

Public Sector Insurance Companies

Life Insurance Corporation of India

General Insurance Corporation of India

National Insurance Co. Ltd.

Oriental Insurance Co. Ltd.

New India Assurance Co. Ltd.

United India Insurance Co. Ltd.

Life Insurance Corporation of India

Headoffice- Mumbai

Chairman - Shri S. K. Roy

The Parliament of India enacted the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance
Corporation of Indian was established on 1st September, 1956, with the objective of spreading life insurance much
more widely and in particular to the rural areas with a view to reach all insurable persons in the country, providing
them adequate financial cover at a reasonable cost
General Insurance Corporation

Headoffice - Mumbai

Chairman - A K Roy

General Insurance Corporation of India (GIC Re) was approved as ‘Indian Reinsurer’ on 3rd November,2000. As an
Indian reinsurer GIC has been giving reinsurance support to four public sector & other private general insurance
companies.

The New India Assurance Co. Ltd.

Headoffice- Mumbai

Chairman - G.Srinivasan

It is the "largest general insurance company of India on the basis of gross premium collection inclusive of foreign
operations". It was founded by Sir Dorabji Tata in 1919, and was nationalised in 1973.

National Insurance Company Limited (NICL)

Headoffice- Kolkata

Chairman - Shri A.V. Girija Kumar

It is a state owned general insurance company in India. The company was established in 1906 and nationalised in
1972. It's portofolio consists of a multitude of general insurance policies, offered to a wide arena of clients
encompassing different sectors of the economy.[3] Apart from being leading insurance provider in India, NICL also
serves Nepal.

United India Insurance Company Limited

Headoffice - Chennai

Chairman - Milind Kharat

under Department of Financial Services, Ministry of Finance (India), is a public sector General Insurance Company
of India and one of the top General Insurers in Asia. With the net worth of Rs 5407 crores and profit of Rs 528
crores, the company has collected gross premium of Rs 9709 crores as of in the financial year 2013-14. The
company has more than seven decades of experience in Non-life Insurance business and was formed to its present
form by the merger of 22 companies, consequent to the nationalisation of General Insurance companies in India.

Oriental Insurance Company Ltd

Headoffice - New Delhi

Chairman - Dr. A.K.Saxena

It was established on September 12, 1947 in the then Bombay. It was a completely owned subsidiary of Oriental
Government Security Life Assurance Company Ltd. It was created with the mandate of executing its parent body’s
general insurance operations.

Fiscal System in India

A country's fiscal system is the complete structure of government revenue and expenditures and the framework
within which its agencies collect and disburse those funds. This system is governed by a nation's economic policy,
which comes from decisions made by the governing body.

Fiscal policy is the means by which a government adjusts its spending levels and tax rates to monitor and influence a
nation's economy. It is the sister strategy to monetary policy through which a central bank influences a nation's
money supply. These two policies are used in various combinations to direct a country's economic goals.

There are 3 parts of the fiscal policy

1. Public Revenue.

2. Public expenditure.
3. Public debt.

Revenues: are the source of income realized by the government and are divided into:

1. Revenue receipts : which consists of revenue from regular sources like Taxation revenues: eg., receipts from
corporate tax, income tax, excise tax, Excise duty, custom duty, service tax etc.Non tax revenue: which include
interest on loans, dividends from Public sector units, Fees and stamp duties.

2. Capital receipts: Which refer to those inflows to government that are not in the nature of regular income, But
are repayments / recoveries, or proceeds from sale of assets. Other receipts like Disinvestment (selling some shares
of a PSU) comes under this head. Borrowings are simply the deficit which can be covered by taking loans from
market.

Expenditure: are the expenses incured by govt and are divided into :

Non plan expenditure: These are on going expenditure not covered under the 5 - year plans. Non-plan revenue
expenditure is accounted for by interest payments, subsidies (mainly on food and fertilisers), wage and salary
payments to government employees, grants to States and Union Territories governments, pensions, police, economic
services in various sectors, other general services such as tax collection, social services, and grants to foreign
governments. Non-plan capital expenditure mainly includes defence, loans to public enterprises, loans to States,
Union Territories and foreign governments.

Plan expenditure: India has adopted economic planning as a strategy for economic development. For stepping up the
rate of economic development five-year plans have been formulated. So far ten five-year plans have been
completed. The expenditure incurred on the items relating to five year plans is termed as plan expenditure. Such
expenditure is incurred by the Central Government.

