Scrapping Article 370 for Kashmir and India

• Article 370 mainly allowed Kashmir’s accession to India as it guaranteed special status to the Valley.
• It gave Jammu and Kashmir exemption from the Indian Constition.
• The scrapping of Article 370 would affect the political status of the state.
• India was a legitimate power in Jammu and Kashmir because of this Article. Once it’s gone, India will be reduced to an occupational force in the region.

Benefits of Removing Article 370

Some of the biggest possible advantages of abolishing Article 370 are:

1. The state, upon removal of Article 370, will prosper economically and socially.
2. The threat of militancy will reduce via social amalgamation.
3. Kashmir could serve as one of the top tourist destinations after complete development.
4. It will supposedly prove to be good diplomacy to deal with Pakistan over territorial disputes.
5. It will politically give chance to all parties to rule the state and allow its development.

Article 370

Article 370 is an article of the Constitution of India, Part XXI: Temporary, Transitional and Special Provisions. Moreover, it grants a special status of autonomy to the state of Jammu & Kashmir.

Article 370’s Inclusion in the Constitution

• Originally, all princely states, including Jammu & Kashmir, merged with India on three matters: defense, foreign affairs and communications.
• Princely states had to draft their own constitutions which would govern other aspects of society.
• However, most states rejected the necessity of a separate constitution and adopted the Indian Constitution.
• Hence, this made those princely states equivalent to other Indian provinces.
• However, Jammu & Kashmir made its own constitution and asked for Indian Constitution to apply only on the three matters of original merger.
• Thus, Article 370 was included in the Indian Constitution according to which other articles of Indian Constitution will apply to Jammu & Kashmir with the agreement of State’s constituent assembly.
• Moreover, this Article was only temporary.

Article 370’s Permanence

• Article 370 was meant to be a temporary provision applied to the state of Jammu & Kashmir.
• The Constituent Assembly of Jammu & Kashmir had the authority to repeal or modify the state constitution. Hence, no external body could make any changes to the clauses.
• The Jammu & Kashmir Constituent Assembly dissolved on 25 January 1957 without any decision.
•  Article 370 has become a permanent provision in Indian Constitution according to Jammu & Kashmir High Court.
• Therefore, Jammu & Kashmir has a special autonomous status in the country.

Original Implications of Article 370

Article 370 included six special provisions for the state of Jammu & Kashmir at the time of Preparation:

1. Exempting the State from completely applying the Indian Constitution. The state could have its own Constitution.
2. Limitation of central legislative powers over the State at the time of framing, to matters of defense, foreign affairs and communications.
3. Extension of other constitutional provisions of Central Government to State only with State Government’s agreement.
4. The ‘concurrence’ (agreement) was only provisional. It required State’s Constituent Assembly’s consent.
5. State Government’s authority to give ‘concurrence’ lasted only until the State Constituent Assembly was assembled. After the Assembly finalized the scheme of powers and dispersed, no further changes were possible.
6. Thus, Article 370 could be repealed or amended only upon the recommendation of the State’s Constituent Assembly.

Major Presidential Orders Regarding Article 370

• Presidential Order – 1950: Specifies which articles of Indian Constitution applies to the state through the original agreement.
• Presidential Order – 1952: Represents abolition of monarchy in Jammu & Kashmir.
• Presidential Order – 1954: Includes
  • allowing Indian citizenship to permanent residents of Jammu & Kashmir
  • extending Supreme Court of India’s jurisdiction over the state.

Almost 50 Presidential orders are issued since then.

Shujaat Bhukari Assasination

• Shujaat Bhukari, a Kashmiri Journalist and the editor of Rising Kashmir was shot dead by 4 assailants on 14th June 2018.
• Bhukari was known as a brave journalist who liked to voice his opinion, the reason of his death is still unknown.
• Shujaat Bhukari’s case is a rare case of Kashmir where the angle of militants assasinating him is being kept aside for his help to militants in Kashmir.
• This cold blooded murder in a normal morning in Kashmir, right outside Bhukaari’s own office raises questions again on Article 370, it’s reliability and it’s failure in many ways at maintaing civilian peace in Kashmir

List of Banks and Headquarters of India - Chairperson/MD/CEO & Logos

India has a total of 27 public sector banks. These include 21 are nationalized banks and 6 are State Bank of India and its associates. With a capital of 500 crore each, the IDBI in the year 2011 and the Bhartiya Mahila Bank in the year 2014 were nationalized. This article brings you the List of Banks, their headquarters, CEO/MD/Chairperson, their logos and tag line to help you have a better grasp at this topic. You can also download Banks and Headquarters – GK Notes in PDF format for future reference.

