Multinational Bank Slogans/ Punchlines(For IBPS and RBI exams)

Bank Name	Slogan/Punch line
CITI Bank	Let’s get it done
Standard Chartered Bank	Your Right Partner
HSBC Bank	The World’s Local Bank
Royal Bank of Scotland	Make it happen
BNP Paribas	The bank for a changing world
JPMorgan Chase Bank	The right relationship is everything
Deutsche Bank	A passion to perform
Scotia Bank	You’re richer than you think
American Express Bank	Do more
Barclays Bank	Fluent in finance
DBS Bank	Living, Breathing Asia

Key Economy Terms(High frequency)

Some Key Financial Terms for Various Exams

APR: It stands for Annual Percentage Rate. APR is a percentage that is calculated on the basis of the amount financed, the finance charges, and the term of the loan.

ABS: Asset-Backed Securities. It means a type of security that is backed by a pool of bank loans, leases, and other assets.

EPS: Earnings Per Share means the amount of annual earnings available to common stockholders as stated on a per share basis.

Financial Administration: Monetary and fiscal policies; Public borrowings and public debt; Budgets - types and forms; Budgetary process; Financial accountability; Accounts and audit.

FINANCIAL ADMINISTRATION:

 MEANING & IMPORTANCE -

As per the definition given by the USA Census department, Financial Administration involves all the activities of finance and taxation. Includes central agencies for accounting, auditing, and budgeting; the supervision of local government finances; tax administration; collection, custody, and disbursement of funds; administration of employee-retirement systems; debt and investment administration; and the like.
So,in simple words Financial Administration  involves :
- all the functions /operations which aim at making funds and finance available for administrative activities of  the government
--all those activities which ensure the lawful and efficient use of the funds/finance.

Actors in Financial Administration:
And these functions are collectively performed by the Executive(asks for funds),Legislature(that has the sole power to grant those funds),Finance Ministry(controls those funds) and the Auditor(to audit whether the funds were used for what they were demanded).

The steps involved in Financial administration are
1-Preparation of the budget for the ensuing financial year
2-Getting it passed by the legislature
3-Executing the budget and collecting the funds for it
4-Managing those funds via the treasury
5-the audit of the Centre and State executive accounts by the Audit authority.

So one can understand the importance of Financial Administration in its element. A balanced and precise financial administration is the base as well as the means to attain successfully all goals of development as well as growth of a country.

MONETARY POLICY:

Monetary Policy is the process by which monetary authority(an authority that controls all matters relating to money) of a country, generally a central bank controls the supply of money in the economy by exercising its control over interest rates in order to maintain price stability,reduce inflation and achieve high economic growth. A sound monetary policy ensures that various sectors of the economy have sufficient tokens/authority to carry out their transactions. It provides the basis to the fiscal policy and the fiscal policy influences the monetary policy and gives it a direction to proceed in.

Monetary policy helps in keeping the money supply and economy of a nation stable whereas the fiscal policy is more involved in development and infrastructural work and policy making and enactment of budget.

WPI vs CPI

W.P.I	C.P.I
Wholesale price index measures inflation at each stage of production	Consumer price index measures inflation only at final stage of production
Wholesale price index is the middle point of the sum of all the goods bought by the traders	Consumer price index is the middle point of the sum of all the goods bought by consumers
Wholesale Price Index (WPI), is based on the price prevailing in the wholesale markets or the price at which bulk transactions are made	The Consumer Price Index (CPI), is based on the final prices of goods at the retail level.
There are only few countries that uses WPI to calculate inflation rates	Many nations have already shifted to using CPI.
There are 676 elementary items included in WPI, some of which are insignificant & outdated goods that are considered in WPI	CPI, on the other hand, have well-selected variables.
Category Weights – Base Year is 2004-05 with Energy Products having 14.91% weights, food 14.3% while services are not included.	Category Weights – Base Year is 20105 with Energy Products having 9.49% weights, food 49.7% while services are included with 26.3% weightage.

Reasons for Widening gap between CPI and WPI

Monthly variation between CPI and WPI inflation during January 2012 to January 2013 shows that the direction of the differential is on the rise.