A provision is made for such expenditure in the budget of the Central Government. Assistance given by the Central
Government to the State Governments and Union Territories for plan purposes also forms part of the plan
expenditure. Plan expenditure is subdivided into Revenue Expenditure and Capital Expenditure.This expenditure
involves funding for programmes and projects covered by the 5 - year plans as decided by the various ministerial
bodies.

Under the above heads there are two components:

Revenue expenditure - It is payments incurred for day - to - day running of government departments and
various services offered to citizens. This also comprises of spending towards subsidies, interest
payments. This spurs consumption in economy.
Capital expenditure: This expenditure spurs asset creation, resulting in increased investment with
spending diverted towards cost associated with acquisition of assets that may include investments in
shares, infrastructure as well as loans and advances given out by government.

Other Important Terms:

Public debt: The money borrowed by the government is eventually a burden on the people of India, and is,
therefore, called public debt. It is split into two heads: internal debt (money borrowed within the country) and
external debt (funds borrowed from non-Indian sources).

Usually the government spends more than what it earns through various sources. This shortfall, which is met with
borrowed funds, is called fiscal deficit. Technically, it is the excess of government expenditure over 'non-borrowed
receipts' — revenue receipts plus loan repayments received by the govt plus miscellaneous capital receipts. Fiscal
deficit for FY13 is estimated at INR.5.64 lakh crore, revenues of INR 9.18 lakh crores less expenditure of INR 14.82
lakh crores.
Fiscal deficit is measured as a percentage of GDP, hence INR 5.64 lakh crore / GDP of INR 100.74 lakh crores work
out to estimated fiscal deficit of 5.6% of GDP.

Revenue Deficit: It is the excess of revenue expenditure over revenue receipts. All expenditure on revenue account
should ideally be met from receipts on revenue account; the revenue deficit should be zero. In such a situation, the
government borrowing will not be for consumption but for creation of assets.

Effective revenue deficit: This is an even tighter number than the revenue deficit. It is revenue deficit less grants
for creation of capital assets.

Primary deficit: It is the fiscal deficit less interest payments made by the government on its earlier borrowings.

Deficit and GDP: Apart from the numbers in rupees, the budget document also mentions deficit as a percentage of
GDP. This is because in absolute terms, the fiscal deficit may be large, but if it is small compared to the size of the
economy, then it's not such a bad thing, especially if it is being used to create production capacities.

Types of fiscal policy

Fiscal policy has an effect on each of these categories. There are two types of fiscal policy: Expansionary and
Contractionary.

Expansionary Fiscal Policy

When an economy is in a recession, expansionary fiscal policy is in order. Typically this type of fiscal policy results
in increased government spending and/or lower taxes. A recession results in a recessionary gap – meaning that
aggregate demand (ie, GDP) is at a level lower than it would be in a full employment situation. In order to close this
gap, a government will typically increase their spending which will directly increase the aggregate demand curve
(since government spending creates demand for goods and services). At the same time, the government may choose
to cut taxes, which will indirectly affect the aggregate demand curve by allowing for consumers to have more money
at their disposal to consume and invest. The actions of this expansionary fiscal policy would result in a shift of the
aggregate demand curve to the right, which would result closing the recessionary gap and helping an economy grow.

Contractionary Fiscal Policy

Contractionary fiscal policy is essentially the opposite of expansionary fiscal policy. When an economy is in a state
where growth is at a rate that is getting out of control (causing inflation and asset bubbles), contractionary fiscal
policy can be used to rein it in to a more sustainable level. If an economy is growing too fast or for example, if
unemployment is too low, an inflationary gap will form. In order to eliminate this inflationary gap a government
may reduce government spending and increase taxes. A decrease in spending by the government will directly
decrease aggregate demand curve by reducing government demand for goods and services. Increases in tax levels
will also slow growth, as consumers will have less money to consume and invest, thereby indirectly reducing the
aggregate demand curve.

Conclusion On Fiscal Policy

The objectives of fiscal policy such as economic development, price stability, social justice, etc. can be achieved
only if the tools of policy like Public Expenditure, Taxation, Borrowing and deficit financing are effectively
used.Though there are gaps in India's fiscal policy, there is also an urgent need for making India's fiscal policy a
rationalised and growth oriented one. The success of fiscal policy depends upon taking timely measures and their
effective administration during implementation.

