Group name : Static GA for Banking Exams
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Group name : Banking, Finance and Economy Quiz for Banking Exams
Purchasing Power Parity (PPP)
It states that the exchange rate of a currency with another (currency) is in equilibrium when their domestic purchasing power are equivalent at that exchange rate.
It means that a good should cost same in India and USA after considering the exchange rate of Indian Rupee (INR) and US Dollar (USD).
Suppose, the current exchange rate of Indian rupee to US Dollar is Rs. 60 perUSD (i.e., 1 USD = Rs. 60). Now suppose a laptop costs Rs. 60,000 in India.
According to the PPP theory, the laptop should cost USD (60,000 / 60) = USD 1,000 (considering the current exchange rate of these two currencies) to maintain parity in purchasing power of these two currencies.
But, it may happen that the actual market price of the laptop in USA is USD 800 (say) (equivalent to Rs. 48,000 in India). Therefore, there is an advantage of buying the laptop in USA at much less price than India (Rs. 12,000 less) (it means that the purchasing power is not in parity between these two currencies)
Indian consumers will go to the exchange office and sell their INR and buy USD, and then buy the laptop from USA. It will cause the Indian currency less valuablethan the US dollar.
The demand of laptop sold in India will decrease (since high price), and the priceof laptop will go down. In contrast, the demand of laptop in USA will increase, and the price will rise accordingly.
These factors will cause the exchange rate (of the currencies) and the prices (of laptops) to change such that there is purchasing power parity in both the currencies.
PPP theory tells us that the price differences between countries are not sustainable in the long run, as market forces will equalize prices between the countries and change the exchange rates accordingly.
(Relate the above example with companies that can buy goods in much less price from foreign countries and sell in much less price in India than its counterparts. For this reason, there are several laws or restrictions on imports and a provision of levying customs duty, etc.)
Vision 2021 Payment and Settlement System:
The Vision 2021 payment and settlement system in India is built on the core theme of Empowering Exceptional (E) Payment Experience. It seeks to empower every Indian with access to a bouquet of e-payment options that is safe, secure, convenient, quick and affordable
- enhancing the experience of Customers;
- empowering payment System Operators and Service Providers;
- enabling the Eco-system and Infrastructure;
- putting in place a Forward-looking Regulation;
- supported by a Risk-focussed Supervision
Vision 2021 concentrates on a two-pronged approach of
- exceptional customer experience;
- enabling an eco-system which will result in this customer experience
The Vision envisages four goal-posts (4 Cs) –
- Competition: For enhancement of Competition in the payment systems landscape, specific thrust areas like creating regulatory sandbox, authorising new players, etc., have been incorporated
- Cost: this along with the presence of multiple players in the market is expected to achieve optimal Cost for the customers
- Convenience: freer access with availability of multiple payment system options anytime-anywhere should cater to the requirement of Convenience
- Confidence: the ‘no-compromise’ approach towards safety of payment systems should address security vulnerabilities to retain customer Confidence
The four goal-posts of Vision 2021 with 36 specific action points over the 36-month timeframe will have the following 12 specific outcomes:
- Further decrease in the share of paper-based clearing as a percentage of retail payments, particularly in terms of number of paper instruments processed.
- Accelerated growth in individual retail electronic payment systems, both in terms of number of transactions and increased availability
- Measurably, the digital payment transaction turnover vis-à-vis GDP (at market prices-current price) is expected to further increase to 10.37 in 2019, 12.29 in 2020 and 14.80 in 2021. Payment transaction turnover, including CCIL transactions and paper, is expected to be 22.30 times the GDP (at market prices-current price) by December 2021
- Increase in use of digital modes of payment for purchase of goods and services through increase in debit card transactions at PoS and continued growth in PPI transactions
- Usage of debit cards at PoS transactions is expected to be at least 44 % of total debit card transactions (at PoS + ATM).
- Increased deployment of card acceptance infrastructure across the country including at smaller centres with a substantial portion of the infrastructure taking care of processing contactless card payments
- The enhanced availability of PoS infrastructure is expected to reduced demand for cash and thus over time achieve reduction in Cash in Circulation (CIC) as a percentage of GDP.