Why are Banks and Headquarters important?

A bank is a financial institution that accepts deposits from the public and creates credit.

• It also Performs lending activities. The banks perform these lending activities through capital markets, either directly or indirectly. Banks are highly regulated in most countries. This is because of their importance in the financial system and influence on national economies.
• The functioning of a Bank is one of the most complicated of corporate operations. Since Banking involves dealing directly with money, governments in most countries regulate this sector very strictly.
• In India, the regulation traditionally has been very strict.

Questions about Banks, their headquarters, logo, tag lines and who are the bank’s CEO/MD are being asked frequently in all competitive exams. SBI PO, SBI Clerk, IBPS PO, IBPS Clerk, and other banking exams test your knowledge in this above topic. Given below is the list of Banks and Headquarters in alphabetical order to help you score better in this topic.

List of Banks and Headquarters 2019

The below list of Banks and Headquarters includes details such as their Chairperson/MD/CEO, Logos and Tagline of the respective banks.

Bank’s Name	Head Quarters	Chairperson/CEO/MD	Logo	Tagline
Allahabad Bank	Kolkata	Shri CH. S. S. Mallikarjuna Rao		A tradition of trust
Andhra Bank	Hyderabad	Shri J Packirisamy		Where India Banks
Bank of Baroda	Mumbai	Managing Director & CEO – Shri P. S. Jayakumar Non-Executive Chairman – Dr. Hasmukh Adhia		India’s International Bank
Bank of India	Mumbai	Shri G. Padmanabhan		Relationship beyond banking
Bank of Maharashtra	Pune	Shri A,S Rajeev		One Family One Bank
Canara bank	Bangalore	Shri. R A Sankara Narayanan		Together We Can
Central Bank of India	Mumbai	Pallav Mohapatra		Build a better life around us
Corporation Bank	Mangalore	P.V. Bharathi		Prosperity for All
Indian Bank	Chennai	Padmaja Chunduru		Your Own Bank
Indian Overseas Bank	Chennai	Shri Karnam Sekar		Good people to grow with
Oriental Bank of Commerce	New Delhi	Mukesh Kumar Jain		Where every Individual is committed
Punjab National Bank	New Delhi	Shri. Sunil Mehta		A Name You Can Bank Upon
Punjab & Sind Bank	New Delhi	Dr. Charan Singh Shri S. Harisankar (MD & CEO)		Where service is a way of life
Syndicate Bank	Karnataka	Ajay Vipin Nanavati		Faithful and Friendly
Union Bank of India	Mumbai	Rajkiran Rai G.		Good people to bank with
United Bank of India	Calcutta	Shri Ashok Kumar Pradhan		The bank that begins with “U”
UCO Bank	Calcutta	Kewal Handa		Honours Your Trust
IDBI	Mumbai	M R Kumar		1.Banking For all 2.Aao Sochein Bada 3.Bank Aisa Dost Jaisa
State Bank of India	Mumbai	Shri Parveen Kumar Gupta		1.“Pure Banking, Nothing Else” 2.“With You – All The Way” 3.“A Bank Of The Common Man” 4.“The Banker To Every Indian” 5.“The Nation Banks On Us

Some_Important_Acts Related to Bank

🔴NEGOTIABLE INSTRUMENT ACTS -1881
⚫Section 4 :- Promissory Notes
⚫Section 5 :-Bill of Exchange
⚫Section 6 :- Cheque
⚫Section 13 :- Negotiable instrument
⚫Section 123 :- Cheque Crossed Generally
⚫Section 124,126 : -Cheque Crossed Specially
⚫Section 130 : -Cheque bearing Not Negotiable
⚫Section 118 :- Presumption as to Negotiable instrument

🔴RESERVE BANK ACT (RBI ACT 1934)