The gap between inflation calculated at WPI (Wholesale Price Index) and CPI (Retail Price Index) has been found widening in the recent months. Monthly variation between CPI and WPI inflation during January 2012 to January 2013 shows that the direction of the differential is on the rise.

WPI inflation has been decelerated to 6.62% in January 2013 from 7.2% in January 2012, however, CPI Inflation has been increased from 7.7% in January 2012 to 10.8% in January 2013.

• The widening gap between prices at wholesale level and retail level could be attributed to supply chain bottlenecks which impede the process of smooth distribution of goods. Post-production hurdles at several levels including storage, packaging, marketing and infrastructure is a major fuel to retail prices
• A second reason may be the high weightage of food prices in calculation of CPI. In the WPI, food articles have a 14.33% weight. In the CPI (Rural+Urban), the food index has a 47% weight.Soaring food prices has been a major issue in India. Inflation in the food articles (WPI) has been increased from 6.7% in October 2012 to 8.8% in November 2012 to 11% in December 2012 and 11.8% in January 2013.CPI for food and beverages rose to 13.3% in January 2013 from 13% in December 2012, 11.8% in November 2012 and 11.4% in October 2012

retrieved from http://www.miraeassetmf.co.in/mailers/mar13/wpivscpi.html

Drought Management.

Droughts had been the grim past of our country.It is so sad to believe that a country which boasts of its GDP is so poor in social sector figures.Malnutrition,Health sector,Women and Infant health show a poinant figures.Agriculture sector which is responsible for  more that 50% employment suffers the most due to droughts leading to imbalance in the whole economy chain.

All said and done I believe following are the steps that can be taken to reduce droughts.--

1) Animal Camps to be promoted and maintainde properly as farmers sell them in their distressed situation.
2)Fodder crops,maize,pulses oilseeds etc which are high value but very less water requiring crops must be given precedence.
3)Seed banks must be opened.
4)Millets and ragi must be included in Public Distribution System progressively.
5)Proper infrastructure chain has to be developed to supply food during drought conditions.
6)Promotion of protein rich food like eggs,poultry etc.

One grave issue is about farmers enthusiasm.In a national weekly, 40% of farmers interviewed said that they would quit farming if they had another option. A grim prospect ,isnt it??

Need for APMC reforms

Agricutural Produce Marketing committees were set up through Agriculture Produce Market Regulation Act,1970.The basic objective was to protect the farmers from the vagaries of market and moneylenders  and to ensure remunerative prices for farmers.But the purpose has been diluted over the course of time and the profit margins of  farmers has been reduced which results in increased the food inflation.

As per APMC Act in states trading outside mandi is not allowed and to trade within mandis license is needed.This system has been misuesd by the middlemen and they possess the licenses and hoard food crops and exercise monopoly to dictate the any prices from farmers.Farmers not having enough knowledge about licence procurement and warehousing availabilities have to suffer under the hands of these middlemens.

Consequently there is an inherent need to ensure the need for reforms as it will farmer's margin will increase as they can directly sell to retailers.This will be a win-win situation for both side as retailers will be able to spend less and therefore  spend the remaining expense on back end infrastructure.This inturn will also help in reducing food inflation in long term as the costs are reduced in the supply chain.

Assess the Significance of Coastal Regions in the Economic Development in India.

India has about 7500 km long coastline, including two island groups. Nine states have sea-coast including two island territories. The coastal zone inhabits about 25% population of India in its first 50 km of area.

It is the coastal region that provides India with a number of sea-ports, minor as well as major, and harbours to take on large scale sea-trade activities which are cheapest means of transport and helped India flourish its international trade.

About 90% of our foreign trade by volume and nearly 70% of value is carried out through sea route. Apart from this, coasts are the reservoir of petroleum and sea-food items. It also provides economic activities like fishing, saltfarming, handicrafts based on coastal materials.

Oil exploration facility from seabed installed at Bombay High accounts for more than 15% of nation's petroleum output.India's Exclusive Economic Zone area constitutes about 2 million sq. km. This area gives economical benefits in term of marine resources like minerals, vegetation and aqua-life.