- Further facilitation of mobile based payment transactions as gauged on basis of the registered customer base (expected increase of 50 % considering the base effect).
- Enhanced usage of electronic payment systems is expected to reduce the marginal cost given the additional volume. The pricing of such services to customers should, over the vision period, show reduction of at least a 100 bps from current levels.
- Security of systems and customer centricity as reflected by –
Decrease in Technical Declines reported across various payment systems by 10 % year-on-year.
Reduction in Business Declines reported across various payment systems by 5 % year-on-year.
Improvement in Turn Around Time (TAT) for resolution of customer complaints by PSOs.
- FTS [Fraud to Sales (Fraud value / Sales value) x 10000] count for payment systems is expected to be less than 10 bps for most of the payment systems
- Enhanced healthy competition in the payments space and establishment of new PSOs during the Vision period is envisaged
New scheme for exporters: NIRVIK
Export Credit Guarantee Corporation of India (ECGC) has introduced ‘NIRVIK’ scheme to ease the lending process and enhance loan availability for exporters.
- The details of the scheme were shared by Union Minister of Commerce and Industry and Railways, Piyush Goyal on September 16, 2019, during a press conference.
- The scheme was announced by the Finance Minister Nirmala Sitharaman on September 14 as a part of measures to boost exports.
Details
- The Export Credit Guarantee Corporation of India (ECGC) currently provides credit guarantee of up to 60 percent loss.
- The new Export Credit Insurance Scheme (ECIS) which has been named the NIRVIK scheme will raise the insurance cover guarantee to 90 percent coverage of the principal and interest.
- Half of the insurance cover will be provided within 30 days.
- The insurance cover will include both pre and post-shipment credit whereas in the present system two different documents are issued by the ECGC for both.
- Under the ‘NIRVIK’ scheme, gems, jewelry and diamond(GJD) sector borrowers with a limit of over Rs 80 crore will have a higher premium rate in comparison to the non-GJD sector borrowers of this category due to the higher loss ratio.
- The scheme is being introduced for a period of 5-years and when the time period is over, the standard ECGC covers will be made available to the Banks with its regular features.
- For accounts with limits below Rs 80 crore, the premium rates will be set at 60 per annum and for those exceeding Rs80 crore, the rates will be fixed at 0.72 per annum for the same enhanced cover.
- The inspection would be waived for up to ₹10 crore. But the inspection of bank documents and records by ECGC officials is mandatory in case of losses of more than Rs.10 crore as against the present Rs 1crore.
- www.facebook.com/groups/rbi.grade.b.prelim.main
RBI introduced a new reporting system for all co-operative banks, called Central Information System for Banking Infrastructure (CISBI). Co-op Banks will submit their information related to their presence points in a single proforma online.
- Bank Branch Statistics Division (BBSD) in Department of Statistics and Information Management (DSIM) of RBI will be nodal unit for CISBI.
- CISBI has replaced existing system of email-based reporting at branches, which was inefficient.
- It has been done after collapse of Punjab and Maharashtra Co-operative Bank, following uncovering of 4000 crores fraud.
- www.facebook.com/groups/rbi.grade.b.prelim.main
Unnat Bharat Abhiyan Scheme for Rural Development
Unnat Bharat Abhiyan was launched by the Ministry of Human Resource Development (MHRD) in Novembter, 2014. It is based on the premise that to promote development of rural areas in tune with Gandhian vision of self-sufficient ‘village republics’, based on local resources and using decentralized, eco-friendly technologies so that the basic needs of food, clothing, shelter, sanitation, health care, energy, livelihood, transportation, and education are locally met. The Mission of Unnat Bharat Abhiyan is to enable higher educational institutions to work with the people of rural India in identifying development challenges and evolving appropriate solutions for accelerating sustainable growth. It also aims to create a virtuous cycle between society and an inclusive academic system by providing knowledge and practices for emerging professions and to upgrade the capabilities of both the public and the private sectors in responding to the development needs of rural India.