⚫Section 17 :- Define Banking Business
⚫Section 18 :-Deals With Emergency Loan To Bank
⚫Section 22 :-Exclusive Rights To Issue Currency Notes In India
⚫Section 24 :-Maximum Denomination a Note Can Be Rs 10,000
⚫Section 26 :- Describe The Legal Tender Character of Indian Bank Notes
⚫Section 28 :-Form Rule Regarding The Exchange Of Damaged and imperfect Notes
⚫Section 31 :-In India only RBI or the central government issue and accept promissory notes that are payable on demand
⚫Section 42 :-Every schedule bank must have an average daily balance with RBI

🔴BANKING REGULATION ACT -1949

⚫Section 10 :-Power of RBI to appoint chairman of banking company
⚫Section 11 :-Recruitment as to minimum capital and reserve.
⚫Section 12 : -Regulation of Paid of capital, authorized capital,voting rights of shareholder
⚫Section 21 :-To control advances by banking company
⚫Section 21(A) : - Rate of interest charged by banking company
⚫Section 22 :- license of banking company
⚫Section 23 :-Restriction on opening transfer of business
⚫Section 29 :-Account and balance sheet
⚫Section 36 :-Power of central government to acquire banking company in a certain case
⚫Section 44 :-Amalgamation of banking company
⚫Section 47 :-Power of RBI to impose penalty

🔴Some Other Important Acts Related To Banking -

⚫SBI ACT: -1955
⚫SBI SUBSIDIARY ACT: - 1959
⚫DICGC ACT :- 1961
⚫EXIM ACT: - 1981
⚫NABARD ACT: - 1981
⚫RRB ACT: - 1976
⚫NHB ACT: - 1987
⚫SIDBI ACT :- 1989
⚫SARFASI ACT :- 2002
⚫FEMA ACT: - 1999
⚫CREDIT INFORMATION CORP :- 2005
⚫PMLA ACT: -2002



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Key Rates used by RBI Repo Rate, MSF Rate & Bank Rate

Key Rates used by RBI

The Bank has various Key Rates at its disposal to influence the money supply in the market through its monetary policy.

What is Liquidity Adjustment Facility?

Liquidity Adjustment Facility (LAF) helps banks adjust their daily liquidity mismatches by pledging government securities over and above the SLR requirement. Repo Rates and Reverse Repo Rates form a part of the Liquidity Adjustment Facility.

What is RBI Repo Rate?

• RBI Repo Rate is the rate at which the Reserve Bank of India (RBI) lends money to commercial banks. By controlling the Repo Rate, and the lending rates to commercial banks, the RBI also indirectly affects the lending rates granted by commercial banks to end consumers.
• When there is low inflation along with low-capacity utilisation and the market demands more supply of money, the RBI decreases the RBI Repo Rate. By decreasing the Repo Rate, the RBI encourages commercial banks to borrow more money from it.
• Increasing RBI Repo Rate means that commercial banks don’t borrow money liberally from the RBI, and avoid doing so. This slows down the economic progress, reduces the liquidity in the market, and the reduction in money supply reduces the inflation. This is an important measure in curbing inflation.

Stay prepared by updating your general knowledge with this course!

What is RBI Reverse Repo Rate?

• Reverse Repo Rate is the rate at which the Reserve Bank of India borrows money from commercial banks within the country. It is one of the monetary policy instrument which can be used to control the money supply in the country.
• Other things remaining constant, an increase in the reverse repo rate will result in decrease in the money supply and vice-versa.
• An increase in reverse repo rate implies a situation where commercial banks get more incentives if they park their funds with the RBI, thereby decreasing the supply of money in the market.

What is Marginal Standing Facility (MSF) Rate?

• Another one of the Key Rates used by RBI is the Marginal Standing Facility Rate.
• Marginal Standing Facility is a new window of Liquidity Adjustment Facility (LAF) created by Reserve Bank of India
• It was created in RBI’s credit policy of May 2011.
• At this rate, the banks are able to borrow overnight funds from RBI against the approved government securities.
• Marginal standing facility (MSF) acts as a support plan for banks, letting them borrow funds from the Reserve Bank of India in an emergency situation wherein the inter-bank liquidity dries up completely.
• Banks borrow from RBI by pledging government securities at a rate comparatively higher than the Repo Rate under liquidity adjustment facility (LAF).
• Under MSF, banks can borrow funds approximately around one percentage of their net demand and time liabilities (NDTL).