Major industrial activities like metallurgy, ship-building, manufacturing etc. are also concentrated around the coastal cities and urban centres around the coasts. The sea-coasts also helps India on security front.

India's three sides are covered by sea. India's strategic location in sea is helpful. India is one mid-journey destination for ships travelling in the Indian Ocean. India gets earning from such visiting ships.

So, we can say that the coastline is the life-line of the economic development of India but it is under constant threat of Global warming and rising Sea-level.

Bring out the FDI and employment implications of China being a manufacturing hub and India a services hub.

China and India are the most rapidly growing economies of the world, even though whole world is facing an uphill task of tackling recession. Both countries poised an attractive growth rate. Most amazing fact of this growth-region that is made up of these two neighbouring country is that both are growing on different business models.

China has vast resources and huge population in rural area, therefore China has emerged as a manufacturing hub. India, on the other hand, has over time with English educated mass of middle class has emerged as the services hub.

With handsome return on investment by FDI showing in these two countries in a global slowdown scenario, a lot of investment is getting into these two nations, according to their expertise.

According to a hypothesis that for each 100 US Dollar invested, manufacturing sector generates 8 jobs while service sector generates 43 jobs. High level of mechanization has reduced jobs in manufacturing sector. This scenario helps India generating more jobs with per unit of FDI in comparison to manufacturing hub of China. This is further strengthened by the fact is India is a democracy unlike China that has single party system where human rights rarely captures the centre point of public discourse.On the other hand, china is attracting more FDI, because manufacturing sector is more capital intensive. Comparatively urban-employment generation in china is relatively less intense than that of India. Moreover there are poor salary structure, complex labor laws and union activities.

Rural Infrastructure Development Fund (RIDF)

RIDF was setup by Government of India in 1995-96 to finance the ongoing rural infrastructure projects in irrigation sector.This fund is maintained by NABARD .Subsequently, RIDF was made available for new projects as well and its ambit was broadened to cover almost all important aspects of rural infrastructure.

Domestic commercial banks donate to the Fund to the extent of their shortfall in stipulated priority sector lending to agriculture.The Fund provides loans to State Governments and State-owned corporations to enable them to complete ongoing rural infrastructure projects.

Double Taxation Avoidance Agreement ( DTAA )

The “Double Tax Avoidance Agreement (DTAA)” or “Tax Treaty” is essentially bilateral agreements entered into between two countries, in our case, between India and another foreign state.

The basic objective is to avoid taxation of income in both the countries (i.e. Double taxation of same income). Currently India has comprehensive DTAA or Tax Treaty with 88 other countries.

Let’s take an example to understand how DTAA works; An NRI residing in USA is maintaining NRO Account with a bank in India. The interest earned on balances in this account is considered as the NRIs income originating in India. If India has DTAA with USA, this income will be taxed at the rate prescribed in the agreement and payable in USA and not India as per the agreement. It may differ as per the clauses in agreement.

The Non Resident can certainly take the benefit of the provisions of DTAA entered into between India and the country, in which he resides, more particularly in respect of Interest Income from NRO account, Government securities, Loans, Fixed Deposits with Companies and dividends etc.This also prevents tax evasion.

1921-Year of great divide

It is called so because after 1921 India's Population reduced drastically by 0.31%.This happed due to epidemic of Influenza. The population growth rate was highest in 1971 census which is 24.80 %.

Demographic Transition Theory

As per this theory there are 3 stages in demographic transition.

Stage 1: Nation is an agrarian economy. Birth rates and Death rates are high.Population unstable.

Sage 2: Death rates are low due to better hygiene, nutrition and medical sector. Birth rates high due to lack of awareness an unmet contraception, poor social development, high fertility and wanted fertility rate/TFR.

Stage 3: BR and DR low but population still uncontrolled due to high reproductive age people.

Stage 4: BR and DR low and country economically and socially developed as is seen in West and European countries.

INDIA is currently in 3rd stage.To achieve the demographic dividend demographic transition is necessary for which reduced TFR, IMR & MMR, Education and Social awareness required.