Financial Inclusion and Business Correspondents

With the objective of ensuring greater financial inclusion and increasing the outreach of the banking
sector, RBI decided in public interest to enable banks to use the services of NGO’s / SHGs and Micro
Finance Institutions (MFIs) as intermediaries in providing financial and banking services through the use
of Business Facilitator and Correspondent.
Business Correspondent

Under the 'Business Correspondent' Model, NGOs/ MFIs set up under Societies/ Trust Acts, Societies
registered under Mutually Aided Cooperative Societies Acts or the Cooperative Societies Acts of States,
In engaging such intermediaries as Business Correspondents, banks should ensure that they are well
established, enjoying good reputation and having the confidence of the local people. Banks may give
wide publicity in the locality about the intermediary engaged by them as Business Correspondent and
take measures to avoid being misrepresented.

Roles of a Business Correspondent –

 Business correspondents are bank representatives.

 They help villagers to open bank accounts.
 They help villagers in banking transactions. (deposit money, take money out of savings account,
loans etc.)
 The Business Correspondent carries a mobile device.
 The villager gives his thumb impression or electronic signature, and get the money.
 Business Correspondents get commission from bank for every new account opened, every
transection made via them, every loan-application processed etc.

The arrangements with the Business Correspondents shall specify:

 Suitable limits on cash holding by intermediaries as also limits on individual customer payments
and receipts.
 The requirement that the transactions are accounted for and reflected in the bank's books by end
of day or next working day.
 All agreements/ contracts with the customer shall clearly specify that the bank is responsible to
the customer for acts of omission and commission of the Business Facilitator/ Correspondent.
Redressal of Grievances in regard to services rendered by Business Facilitators/ Correspondents

 Banks should constitute Grievance Redressal Machinery within the bank for redressing
complaints about services rendered by Business Correspondents and Facilitators and give wide
publicity about it through electronic and print media.
 The name and contact number of designated Grievance Redressal Officer of the bank should be
made known and widely publicized. The designated officer should ensure that genuine
grievances of customers are redressed promptly.
 The grievance redressal procedure of the bank and the time frame fixed for responding to the
complaints should be placed on the bank's website.
 If a complainant does not get satisfactory response from the bank within 60 days from the date of
his lodging the compliant, he will have the option to approach the Office of the Banking
Ombudsman concerned for redressal of his grievance/s.

A Brief of SLR
Statutory Liquidity Ratio is the amount a commercial banks needs to maintain in the form of cash, or gold, or govt.
approved securities (Bonds) before providing credit to its customers. SLR rate is determined and maintained by RBI
in order to control the expansion of the bank credit.

The maximum limit of SLR is 40%

Current SLR is 22% of NDTL

What is a Basis point ?

It is the increase in interest rates in percentage terms. For instance, if the interest rate increases by 50 basis points
(bsp), then it means that interest rate has been increase by 0.50%. One percentage point is broken down into 100
basis points. Therefore, an increase from 2% to 3% is an increase of one percentage point or 100 basis points.

NDTL - is the sum of all the demand (current account and savings account sum in bank ) and time (fixed
deposits or recurring deposits etc. which are to be paid on maturation), these are assets for us but a
liability(debt) for the banks.
Here is an example to show the effect of CRR and SLR.

Let say our Lena Bank had 100 Rs as NDTL they can give this much amount of loan to the needy hence
Rs 100 will flow in the market(can cause inflation), so Mr. Bond (Rajan of RBI) said keep 4% (CRR) with
us and 22% as SLR in the form of govt securities and gold (which can’t be given as loans) so Lena bank
is left with only 74% [100 - (22 + 4)] of the NDTL resulting in lesser money to be given as loans and
eventually resulting in a check on inflation.

The main objectives for maintaining the SLR ratio are the following:

i. to control the expansion of bank credit. By changing the level of SLR, the Reserve Bank of India can increase or
decrease bank credit expansion.

ii. to ensure the solvency of commercial banks.

iii. to compel the commercial banks to invest in government securities like government bonds.

Main use of SLR:

SLR is used to control inflation and propel growth. Through SLR rate the money supply in the system can
be controlled effectively.

What is the difference between SLR and CRR?