What is Bank Rate?

• Bank rate is the rate of interest at which a central bank charges its loans and advances to a commercial bank.
• In case of shortage of funds, banks can borrow from the central bank based on the monetary policy of the country.
• The borrowing is commonly done via repo rate, it is more applicable when there is a liquidity crunch situation in the market.
• The Reserve Bank of India determines the bank rate at which it provides loans to commercial banks with no collateral. This rate is revised periodically, reactively depending on the economy.

What is Cash Reserve Ratio (CRR)?

• CRR is the basic percentage of a bank’s net demand and time liabilities (deposits) that banks ought to maintain as cash balance with the RBI.
• A high CRR percentage means banks have less funds to lend, a low CRR does the opposite.
• This in turn impacts liquidity in the economy.
• CRR is used by RBI to tighten or ease liquidity by increasing or decreasing it as per the situation demands.

What is Statutory Liquidity Ratio (SLR)?

• Statutory Liquidity Ratio is the percentage of net demand and time liabilities (deposits) that banks ought to maintain in safe and liquid assets approved by the RBI.
• The assets can be in the form of government securities, cash and gold.
• Any fluctuations in SLR often tend to influence the availability of resources in the banking system for lending to the private sector.

Important Key Rates used by RBI Updated as of June 2019

Important RBI Policy Rates and Ratio – April, 2019
Current Cash Reserve Ratio	4%
Current Reverse Repo rate	5.5%
Current Repo Rate	5.75%
Current Marginal Standing Facility Rate	6%
Current Bank Rate	6%
Current Statutory Liquidity Ratio	19%

You can visit the RBI Official Site

Know Your Banks - Detailed Explanation About Distressed Banking Sector and NPAs!

What are NPAs?

NPA stands for Non-Performing Assets of the banks. It simply means:

Bank gives a loan to a person.

The concerned person fails to pay loan installment for 3 months. (Even after repeated notices from the bank).

Banks declare such loans as ‘bad loans’ or NPA.

Reasons for NPAs

Dynamic policy changes.

Deadlock in Infrastructure sector.

Sluggish economic conditions deterring overseas investors from investing in India.

Reviving US economy is taking the invested money back from India.

Political uncertainty prevalent in India.

Strict priority sector lending norms.

To overcome the problems of NPA various steps have been taken by different bodies.

Steps taken by the Government

Earlier on the recovery of bad loans from the borrowers, the borrowers filed trivial cases in civil courts.

These made recovery procedure prolonged and hardly any bad loans could be recovered.

Firstly, the Government established Debts Recovery Tribunals (DRT) to deal exclusively with NPA matters. But DRT got clogged with too many pending cases.

Secondly, the Govt. came up with SARFAESI Act 2002, the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Act.

Under this act, the government gives banks the following powers to recover bad loans-

Taking possession of assets without any order of the court.

Auction or sale of the assets.

Amending the management or administration of the assets.

If the assets are sold to a third party, banks can order debtors to pay the bank.

Note: Here the Bank can take away only those assets which were mortgaged or secured to take the loan. But if the bad loan belongs to a company, the banks cannot take away any other personal asset (belonging to individuals in the company as opposed to the company itself) to offset the bad loan. An example is Vijay Mallya of Kingfisher. Though the company declared itself bankrupt and unable to pay back loans, banks cannot seize personal assets belonging to him.

Thirdly, came the idea of Asset Reconstruction Company (ARC).

ARCs buy bad loans from the banks and try to extract maximum profit out of these bad loans. But a problem arises here as not many invest in ARCs and so their capacity to buy NPAs is very low.

Lastly, the newly introduced Banks Board Bureau (BBB) formed to govern all the PSBs will take care of the supervision of the banks. BBBs will also look into strategic planning, risk management and business performance of the PSBs.

Steps taken by the RBI

RBI implemented Basel-I norms in 1992. Banks had to attain 8% Capital to Risk-Weighted Assets Ratio (CRAR) aka Capital Adequacy Ratio (CAR).

RBI has now fixed the deadline of 31^st March 2019 to implement BASEL-III norms.

In BASEL–III, banks have to maintain a Minimum Total Capital (MTC) of 9% of Total Risk Weighted Assets (RWA).