State of economy (21st century)

--More people moving out of agricultural sector in to various sectors like Industrial,Manufacturing,Construction and service sector.
In last 7 years 36 million people have left agricultural sector not because of distress but also as a matter of choice.

--There has been a remarkable difference between the consumption patterns of rich and poor.The product rural people consume like--Textiles,Mobiles,Shoes etc.. are good for economy as they result in employment generation bcoz these market sectors are labor intensive.

--For this structural shift to continue important thing required is that the manufacturing sector needs to create Jobs as much as15 million jobs per year is required.
Therefore Policy changes are required.
1-Import Substitution(Sab import karane ke bajay ghar me hi produce karein ;-P--as this will create jobs)
2-Labor intensive sectors rather than capital intensive.

--SMEs have to be given continued subsidy even after they upgrade as they get demotivated after upgradation from medium scale to large scale,when govt. drops all the subsidies and benefits given.

--Manufacturing policy is very imp if the agricultural to industrial shift is to be continued.In this lieu National Manufacturing Policy is of immense importance.

Top production of important materials/metals/articles

Cars:
China>European Union>USA>Japan>Germany

Steel
China>European Union>Japan>USA

Coal
China>US>India>European Union>Australia

Petroleum
Russia>Saudi Arabia>USA>Iran>China>Canada

Fortune 500 Companies/Indian Entries:

1.IOCL @88th rank
2.Reliance @107th rank
3.Bharat Petroleum @229
4-Hindustan Petroleum @260
5-SBI @298
6-Tata Motors @ 316
7-ONGC @ 369
8-Tata Steels @ 471

Role of Banks in India Economy Development.

Some of the major important role of commercial banks in a developing country are as follows:

Besides performing the usual commercial banking functions, banks in developing countries play an effective role in their economic development. The majority of people in such countries are poor, unemployed and engaged in traditional agriculture.

There is acute shortage of capital. People lack initiative and enterprise. Means of transport are undeveloped. Industry is depressed. The commercial banks help in overcoming these obstacles and promoting economic development. The role of a commercial bank in a developing country is discussed as under.

1. Mobilising Saving for Capital Formation:

The commercial banks help in mobilising savings through network of branch banking. People in developing countries have low incomes but the banks induce them to save by introducing variety of deposit schemes to suit the needs of individual depositors. They also mobilise idle savings of the few rich. By mobilising savings, the banks channelise them into productive investments. Thus they help in the capital formation of a developing country.

2. Financing Industry:

The commercial banks finance the industrial sector in a number of ways. They provide short-term, medium-term and long-term loans to industry. In India they provide short-term loans. Income of the Latin American countries like Guatemala, they advance medium-term loans for one to three years. But in Korea, the commercial banks also advance long-term loans to industry.

In India, the commercial banks undertake short-term and medium-term financing of small scale industries, and also provide hire- purchase finance. Besides, they underwrite the shares and debentures of large scale industries. Thus they not only provide finance for industry but also help in developing the capital market which is undeveloped in such countries.

3. Financing Trade:

The commercial banks help in financing both internal and external trade. The banks provide loans to retailers and wholesalers to stock goods in which they deal. They also help in the movement of goods from one place to another by providing all types of facilities such as discounting and accepting bills of exchange, providing overdraft facilities, issuing drafts, etc. Moreover, they finance both exports and imports of developing countries by providing foreign exchange facilities to importers and exporters of goods.

4. Financing Agriculture:

The commercial banks help the large agricultural sector in developing countries in a number of ways. They provide loans to traders in agricultural commodities. They open a network of branches in rural areas to provide agricultural credit. They provide finance directly to agriculturists for the marketing of their produce, for the modernisation and mechanisation of their farms, for providing irrigation facilities, for developing land, etc.

They also provide financial assistance for animal husbandry, dairy farming, sheep breeding, poultry farming, pisciculture and horticulture. The small and marginal farmers and landless agricultural workers, artisans and petty shopkeepers in rural areas are provided financial assistance through the regional rural banks in India. These regional rural banks operate under a commercial bank. Thus the commercial banks meet the credit requirements of all types of rural people.