What SLR does is it restricts the bank's leverage in pumping more money into the economy. On the other
hand, CRR, or cash reserve ratio, is the portion of deposits that the banks have to maintain with the RBI.
Higher the ratio, the lower is the amount that banks will be able to use for lending and investment.

The other difference is that to meet SLR, banks can use cash, gold or approved securities where as with
CRR it has to be only cash. CRR is maintained in cash form with RBI, where as SLR is maintained in
liquid form with banks themselves.

What does a reduction in SLR mean?

A cut in SLR means that the home, car and commercial loan rates will go down. Banks will have more
money with them.
With the reduction of SLR, the RBI is shrinking the market for government securities and simultaneously enlarging
availability of credit to the private sector. With that, the cost of funds to the government will increase and the rate
charged by banks to the private sector decreases.

US Open Tennis Tournament 2017: Complete List of Winners

The 2017 US Open was the fourth and final Grand Slam event of the year. It was held on outdoor
hard courts at the USTA Billie Jean King National Tennis Center in New York City, USA. The tournament
is an event run by the International Tennis Federation (ITF).

Rafael Nadal was the winner of Men's Singles. With this win, Nadal captured his third US Open title
and his 16th Grand Slam title overall. Sloane Stephens was the winner of Women's Singles. The 83rd-
ranked Stephens is only the second unseeded woman to win the tournament in the Open era.

Here is the complete list of winners/runner-ups of the

Tournament:-
S. No. Event Winner

1. Men's Singles Rafael Nadal

2. Women's Singles Sloane Stephens

3. Men's Doubles Jean-Julien Rojer / Horia Tecau

4. Women's Doubles Chan Yung-Jan / Martina Hingi

5. Mixed Doubles Martina Hingis / Jamie Murray

 Here is the name of players and the country from
which they belong to:-
S. No. Name of Player Winner/Runner-Up

1. Rafael Nadal

2. Kevin Anderson

3. Sloane Stephens

4. Madison Keys

5. Jean-Julien Rojer

6. Horia Tecau

7. Feliciano Lopez

8. Marc Lopez

9. Chan Yung-jan

10. Martina Hingis

11. Lucie Hradecka

12. Katerina Siniakova

13. Jamie Murray

14. Chan Hao-ching

15. Michael Venus

Important Takeaways from Above News-

 The US Open will celebrate 50 years of Open tennis in 2018.

 The Tournament began in 1968.
 Stan Wawrinka and Angelique Kerber were the previous year's men's and women's singles
champions (2016).

The Hindu Highlights Current Affairs Update from 01st to 07th September 2017.
Now we save you from the hassle of noting down everything by selecting it from an ocean of news and happenings
around the world. You can easily download the PDF and study the important highlights of news published in The
Hindu.

Following are some important highlights of 1 to 7 September

1. Former Union Home Secretary Rajiv Mehrishi was appointed Comptroller and Auditor General of India, while
former I&B Secretary Sunil Arora was appointed Election Commissioner to fill the vacancy in the three-member
Election Commission.

2. India thanked Switzerland for its support in global multilateral organisations. Welcoming the visiting Swiss
President Doris Leuthard, Prime Minister Narendra Modi sought greater cooperation to ensure bilateral financial
transparency and thanked the Swiss government for its support to India’s membership bid for the Missile
Technology Control Regime (MTCR).

3. Karur Vysya Bank (KVB) has rolled out its first rural digital centre in an unbanked village — Kathirampatti, near
Erode District of Tamil Nadu.

4. A massive rejig of the Union Council of Ministers saw Nirmala Sitharman being appointed the Defence Minister
of India, the first woman to hold the charge full time (late Prime Minister Indira Gandhi had held additional charge of
Defence twice during her premiership).

5. The Brazil-Russia-India-China-South Africa (BRICS) grouping unequivocally named Pakistan-based groups —

Jaish-e-Mohammad ( JeM) and Lashkar-e-Taiba (LeT) — as terror organisations, removing a key irritant in ties
between New Delhi and Beijing and stepping up the fight against global extremism. A joint communiqué released at
the BRICS summit expressed concern about the regional security situation and listed the Taliban, IS/Daesh, Al-
Qaeda and its affiliates, including the Eastern Turkistan Islamic Movement, the Islamic Movement of Uzbekistan, the
Haqqani network, Lashkar-e-Taiba, Jaish-e-Mohammad, TTP and Hizb-ut-Tahrir as sources of violence.