To promote more investment in asset reconstruction in India, RBI has increased FDI cap on asset reconstruction companies (ARCs).

RBI has also introduced Strategic Debt Restructuring Scheme (SDR).

This step was introduced to ensure that the shareholders of the company bear the first loss of the bad assets rather than the debt holders (banks).

RBI suggests that equity shares of the Company should be transferred by promoters to lenders to compensate for their sacrifices.

SDR also includes Framework for Distressed Assets.

It concentrates on early recognition of stressed assets. Banks are required to route the assets through 3 classes of Special Mention Accounts (SMA- 0, 1, and 2) before classifying it as an NPA.

Moreover, the SMA-2 classified leaders of banks need to form a Joint Lenders Forum (JLF). They have to formulate a Corrective Action Plan (CAP) in order to de-stress the asset.

RBI has also set up Central Repository of Information on Large Credits (CRILC).

CRILC is a registry to keep records of large borrowers and those assets which are under stress.

Steps Taken by Banks

The slowdown in the economy in the last few years (due to recession) has led to a rise in bad loans or NPAs.

Banks have been given more flexibility and powers to deal with these NPAs.

Not only the NPAs but also the rising percentage of restructured assets is a point of contention.

Restructured assets – when a borrower is unable to pay back the loan, the bank makes the loan more flexible. It allows the loan to be paid back over a longer period of time.

The NPAs and Restructured Assets together put pressure on a bank’s profitability.

The banks will be left with less capital to lend extensively to other sectors.

The funding for various important developmental projects will be left dry for too long.

 Vicious Cycle of NPA in an Economy

The cycle of NPAs in an Economy starts with Rising NPA in Banks, followed by Bank’s Profitability and Capital Reduction, Reduction in Bank’s lending to various sectors, No investment & installation of Developmental Projects ultimately leading to Slow Economic Growth.

 

What are new Governance Reforms or Recapitalisation of Banks?

The NPAs of all PSBs (Public Sector Banks) was almost Rs. 4 lakh crore at the end of December 2015.

Also the banks have a deadline of March 2019 to comply with Basel-III norms.

The government has launched a seven-point agenda to revive the PSBs – Indradhanush.

It includes 70,000 crore capital infusion over the next four years. This number may go up after Budget 2016-17.

The remaining amount have to be raised by PSBs through domestic and foreign investments by tapping equity markets.

Banks have to sell their shares to public directly, though the govt. will continue to remain the majority shareholder.

Conclusion

The amount that has been set aside by the govt. for recapitalisation of the PSBs is not enough to root out the issue of Non-Performing Assets and distressed banking sector completely. Need of the hour is a comprehensive bailout package which will enable banks to rekindle the spirit of lending. In return, our economy can come out of the vicious cycle of NPA and aid the urgently needed economic growth path set out by the govt. However, this will mean a heavier toll on the pocket of taxpayers and consumers alike, as the govt. will need fund this bailout from collected revenues.

Negotiable Instruments - Know In Detail About Meaning, Types & Differences

What are Negotiable Instruments?

Negotiable instruments in India are governed under the Negotiable Instruments Act, 1881. Under this act, the instruments are defined and their usage is governed. With reference to Section 13(A) of the Act, a negotiable instrument means ‘a promissory note, bill of exchange or cheque payable either to order or to bearer, whether the word “order” or “bearer” appears on the instrument or not.’  To explain things further, a negotiable instrument is a document that guarantees the payment of a specified sum of money either on demand or after a stipulated period of time.

There are many Negotiable Instruments. However, the Act takes into consideration only three.

The Act does not include demand drafts and hundis which are also popular negotiable instruments. Negotiable instruments can be categorized into two main types:

Order to pay– Drafts and cheques

Promise to pay– bills of exchange and promissory notes.

Negotiable Instruments Criteria

The instrument must be in written form;

Promise or order to pay must be unconditional;

The payment must be of a specified sum of money to which interest may be added;

The payment must either be made after a set time or on demand;

The instrument must be payable to bearer or to order;

The instrument must not require the person promising payment to perform any other action other than payment.

Types of Negotiable Instruments

Bill of Exchange

An instrument containing an unconditional order and signed by the maker, directing a certain party to pay a certain sum of money to the bearer of the instrument. They are issued by banks, thus making this a three-party affair.