5. Financing Consumer Activities:

People in underdeveloped countries being poor and having low incomes do not possess sufficient financial resources to buy durable consumer goods. The commercial banks advance loans to consumers for the purchase of such items as houses, scooters, fans, refrigerators, etc. In this way, they also help in raising the standard of living of the people in developing countries by providing loans for consumptive activities.

6. Financing Employment Generating Activities:

The commercial banks finance employment generating activities in developing countries. They provide loans for the education of young person’s studying in engineering, medical and other vocational institutes of higher learning. They advance loans to young entrepreneurs, medical and engineering graduates, and other technically trained persons in establishing their own business. Such loan facilities are being provided by a number of commercial banks in India. Thus the banks not only help inhuman capital formation but also in increasing entrepreneurial activities in developing countries.

7. Help in Monetary Policy:

The commercial banks help the economic development of a country by faithfully following the monetary policy of the central bank. In fact, the central bank depends upon the commercial banks for the success of its policy of monetary management in keeping with requirements of a developing economy.

Thus the commercial banks contribute much to the growth of a developing economy by granting loans to agriculture, trade and industry, by helping in physical and human capital formation and by following the monetary policy of the country.

What is Self Help Group(SHG)

Self Help Group is a homogeneous group of micro entrepreneurs with affinity among themselves, voluntarily formed to save whatever amount they can conveniently save out of their earnings and mutually agree to contribute to a common fund of the group from which small loans are given to the members for meeting their productive and emergent credit needs at such rate of interest, period of loan and other terms as the group may decide.Women are cornerstone of SHGs as they are more prudential. NABARDs SHG Bank Linkage Programme extend finance to eligible SHGs which help in financial inclusion.

Objective:

1--To meet the credit needs of the poor by combining flexibility, sensitivity and responsiveness of the informal credit system with the strength of technical and administrative capabilities and financial resources of the formal credit institutions.

2--To build mutual trust and confidence between the bankers and the rural poor.

3--To encourage banking activity both on thrift as well as credit side in a segment of the population that the formal financial institutions usually find difficult to cover.

What Is the Demographic Dividend?How should it be improved.

• The demographic dividend is the accelerated economic growth that may result from a decline in a country's birth and death rates and the subsequent change in the age structure of the population.

• With fewer births each year, a country's young dependent population declines in relation to the working-age population. With fewer people to support, a country has a window of opportunity for rapid economic growth if the right social and economic policies are developed and investments made.

Recommended Actions to reap Demographic dividend

The demographic dividend in many developing countries remains a possibility, but for the process to begin, countries must give high priority to substantially lowering fertility and child mortality(a process called demographic transition) through the following actions:

• Invest in child survival and health programs.
• Commit to voluntary family planning to achieve the demographic transition.
• Invest in the reproductive health needs of both married and unmarried youth.
• Prioritize education—especially secondary education for girls.(educated girls are less likely to marry at early age,prefer lesser children,have skills therefor contribute to labor force thereby increasing work participation rate).
• Improved Health,Educationd,Gender equity,Modern Family Planning is needed.

National Population Policy 2000

NPP 2000 is a policy framework to formulate strategies to achieve reproductive and child health needs of people of India.Three pronged objectives-

Immediate objective--
1.Adress unmet needs for contraception,Health care infrastructure and health personnel.
2.To provide integrated service delivery for basic reproductive and child health care.

Medium term objective--To bring TFR levels to replacement level i.e 2.1 by 2010.

Long term Objective--To achieve a stable Population by 2045 to achieve suistanable economic growth,social development and enviromental protection.
In pursuance of these objectives National Socio-Demographic Goals have also been formulated

National Population Register(NPR)

The National Population Register(NPR) is a comprehensive database of the residents of the country  maintained by Registrar General and Census Commissioner of India, Ministry of Home Affairs, Government of India (RGI).It will have biometric data and UID no. of every person(15y and above).In a phased manner National Identity cards will be issued by the Office of Census Commisioner for the first time in country .