- To build an understanding of the development agenda within institutes of Higher Education and an institutional capacity and training relevant to national needs, especially those of rural India.
- To re-emphasize the need for field work, stake-holder interactions and design for societal objectives as the basis of higher education.
- To stress on rigorous reporting and useful outputs as central to developing new professions.
- To provide rural India and regional agencies with access to the professional resources of the institutes of higher education, especially those that have acquired academic excellence in the field of science, engineering and technology, and management.
- To improve development outcomes as a consequence of this research. To develop new professions and new processes to sustain and absorb the outcomes of research.
- To foster a new dialogue within the larger community on science, society and the environment and to develop a sense of dignity and collective destiny.
The requisite funding for the working of subject expert groups for preparation of resource materials, training workshops, etc. is provided by the Ministry of HRD
NATIONAL STEERING COMMITTEEAn empowered Steering Committee has been constituted by the Ministry of HRD for actual implementation, continuous guidance and monitoring of the programme at the national level. Dr. Vijay P. Bhatkar, an eminent scientist and rural development enthusiast has been designated as the Chairperson of the National Steering Committee (NSC) with stalwarts like Dr. Mashelkar (Ex Director General, CSIR), Dr. Ved Prakash (Ex-Chairman, UGC) and Dr. Sahasrabudhe (Chairman, AICTE) and others as the members.
COORDINATING INSTITUTEIIT Delhi has been designated to be the Coordinating Institute (CI) for the Unnat Bharat Abhiyan (UBA). The main task of the coordinating institute will be to facilitate mutual interaction, consultation, responsibility allocation and an active liaison among the mentoring institutions, the subject expert groups as well as the Ministry of HRD.
HOW TO READ THE ECO SURVEY FOR RBI GR B
Read As Follows:
- Numbers are not much important: Many aspirants start mugging up the percentage change, numerical data etc. Remember one thing, they want you to be smart human not a dumb Robot. Try to focus on the trends and patterns rather than engulfing numbers.
- Remember the importance of first chapter: Read first chapter with utmost care because this part contains brief summary of whole survey. You will get a chance to identify the part to be focused on.
- Divide it in different parts: The best and efficient way to read survey is divide it in different sections and each section contains different sector facts. Like if you are preparing for UPSC then divide whole survey for three sections.
Section 1-Society, Role of women, Urbanization, Social Empowerment etc.Section 2-Welfare schemes and their analysis, Schemes for vulnerable sections, Government initiatives, Human resource, Hunger, Malnutrition, poverty, etc.Section 3-Agriculture, Subsidy issues, sustainable tech initiatives, Macroeconomics tangibles, and intangibles, etc. And more topics that are included in your syllabus and asked in exams.a. Mug up all stuff that is in boxes-This is most important you should mug up all the stuff that is in boxes because many times question the stuff put in the box have been directly asked in exams. So read them properly.b. Read it at least two times-As we know we are not Einstein or Newton that only one reading can remember whole life. It is not important to read the survey again and again because it is time-consuming. So as I previously said if you divide it into sections and make your own notes then only that notes will be helpful. So instead of reading whole survey read only your own notes again and again will be less time consuming and easily memorable.
- Don’t mug up all graphs and charts: Survey contains a heck of graphs, charts and plots . You don’t need to put all of them in your head. Just try to prioritize things up and select some important things.
- Bottomline
- Read the Economic survey but don't get too engrossed in it. This year the survey is more like a doctoral thesis.
- Avoid useless information and loads of data if you want to score well in the exam.
- Make a simple one pager note of every chapter jotting down key takeaways
- Pay heed to schemes and policies mentioned in the Survey. For eg. Scheme for Sustainable Structuring of Stressed Assets (S4A)
- Focus on the bigger picture, trend, arguments, analysis.
- https://www.facebook.com/groups/rbi.grade.b.prelim.main/
Importance of BRICS for India
- Geo-Politics: Global geopolitics today represents the case of a tug of war and India finds itself in the middle of it. This has made difficult for India to carve a middle path for balancing its strategic interests between the U.S and the Russia-China axis.