The payee is the party receiving the payment (the creditor)

Drawee is the party making the payment (the debtor)

Drawer obliges the drawee to pay the payee (bank)

Banks can choose to perform the function of discounting the bill of exchange. Banks provide short term credit to the holder of the bill based on these bills of exchange. This discount rate includes the interest rate and other nominal charges. The interest rate increases in proportion to the maturity period of the bill. The earnings of the bank are termed as proceeds which is the difference between the face value and the discount value. At maturity, the bank receives the original face value as reimbursement and the payee receives the discounted value.

Promissory Note

Promissory notes are legal instruments in which one party promises to pay in writing a specific sum of money to the other party, either after a stipulated time period or on demand under specific terms.

Promissory notes are sometimes signed as part of a student loan process.

The bank holds on to that promissory note until the loan is paid back in full.

Promissory notes transform into financial instrumentswhen the creditors have enough payments pending to be made, leading them to a situation where their own liquidity is questionable, approach banks for short term credit where they encash the promissory note at a discounted value and make their due payments.

At the time of maturity, the issuer of the promissory note pays the bank directly in full. The difference is the profit of the bank for rendering their services.

Cheque

Cheques are negotiable instruments used to make payments as part of the day to day business transactions. It is the most popular one and used by businesses and individuals to make and receive payments on a daily basis. Three parties are involved in a cheque transaction.

Drawer– The party issuing the cheque and holding an account with the bank;

Drawee– The party which is directed to make the payment ie. bank;

Payee– The party which receives the payment made by the drawee. If the drawer has drawn the cheque in favor of self then the drawer becomes the payee.

The cheque acts as a written order made by the drawer to the drawee to pay the payee the amount of money specified on the cheque. The drawer’s account will be debited by the amount mentioned on the cheque. The bank earns the nominal feecharged to the customers for granting them checkbooks. Different types of cheques issued are Bearer Cheque, Order Cheque, Crossed Cheque, Stale Cheque, Anti Dated Cheque and Post Dated Cheque.

Features of Negotiable Instruments

A negotiable instrument can be transferred in a hassle-free manner through delivery or endorsement. Formalities such as preparing a transfer deed, payment of stamp duty, etc are absent. Transfer does not even mandate notifying the previous holder of the instrument.

The instrument is in written form. It can be handwritten, typed, engraved or printed.

The time period after which payment is made is certain and unambiguous. Also, the holder anticipates prompt payment because dishonor would imply the ruin of credit of all parties involved. Every instrument contains an unconditional promise or order of payment.

The payee is specified in the instrument. There may be situations where there is more than one payee. The payee can be an institution or organization too.

For a negotiable instrument to be considered valid, the signature of the maker or the drawer needs to be present on the document.

A person or party receiving the negotiable instrument has indisputable ownership.

A negotiable instrument is not complete until and unless it has been delivered to the payee.

Negotiable Instruments Utility

Negotiable instruments are of utmost importance in the commercial world. It has consistently increased in tandem with development in international trade.

The right of property which implies complete ownership accompanies the promissory right.

The transferability from one person to another happens with ease and without much formality which facilitates its heavy use in the business world.

The transfer can be done through endorsement or delivery, which is a common occurrence in business transactions.

Payments made through instruments are immediate, thus minimizing loss of time.

Even after an electronic revolution in the banking sphere, negotiable instruments are still used widely. They may face obsolescence once people develop their banking habits and overcome the problems faced due to the digitization of banks.

IMPORTANT COMMITTEES

👉RBI-HILTON YOUNG
👉CAPITAL MARKET-NARSIMHAN
👉NSE-PHERAWARI
👉NHB-RANGRAJAN
👉NABARD-SIVARAMAN
👉RRB-NARSIMHAN
👉ATM-RANGRAJAN
👉SMALL FINANCE-USHA THORAT
👉PAYMENT BANK-NACHIKET MOR
👉LEAD BANK SCHEME-USHA THORAT
👉BCSBI-TARPORE
👉BBB- P J NAYAK
👉FINANCIAL INCLUSION- NACHIKET MOR
👉IMPS-SHYAMALA GOPINATH
👉CAPITAL ACCOUNT CONVERTABILITY-TARPORE