Therefore, BRICS platform provides an opportunity for India to balance Russia-China axis.
- Global Economic Order: BRICS countries shared a common objective of reforming the international financial and monetary system, with a strong desire to build a more just, and balanced international order
To this end, BRICS community plays an important role in the G20, in shaping global economic policies and promoting financial stability.
- Voice of Developing Nations: As the western countries are raising challenges on issues ranging from World Trade Organisation to climate change, the developing countries are crippling under the onslaught of these policies.
In recent period, BRICS has emerged as the voice of developing countries, or the global south and playing a significant role in protecting the rights of developing countries.
- Terrorism: BRICS also provides a platform for India to galvanize its efforts against terrorism and has worked within the grouping to take a strong stand against terrorism and bring about focused consultations on specific aspects relating to terrorism.
- Global Grouping: India is actively pursuing its membership for United Nation Security Council (UNSC) and Nuclear Supplier Group (NSG).
China forms the major roadblock in pursuing such goals. Therefore, BRICS provides an opportunity to actively engage with China and resolve the mutual disputes. It also helps in garnering support of other partner countries. - www.facebook.com/groups/rbi.grade.b.prelim.main
Corporate Tax Rate Cuts :How the decision will have an impact on the economy?
- More Money to the hands of Private players: Experts believe that lowering the tax rate will leave more money to the hands of the private sector which can offer people more incentive to produce and contribute to the economy.
- Widening the Economic Base: Corporate tax rate is the major determinant which defines the economic activity of the private sector. Thus, the present tax cut can help the wider economic growth.
- Capital Inflow to the Economy: Corporate tax rate is also a major determinant of how investors allocate capital across various economies. Offering a lower tax rate will attract more investors to the economy that will further raise capital inflow into the economy.
- Competitive Economy: The present cut in taxes can make India more competitive on the global stage by making Indian corporate tax rates comparable to that of rates in East Asia.
- Greater Tax Collections: At the same time, the present tax cut can help boost tax collections and compensate for the loss of revenue.
- Expansion of the Corporate Footnote: The benefit is immense as it might expand the corporate universe as new firms will now be taxed at 15 percent.
- More Employment to the Economy: Attracting investors by lowering the tax rate will generate more employment and will help increase the purchasing power of the people.
- Flip to the Government Programme: The move will also give thrust to government initiatives like Make in India, Startup India, etc. which had taken a hit in the past couple of years.
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Recruitment in Government and Public Sector :
Dear Aspirants
Hope you’re all doing well. It’s a difficult time for everyone, especially for people who are waiting for employment opportunities this year. Now there’s a lot of conjecture regarding the availability of public sector jobs post this pandemic and naturally this uncertainty is weighing down on us heavily.
Also, many rumours are floating around RBI GRADE B 2020 as well.
Before we go any further, let us look at how India fared in terms of recruitment during the global financial crisis.
Year 2008:
UPSC 791 VACANCIES
SBI PO 3500 VACANCIES
SSC CGL more than 5000 vacancies
RBI GRADE B Recruitment trends:
2007 62 VACANCIES
2008 75 VACANCIES
2009 79 vacancies
Recently, IMF has also published a report stating that the Indian economy will grow at 1.9%, better than most of the world economies.
And you must also be aware of the steps taken by the Indian govt to remove the hindrances ailing the economy. Further policy actions are anticipated.
You can also see the trends and anaylse that recruitment was not halted during One of the Worst Financial crisis.
There may be a little delay in recruitment exams but exams definitely will be conducted.
Why these numbers matter?
Because it gives us a rough idea of how we fared in one of the worst financial crisis this country has ever seen.
Why should this give you hope?
Because without facts anyone’s opinion can easily be considered as misinformation.
Why should you continue studying?
Because everyone else took this opportunity to study harder at home while you were pondering on things beyond your control.
Don't believe in any rumours and keep Studying.
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